This study examined the effect of dynamic capabilities on firm performance in travel agencies and tour operators in Mombasa County in Kenya. Specifically, the study examined the effect of dynamic managerial capability and dynamic alliance capability on firm performance in travel agencies and tour operators in Mombasa County in Kenya. The theoretical framework of the study was anchored on the resource-based view theory, dynamic capabilities theory and dynamic managerial capabilities theory. Drawing on the positivist research philosophy, the study utilized the quantitative non-experimental research methodology. The study employed the correlational, cross-sectional survey research design to test non-causal relationships between the study variables. The proportionate stratified random sampling technique was utilized to select a sample size of 29 travel agencies and 86 tour operators from a target population of 40 travel agencies and 121 tour operators in Mombasa County, Kenya. A structured self-administered survey questionnaire was used as the means of collecting primary data. The study utilized a cross-sectional survey-based approach to collect data. The collected data was processed and entered into the statistical package for social sciences (SPSS) version 26 to create a data sheet used for analysis. Data was analyzed using descriptive statistics and inferential statistics. The Pearson's product moment correlation results indicated that dynamic managerial capability and dynamic alliance capability had positive and significant relationship with firm performance in travel agencies and tour operators in Mombasa County in Kenya. A standard multiple linear analyses was conducted with firm performance as the dependent variable and dynamic managerial capability and dynamic alliance capability as predictor variables. The regression results indicated that dynamic managerial capability and dynamic alliance capability had positive and significant effect on firm performance in travel agencies and tour operators in Mombasa County in Kenya. The study recommended that it is imperative for the management to develop dynamic capabilities to foster performance of travel agencies and tour operators. The policy makers should consider initiating policy review to encourage the management to develop dynamic capabilities to foster the performance of travel agencies and tour operators. The study points to several intriguing paths for future research. Future researchers should examine the moderating effect of environmental turbulence on the relationship between dynamic capabilities and firm performance in other sectors or contexts.