Banking Sector and Hospitality Industry in Ondo State: Issues and Challenges

Abstract

The study examined banking sector and hospitality industry in Ondo state: issues and challenges. Hospitality industry has remained one of the exciting and rewarding industries in Ondo state, but currently faced with a challenge like unavailability of funds from the banking sector to fund the sector; while recent issue on economic recession presently experienced in the country has further hindered the performance of the sector in terms of reduced local tourists patronizing and the low profit being realized by operators. The banking sub-sector has remained the major funds provider via financial intermediary process ensuring funds availability for the development of hospitality sub-sector (i.e. casinos, hotels, boarding houses, motels, tourist camps, holiday centres, resorts, bars, cafeterias, snack bars, pubs, nightclubs etc., to owners (i.e. ether individuals, group of people or corporate organizations). It was believed that sectors like, agriculture, energy, micro, small and medium enterprises (MSMEs), oil and gas etc., enjoyed more finance assistance from banks than the hospitality industry in Ondo state, Nigeria. The primary source of data adopted was via a structured questionnaire and interview. The statistics that was adopted to estimate the parameter were mean, variance and standard deviation. Also, to determine the standard error, δ√N was adopted. A simple regression was also used to address the responses of the respondents gathered though the questionnaire in order to derive logical conclusion for the study. The result showed that the dwindling trends in the hospitality sector was a result of banks’ restrictive lending patterns by not making funds (e.g. loans) available to achieve development in the industry, unbearable cost of funds and high interest rate charged. The paper recommends that policy makers should periodically evaluate the impact of bank - related policies on the sustainability of hospitality sector and ensure that the hospitality regulatory process is simple, cost effective and consolidated with economic palliatives to proffer solutions to socio-economic challenges facing the country particularly during this period of recession.