Financial Risks Control and Profitability of Licensed Tourism Enterprises in Nakuru City County, Kenya

This study thus endeavored to examine influence of financial risks (operational, cash flow, credit, and marketing risks) on profitability of licensed tourism enterprises in Nakuru County, Kenya. The study is informed by the resource-based theory, contingency theory, agency theory. The research used descriptive survey design and targets 80 finance managers of the tourist enterprises. Primary data was collected by structured questionnaires. Pilot test was carried on 8 finance managers of tourist hotels in Narok County. Pretesting of research instrument was used to confirm that questions are well written, meaningful plus having adequate content so as to ensure content and construct validity, while cronbach's alpha coefficient was computed to determine instrument reliability. All collected data was coded, cleaned, tabulated and analyzed using descriptive and inferential statistics computed by Statistical Package for Social Sciences, version 26. The results revealed that when other variables in the study model are controlled, a unit change in operational risks control would results 0.320 change in profitability in the same direction. Similarly, a unit change in cash flow risks control would result to a change in profitability by 0.270 in the same direction, a unit change in size of the bank would results 0.303 change in profitability in the same direction and a unit change in market risk control would result to a change in profitability by 0.280 in the same direction. The study concluded that financial risks significantly influenced profitability of licensed tourism enterprises in Nakuru City County, Kenya. The study recommended that tourism enterprises prioritize the enhancement of their operational risk management frameworks. The study recommended that tourism enterprises should focus on optimizing their cash management practices to enhance their cashflow. The study recommended that tourism enterprises should prioritize the development and implementation of robust credit risk policies and procedures. The study recommended that tourism enterprises should conduct comprehensive assessments of marketing risks to identify potential threats and opportunities. Key Words: Financial Risks, Organizational Profitability, Tourism Enterprises CITATION: Mose, J. O., Miroga, J., & Otinga, H. (2024). Financial risks control and profitability of licensed tourism enterprises in Nakuru City County, Kenya. The Strategic Journal of Business & Change Management , 11 (2), 848 – 866. http://dx.doi.org/10.61426/sjbcm.v11i2.2954