An examination of cost reduction strategies in the Nigerian hospitality industry: A case study of Transcorp Hilton Abuja
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Background of the Study
The hospitality industry is a critical sector in Nigeria’s economy, contributing to employment and tourism. However, businesses in this sector face rising operational costs due to inflation, energy prices, and supply chain disruptions. Effective cost reduction strategies are vital for maintaining profitability and competitiveness in this challenging environment (Akinbami & Adeola, 2024).
Transcorp Hilton Abuja, a leading player in Nigeria’s hospitality industry, employs various cost reduction strategies to optimize operations while delivering quality service. Strategies such as energy efficiency, procurement optimization, and labor cost management are essential for balancing cost and quality in a highly competitive market (Eze & Adigwe, 2023). This study examines the cost reduction strategies implemented by Transcorp Hilton Abuja and their impact on operational efficiency and profitability.
Statement of the Problem
Rising operational costs pose a significant challenge to the Nigerian hospitality industry, reducing profitability and limiting growth potential. While cost reduction strategies are critical, there is limited research on their implementation and effectiveness within the Nigerian context. This study addresses the gap by exploring how Transcorp Hilton Abuja utilizes cost reduction strategies to sustain profitability and operational efficiency.
Objectives of the Study
- To identify the cost reduction strategies employed by Transcorp Hilton Abuja.
- To evaluate the impact of these strategies on operational efficiency.
- To assess the challenges Transcorp Hilton Abuja faces in implementing cost reduction strategies.
Research Questions
- What cost reduction strategies are employed by Transcorp Hilton Abuja?
- How do these strategies impact operational efficiency at Transcorp Hilton Abuja?
- What challenges are faced in implementing cost reduction strategies at Transcorp Hilton Abuja?
Research Hypotheses
- H₀: Cost reduction strategies do not significantly impact operational efficiency at Transcorp Hilton Abuja.
- H₀: Transcorp Hilton Abuja does not effectively implement cost reduction strategies.
- H₀: Challenges in cost reduction strategy implementation do not significantly affect operational outcomes.
Scope and Limitations of the Study
The study examines cost reduction strategies at Transcorp Hilton Abuja, focusing on their impact on operational efficiency and profitability. Data will be collected from financial records, staff interviews, and industry reports. Limitations include access to proprietary data and the generalizability of findings to other hospitality businesses.
Definitions of Terms
- Cost Reduction Strategies: Methods used to decrease operational expenses without compromising quality.
- Operational Efficiency: The ability to deliver services in a cost-effective manner.
- Procurement Optimization: The process of reducing costs through efficient purchasing and supplier management.
