Gaining Competitive Advantage in Hotels through the Application of Information Technology: a case of 2 - 5 star rated hotels

Abstract

This study was a response to the present crisis in Kenyan hotels that are threatened by a dwindling international market share. It sought to establish a clear relationship between Information Technology Application as the independent variable, and Competitive Advantage, the dependent variable. A number of previous studies have suggested that Information Technology (IT) can be used as a strategic instrument that enables a company to achieve Competitive Advantage. In this study the effects of applying information technology on Competitive Advantage were measured through the seven dimensions of the construct, Competitive Advantage Provided by an Information Technology Application [CAPITA]. These dimensions are: Primary Activity Efficiency, Support Activity Efficiency, Resource Management Functionality, Resource Acquisition Functionality, Threats Response, Pre-emptiveness, and Synergy. Information was surveyed in Nairobi city, the Kenyan Coast and Nature Reserves Clusters, using the cross-sectional exploratory survey research design. The study used structured interview schedules as data collection instruments. The study focused on 2,3,4, and 5-star rated hotels, which constitute a significant 79 per cent of the total number of 2 to 5-star rated hotels in the country. Cluster and stratified probability sampling was complemented with simple random probability sampling. With complex sampling 30 respondents in management were interviewed from 30 hotels within the three principal tour circuits in the country. Data was gathered in the ordinal scale of measurement and Spearman's rank correlation analysis and its related test of significance were applied appropriately to the data. The study established that the seven dimensions of the CAPITA construct do respond to the Application of IT in hotels. This study has also successfully proven the alternate hypothesis: there is a relationship between the Application of information technology and Competitive Advantage in Kenyan hotels. The analysis confirmed a strong correlation between the response of Competitive Advantage in the seven dimensions of the CAPITA construct of hotels, to the Application of IT in hotels, as well as with their star rating or the quality of facilities and personnel in hotels.