The Challenges Of Hotel Business

Project and Seminar Material for Entrepreneurship

The Challenges Of Hotel Business


This study was carried out on the challenges of hotel business. A descriptive survey method was used for this study. The data for this research work was collected from both primary and secondary sources of data. Sampling population is used to avoid possible errors in dealing with population. The population size was narrowed down to determine the sample size. A statistical formula was used in determining the sample size. Sample size of 80 was adopted for this study. The analysis was represented in tabular form for easy understanding and it consist the number of respondents and the corresponding percentage and chi – square was used as the statistical tools used for testing more than two population using data base on two independent random samples. The study concludes that effective management is key to organizational productivity. The study further recommended that the operating environment of the sector should be made conducive enough to attract foreign investors who will improve the level of service rendered by the operators in this sector.

Chapter One


1.1 Background to the Study

The hospitality industry is a ubiquitous one which spans hotels, bars, restaurants, theme parks and a host of other related businesses. Globally, it is a money spinning industry with billions of dollars to its credit even though in this part of the world, we are still grappling with putting the industry on the right pedestal so as to wholly benefit like other countries. Just like any other business running in Nigeria, there are areas of concentration, accommodation and restaurants which seemingly, is the ‘honey pot’ for practitioners in Nigeria.

In recent times, the Nigerian economy has witnessed tremendous ‘growth’ in the hospitality industry leading to the emergence of hotels, fast food restaurant chains, and night clubs and cruise lines. These positive trends in no small measure are clearly helping to re-define the face of the hospitality industry in Nigeria. Information on the street shows that the industry is booming. Nonetheless, the writer believes every Tom, Dick and Harry with adequate funds, is investing into the business with limited knowledge of the expertise required to run such business. Most of them forget that the industry requires investors that are aware of the fact that investment in this area requires long term commitment. Hence, they expect returns as soon as possible at the peril of their poorly remunerated staff.

The hospitality industry in Nigeria is variegated depending on the location. Some of the outfits found in big cities boast of ‘reasonably’ high quality of service like Dansaky Hotel and Suites, Ifako Ijaye, Lagos State while those in the outskirts offer a lower standard. It is therefore not surprising that since the industry has become an ‘all comers affair’, there is in reality, no true classification of restaurants and hotels as obtainable in other countries. Consequently, most hotels have taken a bold step of prescribing their own grading leading to confusion amongst their clientele.

The Nigerian hospitality industry is faced with a myriad of challenges ranging from poor energy supply and insecurity to misconstrued internal perception, cynical global perspicacity, flawed hotel classification, poor customer service, little or no standardisation in operations, inconsistent regulatory environment and skilled labour shortages caused by a few entrepreneurs with little knowledge of the workings of the industry who hijack the process to perpetuate plans for their own personal aggrandisement Chukwudi Njoku (2015).

Indeed, the industry operates in a country whose growth rate is estimated at about 7.4% per annum. The challenges cascades from the ineffective top echelon in government down to the least of employees in the industry. Arguably, the industry has not recorded much progress in terms of achievements from its past precedence. Notwithstanding, more than ever before, it has become more lucrative depending on which side of the divide you find yourself i.e. employer or employee.

The world over, the hospitality industry has provided high yield in returns on investments. Whether or not this has trickled down to the employees is a story for another day. Not long ago staff of about three ‘self-acclaimed’ international hotels embarked on a strike in Lagos State which disrupted the operations of the hotels. According to them, this was owing to the poor working environment and employee packages of these organisations, although their employers were not in agreement with these claims.

The Nigerian market has seen an influx of international brands. However, this is still not reflected in the quality of services rendered. They seem to have fallen into the abyss of ideological quagmire by forgetting to recognise the fact that the industry thrives on service. Take away the services from the hospitality industry then there is nothing to build on. Even in Japan, where plans are ongoing to replace humans with robots. Practitioners have asked if robots will be as intelligent as humans. Others have tagged it as klutzy according to the Guardian UK particularly because humans still outperform robots in terms of dexterity on the job and balance. Although the hotels in Nigeria offer different services to all classes of customers yet they suffer from a culture that is alien to supporting good customer service. Indeed, it is a difficult time to be a stakeholder in the industry but in all, there is always light at the end of the tunnel. It is against this background that the study seeks to examine the challenges of hotel business in Lagos State by using Dansaky Hotel and Suites, Ifako Ijaye, Lagos State as a case study.

1.2 Statement of the Problem

The businessman who fails does not know himself, does not know his market, does not know his business and does not know what is going on around him. Conceivable, everyone wants to succeed in his personal, his social and his economic goals but very few do. The key to success is not the wish for the desire to be successful. It is easy for anyone to wish for a million dollars in business, but to succeed, the individual needs many things. Above all, for the need to be a definite goal there must be energy, drive, and the plan to work for it and the recruitment of people dedicated to the same goals. Many people of course settle for less (Campbell, 1993).

Anything can indicate an economic need. The need may be for better or different food, faster service, new convenience, increased status, or a new product. The only way to prosper is to think, not only to see the various facts, but to understand each fact independently to understand the significance when the facts are put together, and to understand the significance, scope, magnitude, complexity, and completeness of this relationship. Disregard an individual’s potential ability in resolving complex problems of food quality, service, atmosphere, price and competition and look only at this dynamic relationship between emotion and success. However, can anyone succeed who is bored, indifferent, lazy, stubborn, and in-service? How far can the aggressive, crude, tasteless, impulsive, arrogant, and hostile individual climb?

Another major cause for business failure is the lack of detailed understanding and knowledge of the product. Although the inability to plan, direct, and control the various functional areas associated with food is an extremely serious management deficiency. Also, the failure to really understand the nature of the product sold can be equally catastrophic. The potential restaurant operator is exposed to two major problems that he definitely will not encounter if he elects to enter any other field of endeavour. The two specific problems he must resolve are the perish ability of food and the control of inventory.

Most people are aware that food spoils. However, they don’t understand how serious this fact can be. Spoilage begins from the moment a food item is ordered and continues through receiving, dry and refrigerated storage, preparation, production and service, on the delivery truck, food items are thawed, bumped, mishandled, bruised, or robbed off their freshness. In other functional areas, frozen food spoils because it is not stored immediately. Milk source, banana over-ripen, lobsters die, fish rotten, meat dehydrates, lettuce wits, oil becomes rancid, food is cooked too long, high temperature, too early , and the list is endless (Mintzberg, 1975). Therefore, this study will examine the challenges of hotel business in Lagos State by using Dansaky Hotel and Suites, Ifako Ijaye, Lagos State as a case study.

1.3 Research Objectives

The study has both general objective and specific objectives. The general objective or main objective of this study is to examine the challenges of hotel business in Lagos State by using Dansaky Hotel and Suites, Ifako Ijaye, Lagos State as a case study. The specific objectives are:

  1. To examine the challenges facing hospitality industry in Lagos State
  2. To examine the factors responsible for slow growth of hospitality industry in the study area
  3. To determine the factors that can enhance the growth of hospitality industry in Lagos State
  4. To proffer possible solutions to the development of hospitality industry in Lagos State

1.4 Research Questions

The following are some of the questions which this study intends to answer:

  1. What are the challenges facing hospitality industry in Lagos State?
  2. What are the factors responsible for slow growth of hospitality industry in the study area?
  3. What are the factors that can enhance the growth of hospitality industry in Lagos State?
  4. What are the possible solutions to the development of hospitality industry in Lagos State?

1.5 Research Hypotheses

The following will be the research hypotheses to be tested for this study

  1. There is no significant influence on the challenges facing hotels in Lagos and their performance.
  2. There is no significant correlation between organizational policy and its performance.

1.6 Significance of the Study

This study focuses on the assessment of hotels in Lagos. This will enhance the development of hotels since they act as tourist attraction centres. The overall consideration of the significance of the study will be summarized in the following statements. It will also help to fill the gap in the literature in the areas of hospitality and tourism. It become not a primary but a secondary source of information for researchers, academicians and practitioners, It as well serve as guiding documents for policy makers for the adaption, formulation and implementation of a genuine urban development strategies, efficient urban management, migration policy, through hotel establishment and so on. Lastly, it will give insight for the town administrators about the existing and emerging socio-economic challenge of the migrants in relation with the socioeconomic services provided by the town administration

1.7 Scope of the Study

This project is designed to target waiters, reception staff, and room maids in small scale Hotel in Adamawa State. However, Dansaky Hotel and Suites, Ifako Ijaye, Lagos State will be our focus as case study. Also the study will be limited to the personnel in the food and beverage service, reception and housekeeping departments.

1.8 Limitation of the Study

This research was faced by limited research materials as the research material available to the researcher was insufficient, thereby limiting the study. Also, time was another limitation for this study as the time frame allocated to the study did not enhance wider coverage as the researcher had to combine other academic activities and examinations with the study. Organizational privacy also limited this study because there was limited access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities

1.9 Definition of Terms

The following terms were used in the course of this study:


The situation of being faced with something that needs great mental or physical effort in order to be done successfully and therefore tests a person’s ability.


The friendly and generous reception and entertainment of guests, visitors, or strangers.


Is travel for pleasure or business; also the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours.

Chapter Five

Conclusion and Recommendation

5.1 Conclusion

The study concludes that effective management is key to organizational productivity. Event is a contraption of function, people and venue put together by individuals and corporate entities for certain themes. World-wide events of various dimensions, types and classes have become the order to the day, demanding enormous resources of time, money, technology and expertise to organize.

Events stimulate tourism and boosts hotel. They result in high demands for both intra-city and inter-city transport and leisure services. During such occasions, there are also extraordinary demand for accommodation, catering services and entertainments. Outsourcing of event organization has given new dimension to hotel: event management, function catering outdoor catering and contract catering.

It was found that a positive correlation exists between the hotel business and the GDP and that the industry depends almost entirely on the economy, thereby confirming a priori expectation. What this means in effect is that for the hotel business to continue to be relevant, government must at all times ensure a stable but steadily rising economy. The services sector employs about 30 percent of Nigeria’s workforce, yet provides about half of its output. Nigeria depended on its large English speaking, well-educated workforce to develop a burgeoning technology sector, as well. Hotel is a growing portion of Nigeria’s economy with an earnings increase of more than 10 percent from 2010.

5.2 Recommendations

From the findings of this work, the researcher recommends the following:

  1. The researcher sincerely recommends the findings of this research work to policy makers in Nigeria. The findings of this work will be vital if the leaders and decision makers sincerely want this country to be amongst the 20 most developed countries in the year 2020.
  2. The operating environment of the sector should be made conducive enough to attract foreign investors who will improve the level of service rendered by the operators in this sector.
  3. Nigerian investors in the industry should as well study foreign hotel industries and see how to adapt some of their system to enhance theirs here in Nigeria.

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