Funding and Performance of 3-Star Hotels in Port Harcourt

Abstract

The study looked at how funding affected the operations (performance) of three-star hotels in Port Harcourt, Nigeria's Rivers StateDespite the growing importance of the hospitality sector in Nigeria’s urban economies, particularly in oil-producing cities such as Port Harcourt, existing studies have largely focused on: General hotel performance in Nigeria without disaggregating by hotel category; Financing challenges of SMEs broadly, without sector-specific analysis. Therefore, the research gap lies in the absence of context-specific, category-specific, and funding-focused empirical evidence on 3-star hotels in Port Harcourt. The study’sobjective is to ascertain the importance of funding on the performance of three-star hotels in Port Harcourt. All three-star hotels in Port Harcourt, Rivers State, Nigeria, that were registered with the Nigeria Tourism Development Corporation made up the study's target population. Five managers were chosen from each of the 60 hotels in Port Harcourt, making a total of 300 managers in the sample frame, which included the managerial and administrative staff of the hotels. A standardized questionnaire was used to generate the study's data. Additionally, Chi-Square (X²) inferential statistical methods were used to assess (test) the hypotheses because of its suitability for categorical data analysis, testing relationship between variables and suitability for cross-sectional survey. The study found that funding has significant positive impact on the performance of three-star hotels in Port Harcourt, while inadequate funding has significant negative impact on the performance of three-star hotels in Port Harcourt. The study concluded that funding is crucial to the expansion and development of 3-star hotels in Port Harcourt, which will inevitably improve their service delivery and performance. The study recommended amongst others that since funding has significant positive impact on the performance of three-star hotels in Port Harcourt, 3-star hotel owners should partner with local oil servicing firms and indigenous contractors for equity participation. Also partner with local commercial banks and microfinance institutions to negotiate industry-specific loan packages with lower interest rates and flexible repayment terms. Collective bargaining through hotel associations in Port Harcourt can improve negotiating power. Similarly, 3-star hotel management should collaborate with microfinance banks and commercial banks operating in Rivers State to create hospitality-focused credit schemes.