Contribution Of Hospitality Industry To The National Development (A Case Study Of Concord Hotel Owerri & Lodan Hotel Owerri)
This study was carried out to determine the contribution of hospitality industry to national development using a case study of Concord Hotel Owerri and Lodan Hotel Owerri, Imo state. Hotel industry is one of the lucrative ventures which provide a lot of services to people. It has globally aided many countries in terms of revenue generation. A country’s revenue system can work effectively if there the hotel industry pays their tax rate allocated to them. The hotel industry provides services like accommodation, food entertainment and health and fitness to people. The study employed a descriptive research design method. All the workers in Concord Hotel Owerri and Lodan Hotel Owerri, Imo state constituted the sample. Two hotels were selected for the study by the use of systematic and simple random sampling was used in selecting 60 respondents for the study. The study found out that the hotel industry in Nigeria provide jobs for people, provide accommodation for visitors, support the revenue generation of Nigeria. Also, the hotel industry in Nigeria is faced with energy crises, high tax rate, high water and electricity bills which is a challenge to the industry. The study further recommended that the government must reduce the tax rate of the hotel industry, reduce the electricity and water bills, and provide a good regulatory framework to enhance their operations.
Table of Content
- 1.1 Background to the Study
- 1.2 Statement of the Problem
- 1.3 Objectives of the Study
- 1.4 Research Question
- 1.5 Research Hypothesis
- 1.6 Significance of the Study
- 1.7 Scope of Study
- 1.8 Limitation of the Study
- 1.9 Definition of Terms
- 1.10 Organisation of the Study
2.0 Literature Review
- 2.2 Nigeria’s Hotel Industry
- 2.3 The Role of Hospitality Industry to National Development
- 2.4 Challenges Facing the Hotel Industry in Nigeria
- 2.5 Strategies for Curbing the Challenges Facing the Hotel Industry
3.0 Research Methodology
- 3.1 Research Design
- 3.2 Population
- 3.3 Sample and Sampling Technique
- 3.4 Instrument for Data Collection
- 3.5 Validity of the Instrument
- 3.6 Reliability of the Instrument
- 3.7 Method of Data Collection
- 3.8 Data Analysis
4.0 Results and Discussion
- 4.0 Results and Discussion
- 4.1 Result
- 4.2 Green Management Policy
- 4.3 Green Business Practices
- 4.4 Drivers of Green Business Practices
5.0 Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
1.1 Background to the Study
The hospitality industry is a broad category of field within the service industry that includes lodging, restaurants, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. The hospitality industry is a several billion-dollar industries that mostly depends on the availability of leisure time and disposable income. A hospitality unit such as a restaurant, hotel, or even an amusement park consists of multiple groups such as facility maintenance, direct operations (servers, house keepers, porters, kitchen workers, bartenders etc), management, marketing and human resources.
The hospitality industry consists of broad category of fields within the service industry of which hotels are not exempted from industry. The focus of this study is narrowed down to hotels as part of the hospitality industry because of its ubiquity in Nigeria. Hotel is defined by the international accommodation as properties with at least one licensed bar and restaurant on the premises, with on-site management which serve breakfast and sometimes have conference or banqueting facilities setting them apart from other accommodation categories such as self-catering accommodation, caravan and/or camp sites or houses (Automobile Association, 2002).
The industry is one of the most important sectors of a nation’s economy. They provide and create jobs, especially during times of holidays (summer break); they are a source of innovation and entrepreneurial spirit; they harness individual creative effort; and they create competition and are the seed bed for businesses of the future. In, short, hospitality industries are vitally important for the development of the economy. Hospitality industry refers to the services rendered by hotels, restaurants, resorts and entertainment sector of the economy (Walker, 2007). Numerous structures have been established in Abuja to promote the image of the hospitality industry. This great step is a collaboration of the government and the private sector within the economy (UNWTO, 2008)
Hospitality is the act of kindness in welcoming and looking after the basic needs of guests or strangers, mainly in relation to food, drink and accommodation (Tuhin, 2011). A contemporary explanation of Hospitality refers to the relationship process between a guest and a host. Ideally when we talk about the “Hospitality Industry”, we are referring to the companies or organizations which provide food and/or drink and/or accommodation to people who are away from home. However, this definition of the “Hospitality Industry” only satisfies most situations. The hospitality industry includes hotels and restaurants, as well as many other types of organizations or institutions that offer food, drink, shelter and other related services. These products and services are offered not only to people away from home, but also to local guests.
According to Ministry of Tourism (2013) there are two main business sectors in the hospitality industry:
- Accommodation: To provide accommodation (and usually food and drink) to people who for whatever reason are away from home
- Food and beverage: To provide food and beverage to local, commuting, transient customers and tourists
The hospitality industry’s main function is to offer travellers homes away from homes and provide friendly reception and warm greetings (Walker, 2007). It is made up of businesses that provide lodging, food and other services to travellers, the main components are hotels, motels, inns, resorts and restaurants (Ghosh, 2006).
The hospitality industry in Nigeria has moved from the side-lines to the Centre stage of socioeconomic strategies. Currently, Nigeria ranks 14th on the list of most visited hospitality industry in Africa (ISSER, 2009). The relevance of hotel units in the hospitality industry cannot be overestimated. Accommodation (hotels) takes 31% of tourists‟ expenditure-averaging US $1million per trip (Nigeria Review International, 1998).
Nigeria is gradually shifting its attention from primary commodities to market oriented economy with emphasis on hospitality industry in general. It is widely recognized that the hospitality industry is directly linked to the country’s cultural, economic and intellectual potential. These must therefore be managed to meet international standards in order to realize the full benefits that the industry offers. Businesses are increasingly been asked to shoulder responsibility for their social, ethical and environmental impact, with this pressure particularly keenly felt in consumer-facing industries (PWC, 2006).
In the field of hospitality management, previous studies regarding corporate level strategies have primarily focused on topics of branding, franchising, internationalization, and leadership as there is lack of available literature on the contribution of hospitality industry (hotels) to the development of the economy (Okumus, 2002)
Since 1945, the hospitality industry has grown rapidly to become one of the world’s foremost economic phenomena (Deng, 2002). Many countries have already realized the potential positive economic impact of the hospitality industry and have since taken steps towards the development of hotels.
The contribution of hotels to national economics cannot be over emphasized. Its benefits to national economies are: revenue earner and contribution to GOP for most governments, generation of employment, improvement of social services, and development of infrastructure and above all rural development (Mensah, 2009). For instance according to the headline results for 2005-06, reported by Access Economics Pty Limited. (2007), the Western Australian hospitality industry directly accounted for $3.0billion, or 9.6% of Australian total hospitality industry value added. Correspondingly it contributed directly $3.6billion of the Western Australian Gross state Product (GSP) or 9.6% of the hospitality industry contribution to national Gross Domestic Product (GOP). It employed directly 43,300 persons, or 9.3% of total hospitality industry employment in Australia.
Baada (2003) relying on the report by the World Tourism Organizational Report (2006), states that the hospitality industry in sub-Saharan Africa enjoyed a robust annual market share growth rate of 10 per cent. Research has also shown that hospitality industry like hotels can be beneficial to a country’s economy in several ways. At present insufficient information about the hotel industry which is part of the hospitality industry in Nigeria hinder the market from progressing and improving. Research is needed to find out the contribution of hotels to the development of the Nigerian economy
Since the late 1980s the hospitality in Nigeria has received considerable attention in the economic development strategy of Nigeria. However, regional dimension of development has become the subject of scientific and technical research in recent times, imposed on the processes and problems of inequality in utilization, organization and landscaping (Haya, 2000). The development of hotel industry in an area basically depends on the level and phase of development of the overall economy in the area. Thus, it can be concluded that he development of hotel industry is linked to the development of the country Nigeria of which Abuja is not an exception.
There has been a growing body of literature that addresses hotel as a viable economic option for local community development (GSS, 2013). However, there is little evidence on the literature that depicts specific the role of hotels to local communities‟ development which is one of the core elements for developing a viable hospitality industry in a destination (Muganda et al., 2010). According to Godfrey and Clarke (2000) communities form a basic element in modern hotels as they are the focal point for the supply of accommodation, catering, information, transport facilities and services. In the second half of the twentieth century the service sector like hotels, lodges, and rest houses emerged in the world as a major source of employment whilst the industry dwindled (Cole, 2006). This drove to the world evolution of service companies and sectors, including railways, shipping, airlines and banking (Blake et al., 2008).
This is particularly the case in developed countries, where hotel industries have become an important economic sector with a great number of indicators showing the signs of economic growth as predicted by the International Monetary Fund. This growth will be distributed unevenly in developing countries (6.4 and 2.2 %) in advanced nations by 2010 (Ateljevic et al., 2008). Hotels are one of the sources of economic growth.
In Nigeria the hospitality industry has been facing mushrooming modern hotels/lodges to cope with this tremendous development some people have managed to organize themselves and use the hotel industry as a tool for addressing poverty issues (Makame and Boon, 2008). Although there is mushrooming of hotels, resorts, lodges and rest houses in Owerri, it is not known how these hotels contribute to national development.
1.2 Statement of the Problem
The hospitality industry has seen tremendous change over the last decade. Hospitality business today is an integral part of the human life whether in a commercial scale or in small scale. The hotel industry form a sector in the economy that do not undermine the integrity of their customers in service delivery and therefore seek to always provide satisfaction now and in the future.
But as Nigeria initially ignored the hospitality industry by not paying attention to the hotel industry, as a result, most of the hotels in the hospitality industry did not meet the standards expected of them in terms of service delivery such as adequate facilities, excellent customer relationship, knowledge of product or service offerings, trained personnel and provision of confidence and trust of services offered.
The international hotel industry has rapidly grown to become the largest employer of the world, by providing jobs for more than 200 million people (Bohdanowicz 2001). In the EU more than 6% of the population is employed in tourism, which generates around 5% of the EU gross domestic product (GDP) and foreign trade revenue (Bohdanowicz 2001) The impact of the hospitality industry to the GDP ranges from around 2% for nations where the hospitality industry is a relatively small sector, to over 10% for nations where the hospitality industry is an important part of the economy (Unesco 2013).
With over 300.000 hotels worldwide, providing more than 11 million rooms, the fast growth in international travel has additionally caused in a constant growth of the hospitality industry (Bohdanowicz 2001).Although the growth in the hospitality industry provides a lot of benefits into the development of the economy but little knowledge is known about their contribution into the development of Abuja.
Improving domestic hotels in Nigeria will expose the Nigerian economy to opportunities.
Nigerians must be incorporated into the country’s hospitality industry. It is observed by the researcher that there is a great linkage between the hospitality industry and economic development of Nigeria. The research problem is that there is little or no research on the contribution of the hospitality industry (hotels) to the development of the economy of Nigeria but which is a vital component of every national hospitality industry. Hence this research intends to determine the contribution of hospitality industry to national development using a case study of Concord Hotel Owerri and Lodan Hotel Owerri, Imo state.
1.3 Objectives of the Study
The aim of this study is to determine the contribution of hospitality industry to national development using a case study of Concord Hotel Owerri and Lodan Hotel Owerri, Imo state. Specifically, the objectives of the study include to;
- To find out roles hotels play in contributing to the development of the country.
- To find out the challenges facing the hospitality industry.
- Suggest ways of solving the challenges encountered by hotels in contributing to national development.
1.4 Research Question
The following research questions are formulated to guide this research:
- What roles do the hotels play in contributing to the development of the country?
- What are the challenges facing the hospitality industry?
- How can the challenges encountered by hotels in contributing to national development be solved?
1.5 Research Hypothesis
- HO1 There is no significant impact of the hospitality industry on national development
- HA1 There is a significant impact of the hospitality industry on national development
1.6 Significance of the Study
Many reasons may tend to influence a researcher’s choice of a particular topic. The choice of the areas for research allows for fresh, exciting insights and a deeper understanding of issues that are fundamental to the hospitality industry (hotels) of Nigeria. The research provides important knowledge regarding the interplay of roles hotels play in the development of the economy, challenges facing the hotel industry and measures to curb the challenges.
The focus of this study is important because, rural development initiatives such as hotels as other studies have proven; usually have both positive and negative effects on rural communities. An assessment of people’s perception of the extent and nature of hotels in Nigeria influence the economic, environmental, socioeconomic and cultural life of the surrounding settlements may provide government with tools for some solutions to the area’s challenges. The study provided suggestions to overcome the barriers which can hold back the development of hotels in the host community. Results in this study enhance our understanding of the hotels and economic development.
Moreover the results of the study provide a broad overview of how hotels can contribute positively to job opportunities, entrepreneurial skills development and increased income generation in Nigeria. Besides, it will form the basis for future researchers who wish to pursue their research in the same field. The research results will be a valuable source of information on the hospitality industry in Nigeria.
1.7 Scope of Study
This study is focused on the contribution of hospitality industry to national development. The study covered Concord Hotel Owerri and Lodan Hotel Owerri, Imo state.
1.8 Limitation of the Study
Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.9 Definition of Terms
Is a broad category of fields within the service industry that includes lodging, food and drink service, event planning, theme parks, travel and tourism. It includes hotels, tourism agencies, restaurants and bars.
Is the capacity of the country to raise the standard of living of its residence. It can be achieved by providing individuals with basic livelihood requirements and supplying them with employment, etc.
A hotel is an establishment that provides paid lodging on a short-term basis. Facilities provided inside a hotel room may range from a modest-quality mattress in a small room to large suites with bigger.
1.10 Organisation of the Study
This study is organized into five chapters. Chapter one included the background of the study, research problem, research objectives and questions as well as limitation of the study. Chapter two contains the literature review. Chapter three includes the methodology and study area. Chapter Four contains the results and discussion of key findings of the study. Chapter Five finally looks at the summary, conclusions, and recommendations based on the findings.
5.0 Summary, Conclusion and Recommendation
The main purpose of this study was to determine the contribution of hospitality industry to national development using a case study of Concord Hotel Owerri and Lodan Hotel Owerri, Imo state. A descriptive survey was employed for the study. A questionnaire was used to gather data from the workers and managers of the hotel industry in Nigeria. The collected data was analyzed in simple percentages. The first research question was to find out the roles the hotels in Nigeria play in contributing to the development of the area and Nigeria as a whole. The study found out that hotels provide employment opportunities to people., hotels in Nigeria create a variety of jobs for the residents, local businesses benefit the most from the hotels in Nigeria, hotels helped in the provision of infrastructure in Nigeria, hotels generate tax revenues for local governments, hotels helped in improvement of social services and also hotels has helped in the improvement of the area„s located appearance (visual and aesthetic) in Nigeria.
The second research question was to find out the challenges facing the hospitality industry (hotels) in Nigeria. The study found out that high cost of construction materials, energy crisis, high electricity and water bills, high tax paid, lack of adequate and quality skilled personnel, inadequate investment in the hotel industry, poor infrastructure and lack of proper maintenance and inappropriate and contradictory policies of the hotel industry by government is a major challenge to the hotel industry in Nigeria.
The third research question was to find out strategies of curbing the challenges encountered by the hotel industry in Nigeria. The study found out that reduction in electricity bills, water bills and tax rate can help to curb the challenges encountered by the hotel industry in Nigeria. Also, the study found out that trained qualified personnel/professionals, proper maintenance of hotel buildings and government good policies to regulate the operations of the hotel industry can help solve the challenges that are confronting the hotel industry in Nigeria.
From the findings of this study the researchers concluded that the hotel industry has contributed immensely into the development of Nigeria by creating job opportunities for unemployed graduates, has increased the provision of accommodation in the area by guest, has contributed immensely into revenue generation of Nigeria and also has beautify the environment of Nigeria of which it is situated. Also the researchers concluded that the hotel industry in Nigeria is faced with a lot of challenges such as energy crisis, high t ax rate, high electricity and water bills and high cost of building materials.
Based on the findings of the study, the researcher hereby makes the following recommendations:
- The banking industry should provide financial support to hotel managers to get access to loans to be able to be able to develop the hotel industry in Nigeria. And if the hotel industry in Nigeria is increased this will increase the extent to which the people of Nigeria gain benefits out of these ventures surroundings their area.
- More emphasis should also be on direct benefits: Hotel accommodation ventures need to relook on how to improve by increasing the workers in order to employ so many people to reduce the escalating unemployment ratio of the country and Nigeria as a whole.
- Also the government should make the policies regulating the hotel industry so simple and should reduce their tax rate. This will therefore encourage business operators to enter into the hotel industry.
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