Effect of Supplier Relationship Management Practices on Operational Performance of Star-Rated Hotels in the Accra Metropolis

Abstract

Management of interactions with suppliers of focal firms has become critical towards cost cuts, increased quality, delivery and ultimately the competitive position of organisations. With the increasing levels of outsourcing by hotels towards better service outcomes, performance and competitiveness; supplier relationship management (SRM) enhances the timely access of supplies, cost cuts in transactions as well as decreases the risk of opportunism. Notwithstanding, empirical works in the hotel sector remain scanty. The Ghana hotel industry faces underdevelopment and incapability to meet client needs, high utility tariffs, competition among others. Against this background, the main purpose of this study was to examine the effect of SRM practices on hotel operational performance. Therefore, the study examined the extent of SRM practices adoption in star-rated hotels, the effect of information sharing on HOP and the effect of supplier development on HOP. The study employed descriptive and explanatory research designs using structured questionnaire to gather data from hoteliers and other top managers in a census of 164 star-rated hotels in the Accra Metropolis. 100 usable questionnaires were used for the analysis via PLS-SEM. Findings revealed the extent of SRM practices adoption in star-rated hotels. Also, there was a significant positive effect of SRM on operational performance of star-rated hotels in Accra Metropolis. SRM is thus key towards improving performance. Also, there was significant positive effect of supplier development on Hotel Operational Performance but the effect of information sharing was not statistically significant. It is recommended that star-rated hotels must focus on SDAs such as increase volume of outsourced work, effective communication and feedback systems among others.