1.1 Background of the Study
An organization is composed of people, facilities and systems put in place to achieve specific objectives. In most cases, the objective is to render service(s) in pursuit of money or in fulfilling social obligations. The people, the facilities and the systems interplay in order to achieve the given goal. The facilities are composed of buildings, infrastructure and support services. The system is the inter-link and the web that binds people and facilities together and turns them into a production system. As a production system, it is subject to wear and tear apart from the fact that both facilities and the people respond to the dictates of life cycle. The sustenance of a virile system implies proactive management as re-echoed by Thorncroft (1965:14) when he averred that estate management has gone beyond the day-to-day routine activities of the estate manager but what he called the ‘shaping of an estate’. What properties within the estate should be retained and what might be sold to the advantage of the organization. What opportunities are there for adding to the estate, by buying in new property or by terminating leases previously granted out of the ownership? Is the policy to be one of disposal of property to raise This is strategic property management and its essence is the realization that the built estate is a valuable resource, which, along with other resources, such as manpower and finance, can help to deliver the corporate goals of an organization (Worthing, 1994). Some of the tools of strategic estate management are maintenance management, property management and facilities management. BS 3811 (cited by Seeley 1976: 2) defines ‘maintenance’ as: ‘work undertaken in order to keep or restore every facility to an acceptable standard’. Beyond engineering components, the importance of maintenance in property investment is re-echoed by College of Estate Management (1993: 1) in its definition of estate management as:
being concerned with the administration of tenanted land, including letting, control, rent assessment and collection, insurance, repair and renewal, and in general the care and maintenance of the estate with particular regard to conserving and improving its revenue – earning potential
The College of Estate Management (1995: 321) defined property management as “the application of management principles to property assets with the aim of maximizing their potentials’’. Thus, facilities have become crucial, very important and elements that cannot be dispensed with. Sustenance of facilities however, have gone beyond maintenance management or property management due to the need to meet the trinity of investment objectives which are to preserve capital, to enhance its value and to earn a net cash profit on the capital invested Hanford (1970). The trend now is facilities management which Spedding (1999) defined as ‘the practice of coordinating the physical workplace with the people and work of the organization, integrating the principles of business administration, architecture and behavioral and engineering sciences’.
Facilities management is not completely new. It is an offspring of maintenance management and property management. These specialties have been expanded and broadened. Owen (1995) affirmed that facilities management became recognized as an identifiable management concept in the United States at the start of the eighties and has been practised in the United Kingdom since 1983 with the main growth occurring in the nineties. All the functions, which are now incorporated under facilities management umbrella, existed prior to the recognition of facilities management. What facilities management has achieved, which is new, is an understanding that a coordinated and integrated approach to a range of business activities can add value to an organization’s process. This trend is captured by Alexander’s (1996:1) definition of facilities management as “the process by which an organization delivers and sustains support services in a quality environment to meet strategic needs”.
Undoubtedly, facilities management has come to stay as a profession in Europe and other developed nations of the world. However, in Nigeria its existence and even its practice are not sufficiently documented. The Nigerian Institution of Estate Surveyors and Valuers’s 28th Annual Conference of March 1998 focused on the theme ‘Facility Management in Nigeria – The Estate Surveyor and Valuer’s perspective’. That Conference might be regarded as the pioneering effort on facilities management awareness in Nigeria particularly from the estate surveyors’ point of view though it does not necessarily mean that elements of facilities management had not been in operation before 1998.
Other professional institutions such as The Nigerian Institute of Quantity Surveyors, The Nigerian Institute of Building and The Nigerian Society of Engineers had organized seminars and workshops on facilities management. Presently, there has been much argument as to whether it should be a distinct professional calling at all. However, some surveyors do not see any difference between facilities management and maintenance management or property management while others doubt the practicability of its principles being applied in business circles in Nigeria Ojo (2002).
European and American industrial and commercial organizations (including Hotels) have gone ahead to adopt facilities management as one of their strategic management instruments to improve the performance of their hotels (Telfer, 2005). Effective facilities management (FM) combines resources and activities to generate the work environment vital to the success of any organization. At a corporate level, it contributes to the delivery of strategic and tactical objectives. On a day-to-day level, effective FM provides a safe and efficient working environment, which is essential to the performance of any establishment, whatever its size and scope of works (Edum-Fotwe, Egbu and Gibb, 2003). It is imperative that research must begin to be conducted on the responsiveness of Nigerian society to facilities management and whether facilities management, where and whenever it is adopted and practised, is actually enhancing the quality of service delivery.
One major area of the Nigerian economy, which should attract such investigation, is the hotel and hospitality industry. This industry is crucial to the growth and development of tourism as a foreign exchange spinner for many countries of the world, Nigeria inclusive. Hotel organizational structures are not immune to the influences of the economy and business cycles, so the difficulties that befall business in general during economic down-turns also affect hotel organizations. Downsizing, reengineering, facilities management and strategic estate management are some of the strategic tools being used to describe the changes hotel companies have undergone or are undergoing Rutherford (2002).
1.2 The Statement of the Research Problem
In Nigeria, a good number of facts and incidents aid and abet the development of hotels. First is the public sector involvement, which had been predominant at least up to the late nineties. Hotels were established for providing accommodation for government visitors and patrons. Examples include Zaranda Hotel in Bauchi, Owena Hotels in Akure and Maiduguri International Hotel in Maiduguri. In some cases, hotels were established for prestige and business reasons. Examples include Premier Hotel in Ibadan, a colossus of the former Western Region of Nigeria with its thriving cocoa business and Hamdala Hotel in Kaduna catering for the need of the then Northern Regional Government. Second, international occasions and requirements may warrant the establishment of the hotel. Examples are the defunct Durbar Hotels in Lagos and Kaduna, which came into existence as a result of Festac 77. There is also Nicon Noga Hilton Hotel at Abuja (now Transcorp Hilton). This came into being as a result of the establishment of Abuja as the capital city of Nigeria. Such hotels are owned and managed by the government appointed representatives on behalf of the public. However, many of these hotels are bedeviled by mis-management leading to facilities decay, which caused their gradual collapse Bode-Thomas (2003). Third, there are privately owned hotels but usually at a lower scale compared to government owned hotels. Examples include Greenspring Hotel, Ibadan; D’Rovan Hotel Ibadan, Kilo Hotel, Lagos; Bagauda Lake Hotel, Kano and so many others. Even though they might have declined one way or the other due to age, level of use or effluxion of time yet they are still thriving. The most interesting aspect of hotel development is the continued interest, which the private sector is showing in its development. For instance, Ibru Organizations bought over Federal Palace Hotel from the Federal Government and subjected it to total refurbishment for greater service. They also own Ikeja Sheraton Hotel and Towers. Kuku Organizations developed the Grand Hotel, Asaba and is now proposing to develop a larger version in Lagos to be named Ikoyi Grand Hotel. Global Oil Fleet Organizations purchased the extensive Federal Government Guest House at Victoria Island Lagos and proposed to turn it into a 5-star Hotel complex along the ones the organization is already operating at Port Harcourt and Lekki-Ajah axis of Lagos Dada (2005). Sunny Side Corporation of U.S.A bought over Ikoyi Hotel from the Federal Government and the hotel is presently being renovated so as to revive its degenerated facilities. The former Durbar Hotel Lagos was bought over by UACN Property Development Company Plc and is now being re-constructed to a 5-star hotel with modern facilities. Despite the non-proactive nature of facilities maintenance in some of these hotels, other hotels in Nigeria are not left behind in the adoption of facilities management as strategic management principle to get hold of the market going by what are being published in the daily newspapers; for instance Sheraton Hotel and Towers, Ikeja Lagos, Le Meridien Hotel, Victoria Island Lagos and Nicon Hilton Hotel, Abuja (Bode-Thomas, 2003). If these colossal investments are to be retained, sustained and accelerated, there is the need to investigate what the thriving hotels are doing to sustain themselves in business with particular regards to the management of their facilities and property assets.
The research is thus aimed at providing answers to the following research questions:
i. Are the hotels within the study area fully equipped in terms of facilities for effectiveness in accordance with national standards?
ii. Does hotel asset management style lead to effectiveness in service delivery?
iii. What is the extent of application of facilities management in hotel organizations?
iv. What indicators can best be derived for effective facilities management implementation in hotel organizations?
v. What are the challenges militating against effective application of facilities management in hotel operations?
vi. Are there benefits derivable from the adoption of facilities management, from which other hotels can learn from for their effective operations?
It is against this background that this study is designed to examine the management of hotel properties from facilities management perspectives.
1.3 Aim and Objectives of the Research
The aim of the study is basically to investigate the degree of beneficial application of facilities management principles in the management of hotel organizations in the study area.
In order to achieve the above stated aim the following objectives are set to: –
i. Assess the extent to which the provision of facilities in hotel industry
meets national standard as propounded by Nigeria Tourism Development Corporation.
ii Assess the extent of application of facilities management in hotel industry.
iii Assess the impact of hotel assets management style on service delivery effectiveness
iv Derive indicators for effective facilities management implementation in the hotel industry.
v Examine the perceptions of potential benefits of facilities management among various hotel industries’ stake holders.
vi Identify the challenges militating against holistic adoption of facilities management principles in hotel organizations.
1.4 Justification for the Research
Facilities management is a relatively new area with origin in United States of America and spreading to the United Kingdom in the late eighties. Little or nothing had been written about the management of hotel properties generally in Nigeria and in particular facilities management as a strategic estate management tool to meet organizational objectives.
Most of the current literature in Nigeria are therefore preliminary and pedagogic addressing issues such as definitions and scope [Odiete (1998), Ojo (2002)], facilities management tools [Mbamali and Adebayo (2006), Opaluwah (2005)] and which of the professionals within the environmental setting is best suited to serve as facilities manager or to handle what within the facilities management field [ Odiete (1998), Ahmad (1998), Ojo (2002)].
It is only recently that facilities management has come to be applied to specific sectors of the economy usually education and hospital sectors. Most of earlier studies have taken place in South Africa [Kotze and Nkado (2003)] and United Kingdom [Amaratunga and Baldry (1999), Amaratunga (2000)]. In Nigeria, studies have not yet been applied to any sector of the economy. Most of the studies in Nigeria have been devoted to clarifying what facilities management really entails and distinguishing it from the traditionally practised property management and maintenance management. The present study will fill this gap by providing a pioneering application of facilities management to a major economic sector in Nigeria and that is the hotel industry.
The seeming survival of the privately owned hotel in Nigeria might be due to so many reasons amongst which are applications of facilities management principles. Thus, despite the challenges permeating the fabric of hotel businesses in Nigeria, some are still functioning and effectively too. Among the major players are Sheraton Hotels and Towers, Lagos Airport Hotel, Lagos and Trascorp Hilton, Abuja. Within the medium and small hotel categories, there are functional and efficient ones too. What is keeping them going may not be unconnected with effective facilities management, effective management including strategic estate management. The industry is a porous one and the business of owning hotels remains an all comers’ affair. Commendably, more wealthy people, local and foreign, including State Governments are still investing huge sums of money building great structural edifices in a bid to buy into the market, which potentials, experts said remained largely untapped. Probing the extent of applications of facilities management principles and establishing the benefits, probable challenges against holistic adoption of facilities management principles should contribute a great deal to the resolution of this level of uncertainty and information obscurity. It will also provide research result from which upcoming hoteliers can pick from to guide them on successful operation of hotels in Nigeria. Furthermore, the researcher is unaware of anyone who had investigated the impact or contribution of facilities management to hotel management in Nigeria. Thus, in order for business to be conducted in any hotel, it is essential for constructed assets to be appropriately managed if the investment is to maintain and enhance its value and sustain reasonable returns. If Nigeria is to give fillip to the tourism sector of the economy as a veritable and dependable source of foreign exchange, the backbone of which is the hotel and hospitality industry, then the research is considered as highly justified.
1.5 Scope of the Research
The scope of this study is limited to the hotel sector within the South-western geo-political zone of Nigeria; in particular Oyo, Ogun, Osun, Ondo, Ekiti and Lagos States. It should have been ideal to cover all the States in Nigeria, however, the study opted to restrict the scope to South-western geo-political zone of Nigeria because a study of the entire country would make conclusions unnecessarily wide varied and incapable of clear interpretations since the study is perhaps the first of its kind in Nigeria. Thus, a study restricted to South-western geo-political zone of Nigeria on the other hand, would allow the researcher to form definite conclusions, which may be more amenable to clear interpretations and create a pedestal for further research that can be extended to other parts of the country.
Again, it would have been ideal to address the application of facilities management to all sectors of the economy. However, this is unrealistic for the same reasons mentioned earlier. A study of the application of facilities management to sectors as varied as oil and gas, education etc with their differing problems and standards would merely result in generalized and shaky conclusions which may lead to varied implications of inadequate understanding. A study devoted to the hotel industry, on the other hand, would afford the researcher a more concentrated study in a hitherto neglected area of the economy.
Also, the time frame allowed for the research as well as associated logistics in covering the whole country make it imperative that the research be limited to the South-western geo-political zone of Nigeria.
Further, there are so many hotels, private or public, singly or collectively owned; or quoted or unquoted on the stock exchange. It is not possible in the face of the various limitations to cover all the hotels. This research focused on 2 – star to 5- star hotels, that is, hotels with a minimum of 20 bedrooms, private or public. This category accounts for more than 70% of the total hotel stock in accordance with Standard for National Classification and Grading of Hotels and other Serviced Accommodation in Nigeria (2001) produced by Nigerian Tourism Development Corporation (NTDC) in collaboration with Standard Organization of Nigeria (SON). The reason had been that these categories of hotels cut across privately and publicly owned hotels but exclude other serviced accommodations which are classified with 1- Star hotels or lower category of hotels. It is also noted that the hotels are concentrated within big and popular cities of each State with heavier concentration in the State capital as shown in Appendix I. Thus, the farther the city from the State capital the lesser the number of hotels, the lower the quality and the lesser the number of accommodations provided. These inner city hotels can be categorized as hinterland hotels or rural hotels if one goes by Stephen’s classification based on British situations. For this research they have to be dispensed with.
Facilities management is a new field internationally including Nigeria as reflected in the literature review. This study is particularly an exploratory survey research trying to establish the receptivity of facilities management principles in asset management within the Nigerian economy. In this context, the research relied extensively on research questions and field interviews in achieving its aim and objectives.
1.6 Limitations of the Research
It is recognized that, in some ways, any research work would have limitations. For this research, there is little published work relating to hotels in Nigeria, and what is available mainly focused on the privatization of government hotels. Also, as highlighted by Asika (1991), there are various barriers to the collection and exchange of information, compounded by the location and the remoteness of some hotels and fears about commercial confidentiality. All these had been guided against in the sample frame and sample selection.
Geographical limitation as introduced above and the adoption of Tourism Board list may inevitably introduce limited bias into the survey, which could limit the application of the results to geographically dissimilar areas. It is anticipated that the results could at least form the framework for future research of other far away locations in the country. Limiting the research work to South-Western geo political zone of Nigeria and the fact that the focus is on hotel businesses is a major limitation of this work in that it hampers the application of the findings to other sectors of the economy without caution.
1.7 Definition of Key Terms
In a study of this magnitude, it is necessary to define the various terms to distinguish between operational definitions and constitutive definitions to avoid ambiguity. Constitutive definition involves substituting the concept or construct being defined with other concepts or constructs. Operational definition requires that the concept or construct be assigned a type of meaning which one wants it to carry throughout the study (Asika, 1999).
Facilities Management, as applied to the hospitality sector, is defined as the proactive management of constructed facilities and organizational assets to improve their efficiency and add value to their performance and services (Okoroh, Jones and IIozor, 2003). This is in tandem with Alexander’s (1996: 1) definition as ‘the process by which an organization delivers and sustains support services in a quality environment to meet strategic needs’. This study borrows from these two definitions and proposes that facilities management, as applied to the hotel business, is the proactive management of facilities, support services and organizational assets to improve their efficiency and add value to the core accommodation they provide for their customers to meet organizational strategic objectives. Facilities, in the context of hotels, include buildings, industrial kitchen equipment, restaurant, halls of all categories, central air-conditioning system, fans, elevators, lifts, electrical installations, escalators, bakery equipment, recreational facilities including golf courses. This essentially tallies with the Royal Institution of Chartered Surveyors’ Facilities Management Skill Panel’s (1993) [Cited in Owen, 1993] assertion that FM consists of the management of support services; the management of property and the management of information technology. This research adopts this definition totally and as an exploratory study focuses on the three (support services, property and information technology) as they apply to hotel organizations.
Effective hotel combines resources and activities to generate the hotel environment vital to the success of the organization. At corporate level, it contributes to the delivery of strategic and tactical objectives. On a day-to-day level, effective hotel provides a safe and efficient working environment which is essential to the performance of the establishment and give the customer what he wants and needs at a price he is prepared to pay while the hotel sells itself.
Hotel stakeholders are the people who are involved in hotel organizations either as investors, general managers, and hotel workers of all categories including line staff and facilities managers and hotel users or customers.
This refers to property asset sustenance method that is being applied in the running of the hotel and it could be maintenance management, property management or facilities management
Operational Excellence: This according to Torkildsen (1992) is anything or everything being done to satisfy customers’ requirements and meet the organizational goals and objectives in a sustainable way. This study adopts this definition for its operation.
Support Services: These are functions that are accessories or adjunct to the core services in many organizations. For hotel businesses some are rendered as revenue yielding activities while some are part of the total package. They include mail services, fleet cars, catering, reception, housekeeping, and office administration; refuse disposal, reprographics, car park management, horticulture and porterage. This is in agreement with the schedule of support services as identified by (Owen, 1995).
Strategic Estate Management
Aakers (1984:6) defined strategy as “the development of a sustainable competitive advantage with which to compete in a chosen product/market”. However, in line with Thorncroft’s (1965) view and for this research, strategic estate management means property assets’ management decisions that determine the overall direction of business and its ultimate viability in the light of the predictable, the unpredictable and the known and unknown changes that may occur in its most immediate surrounding environments which are considered sustainable. Such decisions may include adoption of facilities management, sales and lease back and change of use of strategic properties.
1.8 The Structure of the Thesis
The thesis consists of seven chapters, organized in a logical manner in order to enable the readers to appreciate the thoughts of the author in achieving the objectives of the study. The chapters are organized as follows:
Chapter One is the introductory chapter and it provides the background of the study, the statement of the research problem, aim and objectives, justification for the study, scope of the research, limitation of the research, definition of key terms and the structure of the thesis.
Chapter Two deals with the review of the related literature, which is structured into a discussion of the whole essence of facilities management detailing its history, goals, and functions. Further the chapter reviews previous empirical studies, which basically are current research studies laden with quantitative analysis of facilities management and hotel businesses.
Chapter Three presents the concept and the theoretical framework of the research. It is composed of the outlines of the researcher’s process of thought, summary of a priori expectations and the theoretical framework.
Chapter Four describes the research method. It is composed of the setting of the study, the research design, population of study, sampling design/sampling frame, sampling size, data requirements, method of data collection, the techniques of refuting a priori expectations, method of developing the conceptual framework of the facilities management compliant hotel and method of data analysis.
Chapter Five presents the analysis of data and interpretation of results while Chapter Six discusses the results. Finally, Chapter Seven focuses on the summary of findings, conclusion and discussion of implication for theory, practice and research.
1.9 Chapter Summary
This introductory chapter deals with the research theme and the nature of the problem to be investigated. Others include the research problem, the aim, objectives, and justification of the study, the study area, and definition of key terms. The next chapter dwells on the review of related literature.