Decline in Hotel Industry of Pakistan

HOTEL INDUSTRY UNDER STRESS
DEPARTMENT OF COMMERCE
JINNAH UNIVERSITY FOR WOMEN
TOPIC:
Business Research Method
DECLINE IN THE HOTEL INDUSTRY OF

PAKISTAN
SUBMITTED TO:
MISS NUDRAT WAHEED
SUBMITTED BY:
KHADIJA DALVI
MIDHAT SALEEM
RABIA FAROOQ
MAHAM YAQOOB
ACKNOWLEDGMENT
2
First of all we would like to thank ALLAH ALMIGHTY, the most Beneficent
and Merciful who give us the opportunity and strength to compile this report as it
was a strenuous task and without having faith in Him it would not have been
possible.
We would especially like to express our acknowledgement to our course instructor

Miss Nudrat Waheed for providing us valuable direction about the professional
aspect of this report and giving us this opportunity to prepare this report as it is an
honor for us.
In the end, we all group members would like to thanks each other for our
coordination regarding this report.
TABLE OF CONTENT
ACKNOWLEDGMENT.3
3
LIST OF CONTENT..4-5
EXECUTIVE SUMMARY.6
RESEARCH PLAN....7
INTRODUCTION....8
OVERVIEW.9
RISE AND FALL OF THE HOTEL INDUSTRY10
THE DECLINE.10-11
LITERATURE REVIEW.....12
PROBLEM STATEMENT......13
HYPOTHESES....13
THEORETICAL FRAMEWORK...14
SCHEMATIC DIAGRAM..14
RESEARCH METHODOLOGY.........15
POPULATION....16
SAMPLING SIZE 16
SAMPLING TECHNIQUE. ..16
MEASUREMENTAL SCALE
..16
DATA ANALYSIS16
TALLY SHEET16
FREQUENCY TABLE17
VARIABLES CALCULATION..18-26
TIME SCHEDULE.27
BUDGET27
LIMITATIONS ..27
CHAPTER 1 .....28
TERRORISM...........28
CHAPTER 2.......28
LACK OF TOURISM.......28
CHAPTER 3............28
POLITICAL INSTABILITY......28
CHAPTER 4....29
GOVERNMENT POLICIES.......29
CHAPTER 5...29
MEDIA............29
CHAPTER 6......29
INFLATION....29
CHAPTER 7...30
UNTRAINED STAFF..30
CHAPTER 830
NATURAL DISASTERS.30
CHAPTER 9.30
GOVERNMENT NEGLIGENCE.30
RECOMMENDATION....31
APPENDIX..................32
I.
II.
III.
IV.
NEWS & ARTICLES.33-39

HYPOTHESES...41
QUESTIONNAIRE.42
QUESTIONNAIRE......43-45
REFERENCE.46
EXECUTIVE SUMMARY
The hotel industry with its charming and lively environment is apparently
flourishing but the reality negates the fact and depicts the other side of the story.
Pakistan hotels association and the government keep trading accusation.
The industry in Pakistan is not very large to begin with. While the hotel industry
appears to be flourishing and healthy in Pakistan that is not really the case; the
hotel business of Pakistan is declining because of growing terrorism, lack of
tourism, untrained staff, government instability etc.
This is the only industry that generates foreign exchange without exporting
anything and this industry should be cultivate and to be focused upon rather than
left to face decline.
Though this report, we have attempted to identify the root cause and the solutions t
stop the decline in hotel industry of Pakistan.
RESEARCH PLAN
INTRODUCTION
The Hotel industry is among the top three constituents of the world economy after oil and autos
and is growing faster than the petroleum and arms. It is larger than automobile industry in Japan,
agriculture in the U.S.A. and banking in Switzerland. It is unfortunate to know that instead of
growing with world trend, the tourism industry in Pakistan has rather taken a back seat in the
revenue generated services. It is the only industry that earns the FOREIGN EXCHANGE
without exporting anything.
The hotel industry with its charming and lively environment is apparently flourishing but
the reality negates the fact and depicts the other side of the story. Pakistan hotels association and
the govt. keep trading accusations. Most of the hotels and motels here, particularly in the far
flung areas, hill stations and the tourists spots and even in the three major cities; Islamabad,
Lahore and Karachi, are dependent upon tourism, international business trips. The industry in
Pakistan is not very large to begin with. There are four major five star hotels operating in the
country: Pearl Continental, Sheraton, Marriott and Avari Tower and then there is a Serena
hotel chain which is basically at the more prominent tourist spots. Actually the greatest growth
in the hotel industry was seen in the late 80s and then some in early 90s but it was clear by this
time that the industry had already entered in a recession and the trend has visibly been reversed.
As far as the five and four-star hotels are concerned, there has been no growth as regard to fresh
investment. Apart from the fact that the Holiday Inn was taken by the Marriott and the hotel Taj
mahal by Holiday inn crown plaza. Moreover attacks on the Marriot hotel (Islamabad)
and on TajMahal (Mumbai) seriously damage this industry. Recent research have revealed that
two hotels popular with foreigners Islamabad Marriott Hotel in Pakistan and Taj Mahal in
Mumbai were attacked by terrorists. Pakistani Hotels are very much affected by the changes in
technology and the most important is the Government Instability had affected this business in
such a way that each Government has its own rules and regulations regarding to the
hotel industry .The number of hotels in the country has increased from 845 in 1991 to 1150
in1996, showing a growth of more than 26% with the fastest growth in the number of hotels seen
in 1993 which tapered off to 2.4% in 1995 before picking up again in 1996. However, in August
2008, hotel occupancy rates fell, an alarming sign given to Pakistani Hotels. By the beginning of
fourth quarter 2008, the Pakistan THL sector (Tourism, Hospitality and leisure)
was sta rting to see meas ur able fallou t fro m the eco nomic cri sis
in the form of negative indicators in the hotel industry, a slowdown in the gaming
sector and increased trading down from casual dining restaurants to quick-serve
restaurants. The economic crisis isnt confined to the Pakistan, either. It is a global
issue whose future impact might possibly spread to the Hotel industry in the form of
decreased tourist activity from overseas.
T his in dicates that th e in dus try is far from h ealthy state and needs
improvement.
OVERVIEW
The hotel business has been present in Pakistan since its independence in 1947. In Pakistan this
industry contributes a large proportion to the countrys economy. The hotel industry contributes
to a large percentage of the countrys revenue. At first there were not many hotels to begin with
but as time passes, the country saw the gradual establishment of local and international hotels.
The Hotel Mehran is an example of an early local hotel. The Avari Towers rose as a prominent
hotel chain present in Karachi, Lahore, Islamabad and Dubai.
At the moment, there are four major five star hotels operating in the country: Pearl Continental,
Marriott, Avari Towers, and Sheraton Hotel. Up and coming hotels include Serena Hotel and
Carlton Hotel, which are relatively new compared to the previous four.
The greatest growth in the hotel industry was seen in the late 80s and then some in early 90s. The
number of hotels in the country increased from 845 in 1991 to 1150 in 1996, showing a growth
of more than 26% with the fastest growth in the number of hotels seen in 1993 which tapered off
to 2.4% in 1995 before picking up again in 1996.
However, the industry began to experience a downfall with time, mostly due to government
instability and terrorism. In August 2008, hotel occupancy rates fell, an alarming sign given to
Pakistani Hotels. By the beginning of fourth quarter 2008, the Pakistan THL sector (Tourism,
Hospitality and leisure) was starting to see major consequences of the economic crisis in the
form of negative indicators in the hotel industry, a slowdown in the gaming sector and increased
preference to quick service restaurants as opposed to dining ones.
RISE AND FALL OF THE HOTEL INDUSTRY IN

PAKISTAN
9
As mentioned before, the hotel industry in Pakistan has seen a sustained decline in its
performance over the years. However, this was not always so. Pakistan, which is a vast country
and a land of serenity and serendipity, attracts infinite number of tourists each year. It has many
tourist destinations with well furnished city and airport hotels. Industry in Pakistan had witnessed
tremendous boom before 2008, which is when things started getting worse. In better times, the
growth of the hotel industry in Pakistan was fueled by the Pakistani tourism industry. Increasing
business opportunities and growing economy in Pakistan is acting as a stimulant for the hotel
industry in Pakistan.
Pakistan does not just have international hotel chains like Sheraton and Marriott. There are a lot
of motels and low budget hotels; each hotel has its own set of facilities and services. When the
countrys economy was in boom during the 1980s to late 2000s period, personal enterprise was
also on the rise and led to the establishment of a variety of small motels.
The Decline
The hotel industry of the country starting facing problems due to factors that are faced in the
economy which include economy, terrorism, political conditions and other macro factors. The
industry faced a major setback in the late 2010 when Marriot Islamabad was under the attack by
terrorist bombing that took the life of 50 people and injured severely 250 people, this incident
brought the decline in the hotel industry as many foreigners and national customers feel
uncomfortable in staying in any hotel in Pakistan and visiting Pakistan for their business meeting
and other corporate events and seminars. Here the factor of Terrorism played the important part
as many print and electronic media highlighted the feared faced by the people in Pakistan and the
act of terrorism that was being increased created the impact of bringing down the visiting
foreigners in the country, many international operating company reduces and restricted their
visits to Pakistan hence reducing the occupancy rate in the Hotel from 60-70%. In order to
survive in those circumstances the Hotel industry reduces their rates to 10-20 % to gain the target
market.
10
In the year 2011 the increase and stability of economy of Pakistan brought a change in the
industry of Hotel and tourism it was observed sudden increase in number of foreign visitors and
meetings were scheduled in Pakistan mainly in the city of Karachi, through which the occupancy
rate of the hotels increase from 60% compared to the last year occupancy rate. This increase of
occupancy rate create the effect on the demand of the hotels , as the demand increase so does the
prices and as it was as the prices of the room of hotel were increase from average Rs. 9000-Rs.
10000 to Rs 11,000 Rs 12,0000 per night .
Due to the impact created by the fast developing economy of Pakistan particularly in Karachi,
which is the industrial hub of Pakistan, many national and international organizations are
engaged in setting their meetings and conferences in the hotels, many foreign corporate people
are also visiting Karachi for their seminars and organization conferences, hotel business in
Karachi therefore is in the business. Many international and national hotels are operating in
Karachi for instance Marriot, Pear Continental, Regent, Carton, Sheraton, Avari and Ramada
Plaza etc hence every category of Hotel which range from 2 star to 5 star hotels are operating in
the country. many foreign investments are also been observed in this sector , as per news France
based Accor hotel is being opened in Karachi this year.
11
LITERATURE REVIEW
There are few of many articles that we critically analyzed and reviewed.
http://www.dawn.com/news/756591/hospitality-industry-an-emerging-career-option. In
this article the writer gives a brief account on the careers that Hotel and Tourism industry
provides.
http://www.dawn.com/news/1151723. The author of this article has given detailed

information about hotel industry being severely affected by the critical situations of
Pakistan.
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 detraining the economy of Pakistan particularly its hospitality industry.
http://www.slideshare.net/rimshakhalidmalik/hotel-industry-in-pakistan. In this article the

author describes the struggles that Pakistan Hotel Industry faces as Terrorism keeps
visitors away.
http://tribune.com.pk/story/735230/hospitality-industry-hoping-for-a-brighter-dawn/. In
this article it is explained that the hotel industry in hoping that in near future theyll rise
again as one of the important industry in Pakistan to generate revenue.
12
PROBLEM STATEMENT:
To examine the real cause and factors which contributes more to the decline in
hotel Industry of Pakistan?
HYPOTHESES:
The hypotheses that was most preferred is:
Uncertain economy resists growth in hotel industry
THEORETICAL FRAMEWORK:
13
A theoretical framework is a conceptual model of how one theorizes or makes logical sense of
the relationships among the several factors that have been identified as important to the problem.
Terrorism
Lack of Tourism
Political Instability
Government Policies
Decline in Hotel Industry
Media
Inflation
Untrained Staff
Natural Disaster
Government Negligence
Independent Variables
14
Dependent Variable
RESEARCH METHADOLOGY
Population:
We have a population of 50. The population is mainly composed on the hotel management.
Sample Size:
15
The sample size of our research is 25 people. The sample size is taken from Karachi only which
includes hotel representatives and consumers.
Sampling Technique:
The data was collected via questionnaire. Our group members met the respondents personally
and got the questionnaire filled.
Measuremental Scale:
We have used the Interval scale because it measure variables equally.
Data Analysis:
We analyzed the survey questionnaires by the measuremental scale.
TALLY SHEET
Factors
Terrorism
Lack Of
Tourism
Political
Instability
Government
Policies
A
|||| |||| ||||
C
-
D
-
E
-
Total
25
|||| ||||
|||| |||| |
|||| |||| ||||
||
25
||||
|||| ||||
|||| |||
||
25
||||
|||| |||| |
|||| ||
|||
25
|||| ||
||||
|||| ||
|||| |
25
|||| ||
|||| ||||
|||| |
||
25
||
|||| ||||
|||| ||
||||
||
25
||
||||
|||| |||
|||| |
||||
25
|||
|||| |||
|||| |
||||
|||
25
Media
Inflation
Untrained
Staff
Natural
Disaster
Government
Negligence
16
FREQUENCY TABLE:
Factors
Total
Terrorism
Lack Of
Tourism
Political
Instability
Government
Policies
15
10
25
11
12
25
10
25
11
25
Media
25
Inflation
Untrained
Staff
Natural
Disaster
Government
Negligence
10
25
25
25
25
1. TERRORISM
S.NO
17
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
15
15
2.
High
10
20
3.
Average
4.
Low
5.
Very low
f = 25
fx = 35
Total
35
25 = 1.4
Interpretation: Terrorism has a very high impact on the decline of hotel industry of Pakistan.
Terrorism
very high
high
average
2. LACK OF TOURISM
18
low
very low
S.NO
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
11
11
2.
High
12
24
3.
Average
4.
Low
5.
Very low
f = 25
fx = 41
Total
41
25
= 1.64
Interpretation: Lack of tourism has a impact between very high to high.
Lack Of Tourism
very high
19
high
average
low
very low
3. POLITICAL INSTABILITY:
S.NO
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
2.
High
10
20
3.
Average
24
4.
Low
5.
Very low
f = 25
fx = 54
Total
54
25
= 2.16
Interpretation: Political Instability has a high impact.
veryhigh
20
high
average
low
very low
4. GOVERNMENT POLICIES:
S.NO
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
2.
High
11
22
3.
Average
21
4.
Low
12
5.
Very low
f = 25
fx = 59
Total
59
25
= 2.36
Interpretation: Government Policies has a impact of high on the decline.
21
Government Policies
very high
high
average
low
very low
5. MEDIA:
S.NO
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
2.
High
10
3.
Average
21
4.
Low
24
5.
Very low
f = 25
fx = 62
Total
62
25
= 2.48
Interpretation: Media has a high impact on the hotel industry decline.

22
Media
very high
high
average
low
very low
6. INFLATION:
S.NO
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
2.
High
10
20
3.
Average
18
4.
Low
5.
Very low
f = 25
fx = 53
Total
23
53
25
= 2.12
Interpretation: Inflation has a high impact on the decline.
Inflation
very high
high
average
low
very low
7. UNTRAINED STAFF
S.NO
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
2.
High
18
3.
Average
21
4.
Low
20
5.
Very low
10
f = 25
fx = 71
Total
24
71
25
= 2.84
Interpretation: Untrained Staff has an impact between high and moderate role for the decline in
hotel industry of Pakistan.
untrained staff
very high
high
average
low
very low
8. NATURAL DISASTER:
S.NO
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
2.
High
3.
Average
24
4.
Low
24
5.
Very low
25
f = 25
fx = 83
Total
25
83
25
= 3.32
Interpretation: Natural disaster has a moderate impact on the decline in hotel industry of
Pakistan.
Natural Disaster
very high
high
average
low
very low
9. GOVERNMENT NEGLIGENCE:
S.NO
Rating
Coding
Scale(x)
(f)
(fx)
1.
Very high
2.
High
16
3.
Average
18
4.
Low
20
5.
Very low
15
f = 25
fx = 72
Total
26
72
25
= 2.88
Interpretation: Government negligence has an impact of high role for the decline in hotel
industry of Pakistan.
government negligence
very high
27
high
average
low
very low
TIME SCHEDULE:
The time distributed to each task was per the requirement of particular task. The total time
given for the completion of research work was 3-4 months.
BUDGET:
The whole research work is completed at the cost of Rs.500.
LIMITATIONS:
The Research has a sample size of only 25 people and all the respondents belong to
Karachi city.
The Research is limited due to time constraints.
Non serious respondents
Time constraints on the part of respondents to fill the questionnaire.
Dual answer of a single question
It was very difficult to get time for interview because being the executive of hotels they
have their own business and responsibilities.
28
CHAPTER 1
TERRORISM:
One of the major factors that affect the hotel industry is the terrorism in the country, Since
Pakistan have taken part in the war against terrorism since 9/11, many terrorism activities and
incidents have been faced by the country which repels the tourist to visit these destination. Swat
valley which was considered as the jewel for tourism was destroyed during the operations against
the terrorist who were operating through that area. Many other areas such as Gilgit, Abbotabad
and other valleys are infected through terrorism.
CHAPTER 2
LACK OF TOURISM:
Pakistan has become an unsafe place due to ever-increasing terrorist attacks. That is another
major factor that is not only damaging the repute of Pakistan in the world but also causing its
tourism industry to a decline. Tourism is one of major revenue earners for Pakistan but persistent
terror activities in the country have negatively impacted the tourism business, especially after the
Marriot Hotel attack which left 60 people dead.
CHAPTER 3
POLITICAL INSTABILITY:
Pakistan political condition are unstable since the establishment of the country, till now no
political party has completed its five years tenure in the government, political condition remains
unstable as each political party keeps on generating blames and civil out bust moments against
the ruling government, due to the instability the country situation are always in the instability,
strikes, march and other political tools are used on the daily basis which affects the economy and
the industry. Due to this political condition no such action have yet been taken for the
29
development of the hotel and tourism industry since the year 2006 when the year was acclaimed
as the year of tourism industry of Pakistan.
CHAPTER 4
GOVERNMENT POLICIES:
It is important to address the issue of how the Government of Pakistan can promote tourism in
our country. At present, the government has not been able to figure out how to capitalize on the
tourism potential and turn our tourism assets into a sustainable employment generating and
foreign exchange earning venture. Government should make policies regarding the hospitality
industry so, that industry again starts generating revenue.
CHAPTER 5
MEDIA:
Media plays an important role in contributing any industry to show its advantages or
disadvantages. For the hotel industry media never played their part. They always showed us and
the world the downside of hotel industry by giving the negative impression of hotels i.e. the
terror attacks on the hotels. Now the media should show the good side, more tourist places,
hospitality of Pakistan so, that the foreigners make Pakistan their favorite tourism place.
CHAPTER 6
INFLATION:
Inflation is considered another major cause of the failure of hotel industry. The hotel owners
have to increase the price of food because of ever increasing prices of goods. High priced food
has made Pakistan a place that is beyond the reach and affordability of tourists. The rising prices
and inflation in the country due to the economy of Pakistan had also created an impact in the
hotel and tourism industry. As the prices of transportation, food, hotels stay and accommodation
have been increased many national tourist now lost the charm in travelling to the northern and
other tourist destinations.
30
CHAPTER 7
UNTRAINED STAFF:
Untrained staff also contributes in the decline of hotel industry. If the staff is not trained and meet
the hotels standard or expectations of a consumer, the consumer will think twice to come again.
In Pakistan, the lower staff is illiterate so, its typically hard to understand for foreigners and
workers to understand each other.
CHAPTER 8
NATURAL DISASTERS:
Pakistans government lacks the ability to cope with the natural calamities. Northern areas
of Pakistan have been the tourists favorite place but after earthquake of 2005, those areas
suffered incomparable loss but nothing had been done for their re-construction and
redevelopment. Poor disaster management caused a loss to the hotel and tourism industry
CHAPTER 9
GOVERNMENT NEGLIGENCE:
Government ignorance is one of the major factors that led in the decline of hotel industry. The
government should make supportive business opportunities available with a world class network
of roads having a firm focus on transportation facilities. Furthermore immediate and aggressive
marketing is needed to attract international tourists to Pakistan in the same way India has done
with Incredible India and Malaysia has done with Malaysia truly Asia.
31
RECOMMENDATIONS
The Hotel Management should improve the quality because most consumers believe that
the charges are high and the quality is less if you compare it with the charges.
Government should stabilize the economic condition of Pakistan because it is causing the
hotel industry to decline.
The Hotel Management should also take measures to improve security because most
consumers do not feel fully secure they regard their security level as average while in a
hotel.
Government should take steps to stop the decline of hotel industry because it is hurting
our tourism industry as well as economy and investments.
The Hotel Management should maintain or maybe improve the level of cooperation by
hotel representatives with consumers.
The Hotel Industry should raise their voice and negotiate with government to make sound
policies for the improvement in hotel industry.
32
APPENDIX A
33
NEWS & ARTICLES:
KARACHI: The Peshawar tragedy has shaken the hotel industry as foreigners are
checking out, events are being cancelled out and movement of local customers slowing
down.
Pakistan Hotels Association (PHA) has shared the feedback with Dawn that it received from its
members regarding the current and future business scenario.
An official of Ramada Plaza Karachi said: Our guests (local/ foreigner) reacted to the news on
Tuesday. Foreigners left the country and locals avoided public places. Now for last two days, our
restaurants are empty. We are not receiving many walk-in guests. Only the in-house guests are
using the restaurants.
Room occupancy has not been affected as such since we have prior local commitments.
However, the future looks bleak. We have started to receive cancellations, the Ramada official
informed PHA.
Pearl-Continental Hotel in Karachi said: We as hoteliers lost business to the tune of Rs2.5
million in our food and beverages area in a day, whilst in our room occupancy we lost business
of approximately 10-15 per cent.
Ramada Islamabad Hotel reported few cancellations but the situation was better than what they
expected.
Islamabad Marriot Hotel gave details of sales loss of up to Rs4 million.
Director Sales of Pearl Continental Rawalpindi observed that after Peshawar tragedy tourists
would stop travelling to Pakistan.
He said many international meetings and conferences scheduled to be held in Pakistan have now
been shifted to other countries like Dubai and Malaysia as chief guests invited refused to visit the
country citing safety concerns.
The stoppage of international flights to Pakistan has badly affected hotel industry since layover
of airlines staff is a major source of income.
Different companies and organisations/institutions have also postponed their events, he added.
34
Most of the travel and tours companies decline to confirm business for next year. The hotel
industry is dependent on tourism which plays a vital role in the growth of a countrys economy,
he said.
LAHORE: The hospitality industry in Pakistan has taken a hit due to multiple
problems faced by the country. People associated with the industry, however, remain
optimistic over future growth provided that business activities regain momentum.
It is well-known that tourism activity is minimal in Pakistan and there is no surprise that the
law and order situation is the biggest reason. Thus, the hotel industry becomes largely
dependent on the corporate sector and other business institutions.
The industrys decline began with the global recession in 2008. It was further hit by terrorist
activities across the country. The attack on Marriott Hotel in Islamabad had a devastating
impact. Additionally, Pakistan being banned from hosting international sporting events took
down what was left of the tourism industry.
In countries where tourism is a key component of the economy, the hotel industry contributes
around 20% to GDP. In Pakistan, however, its contribution is at a meagre 3%, said an industry
expert. Despite this stagnant growth, a few new structures appeared in different cities
especially in Lahore where currently four new five-star hotels are under construction.
The hotel industry showed gradual growth since 2012 and in the first quarter of 2014, the
growth rate was 7% more than the corresponding period previous year, which is
encouraging, Pearl Continental hotel Lahore General Manager Haseeb Gardezi.
The growth was primarily due to increased business activity after the general elections, experts
said. Foreign delegations along with local business activity increased hotel occupancy rates.
However, the recent attack at Karachi airport, political instability and the military operation in
North Waziristan once again has slowed down the growth in hotel industry. The picture is
35
hopefully set to get clearer by September this year and if things go right, then a 10% growth
target will be set for next year.
Previously, when the law and order situation in the country was better, the textile sector was
contributing a handsome share in hotels revenue. Foreign firms and their officials often visited
Pakistan to finalise transaction deals.
Trade with India is another attraction for the hotel industry, especially for Lahore, but some
players see this prospect with limited effect. For growth, the Indian component will play a
limited role. The industry will revolve around the corporate sector and other business
activities, said Ramzan Sheikh, an entrepreneur in the hospitality industry. The local
hospitality brands should strengthen themselves now because foreign brands might hesitate to
invest in Pakistan for some years to come.
36
PAKISTAN HOTEL INDUSTRY STRUGGLES AS TERRORISM KEEPS

VISITORS AWAY
KARACHI: Pakistans hotel industry remains in the red for the last two years because unabated
incidents of terrorism and violence have not only slashed room-occupancy to less than 40 per
cent, but also the number of daily customers, top industry officials said on Wednesday.
The planned construction of at least five hotels, including Avari Islamabad and Sheraton
Lahore, have been put on the hold, while completion of big projects such as Sofitel Hotel in
Karachi are being delayed, they said. And those, which are operating, are finding it difficult to
remain afloat, they added.
With the top hotels being the prime target of terrorists, all of them have literally been
converted into high security zones, with armed guards, barricades, walk-through scanners and
dogs to sniff every vehicle entering their premises.
We as a family used to visit a hotel or a restaurant almost every week, said Rushda Tariq, an
exporter living in Islamabad. Now we hardly visit these places because of the security
threat.
And the concerns of citizens are understandable. Terrorists have targeted posh hotels and
restaurants in every major city, including Karachi, Islamabad, Lahore and Peshawar. Then the
overall security climate has also hit the hotel businesses as many foreign travelers have stopped
coming to Pakistan.
Pakistan Hotels Association Chairman Mustansir Zakir told Our Sources that many leading
hotels were barely managing to stay afloat.
37
Business travelers, who use to fill rooms in the upscale hotels, are too scared to come,
while added security measures have pushed up the cost even as revenues fall.
The Hotels Association of Pakistan, which represents more than 100 hotels across the country,
says room occupancy dropped to 40 per cent on an average, much below the numbers needed
even to breakeven.
Several big hotels have reduced the number of operational rooms to save cost.
Zakir, who is also a deputy director at Hashwani Hotels, which runs Marriott and Pearl
Continental franchises, said that due to the security threat the number of guards had to be
increased by up to more than 400 per cent. Where we required 30 guards, now we have to
deploy at least 150, he said. Then there is a need to have at least 10 dogs trained to detect
explosives. Each of these dogs cost around Rs1 million and we have to spend a lot to maintain
them, he said.
Enhanced security measures, including building a security wall such as in Marriot Islamabad,
which witnessed two deadly attacks in recent years, also cost millions of rupees, industry
officials say.
Investors, who had put money in the hotels in early part of the decade when economy was
growing, are now grumbling at decline in revenues and rising costs.
Thirty out of 180 rooms at Ramada have been closed, said Anwar Qureshi, the financier of the
hotel. Every day I have to face 80 employees who have no work to do. I am not sure for how
long the hotel can keep this additional staff. Just after attack in Lahore, a lot of our customers
handed over the keys.
The absence of a viable domestic tourism industry is also working against the hotels, he said. If
it had not been for the business we get from airlines, the hotel would have been closed. Hotels
are being seen as dangerous place. People coming from other cities prefer staying with their
relatives or friends. he said.
Abdul Rehman Naqi, the managing partner in Sofitel Tower, said that he never expected the
situation to be like this when the decision was taken to invest in the project.
38
The 28-storey hotel is being built in Karachi at the cost of around seven billion rupees. The
project has delayed and the work will now complete in 2012 instead of July 2010
Hospitality industry an emerging career option
LAHORE, Oct 13: Along with traditional career options like medicine, engineering and
business studies, hospitality industry is also emerging as a rewarding field for the local
students who have recently started realizing its true potential.
The hospitality industry includes a wide range of services related to management of hotels and
restaurants, tourism, entertainment and recreation, as well as transportation. Hospitality industry
is categorized in the services sector which makes about 53.3 per cent of the countrys GDP.
It is not just about hotel management and cooking; rather it offers the enthusiasts a wide range of
career choices, including, but not limited to, human resources, accounting, guest relations,
housekeeping, food and beverages, security, real estate management, event management,
marketing and sales etc. Even a business graduate or a finance student could find well-paid jobs
in the hospitality industry with international exposure in many cases.
The investment and tourism boom that followed Ayub era created the need for hotels
development in the country. This trend continued till the early 1980s, after which the Afghan war
repercussion dealt a blow to tourism and investment in Pakistan and subsequently to its
hospitality industry.
However, the 90s saw a progressive change in the sector with tourism and investment flowing in
again and the introduction of modern technology in hotel management mechanisms. At present, a
decline in tourism because of militancy has affected the hotel business in most areas of Pakistan,
particularly the North where, hotels used to be a major source of livelihood for most locals.
In Lahore alone there has been an upsurge in the number of public and private hospitality schools
which claim to offer international standard training to the students. Big names in this regard are
Institute of Tourism and Hotel Management, College of Tourism and Hotel Management and
Pearl Continentals Diploma in Culinary Arts. A number of management institutes also offer
specialised courses in cookery and professional development in the field of hospitality.
These institutes provide skill-based training to groom all aspects of the students personality. In
this regard, courses offered in the skill stream include tourism and hotel management diplomas,
tour operations, chef courses and food and beverage services. Additionally, certificate courses in
various languages and personal grooming are also offered to help the students find career
39
opportunities in different countries. In most cases, the students are given market exposure by
making internship mandatory. Most students are offered jobs immediately on course completion,
while some exceptional ones get offers from hotels abroad.
The Chefs Association of Pakistan represents the local hospitality sector in the international
arena through permanent membership of World Association of Chefs Societies (WACS).
In spite of all these encouraging indicators, hospitality is still a developing sector here. A
situational analysis conducted by International Labour Organization (ILO) of the United Nations
in 2011 concluded that the sector was still characterised by low wages, gender segregation,
inefficient and informal human resource management, resulting in a high workforce rotation.
Eirij Obaid, a student of hospitality management course at a local institute complains that though
to a student the sector appears lucrative, practically it has its own issues including little job
security, especially for female employees. On entering the industry, many a professional might
question themselves whether the money and time they spent for the purpose was worth it or not.
Still the industry entails plenty of opportunities and has the potential of providing employment to
a big percentage of the countrys workforce. These opportunities may lay scattered in even farflung areas where tourism industry can be developed.
However, the growth in the sector is heavily dependent on two other sectors --- economy and
tourism. Unless these sectors are given a boost, the hospitality industry will remain incapable of
sustaining itself and is likely to eventually wane, like many other sector of Pakistans economy.
40
APPENDIX B
41
HYPOTHESES TESTING
Name: ______________________
Organization: ________________
Designation: _________________
We, the students of B.S/ M.COM previous, department of commerce, Jinnah University for
Women, are conducting a practical research on Decline in hotel industry of Pakistan. In this
connection you are required to select the most appropriate hypotheses from the following. We
assure you that information provided by you will strictly be used for academic purpose only.
1. Uncertain economy resists growth in hotel industry.
COMMENTS:
2. Government negligence collapses hotel industry.

COMMENTS:
3. Hotel industry heavily relies on media.

COMMENTS:
42
QUESTIONNAIRE:
NAME:______________________
ORGANIZATION:_____________
DESIGNATION:________________
We the student of BS 3rd year, Department Of Commerce, Jinnah University For Woman,
conducting a practical research on Decline In Hotel Industry Of Pakistan. You are requested to
fill up the following questionnaire to aid the further studies, your opinion will be confidential and
used for academic purpose only.
To what extent do you agree that these factors are contributing in decline in hotel industry of
Pakistan?
S.n
o
FACTORS
1.
Terrorism
2.
Lack of Tourism
3.
4.
Government Policies
5.
Media
6.
Inflation
7.
Untrained Staff
8.
Natural Disaster
9.
Government Negligence
43
Strongly
Agree
Agree
Neutral
Disagree
Strongly
Disagree
Questionnaire
1. Maximum arrivals in a year
a.
b.
c.
d.
2012
2013
2014
2015
2. How you give security to your visitors/customers

a.
b.
c.
d.
By increasing in number of guards

By alarming facility
By proper monitoring
Other then ____________________
3. How government can help Hotel Industry to improve their image in global
scenario?
a.
b.
c.
d.
By proper law and order

By controlling terrorism
By government stability
All of the above
4. Do you think after the attack at Marriott hotel (Islamabad) in 2010 results
decline in hotel industry?
a. Yes
b. No
5. Do you agree that media hit the reputation of hotel industry?

a. Agree
44
b. Disagree
6. Which economic problem do you think plays role in decline of
customers/visitors
a.
b.
c.
d.
Inflation
Uncertain situation
Political issues
Others _______________
7. Decline in hotel industry has been due to

a.
b.
c.
d.
Terrorism
Political instability
Corruption
Economic instability
8. Hotel industry promotes

a.
b.
c.
d.
Economy
Tourism
Local attraction of citizen
Any other ______________
9. Does hotel industry contributes the highest revenue for Pakistan

a. Yes
b. No
10.Do you think the decline we are facing today, will turn into prosperity in
sooner year?
a. Yes
b. No
45
46
REFERENCES:
http://www.dawn.com/news/756591/hospitality-industry-an-emerging-career-option
http://www.dawn.com/news/1151723
http://tribune.com.pk/story/735230/hospitality-industry-hoping-for-a-brighter-dawn/
http://www.scribd.com/doc/109611329/Factors-Affecting-Tourism-of-Pakistan#scribd
https://prezi.com/7dspcaj7ullh/decline-of-hotel-and-tourism-industry-of-pakistan/
https://www.scribd.com/
http://www.slideshare.net/
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HOTEL INDUSTRY UNDER STRESS

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DECLINE IN THE HOTEL INDUSTRY OF

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We would especially like to express our acknowledgement to our course instructor

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NEWS & ARTICLES.33-39

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Business Research Method

Business Research Method

Business Research Method

RISE AND FALL OF THE HOTEL INDUSTRY IN

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Business Research Method

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http://www.dawn.com/news/1151723. The author of this article has given detailed

http://www.slideshare.net/rimshakhalidmalik/hotel-industry-in-pakistan. In this article the

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Uncertain economy resists growth in hotel industry

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