Kagumba, L. W. K. and Maringa, P. M.

Kagumba, L. W. K. and Maringa, P. M.
Gaining Competitive Advantage in Hotels through the Application of Information Technology: a case of 2 5 star rated hotels
Department of Hotel & Restaurant Management, Rwanda Tourism University College, P. O. Box 5150, Kigali (Kicukiro Sonatube), Tel: +250 03271990, E-mail: mamaginomy@yahoo.co.uk, rti007@yahoo.fr, www.rtuc.rw.
AND MARINGA, PAUL MWANGI KAGUMBA, LEAH WAMUYU K.
Department of Civil & Environmental Engineering, Faculty of Engineering, Kigali Institute of Science and Technology, B.P. 3900, Kigali, Rwanda, Tel: +250 08829576, E-mail: pmmaringa@yahoo.co.uk, p.maringa@kist.ac.rw, vra@kist.ac.rw
Abstract
This study was a response to the present crisis in Kenyan hotels that are threatened by a dwindling international market share. It sought to establish a clear relationship between Information Technology Application as the independent variable, and Competitive Advantage, the dependent variable. A number of previous studies have suggested that Information Technology (IT) can be used as a strategic instrument that enables a company to achieve Competitive Advantage. In this study the effects of applying information technology on Competitive Advantage were measured through the seven dimensions of the construct, Competitive Advantage Provided by an Information Technology Application [CAPITA]. These dimensions are: Primary Activity Efficiency, Support Activity Efficiency, Resource Management Functionality, Resource Acquisition Functionality, Threats Response, Pre-emptiveness, and Synergy. Information was surveyed in Nairobi city, the Kenyan Coast and Nature Reserves Clusters, using the cross-sectional exploratory survey research design. The study used structured interview schedules as data collection instruments. The study focused on 2, 3, 4, and 5-star rated hotels, which constitute a significant 79 per cent of the total number of 2 to 5-star rated hotels in the country. Cluster and stratified probability sampling was complemented with simple random probability sampling. With complex sampling 30 respondents in management were interviewed from 30 hotels within the three principal tour circuits in the country. Data was gathered in the ordinal scale of measurement and Spearmans rank correlation analysis and its related test of significance were applied appropriately
EAJIS Vol. 3 No. 1, 2011
to the data. The study established that the seven dimensions of the CAPITA construct do respond to the Application of IT in hotels. This study has also successfully proven the alternate hypothesis: there is a relationship between the Application of information technology and Competitive Advantage in Kenyan hotels. The analysis confirmed a strong correlation between the response of Competitive Advantage in the seven dimensions of the CAPITA construct of hotels, to the Application of IT in hotels, as well as with their star rating or the quality of facilities and personnel in hotels. Keywords: competitive advantage, e-Hotels, information technology, CAPITA constructs.
Introduction
Information Technologies have revolutionalised the management of hotels and introduced a paradigm shift in the way of business operations (Buhalis 1997). Information technology brings with it a fast pace of information exchange and online inquiries, data processing, and analysis that promote easier and more incisive decision-making. The hotel and leisure industry is under increasing pressure to provide the means for those who wish to stay connected to do so, including personal mobile communication, and convenient high-speed access (Connell 2002). The hotel customer is now taking an active role in the purchase process (Gilbert & Perry Powell 2003). Faster and easier communication with these customers that helps them make decisions on what hotel products to consume is an urgent priority, if the hotels will stay competitive. It is therefore becoming critically necessary for hotels in Kenya today to invest in equipping themselves with the necessary skills and technologies to support such a clientele. This would help expand their market reach both, locally, regionally and internationally. Ehotels are an available option. With ecient IT, systems changes can be monitored and the evolution of customers expectations checked. The Problem In present day Kenya, the international market supplies the bulk of the hotel clients who visit to see the tourist attractions that are available locally (Economic Survey 2005). As a predominant target market they have the advantage of a relatively high spending power. These international clients though display increased dependency on ecommerce. Unfortunately, e-commerce is relatively new in Kenya and there is competition from regional rivals like Seychelles, the Republic of South Africa, Uganda, and Tanzania. In these circumstances, it is apparent that, classied hotels in the country are faced with the threat of a shrinking international market share. For this reason, Kenyan hotels must strive to maintain a competitive advantage over their international competitors. This calls for innovation such as the one this research pursued, that enables these hotels to gain a competitive edge, and thereby increase customer attraction through positive application of Information Technology. The initiative can only succeed though when clarity on the currently contended relationship is established between eciency, performance, or productivity in hotels and the application of Information Technology (Clemon 1991, Brynjolfsson 1993, Cho & Olsen 1998). Also where it is conrmed that e-hotels improve customer relations, marketing and reservations management systems, when in use in hotels as some researchers have so far asserted (Cho & Olsen 1998, McFarlan 1984, Porter & Millar 1985). Aims and Objectives This study took up the challenge to reverse the present trends in Kenyan hotels where they are suering diminishing competitiveness, as their international market share progressively dwindles. The study sought an understanding of the eciency of information ows in a hotel within the context of productivity and eventual provision of the resource the room, and its supporting services and
facilities such as food, beverages, and conferencing. It probed the Competitive Advantage Provided by an Information Technology Application (CAPITA) model of hotels (Sethi & King 1994, Cho & Olsen 1998) that arranges these institutions into their fundamental activity nodes, and recognises their need for interaction and complementation through information ows. It investigated the eect of e-hotels in improving their individual and most especially collective performance. Figure 1, included here below is a conceptual framework that illustrates this CAPITA construct of hotels.
COM PUTERISATION
Internet/e-m ail
Normal office computers
use
of
The Web
Application of IT in Hotels
Im pro ved eff iciency and pro ductivit y in the Hotels
Primary activities
Support Activities
Resource
Management
Resource Acquisition
Threats
Preemptivene ss
SYNER GY
COMPET ITIVE ADVAN TA GE
Figure: 1 Conceptual Framework: Source: Authors, 2006
The conceptual framework is an abstraction of the hotel into a network, construct or model of production functions that converges at seven basic interactive activity nodes, which are termed concepts. Every one of these seven concepts brings together actual hotel production processes, each with its respective array of functions, from which the external variables for inquiry are sourced (Sethi & King 1994, Cho & Olsen 1998). An underlying seminal proposition enshrined in the construct is that eective operations in the network depends upon information ows in between these activity nodes which is then internally transmitted to subsidiary activities and synthesised, before being conveyed onwards to other nodes. The model then represents an assembly of concepts whose collective eciency relies on communication. It was within these concepts that Information Technology (IT) driven Competitive Advantage was measured. The conceptual framework uses the model and its arrangement of concepts to suggest the manner in which the two main internal variables, e-Hotels and Competitive Advantage relate. The seven concepts that comprise the CAPITA construct of hotels include the primary activities, support activities, resource management, resource acquisition, threats response, pre-emptiveness, and overall synergy (Cho & Olsen 1998). For each of these activity levels and their functions, the study sought to take score of the eects of the application of Information Technology or e-Hotels with respect to the productive aspects of every level of activity. The conceptual framework that is included above (Figure 1) illustrates the arrangement of the internal variables of hotels that the study assembled together for testing, as informed by the overall theoretical framework that is in turn featured here below (Figure 2). The conceptual framework also suggests at the propositions on sequencing of these activity hubs that the study tested.
CUST OMER RELA TIO NS (CR )
MARKET IN G
HO TE L RESE RVATIONS MANAGE MENT SY STE MS (HR MS)
CU STOM ER R ELATION SHIP MANAGE MENT (CR M)
APPL ICATI ON OF INFO RMAT ION TECHN OLOG Y (IT)
CO MPE TITIV E ADVAN TAG E
Figure: 2 Theoretical Framework; Source: Authors, 2006
The study hoped to develop a hierarchical value of the relative importance of each of the seven activity nodes in a hotel, in promoting eciency of performance, when stimulated by e-Hotels. It also intended to conrm the particular functions and aspects where most eect could be attained through the introduction of e-hotels. In this way intervention that steers local hotels towards improved competitive advantage could be guided with accuracy to those areas of a hotel where it is most needed. Inquiry here was directed by one general objective. This is to establish the relationship between electronic commerce and performance in hotels. From this the following three study objectives were developed: To determine the ways in which the application of IT affects performance (efficiency & productivity) within the primary and support activity levels of hotels. To determine how the application of IT affects performance (efficiency & productivity) within the resource management and acquisition functionality activity levels of hotels. To investigate the manner in which the application of IT improves performance (efficiency & productivity) in handling threats, promoting pre-emptiveness, and ensuring synergy in hotels. A scientic relational hypothesis was adopted for use, represented as shown here below into a null (Ho) and alternate (H1) hypotheses: Ho: There is no relationship between the application of Information Technology and Competitive Advantage in Kenyan hotels. H1: There is no relationship between the application of Information Technology and Competitive Advantage in Kenyan hotels.
Research Methods
Information was surveyed from a wide eld that covered the Nairobi city, Kenyan Coast, and Nature Reserves hotel clusters, using the blended descriptive cross-sectional sample survey research design. The study used deep probing data collection questionnaires and opinionnaires of the form of structured Likert type summative, scaled and coded interview schedules, as data collection instruments that supported quantitative analysis. The study focused on 2, 3, 4, and 5 star-rated hotels, which constituted a signicant 87 per cent of the total number of star-rated hotels in the country. Those in the three circuits added up to 82 per cent of the full complement of the 2-5 starrated hotels in the country. Cluster and stratied probability sampling were used in complementation with simple random probability sampling to constitute a complex probability sampling design. This ensured reliable and valid, as well as representational research applications. Simple random sampling relied on the Tippets table of four digit random numbers, adapted to a two-digit form, to cope with the smaller sample units used in this study. With complex sampling 30 respondent managers were interviewed from fteen hotels within the three principal tour circuits in the country. The actual number of hotels allocated for inquiry in each cluster was arrived at using the proportional allocation method that ensured no bias for any of the clusters. Data was gathered in the ordinal measurement scale that brings data in form of ranking measures. The respondents interviewed were managers and IT administrators. Each was required to respond to evaluation queries on perceived response levels of the various activity levels, functions and aspects of their hotels to the application of IT. They were also required to respond to queries on levels of computerisation, and on the quality and scale of operations, as well as on stang and the physical infrastructure of their premises. The study then tested response to the application of IT,
and also this performance against levels of computerisation in hotels, to constitute e-hotels. In order to determine the association of the selected variables, correlation and signicance were worked out using the Spearmans rank correlation coecient (rho) and the Chi-squared test of signicance. Here, the Median determined measures of central tendency, while the Quartile Deviation gave dispersion levels. The two data management software, S.P.S.S and Microsoft Excel were put to use, to rigorously and easily analyse the data.
Data Analysis
Eciency in performance was measured for direct nancial cost, time, and manpower. It was found to be perfectly correlated in all instances, with but insignicantly few exceptions. Discussions were thereafter therefore restricted to only one measure of cost, that of direct monetary cost, to avoid unnecessary duplication. This research considered eciency in aspects of acquisition, storage, and distribution for the following functions of the primary activity level: conferencing and banqueting, recipe costing systems, stock control systems, electric points of sale, automated mini bars, and rooming (Figure 3).
Storage Acquisition Distribution
Acquisition
Acquisition
Storage
Recipe Control Systems
Conferencing & Banqueting
Rooming
Storage
Distribution
Distribution
PRIMARY ACTIVITY LEVEL

Acquisition Acquisition
Storage
Stock Control Systems
Electronic Points of Sale
Automated Mini - Bars
Storage
Distribution
Distribution
Storage
Acquisition
Distribution
Figure: 3 Primary Activity Level Functions and Aspects; Source: Authors, 2006
On the other hand, the study addressed the resulting rise in performance within the human resource systems for support activities in terms of the cost measure of performance. The three functions of the secondary activity level that were looked into with regard to the aspects of training, communication, and information search in this study, included: personnel management, hotel infrastructure, and general activity coordination (Figure 4). These were the two levels (Primary and secondary levels) at which both the hypothesis and objective one were addressed in tandem.
Communication
Information Search
General Activity Coordination
Training
Training
Training
Com munication
Personnel Management
SECONDARY/SUPP ORT ACTIVITY LEVEL
Hotel Infrastructure
Communication
Information Search
Information Search
Figure: 4 Secondary Activity Level Functions and Aspects; Source: Authors, 2006
The eciency and productivity of resource management in respect of tracking of room utilization and upgrading, and evaluating room eectiveness and usefulness provided yet another yardstick for the appraisal of competitive advantage. Here the study measured responses to the application of IT were examined, in order to characterise another dimension of the manner in which competitive advantage in hotels related to the application of IT. The competitive advantage in hotels, of resource management and acquisition functionality activities that was outlined here, was one that took place in response to the application of IT. It resulted in improved performance (eciency and productivity) in the work process, at the resource management functionality or housekeeping systems inventories level, with respect to the cost measure of performance. This research considered aspects of tracking room utilization, tracking room upgrading, evaluating room eectiveness and evaluating room usefulness in the following functions of the resource management level: front oce, guest accounting, night audit, food and beverage service, and human resource operations (Figure 5).
T racking Room Utilisation
Tracking Room Utilisation
Tracking Room Upgrading
Guest Accounting
Evaluating Room Usefulness
Food & Beverage Service
Evaluating Room Effectiveness RESOURCE MANAGEMENT FUNCTION A LITY Tracking Room Utilisation
Evaluating Room Effectiveness
Night Audit
Human Resource Operations
Front Office Tracking Room Utilisation
Figure: 5 Resource Management Functionality Activity Level Functions and Aspects; Source: Authors, 2006
On the other hand, the study addressed the resulting rise in performance within the resource acquisition functionality also termed the reservations control systems, with respect to the cost measure of performance. Performance here was examined for the four aspects of resource functionality. These were: ordering, conrmation, verication, and acquisition of the resource (room). This performance test was conducted within the following four functions of resource acquisition functionality that included: exchange or housekeeping, reservations, registration, and guest accounting (Figure 6). Resource management and acquisition functionality made up the two dimensions within which the hypothesis and objective two were looked at together.
Ordering
Ordering
Confirmation
Exchange or Housekeeping
Acquisition
Acquisition
Guest Accounting
Confirmation
Verification
RESOURCE ACQUISITION FUNCTIO N A LITY
Verification
Ordering
Confirmation
Reservations
Acquisition
Acquisition
Registration
Confirmation
Verification
Verification
Figure: 6 Resource Acquisition Functionality Activity Level Functions and Aspects; Source: Authors, 2006
The competitive advantage in hotels, of threats response, pre-emptiveness, and synergy that was sketched out here, was one that took place in response to the application of IT. Firstly, the study examined analytically, the resulting enhanced performance (eciency and productivity) in combating the bargaining power of the customer and opportunity costs to the supplier, at the threats response level, with respect to the cost measure of performance. This research considered aspects of the customer and supplier decreasing searching and increasing switching costs, in the functions sales & marketing and acquisitions (Figure 7).
Decreasing Customer Searching Costs Increasing Customer Switching Costs
Decreasing Customer Searching Costs
Sales & Marketing
Decreasing Supplier Searching Costs
Acquisitions
Increasing Customer Switching Costs

THREATS RESPONSE
Figure: 7 Threats Resonse Activity Level Functions and Aspects; Source: Authors, 2006
Secondly, the study attended to the resulting rise in performance as it related to total quality management innovation in the pre-emptiveness activity level in terms of cost, measure of performance. The three functions of pre-emptiveness are strategic planning, sales and marketing, and reservations management that were looked into. Four aspects of preemptiveness were investigated here. They included development of standards and practices in the industry, achieving unique access to channels (aliate marketing), forcing unfavourable market postures on competitors and mounting barriers against imitations (Figure 8).
Achieving Unique Access to Channels (affiliate marketing )
Forcing less favourable Market Posture on C ompetitors ( help outdo a competitor )
Influencing the Standards & Practices ( creativity ) in the Industry ( virtual tours )
Strategic Planning
Offering Barriers against Imitations
Influencing the Standards & Practices ( creativity ) in the Industry (virtual tours )
PREEMPTIVENESS
Influencing the Standards & Practices (creativity ) in the Industry ( virtual tours )
Marketing & Sales
Reservations Management
Forcing less favourable M arket Posture on Competitors ( help outdo a competitor )
Forcing less favourable M arket Posture on Competitors ( help outdo a competitor )
Figure: 8 Preemptiveness Activity Level Functions and Aspects; Source: Authors, 2006
Maringa, P. M., & Maringa L.W.K., JKUAT/KU Kenya, January 2007, Gaining Competitive Advantage in Hotels through the Application of Information Technology: A case of 2 5 Star rated Hotels Finally the study scrutinised improved performance in the synergy attainment activity level, in terms of cost, time and manpower. Here then, the research considered three aspects and their respective subsets. These were, marketing policies and marketing practices as they informed business goals, marketing and nance departments as they related to business strategy, and marketing, nance and human resource departments in respect of the business environment. All these were examined as they applied to six functions of the synergy attainment. These were, integration of the application of IT, commitment of functional units, continuous innovation in the application of IT, enhancement of the application of IT, technological expertise support in the application of IT, and support from
10
top management (Figure 9). These were the three areas in which the hypothesis and objective three received attention, in succession in the following account. The activity levels, their functions, and aspects of the hotel were examined against aspects of ehotels, of computerisation, in several categories. Also probed was the status of human and physical infrastructure in the hotels. These represented distinguishable areas and approaches of the application of information technology.
Business Strategy (Marketing, Finance & Human Resources Departments) Business Goals (Marketing Policies & Practices) Top Management Suppo rt in the Applicat ion of IT Business Environment (Marketing, Finance & Human Resources Departments)
Business Goals (Marketing Policies & Practices)
Business Strateg y (Marketing, Finance & Human Resources Departments)
Integration of the Application of IT
Technological Expertise Support in the IT Application of
Business Environment (Marketing, Finance & Human Resources Departments)
SYNERGY ATTAINMENT
Business Environment (Marketing, Finance & Human Resources Departments)
Business Strategy (Marketing, Finance & Human Resources Departments)
Business Goals (Marketing Policies & Practices) Business Strategy (Marketing, Finance & Human Resources Departments) Commitment of Functional Units
Enhancement of the Application of IT
Business Environment (Marketing, Finance & Human Resources Business Goals Departments) (Marketing Policies & Practices)
Continuous Innovation in the Application of IT
Business Environment (Marketing, Finance & Human Business Resources Environment Departments) (Marketing, Finance & Human Resources Departments)
Business Strategy (Marketing, Finance & Human Resources De partments)
Business Strategy (Marketing, Finance & Human Resources Departments)
Figure: 9 Synergy Attainment Activity Level Functions and Aspects; Source: Authors, 2006
11
Descriptive Analysis and Results
Analysis of the CAPITA construct of hotels with regard to the response of competitive advantage to the application of IT revealed some common trends. The most compulsive Analysis of the CAPITA construct of hotels with regard to the response of competitive advantage to the application of IT revealed some common trends. The most compulsive one was the curious twist where both the three and four-star rated hotels in most instances recorded lower levels of response to the application of IT, than the two-star rated hotels. Further this decline was noted in all the six dimensions of CAPITA for the Nairobi, and Coastal clusters, to place the three-star rated hotels at the lowest level of response of performance to the application of IT (Table 1 & Figure 10). When all three clusters are combined together the three-star rated hotels behaved similarly only being substituted at the bottom position in the resource management functionality and threats response dimensions of the CAPITA model of hotels. Where the Nature Reserves cluster was concerned this least responsive position was fully dominated by the four-star rated hotels.
* AICA: Competitive advantage in terms of improved efficiency and performance as a result of the application of IT in hotels. Figure 10: Competitive advantage in hotels for the three clusters (the nairobi, coast and nature reserves clusters) in response to the application of Information Technology Source: Authors, 2006
On the other hand, in all clusters, whether seen together or individually, the ve-star rated hotels redeemed this situation and in fact did succeed to out-perform even the two-star rated hotels. Finally it is worth noting that twenty-seven out of the twenty nine functions that derived from the seven dimensions of the CAPITA model of hotels also displayed a trend where the three-star rated hotels recorded the least response level of competitive advantage to the application of IT. The three exceptions here were automated mini-bars in the primary work process, front oce in the resource management functionality, and sales and marketing in threats response activity level.
12
* AICAP: Competitive advantage of primary activities; AICAS: Competitive advantage of secondary activities; AICAR: Competitive advantage of resource management functionality; AICAA: Competitive advantage of resource acquisition functionality; AICAT: Competitive advantage of threats response; AICAE: Competitive advantage of pre-emptiveness; AICAY: Competitive advantage of synergy - all in terms of improved efficiency and performance as a result of the application of IT in hotels. Figure 11: competitive advantage of each of the seven dimensions of the capita construct hotels for the three tour circuits (the nairobi, coast and nature reserves clusters) combined in response to the application of information technology Source: Authors, 2006
Three and four-star rated hotels commonly have been in operation longer, have a higher bed capacity, employ more educated managers, rely more on systems administrators, than two-star rated hotels. The fact therefore of their lesser response to IT application than the two-star rated hotels clearly contradicts expectations. It should be noted however that these two, the three and four-star rated hotels, are the stages of hotel improvement in human and physical infrastructure, and also of reorientation from a primarily local market base, to an international one. Such a proposition is well armed by the observed trends where three and four-star rated hotels were generally outdone by the two-star rated hotels in aspects of computer literacy, use, network infrastructure, presence of virtual tours in websites, and mode of enquiry for products and services by e-mail. A status of dynamic change such as, the one that typies growth from two, to three and four-star rated hotels, introduced instability in the hotels. To this extent, stang in these hotels commonly operated in continuously new settings and responsibilities. Performance (eciency and productivity) could not then be ideal, and this reected in the activity centres of the hotels the seven dimensions of the CAPITA construct of hotels. The net eect was clearly a weakening relationship with or response level to the application of IT. A low competitive advantage resulted. It is instructive that this pattern was not replicated in either of the two or vestar rated hotels. At these two levels, the target markets and internal structures (human and physical) of the hotels were denite and stable. One targeted local markets,
13
and the other unequivocally an international market. Performance that responded to the application of IT was expectedly high, rising from the two-star to the ve-star rated hotels. Another trend of interest was the sustained general dominance of the Nairobi cluster in the response of performance to the application of IT, followed alternately by the Nature Reserves cluster, and the Coastal cluster. This particular trend concurred generally with the patterns observed for the quality of hotel personnel and facilities, such as computer systems and infrastructure. It was suciently explained by the rationale just advanced in support of the changes that accompany a transforming hierarchy of hotel star rating. Analysis here also revealed a common pattern where there was conformity between the dimensions of CAPITA, both at the level of the three clusters put together, and also for each of the three individual clusters. In all these situations, the Nairobi cluster continued its domination of the Nature Reserves clusters, followed by the Coastal cluster in terms of levels of response of competitive advantage to the application of IT. Each of these seven concepts or dimensions of the CAPITA construct of hotels was an exclusive derivative of its elements (aspects, components, and functions). For each dimension its elements uniquely shared common focus in facilitating hotel operations. It was natural then that the elements agree in function within themselves and also with their respective derived dimensions of the CAPITA model of hotels. This agreement was conrmed in the preceding analysis. Finally, when all seven dimensions were examined together, threats response commonly dominated with the highest performance. In this hierarchy it was by and large followed in order by resource management and acquisition functionality, pre-emptiveness, and with primary and secondary activities taking the bottom places (Table 1 & Figure 10). The position of synergy in this hierarchy was generally not detected. Any function in hotels that is preferably carried out within or best served with IT applications responded most favourably when such facilitation was available. Threats response that targeted aliate marketing and chain linking was most comfortable and had extensive reach in the world of the web and Internet. It was in this medium that information was compulsively extended to the individual customer and supplier, and actually customized through the one-on-one innovation of marketing to their peculiar circumstances and needs. This was the rst line of invasion into the market.
14
Table 1: distribution of the response of competitive advantage to the application of it in all seven dimensions of the capita model of hotels, for all the three clusters combined
DIMENSIONS OF CAPITA Primary activity Secondary activity Resource Management Functionality Resource acquisition functionality Threat response Pre-emptiveness Synergy-attainment
2 star 41.03% 35.90% 47.71% 46.15% 53.85% 48.72% 44.87%
3 star 23.33% 20.00% 32.67% 30% 35% 20% 30%
4 star 27.78% 33.33% 33.33% 33.33% 33.33% 33.33% 33.33%
5 star 100% 100% 100% 100% 100% 100% 100%
2-5 star 41.67% 34.45% 48% 46.66% 51.67% 44.44% 46.11%
Source: Research Data, 2006
Resource management and acquisition functionality on its part hinged upon the application of IT, especially in respect of reservations at a level that was secondary to threats response. It really acted as a follow-up to the initial continuous engagement of customers and suppliers that was made using threats response strategies. This was the sequence of involvement and dependence on the application of IT that next targeted pre-emptiveness, where hotels addressed their competitors, and eventually in the primary and support activities where customers who already in hand were kept well pleased. Synergy in a sense blended together all the preceding six dimensions of the CAPITA construct of hotels, and their respective elements. It experienced a general spread within the hierarchy of dominance of these six dimensions of the CAPITA model of hotels.
15
Figure 12: Distribution of the response of competitive advantage to the application of it in all seven dimensions of the capita model of hotels, for all the three clusters combined Source: Authors, 2006
Inferential Analysis and Discussions
The preceding trends strongly suggested the existence of a relationship between competitive advantage and the application of IT; between eciency and productivity, and computerisation in hotels; between performance and e-hotels. In their inclination, they compulsively advocated for the acceptance of the alternate hypothesis (H1), which stated, that there is a relationship between the Application of Information Technology & Competitive Advantage in Kenyan hotels). The nature of these suggested relationships were however only rmly proven, through statistical tests of association. The Spearmans Rank Correlation test is sensitive to the ranked data, which data had been collected on the ordinal scale of measurement. For these reasons then, this was the test that was put to use to determine associations in this study. The tests produce coecient values (r) that were signicant in certain instances, and not signicant in others. The association between Competitive Advantage, as represented by the CAPITA construct of hotels and the application of IT, shown here in terms of computerisation was not comprehensive, but rather partial to certain specic functions of both variables. The tests authenticated diering associations between particular functions of competitive advantage and the aspects of the application of IT in hotels. As these associations also varied along the three clusters of hotels, it is reasonable to expect distinctiveness in their arrangements along the hierarchy of star rating of the hotels too. Testing along this hierarchy though not conducted here is available and can easily be carried out as need arises. In the Nairobi cluster, Network infrastructure had perfect positive correlation with r = 1.000** that was signicant at an alpha () error value 0.01 levels (2-tailed) with all 29 functions of the seven dimensions of the CAPITA construct of hotels, with but a few exceptions. The exceptions were general activity coordination in secondary activities, all three functions of threats response that include, strategic planning, sales and marketing, and reservations management, and continuous innovation in synergy attainment. Improvements in network infrastructure of hotels in the Nairobi
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cluster then was available as an eective medium representing the application of IT, through which competitive advantage using the CAPITA construct in these hotels could be achieved. Computer literacy, computer usage, principal mode of inquiry, presence of virtual tours, and reliance on aliate marketing all however failed to achieve any signicant association with performance in hotels in the Nairobi cluster. Perfect correlation that was signicant at an alpha () error value 0.01 levels (2-tailed) with r = 1.000** was also established between the number of computers found in nance department and the prevalence of systems administrators in hotels. The presence of virtual tours also recorded perfect correlation with principal markets, having a r = 1.000**. This correlation was signicant at alpha () error value 0.01 levels (2-tailed). In the Nature Reserves cluster (Table 2), correlation of the application of IT, with the functions of the CAPITA model of hotels, expanded to include a majority of the variables of computerisation. The correlations were signicant at alpha () error values of 0.05 and 0.01 levels (2-tailed). Network infrastructure for instance generally recorded the highest correlation levels with the functions of the primary activity level. There were a number of instances where correlation commonly failed consistently for all seven dimensions. These instances pointed out variables of computerisation that could not be relied upon at all times to provoke the necessary positive changes in competitive advantage through the CAPITA model of hotels in the country. The principle mode of enquiry was the one such variable of computerisation and therefore seven dimensions of the CAPITA construct of hotels, and to a large extent with all their 29 functions. Aliate marketing also failed the correlations tests similarly in all but the dimensions of resource management functionality and the primary activity level of the CAPITA construct of hotels and their functions. The secondary activity level and virtual tours also failed to achieve signicant correlation. The primary activity level singularly showed failure between one or another of its functions with the number of computers in nance (representing general provision of computers in a hotel), frequency of use of computers, virtual tours, and aliate marketing, in addition to the total absence of correlation with the principal mode of enquiry. Curiously, there was no correlation whatsoever between computerisation and the quality of hotel premises and personnel.
17
Table 2: Correlation of Competitive Advantage to the Application of it in The Primary Activity Dimension of The Capita Model of Hotels, for the Nature Reserves Cluster*. Correlation is significant at the 0.05 level (2-tailed). **. Correlation is significant at the 0.01 level (2-tailed).
PRI M AR Y A CT IVI TY LE V EL
C onf ere ncing & banq ueting
R ecipe cost ing syste ms
Sto ck cont rol syste ms
El ectr ic point s of s ale
A uto mat ed mini bars
R oomi ng
N um ber of com pu ter s in fin ance

.548
.065
12
.588*
.044
12
.588*
.044
12
.478
.116
12
.478
.116
12
.767**
.004
12
r
PC
N
r
PC
N
r
PC
N
r
PC
N
r
PC
N
r
PC
N
C om put er liter acy levels of management .760**

.004
12
.625*
.030
12
.625*
.030
12
.671*
.017
12
.671*
.017
12
.701*
.011
12
Frequency of usage of com pu ter s

.484
.111
12
.792*
.002
12
.792*
.002
12
.410
.186
12
.410
.186
12
.701*
.011
12
N etwo rk inf ras truct ure in pl ace

.667*
.018
12
1.000**
.
12
1.000**
.
12
.596*
.041
12
.596*
.041
12
.907**
.000
12
Princip al mode of enq uiry for ro om .525

.080
12
.552
.063
12
.552
.063
12
.494
.103
12
.494
.103
12
.668*
.018
12
Prese nce of virt ual tours

.441
.151
12
.889*
.013
12
.889*
.013
12
.385
.217
12
.385
.217
12
.618*
.032
12
Prese nce of Aff ili at e mar ket ing

.647*
.023
12
.583*
.048
12
.583*
.048
12
.598*
.041
12
.598*
.041
12
.495
.102
12
In the Coastal cluster, the tests of correlation returned considerably less widespread correlation between competitive advantage and the application of IT. The primary activity level of the CAPITA model of hotels only achieved signicant correlation with network infrastructure in its functions of recipe costing, stock control systems, and rooming. These relationships were signicant at an alpha () error value of 0.01 levels (2-tailed). The secondary activity level in its turn achieved signicant associations between its functions, and several aspects of computerisation. The number of computers in nance correlated with all three functions of the secondary activity level in hotels (personnel management, hotel infrastructure, and general activity coordination) achieving a Spearmans rank correlation coecient-r value of 0.557*. Here the set alpha () error value stood at 0.05 levels (2-tailed). On the other hand, network infrastructure displayed higher, more signicant correlation with the same three functions of the secondary activity level in hotels realising a Spearmans rank correlation coecient-r value of 0.720**. The set alpha () error value is 0.01 levels (2-tailed). The trends observed for secondary activities were repeated for the resource management functionality and resource acquisition functionality but with minor variations. Threat response achieved signicant correlation for both of its two functions (Sales & Marketing, and Acquisitions) and only network infrastructure. Pre-emptiveness had a better showing, where two of its functions (sales & marketing, and reservations management) attained signicant relationship with both the principal mode of enquiry, and aliate marketing. Strategic planning on its part only had a signicant association with network infrastructure (Table 3).
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Table 3: Correlation of Competitive Advantage to the Application of it in The Preemptiveness Dimension of The Capita Model of Hotels, for The Coastal Cluster*. Correlation is significant at the 0.05 level (2-tailed). **. Correlation is significant at the 0.01 level (2-tailed).
PREE MPT IV ENESS
Strategic planning
Sales marketing
&
Reservation s manageme nt
r PC N r PC N r PC N
Netwo rk infrastructure in pl ace .690* .009 13 .537 .059 13 .537 .059 13
Principal mode of enqu iry f or room
Affiliate ma rketing
.426 .159 13 .625* .022 13 .625* .022 13
.426 .159 13 .625* .022 13 .625* .022 13
Synergy attainment achieved signicant association for all its six functions with only two aspects of computerisation. The two were, number of computers in nance, and network infrastructure in place. Incentives for improved application of IT then would emerge from these two aspects of computerisation. Such improvements in provision of computers and better and more comprehensive computer networks would in turn push the competitive advantage of the hotels up, through better performance (eciency and productivity) in this synergy attainment dimension of the CAPITA construct of hotels. Finally, in this coast cluster, there were signicant associations between the quality of hotel premises and personnel and computerisation, only in two of their aspects. Network infrastructure correlated signicantly with bed capacity, while principal mode of enquiry related signicantly with education levels of managers. The respective Spearmans correlation coecients-r that were achieved here were 0.855** and 0.705*. These correlations were signicant at a set alpha () error value is 0.01 levels (2-tailed).
Conclusions Recommendations and Implications
This study identied that the Kenyan hotels relied mainly on the international market. This market was well adapted to e-commerce. The international market also enjoyed a high aordability, making it important as a prime source of revenue for the hotels. Kenyan hotels however were in the early stages of adopting the e-hotel business concept. In theory, the construct is sensitive to the application of IT in hotels. The study set out to conrm rst that activity centres of the CAPITA model did in fact respond to the application of IT, in the sense of experiencing improved performance (better and more ecient productivity). In doing so the study expected to establish the existence of a relationship between competitive advantage and the application of IT in hotels. Such a conrmation in eect would establish that hotels do respond to IT application, and that they would gain competitive advantage through improved performance,
19
arising from the application of IT. This would make available very useful tools by which to remedy the present challenge that confronts Kenyan hotels. The challenge was one of a dwindling international market share that results from an e-commerce international compliant clientele and the international competitors. The preceding analysis showed that primary and support activities, resource management and acquisition functionality, threats response, pre-emptiveness, and synergy all commonly responded better to the application of IT with a rising star rating of the hotels. This implied to a general trend of improved eciency and productivity in all seven centres of activity with rising star rating. The patterns were only interrupted by an explainable slump in eciency, at times for the four-star rated hotels, and more commonly for the three-star rated hotels, as a result of the dynamics of changing hotel status. A rising star rating coincided commonly with advances in hotel facilities and personnel. Better hotel facilities were represented in this research as good proles of the hotel premises and personnel. This was with respect to, hotels with longer years of operation, higher bed capacities, and increased reliance on the international market, and management with higher incomes, more education, and with increasing specialisation in systems administration as was necessary to manage communications. Better facilities in this study are represented by the general increase in the size of hotels and the infrastructure especially in the form of computer systems and networks. As such there was an eventual rise of computer literacy, use, and network infrastructure, virtual tours in websites, and the use of e-mail for enquiry in hotel products and services. The study had therefore fully addressed the set objectives, established that all the seven dimensions of the CAPITA construct responded to the application of IT, and in so doing, achieved improved performance in pace with the eventually upgraded human and physical infrastructure of the hotels. For each of the seven dimensions of the CAPITA model of hotels, competitive advantage was seen to respond to the application of IT. The response level generally grew with improved hotel facilities and personnel in other words as the star rating rose. Further, at the aggregate level of the CAPITA construct, the hotels reected similar responses. These responses were conrmed for each of the three clusters (Nairobi, Coast, and Nature Reserves), although with variations in intensity from one cluster to another. They were also established for the three clusters put together, representing as they did, and the overall country. The relationship generally became more intense with rising star rating of the hotels. From these trends it was clear that there is a relationship between Competitive Advantage in each of the seven centres of activity of hotels, with the application of IT. The alternate hypothesis (H1 = There is a relationship between the application of Information Technology and Competitive Advantage in Kenyan hotels) was therefore accepted, while the null hypothesis (H0 = There is no relationship between the application of Information Technology and Competitive Advantage in Kenyan hotels) was rejected. The hierarchies of these relationships were also identied. The threats response dimension of the CAPITA construct of hotels, by and large had the highest improvement of performance arising from the application of IT. It was followed in order by resource management functionality, resource acquisition functionality, pre-emptiveness, primary activities, and nally secondary activities. The Nairobi cluster led in responsiveness of superior performance to the application of IT. The Nature Reserves followed it, with the Coastal cluster turning in the least responsive improvement in performance for most instances. The ve-star rated hotels also dominated with the highest responsive
20
levels of enhanced performance to the application of IT. The two-star rated hotels, with the four-star rated hotels and the three-star rated hotels took the second, third and fourth positions respectively. Hierarchies of responsiveness to the application of IT for the aspects, components, and functions of each of the seven dimensions of the CAPITA construct or model of hotels was also been rmly outlined in this study in the preceding analysis. The generally rising response of competitive advantage and its increasing response to the application of IT in hotels were not incidental, but a clear direct response to eventual increased in levels of computerisation, and computer literacy in hotels. The strong agreement between quality in the facilities and personnel of hotels and computerisation suggested strongly that the observed concurrent increase in quality within hotels, alongside an ultimate rise in computerisation was also not incidental. Hotels with better facilities and more informed, qualied managers had a better understanding and therefore supported better the venture to computerise. The hierarchy of association between competitive advantage and the application of IT varied from that of straightforward simple response. The Nature Reserve cluster led followed by the Coastal cluster, and with the Nairobi cluster coming last. The hierarchy essentially outlined a dwindling room for association, and therefore opportunity for positive intervention that brought about improved competitive advantage in the hotels. Down this hierarchy less and less dimensions of the CAPITA construct of hotels associated with computerisation. Also fewer functions of these dimensions related at all with the aspects of computerisation that were studied. Improvements in competitive advantage could be achieved in the three clusters through all six dimensions of the CAPITA model of hotels, apart from the pre-emptiveness dimension in the Nairobi cluster. In this latter dimension no association existed with computerisation. In the rest of the Nairobi cluster too, association prevailed solely with the network infrastructure aspects of computerisation. This was the sole available avenue for positive intervention here, with which to promote increased competitive advantage. In the Coastal cluster, other avenues for positive intervention opened up. These included principal mode of enquiry for a hotels products and services, number of computers in the hotel, and aliate marketing. Numbers of computers and network infrastructure dominate as the most available areas of the application of IT, through which to stimulate positive change in competitive advantage for the hotels. The Nature Reserves Cluster drew in a wider range of ideal instruments of positive intervention in a hotels competitive advantage. These included number of computers, computer literacy, frequency of usage of computers, network infrastructure, mode of enquiry for a hotels products and services, virtual tours, and aliate marketing. Dominant avenues here were numbers of computers, network infrastructure, and mode of enquiry. The Competitive Advantage Provided by an Information Technology Application (CAPITA) could be used to improve productivity in hotels in order to oer services with increased eciency. It responded well to the application of IT, translating hotels into the e-hotel or e-commerce business mode. Here then customers could be accessed more eectively on a one-on-one basis. It also facilitated for easier, eective, more extensive and therefore more competitive aliations and chain linking. Using the CAPITA construct to boost competitive advantage in hotels through the application of IT, Kenyan hotels stood a better chance of retaining and even expanding their share of the international market.
21
Recommendation and Implications
The hotels with low star rating should prioritize investments that improve their physical facilities along with the quality of their personnel. When hotels upgrade to three and four-star rated hotels, they should be properly guided to lay equal emphasis on building physical and human infrastructure, as well as on improving operations. Improvements to hotel facilities should be made, and more competent personnel are employed. There ought to be more investment on computerisation. These computers should be more in number and of the high performance branded types. The requisite updated software also needs to be made available. Emphasis should be laid on computer training, which promotes better and more intense use of computers in hotels. Hotels should build in an ecient IT infrastructure that will include local area networks, competent ISP providers, and a stable telephone service base for Internet. Hotels should set internal IT policies for all operations and services to be computer based, and to promote reliance on e-mail while communicating with customers. Virtual tours need wider use, while aliate marketing should be emphasized more. Suggestion for further Research A venture to holistically resolve the observed problem of a dwindling international market share would necessarily embrace other alternative avenues of investigation. These would include understanding the place of governance, security, infrastructure, and international geo-politics in marketing. They in this case constitute useful leads that would guide further investigation. It is necessary to understand the role of the electronic and print media that postures the country as an ideal tourist destination. Initiatives to build diversity and therefore expand the attractions that draw tourists to this country can be pursued through well-guided research. Lessons from other international destinations that do not enjoy the advantage of the uniquely rich ora and fauna that Kenya has provide other interesting options for investigation. The composition of the CAPITA construct of a hotel has not quite been tested in this study. This can be done with an investigation that seeks to conrm and if possible re-dene the basic centres of activities in hotels. Such an investigation would necessarily require the use of advanced multivariate analytical techniques, to authenticate the actual identity of these constituents of the CAPITA model. Further, research into possibilities of diversifying away from the traditional international markets is advised. These markets have in the past patronised Kenyan hotels and the tourism trade in this country. They would serve well to diminish the current stranglehold that the traditional markets have on the tourism trade. Finally it would be interesting to investigate the types of computer systems in use in hotels nationally, and to also determine their usefulness. Such enquiry would enable the recommendation of ideal versions or forms that would best serve the purposes for which hotels are in operation.
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Kagumba, L. W. K. and Maringa, P. M.

EAJIS Vol. 3 No. 1, 2011