Digital Transformation and Customer Relationship Management Capability of Star-rated Hotels in Mombasa County, Kenya

Abstract

The general objective of this study was to establish the effect of digital transformation on the customer relationship management capability of star-rated hotels in Mombasa County, Kenya. The specific objectives were to examine the effect of digital infrastructure on customer relationship management capability, establish the effect of digital strategy on customer relationship management capability and analyse the effect of data analytics on customer relationship management capability of star-rated hotels in Mombasa County. The study was founded on the Technology-Organisation-Environment Framework, the Resource-Based Theory and the Dynamic Capabilities Theory. The target population was the star-rated hotels operating in Mombasa County, and they were 43 in number according to the Mombasa County Government Trade Department report (2024).  A census of the target population was done because it was relatively small. A cross-sectional research design was adopted, and data were collected using a structured questionnaire with marketing managers of the hotels being the respondents. Out of the 43 star-rated hotels, marketing managers from 37 of them responded, and this led to an 86% response rate. Data analysis was done using simple regression analysis, and the regression results indicated that Digital infrastructure, Digital strategy and Digital analytics all had a positive and significant effect on customer relationship capability of the star-rated hotels. Digital strategy had the strongest effect on the hotel’s customer relationship management capability, which suggests that improvements in strategic digital planning and alignment are most strongly associated with enhanced CRM capabilities. Based on the results of the regression analysis, the study concluded that digital transformation had a positive and significant effect on the customer relationship management capability of the star-rated hotels in Mombasa County. The study recommended that management of the hotels should prioritise strategic digital planning, invest in scalable digital infrastructure, enhance the hotels’ data analytics capabilities through staff training programs and encourage cross-functional digital collaboration within the hotels. Future studies could consider incorporating qualitative methods to capture deeper organisational perspectives on digital transformation, including challenges, cultural factors, and leadership dynamics.