Factors influencing seasonality in Hotels:The applicability of Blue Ocean Strategies for countering seasonality in Diani Beach, South Coast, Kenya

Abstract

An almost intractable challenge characterizing the hotel industry (HI) worldwide has been its seasonality and a major concern for researchers, policy-makers and HI managers. the accommodation sector in Kenya, for example, is typified by a two-peak seasonality pattern brought about by tourist seasons (one between June and September; the other in December); two shoulder seasons from January to March and again in October; two low seasons – one from April to May and a second in November. The low, high or peak seasons, are attributed to changes in the macro-environment, the micro- environment and various push and pull factors. The impact, scale and duration of the season is often measured based on: tourist traffic in and out of hotels and other tourism enterprises; the number of workers laid-off or employed; the hotel‘s ability to profitably maintain business operations all-year round. Often, these impacts have either led to under-utilisation and or over-utilisation of fixed assets, human and physical resources in the hotels, causing low and high seasons respectively. Due to the consistency and predictability of seasonality patterns, hotel managers have continuously responded to the phenomenon by either coping or capitulating, depending on the impact, scale or recurrence of its changes. The majority of hotels in Kenya‘s South coast are highly dependent on international tourists and are forced to either close partly or wholly for undefined durations, until the season peaks again. Despite the extensive awareness of the problem, hotel managers‘ ability to formulate suitable strategies for countering the phenomenon is marred by extreme rivalry and competition for already existing and known market-space; since many hotels aim for 100% occupancy, by offering, very low-priced and undifferentiated packages. Although various numerous studies have recommended a plethora of ways of shoring up visitor numbers during the low season, very few studies have examined the potential for increasing demand through exploiting existing but unexplored market-space. Thus, this study aims to explore the factors influencing seasonality in hotels on Kenya‘s south coast and how hotel managers might address seasonality through value-innovation techniques (differentiation and low-cost structures). The study area, i.e. Diani beach, Kenya, was purposively selected due to the extreme seasonality in hotels in the region. This qualitative research employed a multiple case study design and collected data from twelve hotel managers representing 88% of the total population and four key informants who were purposively selected on the basis of their experience of the phenomenon being studied, particularly in relation to the study area. This study was conducted in one phase, for duration of six months, with data being corroborated from three sources of data, comprising: 16 in-depth interviews; review of archival data base (of tourist statistics visiting hotels in Kenya between 2002- 2011); varied documents and publications. The findings summarised in the strategic integrated model, showed that although seasonality in hotels was a long-standing phenomenon, there was a potential for a new and viable shift of the problem in the future, by investors and hotel managers being more receptive to creativity and investment in unrivalled products and services through value-innovation. This process was however challenged by the lack of innovation skills, customer engagement and supportive leadership from the key executives. This study strongly supports the application of blue ocean strategies which advocates for a low-cost structure and differentiation whilst countering seasonality. Hence, in each of the established shift, the study recommends the adoption of a hotel managers‘ toolkit, which provides possible tactics to be adopted, for creatively managing seasonality in hotels.