The hotelier was arrested following a report concerning phone seizure, made by the aunt of one of the prostitutes.
The suspect reportedly visited states like Akwa Ibom, Cross River and Edo to deceive young women with a promise of a job.
They eventually end up being prostitutes who pay a sum of N2,500 a day to use rooms at the man's hotel.
Obano got into trouble after he seized the phone of a prostitute who had refused to work.
A report was made by the girl's aunt which led to his arrest.
The hotelier claimed in a statement following his arrest that he received the consent of the girl's father before bringing her to Lagos.
“I met the lady three months ago through a friend, when I traveled to Calabar for a friend’s burial, that she had problem taking care of her two children.
“She begged me to bring her to Lagos so that she could work and take care of them. But before bringing her, I went to see her father who also consented to her coming.
“Before we left Calabar for Lagos, I told her what she would be doing when we get to Lagos and she agreed. The first money she made, she sent it back home for the upkeep of her children, but suddenly she was not concentrating on the hustling anymore.
“She started going out with some boys in my area which annoyed me and I seized her phone.
“I was in my hotel on Wednesday when policemen came and arrested me for trafficking girls and also forcing them into prostitution.
“Some of the ladies in my hotel came through their friends to work; nobody is forcing them into what they are doing. They pay N2, 500 daily for each room they use.
“What I am after is money; whenever the girls come I always provide them accommodation. I don’t chase them away.”
Lagos State police commissioner, Fatai Owoseni has advised parents to be diligent concerning exploiters who lure their children into unseemly trade.