CONTENT INDEX

1. Hotel Industry in Pakistan

An overview
Development constraints and competition
2. Rise and fall of Hotel industry in Pakistan
The decline
3. Relationship between the Hotel industry and Tourism
industry
Global regions
Tourism in Pakistan
Pak Tribune article on current scenario
4. Factors affecting Tourism and Hotel industry in Pakistan
Unfavorable and unstable political conditions
Lack of proper infrastructure
Inability to reinstate the Natural Disasters
Terrorism
Rise in Inflation
Can the situation be reversed?
5. The current scenario
Chefs and the Hotel industry
Pakistans image and the Tourism and Hotel industry
6. Current issues of Hotel industry
Pearl Continental Hotel
Marriot Hotel
Sheraton Hotel
7. Research on Hotel industry
Statistics on industry decline and its reasons
Appendix A (Sources and References)
Appendix B (Sample Questionnaire)

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HOTEL INDUSTRY IN PAKISTAN

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

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.
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Development Constraints and Competition

The four major hotels have not changed much in terms of new
ventures since their establishment. The only major highlight in this
regard was the takeover of Holiday Inn by Marriott. Another constraint
with regards to hotel development are the terrorist attacks that have
plagues the country for some time now. This has led to a huge drop in
foreign visitors to the country. Changes in government have also
created problems as each has its own rules and priorities. Economic
downfall also means that citizens are in not a position to use these
hotels.
Fast food chains like Mc Donalds, KFC and Hardees are providing
significant competition to these hotels, which have comparatively
higher prices than the fast food chains. The restrictions on dinner
menus of weddings are also an important problem. Visitors to Pakistan
prefer staying with family and friends due to the constant threat by
suicide bombers.
Through this report, we have attempted to identify the root cause of
this disastrous decline of the hotel industry. This is the only industry
that generates foreign exchange without exporting anything and
therefore should be cultivated rather than left to face decline.

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Rise and Fall of the Hotel Industry in Pakistan

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
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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.
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
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investments are also been observed in this sector , as per news France
based Accor hotel is being opened in Karachi this year.

Relationship between the Hotel Industry and Tourism

Industry
The hotel and tourism industry have for long been interrelated due to
their interdependent nature. A countrys hotel industry is a symbol of
its hospitality for foreigners and how it makes them feel at home in an
environment that is new to them. Tourism is a source of income to the
country and also promotes a countrys image on a global level.
Malaysia is known for its beautiful honeymoon resorts and Egypt is
known for its historical locations, notably the Pyramids of Giza.
Tourists arriving in a country invariably need a place to stay if they do
not have family or friends in that particular country and that is where
the hotel industry comes in. therefore, both are dependent on each
other.
Spending on trips, however, is largely affected by the current economic
situation of a country. In times of low economic activity people refrain
from spending too much on travel and subsequently, costs associated
with it. The United Nations World Tourism Organization (WTO) says that
international tourist arrivals for business, leisure, and other purposes
are estimated to have declined worldwide by 4% in 2009 to 880
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million. There were certainly sharp differences in the performance of

the various global regions in 2009:
Europe ended 2009 down 6% after a very poor first half (10%).
Destinations in Central, Eastern, and Northern Europe were
particularly badly hit, while results in Western, Southern, and
Mediterranean Europe were relatively better.
Asia and the Pacific (2%) showed an extraordinary rebound.
While arrivals declined by 7% between January and June, the
second half of 2009 saw 3% growth, reflecting improved regional
economic results and prospects.
In the Americas (5%), the Caribbean returned to growth in the
last four months of 2009. The performance was more sluggish in
the other sub-regions, with the A(H1N1) influenza outbreak
exacerbating the impact of the economic crisis.
The Middle East (6%), though still far from the growth levels of
previous years, had a positive second half in 2009.
Africa

(+5%)

was

robust

performer,

with

sub-Saharan

destinations doing particularly well.

The first results from 2010 indicate that the improvement seen in the
final quarter of 2009 is continuing. For, according to the April 2010
Interim Update of the WTO World Tourism Barometer, international
tourist arrivals are estimated to have increased by 7% in the first two
months of 2010. This follows the upturn already registered in the last
quarter of 2009, when arrivals grew by 2% after 14 consecutive
months of negative results. Although data for March are still limited,
countries with data already reported confirm that this positive trend is
set to continue, said the WTO.

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Tourism in Pakistan
Pakistan is one of the countries that offers many categories in tourism ,
which include history , adventure, desert , medical , wild life, natural
and educational tourism which attracts many tourist all over the world
to visit the exotic land and explore the hidden treasures of Mughal and
Indian civilizations that been nourished in time. Today Pakistan had
become one of the major tourist countries but still its not generating
as it should be with this industry due to some factors that would be
discussed further.
Pakistan is rich with natural sites and tourism spots, Pakistan is one of
the countries that have all the natural tourist destinations from
Mountain to plains to deserts and forest and sea. The country is well
connected to these areas through road, rail and air transportations.
The tourist destination and the metropolitan area are filled with hotels,
motels, resorts and guest houses which provide the better services as
many of the hotel services are owned by the private sector and
multinational organizations operating internationally, the government
owns PTDC Motels are the only hotel that operates in the country
through government.
Tourism has been a developing industry in Pakistan. Since 1992 it has
been acclaim as an industry and currently it have the fastest
developing industry. Pakistan government has done many approaches
to enhance the tourism in Pakistan; year 2006 has been acclaimed as
the year of tourism in Pakistan.
Tourism industry has been growing for the past 15 years; year 2006
has recorded the most revenue generated from the industry. Pakistan
Tourism industry have been acclaimed internationally and national
wide.

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Pakistans Golden Age of tourism was in the 1970s when the most
favorite visiting sites were Khyber Pass, Peshawar, Karachi, Lahore,
Swat and Rawalpindi. Currently Pakistan has six major cultural sites
that are categorized as UNESCO World Heritage Sites. These include:
Archaeological

Ruins

at

Moenjodaro

of

the

Indus

Valley

Civilization.
1st Century Buddhist Ruins at Takht-i-Bahi and Neighboring City
Remains at Sahr-i-Bahlol.
The ruins of Taxila from the Gandhara Civilization
The Lahore Fort and Shalimar Gardens in Lahore.
Historic Monuments of the ancient city of Thatta.
The ancient fort of Rohtas
Problems started in July 2010 floods that made around 22 million
people homeless in Pakistan also collapsed Tourism Industry in the
country that was already becoming fragile due to bad law and order
situation in the country. It is further declining due to a sustained
decline in GDP and tourism revenues but it is still considered to be a
potential market for growth.
As discussed before, the hotel and travel industry are dependent on
each other. Consequently, the hotel industry in Pakistan has also
suffered primarily due to the terrorist attacks and following political
and economic instability. An article by in the Pak Tribune sheds some
light

on

the

recent

scenario

of

the

hotel

industry.

The following is an article from the PakTribune, dated June 2010.

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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
Business travelers, who use to fill rooms in the upscale hotels, are too
completion of big projects such as Sofitel Hotel in Karachi are being
scared to come, while added security measures have pushed up the
delayed, they said. And those, which are operating, are finding it
cost even as revenues fall.
difficult to remain afloat, they added.
The Hotels Association of Pakistan, which represents more than 100
With the top hotels being the prime target of terrorists, all of them have
hotels across the country, says room occupancy dropped to 40 per
literally been converted into high security zones, with armed guards,
cent on an average, much below the numbers needed even to
barricades, walk-through scanners and dogs to sniff every vehicle
breakeven.
entering their premises.
Several big hotels have reduced the number of operational rooms to
We as a family used to visit a hotel or a restaurant almost every week,
save cost.
said Rushda Tariq, an exporter living in Islamabad. Now we hardly visit
these
places
the security
threat.
Zakir,
whobecause
is also aofdeputy
director
at Hashwani Hotels, which runs
Marriott and Pearl Continental franchises, said that due to the security
And the concerns of citizens are understandable. Terrorists have
threat the number of guards had to be increased by up to more than
targeted posh hotels and restaurants in every major city, including
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
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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

Its not just the fact that terrorists are targeting these hotels. Costs of
security

are

rising

in

stark

contrast

to

falling

revenues

and

underutilization of room capacity indicates a loss in foreign visitors to

the country. Terrorist attacks have bred political instability in the
country and even some particular locations in the Northern Areas have
been roped off due to security reasons.

Factors

Affecting

the Tourism

and Hotel

industry

in

Pakistan:
As the hotel and Tourism industry are very much inter related as the
factors that influence the one industry also effects the other industry
regarding the hotel and tourism industry. As Pakistan is the country
11| P a g e

with the rich variety of tourism destinations like high mountains, rivers,
oceans, forest, lakes, ancient monuments fertile plains and valleys but
its tourism industry is not growing as it should be, since the year 2006
which had the record revenue generation from the industry no such
revenue is generated till now. The factors that cause this decline in the
industry and which pretend the industry from growing are discussed
below.
Unfavorable and unstable Political Conditions:
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 development of the tourism industry since the year 2006
when the year was acclaimed as the year of tourism industry of
Pakistan.
Lack of Proper Infrastructure:
Pakistan lacks in the industry due the improper infrastructure, roads
are inadequate while the railway is near to destruction while the air
ports are only located in the three major cities. Many tourists find it
difficult to travel in the northern and eastern side of the country due to
in appropriate infrastructure.
Inability to reinstate the Natural Disasters:
Since the earthquake and floods in the area of tourism like Bala kot and
other northern areas still the government havent reinstate the
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condition of those infected area from the past 7 years. This is the
inability of the government that could not cope with the natural
disasters and cannot reinstate the tourist destination to be available
for the tourism.
Terrorism
One of the major factors that affect the tourism 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.
Rising Inflation
The rising prices and inflation in the country due to the economy of
Pakistan had also created an impact in the 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.

Can the situation be reversed?*

In order to bring back the tourism and hotel industry back on track,
certain measures have to be taken:
1. Government should concentrate on the means of transportation,
communication and power for the promotion of tourism industry in
Pakistan.

13| P a g e

2. To attract the foreign travelers who have stopped visiting the

country due to security issues, the said issues should be handled
properly.
3. Tax structure plays a vital role in industrialization process. The
government should give tax incentives to the air fares, hotels and
other tourism related industries.
4. Pakistan is a country with a rich culture and traditional festivals.
These should be organized to create attractions for tourists.
5. Electronic and print media should focus on the highlights and
attractions of tourist sites in the country and so play an important role
in enhancing the demand for tourism in Pakistan

*Along with these suggestions, we have also included some measures that
should be taken after careful research we conducted for the purpose of this
report.

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The Current Scenario

The Pakistan Hotel Association (PHA) is the representative body of the
hotel industry in Pakistan. PHA Member Hotels account for about 90%
of the total inventory of gazetted hotel rooms in the country.
PHA plays an important role in the development and growth of the
tourism and hospitality industries in Pakistan. In addition to promoting
the business interests of its membership, the PHA lends strong support
to the Ministry of Tourism, Government of Pakistan in ensuring
continuing tourism growth through marketing and promotions, product
development, manpower training, productivity improvements and
quality assurance.
The PHA confirmed that public reaction has affected the hotel industry
in the last two to three weeks. A great number of confirmed
reservations for Karachi hotels had been cancelled, resulting in a
decline in room occupancy. Hotel industry leaders fear a massive
decline in room occupancy to below 20 per cent and more strict travel
advisories by the foreign missions in the aftermath of a powerful bomb
blast outside the Marriott Hotel in Islamabad on Saturday in which at
least 60 people were killed. Consequently, leading hotels in the city are
experiencing a phenomenal drop in room occupancy due to reduced
travelling by foreigners and travel advisories issued by many European
countries asking their nationals not to visit Pakistan.
Many groups of foreigners and even Pakistanis working abroad have
postponed their visit to Pakistan after the reaction that sparked anger
among the Muslim world after blasphemous sketches appeared in

15| P a g e

some European newspapers. As a result, the PHA feels the fallout will
be quite significant.
At the moment, Marriott, Sheraton, Pearl Continental and Avari Towers
are the main players in the hotel industry. So far their room rates
(charges) are not affected, but they have prepared budgeted forecast
and spent high amounts on expansion of services, which are to be
recovered over a certain period of time. In the prevailing situation, it
will be difficult for hotels to get desired results. A decrease in booking
is expected, which will subsequently have a strong impact on the rates
of rooms as well as conference halls.
The major concern to the hotels seems to be frequent change in policies,
lack of follow up for effective implementation of the good decisions,
unfriendly attitude of government officials, corruption, international
political situation and above all the law and order situation. Foreigners
will

cancel

or

restrict

travelling

to

Pakistan

in

upcoming

The hotel industry has been very sensitive to such incidents of terrorism
and law and order situation in which not only the foreigners restrict their
visits to the country, but also domestic travelers exercise caution.
Chefs and the Hotel Industry

It is an old saying that chefs are the nucleus of hotels as they provide
hygienic food to customers and are considered 'father in European
countries. The received honour in Western societies more than
teachers but, conversely, in Pakistan only illiterate naais (barbers)
were considered to be a good cook just before five years.
But with the opening of news and entertainment TV channels, people
could know that chefs are such specialized and skilled persons who are
properly

taught

regarding

food

education.

With regard to the hotel industry, chefs play a vital role. Circumstances
16| P a g e

are changing and hotel industry is growing with 5 to 10 per cent

annually, according to the Chefs Institute of Pakistan Executive,
despite instances of political instability. Whether or not this could be a
harbor for the flailing hotel industry remains to be seen.

Pakistans Image and the Tourism and Hotel Industry

The hospitality sector in Pakistan needs to improve its image generally,
and as an employer specifically, by providing better options in terms of
policies,

benefits,

career

plans,

opportunities

and

remuneration

keeping in mind gender roles.

The conclusion was made in a baseline study conducted by the
International Labour Organisation (ILO) to establish gendered situation
analyses of the hospitality sector. The primary objective of the study
was to identify trends of the hospitality sector in Pakistan; working
conditions; extent of decent employment currently prevailing; existing
and emerging opportunities; skills shortages and corresponding
training needs and mapping of major stakeholders.
The hospitality sector needs to work towards cultivating a decent work
culture. Working conditions within the sector are identified with low
wages, poor or non-existent career structures, informal recruitment
practices, unsocial and long working hours, and difficulties in
recruitment and retention resulting in high levels of labour turnover.

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The findings indicate that the sector is gender segregated both with
respect to working conditions and opportunities.

As we have seen, this is the current situation of the hotel industry in

Pakistan. If there is ever to be a hop of rejuvenating this industry,
much needs to be done, from implementing strict governmental
control to rectifying working conditions for hotel employees.

Current Issues of the Hotel Industry

The hotel industry has experienced a decline across Pakistan due to

terrorist activity. The Marriott bombing in Islamabad on September 20,
2008 has damaged the industry. The hotel business has been facing
low room occupancy since September 2008. Hotels in the twin cities
have seen a decline of customers from 40 to 60 percent after
9/20/2008. The Marriott bombing is the worst terrorist attack on an
international hotel since the 9/11 attack. The suicide bomb attack
against the hotel killed over 50 people and injured more than 250. This
demonstrates the recurrent and growing threat to the international
hospitality industry. All segments of the industry are bearing the
burden, from five star hotels to small rental rooms.
The holding of corporate events has declined. Visiting executives from
other countries opt to hold meetings in bungalows or offices for
security purposes. Many foreign and local businesses have restricted
seminars and campaigns of goods. Many international hotels which are
18| P a g e

frequented by Westerners have been targeted, which is a major cause

for the tourism decline in Pakistan.

Pearl Continental Hotel

Since 2001 there have been repeated threats and dismissals against
workers in the Karachi hotel for trade union activities. In 2003 the
International Labour Organization classified the practices of the
management as union busting.
On June 9, 2009, a bomb outside Pearl Continental Peshawar killed at
least 20 and wounded over 70. The hotel is situated on Khyber Road, a
five star hotel popular with VIP's and international tourists.

Marriot Hotel
The Islamabad Marriott Hotel bombing occurred during the night
of 20 September 2008, when a dump truck filled with explosives
detonated in front of the Marriott Hotel in the Pakistani capital
Islamabad, killing at least 54 people, injuring at least 266 and leaving a
60 ft (20 m) wide, 20 ft (6 m) deep crater outside the hotel. The
majority of the casualties were Pakistanis; although at least five foreign
nationals were killed and fifteen others reported injured. The attack
occurred mere hours after President Asif Ali Zardari made his first
speech to the Pakistani parliament. The Marriott hotel was the most
prestigious hotel in the capital, located near government buildings,
diplomatic missions, embassies and high commissions .
A few months after its bombing, the Government of Pakistan had reconstructed the hotel and the Islamabad Marriott reopened officially on
28 December 2008. HESCO, bomb proof and shockproof double
19| P a g e

security wall), bomb proof and shockproof scanning room. and passthrough gates will be placed at the Hotel entrance.
Sheraton Hotel
An ideal destination for foreign travelers visiting Pakistan, the Sheraton
Karachi Hotel boasts an earthquake-proof building with shatterproof
glass. Security is one of our prime concerns and we have recently
installed new security devices and adopted enhanced security
measures to ensure the safety of our guests.
Increased costs due to security measures have been a huge constraint
on the performance of these hotels, especially with regard to the
depleted level of room occupancy. In the current scenario, it is difficult
to see how there can be any hope of a the industry rising again, unless
strict measures of part of the government are taken.

Research on Decline of the Hotel Industry

While making this report, we encountered several reasons as to what

was the main cause of the decline in this industry. In order to identify
the main reason, we conducted a research and made several
discoveries as explained in the pages that follow.

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Hypothesis
Decline of Hotel Industry in Pakistan over the past five
years has been primarily due to Economic Instability

Dependent Variable: Hotel Industry

Independent Variable: Economic Instability

Data and Methodology

Sampling Method:
We collected the data from consumers through judgment sampling and from
hotel representatives we collected through convenience sampling
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Sample Size:
The sample size of our research is 100 persons. The sample is taken from
Karachi city which includes hotel representatives and hotel consumers.

Data Collection Method:

The data was collected via questionnaires. Our group met the respondents
personally for completing this task.

TALLY MARK SHEET

Q#

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FREQUENCY TABLE
Q#

11

28

19

15

12

16

53

27

36

32

32

20

48

24

32

16

38

10

13

19

51

13

26

29

26

19

26

54

10

Most Preferred Hotel

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Preferred Hotel
Marriot
12%

Pearl Continental

3% 11%

Carlton
Regent Plaza
Sheraton

15%

28%

Awari Towers
Ramada

19%
3%

9%

Hotel Mehran

Interpretation: as Indicated by the pie chart it is clear that Pearl

Continental is the most preferred choice of the customers followed by
others

Last Visit

4%

a week ago
16%

a month ago
a year ago

27%

2-3 years ago

4-5 years ago
More than 5 years ago
53%

Interpretation: as Indicated by the pie chart it is clear that 53% of the

consumers visit the hotels on monthly basis.

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Charges of Hotel Service

OPTIONS

CODE (x)

Frequency
(f)

(fx)

Very High
High

-2
-1

36
32

-72
-32

Average

32

Low

Very Low

f=100

=fx/f
= -104/100
= -1.04

Interpretation: Since lies near -1 which is the code of high option so this
means that the consumers believe that charges of hotel services are
high.

Quality of Hotel Service

OPTIONS

CODE (x)

Frequency
(f)

(fx)

Very High
High

-2
-1

20
48

-40
-48

Average

24

Low

Very Low

f=100

=fx/f
= -80/100
= -0.8

Interpretation: Since lies at -0.8 which is in between high and average

option meaning consumers believe that quality of hotel service is
between high to average with more consumers leaning towards
high.
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Reasons for Decline in Hotel Industry

Reasons for Decline

Terrorism
10%

Political Instability
Corrpution

32%

Economic Instability
Communication
Advancement

38%
4%

16%

Interpretation: as Indicated by the pie chart it is clear that 38% people

believe that the decline in hotel industry is due to economic
instability closely followed by terrorism at 32%.

Security Risk Involved While Visiting Hotel

OPTIONS

CODE (x)

Frequency
(f)

(fx)

Very High
High

-2
-1

13
19

-26
-19

Average

51

Low

13

13

Very Low

f=100

=fx/f
= -24/100
= -0.24

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Interpretation: Since lies at -0.24 which is in between average and high

option meaning consumers believe that security risk involved while
visiting a hotel is between average to high with more consumers
leaning towards average.

Hotel Industry Promotes

Hotel Industry Promotes

19%
Economy

26%
Investments

Tourism

Local attraction for citizens

26%
29%

Interpretation: as Indicated by the pie chart it is clear that 29% people

believe that hotel industry promotes tourism closely followed by
investments and economy both at 26%.

COOPERATION OF HOTEL REPRESENTATIVES

OPTIONS

CODE (x)

Frequency
(f)

(fx)

Very
Cooperative
Cooperative

-2

26

-52

-1

54

-54

Average

10

Non-Cooperative

Very NonCooperative

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f=100

=fx/f
= -93/100
= -0.93

Interpretation: Since lies at -0.93 which is in between high and average

option meaning consumers believe that the hotel representatives are
between cooperative to average with more consumers leaning
towards cooperative.

Conclusion
After careful study of the results, we found that our hypothesis has
proven to be true. 38% of the sample population regarded economic
instability as the main reason for the decline in the hotel industry.
Terrorism closely followed up with 32%. Based on our research, we
have certain recommendations to correct the situation, and these are
as follows.

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.
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Limitations

The Research has a sample size of only 100 people and all the
respondents belong to Karachi city.

The Research is limited due to time constraints.

It was very difficult to get the questionnaires filled from Hotel

Management because they were busy in their own responsibilities
thats why there are limited number of questionnaires which were filled
by the Hotel Management.

Future Outlook

After conducting our research, we have arrived at certain conclusions

about the hotel industry and its possible future.
The economic and political situation of the county at the moment is not
very hopeful and consequently the industries of the country will suffer.
Tourism is the major industry which is that is seeing a sustained
decline due to the political situation of the country at the moment.
Despite the fact that the major hotels are taking initiatives for strict
security measures, still the public and foreigners are hesitant to visit
and stay at hotels and occupancy levels are falling. Major hotels have
put a hold on investment plans due to changes in the government
scenario. One positive factor is the number of chefs, which is
increasing in the country which may or may not contribute to the hotel
industry rising again.
To conclude, the hotel industry seems to be heading down for the
moment. Whether it will see a rise in the future or not remains yet to

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be seen, largely dependent on the policies adopted by the current

government.

Appendix A

www.pakribune.com
www.google.com
www.dawn.com.pk
www.scribd.com
www.pha.org.pk
www.thenews.com.pk
www.nation.com.pk
www.marriott.com
www.pchotels.com
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www.sheraton.com
www.avari.com

Appendix B
SAMPLE QUESTIONNAIRE
Dear Sir/Madam,
We, the students of BS Commerce, Department of Commerce (4th Year),
University of Karachi, are conducting a research on the decline of hotel
industry in Pakistan. In this regard, we have developed the following
questions. You are requested to fill out this questionnaire. Any information
that you provide will be kept confidential and will be used for academic
purposes only.
Thank you.
Please tick the most appropriate answer.
Q1. The hotel which you prefer most is
A. Marriot
B. Pearl Continental
C. Carlton
D. Regent Plaza
E. Sheraton
F. Avari Towers
G. Ramada
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H. Hotel Mehran
Q2. Your last visit at a hotel was
A. a week ago
B. a month ago
C. a year ago
D. 2-3 Years ago
E. 4-5 Years ago
F. More than 5 years ago
Q3. Charges of hotel services are
A. Very High
B. High
C. Average
D. Low
E. Very Low

Q4. Quality of hotel service is

A. Very High
B. High
C. Average
D. Low
E. Very Low
Q5. Decline in hotel industry has been due to
A. Terrorism
B. Political Instability
C. Corruption
D. Economic Instability
E. Communication Advancement
Q6. Security risk while visiting a hotel is
A. Very High
B. High
C. Average
D. Low
E. Very Low
Q7. Hotel industry promotes
A. Economy
B. Tourism
C. Investments
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D. Local attraction for citizens

Q8. The hotel representatives are
A. Highly Cooperative
B. Cooperative
C. Average
D. Non-cooperative
E. Highly Non-cooperative

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