Role of Risk Identification on the Financial Performance of3-5-Star Hotels in Nairobi City County, Kenya
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Date
2025-12
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Stratford Peer Reviewed Journals and Book Publishing
Abstract
Risk identification is crucial to success in hospitality, helping achievestakeholders' income and growth objectives. Risks can negatively affect financialoutcomes. This study examines how risk identification influences the financial performance of 3-to 5-star hotels. It provides insights for hotel owners, managers, industry stakeholders, officials, policymakers, and researchers, emphasizing the importanceof risk mitigation strategies in ensuring financial stability. Data was collected from 396 participants across 44 star-rated hotels, divided into three groups, using structured questionnaires, interviews, observation, and published sources. A stratified random sample of 196 respondents, including hotel managers, staff, and suppliers, was selected. The study employed a descriptive, mixed-methods approach to analyze both qualitative and quantitative data to answer the research questions. Data analysis was conducted with SPSS, utilizing descriptive and inferential statistics. Results indicated that risk management practices significantly impact the financial performance of star-rated hotels. Risk identification (β = 0.4080, p < 0.05) enables 3-to 5-star hotels in Nairobi City County, Kenya, to anticipate financial uncertainties, reduce losses, minimize disruptions, and enhance operational efficiency. The study emphasizes that a strong risk identification strategy contributes to long-term financial stability. The conclusion states that a structured risk identification approach improves hotels' financial performance, leading to higher profitability, lower risk, and sustainable growth. Risk governance officers should enhance risk identification and incorporate it into strategic planning for stability. Future research might explore differences in risk mitigation between private and franchise hotels and their financial outcomes.
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Njeru, S., M., Mwangi,P.& Maranga, V.(2025). Role of Risk Identification on the Financial Performance of 3-5-Star Hotels in Nairobi City County, Kenya.Journal of Hospitality & Tourism Management 8(2),102-118.https://doi.org/10.53819/81018102t3157