Strategic alliance enables firms to remain competitive and thus survive, grow and prosper. In order for enterprises to survive in a rapidly changing business environment, they are increasingly forming strategic alliances with other firms. This paper assesses the influence of distribution alliances on growth of hotel industry in Eldoret town. The paper is based on a study that sought to evaluate the influence of strategic alliances on the growth of the hotel industry in Eldoret town in North Rift region of Kenya. The study applied the Resource Dependency theory and the Resource Based theory and adopted a descriptive survey research design on a target population of 220 respondents involved in the hotel industry in Eldoret town. A sample of 112 respondents was drawn proportionately from four categories of hotels using stratified random sampling technique. A semi-structured questionnaire was administered to the respondents to collect the required data. Data was analyzed using both descriptive and inferential statistical techniques with the aid of the Statistical Package for Social Sciences (SPSS) version 20. Multiple regression analysis was also used to analyze the data. The study established that distribution alliance had increased the hotel sales, profits, product/service quality and reduction of costs. Further, strategic alliance had increased market share and enabled hotel businesses to gain competitive advantage. The study also established that the hotels have improved proximity to customers and faster and easier market penetration due to strategic alliance. Based on the research findings and conclusion in the study, it is recommended that hotels need to come up with governance structure that governs strategic alliance. This will help reduce problems encountered in strategic alliance.
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