Effects of Facility Competitiveness on Financial Performance: The Mediation of Green-Technology Application

Abstract

Although facility competitiveness in service delivery (compared to alternative firms both within and beyond the destination) is linked to firm performance and profitability, the contribution of green-technology application to this relationship has been underexplored in the literature on hospitality firm competitiveness, particularly in the context of developing economies like Kenya. This study aimed to employ the Kenyan context to enhance knowledge on the effects of facility competitiveness on financial performance and the extent to which green-technology application mediates the process. Anchored on resource-based view theory, this study adopted a partial least squares structural equation model (PLS-SEM) to test hypotheses utilizing 206 data samples from managers of accredited hospitality facilities in Kenya. The results of path coefficients indicated service quality (β = .18, t = 2.05, p = .04), location (β = .17, t = 2.58, p = .01), innovation capacity (β = .18, t = 2.79, p = .01) and quality of human resources (β = .12, t = 2.26, p = .02) dimensions of facility competitiveness to have a direct and significant effect on financial performance of accredited hospitality facilities in Kenya. Moreover, green-technology application mediated service quality (β = .11, p = .00), innovation capacity (β = .09, p = .00), quality of human resources (β = .12, p = .00) and location (β = .05, p = .03) effects on financial performance of hospitality facilities. As such, green-technology application is a fundamental mechanism through which other hospitality facility resources and capabilities improve financial performance. The study gives strategic interventions for enhancing the financial performance of hospitality facilities via fostering facility competitiveness and applying green technologies.