Cashflow Management Practices and the Financial Performance of Five-Star Hotels in Nairobi County, Kenya

Abstract

Financial performance of entities in the hospitality industry continue to elicit widespread scholarly interest in the modern competitive business landscape. Effective cashflow management practices remain the mainstay of financial performance in most organizations. However, scholarly research on cashflow management practices enable performance improvement in Kenya’s hospitality industry particularly five-star hotels in Nairobi County is largely limited. The current study examined cashflow management practices’ impact on the financial performance of five-star hotels in Nairobi County, Kenya. The theory that underpinned the study is the Liquidity Preference Theory. A descriptive research design was used and it involved using a survey distributed to all five-star hotels in Kenya. Financial and general managers and their assistants from each five-star hotel provided insights through a closed-ended questionnaire that enabled the researcher to collect and analyze numeric data. Data collected was coded and entered into the package referred to as the Statistical Package for Social Sciences (SPSS) used to analyze quantitative data. The analyzed data revealed that there is a significant relationship between cashflow management practices (p=0.039; p<0.05) and the financial performance of five-star hotels in Nairobi City County, Kenya. The study recommended that five-star hotels in Nairobi County should adopt effective strategies for cashflow management to actualize improved financial performance. Keywords: cashflow management practices, financial performance, Nairobi County, five-star hotels.