The Challenges of Hotel Business

1.1 Introduction

The hotel business is a vital segment of the hospitality industry that is primarily concerned with providing accommodation, food, and other related services to travelers and tourists. A hotel is defined as an establishment that offers lodging, meals, and other services to guests for a fee, often aimed at ensuring comfort, convenience, and a positive experience (Walker, 2020). The sector is a major contributor to the global and local economy, creating employment opportunities, stimulating tourism, and generating revenue through various service offerings (Eniola & Ojo, 2019). Security and safety concerns constitute another major challenge in the hotel industry. Ensuring the protection of guests' lives, property, and data requires continuous investment in surveillance systems, cybersecurity measures, and staff training (Akinola & Oladimeji, 2019). Hotels that fail to guarantee a safe environment often suffer reputational damage, reduced patronage, and diminished customer trust.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of terms.

1.2 Background of the Study

In Nigeria, the history of the hotel industry is closely linked to colonial influence and the growth of commerce and tourism. Eniola and Ojo (2019) stated that during the colonial era, hotels were established mainly in port cities and administrative centers to accommodate expatriates, traders, and government officials. Following Nigeria's independence in 1960, the hotel industry experienced significant growth, driven by increased domestic and international tourism, urbanization, and economic expansion (Ogunbiyi, 2018). The modern hotel business in Nigeria has evolved to include diverse categories, ranging from budget accommodations to luxury hotels offering specialized services such as conference facilities, spas, and entertainment centers. However, this expansion has not been without challenges. According to Okoli and Anyadighibe (2020), the industry faces persistent issues such as inconsistent service quality, inadequate infrastructure, rising operational costs, and regulatory constraints. Furthermore, globalization and technological advancements have introduced both opportunities and pressures, requiring hotels to continuously innovate and adapt to changing customer expectations (Eze & Nwankwo, 2021).

The hotel business is an essential part of the hospitality and tourism industry, providing accommodation, meals, and other services to travelers and tourists. According to Walker (2020), a hotel is defined as an establishment that offers lodging and related services to guests for a fee, designed to ensure comfort, convenience, and satisfaction. The growth of the hotel sector is closely linked to tourism development, economic advancement, and employment generation (Eniola & Ojo, 2019).

Ogunbiyi (2018) reported that high operational costs, including energy consumption, staff salaries, and maintenance expenses, often strain hotel resources and reduce profitability. Similarly, Akinola and Oladimeji (2019) asserted that security concerns, both physical and cyber-related, have become critical issues for hotel operators, as guests increasingly demand safe and secure environments. In addition, technological advancement has become both an opportunity and a challenge in the hotel business. Eze and Nwankwo (2021) stated that while innovations such as online booking systems, digital marketing, and automated service processes improve efficiency, hotels that fail to adopt these technologies risk losing competitiveness. On the other hand, the financial and human resource investments required to integrate new technologies pose significant barriers, especially for small and medium-sized hotels.

Nwosu (2020) affirmed that multiple taxes, licensing procedures, and inconsistent enforcement of regulations complicate operational management and hinder business expansion. Infrastructural deficiencies, such as poor electricity supply, limited water availability, and inadequate transport networks, further exacerbate the challenges faced by hotel operators, as reported by Ogunbiyi (2018). Scholars contend that these challenges collectively undermine service quality, customer satisfaction, and overall profitability within the hotel industry (Okoli & Anyadighibe, 2020). This study is set against the backdrop of this operational, technological, security, and regulatory challenges, seeking to understand the difficulties faced by hotels and to identify strategies that can enhance the sustainability and growth of the hotel industry.

1.3 Statement of Problems

Investigation revealed that the hotel business faces several challenges arising from existing issues within the sector. Service quality inconsistency is a major problem, where many hotels fail to meet customer expectations due to inadequate staff training and poor customer service standards (Okoli & Anyadighibe, 2020). On the other hand, technological adaptation is a critical issue. Hotels that fail to integrate modern technologies such as online booking platforms, automated services, and digital marketing fall behind in competition (Eze & Nwankwo, 2021).

Furthermore, government regulations and taxation policies are a recurring source of concern. Multiple taxes, licenses, and levies imposed on hotels often stifle their growth potential. Many hotel operators struggle to meet these obligations while still maintaining affordability for their customers. Inconsistent policies and weak enforcement of industry standards equally lead to unregulated practices that tarnish the image of the hotel sector (Nwosu, 2020). It is against this backdrop that this study seeks to examine in detail the challenges facing the hotel business.

1.4 Aim and Objectives of the Study

The aim of the study is to investigate the challenges of the hotel business and propose practical solutions to enhance its sustainability and competitiveness. The specific objectives of this study are:

1. To identify the operational challenges faced by hotels in Nigeria.
2. To examine the impact of security and safety issues on hotel performance.
3. To assess the effect of technological adoption on service delivery in hotels.
4. To evaluate the influence of government regulations and taxes on hotel operations.
5. To propose strategies that will address the challenges and improve hotel business performance.

1.5 Research Questions

Based on the stated objectives, the study will address the following research questions:

• What are the operational challenges faced by hotels in Nigeria?
• How do security and safety issues affect hotel performance?
• What is the effect of technological adoption on service delivery in hotels?
• How do government regulations and taxes influence hotel operations?
• What strategies can be implemented to mitigate the challenges facing the hotel business?

1.6 Significance of the Study

The outcome of this research will benefit policymakers and government agencies by highlighting the regulatory, infrastructural, and security issues that hinder the growth of the hotel sector. The findings will guide the development of policies and frameworks that will support sustainable growth in the hospitality industry.

Furthermore, the study will be valuable to investors and entrepreneurs considering entering the hotel business, as it will reveal potential risks, operational bottlenecks, and areas that require strategic investment.

Academically, this research will contribute to the body of knowledge on hospitality management, offering empirical evidence that will inform future studies and training programs. In addition, employees in the hotel industry will benefit from improved training and service standards, which will enhance their productivity and career growth.

1.7 Research Hypotheses

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

• H₀1: There is no significant relationship between the challenges faced by hotels and their operational performance in Nigeria.
• H₀2: Security and safety issues significantly affect the performance of hotels.
• H₀3: Technological adoption has a significant effect on service delivery in hotels.
• H₀4: Government regulations and taxes significantly influence hotel operations.

1.8 Scope of the Study

The research study will focus on hotels within Lagos State, Nigeria, examining operational, technological, security, and regulatory challenges. Both budget and luxury hotels will be considered to provide a comprehensive understanding of the issues across different service categories.

1.9 Limitations of the Study

A study of this nature is bound to experience certain problems as such the constraints imposed on the research include:

1. Time Constraints: A study of this nature needs relatively long time during which information for accurate or at least near accurate inference could be drawn. The period of the study was short, time posed as constraints to the research.
2. Financial Constraints: The research would have extended the survey to other area at the empirical level, but limitation as included cost of transportation to the source of material and the cost of time setting of the already completed work.
3. Lack of Cooperation: Many of the respondents are usually aggressive on issue that border cooperation among the respondents border.
4. Response Bias: The study will involve surveys and interviews with cooperative managers and members. Response bias may occur if respondents provide socially desirable answers or if there is reluctance to disclose negative financial information due to privacy concerns or fear of repercussions.

1.10 Definition of Terms

Hotel: A facility that provides lodging, meals, and other services for a fee, designed to ensure comfort and satisfaction for guests (Walker, 2020).

Hospitality Industry: The broad sector that includes hotels, restaurants, tourism, and related services aimed at providing accommodation, food, and leisure experiences (Brotherton, 2018).

Operational Challenges: Issues relating to the day-to-day management of hotels, including cost management, staff performance, and resource allocation (Ogunbiyi, 2018).

Service Quality: The standard of service delivered to guests, including responsiveness, reliability, and satisfaction of expectations (Okoli & Anyadighibe, 2020).

Technological Adoption: The integration of modern tools, systems, and digital platforms to improve operational efficiency and customer experience in hotels (Eze & Nwankwo, 2021).

Regulatory Challenges: Difficulties arising from government policies, taxes, licenses, and other legal obligations that affect hotel operations (Nwosu, 2020).