Digital marketing adoption and financial performance among tourism micro, small, and medium enterprises (MSMEs) in Livingstone, Zambia

Abstract

Digital marketing has become an important tool for small businesses seeking to expand their customer base at a lower cost than traditional advertising. In Livingstone, Zambia, tourism micro, small, and medium enterprises [MSMEs] continue to face financial strain, yet no prior study has directly tested whether digital marketing adoption improves financial outcomes. This study addresses that gap by examining the adoption‑performance relationship and identifying the conditions that shape its impact. Guided by the Technology Acceptance Model, the research employed an explanatory sequential mixed-methods design. The target population comprised 167 MSMEs registered with the Patents and Companies Registration Agency (PACRA) across eight tourism sub-sectors. The survey sample size was calculated using the Yamane formula (n = N / (1 + N(e)²), where N = 167 and e = 0.05), yielding a minimum required sample of 118, of which 97 complete questionnaires were returned. Survey data were collected from 97 MSME owners and managers across eight tourism subsectors, complemented by interviews with 12 key informants. The financial performance scale used in the survey demonstrated excellent reliability, with a Cronbach’s alpha of 0.932, ensuring confidence in the results. Findings show that 60 of the 97 enterprises had adopted digital marketing, with social media marketing overwhelmingly dominant. Platforms such as Facebook, WhatsApp Business, and Instagram were used by more than nine in ten adopters, meaning social media accounted for nearly two‑thirds of all businesses in the sample, while technically demanding tools such as search engine optimisation and email marketing were rarely taken up. Revenue outcomes were stronger among adopters: their average agreement score was 3.68 compared to the neutral baseline of 3.0, and three‑quarters reported revenue growth after adoption. A correlation analysis confirmed that adoption was moderately linked to revenue change, with a coefficient of 0.325, showing that businesses using digital marketing were more likely to report growth than those that did not. However, the benefits were not automatic. Nearly half of the enterprises reported lacking the digital skills needed to use digital marketing effectively, while 44.2% cited insufficient funds for ICT investment, and the same proportion struggled with unreliable internet connectivity. These barriers were most acute among microenterprises, which make up more than three‑quarters of the sector, explaining why revenue outcomes varied by business size. To capture this reality, the study proposes a conditional impact model that extends the technology acceptance model by explicitly incorporating these enabling conditions. The study concludes that digital marketing adoption can improve financial performance among tourism MSMEs in Zambia, but only when skills, financing, and infrastructure are in place, and it recommends that MSME owners, industry associations, and policymakers prioritise training, affordable ICT financing, and reliable internet access to unlock the full potential of digital marketing in the tourism sector.