Influence of service diversification strategy on growth of registered hotels in Kitui town

Abstract

The purpose of this study is to examine the influence of service diversification strategy on growth of the registered hotels in Kitui Town Kenya. The research was guided by the following objectives; to examine the influence of concentric diversification on the growth of registered hotels in Kitui Town; to establish the influence of conglomerate diversification on the growth of registered hotels in Kitui Town, to determine the influence of horizontal diversification on the growth of registered hotels in Kitui Town and to establish the influence of geographical diversification on the growth of registered hotels in Kitui Town. The study was guided by the following theories: Porter’s five forces Theory, Portfolio Diversification Theory and Resource-Based Theory. The study employed a descriptive research design with a target population of 385 employees working in 30 registered hotels in Kitui Town. Data was collected using questionnaires and an interview guide. Descriptive statistics including frequencies, means and standard deviations and inferential statistics like ANOVA were used in data analysis. The output was presented in percentages, tables and figures. The result shows that concentric, conglomerate, horizontal and geographic diversifications are significantly correlated with growth of Hotels. The study concluded that concentric, conglomerate, horizontal and geographical diversification positively affects organizational growth. The study recommends more research be done to evaluate how other strategies affect the organizational growth of hotels in Kenya. Further study can also be done on the diversification strategies adopted by the hotels in view of the new norm presented by Covid 19 pandemic.