ABSTRACT
Hospitality industry, especially hotel business is declining in Nigeria due to their inability to infuse the culture of social relationship among network members during operation. Hence, this study investigates the impact of social capital on performance of hospitality industry in Minna Metropolis, Niger State. The survey research design was adopted with a structured questionnaire for data collection. The sample frame for this study contained combination of thirty six (36) Two-stars and Three- stars hotels registered with Niger state Association of hotels Minna, Niger state. A multi- stage sampling techniques was adopted to select 72 respondents. Descriptive and inferential statistical method were employed for data analysis. Hypotheses were formulated and tested using multiple regression analysis. The result showed R2 of 71.8% at 0.0000 significant for Two- stars hotels, 46.3% at 0.0140 significant for Three- stars hotels and 57.3% at 0.0011 significant for pooled data. The study revealed that information sharing has a positive and significant impact on performance of Two- Stars, Three- Stars hotels and Pooled data in the study area. The second hypotheses revealed that trust has a positive and significant impact on performance of Two- Stars hotels and pooled data as well as positive and insignificant impact on performance of Three- stars hotels in the study area. The third hypotheses revealed that shared vision has a negative and insignificant impact on performance of Two- Stars hotels and pooled data as well as positive and significant impact on performance of Three- stars hotels in the study area. The study concluded that information sharing has the strongest impact on performance of hotels in the study area which means that sharing vital information among network members enhances effective and efficient services delivery. It is recommended that management of hotels should imbibe the culture of social capital as catalyst that influence employees‟ behaviour to achieved sustained performance. Government should ensure strict compliance of social capital dimensions in developing local content policies by institutional body as well as explore social capital as critical tool for business success.
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background to the Study
The recent dynamic nature of business environment has made hospitality industry operating in a competitive environment to constantly improve their performance, otherwise, they may experience decline in business (Chamanifard et al., 2015; Samad, 2020). As such, Hospitality industry across the globe has now focused on how to enhance their services irrespective of the capabilities and resources required for such investments (Nemati et al., 2017; Konak and Secilmis, 2018; Majeed, 2019). Consequent to this, Eshetie et al. (2016) affirmed that the hospitality industry will continue to grow in both developed and developing countries with a major portion of the growth to be influenced by social interaction and trust among employees as an ingredient for unique service delivery. Based on this, the hospitality industry helps to generates revenue for the economy as well as enhanced productivity and superiority of service offerings (Rasak, 2012; Eshetie et al., 2016).
More so, it plays an integral role in enhancing the economy of its host community through its tourists‟ support business outfits such as the drinking spots, transport sector, club houses, arts and crafts, super markets and restaurants (Zhao et al., 2011). In addition, the hospitality industry is endowed with several tourism resources that can provide viable business opportunities to both local and foreign investors; while enhancing government‟s earnings (Amalu and Ajake 2015). Furthermore, the importance of the hospitality industry to businesses cannot be overemphasized because it served as link between client and tour operators through its online presence and global reach. It further helped to streamline and reduce bottlenecks of guest‟s satisfaction through efficient systems (Amalu and Ajake 2015; Eshetie et al., 2016). For example, the hospitality industry has brought about tourist development and globalization which integrate networks members and connect other business partners to produce quality services at competitive prices (Konak and Secilmis, 2018).
Moreover, the hospitality industry contribute 9 percent to the world Gross Domestic Product (GDP) and also create 216 million jobs in the world as well as generating about US$6 trillion revenue (Amalu and Ajake 2015; Eshetie et al., 2016). Presently, the revenue in Nigeria is valued at over $252 million in the year 2013, and is projected to be increased in size to about $445 in 2023, with over 12.7% increase in foreign visitors. For other countries within African continent, South Africa has over R16.6 billion in 2017, Tanzania‟s revenue amounted to 206Tsh million in 2017 and Kenyan 103.2Ksh million due to it attractive promotions (Hotels outlook, 2018–2022). In Minna, the hotel industry has experience a tremendous growth in recent times. The sector has Brighter, Princess Az- Zahra, Saftec, Whitehill luxury, Haske and Dogon Koli as the top hotels in the city. Despite this growth, the quality of services provided by most of the hotels to their customers is nothing to write home about. Notwithstanding, the sector contribute 18.6% to the state revenue (Banki et al., 2016).
Relatedly, Chamanifard et al. (2015) described social capital as the network of relationships possessed by social actors and the sum of potential resources embedded within, available through and derived from such network build by mutual acquaintance. Such relationship among actors, provide opportunities for them to gain access to relevant peers with desired sets of knowledge or resources that enhanced effective and efficient service delivery in an organisation (Andrews, 2011). However, the concept of social capital has been synthesized as the internal and external social capital: internal social capital connote social relationship among employees within an organisation; external social capital is based on social links with external entities such as customers, suppliers and business partners (Mahajan and Benson, 2013; Dai et al., 2015; Konak and Secilmis, 2018; Akintimehin et al., 2019). Konak and Secilmis (2018) argue that successful interaction between actors enables hotel managers to mobilize beneficial resource for the organization which in turn, enhances organizational performance. More so, interaction between different departments within an outside the organization enable hotel managers to gather knowledge “spillovers” to accomplish collective ends or obtain scarce resources to satisfy customer need (Felıcio, et al., 2014).
However, the adoption of social capital has provided hospitality industry employees with valuable resources and knowledge that are not available in the first place, that can enhanced their service delivery (Terrykim et al., 2013; Li et al., 2013; Stam et al., 2013; Swanson et al., 2020). The resources generated by social capital are: trust, cooperation, common goal, business opportunities, information, financial capital, ideas as well as emotional support which are very beneficial to hotels and improve overall business success (Saha and Banerjee, 2015; Tata and Prasad, 2015). Furthermore, social capital played a dominant role for the continued success of lodging firms‟ seeking for survival in a dynamic and turbulent nature of the business environment (Rasak, 2012; Chamanifard et al., 2015; Hallam et al., 2017). Undeniably, Social capital helped hospitality industry service providers with better response to client‟s diverse needs and provide an added value-chain of services through relationship shared with network members (Andrews, 2011; Mahajan and Benson, 2013; Li et al., 2013). Apparently, it is a requirement for hospitality industry service providers to create dense networks through social interaction and trust among actors, thereby, influencing their service offerings (Muniady et al., 2015; Chen et al., 2016; Akintimehin et al., 2019)
Interestingly, information sharing has been recognised by scholars as one of the indispensable aspects of the social capital that is essential to enhance hospitality industry performance (Mani and Lakhal, 2015; Muniady et al., 2015; Tata and Prasad, 2015; Hador, 2017) More so, as business grow over time, it is vital for lodging firms to explore intangible resources needed to offer efficient service delivery (Felıcio, et al., 2014; Saha and Banerjee, 2015). Consequent to this, Dai et al. (2015) also corroborated that intangible resources such as social relationship helps lodging firms to renew their services within the context of their business life cycles, raised their competitive advantage and induced tourist development. Therefore, social interaction among network members enable hospitality industry to search for novel ideas beyond their organisational boundaries by developing social links with external entities to have access to different resources (Mani and Lakhal, 2015; Tang, 2016; Konak and Secilimis, 2018). On that note, hospitality industry in Nigeria needs to engage in network of relations in order to revitalize or redefine their position within markets (Amalu and Ajake 2015; Hador, 2017).
Benhador (2016) pointed out that the aim of social capital initiatives is to promote cooperation and coordination between hotel employees and units in order to improve the quality of services and operational efficiency. Moreover, it also enables hospitality industry to secure valuable resources, learn from others, gain legitimacy and reap the benefit of collaborating with travel agencies, third party web site and airline in hotel (Dai et al., 2015). Furthermore, hospitality industry engaged in social relationship allows hotel employees to share their work-related experience, expertise, technical – know-how, and contextual information with other colleagues (Swanson et al., 2020), which in turn, improve their service qualities by enhancing employees knowledge of customer preferences and tailoring their service accordingly (Pinho, 2011; Terrykim et al., 2013; Li et al., 2013). Going by this, having a social capital-oriented approach is not only a strategy for hospitality industry in the present time, but a complete modelled blueprint for operational efficiency (Tang, 2016; Neneh, 2017; Konak and Secilmis, 2018). Based on the global perspective, hospitality industry has now employed various dimension of social capital such as trust, information sharing, and shared vision to revitalize hotel operations, build new capabilities (Ellinger et al., 2013; Hallam et al., 2017) and achieve sustainable economic growth (Jafri et al., 2014). Interestingly, managers of established hotel have acknowledged the fact that social relationship could be used to achieve service effectiveness, pursue strategic goals, achieved profitability and novel operations. ((Sainaghi and Baggio, 2014; Konak and Secilmis, 2018; Swanson et al., 2020).
However, considering the quest of hospitality industry to remain relevant in the market, it has become necessary for hotels to focus on social capital as vehicle of building specific resources (tangible or intangible resources) that would address a specific concerned for increased performance delivery (Terrykim et al., 2013). As such, there is need for hotels in Minna to establish a fertile relationship with their guests in order to achieved customer loyalty, through adoption of the viable social capital dimensions, and taking into consideration, the failures of such dimensions (Neneh, 2017).
Hence, this study attempts to examine the impact of social capital on performance of hospitality industry in Minna Metropolis as they are characterised by dramatic and rapid change shown by empirical evidence. Based on the specific objectives, the study provided statistical evidence that information sharing has a positive and significant impact on the performance of Two- Stars, Three- Stars hotels and Pooled data. Trust has a positive and significant impact on the performance of Two- Stars hotels and pooled data as well as positive and insignificant impact on performance of Three- stars hotels. Shared vision has a negative and insignificant impact on performance of Two- Stars hotels and pooled data as well as positive and significant impact on performance of Three- stars hotels in the study area.
1.2 Statement of the Research Problem
In the year 2020, the World Tourism and Travel Council (WTTC) reports from its robust database of 58 tourism industry statistics, which represents 65.5 percentage of the global population of the industry, extrapolate that global revenue is to decrease by 34.7% due to negative effect of coronavirus pandemic (Hotel Tech Report, 2020). With reference to Africa, the industry contributes 4.8% to Nigeria GDP as compare to South Africa with 9.3% in 2019, this is quite disheartening as reported by Jumia Travel (Dutta, 2019). In spite of the low GDP contribution in comparison to other economies of the world, the Nigeria hospitality industry is one of the foremost among the tourism sector in Africa driven by tangible and intangible resources as major asset for survival in a globalised competitive business environment (Dai et al., 2015).
However, the performance of hotels in Minna is decreasing as result of non – existent of footfall customers. As such, resulted in the closure of top three hotels Minna with good edifice namely, Golden Place, Hydro and Shiroro hotels respectively. More so, the dynamic and highly competitive business environment of the hospitality industry, beckons for social relationship as crucial task for hotels to ensure influx of guest as well as enhance effective and efficient service delivery (Terrykim et al., 2013; Li et al., 2013), which in turn, focus on enhancing employees‟ knowledge of customer preferences (Pinho, 2011; Li et al., 2013).
On the other hand, lack of social relationship among employees is another critical challenge facing hospitality industry today and that is the reason why top players of hotels business are embracing social capital as a critical path to business success. In doing so, they incorporate strong ties, information sharing, shared vision, and trust as ingredient of social capital that made hospitality industry better and its ability to capture the nuances of the world as well as to salvage economic decline of service industries (Neneh, 2017). More so, the hospitality industry survival depends on its ability to build capacity through network of relationship to respond to competition in the industry (Muniady et al., 2015).
Based on the previous studies review globally, there has been very little focus on social capital and performance of hospitality industry in the past few years. Previous studies have focused more on family firm performance, small-and medium-sized enterprises (SMEs), Entrepreneurs, tourism and manufacturing firms and their role in fostering firm value with no representation from the Niger state (Mahajan and Benson, 2013; Chamanifard et al., 2015; Hallam et al., 2018; Konak and Secilmis, 2018). However, as far as the research work is concerned, no empirical study has been conducted to determine the impact of social capital on performance of Two- stars and Three-star hotels in Minna Metropolis. In view of the above, the study poses a gap which it sought to fill. Hence, it has become important to examine the impact of social capital on performance of hospitality industry in Minna Metropolis, and such is the overall aim of the study.
1.3 Aim and Objectives of the Study
The overall aim of the current study is to examine the impact of social capital on performance of hospitality industry in Minna Metropolis, Niger State. This aim will be achieved through the following specific objectives:
1. To ascertain the impact of information sharing among network members on hotel performance in the study area.
2. To evaluate the extent by which trust among network members influences hotel performance in the study area.
3. To determine the impact of shared vision among network members on hotel performance in the study area.
1.4 Research Questions
The current study sought to find answers to the major research question: What is the impact of social capital and performance of hospitality industry in Minna, Niger State? In order to answer this major research question, the specific objectives of this current study are operationalized using the following specific research questions:
1. Does information sharing among network members have any impact on hotel performance in the study area?
2. What is the extent of trust between network members and hotel performance in the study area?
3. What is the impact of shared vision among network members and hotel performance in the study area?
1.5 Research Hypotheses
For the purpose of this study, the following null hypotheses will be developed and tested to guide the decision of the study:
1. H1: Information sharing among network members has no impact on hotels performance in the study area.
2. H2: Trust among network members has no impact on hotels performance in the study area.
3. H3: Shared vision among network members has no impact on hotels performance in the study area.
1.6 Scope of the Study
To encapsulate, this current study sought to examine the impact between social capital and performance of hospitality industry in Minna, Niger State. This location was deemed ideal for the study considering that Minna is the capital of Niger State and a centre for corporate businesses. The internal dimensions of social capital was employed for this study. Importantly, the study will focus only on Two- stars and Three-stars hotels registered with Niger State Association of Hotels in Minna Metropolis, as they are the leading hospitality industry in Minna, Niger State. The high proliferation of hotels across the state capital also necessitates the need for the current study. Based on the researcher‟s knowledge, it seems no such study has taken place in this area. As such, it is assumed that it will give a proper representation of the current state of affairs within the hotels industry.
In addition, the data collection process will be facilitated through the use of structured questionnaires to elicit responses from general managers and receptionist. The study will be conducted using cross sectional data which measure variable at a point in time. Both descriptive and inferential statistics will be employed in the study. The data for the study was collected in the year 2021.
1.7 Significance of the Study
The present study immensely benefit policy makers, institutional bodies, employees of existing hotels and the academia.
In line of the growing importance of hospitality industry, and following the multiple disruptions they causes across different sectors of the economy such as transportation, hotels, restaurants, recreational parks, resorts and casinos. It is important to note that Social capital is undeniably a relevant construct that needs to be infused into the framework of lodging firms particularly those within the hospitality industry in Nigeria.
However, this study sought to provide insights to institutional bodies such as National Tourism Development Council (NTDC) on the outcome of social relationship on the performance of hospitality industry amongst other service industries countries development to compare with that of their partners in other countries. In addition, this study would offer hotel‟s employees the need to have an integrated strategy by sharing their work-related experience and knowledge of customer preferences in order to capture, create and deliver value to their shareholders.
Furthermore, the empirical evidences from this study would be of importance to the policymakers within the hospitality industry in the formulation of regulatory framework or policy documents that will guide the activities of indigenous lodging firms such that constant social relationship among network service members would be evenly practised across firms in order to guide that against oligopolistic markets. Therefore, social interaction and knowledge sharing among network member must be rudimentary for relevant stakeholders. This will ensure that, cooperation and trust among network members within the hotels provides unique and international practice services with their counterparts from other countries.
Lastly, considering academic interest in social capital investment activities in recent times, this study would open new window of opportunities for further research on social capital within the Nigeria context. The study has added to existing literature on social capital and performance hotels within the African context, which has arguably received meagre representation. It is empirically proof that social capital has a positive and significant impact on performance of hotels. In view of the above, researchers should explore social capital as a critical tool for business success and a significant factor for establishing viable and sustainable hotels business.
1.8 Limitation of the Study
In any human endeavour, there are always some constraints and this research work is not an exception. Hence the study has the following limitations. Evidently, the results of this study cannot be generalized to the whole Niger State or the entire country, hence, a geographical limitation exists. More so, only Two-stars and Three- stars hotels were explored excluding Four- stars and Five- stars hotels. The coronavirus pandemic and lockdown measure to contain it has posed a serious limitation to the research, as the researcher had to observed all the Covid 19 protocols before having access to hotels. Moreover, most of the hotel staff are not comfortable with giving out information about their hotel to outsiders which abate their ability respond to the questionnaires in good time which eventually prolonged the duration of receiving the questionnaires and at the end the questionnaire could not be retrieved 100%. Furthermore, the researcher simultaneously engaged in the study with other academic work. This consequently cut down the time devoted for this research work.
1.9 Definitions of Operational Terms
Below are some definition of important terms used in this study:
Actors: Is defined as the interconnectedness among hotels employees with various units or departments.
Social relationship: Is described as form of relationship that allows network members to exchange resources such as good and services, information, financial support and social support between group members.
Network ties: can be defined as the degree of connections employees within hotels share with each other.
Performance: can be define as the assessment of overall activities carried out in hotels
with a view of satisfying stakeholders‟ value.
Network members: people or employees working together in an organisation.
This material content is developed to serve as a GUIDE for students to conduct academic research
IMPACT OF SOCIAL CAPITAL ON PERFORMANCE OF HOSPITALITY INDUSTRY IN MINNA METROPOLIS, NIGER STATE, NIGERIA
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