Marketing Strategy Integration and Financial Performance in Luxury Hospitality: Evidence from Nairobi’s Five-Star Hotels

Abstract

The study examined the relationship between marketing strategies and the financial performance of five-star hotels in Nairobi City County, Kenya. The variables investigated in the study included the adoption of digital marketing, segmentation, brand positioning, and loyalty programs, with other variables included in the analysis being the quality of service, customer satisfaction, competitiveness strategy, and economic environment. The research design was a mixed-methods design, which involved secondary data gathered hand in hand with primary data of 7 hotel managers and 70 customers. Descriptive statistics, Pearson correlation, multiple regression, and Structural Equation Modelling (SEM) were used to analyse data. The results indicated that the marketing strategies are strongly associated with financial performance, and the strongest positive correlation with financial performance was between digital marketing (r = 0.85), brand positioning (r = 0.87), and loyalty programs (r = 0.88). Primary data revealed that the majority of the respondents (85 and 92, respectively) stated that they actively utilize social media marketing and that digital marketing helped to generate more revenue. The results of the SEM also supported that loyalty program (β = 0.41) and digital marketing (β = 0.38) showed the best predictive values and all the variables were statistically significant. The research concludes that integrated marketing strategies play a vital role as determinants of financial performance in the hospitality industry. The study recommended that in the future more investment in data analytics should occur, a wider range of categories and regions of the hotels should be included in the research and more sophisticated methods of analytical techniques should be used. The research results are relevant to theory and practice as they have a context-specific understanding of marketing-performance relationships in emerging markets.