ROLE OF ICT ON THE PERFORMANCE OF SMES IN TANZANIA

A CASE OF HOTELS IN DAR ES SALAAM

BY

KEMILEMBE BAIS

A Dissertation Submitted in Partial Fulfillment of the Requirement for the Degree

of Master of Business Administration in Corporate Management

(MBA-CM) of Mzumbe University

2017
 CERTIFICATION

We, the undersigned, certify that we have read and hereby recommend for acceptance by
the Mzumbe University, a Dissertation entitled, Role of ICT on the Performance of
SMEs; A case of Hotels in Dar es Salaam in partial fulfillment of the requirements for
award of the Degree of Master of Business Administration in Corporate Management of
Mzumbe University.

________________________
Major supervisor

________________________

Internal Examiner

Accepted for Mzumbe University, Dar es Salaam Campus College

___________________________________________
CHAIRPERSON, CAMPUS COLLEGE BOARD

i
 DECLARATION

AND

COPYRIGHT
I, Kemilembe Bais, declare that this dissertation is my own original work and that it has
not been presented and will not be presented to any other university for a similar or any
other degree award.

Signature: ______________

Date: ________________

This dissertation is a copyright material protected under the Berne Convention, the
Copyright Act 1999 and other international and national enactments, in that behalf, on
intellectual property. It may not be reproduced by any means in full or in part, except
for short extracts in fair dealings, for research or private study, critical scholarly review
or discourse with an acknowledgement, without the written permission of Mzumbe
University, on behalf of the author.

ii
 AKNOWLEDGEMENT

The successful completion of this dissertation is the result of the support I got from
many people, and I would like to express my gratitude to all of them.

Special thanks to Almighty for his guidance and granting me the strength to conduct this
report. Thanks to my parents and sisters for their endless love, financial and non-
financial support. I sincerely wish to acknowledge my supervisor Professor A.
Mbwambo for his advice, encouragement, academic support and constructive
suggestions and comments that led to successful completion of this dissertation.
Furthermore, I would like to extend my appreciation to my beloved friend Augustine
Kasale for his supportiveness. May God bless you abundantly!

My heartfelt recognition goes to all Hotels used as a sample during my work. Lastly, to
everyone who contributed in any way to the completion of this report.

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 DEDICATION

This dissertation is dedicated to my parents, Mr. and Mrs. Bais and my sisters Felister
and Janet.

iv
 LIST OF ABBREVIATIONS

ANOVA Analysis of Variance

B2B Business to Business

CEO Chief Executive Officer

CMI Computer Managed Instruction

CML Computer Managed Learning

ECBIP Electronic Commerce Business Impact Project

EFT Electronic Fund Transfer

GDP Gross Domestic Product

ICI Information and Communication Infrastructure

ICT Information and Communication Technology

IS Information System

IT Information Technology

ITU International Telecomm Union

MSME Micro Small and Medium Enterprise

NGO Non-Governmental Organization

PC Personal Computer

PEU Perceived Ease of Use

PMS Property Management System

PU Perceived Use

SCBR Statistics Canada’s Business Register

SME Small and Medium Enterprise

SPSS Statistical Package for Social Science

v
STATA Statistics and Data

TCRA Tanzania Communication Regulatory Authority

TRA Theory of Reasoned Action

TTCL Tanzania Telecommunication Company Limited

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 ABSTRACT

The study intended to find out the extent to which Hotels in Dar es Salaam utilize ICT
for better performance. The objectives of the study were; to identify the key
characteristics of Hotels in Dar es Salaam: To examine factors which influence
performance of Hotels in Dar es Salaam: and to examine the extent to which the use of
ICT in Hotels has promoted performance. A sample of 100 Hotels was selected through
purposive sampling technique. Primary data were collected through the use of structured
questionnaire as a tool for data collection and secondary data were collected through
books and reports. The study used quantitative data analysis technique such as
descriptive statistics (percentages), SPSS 20 and STATA 12. MS Excel used for
drawings of tables and figures which presented and supported with interpretations. The
test for reliability of the study was 0.78 whereby it is considered Acceptable. The study
used ANOVA test to compare the performance between Hotels which uses ICT and
Hotels which don’t use ICT. Results generally indicated that there is a relationship
between ICT and performance of Hotels, and Hotels which uses ICT perform better in
Sales, Number of employees and Working capital. Logistic regression model was
estimated and found that Computerized reservation process, Computerized management
system and Supplies methods (both approaches) and the Hotel status as the significant
variables in influencing performance of the Hotel.

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 TABLE OF CONTENTS

CERTIFICATION ..............................................................................................................i

DECLARATION AND COPYRIGHT ............................................................................. ii

AKNOWLEDGEMENT .................................................................................................. iii

DEDICATION ..................................................................................................................iv

LIST OF ABBREVIATIONS ............................................................................................ v

ABSTRACT .................................................................................................................... vii

LIST OF TABLES ......................................................................................................... xiii

LIST OF FIGURES ........................................................................................................xiv

CHAPTER ONE ................................................................................................................ 1

BACKGROUND INFORMATION .................................................................................. 1

1.1 Introduction .................................................................................................................. 1

1.2 Background to the Problem.......................................................................................... 1

1.3 Statement of the problem ............................................................................................. 3

1.4 General objective ......................................................................................................... 4

1.4.1 Specific objectives .................................................................................................... 4

1.5 Specific questions......................................................................................................... 4

1.6 Scope of the study ........................................................................................................ 5

1.7 Significance of the study .............................................................................................. 5

1.8 Organization of the Dissertation .................................................................................. 5

CHAPTER TWO ............................................................................................................... 6

LITERATURE REVIEW................................................................................................... 6

2.1 Introduction .................................................................................................................. 6

viii
2.2 Theoretical literature review ........................................................................................ 6

2.2.1 Definition of key terms ............................................................................................. 6

2.3 ICT adoption and SMEs performance.......................................................................... 7

2.4 Computer usage in Tanzania SMEs ............................................................................. 9

2.4.1 Influencing factors (internal)..................................................................................... 9

2.4.2 External factors ....................................................................................................... 11

2.5 Importance of ICT on SMEs ...................................................................................... 14

2.6 Solution to low adoption of ICT/barriers to ICT adoption ........................................ 17

2.7 Cost of ICTs and E-business ...................................................................................... 18

2.8 ICT knowledge and skills........................................................................................... 20

2.9 Related problems facing SMEs in Tanzania .............................................................. 21

2.10 Solutions to help SMEs use/ make a greater use of ICT .......................................... 23

2.11 Theoretical perspectives ........................................................................................... 23

2.11.1 Innovation and diffusion theory ............................................................................ 24

2.11.2 Technology Acceptance Model............................................................................. 26

2.12 Empirical literature review ....................................................................................... 27

2.13 Hypothesis ................................................................................................................ 33

CHAPTER THREE.......................................................................................................... 34

RESEARCH METHODOLOGY ..................................................................................... 34

3.1 Introduction ................................................................................................................ 34

3.2 Research design .......................................................................................................... 34

3.3 Area of study .............................................................................................................. 34

3.4 Population .................................................................................................................. 35

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3.5 Sampling and sample size .......................................................................................... 35

3.6 Data Sources and Type............................................................................................... 35

3.7 Data collection instruments ........................................................................................ 35

3.8 Reliability and validity ............................................................................................... 36

3.9 Data processing and analysis Methods ...................................................................... 37

CHAPTER FOUR ............................................................................................................ 38

PRESENTATION AND DISCUSSION OF THE FINDINGS ....................................... 38

4.1 Introduction ................................................................................................................ 38

4.2 General characteristics of Hotels ............................................................................... 38

4.2.1 Location of the Hotel .............................................................................................. 38

4.2.2 Number of Rooms ................................................................................................... 39

4.2.3 Years in business of the Hotel ................................................................................. 40

4.2.4 Main type of Guest .................................................................................................. 40

4.2.5 Occupation of guests ............................................................................................... 41

4.2.6 How Guests book for reservation ............................................................................ 42

4.2.7 Reservation Process ................................................................................................ 43

4.2.8 Receiving Payment.................................................................................................. 44

4.2.9 Business Commitment ............................................................................................ 44

4.2.10 Supplies ................................................................................................................. 45

4.2.11 Management system .............................................................................................. 46

4.2.12 Room Occupancy Rate.......................................................................................... 47

4.2.13 Sales during Peak and off season .......................................................................... 48

4.2.14 Hotel workers ........................................................................................................ 48

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4.2.15: Average amount of Working Capital ................................................................... 49

4.2.16: Hotel expansion.................................................................................................... 50

4.3 The Role of ICT on the Performance of Hotel ........................................................... 51

4.3.1 Reservation process and performance indicators .................................................... 51

4.4: Hotel Performance Regression Models..................................................................... 53

4.4.1: Diagnostic test of Logistic Regression Model ....................................................... 53

4.4.2 Model Specification Test ........................................................................................ 54

4.4.3: Multicollinearity test .............................................................................................. 56

4.4.4 The Logistic Regression Model and Hypothesis Test............................................. 57

4.5 Influences of ICT on Hotel Performance ................................................................... 59

4.5.1 Computerized Reservation Process ......................................................................... 59

4.5.2 Computerized Management System ....................................................................... 60

4.5.3 Hotel Status ............................................................................................................. 60

4.5.4 Supplies ................................................................................................................... 60

4.6 Test for Hypothesis .................................................................................................... 61

4.7 Conclusion ................................................................................................................. 62

CHAPTER FIVE .............................................................................................................. 63

SUMMARY, CONCLUSIONS AND POLICY IMPLICATIONS ................................. 63

5.1 Introduction ................................................................................................................ 63

5.2 Summary of Findings and Conclusion ....................................................................... 63

5.3 Policy Implication ...................................................................................................... 64

5.4 Area for Further Study ............................................................................................... 65

REFERENCES................................................................................................................. 66
xi
APPENDIX 1 ................................................................................................................... 75

Questionnaire ................................................................................................................... 75

APPENDIX 2 …………………………………………………………………………..81

List of the surveyed Hotels ……………………………………………………………. 81

xii
 LIST OF TABLES

Table 2.4 Summary of Determinant of Hotel Performance ............................................. 33

Table 3.1 test for reliability .............................................................................................. 36

Table 4.1 Reservation process and performance indicators ............................................. 51

Table 4.2 How guests book for reservation and performance indicators ......................... 52

Table 4.3 Business Commitment and performance indicators ........................................ 52

Table 4.4 Management system and performance indicators ............................................ 53

Table 4.5 Model specification Test .................................................................................. 55

Table 4.6 Multicollinearity test ........................................................................................ 56

Table 4.7 Variance Inflation Factors ................................................................................ 57

Table 4.8 Logistic Regression Model .............................................................................. 58

xiii
 LIST OF FIGURES

Figure 2.1 The model of the innovation-decision process ............................................... 25

Figure 2.2 Technology Acceptance Model ...................................................................... 26

Figure 2.3 Conceptual framework.................................................................................... 29

Figure 4.1 Location of the business ................................................................................. 39

Figure 4.2 Number of Rooms .......................................................................................... 39

Figure 4.3: Years in business ........................................................................................... 40

Figure 4.4: Main type of Guest ........................................................................................ 41

Figure 4.5: Occupation of the Guest ................................................................................ 42

Figure 4.6: Mode of making reservations ........................................................................ 42

Figure 4.7 Reservation process ........................................................................................ 43

Figure 4.8 Receiving payment ......................................................................................... 44

Figure 4.9: Payment of the business commitment ........................................................... 45

Figure 4.10: Hotel supplies .............................................................................................. 46

Figure 4.12: Room occupancy rate .................................................................................. 47

Figure 4.13: Sales volume during peak and off season.................................................... 48

Figure 4.14: Number of Hotel Workers ........................................................................... 49

Figure 4.15: Amount of working capital .......................................................................... 49

Figure 4.16: Expansion .................................................................................................... 50

xiv
 CHAPTER ONE
BACKGROUND INFORMATION
1.1 Introduction

This part provides a clear understanding of the study which is the Role of ICT on SMEs
Performance, the case of Hotels in Dar Es Salaam region. The background and statement
of the problem of this study are given in this chapter. Apart from the background and
statement of the problem, there are objectives (both, main and specific), questions to be
answered, the scope and significance of the study.

1.2 Background to the Problem

Information Communication Technology (ICT) refers to the collection of technological

equipment and resources that are used for communication. They are used to create,
distribute, collect, store and manage information. ICT consists of hardware, software and
networks for collection, processing, distribution and presentation of information and
services. Sarkar (2012) divides ICT into two components, information and
communication infrastructure (ICI) which refers to physical telecommunication systems
and network and the services that utilize those (internet, voice, mail, radio, Television)
and information technology (IT) that refers to the hardware and software of information
collection, storage, processing and presentation.

ICT is about the new ways in which people can communicate, inquire, make decision
and solve problems. It is the processes, tools and techniques for gathering and
identifying information, classifying and organizing; summarizing and synthesizing,
analyzing and evaluating, speculating and predicting (Sarkar, 2012).

The first computer in Tanzania (ICT 1500) was installed in the ministry of finance in
1965. By 1974 there were seven computers in the country and the ministry of finance
had already acquired a new computer, ICL 1900. The introduction of computer was
surrounded by problems in almost all installations (Drew & Foster, 1994). Although, the

1
Tanzania ICT Policy was approved by the Parliament in 2005 to offer Government
guidance on ICT issues (Materu-Behitsa & Diyamett, 2010).

One cannot imagine the world today without ICT (Mobaraki, 2011). Therefore, the
revolution in ICT has changed the way people and organizations are conducting their
business. SMEs are getting big support from ICT in doing their business in easier way so
that they can grow and achieve and reach their destination.

SMEs cover a wide range of definitions, and there is no single definition of it, since
every country defines SMEs according to their level of development. But the one
presented by EU is, Small and medium enterprises has less than 250 employees with the
annual turnover which does not exceed 50 million€, and their annual balance sheet total
is less than 43million€ (Gilaninia et al., 2012).

In the case of Tanzania Rutashobya, Chijoriga & Ishengoma (2014) argue that, Tanzania
has gone through a period of deep change since the late 1980’s after her move to
abandon monopolistic policies under the command approach to economic management.
And it is estimated that about third of Tanzania GDP originate from SME sector. Many
of the micro and small enterprises in Tanzania are survival firms; few grow into medium
and large firms, while many others are struggling to grow.

SMEs are playing a crucial role in the economy of every country. Competitive economy
today needs the development and support of private sector and creates SMEs. Therefore,
it requires training, constructing job infrastructure and facilities to transfer knowledge so
that to stimulate creativity and the development of entrepreneurship. ICT plays an
important role in the development of entrepreneurship and SMEs.

ICT entrepreneurship is almost taking over from the traditional entrepreneurs, the
evidence of ICT entrepreneurs’ development can be seen from the successful
entrepreneurs at western countries like United States. The successful ICT entrepreneurs
in the U.S can be traceable in Google.com. Yahoo.com, Amazon.com or/and Ebay.com.

2
The distribution and adoption of ICT entrepreneurship in Western business
organizations can be regarded as more developed, while it’s vice versa on less developed
countries, business networks still need to be stimulated, re-engineered and re-evaluated,
Kofi and Anns (2010). The purpose of this study, therefore was to find out the role of
ICT on the performance of SMEs in Tanzania, especially in Hotels of Dar es Salaam
region.

1.3 Statement of the problem

Information Communication Technology is used as a tool for helping SMEs to connect

and seek information. Entrepreneurs also use this tool as a part of creating successful
business. Access to ICT has created exciting new possibilities for entrepreneurs
worldwide. The ICT increasingly crosses the economic divide to reach those previously
excluded from economic opportunities. Not only can these new users consume what is
already online, but they can also improve their education, research new ideas, raise
money, collaborate, and start their own companies, opportunities that would be
unimaginable for them without access to this technology. The largest of these startups,
including Google and Facebook, are now taking their place among the most valuable
companies in the world, (World Economic Forum, 2015). However, almost impacts of
the internet on entrepreneurial ventures is good such as raise the capacity of accessing
information through internet, increase communication capability among entrepreneurs
and other people, help to achieve the target specific venture firm, increase the efficiency
of the submission process and specially support marketing strategy.

SMEs are playing a crucial role in the economy of every country. Competitive economy
today needs the development and support of private sectors particularly the SMEs. This
requires training, building infrastructure and facilities to transfer knowledge and
technology to stimulate creativity and entrepreneurship. ICT promotes changes in
organizations, and is a good stimulant to SME development, since it helps in finding the
new business models, raise awareness, and saves time, price transparency (Bughin, et
al., 2011). Many SMEs however remain unconvinced of the value of ICT and only

3
28.2% of them are using a computer based medium such as email, and 76% of SMEs
makes no annual investment in ICT. This is a rational trend (Nielinger, 2003). Due to
this fact, it was the interest of the researcher to find out the role of ICT on the
performance of SMEs, and if they know how important is ICT to their businesses.

Despite the importance of ICT, most SMEs in Tanzania are still using old tools, and
therefore staying competitive is a challenge. The interesting question for this study was
therefore, to what extent do small and medium Hotels in Dar Es Salaam use ICT for
their performance.
1.4 General objective

The main objective of this research work was to find out the extent to which hotels in
Dar es Salaam utilize ICT for better performance.

1.4.1 Specific objectives

The research was guided by the following specific objectives

i. To identify the key characteristics of Hotels in Dar es Salaam.

ii. To examine factors which influence performance of Hotels in Dar es Salaam.
iii. To examine the extent to which the use of ICT in Hotels has promoted
performance.

1.5 Specific questions

The study intended to answer the following specific questions

i. What are the key characteristics of Hotels in Dar es Salaam?

ii. What are the factors which influence performance of Hotels in Dar es Salaam?
iii. To what extent has the use of Hotels influenced performance?

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1.6 Scope of the study

The study was conducted in Dar Es Salaam region. 100 hotels were selected as a sample
for data collection. So hoteliers were selected as a sample for data collection. Hotels
from which data were collected were of medium and small size. The study focused on
the role of the ICT on the performance of SMEs in Tanzania.

1.7 Significance of the study

i. The study has both academic and practical usefulness. Academically, the study
will contribute to the existing knowledge of the usage of ICT in SMEs in
Tanzania.
ii. More importantly, if written to acceptable standards, this work will lead to the
authors’ Master’s degree.
iii. On practical usefulness, the findings may be of use to both entrepreneurs, the
hoteliers as well as to policy makers.

1.8 Organization of the Dissertation

Chapter one is the Introduction/problem setting which have background of the problem,
statement of the problem, objectives of the study, general objective and specific
objectives, research questions, significance of the study, scope of the study and
limitation of the study.

Chapter two is the Literature Review which contain three parts, include theoretical,
empirical literature review and conceptual framework.

Chapter three is Research Methodology, which is having introduction, research design,

area of the study, population of the study, sample size, research design: qualitative and
quantitative research design, data collection, data analysis, data analysis procedure,
reliability and validity of data.

Chapter four presents the presentation and discussion of the findings

Chapter five is the summary, conclusion, and policy implications of the study.

5
 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

This chapter presents the definitions of the key terms, theoretical orientation of the
study, the empirical analysis and the conceptual framework. The review of related
literature focuses on the role of ICT on SMEs performance, it examines what various
authors and academic scholars have studied and written about ICT usage and financial
performance of SMEs.

2.2 Theoretical literature review

2.2.1 Definition of key terms

Information and Communication Technology (ICT)

Information and communication technology is useful to any communication

device/program, such as: radio, television, cellular phones, computers, software,
hardware, networking, satellite systems and the like it that is related numerous services,
programs and services to them.

ICT can act as data channels for they are skilled to help the connection of data for its
physical source, which can be asserted to be the truly progressive part of these
technologies (Evans and Wruster, 1997; Pohjola, 1998).

Matambalya and Wolf (2001) contend that, there is little proof that the dispersion and
utilization of ICTs can advance monetary competitiveness and development in less
developed nations.

Organizations use ICT for various purposes in order to match their business ideal. Thus,
ICT can be categorized into different groups from the business, or in this case SME,
point of view (Lucchetti & Sterlacchini, 2004). Depending on the business plan an SME
can select a specific category as its ICT.

6
Small and Medium Enterprise (SME)

According to National SME policy (2003) defined SMEs as a term which stands for
micro, small and medium enterprises, but it is sometimes stated as micro, small and
medium enterprises (MSMEs). SMEs is mainly used for non-farm economic activities
such as mining, commerce, manufacturing and services. Since there is no generally
accepted definition of SME, different countries measures the size of enterprises
depending on their level of development. But, there is the common measurement which
is total number of employees, total investment and sales turnover. In Tanzania, micro
enterprises are made up of 4 people, with the capital ranging up to Tshs.5 million and
most of them are falling under informal sector. Small enterprises are formalized and
having between 5 and 49 employees, with capital amounting from Tshs.5 million to
Tshs.200 million and medium enterprises hire between 50 and 99 people with the capital
from Tshs.200 million to Tshs.800 million.

The empirical study shows that, SMEs contribute to over 55% GDP and over 65% of
total employment in high income countries. 60% of GDP and above 70% total
employment in low income countries, but 95% total employment and 70% GDP in
middle income countries (OECD, 2004).

2.3 ICT adoption and SMEs performance

ITU (International Telecom Union) rated the internet diffusion in Tanzania for 1.3%
which is equal to 520,000 users and the average penetration rate was 23% in the world,
while in Africa stick up on 4.2% by 2009.

Regardless the importance of ICT, there is discussions on how its adoption improves the
Small Medium Enterprises (SMEs) performance. The use and investment of ICTs needs
skills, organization, innovation and change which in turn involve risks as well as cost so
as to bring possible benefits. While various studies says the probability of market
expansion as advantage for SMEs, large enterprises can also enlarge their businesses
into areas which SMEs dominate. Also, it is not easy for SMEs to adopt and control an

7
on-line business, since involves complement costs for organizational changes, training
and direct costs in hardware and software (OECD, 2004).

Many studies has given the constructive outcome of the adoption and use of ICT on firm
on organization performance, but others said there is no relation between the use of
computer and organization performance. The study done by Canadian manufacturing
establishments (on plants) with 10 employees excluding those of food processing, drawn
from Statistics Canada's Business Register (SCBR) demonstrates that, people with high
profitability development are likely to be utilizing advanced ICTs (Baldwin, 2002).
Between 1988 and 1997, the quantity of technology users grew in both profitability and
productivity than non-ICT users, especially when they utilized communication
technologies, including organization and inter-organizational computer systems.

Current OECD analysis reveals the results of e-business and ICT on SME performance
is helpful at all, but ICTs are not a solution in themselves. The study done set of by
OECD’s Electronic Commerce Business Impact Project (ECBIP) on 220 adopters of
ICT in their businesses in11 countries, and found constructive results of electronic
business on their income but it reduces employment mostly when electronic business is
among the business plan of the organization. Another work done in 13 different
countries based on larger scale statistical survey proved that the use of Information and
Communication Technology can promote organization performance, in term of better
response to clients demand and increased market share.

Furthermore, it indicates that ICT helps to minimize inefficiency in the use of labor and
capital, and to invest in skills, innovation and organizational change are the main points
in making a better use of ICT and therefore the use of ICT affects SMEs performance
when they go together with other changes and investments and without these, the
economic impact of ICT may be limited (OECD, 2004).

8
2.4 Computer usage in Tanzania SMEs

Literatures done on ICT in Tanzania, shows that ICT is commonly used in wood
processing whereby about 45.9% of SMEs use it (Nielinger, 2003). Other areas where
SMEs use ICT include book keeping (records keeping) 26.4%, email 20.9%, order
processing 20.3%, inventory management 9.5% and production control 6.1%. This
indicates that much has yet to be done on the improvement of ICT usage our SMEs.

2.4.1 Influencing factors (internal)

Top management

Adoption of ICT in SMEs is directly affected by the owners and/managers, since all the
decisions of day to day operations and future investments are made by owners and top
managers (Bruque & Jose-Moyano, 2007; Nguyen, 2009). The decisions they made are
mostly based on their understanding level with the combination of knowledge, personal
experience, communication skills and judgment (Gilmore, Carlson, Grant, Pickett, &
Laney, 2000). Other literature claimed that, ICT adoption in SMEs is affected by other
factors such as attitudes and management’s perception concerning ICT, desire for
growth, ICT familiarity and knowledge as well as innovation (Drew, 2003; Lybert,
1998; Premkumar G., 2003; Qureshi & York, 2008; Thong, Yap, & Raman, 1993;
Thong & Yap, 1995).

Resources

In general, SMEs are restricted from the access of the particular resources rather than big
organizations (Igbaria & Tan, 1997; Nieto & Fernandez, 2005). (Dutta & Evrard, 1999)
During their investigation on the strategic management of ICT and organization within
SMEs in six European countries, proposed that there is a difference between the small
firms with the capability of using ICT and those which are not. That difference in some
extent is initiated by the quality of the internal resources (mostly manpower), but
primarily, the control of IT (technological information). They also state, lack of financial
resources required for R&D is the obstacle to innovation.

9
A rough decisions on the investment ICT can cause huge financial consequences for
SMEs, which in turn, it may lead to economical failure and hence bankrupt (Sarosa &
Zowghi, 2003). As operation of new ICT system and its equipment wants a long term
investment (Nguyen, 2009) and high cost infrastructure (Walczuch, Braven, &
Lundgren, 2000), SMEs with suitable financial resources would accept ICT as a possible
option to carry out (Thong & Yap, 1995), and hence, SMEs owner and/or managers with
access to necessary financial resources has the capability to establish the chosen
Information System (IS) (Lybert, 1998).

End users

Employees are considered as the important asset in organization, whereby firms depend
on them for their survival and success (Melville, Kraemer, & Gurbaxani, 2004);
Nguyen, 2009). Nevertheless, SMEs sees IT as the important and valuable resource
which should be established in order to add value on business (Caldeira & Ward, 2002)
it needs to be developed to contribute to the success of business (Egbu, Hari, &
Renukappa, 2005); (Zhou, Li, & Lam, 2009). In order to avoid failure implementation of
ICT in SMEs, these enterprises need to expand the ICT knowledge to their staff with
training and/or computer education (Thong, 2001). Sarosa & Zowghi (2003) and
Ghobakhloo, Zulkifli, & Aziz (2010) argue that, the acceptance of ICT within users of
IT will impart constructive impacts on ICT adoption and usage. According to these
authors, provision of ICT courses and training to the end users (staff) would help the
SMEs on the successful implementation of new technology.

IT solution (computer application)

Process of ICT implementation within SMEs depends on a group of factors, including

type, user friendliness and popularity, the available software in market, the costs of ICT
and perceived impacts of ICT on the firm (Caldeira & Ward, 2002; Cynthia, Simeon, &
Robert, 1997; Foong, 1999). A study by Shin (2006) reveals, ICT applications that are
easy-to-understand and long experienced enterprise application are effective in SMEs
than hard hard-to-understand and brand-new applications. In addition, the access of the

10
quality ICT available in the market and its type might be the important factor affecting
the acceptance and use of ICT and use among enterprises (Caldeira & Ward, 2002)
where concerning IT as the main resource needed for achievement of good performance
for business, its quality, reliability and usefulness referred as the element of selected ICT
(Sardana, 2008).

Organization characteristics

Organization characteristics such as cost reduction or value added strategies affect the
ICT investment among SMEs (Levy, Powell, & Yetton, 2001). According to (Nguyen,
2009), some other SMEs are adopting Information Technology just to be similar as other
businesses who are already have these technologies. On top of that, Lybert (1998) found
that SMEs with less family ownership and less innovation in strategic management as
well as owner/managers with a greater strategic consciousness uses higher information.

However, one of the important determinant of ICT implementation is business size

which is definable by turnover and/or number of employees, (Fink, 1998; Thong & Yap,
1995). Firm size is partially important, because of its role as the source of firm
capabilities (Molla & Fernandez, 2005).

2.4.2 External factors

External and competitive pressure

Keeping up with the competitors enhance the survival and growth of the business,
managing changes, staying competitive and/or enhancing innovation abilities, and
promoting services to customers have forced SMEs to adopt ICT (Drew, 2003; Nguyen,
2009; Premkumar & Roberts, 1999). Prior literature suggests that as small businesses are
vulnerable to customer pressure; these firms adopted ICT as a result of demand from
customers to develop the efficiency of their inter-organizational dealings (Levy et al,
2003). Hence, it has become an indispensable strategy from firms to have these
technologies (Premkumar & Roberts, 1999) while others suggest that the main forces to
move towards ICT tools in SMEs are internal factors including industry changes and

11
trends, maintaining current market, finding new market, opportunities for growth and the
necessity to keep up with competition (Drew S. , 2003). Nguyen (2009) argues that firms
move towards adoption of ICT for dissimilar reasons due to various functions of firms in
different environments and their operation in different ways. According to their study,
firms’ movement to ICT is:

a) In response or reaction to an event;

b) In response to the pressure from the internal and external environment
c) Resulted from the pressure from customers and emphasis on improving
efficiency.

Furthermore, the study by (Premkumar & Roberts, 1999) on rural small businesses,
submits that external pressure and competitive are the important factors to the adoption
of ICT. Likewise, it is advised that the pressure of clients and suppliers to adopt ICT is
influencing the IS/ICT adoption success in Portuguese manufacturing SMEs (Caldeira &
Ward, 2002).

External IT consultant and vendors

There is a body of research that shows assistance of external IT expertise, consultant and
vendors and their quality is one of the most important aspects of the IT adoption process
within SMEs (Ghobakhloo, Arias-Aranda, & Benitez-Amado, 2011). Their professional
abilities could have positive impacts upon IT adoption process while most SMEs are
suffering from lack of IT experts and hiring external consultants (Nguyen, 2009;
Premkumar & Roberts, 1999; Thong, 2001). Cragg & Zinatelli (1995) pointed out that
shortage of internal experts has hindered Information System complexity and
development within SMEs, therefore they seek help from external sources or developing
their internal end-users computing skills as the solutions to that problem. According to
(Thong, Yap, & Raman, 1997) and (Thong J. Y., 1999), internal experts and vendors are
main sources of external IS expertise concerning ICT implementation within SMEs.

Generally, the duties of external specialists containing IS project management,

encouraging employees over the fear of new technology and to accept it, accomplishing
12
information required for analysis of business needs, training to IT users, and choosing
suitable hardware and software (Thong and Yap, 2011).

Government

According to literature, the significant positive relationships could be found between IT

adoption and government (Ahuja et al, 2009; Yap et al, 1994). SMEs are more
dependent than large enterprises in terms of external resources and support, simply
because of their sizes (Sarosa & Zowghi, 2003). According to Fink (1998), the support
from the government for helping information transfers to SMEs is slowly increasing.

Government policies can directly or indirectly motivate the development of ICT

infrastructure to empower faster technology adoption (Ghobakhloo et al, 2011).
Nevertheless, other literature recommends that, the governmental support is not helpful.

A study by Dutta and Evard (1999) on SMEs in six European countries, indicates that
although the government have tried to support SMEs in implementing ICT through
different technology projects, campaigns to improve invention and emphasizing the
performance of enterprises; there are obstacles in the governmental agencies to help
SMEs. This unsuitableness is caused by the gap between what is needed by SMEs and
what is provided by the government (Sarosa & Zowghi, 2003). This result is similar to
the study done by Yap et al, (1994) on 40 computerized SMEs with no government
support, shows that the government participation in computerization program has no
effects on Information System. However, this program has just encouraged SMEs who
lack financial resources and IT expertise to automate their operations. From a similar
perception, Fink (1998) study found that government contribution does not seem to be as
important factor in supporting the adoption of IT within Australian SMEs.

13
2.5 Importance of ICT on SMEs

General environment

Amue, Igwe, & Abiye (2014) said ICT in Entrepreneurship is important and successful
as it can be referred from the successful entrepreneurs at Western countries. The
successful entrepreneurs in United States are like Google.com, Amazon.com,
Yahoo.com and eBay.com, and Facebook.

Technologies play a role in helping business to improve efficiently and effectively

(Kollmann, 2006). He also claimed that, information sector is moving from the old
economic sectors which are production, service and agriculture.

Tanzania is among of the fastest growing ICT markets in Africa, and about 17 million
are subscribers of mobile telephone within the population of 43million, which means the
mobile telephone market is also growing too fast (Materu-Behitsa & Diyamett, 2010).
Vodacom, Airtel, TiGO and TTCL-mobile, Zantel-mobile and Sasatel are the major
operators in Tanzania telephone market, but there is still room for growth as the
penetration level is around 30%. This speed has stimulated the development of the
industrial sector both small and medium enterprises.

Nielinger (2003) found that, the significance of ICT for economic performance has a
clear ranking that, the perceived significant of technologies matches with the rate of
their diffusion, hence WWW ranked lowest and telephone highest. 60% of respondents
recognized the telephone and 38% the cell phones as very significant. Computer based
application s email (28%), then come other computer application (25%) and last in the
WWW with 12%.

In other sectors, such like the banking sector ICT is used heavily so as to provide better
customer service (National ICT policy, 2003).

In the study done by (Brynjolsfsson & Hitt, 1995) on the effects of IT on productivity,
detected that beside the organization effects, IT also gives positive and significant to
production. The results was consolidated even in the latest study, which again

14
emphasizes the importance of IT for the growth of productivity (Matambalya & Wolf,
2001).

By using ICTs in organizations, the production costs have to be lowered and therefore
the cost in exporting can be reduced. This will allow and stimulate of SMEs not to stick
to local markets but also regionally and internationally (Matambalya & Wolf, 2001).
They also said that, SMEs that are in rural areas are safe against competition from large
enterprises because of high communication and transport costs. Consequently, ICTs
could also increase competition among these enterprises, therefore they have to be more
creative in production or close down (Matambalya & Wolf, 2001).

Doing wired business is easy and it saves cost, compared to traditional ways of doing
business said Marks and Albert (2009). ICT users stated that, technology has helped in
increasing efficiency and reduce information expenditures, although it is still un-utilized
resource, (Matambalya & Wolf, 2001).

In fact, e-commerce users be likely to increase business operation speed and

consistency, it also reduces transaction costs (OECD, 2002).

Case study (Hotels)

ICT is adding important value in business (Richard, 2013). So, that value needs to be
utilized in order to increase business performance and competition as well (Sirirak,
Islam, & Khang, 2011). He also clarified that ICT adoption has a substantial positive
relationship with hotel performance; it encourages operational productivity than
customer satisfaction in the three stars hotels. Availability and integration of ICT have
an important positive relationship only with operational productivity, while the ICT
usage has a relationship with both and customer satisfaction operational productivity
(Sirirak, Islam, & Khang, 2011).

ICT have now into hotel services, connects the operations, marketing, improve efficient
and develop customer service (Bethapudi, 2013). Information Communication
Technology is playing a role in upgrading the hotel reservations and presentation,

15
whereby a hotel without ICT infrastructure is not considered as a good hotel.
Technology has now used to push the slower movement of business by providing better
services, increasing revenues and making better decisions (Ansah, Blankson, & Kontoh,
2012). ICT has transformed the hotel business by developing a whole collection of
software applications so as to increase higher performance in revenue, room occupancy,
cost reduction, improved customer satisfaction, and superb guest experience (Sirirak,
Islam, & Khang, 2011; Chevers, 2015).

The hotel sector has been less excited, but is slowly got up to the benefits which
electronic can bring (Nwakanma, Ubani, Asiegbu, & Nwonkonkwo, 2014). ICT
improvement introduced room reservation, whereas a customer can make a reservation
online, anytime or anywhere as long as there is a connection (internet access). Booking
are done through Web which is suitable to customers who regularly use the hotel and
that provides an efficiency and effective communication tool by saving time and reduce
a line up at the hotel (Bethapudi, 2013; Ansah, Blankson, & Kontoh, 2012).

Nwakanma et al (2014) claimed that, for every hotel, the Property Management System
(PMS) is acting as the center of technology and hotel operations. PMS is used to
produce billing information, recording customer details and room inventory. It also
interacts with other systems such as food & beverages point of sale station to allow
integrated billing and management reporting. Yet, Ansah et al (2012) found that, in the
front office bills and invoices are created by computer, other services such as monitoring
bookings and reservations, to check-in and check-out guests, recording customer
spending and share information inside and outside the hotel. Electronic Fund Transfer
(EFT) supports updates of hotels & guests accounts after reservations, therefore, tools
like Computer Managed Learning (CML) and Computer Managed Instructions (CMI)
used by management to organize customers’ data, occupancies and vacant room.
Networking the integrated reservation system improves cost effectiveness, good
management of data and faster communication (Lucey, 2005).

16
Bethapudi (2013) said the greater the number of departments, transaction, arrivals,
departures and reservations stimulates the need for technologies to enable processes.
Hence, ICT is core competence in doing the business. There is a high rate of ICT uses in
the hotel, and managers have knowledge to manage business data. ICT enhances value
to the by expand their client’s base and receive feedback (Richard, 2013).

2.6 Solution to low adoption of ICT/barriers to ICT adoption

There should be more efforts in improving the ICT skills in Tanzania by developing
human capacity in areas such as management, technical, research and development, e-
business and e-governance. Human resource advancement in ICT ought to be urged by
increasing attention to the students and the more opportunities and abilities in ICT.
There must be the condition that energize ICT education and give inspirations,
particularly for those putting resources in research, development, training, and
programming. Interest in training will connect the advanced gap and upgrade the quality
of infrastructure, access, utilization, and growth (Materu-Behitsa & Diyamett, 2010).

Human resource advancement in ICT ought to be urged by increasing attention to the

students and the more opportunities and abilities in ICT. There must be the condition
that energize ICT education and give inspirations, particularly for those putting
resources in research, development, training, and programming. Interest in training will
connect the advanced gap and upgrade the quality of infrastructure, access, utilization,
and growth.

Matambalya & Wolf (2001) claimed that, the one important aspect of access to ICT is
the high cost of devices and services in several African countries. Due to this case,
liberalization and privatization that ensures competition will be the significant step to
increase the use of ICTs to the possible users. Priority should be provided to the
Telecommunication Infrastructure as this could also be used by less successful SMEs
and even poor homes (Torero, 2000).

17
When designing supportive plans for the increase of ICTs usage to SMEs, one has to
remember that access to information to be used by the firm is the objective and not
introduction of technology. This should also be reflected in training courses whereby
SMEs target is to improve marketing or accounting should be in the center and use of
Internet or computers should be presented as one tool to reach the goal. The provision of
quality courses instead of self-taught skills which is currently done will help to increase
efficiency in ICT use (Duncombe & Heeks, 2001). So as to increase access to ICT,
intermediaries must also play a role, since they are able to add value to the information
they provide. This role might be played for profit organizations such as business
organizations and SMEs; as they are conscious of the need of information for SMEs and
can assist by forming and add more networks that will increase access to information
about market prices, best practices of working (operation) and sources of supply. Also,
important object for SMEs are government sites where support programs and regulations
found. Additionally, apart from the time saving of small enterprises, the public
accessible information could increase transparency and then reduce other business
difficulties (Matambalya & Wolf, 2001).

2.7 Cost of ICTs and E-business

Access is not only about availability, but also cost affect the use of ICT. The charges is
costly which acts as an obstacle. While competition brought down prices, the cost of
access is still higher. Importation of Computer hardware in Tanzania making high
computer prices an obstacle to access. Electronic business and telecommunication
infrastructure it must have affordable computing facilities to be completely. The price of
computer has been falling like telephones and internet cost, but not to the point that
everyone can afford to have it. Many individuals and businesses, needs access at
reasonable price, computers for education and businesses (Materu-Behitsa & Diyamett,
2010).

One of the central views of the information-theoretic approach, noted by early observers
is that acquiring information is costly, particularly within the developing countries.

18
These difficulties associated with information acquisition have numerous implications:
The high costs of acquiring information may lead to behavior that differs obviously from
what it would have been if more information had been available. This will have
implications for the efficiency, productivity, and welfare of the various agents in the
economy and the right solution in many cases is to be involved in information activities.
Extra costs arise when search costs increase since information overflow and reliability
has to be checked. There is also the fear that, dependency on information suppliers and
facilities will increase (Matambalya & Wolf, 2001).

SMEs will not accept ICTs if the profits is less than the costs of system maintenance and
development. The issue is costs versus benefits expected and not only cost. In general,
SMEs are worried about the costs of adopt and maintain ICTs since they normally suffer
from budget restrictions and are not sure of the predictable earnings on the investment
(OECD, 2004).

Some SMEs cannot afford to adopt sophisticated ICT solutions because of the high cost.
Some small businesses especially micro-enterprises with 1-9 employees or the self-
employed, may adopt a simple Web site without any e-commerce function if the cost of
basic Internet use is well within their marketing budget. For instance, in the United
States, typical Internet charges USD 10-35 a year for a domain name (i.e. Web site
address) and USD 10-100 a month for Web site hosting, are low compared to traditional
advertising in printed media (Bricklin, 2002).

E-commerce maintenance and upgrades can be very costly, especially when firms prefer
a highly sophisticated virtual shop. The Australian study stated that Web site
maintenance is the most costly component of ongoing costs, ranging from USD 800 to
USD 103,000. Other elements include telephone, Internet service provider charges and
Web site hosting. (Ernst & Young, 2001).

19
2.8 ICT knowledge and skills

A study done to small ICT companies suggests that the Internet is used in their firms
because of the personnel who are able to use and understand the technology (Mehretens,
Cragg, & Mills, 2001). But, the study found it is not necessarily ICT professionals, even
simply people who have got interest in technology, (OECD, 2004).

Jensen (2000) said that, regular usage of Internet per day is one incoming and one
outgoing e-mail. Communications are frequently done with people outer the continent.
He also said that, most of ICT and Internet users are NGOs, private organizations or/and
universities and users are mainly male and educated. E-mails are used to communicate,
exchange document, to manage projects as well as meetings arrangement, although it is
limited for accessing official information resources. ICT and Internet users has reported
that, through ICT, efficiency increased and Information cost reduced, even though it is
not well utilized resource (Matambalya & Wolf, 2001).

According to MacGreor (1996) small business tend to avoid ICTs into their business, if
it’s seen as complex to use. This is not surprising because SMEs always lack of skills
amongst workforce to use ICT (Spectrum, 1999) .Paul & Pascale (2003) reveal that the
ICT adoption in SME depends on the CEO/owner being the decision maker. Their
finding clearly indicated that ICT adoption is positively related firm.

OECD (2004) reported that, the other reasons for most firms not doing online sales it is
because they lack personnel/staff with proper skills and knowledge of ICT, fear of the
costs to be used and perceived benefits, inadequate customer access to Internet and
technology anxieties, such like online security. 56% of businesses that did not sell or
buy online in Canada, assumed that their goods and/or services did not lend themselves
to Internet transactions.

The lack of suitable technical and managerial team with the proper ICT knowledge is
among the obstacles for the implementation of ICT to SMEs. Allison (1996) also
approves that a skilled and knowledgeable staff was linked with the successful adoption
of technology. Among the strongest hindering reasons for SMEs to implement IT
20
(Information Technology) was the absence of information system know-how (Cragg &
King, 1992).

In Tanzania, the most of organizations do not provide any formal computer training to
their workers. 20% of firms depend on learning by doing methods, which limits
computer utilization to basic applications. 13% avoids the problem of training by hiring
skilled employees, (Nielinger, 2003). A minority of 18% of organizations offer formal
computer training courses to their employees. Both internal and external courses
deserves attention, since internal training is suitable when a serious mass of trainees is
existing.

2.9 Related problems facing SMEs in Tanzania

The greatest problem to effective use of ICT in the workplace according to the Sida
Survey and the eReadiness Report is the inability of human capital to use and maintain
ICT (ICT, 2003).

Materu-Behitsa & Diyamett (2010) claimed poor electricity supply is among the
problems face by most SMEs in Tanzania. The use of power generators adds costs by
means of fuel is expensive, therefore, this acts as an obstacle in growth and development
of e-commerce. However the availability has grown but is has not matched the quality of
service.

Though bandwidth could have been a problem, but there are other factors which
contribute to poor Internet penetration and ICT usage in Tanzania. With favor to Internet
access and use, Tanzania lacks complete data giving details of Internet and ICT users in
the country. The available data is mostly gathered from Internet café and this does not
provide a real picture of the Internet usage, claimed (Materu-Behitsa & Diyamett, 2010).
Number of people who use their phones to access the Internet is not recognized. By
2009, there were about 520,000 Internet users in Tanzania.

Materu-Behitsa & Diyamett (2010) also said the change in purchasing power is also one
of the problem facing SMEs in Tanzania. Tanzania has the highest mobile prices,

21
followed by Burkina Faso, regardless of their good performance before the modification.
The effort to reduce prices is challenged in, nevertheless, by the special taxes on
communications equipment and services. As discussed above, telecommunication
equipment in Tanzania is subject to 20% import duty and 20% VAT and there is a 7
percent special tax on mobile airtime.

Esselaar & Adam (2013) said, Tanzania is facing obstacles in the development ICT
sector which are; lack of qualified ICT experts and users, poor infrastructure (electricity)
it is said that only 10% among 40m population in city areas and less than 2 percent in
rural areas have access to electricity (The World Bank, 2012).

Materu-Behitsa & Diyamett (2010) In Tanzania ICT sector performance review

recommended that, activities based on Research and Development (R&D) in ICT sector
are limited, while telecommunications statistics and data usage are not often collected.
This makes hard in establishing and predict trends in the sector without researches.

The availability of PCs (Personal Computers) is poor in Tanzania. Less than 1% MCT
(Multipurpose Community Center) offers basic telecommunication services and
facilities that are aimed to serve individuals and businesses by providing training and
distance learning services, but these centers are few and far (Materu-Behitsa &
Diyamett, 2010).

In general, there is a scarcity of qualified professionals and well establishment of ICT

professionals profiles in Tanzania. Lack of certified ICT courses offered by several
training centers, access to online is also limited. In addition, training opportunities are
limited to the small number of centers which are located in urban areas few urban
centers. Although there are numerous websites in Tanzania, most of them are in English,
which made it hard to access information, also many websites are outdated. There has
been current different views on access to pornography over the Internet, since it causing
distraction of our morals, customs and culture. The potential for e-business embarrassed
by the lack of local credit cards and an suitable legal agenda that create of trust, security
and accountability environment (ICT, 2003).

22
ICT can improve the SMEs performance, but some plans must be taken into account so
the difficult environment and the high number of various business obstacles SMEs
facing to be solved (Nielinger, 2003).

2.10 Solutions to help SMEs use/ make a greater use of ICT

In order to encourage the greater use of ICT in Canadian SMEs, research done by
NetPME exposed that a set of factors would be useful. The study shows examples of
successes or best practices (52 .0%), and related training, lectures or workshops (50.7%)
and over half of Canadian SMEs (54 .2%) would be interested in having access to a
manual user or guide of using ICT (NetPME, 2011).

Materu-Behitsa and Diyamett (2010) on their Review of Performance in Tanzania ICT

Sector, recommended that, mobile operaters need to provide education about
developments in telecom sector, mainly on accessibility of broadband communication
facilities, and how these developments can be used to enhance economic development of
the country.

Internet and data service providers need to be assisted to review their Internet access
charge models. For instance, time-based Internet access charging models may need to be
replaced by data (file size) charging models, (Materu-Behitsa & Diyamett, 2010). What
should be done is to cut down call charges and provide education to people on how to
exploit and use broadband for economic development.

2.11 Theoretical perspectives

In studies of innovation in SMEs, researchers have focused on the owners/managers of

SMEs especially their characteristics, behaviors and attitudes. This is because such
individuals usually directly and/or indirectly dominate decision making in their
organizations. Lakhanpal (1994) suggested that characteristics of individuals:
innovators, leaders and other individuals in key positions have been observed to have
significant impacts on explaining differences in the degree of innovation adoption. As
B2B techniques are relatively recent technological innovation, the technological

23
innovation literature would be a good place to start identifying factors that might affect
the individual adopting B2B in SMEs.

2.11.1 Innovation and diffusion theory

The idea of innovation is about presenting adopters with new means of solving problems
and that is encouragement for organization moving towards technology adoption
(Rogers, 1995: Runge & Lee, 2002; Thong, 1999).

Rogers (1995) proposed a model of the innovation-decision process that emphasizes the
role of individual behavior in the technology adoption process. The model relates actions
and choices during which an individual evaluate a new innovation and decides whether
or not to incorporate it into an ongoing practice. The perceived advantage of adoption
and the associated uncertainty are distinctive aspects of innovation decision making
process. SMEs owner/managers would normally decide whether to adopt an innovation.
During the decision process, the owners/managers would gather information from
various sources and attempt to determine the innovations’ utility. They will assess the
proposed innovations’ relative advantage, compatibility with existing systems,
complexity, trial ability and observability to decide whether or not to adopt the new
innovation (Kendall, et al., 2001; Rogers, 1995).

24
Figure 2.1 The model of the innovation-decision process

Source: Rogers' Diffusion of Innovation (4th Ed, 2003)

Kendall et al. (2001) used Roger’s model as a study framework and found that relative
advantage and compatibility issues are the two most significant factors in determining
SMEs acceptance of EC in Singapore because their managers deal with the beliefs on
how much EC will benefit the organization and their perceptions of the importance of
EC on their organization now and in the future.

Rogers (1995) stressed that managerial attitude and innovativeness is a key factor in the
innovation-decision process. They affect the way in which an individual or unit acquires
knowledge about the proposed technology, lobbies for adoption, makes the decision and
implements the new technology. Thong & Yap (1995) and Fink (1998) also support the
proposition on the SMEs owners/managers individual characteristics, attitude to IT and
innovativeness are powerful determinations on IT adoption, and found that
owners/managers who possessed a positive attitude towards IT were more likely to
adopt new technology in their organizations.

25
2.11.2 Technology Acceptance Model

Davis’s Technology Acceptance Model (Davis, 1989; Davis, Bagozzi, & Warshaw,
1989) is the most widely applied model of users’ acceptance and usage of Technology
(Venkatesh, 2000).. It was developed by Fred Davis and Richard Bagozzi, and
a TAM
replaces many of TRA (Theory of Reasoned Action) attitude measures with the two
technology acceptance measures
measures- ease of use and usefulness.

Like the Diffusion and Innovation T

Theory,
heory, the Technology Acceptance Model (TAM) is
used to determine the factors causing an individual to accept or reject an IT innovation.
The model attempts to explain individual decisions to adopt technology by considering
the impact of external factors on internal beliefs, attitudes and intentions. TAM is an
adaptation of Theory of Reasoned Theory (TRA) specifically tairoled for modelling the
acceptance of technology adoption. The model contains two determinants – perceived
usefulness (PU) and perceived ease of use (PEU) that provide an explaination of IT
acceptance that is general and capable of explaining individual behaviour across a broad
range of end-user
user technologies and user populations, while being theoretically justified
(Davis, Bagozzi, & Warshaw, 1989)
1989).

Figure 2.2 Technology Acceptance Model

Source: (Davis, Bagozzi

zzi & Warshaw, 1989)

The model stresses that,, technology acceptance and usage is determined by intention to
use, which determines actual systems use. Davis, Bagozzi, & Warshaw (1989) explained
that intention to use new technology can be explained in two ways:
ys: First,
First when both
perceived usefulness and perceived ease of use are both positive, individuals will create
26
intention to perform behaviours on the basis of positive attitude. Second, individual will
provoke the intention toward behaviours that is believed to be useful for a job
performance without concerning either the ease of use is negative.

The results of the previous study (Davis, 1989; Davis, Bagozzi, & Warshaw, 1989) have
confirmed that the perceived usefulness is more strongly linked to IT adoptionand usage
than perceived ease of use as people may be willing to torelate a complex technology to
gain an advantage from IT adoption. Therefore, it can be inferred that the benefits from
individual perception influence the decision-making process of IT adoption.
2.12 Empirical literature review

A study by (Tarute & Gatautis, 2014) explained on the Impact of ICT on SMEs
performance. The aim of this paper was to analyze the literature on potential direct and
indirect effects of ICT on SMEs performance and to identify those that could determine
a business success. Results confirmed that, ICT has impact on the improvement of
external and internal communication and that for best performance it is important to
align ICT investments with internal capabilities and organizational processes.

A study by (Alam & Noor, 2009) on ICT Adoption in SMEs; the purpose of this study is
to gain a deep understanding of the factors which influence the adoption and usage of
ICT by SMEs in Malaysia. This study examined the relationship between ICT adoption
and its five factors which are perceived benefits, perceived cost, ICT knowledge,
external pressure and government support. The results of this study show that three
factors examined are significantly important to the adoption of ICT whereas perceived
cost and external pressure are found to be insignificant in determining its adoption. This
study provides a greater understanding of SME’s perception about ICT adoption in their
service business. Those SMEs who are interested in promoting their business on online
may find these results helpful in guiding their efforts. Data was gathered based on mail
and personal administered questionnaire.

Rufai (2014) presented a research that examines the impact of communication

technologies (mobile phone, personal computer and internet facilities) on the

27
performance of small and medium businesses in Lagos state. Results indicate that SMEs
operating in different socio-economic settings present varying performance results from
the use of communication technology tools. The study was undertaken through a firm
survey and also a number of semi-structured interviews with purposively selected 100
SMEs operating in both the affluent and disadvantaged districts of the city. Using basic
descriptive statistics and thematic analytical techniques for the survey and interview data
respectively, major findings suggest that ICT positively impacts the performance of
SMEs.

A research by Migiro & Ongori (2010) examined the driving forces, challenges, benefits
and strategies to decrease barriers to Information and Communication Technology (ICT)
adoption and assimilation by SMEs in this era of globalization. The methodology used
was based on review of literature both online and printed. Findings conclude that ICT
adoption and assimilation in SMEs is critical to enhance their competitiveness. In
addition, ICT usage in SMEs will enhance accessibility into the international markets.
Major limitation of this study is that it only reviewed relevant literature and that
empirical findings are not obtained to give an insight and holistic view of ICT adoption
and assimilation by SMEs.

In their study on the role of ICT in SMEs performance based in Tanzania and Kenya,
with the sample size of 300 SMEs, Matambalya & Wolf (2001) show that, the use of
ICT is increasing over time. Although the usage of fixed phone lines is reaching the
highest point, it is still poorer in Tanzania than Kenya. The study also found that, in both
countries the percentage of businesses that uses phones is increasing faster. Mobile
phones usage is contributing much on the regional market expansion by most
enterprises, and the average size of firms with the use of advanced ICTs bigger for both
countries. The main findings of the study are that, there is a significant positive
relationship between the use of fax machines which provides access to formal
information, and productivity, in both countries. However, there was a negative sign on
ICT investment in different specifications of the regression, then is never significant.

28
2.13 Conceptual
nceptual framework

Figure 2.3 Conceptual framework

Source: Researcher (2017

2017)

From the conceptual framework, hotel performance is measured by using looking at the
trend of annual sales, working capital and number of employees. This means that, annual
sales, working capital and number of employees can annually increase, decrease or
remain the same. Therefore it with this study we inte
intend
nd to measure the performance of

29
the Hotel by looking at either increase which indicate good performance and decrease
and remaining constant which will indicate poor performance of the hotel.

Therefore, the dependent variable for the study at hand is changes in annual sales,
working capital and number of employees. The dependent variable is transformed into
dummy with the value of 1 indicating increase in the performance of the hotel (i.e.
changes in annual sales, working capital and number of employees.

Because our dependent variable takes value of 1 for increase and 0 otherwise, the study
uses logistic regression model to determine the influence of ICT usage in the
performance of the hotel. Logistic regression model is used due to the fact that it is
capable of transforming the probability to remove the range restrictions, and model the
transformation as a linear function of the independent variables.

Modelling Logistic model

The logit model is generated from the probabilities ߨ௜ which depend on a vector of
observed independent variables. By letting ߨ௜ be a linear function of the independent
variables, we have the following equation:

π୧ = x୧ᇱ β, … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ሺ1ሻ

Where, ߚ is a vector of regression coefficients. The equation (1) above is the linear
probability model and one problem with this model is that the probability ߨ௜ on the left-
handside has to be between zero and one, but the linear predictor ‫ݔ‬௜ᇱ ߚ on the right-hand-
side can take any real value, so there is no guarantee that the predicted values will be in
the correct range unless complex restrictions are imposed on the coefficients.

A simple solution to this problem is to transform the probability to remove the range
restrictions, and model the transformation as a linear function of the independent
variable. This can be done by transformation from the probability ߨ௜ to the odds.
஠
odds୧ = ଵି஠౟ ,
౟

30
Defined as the ratio of the probability to its complement

Second, we take logarithms, calculating the logit or log-odds

π୧
η୧ = logit ሺπ୧ ሻ = log , … … … … … … … … … … … … … … … … … … … … … … … ሺ2ሻ
1 − π୧

We are now in a position to define the logistic regression model, by assuming that the
logit of the probability ߨ௜ , rather than the probability itself, follows a linear model.

The Logistic Regression Model

Suppose further that the logit of the underlying probability π୧ is a linear function of the
predictors

logit ሺπ୧ ሻ = x୧ᇱ β, … … … … … … … … … … … … … … … … … … … … … … … … … … … … ሺ3ሻ

Exponentiating Equation 3 we find that the odds for the i-th unit are given by
π୧
= expሼx୧ᇱ βሽ … … … … … … … … … … … … … … … … … … … … … … … … … … . ሺ4ሻ
1 − π୧

Solving for the probability π୧ in the logit model in Equation 4 gives

expሼx୧ᇱ βሽ
π୧ = … … … … … … … … … … … … … … … … … … … … … … … … … … … … ሺ5ሻ
1 + expሼx୧ᇱ βሽ

Therefore, it is with equation 5 we specify our model for the study as follows
π୧
C = logit ൬ ൰ = β଴ + βଵ xଵ + βଶ xଶ + βଷ xଷ + βସ xସ + βହ xହ + β଺ x଺ + ε୧ … … … . ሺ6ሻ
1 − π୧
π୧
S = logit ൬ ൰ = β଴ + βଵ xଵ + βଶ xଶ + βଷ xଷ + βସ xସ + βହ xହ + β଺ x଺ + ε୧ … … … ሺ7ሻ
1 − π୧
π୧
E = logit ൬ ൰ = β଴ + βଵ xଵ + βଶ xଶ + βଷ xଷ + βସ xସ + βହ xହ + β଺ x଺ + ε୧ … … … ሺ8ሻ
1 − π୧

Where;

π୧ is the probability of performing well

C = Working capital, S = Annual sales and E = Number of employees

31
βᇱ s is a vector of regression coefϐients

x ᇱ s are predictors

Definitions and Explanation of expected signs of Independent Variables

xଵ Reservation. This is the way guest’s book for reservation in the hotel. It is expected
that reservation which uses ICT in booking for reservation will positively influences
performance of the hotel as the use of ICT increases efficiency and people from different
location of the world can do booking while at their country and are assured that they will
get their rooms without any problem. The use of ICT in booking for reservation involve
use of phone calls, emails and websites of the hotel.

xଶ Process. This measure whether reservation process in the hotel is computerized or

not. The study expect that computerized reservation process affect positively the
performance of the hotel as this increases efficiency and accuracy and therefore even
number of employees, sales and working capital are expected to be increasing with the
use of computerized reservation process.

xଷ Management. Also, the management can be computerized or manual. A computerized

management system is expect to positive influence on sales, number of employees and
amount of working capital. This also could be contributed by efficiency and accuracy
which is increased by the use of computerized management system.

xସ Commitment. This is determined by whether the hotel use ICT in its business
commitment or not. The use of ICT in business commitment have a positive influence
on the performance of the hotel by affecting the sales, employees and working capital.
The reason for a positive influence in the performance is because ICT increases
efficiency and accuracy in the hotel.

xହ Status. This was measured by looking at whether the hotel grow with the use of ICT.
The variable is expected to have positive effect on the performance of hotel because as
the business grow as a result of ICT it leads to increase in sales, number of employees
and working capital.

32
x଺ Supplies. Supplies for the hotel can be done by E-procurement, Physical procurement
and by using both physical and e-procurement. It is expected to have positive impact on
sales, working capital and number of employees if the hotel uses e-procurement as it
increases efficiency and procurement processes in the hotel. On the other hand, use of
physical procurement have limitation and hence affects the performance of the hotel.

Table 2.4 Summary of Determinant of Hotel Performance

Determinant Descriptions Expected sign

Reservation Booking for reservation in the hotel (1=Use of ICT in booking, +

0=Otherwise)

Process Reservation process (1=Computerized reservation Process, +

0=Otherwise)

Management Management system (1=Computerized management system, +

0=Otherwise)

Commitment Use of ICT in business commitment (1= Use of ICT, 0= Otherwise) +

Status Growth of hotel with ICT (1=Grow, 0=Shrinking) +

Supplies Purchase of supplies (1= E-Procurement, 2=Physical procurement, +/-

3=Both approaches)

Source: Author, 2017

2.13 Hypothesis

H1: There is no significant relationship between ICT and Sales in Hotels.

H2: There is no significant relationship between ICT and Capital in Hotels.

H3: There is no significant relationship between ICT and Number of employees in

Hotels.

33
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This section is having details about research methodology. The chapter covers the
following: Research design (quantitative research design), area of study, population, and
sample size and data collection, data analysis, reliability and validity.

3.2 Research design

Quantitative research design has been applied as to gather statistical data from
respondents. It is designed to produce statistically reliable data that tells us how many
people do/think something. Quantitative data typically is in numerical form such as
averages, ratios or ranges.

Quantitative research design is suitable in different situations such as when we want to

quantitative answers, when conducting audience segmentation, to explain some
phenomena as well as to test hypothesis. Therefore, this study adopted quantitative
research design to find out the extent to which hotels in Dar es Salaam utilize ICT for
better performance.

3.3 Area of study

The study was conducted in Dar es Salaam region. Dar es Salaam is the largest city in
Tanzania. Dar es Salaam is not only the principal commercial city of Tanzania but also
an important regional economic hub. Dar es Salaam is divided into five administrative
districts: Kinondoni, Ilala, Temeke, Ubungo and Kigamboni. Dar es Salaam being a
commercial capital is highly populated and urbanized, so there are many small and
medium sized hotels.

34
3.4 Population

Population refers to the total of objects under investigation. The population of this study
were SMEs who use ICT in their businesses. The small and medium sized hotels located
in Dar es Salaam were the population of the study.

3.5 Sampling and sample size

A sample is a group of respondents drawn from a population under study (Kothari,

2008). According to the nature of the research, the sample was obtained through
purposive sampling. A sample is a small group drawn from the population to represent
the whole population. Sample size for this study was 100, which included hotels, both
small and medium. Since any sample size above 30 is viewed as suitable for conducting
statistical test (Saunders, Lewis, & Thornhill, 2009) therefore this choice is considered
to be proper.

3.6 Data Sources and Type

The researcher collected data from both primary and secondary data sources;

Primary data was collected directly from respondents through questionnaires. Primary
data includes location of hotels, age of the business, number of rooms, occupation of
guests and methods of payment used to name a few.

Secondary data was obtained through various relevant literatures. The researcher
reviewed previous journals, reports and books that relate to the subject. Secondary data
includes quantitative and qualitative analysis of ICT usage in SMEs’ performance.

3.7 Data collection instruments

The researcher used the following instruments in data collection.

Questionnaire was used in this study, since it is free from bias and respondents had
enough time to answer the questions personally. This method used to find answers based
on primary data from the respondents with questions that reflect the study objectives.

35
Years in business, number of rooms, types of guests, occupation of the guests,
reservation process, room occupancy rate, a few to name.

Documentary review; Secondary data was collected by reading various reports and
books at the Mzumbe university Dar es Salaam campus library and only relevant
literature was used with proper referencing done.
3.8 Reliability and validity

Reliability and validity are the basic principles of social research. The former refers to
the ability of an instrument to produce consistent results. It is also characterized by
precision and objectivity. There are different types and checking methods that address in
reliability and validity in qualitative and quantitative research.

Reliability is the degree to which measures are free from error and therefore produce
consistent result. It includes internal reliability as well as external reliability. Internal
reliability refers to the consistency of results within a particular site, and the plausibility
of data within that site. External reliability refers to the consistency and duplicative
attributes of data across the site (Neumannn, 1994).

George & Mallery (2003) provide the rules of thumb that the alpha of greater than 7 is
acceptable and therefore the reliability for the study is considered successful.
Table 3.1 test for reliability

Variable alpha

Reservation 0.75840

Process 0.77980

Management 0.79580

Commitment 0.78610

Status 0.78400

Supplies 0.79320

Grand average 0.78288

36
Validity on the other hand is defined as whether an instrument measures what is
supposed to measure given the context in which it is applied. Validity for this was
censured by evaluation of the instrument and pretesting the instrument in the pilot
survey.

3.9 Data processing and analysis Methods

Data analysis is an important step forward finding solution of a problem understudy,

(Guba & Lincolin, 1994) describe data analysis as being a systematic process involving
working with data, organizing them and dividing them into small manageable parts.

Data was coded and entered analyzed by using the Statistical Package for Social Science
(SPSS) 20. and ANOVA used to make a comparison between the hotels using ICT and
non-ICT with their performance, T-test was useful in comparing sales between peak
season and off season. The study also used MS Excel to draw tables and figures
presented and supported with interpretations.

Conclusion

This chapter explained about the methods used for the study. Quantitative research
design used for the study, in all Dar es Salaam districts by using purposive sampling to
choose 100 hotels to be used as sample of the study. Primary data found by using
questionnaire and secondary sources of data was literature reviews. Reliability tested
and considered successful. Different programs used for the study, including SPSS for
data entry, STATA and one way ANOVA for comparison of ICT and non ICT user with
their performance and then MS Excel drew diagrams, charts and tables.

37
 CHAPTER FOUR

PRESENTATION AND DISCUSSION OF THE FINDINGS

4.1 Introduction

The target of presenting data is to provide the evidence that research has been carried
out, to find answers of the research questions, which therefore form the base for the
conclusion and implication. The results has been presented by referring objectives of the
study, research questions and hypothesis which were settled by the researcher.

This chapter is structured as follows; analysis on the general characteristics of the Hotels
(both medium and small sized Hotels) as shown on section 4.2. Also the results of the
main objective which is “the role of ICT on the performance of SMEs – Hotels”, has
analyzed through this chapter whereby its variables has been tested by using ANOVA
and lastly, section 4.5 has the logistic regression model with its tests.

4.2 General characteristics of Hotels

4.2.1 Location of the Hotel

A total of 100 hotels from different location of Dar es Salaam was used for the study as
shown on figure 4.1. The number of hotels was quite high for Ilala and Ubungo
comprising of 29% and 23% respectively. This could be attributed by the fact that these
areas are found in the city center where customers would find easy to have other services
such as airport, hospital, which are accessible in those areas. The number was quite low
for Kigamboni and this could be because Kigamboni is located far from bus terminals
and airport hence difficult for customers to access the place.

38
Figure 4.1 Location of the business

35
30
25
Percentage

20
15
10
5
0
Kinondoni Temeke Ubungo Ilala Kigamboni
Location

Source: Field data, 2017

4.2.2 Number of Rooms

Most of the Hotels

tels has 20
20-29
29 rooms as shown on the figure 4.2, covering 30%, followed
by 23% which represent 10
10-19
19 rooms. The study based on medium and small sized
Hotels (SMEs), therefore most of the hotels are having average number of rooms due to
the capital invested,, compared to large hotels.

Figure 4.2 Number of Rooms

Source: Field data, 2017

39
4.2.3 Years in business of the Hotel

Most of the hotels have been in the business for 6 to 10 years as shown on figure 4.3;
4.3
35% of 100 hotels which were selected have been on the business on such period of
time, which means it is between 2007 and 2011. By that time, there was huge money
circulation and high income flow, therefore people were able to spend for either
vacations, holidays etc. Tourism was taking place compared
ared to past years. These led to
have many hotels during that time.

Figure 4.3: Years in business

Source: Field data, 2017

4.2.4 Main type of Guest

Guests

The study found that, most of the Dar es Salaam Hotels’ type of guests are from within
Tanzania. The figure
ure 4.4 shows that National guests from different regions within
Tanzania like Tanga, Mtwara, Kagera and other regions are likely to visit mostly than
the ones from Europe or America acting as Tourists. The frequency and percentage does
not resemble the total
tal since the question allowed the respondent to answer more than
one type of guest.

40
Figure 4.4: Main type of Guest

Source: Field data, 2017

4.2.5 Occupation of guests

Up to 56 percent of the Guest in Dar es Salaam hotels are Business people, followed by
19% which represent employees, 13% of Tourists and 12% of guests attending
workshop/seminars and vacation/holidays. Business people are leading in this, because
Dar Es Salaam is the leading business city and leading financial center in Tanzania.
Apart from it, it is also leading in arrival and departure points, therefore there is a high
concentration business compared to other regions of the country.

41
Figure 4.5: Occupation of the Guest

Source: Field data, 2017

017

4.2.6 How Guests book for reservation

Most guests do their Hotel booking by physical visit, either personal or friend. The
figure 4.6 showing that booking for reservation is done mostly by physical visit than
other ways like mobile phones, or email and website. People are doing physical booking
for different reasons, assurance of getting the room is more likely than booking through
non-physical
physical means. Also they do so, just to avoid customer distortion, and last but not
least; most of the small hotels ha
has no ICT facilities so that guests cannot book online.

Figure 4.6: Mode of making reservations

50
40
percentage

30
20
10
0
By mobile phone By e-mails By Website By physicalvisits
calls personally or friend

reservation facilities

Source: Field data, 2017

42
4.2.7 Reservation Process

The study set to find out if the Dar es Salaam hotels reservation process is computerized
or not. The findings in figure 4.7 show that,, 69% said their reservation process is
computerized while 31% were not computerized. The ones with computerized
reservation process are using ICTs way in booking, for example websites, phones and
others and therefore paymen
paymentt can be done through mobile money or electronic banking
then room be reserved, and at the same time Guest information remains in the system for
future use or as a record. But the hotels with no computerized reservation process, guests
are just going to thee hotel physically and guests information be recorded in the book, or
any other non-computerized
computerized way.

Figure 4.7 Reservation process

31%

69%

Yes No

Source: Field data, 2017

43
4.2.8 Receiving Payment

According to figure 4.8, cash payment shown as the most valuable and trusted way of
receiving payments in most of the hotels in Dar es Salaam. More than 80% responded
that they receive cash payment, since other guests has no bank accounts, credit cards or
using mobile money, apart from that assurance of money by cash payment is accessible
different from other ways such as e-banking. Apart from cash, also mobile money
transfer been used in Hotels leading by M-pesa followed by TigoPesa and then Airtel
Money. Cheque payment and E-banking are mostly used by corporate companies and
telegraphic transfer by tourists.

Figure 4.8 Receiving payment

120
100
Percenaget

80
60
40
20
0

Payments

Source: Field data, 2017

4.2.9 Business Commitment

As the results shown on the figure 4.9 below, among the 100 Hotels are paying their
business commitment (TRA, DAWASCO, TANESCO, suppliers) through Max Malipo
with 35%, followed by E-banking, cash, cheque and Tigopesa. They are using these
electronic means to pay for their business commitment because they save time and they
are fast, compared to non-electronic means.

44
Figure 4.9: Payment of the business commitment

Source: Field data, 2017

4.2.10 Supplies

The results show that, most of the Hotels are getting the supplies by using both E-
E
procurement and Physical procurement for 58% as shown on figure 4.10. This implies
that hotels choose a mode of getting supplies depending on the nature of the product.
Some SMEs are reluctant to adopt E-procurement
procurement because they perceive it to be
expensive, and so they only use it if the need arises. However, there are SMEs who
adopt E-procurement
procurement because of the benefits such as wide spread supplier bases and
reduced transaction time but also use physical procurement in the scenario when it is
less costly than the E-procurement.
procurement.

45
Figure 4.10: Hotel supplies

16%

58% 26%

E-procurement Physical procurement Both approaches

Source: Field data, 2017

4.2.11: Management system

Management system comprises all the activities done in the Hotel being managed
electronically.
lly. Among the 100 hotels that has been selected, 60% of them using
computerized management system, while 40% are still in manual management. That
60% are using computerized management system due to the fact that it reduce data
duplication, improve data ac
accuracy,
curacy, fastening data process and information retrieval. But
the ones who are using manual management system said it is beca
because
use of being cheap and
flexible.

46
Figure 4.11 Management system

40%

60%

Computerized Manual

Source: Field data, 2017

4.2.12 Room Occupancy Rate

Room occupancy rate for all 100 hotels were as follows, 39% of Hotels was between 81-
100, while 38% rated 61-80 and 41-60 was for 23%. This simply means there is the high
tendency of room occupation in both small and medium sized hotels in Dar es Salaam.
This could be attributed by the fact that, Dar es Salaam has a huge population and
movement of people from either within and other parts of the country.
Figure 4.12: Room occupancy rate

45
40
35
30
Percentage

25
20
15
10
5
0
41-60 Percent 61-80 Percent 81-100 Percent
Room occupancy rate

Source: Field data, 2017

47
4.2.13: Sales during Peak and off season

Sales
es volume during peak and off season has been analyzed by using T-test
T so that to
test if there is a significant difference in sales between the two seasons. As shown on
figure 4.13, there was a statistical significance difference in mean sales at 1% level with
high mean of 3.36 during the peak season compared to off season mean of 3.09.
Figure 4.13: Sales volume during peak and off season

Source: Field data, 2017

4.2.14 Hotel workers

The study found that, most of the Hotels has 10

10-19
19 workers simply because
beca the hotels
used for the study was small and medium and therefore they have few number of rooms
which does not need large number of workers. Most of the hotels have 20-29
20 rooms
which makes the hotelier to have 10
10-19
19 workers who are enough to provide services
ser to
guests.

48
Figure 4.14: Number of Hotel Workers

Source: Field data, 2017

4.2.15: Average amount of Working Capital

The total amount that most of the Hotels spent for paying rent, employees, taxes,
supplies, debts, utilities – power and water, internet, among others is 3m-4m
3m which is
represented by 43% and only 1 percent of 100 Hotels has working capital of less than
1million. The estimation of average amount of working capital is calculated after all the
Hotel expenses.
Figure 4.15: Amount of working capital

Source: Field data, 2017

49
4.2.16: Hotel expansion

The study set to explore views from the respondents if by the use of ICT made the hotel
to grow or shrink. The study observed that, 96% of the hotels said the business is
growing by the use of ICT facilities and infrastructure. Business is growing in terms of
publicity,, providing best and fast services
services. Apart
part from it management, operations,
payments, booking and supervision has becom
becomee easier because of ICT. Only 4% of the
respondents said ICT it cause their business to shrink
shrink. This is in line with their views on
whether ICT usage in their busin
businesses helps to grow or shrink.
Figure 4.16: Expansion

Source: Field data, 2017

50
4.3 The Role of ICT on the Performance of Hotel

The study set to identify the role of different ICT related variables on the Performance of
the hotel. Different ICT variables were tested for their role on the performance of the
hotel by using ANOVA and results were as indicated in the following subsections:
4.3.1 Reservation process and performance indicators

Reservation process and hotel performance was tested to see if there was a statistical and
significant different in performance between computerized reservation process and the
reservation process which is not computerized. Results indicates that there was a
statistically significant different in performance for all the three measures (i.e. sales,
working capital and number of workers) with computerized reservation process having a
high mean for number of workers, working capital, peak season and off-season with
10% significant level for number of workers and working capital, 5 % significant level
for peak season and off-season.
Table 4.1: Reservation process and performance indicators

Reservation Process

Mean Barlett's test

Performance Indicators Yes No chi2(1) Prob>chi2
Number of workers 2.2173913 1.5483871 3.2816 0.070
Working capital 3.4492754 2.5806452 3.238 0.072
Peak season 3.6956522 2.6129032 6.2198 0.013
Off-season 3.4347826 2.3225806 5.2752 0.022

Source: Field data, 2017

How Guests book for reservation and performance indicators

The table 4.2 shows how guests book for reservation and performance indicators tested
to find if there was significant difference between them. The results found the
statistically significant in Reservation booking (either with the performance measures
used which are workers, working capital and sales (both peak) but insignificant in Peak

51
season; with level 1% in peak season, while in number of workers and working capital
with 5% level.
Table 4.2: How guests book for reservation and performance indicators

How Guests book for Reservation

Mean Barlett's test
Performance Indicators By Mobile By E-mail By Website By physical visit chi2(3) Prob>chi2
Number of workers 1.75 1.8666667 2.8235294 1.9 9.9265 0.019
Working capital 2.9642857 3.2666667 3.8235294 3.025 10.1456 0.017
Peak season 3.1428571 3.6 3.8823529 3.2 16.536 0.001
Off-season 2.75 3.2666667 3.55294118 3.05 4.8308 0.185

Source: Field data, 2017

Business commitment and Performance indicators

The test to see the significance difference between Business commitment and hotel
performance was done and indicated a significant difference in performance between
ICT means and non-ICT means of paying for the business commitment. Results indicate
that there was a statistically significant difference in performance for all the three
measures (i.e. sales, working capital and number of workers) with Business commitment
payment means (Max-malipo, E-banking, Tigopesa, Cheques and Cash) having 0.82
which is equal to level 10% for number of workers, working capital and off season with
50% significant level and 1% significant level for peak season.
Table 4.3: Business Commitment and performance indicators

Business Commitment
Mean Barlett's test
Performance By E- By
By max malipo Cheque By Cash chi2(4) Prob>chi2
Indicators banking TigoPesa
Number of
1.7428571 2.3214286 1.75 2.6 1.826087 8.2729 0.082
workers
Working
2.914286 3.642857 2.75 3.6 2.913044 10.6559 0.031
capital
Peak season 3.171429 3.75 2.75 3.8 3.086957 18.9469 0.001
Off-season 2.885714 3.571429 2.25 3.3 2.869565 12.4438 0.014

52
Management system and Performance indicators

Management system and hotel performance was tested to see if there was a statistical
and significant different in performance between computerized management system and
manual management system. Outcomes shows that there was a statistically significant
different in performance for all the three measures (i.e sales, working capital and number
of workers) with management system by having a high mean for number of workers,
working capital, peak season and off-season, with 5% significant level for number of
workers and 10% for working capital and for off-season but 5% for peak season.
Table 4.4: Management system and performance indicators

Management System
Mean Barlett's test
Performance Indicators Computerized Manual chi2 (1) Prob>chi2
Number of workers 2.2166667 1.7 2.3838 0.123
Working capital 3.3666667 2.9 3.6895 0.055
Peak season 3.6 3 5.9541 0.015
Off-season 3.333333 2.725 3.2876 0.07

Source: Field data, 2017

4.4: Hotel Performance Regression Models

4.4.1: Diagnostic test of Logistic Regression Model

In order to estimate model, diagnostic tests were performed to see if relevant variables
were included in the model. The test was performed in order to avoid a problems of
biased coefficient estimates and very large standard error to avoid invalid statistical
inferences. Therefore, model fitness test was conducted before we use model for
statistical inferences.

53
4.4.2 Model Specification Test

This was performed to see if relevant variables are used in regression. The logit model is
assumed to be the results of the linear combination of the predictors. The two sides of
the model was considered, where first we considered the link function of the outcome
variables on the left hand side of the equation. Also, logit function is assumed to be the
correct function to use. Further, the right hand side of the equation assumes that all
relevant variables are included in the model and both models are the linear combination
of the predictors.

Results from table indicate that, all the three models are correctly specified since _hat is
statistically significant at 1 percent for all the three models. On the other hand, _hatsq
was statistically insignificant. Therefore it is with results we say we have included all
relevant variable s in our model and hence the model can be estimated and can be used
for statistical inferences.

54
Table 4.5: Model specification Test

SALES Coef. Std. Err. z P>z [95%Conf. Interval]

_hat 1.031602 0.219579 4.70 0.0000*** 0.601236 1.461968

_hatsq -0.0558 0.10643 -0.52 0.6000 -0.2644 0.1528

_cons 0.124531 0.381073 0.33 0.7440 -0.62236 0.87142

WORKERS Coef. Std. Err. z P>z [95% Conf. Interval]

_hat 1.499262 0.396899 3.78 0.0000*** 0.721355 2.277169

_hatsq 0.377044 0.139655 2.70 0.9870 0.20456 0.20782

_cons -0.14792 0.307284 -0.48 0.6300 -0.75018 0.454348

CAPITAL Coef. Std. Err. z P>z [95% Conf. Interval]

_hat 1.017176 0.270541 3.76 0.0000*** 0.486926 1.547426

_hatsq 0.024864 0.239853 0.10 0.9170 -0.44524 0.494967

_cons -0.02877 0.364211 -0.08 0.9370 -0.74261 0.685072

*** indicate significant at 1%

Source: Field data, 2017

55
4.4.3: Multicollinearity test

Multicollinearity exist when two or more independent variables in the model are
correlated and provide redundant information about the response. Severe
multicollinearity leads to increased standard error of estimates of the coefficients which
decreased reliability and often results can be confusing and misleading.

Multicollinearity can be detected by computing correlations between all pairs of

predictors. If some correlation are close to 1 or -1, remove one of the two correlated
predictors from the model (Gujrati, 2004). Results on table 4.6 Indicates that our
variables are not correlated and therefore our estimates are reliable and can be used for
statistical inferences.

Table 4.6 Multicollinearity test

Reservation Process Management Commitment Status Supplies

Reservation 1.0000

Process 0.2913 1.0000

Management -0.3333 -0.6885 1.0000

Commitment -0.0955 0.1274 -0.0781 1.0000

Status 0.1178 0.3216 -0.2439 0.1516 1.0000

Supplies -0.0870 0.0582 -0.0761 0.1093 0.1636 1.0000

Source: Field data, 2017

Another way of detecting multicollinearity is by calculating the variance inflation factors

(VIF) for each independent variables. Also in this case Multicollinearity exists if VIF is
greater or equal to 5. From table 4.7 VIF was below 5 which indicate there was no
severe Multicollinearity among explanatory variables.

56
Table 4.7: Variance Inflation Factors

Variable VIF 1/VIF

Reservation 2.56 0.389954

Process 4.52 0.221483

Management 2.62 0.381125

Commitment 3 0.333259

Status 3.02 0.331508

Supplies

Physical Procurement 2.63 0.379939

Both Approaches 3.5 0.285873

Mean VIF 3.12

Source: Field data, 2017

4.4.4: The Logistic Regression Model and Hypothesis Test

After having tests for the variables that are to be used in the model, we can therefore use
them in the regression. Therefore, the logistic regression model which shows the role of
ICT in the Hotel performance is as shown on table 4.8.

57
Table 4.8: Logistic Regression Model

SALES WORKERS CAPITAL

Coef. Coef. Coef.

Reservation 0.0879675 (0.14) 0.2955494 (0.56) 0.3691329 (0.72)

Process 2.122981 (2.56)** -1.92271 (-2.03) ** 1.0355470 (1.38)

Management -0.8290633 (-1.10) 3.034014 (3.43)*** 1.593806 (2.39)**

Commitment 0.3057110 (0.47) -0.6681142 (-1.35) -0.0957509 (-0.18)

Status 2.406235 (3.71)*** 0.7481292 (1.40 ) 0.1111378 (0.22)

Supplies

Physical Procurement -1.982826 (-1.70)* -1.3550640 (-1.52) 1.2327990 (1.36)

Both Approaches -1.3203040 (-1.38) -1.327588 (-2.00 )** 1.338904 (2.13)**

_Cons -1.2801510 (-0.89) -2.181853 (-1.82)* -1.7034970 (-1.61)

Number Of Obs 100 100 100

Lr Chi2(7) 61.43 22.84 28.51

Prob > Chi2 0.0000 0.0018 0.0000

Pseudo R2 0.4515 0.1720 0.4515

Log Likelihood -37.315417 -54.987046 -37.315417

1
The number in parentheses are z-statistics for Logistic model
2
Legend *, ** and *** are 10%, 5% and 1% levels of significance
Source: Author computation from survey data, 2017

58
Results from the table confirms the previous tests on model specifications. From our
three models, the null hypothesis is that all coefficients are simultaneously equal to zero
and this was tested by using the likelihood ratio. The calculated likelihood ratio chi-
square is 61.43, 22.84 and 28.51 for increase in sales, number of workers and capital
respectively leading to the rejection of the null hypothesis 1 percent for all the three
models. This indicates that our model is capable of explaining the performance of hotel.
Also, this indicate that our model fit well with the data.

4.5 Influences of ICT on Hotel Performance

The results in table 4.8 indicate that, Reservation Process, Status and Supplies have
significant influence on increase in sales of the hotel. Also, process, management and
supplies have significant influence on increase in number of employees. Results, further
indicate that management and supplies have a significant influence on the increase in the
capital of the hotel.

4.5.1 Computerized Reservation Process

Computerized reservation process was found to be positive and statistically significant at

5% level at influencing performance of the Hotel. Result further indicates that
computerized reservation process increases the monthly sales volume by 2.12, and it
decrease the number of workers by 1.9. This results is similar to (Lin & Lee, 2009) who
concluded that, online reservation system is useful tool for the Hotel and it can be used
as a competitive profit strategy. Also the study by Zozi Advance (2015), Catillo, Asi,
Berberabe, Mandigma & Sarmiento (2014) mentioned computerized reservation process
as it is important to Hotel sales and can add up sales effortlessly and therefore business
can grow up.

59
4.5.2 Computerized Management System

Management system is also the factor or variable which is significant at influencing the
Hotel performance, as shown on the table 4.8. The study found computerized
management system as statistically significant at level 1% in increasing number of
workers and increase capital at level 5%. A study done by Cornd (2017) mentioned the
advantages of using computerized management system including the work speed and
efficiency, document generation and timely data. Therefore, 60% of the respondents are
using computerized management system since it influence the Hotel prformance.

4.5.3 Hotel Status

The Hotel status was found positive and is statistical significant at level 1% in
influencing the Hotel performance. The study indicate that, by using ICT the status of
room occupancy rate is increasing. This is because ICT when it’s used in the hotel
operations such as front office operation, booking systems, guests can be able to do
online reservation at any time as long as they have the internet access, therefore the
occupancy will increase than the ones who don’t have ICT facilitates in their day to day
operations.

4.5.4 Supplies

Both approaches (e-procurement & physical procurement) was positive and statistical
significant in increasing capital as the one of the factors which influence the Hotel
performance at level 5%. Both approaches are mostly used in the Hotels because of the
technology situation in Tanzania is average and still not widely spread. In this view,
there must be both approaches so that the Hotel to get supplies. Physical procurement it
is significant but it is decreasing sales compared to e-procurement. Both approaches it is
suitable since it is statistical significant at level 5%, though it is decreasing workers by -
1.32 while it is increasing the Hotel capital for 1.33.

60
4.6 Test for Hypothesis

Based on the research findings, the Hypothesis was tested to find out if they are rejected
or accepted. In this study three hypothesis were formulated and the logistic regression
model was used to test so as to examine if all affects the performance of Hotels. The
results from each hypothesis are as follows:

The first hypothesis stated that, there is no significant relationship between ICT and
Sales in Hotels. Logistic regression model on table 4.8 show the results that there is a
significant relationship between ICT and Sales, and variables Physical procurement,
status and computerized reservation process has a positive influence in enhancing sales
performance. Therefore, by this results null hypothesis is rejected since there is a
relationship between ICT and Sales in Hotels.

Second hypothesis is; there is no significant relationship between ICT and Capital in
Hotels. This hypothesis was tested by the logistic regression model shown on table 4.8,
and the result was that there is a relationship between ICT and Capital in Hotels since
the use of ICT in the Hotels enhance the working capital and hence the performance of
the hotel. Computerized management system and the use of both approaches in buying
supplies of the hotel are the variables that has a positive influence in increasing the
capital. Therefore, the null hypothesis is rejected.

There is no relationship between ICT and Number of employees in Hotels was the third
hypothesis of the study. This null hypothesis is rejected due to the results shown on
Logistic regression model on table 4.8, it shows that there is a significant relationship
between ICT and Number of employees in Hotels. Computerized reservation process
and both approaches in supplies has a negative influence in increasing the number of
employees in Hotels, but with accordance of the results computerized management also
found that it increasing the number of employees in Hotels and has a positive influence.

61
4.7 Conclusion

In this chapter, descriptive analysis was used to analyze the general attributes of the
Hotels in Dar es Salaam. Attributes such as location of the hotels, their sales, years in
business, number of rooms they have and their use of ICT in their daily activities were
described in the study. Further, the study used ANOVA test to compare the performance
between hotels which uses ICT and hotels which don’t uses ICT. Results generally
indicated that hotels which uses ICT more performs better in sales, working capital and
number of employees compared to the one who uses less ICT. Also, comparison of sales
between the Peak and off season was done by using T-test and results indicated that
sales were high during the peak season compared to off season. Finally diagnostic test of
model such as model specification and multicollinearity test was done and findings show
that the model was correctly specified and it has no multicollinearity. Lastly, the logistic
regression model was estimated and found that computerized reservation process,
computerized management system, supplies (both approaches) and the hotel status as the
significant variables in influencing performance of the hotel.

62
 CHAPTER FIVE

SUMMARY, CONCLUSIONS AND POLICY IMPLICATIONS

5.1 Introduction

The summary of findings, conclusion and policy implication of the study in line with the
objective of the study has been presented in this chapter.

5.2 Summary of Findings and Conclusion

The main objective of the study was to find out the extent to which hotels in Dar es
Salaam utilize ICT for better performance. The study was motivated by the fact despite
of importance of ICT, that most SMEs in Tanzania still used old technology, and
therefore staying competitive is a challenge. Therefore, the study at hand determined the
extent to which small and medium hotels in Dar Es Salaam use ICT in their daily
operation.

The study identified key attributes of the hotel. These attributes include location, years
in business, number of rooms, occupancy rate, sales and ICT use and related
performance measures (i.e sales, working capital and number of employees).

The findings on ICT related factors which influence performance of the hotel found that
computerized management system have positive influence in sales of hotels, on the other
hand physical procurement influences negatively sales of the hotel. The study, further
identified factors which has a significant influencing in increasing workers of the hotels
and results shows that computerized management system have a positive influences in
increasing number of workers. Computerized reservation process and use of both
physical and e-procurement decreases the number of workers in hotel. Lastly
computerized management system and the use of both e-procurement and physical
procurement in hotel supplies increases the level of capital of the hotel.

63
Lastly, comparison of sales during off and peak seasons was done using t-test, the study
find that sales during the peak season were significantly high compared to off season
sales.

5.3 Policy Implication

The findings from this study have relevant implications on policy and research. The
policy implication of this study tries to highlight important ICT related factors that hotel
and other stakeholders to have a look at for their hotels to perform better.

Based on the findings above it is important for policy to be enacted in favor of ICT
variables that were found to be significant in influencing performance of the hotel.
Therefore, the policy implication in favor of those factors is as explained below:

i. Computerized reservation process

a. Since computerized reservation process seem to be very Important in
Hotels regardless the size or location. Non-ICT hotels or the hotels which
are still in manual mode of reservation, should be encouraged to establish
or set-up computerized process. To those Hotels which already having
ICT related reservation process, should be encouraged to add more
important features that are not included into the existing ones.
ii. Computerized management system
a. As the study found computerized management system as the factor which
influence the Hotel performance, more emphasis should be on the
implementation of the computerized management system in both hotels in
Tanzania. Computerized management system helps to boost the hotel
sales, but mostly in managing operations and day to day activities.
Automatic back up of data, and better control of business through
automation is easier with the computerized management system, and
therefore Hotels should adopt these systems.

64
 iii. Hotel supplies
a. For the hotels to buy or purchase their requirements, they encouraged to
adopt e-procurement, since it has so much benefits. Regardless of the
current purchasing strategy of the Hotel needs, it is encouraged that, the
use of e-procurement will be as important management instrument to
influence and enhance performance. The available technology forcing
most of the hotels to use physical procurement and e-procurement at the
same time, and therefore, adoption of new technology will boost the use
of e-procurement in most of the hotels.

5.4 Area for Further Study

This study mainly focused on the role of ICT to small and medium sized Hotels in Dar
es Salaam, and therefore:

i. Other studies should go further on other big cities such as Mwanza, Arusha,
Tanga, and Mbeya so that to find the roles of ICT on the performance of Hotels
as the study was only in Dar es Salaam.
ii. Also ICT is not the only factor which influences hotel performance, other studies
on other factors which affects performances of hotels such as location, service
quality, size of the hotel, brand affiliation, few to mention.

65
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APPENDIX 1
Questionnaire

Dear Sir/Madam

My name is Kemilembe Bais, a student of Mzumbe University Dar Es Salaam Campus

College, pursuing Master of Business Administration in Corporate Management. As a
partial fulfilment of the requirement for the award of the degree, a student is required to
do research and thereafter submit a dissertation. This questionnaire serves the purpose of
data collection. The study is about “the role of ICT on the performance of SMEs in
Tanzania”.

This questionnaire aims to acquire data and the responses obtained will only serve the
stated purpose and confidentiality is guaranteed. Answering the questionnaire is not time
consuming and due to limited time to conduct the research timely response will be
appreciated.

1) Name of Hotel (optional) ____________________________

2) Location:
1. Kinondoni
2. Temeke
3. Ubungo
4. Ilala
5. Kigamboni

3) Number of Rooms:
1. 01 - 09
2. 10 – 19
3. 20 - 29
4. 30 – 39
5. 40 – 50
6. 51 and above

75
4) Years in Business
1. 0 – 5
2. 6 – 10
3. 11 – 15
4. 16 – 20
5. 21 – 25
6. 26 and above
5) Main Type of Guests (tick 2)
1. Local (from within the Region)
2. National (from within Tanzania)
3. Regional (from within Eastern and Southern Africa)
4. Tourists (from Europe, America, etc)
6) Occupation of most of your Guests
1. Business people
2. Tourists
3. Employees
4. Workshops/Seminars
5. Vacation (holiday, rest etc)
7) How do most of your guests book for reservation
1. By mobile phone calls
2. By sms through mobile phones
3. By e-mails
4. By Website
5. By physical visits personally or friends
8) Is your reservation process computerized? 1. Yes_____ 2. No _____

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9) By what means do your hotel receive payments from guests and/or Suppliers
(mark the 3 most used means):
1. By Max Malipo
2. By M-Pesa
3. By Airtel-Money
4. By Tigo Pesa
5. By Halotel Money
6. By Telegraphic Transfer
7. By Cheque
8. By Cash
9. E-banking
10) How does your hotel paying for its business commitments:
1. By Max Malipo
2. By E-banking
3. By M-Pesa
4. By Airtel-Money
5. By Tigo Pesa
6. By Halotel Money
7. By Telegraphic Transfer
8. By Cheque
9. By Cash
11) How does your hotel get most of its supplies:
1. By E-Procurement
2. By Physical Procurement
3. By both approaches
12) How is your hotel management system:
1. Computerized
2. Manual

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13) How do you rate your Hotel Room Occupancy Rate – On average:
1. 0 - 20 percent
2. 21 - 40 percent
3. 41 - 60 percent
4. 61 - 80 percent
5. 81 - 100 percent

13b. By using ICT in Hotel management, what is the status of room occupancy:

1. Increased
2. Decreased
3. Remained the same

14) What is your estimated Hotel monthly sales volume (T. shillings) during peak
business season:
1. Less than 3m
2. 3m – 5m
3. 6m – 9m
4. 10m and above
15) What is your estimated Hotel monthly sales volume (T. shillings) during off
business season:
1. Less than 3m
2. 3m – 4m
3. 5m – 6m
4. 7m and above

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16) By using ICT has the hotel monthly sales volume increased/decreased/remained
the same?

1) Increased

2) Decreased

3) Remained the same

17) Currently, what is the total number of people working for the hotel (employed,
part time and laborers)
1. Less than 10
2. 10 – 19 people
3. 20-29 people
4. 30 – 39 people
5. 40 – 49 people
6. 50 and above

17b. By using ICT, in your view, has the total number of people working for the
hotel increased/decreased/remained the same

1. Increased

2. Decreased

3. Remained the same

18) What is a rough estimate of average amount of working capital in a month (The
total amount spent for paying rent, employees, taxes, supplies, debts, utilities –
power and water, internet etc.)
1. Less than 1m
2. 1 – 2m
3. 3 – 4m
4. 5 - 6m

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19) In your view has your average amount of working capital in a month
increased/decreased/remained the same compared to the previous months?
1. Increased
2. Decreased
3. Remained the same
20) In your own views, do you think by using ICT the way you do, the hotel is
growing or shrinking:
1. Growing
2. Shrinking

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APPENDIX 2
List of the surveyed Hostels

S/no Name of the Hotel Location

1 Marrioti Hotel Ubungo

2 Twiga Inn Hotel Temeke

3 Jumbo Hotel Ubungo

4 B Hotels Kinondoni

5 Justo Hotel Ilala

6 Big Elephant Hotel Ilala

7 Tiara Hotel Kigamboni

8 Adidas Hotels Temeke

9 Lorenzo Hotel Ubungo

10 Mambosasa Hotel Ubungo

11 Varlek Hotel Kinondoni

12 Sleep Inn Hotel Ilala

13 Kipepeo Beach Hotel Kigamboni

14 Aroche Grand Hotel Ilala

15 San Diego Hotel Ubungo

16 Hotel South Beach Kigamboni

17 Amverton Bay View Hotel Kinondoni

18 Mambosasa View Executive Ilala

19 Wanyama Hotel Ilala

20 Hotel Sapphire Ilala

21 Sunrise Beach Hotel Kigamboni

22 New Yuetan Hotel Ilala

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23 FQ Hotels Ilala

24 Al-Uruba Hotels Ilala

25 Kingsway Hotel Kinondoni

26 King D Hotels Ubungo

27 ABC Travelers Hotel Ilala

28 Hotreef Hotel Ilala

29 BluePearl Hotel Ubungo

30 Conway Hotel Kinondoni

31 Mayfair Hotels Kinondoni

32 DreamGlory B&B Hotel Kinondoni

33 Greenlight HotelIris Hotels Ilala

34 Hotel De Mag Kinondoni

35 HongKong Hotel Ilala

36 Mgulani Lodge Hotel Temeke

37 Lantana Hotel Ubungo

38 Jamirex Hotel Kinondoni

39 Butterfly Hotel Ilala

40 Hotel Nikko Tower Ilala

41 Neafaland Hotel Ubungo

42 Transit Motel Airport Ilala

43 Mesuma Hotel Kinondoni

44 AVM Hotel Kinondoni

45 Moga Hotels Kinondoni

46 KB Junction Hotel Kinondoni

47 Rosesy’s Hotel Kinondoni

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48 Caspedo Hotels Temeke

49 Double G Hotel Temeke

50 PR Hotel Temeke

51 Kilimanjaro Hotel Temeke

52 National Hotel Temeke

53 Lake Hotel Kigamboni

54 Wanyama Hotel Ubungo

55 Sparrow Hotel Ubungo

56 Park to Park Hotel Ubungo

57 Rombo Green View Hotel Ubungo

58 Password Annex Hotel Ubungo

59 Riki Hotel Ilala

60 Tropical Hotel Ilala

61 Iris Hotel Ubungo

62 Lamada Hotel Ilala

63 B n’ B Hotel Kinondoni

64 Sharon House Hotel Kigamboni

65 Skippers Haven Kigamboni

66 Nelly’s Inn Hotel Temeke

67 Stay Inn Hotel Temeke

68 Astriums Hotel Ubungo

69 Brunie Executive Resort Ubungo

70 Sayari Hotel Ilala

71 Mwika Hotel Ubungo

72 Northen Breeze Hotel Kigamboni

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73 Urban Rose Hotel Kigamboni

74 Kebbys Hotel Kinondoni

75 City Style Hotel Ubungo

76 Amariah Hotel and Restaurant Kigamboni

77 Fine Traveller Hotel Ubungo

78 Rising Sun Hotel Ilala

79 Ideal Hotel Ilala

80 Double View Hotel Kinondoni

81 Villa Nyangumi Temeke

82 Mexico City Hotel Temeke

83 Gold Plaza Hotel Ilala

84 Shamool Hotel Temeke

85 Amazima Hotels Temeke

86 MIC Hotel Ubungo

87 Tamal Hotel Kinondoni

88 P&A Hotel Kinondoni

89 La Vista Inn Kinondoni

90 Sawe Hotel Kinondoni

91 Picolo Beach Hotel Kinondoni

92 Nemax Royal Hotel Kinondoni

93 Picnic Villa Hotel Kigamboni

94 KB Hotel Ubungo

95 Nicos Lodge Ubungo

96 Rungwe Palace Hotel Ilala

97 Don Suite Hotel Ilala

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98 Perfect Hotel Ilala

99 Cate Hotel Ilala

100 Harbour View Suite Ilala

85