Technology-Driven Financial Services and the Profitability of Five-Star Hotels in Nairobi City County, Kenya
DOI:
https://doi.org/10.53819/81018102t3152Abstract
The hotel industry is a critical component of Kenya’s economy, with Nairobi City County hosting the highest concentration of five-star hotels. Between 2020 and 2024, these hotels experienced a marked decline in profitability. This study examined the effect of technology-driven financial services on the profitability of five-star hotels in Nairobi. Specifically, it investigated the impact of online booking platforms, mobile banking solutions, fintech-based loyalty programs, and automated invoicing systems. Anchored on Transaction Cost Theory, Innovation Diffusion Theory, and the Technology Acceptance Model, the study employed a descriptive research design targeting Finance, IT, and Customer Service departments across all eleven five-star hotels in Nairobi, yielding 62 respondents. Data were collected via structured questionnaires and analyzed using multiple regression techniques. Findings revealed that online booking platforms (β = 0.843, p < 0.05), mobile banking solutions (β = 1.333, p < 0.05), and fintech-based loyalty programs (β = 0.802, p < 0.05) significantly and positively influenced profitability, with mobile banking showing the strongest effect. Automated invoicing systems had a positive but statistically insignificant effect (β = 0.136, p = 0.382). The study concluded that integrating digital financial technologies, particularly mobile banking, online booking platforms, and loyalty programs, enhances hotel profitability. Recommendations include improving booking platforms, prioritizing mobile banking investments, and developing personalized loyalty programs integrated with other fintech tools to boost customer retention and long-term financial performance.
Keywords: Technology-Driven, Financial Services, Profitability, Five-Star Hotels, Nairobi City County
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