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 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 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.

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 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 Decline in Hotel Industry Pakistan

Government Instability

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

Hotel Declining

100 0 2.92 3.00 2 1.12 1.266

100 0 2.27 2.00

100 100 0 0

100 0

100 0 1.76 2.00 1 .986 .972

2.30 1.77 1.27 2.00 2.00 1.00

Median

Mode S.D

2 2 2 1 5.664 .959 .723 .446 .442 .919 .522 .199

Variance
FREQUENCY TABLES
Decline of Hotel Industry
Valid Strongly 8 Agree Agree Don’t know

Frequency Percent Valid Cumulative Percent Percent

8.0 35.0 22.0 27.0 8.0

8.0 35.0 22.0 27.0 8.0

8.0 43.0 65.0 92.0 100

35 22

Disagree 27

Strongly 8 Disagree

100

100.0 100.0
Chain Affiliation
Frequency Percent

Valid Percent

Cumulative Percent

Valid Very much

12

12.0

12.0

12.0

49
Somewhat

49.0

49.0

61.0

Don’t know

39

39.0

39.0

100
Frequency Percent Valid Cumulative Percent Percent
Valid Strongly 19 Agree Agree Don’t know

Law and Order

19.0 47.0 20.0 13.0 1.0 19.0 47.0 20.0 13.0 1.0

19.0 66.0 86.0 99.0 100

47 20

Disagree 13

Strongly 1 Disagree

100

100.0 100.0
Lack of Tourism
Frequency Percent Valid Cumulative Percent Percent
Valid Strongly 36 Agree Agree Don’t know

36.0 55.0 5.0 4.0 0.0

36.0 55.0 5.0 4.0 0.0

36.0 91.0 96.0 100.0 100

55 5

Disagree 4

Strongly 0 Disagree

100

100.0 100.0
Terrorism Effect
Valid Strongly 48 Agree Agree Don’t know

Frequency Percent Valid Cumulative Percent Percent

48.0 40.0 3.0 6.0 3.0

48.0 40.0 3.0 6.0 3.0

48.0 88.0 91.0 97.0 100

40 3

Disagree 6

Strongly 3 Disagree Total

100

100.0 100.0
Technological Changes
Frequency Percent Valid Percent Cumulative Percent

Valid

Yes No

73 27 100

73.0 27.0 100.0

73.0 27.0 100.0

73.0 100

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
REGRESSION 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)
Y

X1

X2

X3

X4

* * (Declining) 0.286 (0.08) 0.66 (0.06)

DATA & METHODOLOGY

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

** *** 0.475 (0.02) - 0.135 (0.002)

Overall model result that we found with the ANOVA Table pvalue = 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 don’t communicate the underlying
weakness of their hotel truly.
WE REALLY THANK YOU FOR YOUR KIND PATIENCE