Effectiveness of Compensation Recovery Strategies in Enhancing Customer Experience in Star-Rated Hotels in Mombasa County, Kenya

Since today’s customers not only purchase goods and services for their utilitarian but also hedonistic benefits, service recovery has become an integral part of any hotel that wishes to remain competitive. In a bid to remain competitive, most hotels have developed service systems. However, none of the systems in place are perfect. Though compensation has been proposed as a means of securing competitive advantage, scant evidence exist suggesting that the same can be used as recovery strategies to enhance customer experience. While using star rated hotels in Mombasa, Kenya, this study sought to adduce the effectiveness of compensation recovery strategies in enhancing customer experience using descriptive research design. Staff from10 front-line sections within the 17 rated hotels in Mombasa County formed the sampling frame. Data were collected by the use of an on-line questionnaire due to COVID-19 pandemic that prevailed during the study period. A pre-test of the questionnaire was done on one of the hotels, and the results were subjected to the Cronbach formula producing a reliability index of 0.989. Data were analysed by the use of inferential and descriptive statistics and the findings presented in tables, bar graphs and pie charts.  From the findings, descriptive analysis on customer experience indicated that front line managers agreed and strongly agreed that when customers are pleased with their recovery effort, they receive referrals from them, they spend more money in the establishment, they show eagerness to return on, they become more loyal, they share with others about the good services, and they trust that any offer given to them in the future will go right. Descriptive analysis on the dimensions of the three strategies (compensation, staff actions, and communication strategies) produced high means and low standard deviations, indicating that front-line managers often and always applied the three recovery strategies whenever a failure occurred. The regression analysis of the three hypotheses indicated that the three strategies have a statistically significant influence on the customer experience if used effectively. Other than advancing scholarly work in the field of service recovery, the findings inform Kenya’s Ministry of Tourism and hotel stakeholders as a whole by guiding in policy review and formulation so as to help in minimizing service failures.