Journal of Tourism, Hospitality and Sports - An Open Access International Journal Vol.1 2013 23 Determinants of the Level of Revenue of Tourist Enterprises within the North Coastal Region of Kenya Dr. Isabel Cheloti Mapelu*, Thomas Bor, Rita Nthiga, James Kamwea, Jacob Yego Moi University School of Tourism, Hospitality and Events Management, Department of Hotel and Hospitality Management, Moi University, P.O. Box 3900 - 30100, Eldoret, Kenya *Corresponding author: immapelu@yahoo.com Abstract Revenue of produced goods and/or provided services is determined by the volume of sales, prices of particular products, variety of products, ways of invoicing and period of payment. The current study was carried out at the north coastal region among tourist enterprises to establish factors that influence the amount of revenue they generate per year. The target population involved all enterprises relying on tourists for their business. They include hotel accommodation facilities, curio shops and tour companies. Simple random sampling technique was used to select a final sample of 97 enterprises, whose owners were given self administered questionnaires. Afterwards a regression on determinants of revenue by tourist enterprises was expressed as Y= β o + β 1 X 1 + β 2 X 2 + …β n X n + ε; Where: Y – is the dependant variable; X 1-n – are the independent variables; β 0 – is the constant β 1-n – are the regression coefficients or change induced in Y by each X, while ε is the error. The results indicated that the net monthly income of enterprises was determined by the age of the enterprise (β = 0.169, p = 0.001), the location of the business (β = 0.149, p = 0.038) and the number of employees within the enterprise (β = 0.703, p < 0.0005). Therefore findings indicated that the main determinants of revenue for tourist enterprises at Kenya’s north coast were the age of the business, business location and the number of employees. Keywords: Tourist enterprises; Determinants of revenue; Firm; Tourist expenditures 1. Introduction The Organization for Economic Cooperation and Development points out that tourism is one of the three main sectors of trade in international services, since higher education, more leisure time and consistent growth of employment and personal income are inducing more people to travel and to explore new regions. The world’s top tourist destinations in 1996 were France, United States, Spain, Italy, and China. International tourist arrivals in France reached 61.5 million, 44.8 million in the United States, 41.3 million in Spain, 35.5 million in Italy, and 26.0 million in China. In a revised forecast announced mid-1996, the WTO predicts that international tourists, which amounted to 566 million in 1995, will grow to 702 million in 2000 and to 1,018 million in 2010, while tourist international expenditures will climb from $393 billion in 1995 to $526.5 billion in 2000 and 4620.5 billion in 2010. Developed and developing nations look to the industry to have a positive impact on their economic activity, by contributing to the Gross National Product (GNP), supporting the country’s balance of payments and creating employment opportunities. A country that depends heavily on revenue from tourism will have a high relative figure for contribution to GNP, and vice versa. Compared to creating employment in the manufacturing sector, service sector jobs in tourism are seen as a relatively cheap and easy way of making employment opportunities available since the associated capital start-up costs are generally considerably lower (Ray, 1998; Crandall, 2006). Tourism expenditure contributes greatly to the economic impacts of sectors in the tourism industry as a whole. However, direct and indirect impacts of tourism expenditure depends on the ways in which the receipts are allocated which in turn depends on the ownership and resource utilization of the tourism supplying factor (Bull, 1995). Additionally, the economic benefits of travel and tourism in an area are the gross contributions to resident’s income and wealth resulting from the presence of travelers who make expenditures in the area (Ritchie, 1994; Fretchling, 2000). It is thus measured in monetary terms to determine levels of income over and above levels that would prevail in the absence of the activity under study Ceteris Paribas (Ritchie, 1994). The role of tourism in the generation of earnings and employment, as well as its contribution to investment, government revenue and balance of payments is well recognized and understood (Cleverdon, 1979; WTO, 1998; 2001a; 2001b). Consequently, destinations become involved in tourism due to the potential economic and other benefits that can be derived from it (Odunga, 2006). According to the World Travel and Tourism Council (WTTC) 2004, tourism generates around 214.7 million jobs worldwide (or 8.1 per cent of world employment) and accounts for over 10 per cent of global Gross Domestic Product (GDP). Locally, Kenya provides a good example of a developing country that has embraced tourism as a tool for socio- economic development (Sindiga, 1999; Odunga, 2006; Akama and Kieti, 2007). Tourism is one of the leading foreign exchange earner, only coming after tea, and contributes immensely to employment generation. Kenya has become a popular tourist destination for visitors from Europe, North America and emerging tourist generating regions, particularly South East Asia. Tourism also leads to income generation, provision of resources