CHAPTER ONE: INTRODUCTION

1.0 Introduction

This chapter presents the general introduction to the study. It covers the background to the

study, statement of research problem, research purpose and objectives, and significance of the

study.

1.1 Background of the Study

The hotel industry is known to be the driving force of tourism development worldwide

(Akyeampong, 2007). In view of this, it is not surprising that Ghana is now gradually

experiencing proliferation of international hotel chains, small independent hotels from the bulk

of the hotel stock (Akyeampong, 2007; Mensah, 2009). Akyeampong (2007) and Mensah (2009)

argue that Accra, is experiencing a rapid rise in the number of hotels being built and maintained

to cater for international arrivals. Ghana Tourism Authority (2016) reports that the number of

international arrivals into the country increased from 746,500 in 2010 to 1,093,000 in 2014. The

figure increases at an average rate of 10% per year. The number of registered hotels in increased

from 1,797 in 2010 to 2,570 in 2014 (Ghana Tourism Authority, 2016).

The Internet has provided a new paradigm for communication and empowered millions of people

to network socially beyond the confines of geographical proximity. Social networking online has

gradually moved from a niche phenomenon to a current trend being adopted by the masses.

Social networking, podcasts, user-sponsored blogs, company-sponsored websites, multimedia

sites, collaborative websites are common examples of the various methods of social media. From

the business perspective, effective networking is a very essential component to success (Kelley,

2010). Social media tools of today are bringing rapid change to organizational communication
and public relations. These technologies have shifted the emphasis of internet services from

being consumption-based towards becoming interactive and collaborative, creating new

opportunities for interaction between organizations and publics (Henderson & Bowley, 2010).

Social media is perceived today in the corporate world as a strategic communication partner,

driving new and distinctive possibilities for organizations to involve stakeholders in

conversations (Vasquez & Velez, 2011). According to Hsu (2012), social media is the gathering

place for a big pool of clients that serve as a warehouse of consumer information and a means of

distribution of information to build market share.

Social media usage in the hospitality industry is very high, and has attracted a lot of studies on

how its usage affects performance. Verma and Verma (2017), in their study of social media as a

promotional tool in the hotel industry noted that its interactivity and accessibility qualify it as

one of the most cost effective marketing tools today, and has therefore transformed marketing

strategies of the hotel industry. Therefore considering the growing importance of social media as

a strategic tool for hotels this study aims to investigate the effect of social media usage on sales

performance of hotels using Eastern Premier Hotel as a case study.

1.2 Statement of the Problem

With the advent of social media, it is no longer enough for businesses in tourism and hospitality

industry to rely exclusively on traditional media for marketing communication (Leung, Law, Van

Hoof &Buhalis, 2013). However, just a few businesses are exploring the full potential of social

media to communicate with stakeholders or access feedback from them (O‘Connor, 2011).

According to Ab Hamid, Razak, Akhir, and Cheng (2013), the advent of social media tools have

altered the way customers search for information with regards to their purchase decisions. The

mobility and how scarce time is for today‘s consumers, traditional modes of communication are
no longer sustainable, hence the relevance of social media as a communication tool

(Poalses&Joubert, 2014; Teixeira, 2014). Again, the cost of advertising is increasingly rising and

consistently in the past decades and consumers are devoting less attention to traditional

advertising due to advertising clutter, distrust and media proliferation (Poalses&Joubert, 2014;

Teixeira, 2014).

In view of these challenges, Mahmood (2012) argues social media platform offers the most

flexible interactive exchanges between organizations and their publics as the most cost effective

marketing communication tool today. In spite of the growing use of the social media tools among

consumers, it appears the hotels are not utilizing social media as a marketing communication tool

(Kaplan &Haenlein, 2010; Aggarwal, 2011). As of March 2019, Golden Tulip Facebook Accra

had 40,163 followers on Facebook, Movenpick had 84,465, Labadi Beach Hotel had 20,453; and

Kempinski Hotel had 16,854; which shows some level of presence on the biggest social media

network. However, O‘Connor (1999) argues the hotels are not harnessing the full potential of

social media; even when present on social media channels their use is very basic. That is hotels

are thus, missing valuable opportunities to interact and engage with customers (O‘Connor,

1999). Though hotel facilities are found on multiple social media channels, they suffer from a

very low level of visibility, activity and engagement and need to take substantial action if they

are to fully exploit the potential of Social Media. This assertion was confirmed by O‘Connor

(2011) in an observational study to assess the presence, visibility, activity and engagement of the

top fifty international hotel brands on four major Social Media channels-Facebook, Twitter,

YouTube and Flickr. The study revealed that major hotel chains are present on a variety of

Social Media channels, overall their use of Social Media is basic (O‘Connor, 2011).
The impact of social media usage on organizational performance has been scantly investigated;

particularly in Ghana. Recent ones sighted include Boating (2014) which revealed that MTN

Ghana and Vodafone Ghana have employed social media to manage customer knowledge; and

Adomako (2015) which looked at factors influencing the choice of social media as a

communication tool in the hotel industry. Besides the latter, there are only a few other studies for

the hotel industry. By way of academic contribution, this study sought to fill the gap in literature

as far as the Ghanaian hotel industry and social media adoption as performance tool is

concerned. The study investigated the effects of social media utilization on performance of hotels

in Ghana using Eastern Premier Hotel as a case study.

1.3 Objective of the Study

1.3.1 Main Objective

The main objective of this research is to determine the effect of social media utilization on the

performance in the hotel industry in Ghana using Eastern Premier Hotel as a case study.

1.3.2 Specific Objectives

1. To determine the types of social media Eastern Premier Hotel uses the most

2. To determine the extent of social media utilization on performance at Eastern Premier

Hotel

3. To determine the challenges facing Eastern Premier Hotel in the utilization of social
media
1.4 Research Question

1. What are the types of social media Eastern Premier Hotel uses the most

2. What is the extent of social media utilization on performance at Eastern Premier Hotel?
 3. What are the challenges facing Eastern Premier Hotel in the utilization of social media?

1.5 Significance of the Study

This study will be beneficial from a managerial perspective as this research will assist owners,

managers and marketers of graded properties to have a better understanding of the benefits of

adopting social media as communication tool in the hotel industry.

Results of the study can help to put forth proposals on the benefits of social media utilization to

the hospitality sector. The findings of this study would inform decision makers on the value of

social media as a communication tool. Also, the results of this study will highlight the need for

hotels to drive sales via social media since that provides them with an alternative market to

expand their share and reach a wider audience.

1.6 Scope of the Study

The study is conducted within the hotel industry in the New Juaben South, Eastern region of

Ghana. The study focuses on the effect of social media utilization as a marketing communication

tool on sales performance in the Ghanaian hotel industry.

1.7 Limitations the Study

The study focused on Eastern Premier Hotel in Koforidua. The assessment may be different in

other hotels and in other geographical jurisdictions. Besides, the sampling approach used did not

permit the inclusion of hotels in the peripheries. Therefore, care must be taken to make no

sweeping generalizations, but place it in context. However, the findings presented offer valuable

insights into the use of social media and its effect on sales performance.
1.7 Chapter Organization

The study is presented in five-chapter report which facilitates flow and ease of understanding for

the reader.

Chapter one, the first chapter highlights the background for the study, presents the problem

statement, followed by the objectives of the study, the research questions and significance of the

study.

Chapter two, this chapter reviews literatures on social media utilization theories as well as

empirical literature in line with the objectives of the study as well as the contextual background

information of the study.

Chapter three, this chapter presents the methodology to be used in analyzing the data. It includes

detailed discussion of research tools required to address the questions. It highlights the study

design, population, sample and sampling procedure, data collection instrument, data collection

procedure and data analysis technique.

Chapter four, this chapter presents the analyses of data and its interpretation in line with the

objectives of the study as well as discussions of the findings of the study.

Chapter five, chapter presents a summary of the findings, conclusions, and recommendations.