Strategic Management and Government Support as Determinants of Hotel Performance: A PLS-SEM Analysis of the Saudi Hospitality Sector

Abstract

Tourism is among the major sources of foreign exchange as well as economic development of countries. Saudi Arabia is an emerging tourist destination that the government is encouraging through Vision 2030. However, the hotel industry performance is still less than that of regional countries. The research hypothesis is the following: strategic management practices (SMP), which include strategic planning, formulation, implementation, and evaluation, affect the strategic performance of five-star hotels in Saudi Arabia, with the moderating variable being government support. The Saudi hotel managers collected the survey findings, and the quantitative approach informed the study in which the resource-based view (RBV) and the contingency theory (CT) were applied. A sample of five-star hotels was taken in order to obtain 116 responses. The findings revealed that all the SMP dimensions enhance the performance of a hotel, thereby demonstrating that the dimensions are as critical as organizational competencies. The governmental support also pushes the relationship between SMP and performance, especially through the improvement of strategic establishment and review. This means that the new economies should incorporate internal strategic capabilities with institutional advocacy. The study uses RBV and CT in the hospitality industry and offers a feasible recommendation that can be applied by the leaders and administrators of various hotels to embark on the Saudi Arabia Vision 2030.