CREDITS

This 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

INTRODUCTION

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 countrys economy. A large percentage of the countrys revenue come from this industry It is unfortunate to know that instead of growing with worlds 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 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 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. Manav Thandani (2008) in his article Terror Strikes: The Indian Hotel Industrys 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.

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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.

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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. 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

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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
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.

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8) Smith Barney in his article Global hotel industries explores the aftermath of 9/11 that further recessed hotels 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 STATEMENT

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 WORK

Technological changes

Lack of tourism

Government Instability

Decline in Hotel Industry Pakistan

Terrorism Independent Variables

Dependent Variable

TYPE 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 ANALYSIS
The unit of analysis is Individual, since we are measuring responses of individuals for our research

DATA & METHODOLOGY

SAMPLE SIZE
We have a sample size of 100. The sample was taken from Multan. It includes : Hotel Customers Hotel Management General Public

SOURCES OF VARIABLE
Our main source of variable is primary source ( Interviews and Questionnaires) and the secondary source of literature review.

MEDIUM OF COMMUNICATION
Our medium of communication was personal interviews by which we get the questionnaire filled

DATA 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.

METHODOLOGY
In this report we have used Descriptive and Empirical statistics.

DESCRIPTIVE 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 :-

Hotel Declining
Law Lack Chain Declining & of Affiliation Order tourism N Valid Missing
Mean Median
Terrorism Effect Technology

Lack of

100 0 2.92
3.00 2 1.12 1.266 1 5

100 0 2.27
2.00 2 5.664 .442 1 3

100 100 0 0 2.30 1.77

2.00 2 .959 .919 1 5 2.00 2 .723 .522 1 4

100 0 1.27
1.00 1 .446 .199 1 2

100 0 1.76
2.00 1 .986 .972 1 5

Mode
S.D Variance Min Max

FREQUENCY TABLES

Decline of Hotel Industry

Frequency
Valid Strongly Agree Agree Dont know Disagree Strongly Disagree Total

Percent

Valid Percent

Cumulative Percent

8.0

8.0

8.0

35 22
27 8 100

35.0 22.0
27.0 8.0 100.0

35.0 22.0
27.0 8.0 100.0

43.0 65.0
92.0 100

Chain Affiliation
Frequency Percent

Valid Percent

Cumulative Percent

Valid
Very much

12
49 39 100

12.0
49.0 39.0 100.0

12.0
49.0 39.0 100.0

12.0
61.0 100

Somewhat
Dont know Total

Law and Order

Frequency
Valid Strongly Agree Agree Dont know Disagree Strongly Disagree Total

Percent

Valid Percent

Cumulative Percent

19

19.0

19.0

19.0

47 20
13 1 100

47.0 20.0
13.0 1.0 100.0

47.0 20.0
13.0 1.0 100.0

66.0 86.0
99.0 100

Lack of Tourism
Frequency
Valid Strongly Agree Agree Dont know

Percent

Valid Cumulative Percent Percent

36 55 5

36.0 55.0 5.0

36.0 55.0 5.0

36.0 91.0 96.0

Disagree
Strongly Disagree Total

4
0 100

4.0
0.0 100.0

4.0
0.0 100.0

100.0
100

Terrorism Effect
Frequency
Valid Strongly Agree Agree Dont know Disagree

Percent

Valid Percent

Cumulative Percent

48 40 3 6

48.0 40.0 3.0 6.0

48.0 40.0 3.0 6.0

48.0 88.0 91.0 97.0

Strongly Disagree
Total

3
100

3.0
100.0

3.0
100.0

100

Technological Changes
Frequency Percent Valid Percent Cumulative Percent

Valid Yes No

73

73.0

73.0

73.0

27
100

27.0
100.0

27.0
100.0

100

Total

PIE CHARTS

LAW & ORDER EFFECT

Strongly Agree Agree Don't know Disagree Strongly Disagree

LACK OF TOURISM EFFECT

Strongly Agree Agree Don't Know Disagree Strongly Disagree

EMPIRICAL STATISTICS
In empirical statistics we have done hypothesis testing. The results of it will be shown later

ESTIMATION & RESULTS

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

REGRESSION ANALYSIS

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)

X1

X2

X3

X4

(Declining)

DATA & METHODOLOGY

* = 0.1 ** = 0.05 *** = 0.01 *, **, *** Represent Significance at
10%, 5% , 1% respectively

* 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

RECOMMENDATIONS & LIMITATION

RECOMMENDATION
In the light of these findings we are able to recommend some suggestions to hotel managements and Government authorities.

Recommendations for Hotel Managements

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 Authority

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.

LIMITATION
The personal interviews we conducted with hotel management was the only limitation we identified. It is because the hotel management dont communicate the underlying weakness of their hotel truly.

WE REALLY THANK YOU FOR YOUR KIND PATIENCE