CHALLENGES AND RESPONSE STRATEGIES OF TOUR FIRMS IN KENYA

TO GOVERNMENT REGULATIONS IN THE TOURISM INDUSTRY

BY

EVELYN KAOSE

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE AWARD OF THE MASTER OF BUSINESS
ADMINISTRATION DEGREE, SCHOOL OF BUSINESS, UNIVERSITY OF
NAIROBI

OCTOBER 2014
 DECLARATION

This research proposal is my original work and has not been presented for any award in
this or any other institution.

Signature…………………………………… Date…………………………………….

Lekini Evelyn Kaose

D61/76005/2012

This research proposal is submitted for examination with my approval as university

supervisor.

Signature………………………………… Date…………………………………….

Prof. Martin Ogutu

Department of Business Administration,
School of Business, University of Nairobi.

ii
 ACKNOWLEDGEMENTS

I am gratefully indebted to all those who have contributed to the success of this
dissertation. First and foremost I recognize and uphold my Almighty Lord whose power
has made me come this far. My sincere gratitude goes to my supervisor, Prof. Martin
Ogutu for tirelessly and willingly sharing his scholarly experience and for making this
dissertation a success undertaking. He has been available for consultation, his
professional guidance and supervision added value to this work.

Many thanks go to the tour firms for their support they gave me during data collection.
Their response assisted and enabled the study to be what it is.

iii
 DEDICATION

This dissertation is dedicated to my lovely mother, for the support and encouragement
during the project.

iv
 ABBREVIATIONS AND ACRONYMS

EMCA - Environmental Management Coordination Act

EIA - Environmental Impact Assessment

GDP - Gross Domestic Product

KATO - Kenya Association of Tour Operators

KNBS - Kenya National Bureau of Statistics

PEST - Political, Economic, Social, and Technological

SWOT - Strength, Weaknesses, Opportunities, and

Threats WTA - World Travel Agency

v
 TABLE OF CONTENTS
DECLARATION...............................................................................................................ii
ACKNOWLEDGEMENTS.............................................................................................iii
DEDICATION..................................................................................................................iv
ABBREVIATIONS AND ACRONYMS..........................................................................v
LIST OF TABLES..........................................................................................................viii
ABSTRACT.......................................................................................................................ix
CHAPTER ONE: INTRODUCTION..............................................................................1
1.1 Background of the Study...........................................................................................1
1.1.1 Response Strategies in the Tourism Industry.....................................................1
1.1.2 Government Regulation in the Tourism Industry...............................................4
1.1.3 Tourism Industry in Kenya.................................................................................7
1.1.4 Tour Firms in Kenya...........................................................................................8
1.2 Research Problem......................................................................................................9
1.3 Research Objectives.................................................................................................11
1.4 Value of the Study...................................................................................................11
CHAPTER TWO: LITERATURE REVIEW...............................................................12
2.1 Introduction..............................................................................................................12
2.2 Theoretical Foundation of the Study.......................................................................12
2.3 Government Regulations in the Tourism Industry..................................................15
2.4 Response Strategies.................................................................................................16
2.5 Empirical Literature.................................................................................................17
CHAPTER THREE: RESEARCH METHODOLOGY..............................................19
3.1 Introduction..............................................................................................................19
3.2. Research Design.....................................................................................................19
3.3 Study Population......................................................................................................19
3.4 Sample Design.........................................................................................................20
3.5 Data Collection........................................................................................................21
3.6 Data Analysis...........................................................................................................22
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSION.................23
4.1 Introduction..............................................................................................................23

vi
 4.2 Background Information..........................................................................................23
4.2.1 Descriptive Data...................................................................................................23
4.3 Challenges facing tour firms as a result of government regulations.......................24
4.4 Response strategies by Tour Firms in Kenya..........................................................28
4.4.1 Descriptive data on response strategies............................................................28
4.5 Discussion................................................................................................................29
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS...32
5.1 Introduction..............................................................................................................32
5.2 Summary..................................................................................................................32
5.3 Conclusion...............................................................................................................33
5.4 Recommendations of the Study...............................................................................34
5.4.1 Managerial Policy Recommendation................................................................34
5.4.2 Managerial Practice Recommendation.............................................................35
5.5 Limitations of the study...........................................................................................36
5.6 Suggestion for Further Research.............................................................................36
REFERENCES.................................................................................................................37
APPENDICES..................................................................................................................41
APPENDIX I: INTRODUCTION LETTER.................................................................41
APPENDIX II: QUESTIONNAIRE..............................................................................42

vii
 LIST OF TABLES

Table 4.1 Employee Statistics............................................................................................23

Table 4.2: Tour Policies Affecting Strategy?....................................................................24
Table 4.3: Strategy Frequency...........................................................................................24
Table 4.4: Challenges from government regulation..........................................................25
Table 4.5: Response strategies to government regulations................................................28

viii
 ABSTRACT

With the tourism sector being important to the Kenya economy, sustainability in the
industry is important to enable competitiveness and therefore the government has been
able to come up with regulations to ensure that tourism sustainability is achieved. The
research objectives with regards to the gaps identified from previous studies were to
determine the challenges and strategic responses by tour firms in Kenya from government
regulations in the tourism industry. Research questions were formulated from the
research objectives in order to enable collection of data. Literature review was done by
analyzing the theories relevant to the studies and empirical studies done. From the
literature, government regulation challenges that were identified were licensing
regulations, tourist vehicle regulations, boating activities regulations, and environmental
regulations. Primary data was collected using questionnaire which had questions
formulated from the four regulation challenges. The questionnaires were sent to the target
population of tour guides whose number was identified to be 397 in total. A sample size
of 132 tour firms was calculated and questionnaires sent to them. From the tour firms
sampled, 94 were able to respond and provide information relevant to the study. Data
analysis was done using descriptive analysis and the results presented in tables. From the
study results, it was seen that tourist vehicle regulations was the biggest challenge to tour
operators, followed by licensing regulations both being challenges to a great extent.
Boating activities regulations and environmental regulations were challenges to a little
extent to tour operators in the country. The strategic responses by tour operators as a
result of challenges experienced included proper maintenance of tour vehicles, early
application of operating license, and ensuring human resource is adequately qualified and
trained being used to a very great extent. The study recommended that proper policies
and legislations need to be implemented in the tourism sector by both the government and
the tour operators association. Also the study recommended that proper infrastructure
needs to be put in place and marketing to improve the sector which is necessary for the
economic growth. Finally, the study suggested that more research should be done in the
tourism sector including other factors which affects tourism industry and were not
analyzed by the study.

ix
 CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Strategy is the direction and scope of an organization over the long term, which achieves

advantage in a changing environment through its configuration of resources and

competences with the aim of fulfilling stakeholders‟ expectations (Johnson, Scholes and

Whittington, 2005). According to Scholes (2002), the definition of strategy highlights

that strategy is long-term and that it is future oriented as it tries to identify and set where

the business is trying to be. It identifies which markets a business should compete in and

what scopes of activities are involved in such markets.

The impact of tourism in Kenya cannot be over emphasized since independence. The

benefits of tourism in Kenya are both direct and indirect in terms of cash brought by

tourists and the employment in provides for the local people. Recently the tourism

industry has been affected by terror attacks and travel advisories and the industry has

been losing millions of shillings as a result of decline in tourist arrivals. Strategies and

policies have been implemented by the government to ensure there is stability and

sustainability in the tourism sector. This will ensure all the stakeholders are satisfied and

minimize friction amongst them. During this policy formulation, all the key players in the

tourism industry are involved in the process in order to get a balanced opinion of the

industry.

1.1.1 Response Strategies in the Tourism Industry

Response strategies are the approaches that firms can make to dealing with the changes

identified and quantified or perceived. Robinson (1997) defined strategic responses as the

1
set of decisions and actions that result in the formalization and implementation of plans

designed to achieve a firm‟s objectives. Therefore it is a reaction to what is happening in

the economic environment of organizations. Porter (1998), views operational responses

as part of a planning process that coordinates operational goals with those of the larger

organization.

Tourism is a sector of multiple, but related industries and so, by necessity; strategy

operates at different levels (local, regional, national). In turn, it can be analyzed for the

school of strategy adopted, its focus and content, its governance including the structures

in which it occurs (Hall, 2000), the processes employed, the participants in these

processes and timeframes. The focus of strategy or „what it is about‟ may be tourism

infrastructure and land use; destination management or the corporate, business and

functional activities of tourism organizations. However, within destination management

organizations and state tourism offices, strategy is most often referred to in the context of

marketing. Whether or not they deliberately consider the overall approach or school of

strategy being adopted, most authors conclude that strategic planning with its deliberate

and sequential processes offers some guidance to managers (Soteriou & Roberts, 1998),

but not the whole solution. Earlier studies only addressed tourism and strategy from a

planning perspective and strategic management in tourism lags in knowledge about

strategy (Hax & Majluf, 1991).

Since the late 1990s, tourism research has increasingly referred to entrepreneurialism,

collaboration, learning and knowledge, power and political processes in destination

development. Halme‟s (2001) discussion of strategies derived from network-based

learning and Reed‟s insights to power relations (strategy by negotiation) provide insights

2
to strategy making beyond traditional planning. Collective or socially based strategy

processes (for example, Mintzberg‟s culture school) also fit well with the community

tourism tradition (Jamal & Getz, 1996, 2000; Murphy, 1985; Reed, 1997, 2000).

Aosa (1992) noted that the action of competitors have a direct impact on a firm‟s

strategy. He further stated that strategy will only make sense if the markets to which it

relates are known; and pointed out that the nature of the industry in which the company

operates needs to be understood. The structure of an industry and trend in that industry

will help the current and future attractiveness of that industry.

Various strategic models can be used in coming up with strategic formulation and

responses. These may include Porter‟s (1980) generic strategies, Gilbert‟s (1984)

proposition for „differentiation of the destination‟ and Poon‟s analysis for „flexible

specialization‟. Porter‟s generic strategies shows that in order to outperform other firms

in an industry‟: overall cost leadership, where the firm is required to minimize its costs,

based on mass production and strict cost control of the main business functions;

differentiation of products or services by „creating something that is perceived industry-

wide as being unique‟; or focus on a „particular buyer group, segment of the product line

or geographical market‟ and achieve either cost leadership or product differentiation

(Porter, 1980). Gilbert (1984, 1990) argues that destinations should differentiate their

tourism products in order to be able to achieve a unique „tourist product benefit‟ which

would enable them to establish their position in the international tourism market, as well

as to attract high spenders and loyal tourists.

3
A third strategic approach is proposed by Poon (1990, 1993), based on the concept of

„flexible specialization‟ of the tourism business. In essence, Poon examines the industry

processes and proposes a strategy to enable tourism organizations to improve their

competitiveness. Poon argues that „flexible specialization‟ is a strategy of „permanent

innovation‟ and „ceaseless change‟ which provides for the „new tourism‟. This new

tourism is flexible, segmented, customized to the tourist‟s needs and diagonally

integrated. In contrast, the old tourism can be characterized as „mass, standardized and

rigidly packaged‟ (Poon, 1989). Examination of these three main strategies illustrates that

they share a similar base. Porter‟s (1980) „differentiation‟, Gilbert‟s (1984) „status area‟

and Poon‟s (1990) „flexible specialization‟ describe the attempt undertaken by firms and

tourist destinations to achieve value competitive advantages. Also, another strategy that

may be used in the tourism industry is cost leadership. A firm that provides quality

service at a lower cost may have an advantage over their competitors.

1.1.2 Government Regulation in the Tourism Industry

According to the Kenya National Tourism Policy (2006), there is need to provide for the

licensing and grading of operators of other tourist facilities or services not adequately

controlled under the existing regulations, and to implement a uniform classification and

grading system for other designated tourist facilities, apart from hotels, including

provision for the inspection of such facilities. It shall be a condition for the renewal of

licences that the applicant is current with regard to payment of tourism levies and other

charges.

In addition, the regulatory and licensing regime shall be extended to include private home

stays; private game sanctuaries, villas and other providers of tourist accommodation in

4
order to put them on a par with hotels and other providers of tourism services. In

particular, the current definition of “hotel” in the Hotels and Restaurants Act, which

exempts villas and other properties having less than five beds, shall be changed to cover

all providers of tourist accommodation (including those who may seek to claim

exemption for various reasons) to establish a „level playing field‟ and to enhance revenue

collection. Providers of all types of accommodation used by international and domestic

visitors should be obliged to furnish periodic occupancy and other business details to the

appropriate authorities.

The hotel and general tourism licensing inspectorate shall be strengthened by establishing

laid down regulations, procedures and systems. Methods of regulation for timeshare

developments shall be examined. Finally, it shall be a mandatory licensing requirement

for operators of designated tourist facilities or services to belong to an industry

association duly recognized by the Ministry of Tourism & Wildlife, and which has its

own Code of Conduct (thereby prohibiting the sale of safari and other tour operations by

unauthorized operators).

Regulation of tourist vehicles is another regulation implemented by the government.

There is need to ensure that high standards are maintained in the transportation of

tourists. This should go hand in hand with provision of an enabling environment for

regulation and licensing of tourist vehicles.

A “Tourist Vehicle Service” (TSV) category will therefore be introduced to distinguish

tourist operations from mainstream PSV vehicles used for general public transportation.

The TSV category will be clearly defined and administered under the Tourism Act.

5
Vehicle standards will be clearly defined and administered und the Tourism Act, in

consultation with the Ministry of Transport.

The government in the tourism regulation policy has also regulated boating activities.

There is need for greatly improved regulation of boating activities (especially craft

carrying passengers) on Lake Victoria and other inland waters in the areas of licensing,

insurance, training of coxswains, navigation, safety of passengers (life jackets),

maintenance, etc., as well as provision of jetties and other facilities. The same need for

improved regulations applies to boat operators plying on coastal waters. To this end,

existing regulations and the International Maritime Organisation‟s recommendations on

inland waters (especially as regards navigation and operation of passenger carrying

vessels, and the creation of a body to inspect, license and classify boats and other vessels

on Lake Victoria and other inland waters not covered by KPA's jurisdiction) shall be

implemented so as to establish the necessary pre-conditions for the development of cruise

and pleasure boating, especially on Lake Victoria.

Government has also ensured that the provisions of the Environmental Co-ordination and

Management Act of 1999 (and related regulations) are enforced and that the National

Environment Management Authority is sufficiently strengthened so that it can fully

discharge its responsibilities under this Act, including enforcement of the need for

mandatory Environmental Impact Assessments (EIAs) for all significant new tourism

developments; the development and implementation of a Coastal Area Management Plan;

the enforcement of regulations to eliminate pollution from vehicle exhausts; and the

control of siltation at Malindi and other coastal locations.

6
In order to enforce the Environmental Management Coordination Act (EMCA) 1999, the

Ministry of Tourism and Wildlife shall identify the appropriate legal framework within

Environmental Management Coordination Act (EMCA) 1999 and incorporate it within

the proposed Tourism Act; support the formulation and develop guidelines on

environmental impact assessment for the tourism industry.

1.1.3 Tourism Industry in Kenya

According to the Kenya National Bureau of Statistics, KNBS (2012) there were 1.82

million visitor arrivals in 2011 with earnings of Ksh.97.9 billion from the tourists. Also in

regards to the tourist numbers according to countries, the Kenya tourism ministry

website, in 2010 United Kingdom was leading in terms of arrivals with 174,051 followed

by United States 107,842 while Italy and Germany took third and fourth positions at

87,694 and 63,011. France took the fifth position with 50,039 visitors. Uganda topped the

African market with 33,900 followed by South Africa 33,076 and Tanzania with 30,264.

From Asian markets, India led with 47,611 arrivals followed by China 28,480 and UAE

14,874. This shows the importance of the sector towards the development of the country

and the attainment of vision 2030. The then minister for tourism Hon. Balala lamented

the decline of cruise tourism which recorded only 508 arrivals as compared to 12,096

received in 2009. He blamed insecurity along the Indian Ocean for this decline (Ministry

of Tourism, 2014).

According to Kenya Economic Report (2013), in the year 2012 Europe remained the

main source market for Kenya with a share of 43 per cent, followed by Africa at 24 per

cent, the Americas at 13 per cent, Asia at 12 per cent, the Middle East at 5 per cent and

Oceania at 3 per cent. However, there was a decline in the number of visitors from major

7
European sources such as the UK, Italy and Germany. Holidaying is the major purpose of

travelling to Kenya, accounting for 75 per cent of all arrivals. Business arrivals stood at 8

per cent, with conference arrivals taking 3 per cent. In 2012, Kenya was voted as having

Africa‟s leading Tourist Board during the World Travel Awards (WTA) in the UK. The

country was also honored with the Best African Tourist Board in Africa Award at a

Safari awards held in London. Improved security surveillance at the Coast region as well

as the fight against terrorism is likely to result in resumption of cruise tourism (Kenya

Economic Report, 2013).

1.1.4 Tour Firms in Kenya

The Kenya Association of Tour Operators (KATO) is a leading tourism trade association,

representing the interests of over 300 of the most experienced tour operators in Kenya. It

was founded in 1978 as a non-political member's organization with the following

objectives: to promote Kenya as a prime destination in all trade markets worldwide; to

ensure that a high standard of service is offered by the Kenya Travel Industry; to uphold

the business ethics of the travel profession (Kenya Association of Tour Operators, 2014).

The Kenya Association of Tour Operators (KATO) is Kenya's foremost tourism trade

association, representing the interests of over 250 of the leading and most experienced

professional tour operators in Kenya. The members offer a wide range of services that

can be broadly divided into the following: Air safaris, Incentive travel group safaris,

Custom safaris for individual travelers, Camping safaris (luxury & budget), Indian Ocean

& Coast holidays, Cultural & Community Safaris, Golf Safaris, Agro Safaris, Special

interest safaris (e.g. mountaineering, deep sea fishing, horse riding)

8
(http://www.katokenya.org/). Tour operators in Kenya are supposed to ensure that Kenya

is a sustainable tourist destination.

All members of the Kenya Association of Tour Operators are bound by the rigid rules of

their own code of conduct. Intending safari visitors to Kenya are advised to arrange their

holidays through one of our members whose addresses and telephone numbers are

contained in the directory. This code of conduct is designed to ensure that all members of

the Kenya Association of Tour Operators trade honestly which is the only ethical method

of trading. The code covers trading in its widest sense between members of KATO, and

overseas agents and principals and between members of KATO and their clients.

Members of the association are required to signify their agreement to observe strictly the

Ethics and Standards incorporated in the code of conduct and to abide by judgments

reached by the ethics and standards sub-committee and the executive committee in any

case in which the conditions of the code of conduct are considered to have been breached.

1.2 Research Problem

Various industries and organizations face several environmental challenges and each

respond to these challenges in different ways as a result of their SWOT analysis. Tourism

is a dynamic industry with challenges such as terrorism, climate change, disasters and

other unique challenges and stakeholders want to ensure stability of operations and it is

for this reason, countries and organizations are looking at ways of ensuring sustainable

tourism and have come up with several ways to deal with these challenges.

The government has to put in place regulations to all stakeholders to govern the sector in

order to ensure efficiency. With this the tour firms in Kenya who are key stakeholders in

9
the industry have to abide by the rules and regulations stipulated by the government and

also by the Kenya Association of Tour Operators. Ritchie (2004) did a study on strategic

approaches to crisis management in the tourism industry and analyzed it in a holistic

approach for both public and private sectors. The study concluded by advocating for

further studies in crisis and disaster management theories and concepts from other

discipline. Stokes (2007) also did a study on strategy making in events tourism in

Australia. The study showed that events tourism strategies are mostly reactive or

proactive relative to emerging events by different stakeholders.

Limited studies have been done in Kenya about stakeholder tourism response with little

reference studies currently present. A study done by Meresha (2012) analyzed the

strategic responses by Heritage Hotels as a result of competition on the tourism industry.

This study has not looked at the industry as a whole to determine what factors affect tour

operators in the country which provides a research gap. The local studies done on tourism

response strategies did not look at the regulatory strategic responses but analyzed an

individual company (Meresha, 2012) while the international studies did not have the

same regulatory (Kenyan) challenges as the ones in this study. The study therefore tried

to answer what challenges were faced by firms in the tourism industry as a result of

government regulations, and what strategies were used by these firms to cope with the

challenges arising from government regulations.

1
1.3 Research Objectives
The objectives of the study were:

i) To determine the challenges faced by firms in the tourism industry due to government

regulations.

ii) To establish strategies used by firms in the tourism industry to cope with challenges

arising from government regulations.

1.4 Value of the Study

The study will be of importance to the tour operators in the country as it will highlight the

various ways in which to respond to regulations such as those imposed by the

government. The tourism stakeholders make important policies and decisions which

enable sustainability that will improve the number of tourists. These policies will

eventually improve the economy of the country.

The study will also be of importance to government policy makers and decision makers.

Since tourism is a very important aspect of the economy constituting a big percentage of

the GDP income, the effects of policies laid by the government will be known. Also,

policy makers will be able to predict effectively the number of tourists from the

regulations and have proper response strategies that would stabilize the industry.

The study would be of importance to scholars to further the study and also serve as a

literature in other studies related to it. This will help to increase the general knowledge of

the subject and also provide useful reference to future studies.

1
 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

The study will review the theoretical and empirical literature of the strategic responses by

tourism sectors as a result of travel advisories. Section 2.2 will discuss the theoretical

literature, highlighting the various theories that form the bedrock of the study. Section 2.3

will look at the government regulations in the tourism sector while section 2.4 will look

at the response strategies. Section 2.5 will look at the empirical literature that will be

used, where previous studies will be reviewed in order to fill the research gap while

section 2.6 will review the summary of the literature review.

2.2 Theoretical Foundation of the Study

The theoretical foundation will look at the theories that are relevant to the study and how

they will be relevant to our study. Theories are explanations of observed regularities to

explain some empirical observation (Bryman and Bell, 2004). The theories that will be

used in this study are the Stakeholders‟ theory, and the Resource Dependency theory.

2.2.1 The Stakeholders’ Theory

A stakeholder can be defined as any group or individual who can affect or is affected by

the achievement of an organization‟s objectives (Freeman, 1984). The stakeholder

approach argues that organizations, like individual people, are characterized by their

relationships with various groups and individuals such as employees and customers. The

stakeholders‟ theory argues that shareholders are neither the sole owners of a business

nor the sole beneficiaries of its activities. Some of these groups are internal to the

organization whilst others are external.

1
One widely used and useful model for understanding how stakeholders exert influence on

an organization‟s objectives was proposed by Mendelow (1991). According to this

model, stakeholders can be „ranked‟ depending upon two variables: interest and power.

Stakeholder power refers to the ability to influence the organization while stakeholder

interest refers to the willingness to influence the organization. The actual interest that a

stakeholder has will depend upon where the stakeholder is positioned with respect to

ability to influence and willingness to influence. A stakeholder with both high power and

high interest will be more influential than the one with low power and low interest.

The nature and number of stakeholders included in strategy processes may depend upon

whether a political economy view or a functionalist view of tourism development is

adopted (Truly Sautter & Leisen, 1999). According to Buchholz & Rosenthal (2005),

stakeholder management would generally involve taking the interests and concerns of

various groups and individuals into account, so that they are „all satisfied at least to some

extent, or at least the most important stakeholders with regard to any given issue, are

satisfied‟‟. A potential influence on stakeholder representation in events tourism strategy

making could be the degree of inclusiveness deemed acceptable by individuals or

agencies that guide (deliberately or otherwise) the strategy process.

Processes for decision making about strategy are perhaps as numerous as the strategy

schools that guide them. For example, chaos theorists in tourism (Faulkner & Russell,

1997) show how individual decisions of entrepreneurs have shaped the development of

some tourist destinations; in effect, „destination strategy by default‟. In other settings,

processes such as small intra-governmental meetings between policy makers or highly

collaborative, multi-stakeholder round tables (Jamal & Getz, 2000) can be observed.

1
Jamal and Eyre (2003) note how process rules and structures often influence who will

seek to participate or be encouraged to participate in strategy making. Globally, the

structures in which tourism strategy making occurs have been influenced by a transition

from passivity to interventionism to shared responsibility (Goymen, 2000).

The stakeholders‟ approach will be important in this study as it shows how various

stakeholders influence the objectives of the organization. In this study, the various

stakeholders in the tourism sector will be identified and their impact in the formulation of

tourism policies will be analyzed.

2.2.2 Resource Dependency Theory

Resource Dependency Theory characterizes the corporation as an open system,

dependent on contingencies in the external environment (Pfeffer & Salancik, 1978). As

Pfeffer & Salancik (1978) stated, “to understand the behavior of an organization you

must understand the context of that behavior, that is, the ecology of the organization.”

RDT recognizes the influence of external factors on organizational behavior and,

although constrained by their context, managers can act to reduce environmental

uncertainty and dependence. Central to these actions is the concept of power, which is the

control over vital resources (Ulrich & Barney, 1984). Organizations attempt to reduce

others‟ power over them, often attempting to increase their own power over others.

Pfeffer (1987) provides the basic argument of the resource dependence perspective and

inter-organizational relations as 1) the fundamental units for understanding inter-

corporate relations and society are organizations; 2) these organizations are not

autonomous, but rather are constrained by a network of interdependencies with other

organizations; 3) interdependence, when coupled with uncertainty about what the actions

1
will be of those with which the organizations interdependent, leads to a situation in which

survival and continued success are uncertain; therefore 4) organizations take actions to

manage external interdependencies, although such actions are inevitably never

completely successful and produce new patterns of dependence and interdependence; and

5) these patterns of dependence produce inter-organizational as well as intra-

organizational power, where such power has some effect on organizational behavior.

The three core ideas of the theory are social context matters; organizations have strategies

to enhance their autonomy and pursue interests; and power (not just rationality or

efficiency) is important for understanding internal and external actions of organizations.

The emphasis on power, and a careful articulation of the explicit repertoires of tactics

available to organizations, is a hallmark of resource dependence theory that distinguishes

it from other approaches, such as transaction cost economics.

2.3 Government Regulations in the Tourism Industry

Regulation is primarily concerned with stabilizing an unstable regime of accumulation

that cannot guarantee its own reproduction (Jessop, 2000). As a social process (depending

on interpretations of value) regulation is dynamic, occasionally contradictory and suffers

from occasional crises (Goodwin and Painter, 1996), particularly when the mode of

regulation is no longer adequate for the current regime and accumulation.

Regulations by a government in the tourism industry are done for a number of reasons

such as to prevent monopolies, to prevent anti-competitive behavior, enable continuity

and availability of service, prevent unequal bargaining power, enhance distributional

justice and social policy, regulate externalities and many other reasons. The rationale for

a particular type of regulation depends on the subject matter or sector. This may be

1
through a particular rationale or a combination of them. A number of broad approaches

are adopted in explaining how regulations are developed. These are: where stress is

placed on the force of new ideas that upset the status quo in some way, perhaps through

demonstrations of experimental evidence, logical evidence, or rhetorical power; where

emphasis rests on the pressures of interests that act in pursuit of developments that suit

their own purposes; where changes are seen to flow from changes in „habitat‟ that make

old policies obsolete in the face of new conditions; and where policies are said to destroy

themselves because of internal problems, such as where bureaucratic failings or internal

deficiencies of strategy defeat the initial policy and produce changes.

Tourism has been identified as an industry under increasing pressure from governments

to become more sustainable (Elkington, 1994). The potential impact of growing numbers

of visitors to natural areas has meant that more attention has been directed towards the

sustainability of sensitive areas (Allcock et al., 1994; Carter, Baxter, & Hockings, 2001;

Hunter, 1997; Yunis, 2003). Regulations by the Kenyan government in the tourism

industry help minimize unnecessary competition and to have a sustainable and vibrant

tourism industry. These regulations as stipulated in the National Tourism Act include

registration, environmental, boating, and tourist vehicles regulations. These regulations in

the Act provide a guideline to the creation of laws which govern the industry. The

government in conjunction with the tourism stakeholders keeps amending the laws in

relation to the external environmental changes that may arise.

2.4 Response Strategies

According to Gabrielsson, Gabrielsson, Al-Obaidi and Salimäki (2008), a good response

strategy has to have at least four components: scope which defines companies and

1
business such as the present and planned interactions of the company with its

environment; competence which is an indication of the level and patterns of the

company‟s competition; competitive advantage which ensures the unique position a

company develop vis-à-vis its competitors through its resource deployments; and synergy

which is the joint effects that are sought from the company‟s resources deployment and

the company scope decisions. Competition exerts pressure on firms to be proactive and to

formulate successful strategies to deal with threats and harness opportunities in the

environment.

Mintzberg (1987) pointed to five types of strategies: strategy as plan (a direction, guide,

course of action – intention rather than actual); strategy as ploy (a maneuver intended to

outwit a competitor); strategy as pattern (a consistent pattern of past behaviour – realized

rather than intended); strategy as position (locating of brands, products, or companies

within the conceptual framework of consumers or other stakeholders – strategy

determined primarily by factors outside the firm); and, strategy as perspective (strategy

determined primarily by a master strategist). These strategies are important for tour firms

in the country in order to achieve competitive advantage.

2.5 Empirical Literature

The study will look at various literatures on tourism regulations imposed by countries and

the responses by their various stakeholders. These studies will enable our study have an

expectation of responses from tour operators in the country.

Ritchie (2004) did a study on strategic approaches to crisis management in the tourism

industry. The study proposed a strategic approach to the crisis management from

1
proactive pre-crisis planning through strategic implementation and finally evaluation and

feedback. The study also noted that although crises and disasters cannot be stopped, their

impacts can be limited by both public and private sector managers. The paper concluded

that the understanding and subsequent management of such incidents can be vastly

improved through the extension and application of crisis and disaster management theory

and concepts from other disciplines, coupled with the development of specific tourism

crisis management research and frameworks.

Stokes (2007) did a study on tourism strategy making in events tourism in Australia. He

investigated the stakeholder orientations of strategy makers in this domain. For this study,

a two step, qualitative methodology involving convergent interviews and multiple case

research. Findings show that events tourism strategies of public sector events agencies

(within or outside tourism bodies) are mostly reactive or proactive relative to emerging

episodes/events by the different stakeholders.

Meresha (2012) also did a study on the response strategies by the Heritage Hotels as a

result of competition in the tourism industry in Kenya. The study was conducted through

interview guides of 5 employees of the hotels. The study findings indicated that Heritage

Hotels Limited faced a lot of competition from both small and large firms of local or

international ownership and operations. The study also found that the hotel has responded

to these challenges through competitive pricing, aggressive marketing in trade fairs,

online and print media, product and service innovation and differentiation, promotion

through offers and discount on repeat purchases among others.

1
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This chapter contains the methodology, which was used in the study. Section 3.2 began

with discussion of the overall research design, while Section 3.3 discussed the target

population and the sampling procedure, which was used. Section 3.4 presented the data

collection techniques and instrument used in data collection and the justification for the

choices. The technique of data analysis was contained in Section 3.5.

3.2. Research Design

According to Bryman & Bell (2007), research design is a general plan that provides a

framework for the choice of data collection techniques and data analysis procedures. A

descriptive cross-sectional survey was used for this study as it analyzed different tour

firms in the country in order to identify their response strategies as a result of government

regulations.

The descriptive study is one which information is collected without changing the

environment while a cross sectional study is one which involves a one-time interaction

(snapshot) with the unit of analysis. The benefit of this cross-sectional study design is

that it allows researchers to compare many different variables at the same time. The tour

firms as the unit of analysis will be analyzed at the same time and information necessary

for the study gathered.

3.3 Study Population

According to Borg et al (1996), population refers to the biggest cluster that researchers

desire to study. The study‟s population was all the tour firms in Kenya and the target
1
population was the tour firms in Kenya. This population is believed to provide the

information necessary for the research study.

From the Kenya Association of Tour Operators‟ website (http://www.katokenya.org/

index.php? option=com_staff&view=list&Itemid=32), there is a total number of 397 tour

operators in the country which represented the study population. The unit of analysis is

the sampling unit replicated within a research study (Borg, et al., 1996). The unit of

analysis was an individual tour firm in the country and it is believed that the analysis of

the tour companies provided a true picture of the industry (population).

3.4 Sample Design

The study employed random sampling. In random sampling, each unit of analysis (tour

firms) has an equal probability of being chosen. This sampling technique is believed to be

representative and is believed that the identified tour firms equally had the information

that is required. The study therefore sought responses from the Kenya Association of

Tour Operators (KATO) and tour companies in Kenya. The association and tour

companies sampled were representative of the whole sector.

According to Cochran (1963), a sample size is determined by the level of precision, the

confidence level, and the degree of variability. For finite populations, the sample size was

calculated using the following formula:

𝑛0
𝑛= (𝑛0 − 1)
1 𝑁

Where n is the sample size and N is the population size, and n0 was determined using the

formula:

2
 𝑛0
𝑁
= 1 + 𝑁(𝑒)2

Where N is the population size and e is the level of precision. The study used a precision

level of 5% and therefore from the above formula, the calculated sample size is 132 tour

firms.

3.5 Data Collection

The purpose of data collection was to obtain information on the response strategies of

tour firms in Kenya to government regulations. The study was mainly quantitative in

nature as written responses shall be received from the respondents. The study used both

primary and secondary data. For primary data, the data collection instrument was the

questionnaire. The questionnaire was structured so as to provide conformity in the

answers given by the respondents. Reliability and validity tests were done before

administering the questionnaire through pilot tests. These questionnaires were sent to tour

operation firms via email so as to minimize on costs and reach a wider population when

collecting the data.

Secondary data was from newspapers, journals, and internet where responses by any of

the tourism stakeholders were captured. Secondary data will be useful in providing the

general information about the industry and also about the specific tour firms. They are

therefore considered useful in the collection of relevant data. A pilot test with 5

questionnaires was carried out before administering the final questionnaire to identify and

correct any problems that the respondents encountered in understanding the survey

questions. Also, guidance on the data collection instrument was sought from the

supervisor.

2
3.6 Data Analysis
Data analysis is the process of inspecting, cleaning, transforming and modeling data with

the goal of highlighting useful information, suggesting conclusions and supporting

decision making. The output of data analysis enabled the study to infer the sample

characteristics to the population. The study employed descriptive data analysis which was

used to determine the level of impact of the government regulation challenges provided.

Responses from the questionnaire were coded and rated to determine the impact of the

challenges.

The responses from the data collection instrument also enabled the study establish the

strategies used by the tour firms to cope with the aforementioned challenges. The

findings of the study were presented using both descriptive and inferential methods. The

data was presented using tables for ease of understanding.

2
 CHAPTER FOUR

DATA ANALYSIS, RESULTS AND DISCUSSION

4.1 Introduction
The objective of the study was to identify response strategies of tour firms in Kenya to

government regulations in the tourism industry. This chapter contains the summary

statistics from the tour firm responses in 4.2, while the descriptive analysis will be done

in section 4.3. The study findings discussions were contained in section 4.4 and section

4.5 summarized the data analysis findings, results and discussions.

4.2 Background Information

The study target population was 397 tour firms, with a sample size of 132 respondents

using the Cochran (1963) formula. Of this target, 94 respondents participated by filling

and returning the questionnaire. This yielded a response rate of 71.2%. The other 28.8%

of the target population may not have responded to the questionnaire as a result of lack of

adequate time to respond to the questionnaire.

4.2.1 Descriptive Data

A profile of the respondents was analyzed so that meaningful information can be used to

describe the data.

Table 4.1 Employee Statistics

N Minimum Maximum Mean Std. Deviation
No. of Employees 94 5 35 17.7 8.242
Valid N (listwise) 94 8

Table 4.1 shows the number of employees at the tour firms in Kenya. The respondent

statistics show that the number of employees employed at the tour companies in Kenya

2
range from a minimum of 5 employees to a maximum of 35 employees, with a mean of

17 employees and a standard deviation of 8 employees.

Table 4.2: Tour Policies Affecting Strategy?

Frequency Percent

Valid No 3 3.2
Yes 91 96.8
Total 94 100.0

Table 4.2 shows the frequency of whether government policy affects strategy making by

the tour firms. From the response in the study, 97% (n=91) of the respondents stated that

the government tour policies affect their strategy formulation.

Table 4.3: Strategy Frequency

Frequency Percent
Valid Monthly 11 11.7
Never 2 2.1
Once a year 13 13.8
Quarterly 60 63.8
Rarely 8 8.5
Total 94 100.0

Table 4.3 shows the strategy making frequency by tour firms in Kenya. The results

showed that 63.8% of tour firms (n=60) make their strategies quarterly, 13.8% (n=13)

make their strategies once a year while 11.7% (n=11) perform their strategy making

monthly.

4.3 Challenges facing tour firms as a result of government regulations

The descriptive data formulated was provided from the tour firm responses to describe

the challenges they face as a result of government regulations through means and

standard deviations.

2
Table 4.4: Challenges from government regulation
Std.
Government regulation challenges affecting tour firms Mean Deviation
Licensing Challenges
There are a lot of requirements in place to obtain a tour license. 3.90 .465
The costs for obtaining a tour license are high. 3.89 .401
The human resource requirements for tour operations are a challenge for 3.84 .493
obtaining a license.
There are delays in receiving of licenses for tour operations. 1.57 .836

Grand Mean 3.30

Tourist Vehicle Regulations
The number of tour vehicle inspections is many and affects the operations 4.53 .683
of tour operations.
The tour vehicle regulations affect the number of passengers carried per 4.40 .661
vehicle.
The tour operation vehicles are expensive to obtain and maintain. 4.02 .439
The tour vehicles are restricted from accessing certain areas depending on 1.57 .874
the type of vehicle.
Grand Mean 3.63
Boating Activities Regulations
Boating activities regulations the obtaining of boatin 3.47 .958
affects infrastructure as it g
makes it expensive.
The fisheries report is a challenge in obtaining a boating activity license. 1.34 .578
The maritime regulations affect the access to certain water areas and 1.31 .605
activities for tourists.
Acquisition of a coxswain certificate is a challenge for tour operators in 1.18 .548
the country.
Grand Mean 1.83
Environmental Regulations
The environmental policies instituted by the government affect the 1.66 .770
movement of tour operators to certain places.
Environmental policies in the country prevent the performance of certain 1.57 .823
activities by tourists.
Environmental policies instituted by the government hinder the quality of 1.53 .799
sight-seeing by tourists.
The environmental policies affect the procurement of certain equipment or 1.32 .626
materials used in the tour business.
Grand Mean 1.52
Overall Grand Mean 2.57

2
The first objective of the study was to determine the challenges faced by the tour firms as

a result of government regulations. The means as indicated in Table 4.4 were calculated

from the coded responses, with a value of 1 having represented not at all and 5 having

represented very great extent. From the table, it can be seen that overall the government

regulations challenge the tour firms to a moderate extent with a mean of 2.57. However,

the study results were categorized according to the government challenges i.e licensing

challenges, tourist vehicle regulation challenges, boating activity regulation challenges,

and environmental regulation challenges. In each of these categories, tourist vehicle

regulation had the highest mean of 3.63 implying that it was a challenge to tour operators

to a great extent. This category was followed by licensing regulation which had a mean of

3.30, which implied it is a challenge to tour operators to a great extent. Boating activities

regulations had a response mean of 1.83 implying that it was a challenge to tour operators

to a little extent. Finally, environment regulations were the least of a challenge to tour

operators with a mean of 1.52.

The categories indicated had four questions each which the respondents indicated the

level at which they agreed, from 1 being not at all to a maximum of 5 being to a very

great extent. Each question indicated the level the respondent agreed with the statement.

Under the tourist vehicle regulations which had a mean of 3.63, the number of tour

inspections was the statement that majority of respondents stated as a challenge with a

mean of 4.53, followed by tour vehicle regulations affecting the number of passengers

carried per vehicle with a mean of 4.40. The cost of tour operation vehicle was the next

challenge with a mean of 4.02 also indicating that it affected tour operators to a great

2
extent. Tour operators being restricted access to certain areas was the least of a challenge

in that category with a mean of 1.57, indicating that it was a challenge to a little extent.

The licensing challenges category also had four questions with the responses being

averaged with the number of requirements in place to obtain a tour license being the

biggest challenge with an average of 3.90 implying that it was a challenge to a great

extent. This was followed by costs for obtaining tour license being high with a mean of

3.89, implying that it was a challenge to tour operators to a great extent. Human resource

requirements for tour operators had a mean of 3.84, implying that it was a challenge to a

great extent. Finally, delays in receiving of tour operation licenses was the least of a

challenge in the category with a mean of 1.57, implying that it was a challenge to a little

extent.

Boating activity regulation which had an aggregated mean of 1.83 also had for questions

which were responded to. The cost of obtaining boating infrastructure being high was the

biggest challenge to tour operators with a mean of 3.47, implying that it was a challenge

to tour operators to a great extent. The fisheries report was the next challenge with a

mean of 1.34, implying that it was a challenge to tour operators to a little extent, followed

by marine regulation accessing certain water areas as a challenge with a mean of 1.31,

implying that it also had little impact to tour operators. The acquisition of a coxswain

certificate was the least of a challenge to tour operators with a mean of 1.18, implying

that it was a challenge to a little extent.

Finally, the environmental regulations which had an aggregate mean of 1.52 contained

four questions which included environmental policies affecting the movement of tour

2
operators to certain places with a mean of 1.66, environmental policies preventing the

performance of certain activities with a mean of 1.57, followed by environmental policies

hindering the quality of sight-seeing with a mean of 1.53 and finally environmental

policies affecting the procurement of certain equipment used in the tour business. All

these showed that environmental regulations were a challenge to tour operators to a little

extent.

4.4 Response strategies by Tour Firms in Kenya

The objective of the study was to analyze the strategic responses by the tour firms to the

government regulations. Data was collected from the tour firms in order to identify

response strategies to government regulations. There were 94 responses and from the

response the rotated factor matrix and descriptive response strategies were tabulated.

4.4.1 Descriptive data on response strategies

The respondents were asked on how they dealt with the challenges they experienced as a

result of government regulation. There were a total of eight questions which were meant

to capture the required information. From the questions, 94 tour firms responded and then

analyzed to give us the mean rankings and standard deviations. These showed the degree

with which the respondents agreed or disagreed with the response strategies as a result

challenges brought by government regulations.

Table 4.5: Response strategies to government regulations

Std.
Response strategies to government regulations by tour firms Mean Deviation

2
The tour vehicles are always maintained in good working conditions to 4.54 .63
operate effectively. 4
Our tour firm applies for operating license in good time to avoid delays. 4.41
.67
9
Our tour firms ensure that the human resource is adequately qualified and 4.35 .714
trained to perform its duties.
There are adequate vehicles for our tour firms and backup vehicles in case 3.98 .387
of break down.
Our tour firm has alternative tour sites in case of restriction to a certain 3.77 .73
tourism site. 9
Our tour firm has alternative activities for the tourists and the itinerary is 3.70
always flexible. .70
1
Our tour firm is averse to and adheres to the Kenya and International 3.60
maritime standards in relation to water jurisdiction and activities.
.76
6
The tour boats are well maintained to ensure sea worthiness. 3.57 .849
Mean 3.99

The means were calculated from the coded responses, with a value of 1 having

represented not at all and 5 having represented very great extent. From table 7 above, it

was noted that tour vehicle maintenance as a big strategy to overcome government

regulations with a mean of 4.54, followed by applying for tour operation license in good

time with a mean of 4.41. On the other end, maintenance of tour boats was stated as the

least strategy used by tour operators with a mean of 3.57.

4.5 Discussion
The study has shown that for every challenge, there are response strategies to deal with

the challenges and so it is important to formulate the strategies for competitive advantage.

Gabrielsson et al. (2008) stated that a good response strategy has to have at least four

components i.e scope which defines companies and business, competence which is an

indication of the level and patterns of the company‟s competition, competitive advantage

2
which ensures the unique position a company develops vis-à-vis its competitors, and

3
synergy which is the joint effects that are sought from the company‟s resources

deployment and the company scope decisions. This study has shown that these four

components are present in the tour firms whereby the tour firms are defined by the

industry which they are operating, their response to presence of past strategy making

decisions, individual strategies which is shown by the difference in response to

government regulations and using their resources to achieve these strategies.

Mintzberg (1987) pointed to five types of strategies: strategy as plan, strategy as ploy,

strategy as pattern, strategy as position, and strategy as perspective. The tour firms in this

case have practiced strategy as position where strategy is determined by factors outside

the firm in order for them to be sustainable in the industry.

The study is also consistent with Meresha‟s (2012) study on the response strategies of

dealing with competition by Heritage Hotels. The study indicated that the hotel

responded to competition challenges through competitive pricing, aggressive marketing

in trade fairs, online and print media, product and service innovation, and differentiation.

For every business challenge as a result of external factors, strategies have to be

formulated to attain competitive advantage.

From the descriptive analysis, the means and standard deviation of the respondents were

measured. It was observed that Tourist Vehicle Regulation challenges had the biggest

impact with a mean of 3.63 implying that it was a challenge to a great extent, with

licensing regulation challenges having a mean of 3.30, also implying they impacted to a

great extent. Boating activities regulations and environmental regulations had the least

3
impact as a challenge with means of 1.83 and 1.52 respectively. This implied that they

contributed to challenges to a little extent.

With respect to strategic responses on the government challenges, it was seen that tour

vehicle maintenance as the strategy used by tour operators with a mean of 4.54. This may

be due to the fact that many tour companies deal with tour safaris and ground travel.

Many of the tourists who visit the country come to see the wildlife hence the safaris and

so the tour vehicles have to be in good condition to take tourists to the preferred

destinations. This was followed by application of operating license in good time with a

mean of 4.41. This is deemed a necessity by tour operators to enable smooth operation.

Boat maintenance is the least strategy used with a mean of 3.57 indicating that not many

tour operators deal with marine tourism.

3
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction
This final chapter contains the summary and conclusion of the study with regards to the

response strategies of tour firms in Kenya to government regulations in the tourism

industry. The chapter looked at the summary of the study and presented the conclusion of

the study based on the results of the analysis. The limitations of the study and the study

recommendations were finally presented.

5.2 Summary
Tour firms in the country have been facing several challenges that affect their operations,

and they have been coming up with strategies to overcome them. In the last few years

tourism in the country has been hit following terrorism acts and travel advisories by

foreign countries. However for sustainable tourism and competitiveness by the country in

the global tourism, various legislations and regulations have been implemented by the

government through the tourism ministry and other stakeholders. Little research had been

done in respect to tour operation challenges in the country and so a gap was identified,

objectives of the study created and research questions formulated from these objectives.

In the study, primary data was collected through the questionnaire and designed in a way

to answer the research questions and sent to the tour companies. The study had identified

a population of 397 from the KATO website and a sample size of 132 tour companies

randomly selected. There were 94 respondents giving a response rate of 71.2% and both

descriptive and inferential statistics analysis done. From the factor analysis done, it was

noted that tourist vehicle regulation challenges impacted the tour firms the most,

3
followed by licensing regulations, then boating activities regulations and environmental

regulation challenges being of least impact. For the strategic responses, it was noted that

tour vehicle maintenance as the strategy mostly used by tour operators to respond to

government strategies followed by applying for operating license in good time to avoid

delays, while the least used strategy by tour operators was tour boats maintenance.

The new factors identified as government regulation challenges were environmental

challenges, boating report and coxswain certificate challenges, licensing requirements

and human resource challenges, vehicle inspection and passenger number challenges, and

vehicle acquisition, management and site access restrictions challenges.

5.3 Conclusion
Tourism is an important sector for the economy and its sustainability is important for the

Kenyan economy. Some of the government tourism legislation and regulation were in

line with the attainment of Vision 2030 and therefore proper mechanisms and structures

are needed to ensure Kenya becomes a favorite destination for tourists. The government

through the tourism ministry and other stakeholders has come up with guidelines,

regulations and strategies to improve the tourism sector. This study has been able to look

at the challenges that tour guides as stakeholders face as a result of the guidelines and

regulations.

The first objective of the study was to determine the challenges of tour firms as a result of

government regulations in the tourism industry. The literature identified the government

regulations to be licensing regulations, tourist vehicle regulations, boating activities

regulations, and environmental regulations. From the analysis done, it can be concluded

that tourist vehicle regulation was the biggest challenge to tour operators with a mean of

3
3.63, implying that this regulation was a challenge to a great extent. Licensing regulations

were also a challenge with a mean of 3.3 implying that it was a challenge to a great

extent. Boating activities regulations and environmental regulations were shown not to be

challenges to tour operators with a mean of 1.83 and 1.52 respectively implying they

were challenges to a little extent.

The second objective of the study was the response strategies of tour firms in Kenya to

government regulations in the tourism industry. From the responses, it can be concluded

that tour vehicle maintenance is the most used strategy at a very great extent as a result of

tourist vehicle challenge with a mean of 4.54. This is followed by tour operators applying

for operating licenses in good time and ensuring that the human resource is adequately

qualified and trained with means of 4.41 and 4.35 respectively, implying that they are

used strategies to a very great extent.

5.4 Recommendations of the Study

The study was able to identify the research gap and fill the gap. From the study,

challenges were identified and the strategies to deal with them were identified. The tour

operators are very important stakeholders who would take the tourism sector to the next

level once their challenges are addressed. The study therefore provided managerial

recommendations for both the policy and practice. These will help for better management

of the sector in order to achieve its goals.

5.4.1 Managerial Policy Recommendation

The government should put in place tourism policies and regulations that will assist better

management by tour firms and other stakeholders. Certain regulations such as the tourist

vehicle regulation are a big challenge to tour firms and the government should look for

3
ways to assist in addressing the challenges. Also, using the stakeholders‟ theory the

government should come up with policies to level the competition field for tour operators

and attract more tourists. The intergovernmental bodies dealing with tourism, security

and infrastructure should work together to fully utilize the resources available to harness

maximum value from the sector.

Also, the Kenya Association of Tour Operators (KATO) as a body should be able to

come up with other policies that will compliment the government policies to achieve the

national tourism objectives. Government objectives are broad and therefore the

association should come up with policies to compliment government policies. The

organizational strategies should be aligned to the association strategies which should be

congruent to the national policies and strategies.

5.4.2 Managerial Practice Recommendation

The government should be able to provide a proper operational environment through

proper infrastructure which would minimize motor vehicle repair costs and enable easy

access to some of the tourist destinations. Access to some of the tourist sites as a result of

poor infrastructure would reduce distribution of money that would be spent in those

areas.

Finally, the government should be able to market the country to attract more tourists and

deal with issues that threaten the arrival of tourists in the country. For any business or

industry to prosper, proper marketing should be done by both the tour operators and the

government.

3
5.5 Limitations of the study
The study provided an opportunity to look at the challenges and strategic responses as a

result of government regulations. In the course of carrying out the study, a few limitations

were experienced. One of the challenges experienced was the response time by tour

companies. Some of the respondents took long to submit back the questionnaire

prompting a reminder to them. Due to the project timelines we had to work with the

available 94 respondents.

Another limitation encountered during the course of the study was the few local studies

done in the tourism sector. This showed little research has been done in the sector and

therefore adequate material for literature review was not sufficient to nourish the study

fully. However, the international studies available were able to assist in coming up with

comparisons.

5.6 Suggestion for Further Research

The study suggests that more research should be done on tourism sector and other factors

that may affect tourism including factors which may have an impact other than those

currently analyzed and may provide further knowledge in the research area. These may

be factors other than government regulations and have an impact on the operation in the

tourism industry.

Other analytic methods such as the impact of these tour challenges may be done in future

studies. Various analytical techniques such as chi-square tests or regression analysis may

be done to determine the level of impact these challenges have on tourism.

3
 REFERENCES

Allcock, A., Jones, B., Lane, S., & Grant, J. (1994). National Ecotourism Strategy.
Canberra: Commonwealth Department of Tourism.

Aosa E. (1992). An Empirical Investigation of Aspects of Strategy Formulation and

Implementation within Large Private Manufacturing Companies in Kenya –
Unpublished PhD Thesis, University of Strathclyde Glasgow Scotland U.K.

Bryman, A. & Bell, E. (2007). Business Research Method. 2nd Edition. Oxford: Oxford
University Press.

Buchholz, R., & Rosenthal, S. (2005). Toward a contemporary conceptual framework for
stakeholder theory. Journal of Business Ethics, 58, 137-148.

Carter, R. W., Baxter, G. S., & Hockings, M. (2001). Resource management in tourism
research: A new direction? Journal of Sustainable Tourism, 9(4), 265-280.

Cooper, C.P. (1995). Strategic Planning for Sustainable Tourism: The Case of the
Offshore Islands of the UK. Journal of Sustainable Tourism, 3(4), 1-19.

Elkington, J. (1994). Towards the sustainable corporation: Win-win business strategies

for sustainable development. California Management Review, Winter: 90-100.

Faulkner, B. & Russell, R. (1997). Chaos and complexity in tourism: In search of a new
perspective. Pacific Tourism Review, 1(2), 3–6.

Freeman, R. (1984). Strategic Management: A Stakeholder Approach. Boston: Pitman.

Gabrielsson, M., Gabrielsson, P., Al-Obaidi, Z. & Salimäki, M. (2008). Firm Response
Strategies under Globalization Impact In High-Tech and Knowledge-Intensive
Fields, 9-32.

Gilbert, D. (1984). The Need for Countries to differentiate their Tourist product and how
to do so. Seminar Papers for Ministers of Tourism and Directors of National
Tourist Organizations: Tourism Managing for Results, University of Surrey,
Guildford.

3
Gilbert, D. (1990) Strategic Marketing Planning for National tourism. Tourist Review 45
(1), 18-27.

Goymen, K. (2000). Tourism and governance in Turkey. Annals of Tourism Research,

27(4), 1025–1048.

Hall, C.M. (1999). Rethinking collaboration and partnership: A public policy perspective.
Journal of Sustainable Tourism, 7(3/4), 274–289.

Hall, C.M. (2000). Tourism planning: Policies, processes and relationships. Harlowe,
England: Prentice-Hall.

Halme, M. (2001). Learning for sustainable development in tourism networks. Business,

Strategy and the Environment, 10, 100–114.

Hax, A. & Majluf, N. (1991). The strategy concept and process: A pragmatic approach.
Englewood Cliffs, NJ: Prentice-Hall International.

Heath, R. (1998). Crisis Management for Managers and Executives. London: Financial
Times Management.

Henderson, J.C. (1999). Managing the Asian Financial Crisis: Tourist Attractions in
Singapore. Journal of Travel Research, 38(2), 177-181.

Hunter, C. (1997). Sustainable Tourism as an adaptive paradigm. Annals of Tourism

Research, 24(4), 850-867.

Jamal, T. B., & Getz, D. (1996). Does strategic planning pay? Lessons for destinations
from corporate planning experience. Progress in Tourism and Hospitality
Research, 2(1), 59–78.

Jamal, T. B., & Getz, D. (2000). Community roundtables for tourism related conflicts:
The dialectics of consensus and process structures. In B. Bramwell, & B. Lane
(Eds.), Tourism collaboration and partnerships: Politics, practice and
sustainability (pp. 159–182). Clevedon, UK: Channel View Publications.

3
Johnson, G. & Scholes, K. (1993). Exploring Corporate Strategy. Oxford: Butterworth-
Heinemann.

Johnson, G., Schole, S., & Whittington, R. (2005). Exploring Corporate Strategy, 7
Edition. Delhi: Pearson Education Ltd.

Kenya Association of Tour Operators (2014). http://www.ktf.co.ke/section.asp?id=19.

Kenya Economic Report (2013). Creating an Enabling Environment for Stimulating

Investment for Competitive and Sustainable Counties. Kenya Institute for Public
Policy Research and Analysis (KIPPRA).

Kenya National Tourism Policy (2006). Ministry of Tourism and Wildlife, Final Draft.

Kothari, C.R. (1990). Research methodology: Methods and techniques. New Delhi:
Vishwaprashan.

Meresha, O.A. (2012). Response Strategies by Heritage Hotels Limited to Increased

Competition in the Tourism Industry in Kenya. Unpublished, University of
Nairobi.

Ministry of Tourism (2014). (http://www.tourism.go.ke/ministry.nsf/pages/facts_figures)

Mintzberg, H. (1987). Crafting Strategy. Harvard Business Review, July/August 1987.

Mugenda, O., & Mugenda, A. (2003). Research Methods: Qualitative and Quantitative
Approaches. Nairobi: Africa Centre for Technology Studies (ACTS) Press.

Murphy, P. (1985). Tourism: A community approach. New York: Methuen.

Pfeffer, J. (1987). A resource dependence perspective on interorganizational relations. In

M. S. Mizruchi, & M. Schwartz (Eds.), Intercorporate relations: The structural
analysis of business: 22-55. Cambridge, UK: Cambridge University Press

Poon, A. (1989) Competitive strategies for new tourism. In C. Cooper (ed.) Progress in
Tourism Recreation and Hospitality Management, 1, 91-102.

4
Poon, A. (1993). Tourism, Technology and Competitive Strategies. Oxford: CAB
International .

Porter, M. (1980) Competitive Strategy: Techniques for Analysing Industries and

Competitors. New York: Free Press.

Reed, M. (1997). Power relations and community based tourism planning. Annals of
Tourism Research, 24(3), 566–591.

Reed, M. (2000). Collaborative tourism planning as adaptive experiments in emergent

tourism settings. In B. Bramwell, & B. Lane (Eds.), Tourism collaboration and
partnerships (pp. 247–271). Clevedon: Channel View Publications.

Richardson, B. & Richardson, R. (1992). Business Planning: An approach to Strategic

Management (2nd Ed.). London: Pitman.

Sautter, E. & Leisen, B. (1999). Managing Stakeholders: A Tourism planning model.

Annals of Tourism Research, 26(2), 312-328.

Soteriou, E., & Roberts, C. (1998). The Strategic Planning Process in National Tourism
Organisations. Journal of Travel Research, 37, 21–29.

Stokes, R. (2007). Tourism Strategy Making: Insights to the Events Tourism Domain.
Tourism Management, 29, 252-262.

Truly-Sautter, E., & Leisen, B. (1999). Managing Stakeholders: A Tourism Planning

Model. Annals of Tourism Research, 26(2), 312–328.

Ulrich, D., & Barney, J. B. (1984). Perspectives in organizations: Resource dependence,

efficiency, and population. Academy of Management Review, 9, 471-481

Viljoen, J. (1994). Strategic Management: Planning and Implementing successful

Corporate Strategies (2nd Ed.). Melbourne: Longman.

Yunis, E. (2003). Sustainable tourism: World trends and challenges ahead, Nature-based
tourism, environment and land management.

4
 APPENDICES

APPENDIX I: INTRODUCTION LETTER

To whom it may concern.

RE: SURVEY OF MY RESEARCH PROJECT

My name is Evelyn Kaose from the University of Nairobi. I am carrying out a research
study on the response strategies of tour firms in Kenya to government regulations. The
research is purely for academic purposes and I am glad to inform you that your input will
form part of the research study. I would request your assistance in filling the
questionnaire and any information given will be treated with utmost confidentiality

Thank you.
Evelyn Kaose,
Student, University of Nairobi.

4
 APPENDIX II: QUESTIONNAIRE
PART A: DEMOGRAPHIC AND COMPANY INFORMATION

Respondent‟s Name (optional) Date of interview

Name of tour firm

Year of establishment
No. of employees
What are the tourism activities
that your firm is engaged in?

How often do you strategize for Monthly

your company’s operations? Quarterly
At least once a year
Rarely
Never

Do government tourism policies Yes

affect your strategy formulation No
and implementation?

PART B: CHALLENGES FROM REGULATIONS

To what extent does your firm encounter each of the following challenges from
government regulations with 1=not at all, 2=little extent, 3=moderate extent, 4=great
extent, and 5=very great extent.

1 2 3 4 5
a) Licensing Regulations
There are delays in receiving of licenses for tour
operations.
The costs for obtaining a tour license are high.

There are a lot of requirements in place to obtain a

tour license.
The human resource requirements for tour
operations are a challenge for obtaining a license.

4
 b) Tourist Vehicle Regulations
The tour operation vehicles are expensive to obtain
and maintain.
The tour vehicle regulations affect the number of
passengers carried per vehicle.
The number of tour vehicle inspections are many
and affects the operations of tour operations.
The tour vehicles are restricted from accessing
certain areas depending on the type of vehicle.
c) Boating Activities Regulations
Boating activities regulations affects the obtaining of
boating infrastructure as it makes it expensive.
The maritime regulations affect the access to certain
water areas and activities for tourists.
The fisheries report is a challenge in obtaining a
boating activity license.
Acquisition of a coxswain certificate is a challenge
for tour operators in the country.
d) Environmental Regulations
The environmental policies instituted by the Kenyan
government affect the movement of tour operators to
certain places.
Environmental policies instituted by the government
hinder the quality of sight-seeing by tourists.
Environmental policies in the country prevent the
performance of certain activities by tourists.
The environmental policies affect the procurement
of certain equipment or materials used in the tour
business.

PART C: MEASURES FOR COPING WITH REGULATION CHALLENGES

To what extent do you apply the following strategies to cope with government challenges
with 1=not at all, 2=little extent, 3=moderate extent, 4=great extent, and 5=very
great extent.

Strategic responses to government tour regulations 1 2 3 4 5

Our tour firm applies for operating license in good
time to avoid delays.
Our tour firms ensure that the human resource is
adequately qualified and trained to perform its duties.
The tour vehicles are always maintained in good

4
working conditions to operate effectively.
There are adequate vehicles for our tour firms and
backup vehicles in case of break down.
Our tour firm is averse to and adheres to the Kenya
and International maritime standards in relation to
water jurisdiction and activities.
The tour boats are well maintained to ensure sea
worthiness.
Our tour firm has alternative tour sites in case of
restriction to a certain tourism site.
Our tour firm has alternative activities for the tourists
and the itinerary is always flexible.