Impact of local sourcing on sustainability and profitability of Troutbeck hotel, Nyanga

Author

Muguto, Tamuka B.

Title

Impact of local sourcing on sustainability and profitability of Troutbeck hotel, Nyanga

Abstract

The study explored the impact of local sourcing on sustainability and profitability of Troutbeck Hotel Nyanga. Troutbeck Hotel Nyanga, like many Zimbabwean hotels, operates within a turbulent economic environment characterized by inflation, fluctuating exchange rates, and supply chain uncertainties. This instability makes reliance on imported goods for guest amenities, food, and operational supplies both costly and unpredictable and negatively affecting its profits. Simultaneously, consumer demand for sustainable practices and support for local economies is on the rise both domestically and within the international tourism source markets. Currently, Troutbeck Hotel relies heavily on imported food and beverage supplies, with approximately 60% sourced from external suppliers located outside of Zimbabwe. This high dependence on imports is reflected in the hotel's narrow profit margins. For example, in 2022 the costs associated with imported supplies increased by 20% more than the overall. The study aimed to evaluate the impact of local sourcing on the hotel's profit margins, quantitatively assess the cost savings from locally sourced ingredients, identify challenges in local sourcing, and recommend strategies for improving profit margins through local sourcing. An explanatory research design was employed, with data collected via structured questionnaires from a sample of 73 respondents, selected through simple random sampling. The data was analysed using both descriptive and inferential statistical methods. The study findings indicated that the procurement of local produce has a highly significant positive (p= 0.002) impact on profit margins. Using local suppliers, with a p-value of 0.012, also significantly boosts profit margins. Supporting local artisans, with a p-value of 0.067, shows a positive but not statistically significant impact. Hiring local staff, seasonal menus, and eco -friendly practices show positive but not statistically significant importance. The findings indicate that the procurement of local produce has a statistically significant positive impact on cost savings, with a t-statistic of 2.065 and a p-value of 0.043. However, the use of local suppliers, support for local artisans, hiring of local staff, seasonal menus, and eco-friendly practices show positive but not statistically significant impacts on cost savings. The findings indicate that supply consistency is the most significant challenge for Troutbeck Hotel in engaging in local sourcing, highlighting concerns about local suppliers' ability to provide a consistent supply of products. The results reveal that establishing long -term contracts is the most effective strategy for improving profit margins at Troutbeck Hotel Nyanga. The study recommended that Troutbeck Hotel should negotiate long term agreements with local suppliers to secure stable prices and a consistent supply of products.

Date

June 2024

Publisher

BUSE

Keywords

Local sourcing

Sustainability

Profitability

Supervisor

N/A