ABSTRACT: This study examined the effect of risk transfer strategies on organizational performance of classified hotels in Nairobi County in Kenya. The study was based on the prospect theory. The study employed a cross-sectional research design. The target population consisted of 50 classified hotels operating in Nairobi County and as classified as at the year, 2023. The study adopted a census sampling method. Both primary and secondary data were used. Primary data was collected using structured questionnaires. Secondary data was obtained through document analysis from official records obtained from the hotel. The study used inferential statistics. The regression results of the study indicated that risk transfer strategies have a positive and statistically significant effect on organizational performance of classified hotels. This is supported by regression coefficient of 0.459 and p-value 0.000. The study made appropriate contribution to the hospitality industry by proposing the best suited risk transfer management strategies on performance of hotels in Kenya, regionally and globally. Further, the study served as a reference for future researchers and scholars in strategic management.