Problems Facing Small Scale Hotel In Nigeria

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1.1      Background of the study

In recent times, small and medium scale business has been a major source of revenue to most urban dwellers in Nigerian cities. World Tourism Organization (2016) has pointed out that hotels are now regarded as one of the best monuments in developed and developing countries of world. First class hotels in Abuja, Lagos, Port-Harcourt, Calabar, Kano, Kaduna, etc now rank one of the best tourist attractions in Africa. This is evidence that hotels and recreational centers serve as tourism centers through the provision of tourism facilities in most Nigerian Cities (Fred, 2017). Awaritefe (2004) opined that environmental perception is one of the psychological processes that occur as a result of the interaction of humans with their environment. Awaritefe (2003) emphasize the significance of positive perceptions by consumers in their selection of holiday resorts. This implies that small scale hotels plays significant role in the development of Lagos. Small scale business such as hotels and recreational centers is necessary as it is imperative to incorporate new business idea in form of entrepreneurship in business which will equip tourists to meet the socio-economic requirement of the world of work. It will empower the young youths and provide job for the timid unemployed youths in Nigeria (Evans, 2016). Through small scale businesses, they can explore the business and economic opportunities around them to become self-employed and create job for other people. Through small scale business, specific skills that are needed for successful entrepreneurship is taught such as the knowledge of the business environment, managerial skills, marketing strategies etc. According to Martins (2017), small scale businesses which is an essential tool for economic development, will take cognizance of the need to provide unemployed youths with the ability and skills to be gainfully employed upon completion of their programme as well as prepare them for setting up their small businesses as entrepreneurs. All these are in tandem with the National Economic Empowerment and Development Strategies (NEEDS) thrust on value orientation, employment generation and wealth creation. As observed by Elvis (2014), tourism has been of great help to most entrepreneurs who see the need of venturing into small scale businesses such as hotels and recreational centers. The Lagos State Ministry of Culture and Tourism Development in 2016 declared Lagos state hotels which meets tourism requirement as tourist’s sites. In this vein, the World Tourism Organization (WTO) in recent years has approved various hotels such as Chariton Hotel, Abuja and Leki Suit, Lagos as monuments and tourists attractions (Tourism Factbook, 2017). Osuala (2009) predicted that small scale business at grass root level will not only drastically reduce social vices among the youth but will also cater for all interests, the dropouts, the handicapped, the geniuses and other physically-fit persons. Small scale business at grass root entails the strategies as adopted by the tourists, which vary from locations to locations. A hotel which is usually positioned at urban centers and open places will always have more people patronizing it than that located in villages and remote areas that are inaccessible. Okon (2002) confirmed that small scale business strategies include not only the manner of presentation of tourist facilities, but everything that he/she (tourists) does in the way of arranging tourism items within the hotel to tourism activities. According to Obi, (2005) small scale business is much more than opening a business, it involves turning the small business into big business opportunities which eventually become tourist attraction in future. This is in agreement with the tourism approach proposed by Shepherd and Douglas in Agbamu, (2011) and has been touted as an effective path towards developing the entrepreneurial spirit. This approach requires a shift from the traditional small scale businesses to active participation in a real life entrepreneurial environment (Nyanducha, 2006). The approach enables the tourist engage in some activity, reflect upon the activity, derive insight from the analysis and incorporate the result through a change in understanding of what (Sherman, Serbora & Pigman, 2008) calls experiential learning, which is gained through experience. Osuala (2009) opines that small scale business remains a practical experience that empowers the youths for greater challenges of the future, as it will enable the individual to understand how the economic decision he makes will influence his present and future standard of living as he will understand how the labour market functions. Thus, entrepreneurship in business at grass root is supposed to be dynamic, practice-oriented and activity based through the application of different teaching strategies. According to Fred (2017), assessing the challenges of small scale hotels in Nigeria would help highlight the challenges confronting small scale hotels in Nigeria with a view to tackling such challenges so that investors can be confident enough to invest in the Nigerian economy which would at the long run help in the socio-economic development of Nigeria. Studies have shown that people have neglected small scale business and business environment have not been friendly for people who do not have the required capital to sustain the business especially the establishment of hotels and recreational centers which requires huge capital and finance. It is against this background that this study is carried out to assess the challenges of small scale hotels in Lagos state.


The major problem associated with small scale businesses is the sustainability of the business. Majority of the hotels in Lagos state lack the required hotel facilities needed to make tourists and others comfortable (Evans, 2016). The establishment of hotels requires huge capital and adequate funding. Most hotels managers in Lagos lack the required managerial skill to run the business and the knowledge in making the hotel a tourist attraction sites (Fred, 2017). Awaritefe (2017) in his inaugural lecture highlighted the problems facing Nigerian development and tourism sectors. He opined that most travelers often find it difficult to patronize hotels and recreational centers due to lack of facilities. Another major problem facing the development of hotels in Lagos is the negligence of hotel owners who see hotel business as profit making rather than tourism venture. Tourism is best effective if hotels are developed and provided with the tourism items needed so as to make tourists who wish to lodge after the see-sighting such as the case of Obudu Cattle Ranch and Tinapa, Calabar, Cross River State. It has been observed that small scale businesses have not yielded much profit as expected. This often discourages businessmen/women who wish to venture into hotel business since they see it as seasonal business. Resource are therefore diverted to other sectors thereby causing serious setback in tourism since hotels when developed to world standard are major sources of tourist attraction in developed and developing world. Most hotels which are located in flooded areas and difficult terrain face usually have low patronage since most tourists prefer accessible areas than inaccessible routes. These problems have hindered the development of hotels in Lagos at large. This study is therefore carried out to address the aforementioned problems.


The objective of this study is to assess the challenges of small scale hotels in Lagos. The study will achieve the following objectives;

1.   identify the challenges facing small scale hotels in Lagos

2.   examine the factors responsible for slow growth of small scale hotels in the study area

3.   examine the factors that can enhance the growth of small scale hotels in Lagos

4.   To suggest possible solutions to the development of small scale hotel in Lagos.


For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0:   there are no challenges facing small scale hotels in Lagos

H1: there are challenges facing small scale hotels in Lagos

H02: there are no factors that can enhance the growth of small scale hotels in Lagos

H2: there are factors that can enhance the growth of small scale hotels in Lagos


This study focuses on the assessment of hotels in Lagos. This will enhance the development of hotels since they act as tourist attraction centers. The overall consideration of the significance of the study will be summarized in the following statements.

–  Fill the gap in the literature in the areas of hotel development,

–   It become not a primary but a secondary source of information for researchers, academicians and practitioners,

–    Serve as guiding documents for policy makers for the adaption, formulation and implementation of a genuine urban development strategies, efficient urban management, migration policy, through hotel establishment, etc.

–    Give insight for the town administrators about the existing and emerging socio-economic challenge of the migrants in relation with the socio-economic services provided by the town administration.


The scope of the study covers challenges facing scale hotel in Lagos. The researcher encounters some constrain which limited the scope of the study;

a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study

b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities


CHALLENGES: A call to someone to participate in a competitive situation or fight to decide who is superior in terms of ability or strength.

SMALL SCALE HOTEL: A motel, an abbreviation for “motor hotel”, is a small-sized low-rise lodging establishment similar to a limited service, lower-cost hotel, but typically with direct access to individual rooms from the car park


This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

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