Abstract:
The hotels invest in addressing the concerns of their stakeholders such as customers,
investors and suppliers to the exclusion of the internal customers or rather employees;
therefore, there is little emphasis on internal marketing which contribute to performance
of hotels. The study sought to examine the effects of strategic internal marketing on
performance of five-star hotels in Nairobi City County. The study was anchored on
social exchange theory and balanced score card and adopted concurrent triangulation
research design. The target population was 1181 employees and 10 managers working
in 10 five-star hotels in Nairobi, out of which 290 employees and 10 managers formed
the sample size. A census of the 10 hotels were conducted while systematic random
sampling was used to select employees and purposive sampling for the hotel managers.
Questionnaires were used to collect quantitative data, which was analysing using
descriptive and multiple linear regression. Interviews were used to collect qualitative
data from hotel managers, which was analysed using thematic analysis method. The
regression attained R2= 0.353 which implies strategic internal marketing explains
35.3% of the variation in performance. The interviewees acknowledged that strategic
internal marketing enhanced hotel performance. The results revealed that strategic
rewards (β=0.184; t=2.416, p=.016) and internal communication (β=0.675; t=7.715,
p=0.001) had a positive and significant effect on performance while training (β=0.057;
t=0.815, p=0.416) had no significant effect on performance. The interviewed managers
implored the importance of employee recognition, fair compensation, sharing
information, feedback, updates, teamwork and capacity building to performance. The
study concluded that strategic rewards and internal communication affect performance
while training does not. The study recommended the use of both financial and non
financial strategic rewards, vertical and horizontal communication and feedback
mechanism.
