Challenges Facing Small Hotel Operators in Tanzania –A Case Study of Arusha Municipality

The purpose of this study was to assess challenges that small hotels face in their operations in Arusha Municipality. Specifically, the study aimed at addressing the following objectives: to identify the contribution of small hotels in Arusha Municipality; to examine challenges facing small hotel operators in Arusha Municipality; and to identify measures taken by small hotel operators towards addressing challenges they face. This was essentially a descriptive research by design. The sample for this research comprised of57 managers of the selected hotels, hotel staff and supervisors. Purposive and simple random sampling methods were used to develop the study sample. The study used questionnaires, interviews, direct observation and document review as tools for collecting data. Quantitative data were analyzed using a Statistical Packages for Social Science (SPSS version 16.0) whereby content analysis was used to analysis qualitative data of the study. Findings of the study revealed that key factors that constrained development of the small hotels in the study area were high interest rate, inflation, cost of daily operations, high taxes, changes in the world market, and lack of training. The following were mentioned to be measures that hotel operators and other stakeholders had taken to overcome the said challenges: reduction of operation cost; reduction of tax; reduction of inflation rate; increased marketing and promotion; and improvement of hotel infrastructure