Innovation Strategies and Performance of the Domestic Tourism Industry in the Western Circuit Region, Kenya

Kenya's Western Circuit, despite its cultural, ecological and lake-based attractions, attracts a small share of domestic tourists, and its tourism enterprises face limited innovation capabilities, inadequate technology adoption and weak market differentiation. This study therefore examined the influence of innovation strategies on the performance of the domestic tourism industry in the Western Circuit, Kenya. Specifically, it assessed the influence of product innovation, process innovation, marketing innovation and technological innovation on domestic tourism performance. The study was anchored on the Dynamic Capabilities Theory and supported by the Diffusion of Innovation Theory, the Resource-Based View and the Technology Acceptance Model. A descriptive research design was adopted. The target population comprised 214 tourism enterprises in the Western Circuit, from which a sample of 91 enterprises was drawn using stratified random sampling across hotels, lodges, tour operators, travel agencies, cultural tourism facilities and attraction management organizations. Data were collected from managers, owners and operational personnel using a structured questionnaire, and 84 questionnaires were returned, a response rate of 92.3%. Data were analysed using descriptive statistics, Pearson correlation and multiple linear regression. The four innovation strategies jointly explained 56.2% of the variation in domestic tourism performance (R² = 0.562; F = 25.329; p < 0.001). Product innovation had the strongest influence (β = 0.460, p < 0.001), followed by process innovation (β = 0.411, p < 0.001), technological innovation (β = 0.277, p = 0.003) and marketing innovation (β = 0.159, p = 0.021); all four null hypotheses were rejected. Enterprises performed relatively well in adding service features, integrating systems and building brand recognition, but were weaker in converting cost savings into affordability, generating engagement through digital campaigns and providing mobile access, while respondents were least convinced that innovation had raised revenue and customer satisfaction. The study recommends continuous market-driven product development, process automation linked to competitive pricing, interactive and targeted digital marketing, and customer-facing mobile technologies, supported by county and national investment in Western Circuit destination branding and infrastructure.