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CREDITCREDITSS
This Research Project is a collaborative effort ofThis Research Project is a collaborative effort of
Iqra Khan Sidra Ghazanfar Saad Zafar Zoya Chaudhry Kokab Khalid Mudassir Khalid
MB-08-12
MB-08-06
MB-07-53
MB-08-06
MB-08-20
MB-08-61
INTRODUCTIONINTRODUCTION The Hotel industry is among the top three
constituents of the world economy after oil and autos. It is larger than automobile industry in Japan, agriculture in the U.S.A. and banking in Switzerland
In Pakistan this industry contributes a large proportion to the country’s economy.
A large percentage of the country’s revenue come from this industry
It is unfortunate to know that instead of growing with world’s trend, this industry in Pakistan has rather taken a back seat in the revenue generating services.
Our hotel industry is declining rapidly.
The major players of hotel industry in Pakistan are, of course, the Pearl Continental, Sheraton, Marriott and Holiday Inn chains and then there is a Serine hotel chain which is at the more prominent tourist spots
The Holiday Inn was taken by the Marriott and the hotel Taj mahal by Holiday inn crown plaza, though sources indicates the later has since broken its chain with the Holiday Inn on account of various reasons. (for e.g. poor management and small investment)
Moreover the recent attack on the Marriot hotel (Islamabad) and Taj Mahal (Mumbai) has seriously damaged this industry
Marriott bombing in Islamabad
Taj hotels bombing in Mumbai
OUR OBJECTIVEOUR OBJECTIVE
Our main focus is to root out the real cause of decline of hotel industry in
Pakistan and to find which factor contributes more to this decline
LITERATURE REVIEWLITERATURE REVIEW we conducted a literature review to further
explore and clarify the research on this topic. The literature review includes ten peer reviewed research studies, journals, articles and other scholarly work.
1) Manav Thandani (2008) in his article “Terror Strikes: The Indian Hotel Industry’s 9/11” has discussed the impact of Bombing on Taj Hotels Mumbai on the overall hospitality industry of India . The global economic crisis of the past few years has been difficult enough for hotel sector and the bombing at Taj has compounded the situation further.
2) Ingram & Baum (1997) in their study named “Chain Affiliation and The Failure of Manhattan Hotels” examine the set back of Manhattan Hotels due to chain affiliation.
3) Wind, Green, Shifflet & Scarbrough (1989) presented their research study in “Courtyard by Marriott: Designing a hotel facility with Consumer Based Marketing Model”. In this they have examined why the segment of business travelers was not satisfied with current hotel offerings. Reasons as identified were that some hotels cost too much and offer features not valued by the travelers while others that cost less offer too few of the desirable features.
4) Ann Goodman (2000) in his study “Implementing Sustainability in Service Operations at Scandic Hotels” explored that the factors that caused the just collapse of Scandic Hotels were
the recession in Scotland the Gulf War unfocused strategy No crisis awareness rapid growth Messed management increasing awareness of people regarding
sustainability practices.5) “2009 Industry Outlook: Tourism hospitality
and Leisure” discusses that U.S hospitality industry suffered a great set back due to Economic Crisis in 2008. It resulted in decreased tourist activities that subsequently caused falling hotel occupancy rates
6) Ingram & Baum (1998) in their research study “Survival-enhancing learning in The Manhattan Hotel Industry 1898-1980” examine that organizations enjoy reduced failure with increased survival-enhancing learning from population experience before their founding the organization; but not after. Related organizations provide experience that lowers failure, but it matters whether their experience is local or non-local
7) Robert Kiener in his article “Crisis in Pakistan” examines the critical situation of Pakistan concerning law & order, terrorism and government instability. And how these factors participate in damaging the economy of Pakistan particularly its hospitality industry.
8) Smith Barney in his article “Global hotel industries” explores the aftermath of 9/11 that further recessed hotel’s economy. It was the enormous lay offs and lessened development of hotels’ human resource.
9) Wilder, Gates and Wolfe in their work “Hotel Investment Activity in Canada Witnesses Significant Decline” discusses that the global credit crunch and the recession that followed have hit the Canadian hotel real estate sector, which experienced a 77% decline in investment activity
10) Paul Slattery in his article “Hospitality industry” defines the true services of any hospitality industry. He argues that nowadays hotels are foregoing these services in the best interest of their hotels as a source of business to them.
THE PROBLEM THE PROBLEM STATEMENTSTATEMENT
“ “TO WHAT EXTENT DO TERRORISM, LACK OF TOURISM, CHAIN
AFFILIATION, GOVERNMENT INSTABILITY AND POOR
TECHNOLOGICAL CHANGES CAUSE THE DECLINE OF HOTEL INDUSTRY IN
PAKISTAN?”
THEORETICAL FRAME THEORETICAL FRAME WORKWORK
Technologicalchanges
Lack of tourism
Government Instability
Terrorism
Decline in HotelIndustry Pakistan
Dependent
Variable Independent
Variables
TYPE OF STUDYTYPE OF STUDY
This is an Exploratory study in which we tried to explore the various
variables which are effecting the main variable i.e. Decline in hotel
industry in Pakistan
UNIT OF ANALYSISUNIT OF ANALYSIS
The unit of analysis is Individual, since we are measuring responses of
individuals for our research
DATA DATA &&
METHODOLOGY METHODOLOGY
SAMPLE SIZESAMPLE SIZEWe have a sample size of 100. The sample
was taken from Multan. It includes : Hotel Customers Hotel Management General Public
SOURCES OF VARIABLESOURCES OF VARIABLE Our main source of variable is primary
source ( Interviews and Questionnaires) and the secondary source of literature review.
MEDIUM OF MEDIUM OF COMMUNICATIONCOMMUNICATION
Our medium of communication was personal interviews by which we get
the questionnaire filled
DATA COLLECTION METHODDATA COLLECTION METHOD
The data was collected through questionnaires. We met the respondents personally and got the questionnaires filled.
The only problem was the time constraint. The data was tabulated in the form of a
worksheet using SPSS software. Question numbers were taken vertically and the questionnaire choice numbers were taken horizontally on the table.
METHODOLOGYMETHODOLOGY
In this report we have used Descriptive and Empirical
statistics.
DESCRIPTIVE STATISTICSDESCRIPTIVE STATISTICS
In descriptive statistics we have used frequency distribution in which we
calculated mean, median, variance, and standard deviation. Graphically we have presented the data in the
form of pie charts as follows :-
DeclininDecliningg
Chain Chain AffiliatioAffiliationn
LawLaw
&&
OrdeOrderr
Lack Lack
of of touristouris
mm
Lack Lack
of of TechnologTechnolog
yy
TerrorisTerrorism m
EffectEffect
N N ValidValid
MissingMissing
100100
00100100
00100100
00100100
00100100
00100100
00MeanMean 2.922.92 2.272.27 2.32.3
001.771.77 1.271.27 1.761.76
Median Median 3.003.00 2.002.00 2.02.000
2.002.00 1.001.00 2.002.00
ModeMode 22 22 22 22 11 11S.DS.D 1.121.12 5.6645.664 .95.95
99.723.723 .446.446 .986.986
VarianceVariance 1.2661.266 .442.442 .91.9199
.522.522 .199.199 .972.972
MinMin 11 11 11 11 11 11MaxMax 55 33 55 44 22 55
Hotel Declining
FREQUENCY FREQUENCY TABLESTABLES
Decline of Hotel IndustryDecline of Hotel IndustryFrequencyFrequency PercenPercen
ttValid Valid PercenPercentt
Cumulative Cumulative PercentPercent
Valid Valid StronglyStrongly
AgreeAgree
88 8.08.0 8.08.0 8.08.0
AgreeAgree 3535 35.035.0 35.035.0 43.043.0 Don’tDon’t
knowknow2222 22.022.0 22.022.0 65.065.0
DisagreeDisagree
2727 27.027.0 27.027.0 92.092.0
StronglyStrongly
DisagreeDisagree
TotalTotal
88
100100
8.08.0
100.0100.0
8.08.0
100.0100.0
100100
Chain AffiliationChain Affiliation
FrequencFrequencyy
PercentPercentValid Valid PercentPercent
CumulativCumulative Percente Percent
Valid Valid
Very Very muchmuch
1212 12.012.0 12.012.0 12.012.0
SomewhatSomewhat
4949 49.049.0 49.049.0 61.061.0
Don’tDon’t
knowknow
3939 39.039.0 39.039.0 100100
TotalTotal 100100 100.0100.0 100.0100.0
Law and OrderLaw and OrderFrequencyFrequency PercenPercen
ttValid Valid PercenPercentt
Cumulative Cumulative PercentPercent
Valid Valid StronglyStrongly
AgreeAgree
1919 19.019.0 19.019.0 19.019.0
AgreeAgree 4747 47.047.0 47.047.0 66.066.0 Don’tDon’t
knowknow2020 20.020.0 20.020.0 86.086.0
DisagreeDisagree
1313 13.013.0 13.013.0 99.099.0
StronglyStrongly
DisagreeDisagree
TotalTotal
11
100100
1.01.0
100.0100.0
1.01.0
100.0100.0
100100
Lack of TourismLack of TourismFrequencyFrequency PercentPercent Valid Valid
PercenPercentt
Cumulative Cumulative PercentPercent
Valid Valid StronglyStrongly
AgreeAgree
3636 36.036.0 36.036.0 36.036.0
AgreeAgree 5555 55.055.0 55.055.0 91.091.0 Don’tDon’t
knowknow55 5.05.0 5.05.0 96.096.0
DisagreeDisagree
44 4.04.0 4.04.0 100.0100.0
StronglyStrongly
DisagreeDisagree
TotalTotal
00
100100
0.00.0
100.0100.0
0.00.0
100.0100.0
100100
Terrorism EffectTerrorism EffectFrequencyFrequency PercenPercen
ttValid Valid PercenPercentt
Cumulative Cumulative PercentPercent
Valid Valid StronglyStrongly
AgreeAgree
4848 48.048.0 48.048.0 48.048.0
AgreeAgree 4040 40.040.0 40.040.0 88.088.0 Don’tDon’t
knowknow33 3.03.0 3.03.0 91.091.0
DisagreeDisagree
66 6.06.0 6.06.0 97.097.0
StronglyStrongly
DisagreeDisagree
TotalTotal
33
100100
3.03.0
100.0100.0
3.03.0
100.0100.0
100100
FrequencyFrequency PercentPercent Valid Valid PercentPercent
Cumulative Cumulative PercentPercent
Valid YesValid Yes
NoNo
7373
2727
73.073.0
27.027.0
73.073.0
27.027.0
73.073.0
100 100
Total Total 100100 100.0100.0 100.0100.0
Technological ChangesTechnological Changes
PIE CHARTSPIE CHARTS
Strongly Agree
Agree
Don't know
Disagree
StronglyDisagree
LAW & ORDER EFFECT
Strongly Agree
Agree
Don't Know
Disagree
StronglyDisagree
LACK OF TOURISM EFFECT
EMPIRICAL STATISTICSEMPIRICAL STATISTICS
In empirical statistics we have done hypothesis testing. The results of it
will be shown later
ESTIMATIONESTIMATION
&&
RESULTSRESULTS
REGRESSION ANALYSISREGRESSION ANALYSIS Firstly to Analyze our data by applying Regression on all the independent
Variables (Tech, Lack of Tourism, law and order, Chain affiliation , Promotion, terrorism, Govt. instability) in our Questionnaire .Reducing number of these variables and applying regression on most relevant variables we get best Fitted Estimated Regression Equation
Y = 1.552 + 0.286x1 + 0.66x2 + 0.475x3 – 0.135x4
Y = Hotel Industries Declining (D.V) x1 = Technological Changes (I.V)x2 = Lack of Tourists (I.V)X3 = Government instability (law and order) (I.V)X4 = Terrorism (I.V)
DATA & METHODOLOGYDATA & METHODOLOGY
* α = 0.1
** α = 0.05
*** α = 0.01
*, **, *** Represent Significance at 10%, 5% , 1% respectively
YY XX11 XX22 XX33 XX44
(Declining)
*0.286 (0.08)
* 0.66 (0.06)
**0.475 (0.02)
***- 0.135 (0.002)
Overall model result that we found with the ANOVA Table p - value = 0.031 **
It will be significant on 5%
R2 (R-square) = 1.08 Higher
Standard Error (S.E) = 0.72 Least
So overall result shows the significant relationship between dependent and independent variable
RECOMMENDATIONSRECOMMENDATIONS & &
LIMITATIONLIMITATION
RECOMMENDATION RECOMMENDATION In the light of these findings we are able to
recommend some suggestions to hotel managements and Government authorities.
Recommendations for Hotel Recommendations for Hotel ManagementsManagements
The quality of food should be improved to facilitate the hotel accommodators
The hotels should follow the new technological trends of recent times
There should be proper marketing and sales promotion for their hotels.
Hotels should be constructed at convenient and healthy locations.
There should be proper security system to secure the hotel from terror attack.
They should raise their voices and negotiate with government to chalk out sound policies for the improvement in hotel and tourism industry.
Parking facility should be provided proper space.
Room services should be according to the needs of customers.
Attendants should be adequately trained, educated, well behaved and efficient.
Recommendations for Government Recommendations for Government AuthorityAuthority
The Government should reduce / rationalize the number of taxes and their rate for the betterment of customers / guests, as well as, for the hotel management. If the government lowers taxes the hotels will be able to provide better facilities at lower rates having no strain on their margins
There should be effective marketing strategy for the promotion of tourism and hotel industry inside the country, as well as, outside country for which tourism department must be mobilized.
Airport facility should be provided to all big as well as middle sized cities and availability of regular flights from remote locations should be arranged.
Government should provide long term and short term loans on reasonable mark up for the growth of industry .
Government should make efforts to attract tourists from all over the world and make sure their security.
LIMITATIONLIMITATION
The personal interviews we conducted with hotel management was the only limitation we identified. It is because the hotel management don’t communicate the underlying weakness of their hotel truly.
WE REALLY THANK WE REALLY THANK YOU FOR YOUR YOU FOR YOUR KIND PATIENCEKIND PATIENCE