Effect of Market Orientation on Hotel Performance: Does Absorptive Capacity Matter? Evidence from Budget Hotels in Emerging Economies

Abstract

This study examines the moderating role of absorptive capacity in the relationship between market orientation and performance of budget hotels in developing countries. Data gathered from 231 managers and owners was analyzed using SPSS and the Smart PLS (Partial Least Square). The result showed that market orientation and absorptive capacity have a direct significant effect on the performance of budget hotels in Ghana. The result of the study further revealed that absorptive capacity moderates the relationship between MO and budget hotel performance. The findings imply that hotels that can absorb insight generated from the market have the potency of enhancing their performance. The findings provide the contemporary perspective of how to budget hotels could reap superior performance in developing economies. While this new insight is an additional knowledge that will be beneficial to stakeholders in the hospitality industry, it also advances scholarly discourse in the Sub Sahara African setting.