ANALYSIS OF THE CURRENT AND FUTURE CONTRIBUTION OF THE HOSPITALITY INDUSTRY TO THE

ECONOMY OF NIGERIA

By

BENJAMIN ELANGWE MUTUTU

GLOBAL HOSPITALITY MANGEMENT

Submitted to

Schellhammer Business School

in partial fulfillment of the requirements

for the degree of

BACHELORS OF ARTS

2022

i
 A Thesis entitled:

ANALYSIS OF THE CURRENT AND FUTURE CONTRIBUTION OF THE HOSPITALITY INDUSTRY

TO THE ECONOMY OF NIGERIA

By

BENJAMIN ELANGWE MUTUTU

We hereby certify that this Thesis submitted by Ezinne Jenifer

Uzoigwe conforms to acceptable standards, and as such is fully
adequate in scope and quality. It is therefore approved as the
fulfillment of the Thesis submission requirements for the degree of
Bachelors of Arts in Global Hospitality Management.

Approved:

Ms. Tanya Aljewiz 24/05/2022

Thesis Advisor: Date:

Schellhammer Business School

2022

ii
 CERTIFICATION STATEMENT

I hereby certify that this paper constitutes my own product, that where the
language of others is set forth, quotation marks so indicate, and that appropriate credit
is given where I have used the language, ideas, expressions or writings
of another.

Student Signature: BENJAMIN ELANGWE MUTUTU

iii
 ABSTRACT

ANALYSIS OF THE CURRENT AND FUTURE CONTRIBUTION OF THE HOSPITALITY INDUSTRY

TO THE ECONOMY OF NIGERIA

By

BENJAMIN ELANGWE MUTUTU

Increasingly, developing economies in Africa are awakening to the enormous potential that
lies untapped in their hospitality industry; even as success stories from Latin America and
Asia have shown the possibilities that abound. This study is an investigation of the current
and potential contribution that the hospitality industry can leverage in the economic
development of Nigeria. It seeks to analyze this contribution by considering the impact of
the hospitality industry on key macroeconomic indicators such as employment, GDP growth,
capital investment and foreign exchange earnings. The study employed both secondary and
primary data. Primary data was collected from Cross River State. A total number of one
hundred (100) copies of questionnaire were administered to staff of selected tourist
institutions for which (85) returned were used for analysis. After cleaning and sorting the
copies of the accepted questionnaire they were fed into the statistical package for social
science (SPSS). The questionnaire was structured in line with the research objectives,
questions and hypothesis of the study. The Pearson product moment correlation coefficient
was used to confirm formulated hypotheses. Among the finding were that hospitality and
tourism has minimally contribution to the economy of Nigeria long major macroeconomic
indicators such as GDP, employment, capital investment and foreign exchange earnings.
Also, the potential of the industry is not fully exploited, being riddled with many constraints.
The study concluded that if hospitality and tourism sector is properly harnessed it will
generate reasonable revenue to government, and recommended that government should
provide adequate funds through budgetary allocation and financial aids to tourism
Management for effective promotion of tourism in at the national and state levels.

iv
 TABLE CONTENTS
TITLE PAGE.......................................................................................................................................i
CERTIFICATION STATEMENT...................................................................................................iii
ABSTRACT........................................................................................................................................iv
TABLE CONTENTS...........................................................................................................................v
CHAPTER ONE..................................................................................................................................1
INTRODUCTION...............................................................................................................................1
1.1 BACKGROUND OF THE STUDY............................................................................................1
1.2 THE STATEMENT OF PROBLEM/RESEARCH PROBLEM..................................................2
1.3 OBJECTIVE OF THE STUDY...................................................................................................3
1.4 RESEARCH HYPOTHESES......................................................................................................3
1.5 RESEARCH QUESTIONS.........................................................................................................3
1.6 SIGNIFICANCE OF THE STUDY.............................................................................................4
1.7 SCOPE AND LIMITATION OF THE STUDY..........................................................................4
1.8 RESEARCH METHODOLOGY.................................................................................................4
1.9 DEFINITION OF TERMS..........................................................................................................5
CHAPTER TWO.................................................................................................................................6
LITERATURE REVIEW...................................................................................................................6
2.0 INTRODUCTION.......................................................................................................................6
2.1 CONCEPT OF THE HOSPITALITY INDUSTRY.....................................................................6
2.2 THE HOSPITALITY INDUSTRY IN NIGERIA.......................................................................7
2.3 CONCEPTUAL FRAMEWORK................................................................................................7
2.3.1 Hospitality Industry and Macroeconomic indicators.............................................................7
2.3.2 Prospects and potential of the hospitality industry to developing economies......................10
2.3.3 Constraints of the Hospitality Industry...............................................................................11
2.3.4 The role of policies and strategies in boosting Hospitality potential to contribute to
economy......................................................................................................................................12
2.4 CHANNEL OF ECONOMIC IMPACT....................................................................................12
2.5 METHODOLOGY FOR ECONOMIC IMPACT ASSESSMENT............................................13
2.6 GAPS IN THE LITERATURE..................................................................................................14
CHAPTER THREE...........................................................................................................................15
METHODOLOGY............................................................................................................................15
3.0 INTRODUCTION.....................................................................................................................15
3.1 RESEARCH DESIGN...............................................................................................................15
3.2 STUDY AREA..........................................................................................................................15
3.3 TARGET POPULATION..........................................................................................................15
3.4 SAMPLING TECHNIQUE.......................................................................................................15
3.5 SAMPLE SIZE..........................................................................................................................16
3.6 DATA COLLECTION TECHNIQUE.......................................................................................17

v
 3.7 VALIDITY AND RELIABILITY.............................................................................................17
3.8 DATA ANALYSIS...................................................................................................................17
CHAPTER 4......................................................................................................................................19
DATA ANALYSES...........................................................................................................................19
4.0 INTRODUCTION.....................................................................................................................19
4.1 DESCRIPTIVE STATISTICS...................................................................................................19
4.2 FIELD DATA............................................................................................................................21
CHAPTER 5......................................................................................................................................27
DISCUSSIONS..................................................................................................................................27
5.0 INTRODUCTION.....................................................................................................................27
5.1 TEST OF HYPOTHESIS 1.......................................................................................................27
5.2 TEST OF HYPOTHESIS 2.......................................................................................................27
5.3 TEST OF HYPOTHESIS 3.......................................................................................................27
5.4 TEST OF HYPOTHESIS 4.......................................................................................................27
CHAPTER 6......................................................................................................................................29
SUMMARY, CONCLUSIONS AND POLICY IMPLICATIONS................................................29
6.0 INTRODUCTION.....................................................................................................................29
6.1 MOTIVATION OF THE STUDY.............................................................................................29
6.2 SUMMARY..............................................................................................................................29
6.3 POLICY IMPLICATION..........................................................................................................29
6.4 LIMITATION OF THIS STUDY AND FURTHER RESEARCH............................................30
REFERENCES................................................................................................................................31
APPENDICES.................................................................................................................................32
LIST OF TABLE
LIST OF FIGURES
Table 1: Number of rooms, guest nights, occupancy rates and revenue from 2013 -2019...................19

Table 2: Contribution of Tourism and Hospitality Industry to GDP of Nigeria...................................20

Table 3: Contribution of Tourism and hospitality industry to employment as a share of GDP in

Nigeria.................................................................................................................................................20

Table 4: Demographic information of respondents..............................................................................21

Table 5: Distribution and return of questionnaires...............................................................................21

Table 6: Distribution of questionnaires to tourism industries..............................................................22

Table 7: Response on whether hospitality and tourism has contributed to the Nigeria in terms of GDP,
employment, foreign currency earnings and capital investment..........................................................22

Table 8: Response on whether Nigeria’s hospitality and tourism potential is significant to make it a
leading destination for tourists and tourist on the African continent....................................................22

Table 9: Response on whether challenges and constraints hampering the development of the
hospitality industry in Nigeria are adequately being handled..............................................................23

vi
Table 10: Response on whether the policies and strategies implemented by the government of Nigeria
have positively and significantly influenced the hospitality and tourism industry...............................23

Table 11: Summary of Hypotheses Test Results.................................................................................23

Figure 1: Conceptual model, Tourism development and economic development................................18

Figure 2: The Economic Impact of the Hospitality Sector (Economics, 2015)....................................21

vii
 CHAPTER ONE
INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The hospitality industry has experienced remarkable growth in the last decade; since the
end of the last financial crisis in 2011. According to the ‘’Hospitality Global Market Report
2021: Covid-19 Impact and Recovery to 2030’’, In 2020, the global hospitality market
attained 3486.77 billion U.S dollars in revenue and was forecasted to grow to 4132.5 billion
U.S dollars in 2021 at a compound annual rate of (CAGR) OF 18.5 percent. In Africa, the
trend has been upbeat even as the continent has become the second-fasting growing
tourism region in the world, with a growth of 5.6% in 2018 after Asia Pacific and against a
3.9% global average growth rate. The Jumia hospitality report (2019) highlighted Morocco
and South Africa as the top destinations of the continent with 11 and 10 million arrivals per
annum respectively; but forecasted Nigeria to become the fastest-growing market in terms
of revenue, with a projected 12% compound annual increase.
An increasing number of studies including United Nations World Travel Organization
(UNWTO, 2002) continue to demonstrate that the hospitality industry plays a major role to
the attainment of balanced sustainable development, and can be harnessed effectively to
deliver net benefits for the poor. The story can be told of several industrialized and
developing countries which resorted to the development of their hospitality industry in an
attempt to solve the problems of unemployment and stagnation of GDP growth.
According to Twining-Ward and shields (2017), there exist twenty reasons why hospitality
and tourism should be built into the economic development agenda of any country. These
include: stimulating GDP growth, boosts international investment, revitalizes urban areas,
drives infrastructure development, promotes inclusive growth, bolsters artisans, propels
the blue economy, increases international trade, spreads philanthropy, supports low-
income economies, creates jobs efficiently, strengthens rural communities, improves access
to income through travel tech, benefits women who mostly find employment in them,
protects cultural sites, sustains intangible culture, cultivates intercultural understanding as
well as aiding post-conflict recovery (Twining-Ward & Shiels, 2017).
The Central Bank of Nigeria (CBN 1988) estimated that a total of 328,906 tourist arrived
Nigeria in 1987 and the revenue inflow was N1.1 billion and was expected to grow to N53
billion by the year 2000; continue in this trend up to 2005, given the growing stability of the
country (Yusuf and Akinde 2015). In 2016, the hospitality industry in Nigeria contributed
about 4.8% to National output (GDP) and employed 1.6% of Nigerians (Kushal, 2017).
However, by 2017, the government of Nigeria having witnessed fall in oil prices and coming
to the realization of its neglect of the hospitality industry decided to introduce a number of
measures and policies to boost the growth of this sector. African countries like South Africa,
Morocco and Kenya which have invested significantly into their hospitality industry have
reaped massive returns in terms of GDP growth, employment, export earnings and capital

1
investment. In light of the trend of countries leveraging the vast potential of the hospitality
industry for economic development and transformation, it is has become imperative to
assess the extent to which this sector has contributed and is contributing to the Nigerian
economy, and what potentials it holds if fully harnessed and leveraged.

Drivers, attractiveness and opportunities in the hospitality industry in Nigeria

The Global Travel and Tourism Competitiveness index (2017) gave Nigeria’s Hospitality and
Tourism industry a ranking of 129 out of 136 countries, far behind countries like Mauritius,
South Africa, Seychelles and Egypt which ranked at 54th, 61st, 62nd, and 65th, respectively.
Though the has been a marked growth in the number of tourists visiting the country to 1.2
million in 2017, this falls significantly below the figures for prime destinations on the
continent like South Africa which received 9 million visitors and Morocco which recorded 10
million visitors.
However, great initiatives and investment has gone into transforming the fortunes of
Nigeria’s Hospitality industry; albeit with mixed results. Nigeria boasts of vast potential in
the hospitality and tourism sectors, though not fully or efficiently exploited. Home to about
250 ethnic groups and 500 distinct languages, mix of climate, multiple historical sites,
monuments, festivals, game reserves, resorts, rich and diverse culture, there is no shortage
of attractions for visitors. Unfortunately, these abundances of potential haven’t always
translated into economic or development gains for the local communities or the nation at
large. This has been due to years of neglect, poor policies, lack of basic infrastructures such
as rampant power outages, poor road network and inadequate health facilities. Also, the
fragile security situation of the nation and generally negative global perception of the
country have done great harm to the attractiveness of the industry.
In the midst of these challenges, the hotel and restaurant category of the industry has
witnessed unprecedented growth leading to the emergence of hotels, fast food restaurants
chains, cruise lines and bars. Despite the obvious constraints of Nigeria’s hospitality
industry, its size offers vast opportunities and attractive to investor who are keen on
capitalizing on the bourgeoning industry. Major global hospitality players like Starwood
Hotels and Resorts, Marriot group, America’s Star Points and South Africa’s Protea have
invested heavily in building and upgrading their brand offerings. The Restaurant business
has grown mostly through investment from local entrepreneurs. The leading brands include
Chicken Republic, Mr Biggs, Mama Cass have spread nationwide impacting communities by
creating employment and demand for product and services in the value chain.

1.2 THE STATEMENT OF PROBLEM/RESEARCH PROBLEM

In light of the statistics given above and the predictions for the hospitality industry in Nigeria
and the resultant impact on the economy, it could be mistaken that all is well for the
hospitality industry in Nigeria.
Nevertheless, the true scope and significance of the hospitality industry in the Nigerian
economy cannot be limited to the recitation of impressive statistics which may not

2
necessarily translate into meaningful impact and contribution to major macroeconomics
indices such as increase in GDP, employment, export earnings and capital investment.
Therefore, this study seeks to investigate the contribution of the hospitality industry to the
Nigerian economy along the lines of the indices mentioned above, while attempting to
unearth the factors that stand as hindrances to the realization of the full potential of this
sector; with the aim of proposing recommendations for attaining such a state of affairs.

1.3 OBJECTIVE OF THE STUDY

1.3.1 The general objective
The overall aim of this study is to analyze the relationship between the hospitality industry
and economic development in Nigeria.
1.3.2 The Specific objectives
- To assess the extent to which the hospitality industry has contributed to the
economy of Nigeria along major macroeconomics indices such as GDP growth,
employment, export earnings and capital investment.
- To determine the potential impact and contribution of the hospitality industry to the
economy of Nigeria.
- To identify the hindrances to the full exploitation of the potential of the hospitality
industry in the economy of Nigeria.
- To offer policy recommendations based on the finding of the study

1.4 RESEARCH HYPOTHESES

1. The hospitality industry contributes significantly to the economy of Nigeria in major
macroeconomics indices.
2. The hospitality industry possesses great potential to contribute to the economy of
Nigeria.
3. The Hospitality industry is faced with enormous hindrances that hamper and slow
down the full extent to which it can contribute to the Nigerian economy
4. Right policies and properly implemented strategies could boost the hospitality
industry growth and contribution to the Nigerian economy.

1.5 RESEARCH QUESTIONS

- What is the extent to which the hospitality industry has contributed to the economy
of Nigeria?
- Does the Hospitality industry have the potential to impact and contribute even more
to the economy of Nigeria?
- What are the hindrances to the exploitation of the full potential of hospitality
industry in Nigeria?
- What policies and strategies are required for stimulating the hospitality industry in
Nigeria?

3
1.6 SIGNIFICANCE OF THE STUDY
The hospitality industry in Nigeria has attracted growing attention in recent years as there
has been mounting evidence of the potential of this sector for economic development and
transformation. However, most of the studies or analysis employed so far have failed to
investigate the contribution of the industry along key macroeconomics indices. This study
attempts to provide a more evidenced approached based of data to assist policy makers to
formulate informed decisions. Also, the study is intended to provide stakeholders of the
hospitality industry in Nigeria with more and better information to enable them increase the
footprint of their operations and benefit maximally from the vast potentials that this
industry offers, while adding to the existing body of literature.

1.7 SCOPE AND LIMITATION OF THE STUDY

1.7.1 Scope
This study is an investigation of the hospitality industry in Nigeria economy but specifically
carries out investigation in Cross River state. The study has been designed so as to
demonstrate how data from the region under investigation extrapolates to the country as a
whole.
1.7.2 Limitations
A number of limitations have been identified and are outline below:
1. Though this study seeks to demonstrate the contribution of the hospitality industry
to the Nigerian economy, the area under investigation is limited to Cross River State
due to constraints in terms of time and logistics if a larger area was to be covered.
2. The emphasis of the study is to assess the contribution of the hospitality industry in
four major macroeconomic indices, namely; GDP growth, employment, exports
earnings and capital. This does not however imply that these are the only measures
that are useful for such an evaluation.
3. Though data on the hospitality industry contribution to the Nigerian economy spans
back to 1980’s, this study concentrates on more recent data and information;
precisely data from the year 2022. This would be used to make comparison with data
from the year 2010 – 2019 to make projections about the potential the industry
holds in the Nigerian economy.
4. Also, the student had to deal with the unavailability of data on certain issues of the
study.

1.8 RESEARCH METHODOLOGY

This study makes use of the descriptive survey method, which combines a literature review
and field work. The literature review examines the existing body of knowledge in the are
under consideration to assess the approached utilized by other researchers to investigate
the problem (Mouton: 87). On the other hand, fieldwork pushes the boundaries of what is
known in a quest to unearth new information.

4
1.8.1 Literature Review
The literature review will provide a general background and context to the study and
includes: journal articles, books, government publications and information from websites.
Based on this secondary source of data covering the year 2010 – 2019, comparison will be
made with primary data from the year 2022.
1.8.2 Fieldwork
Fieldwork is useful for assessing the validity of the hypotheses and other sub-themes of this
study through the collection of primary data from the target audience. It made use of semi-
structured Interviews and structured questionnaires administered to a wide array of
stakeholders in the hospitality industry in the Calabar city area and its environs including but
not limited to tourist management board officials, staffs and executives of hotelier’s
association of Nigeria.

1.9 DEFINITION OF TERMS

Hospitality industry: is a broad category of field within the service industry that includes
lodging, food and drink service, event planning, theme parks, travel and tourism.
Economic development: is the creation if wealth from which community benefits are
realized. It is more than a jobs program, it’s an investment in growing the economy and
enhancing the prosperity and quality of life for all residents.
Nigeria: is a country located on the western coast of Africa.
Cross River State: is a state in the South South geopolitical zone of Nigeria, formed from the
Eastern part of the Eastern Region on 27 May 1967. Its capital is Calabar.
Calabar: is the capital of Cross River State, Nigeria; originally named ‘’Akwa Akpa’’, in the
Efik language.
Gross Domestic Product (GDP): is the monetary value of the market value of all goods and
services produced in a specific time period by countries
Export Earnings: consist of the earning of a company or country that are generated through
the export of goods or services
Capital Investment: is the acquisition of physical assets by a company for use in furthering
its long-tern business goals and objectives.

5
 CHAPTER TWO
LITERATURE REVIEW

2.0 INTRODUCTION
Overwhelmingly, the literature review points to a strong and positive causal relationship
between the hospitality industry and economic growth. Fayissa et al (2007) used panel data
of 42 African countries from the year 1995 to 2004 to explore the potential contribution of
tourism to economic growth and development within the conventional neoclassical model.
The results found out that the returns from the tourism industry significantly contributed to
the current level of GDP and economic growth of the Sub-Saharan countries and
recommended that African economies could enhance their short-run economic growth by
strategically strengthening their tourism industries.
An Investigation by Albert, M (2013) of the hospitality industry in Sothern African
Development Countries (SADC) established a connection between the industry and GDP
growth, employment, capital investment, exchange earnings, sustainable development and
poverty alleviation.
Page (1999)

2.1 CONCEPT OF THE HOSPITALITY INDUSTRY

Jones (2004a) the confusion in the understanding of the hospitality industry by referring to
‘’the schizophrenia of the hospitality industry, and the ‘’fragmentation’’ of hospitality
academia…’’. Researchs by (Gillespie 1994, Jayawardena 2000, Slattery 2002, Hemmington
2004) pointed to the difficulty in determining whether the hospitality industry is a service
industry, entertainment, art, retailing or whether it is an entirely newform of business.
Morriso & O’Mahoney (2002) highlight the tensions, contradictions and debates confronting
the contemporary hospitality management educationalists and hospitality management as
an area of study to struggle in producing a definite definition for the term; serving as a
major barrier to the development of the industry (Wood 1992).
Lashley & Morrison (2000) presented a range of perspectives of the hospitality industry,
from the philosophical to the commercial marking a departure from the former definitions
that were based on a grouping of industrial activities. Their work demonstrated the
interaction of the concept of hospitality in the social, private and commercial environments.
Slattery (2002) and many other challenged and refuted these many domains approach and
is quoted as saying ‘’Hotels, restaurants, bars and other hospitality venues are businesses
where the critical relationship is between sellers and buyers. The buyers are not guest, they
are customers. The relationship is not philanthropic it is economic.’’ He went on to present a
model that structure the industry under four categories: Free-standing Hospitality
Businesses, Hospitality in Leisure Venues, Hospitality in Travel Venues, and Subsidized
Hospitality; acknowledging the variegated nature of the industry depending on the type of
environment in which the activity takes place.
Brotherton and Wood (2000) define the hospitality as ‘’ A contemporaneous human
exchange, which is voluntarily entered into, and designed to enhance the mutual wellbeing

6
of the parties concerned through the provision of accommodation, and/or food, and/or
drink’’, which has been criticized for lacking the full extent of the vibrancy and creativeness
of the industry in real world.

2.2 THE HOSPITALITY INDUSTRY IN NIGERIA

In the context of Nigeria, the hospitality and tourism sector are industries whose combined
activities are regarded as belonging to one sector. This study considers the contribution of
the two activities as an input emanating from the same sector and adding value to national
development. Therefore, hospitality contribution to national development includes all
inflows from the tourism activities into the national income. Specifically, for this study, the
hospitality industry is made up of the following four elements:
 Hotels & related services (including camping grounds and other accommodation)
 Restaurants & related services (including pubs, takeaway food shops, licensed clubs
and motorway service areas, where hospitality services are the main activity for the
latter)
 Catering [including corporate hospitality / contract catering to both private clients
(for example airlines) and public sectors clients, and in-house catering across non-
hospitality direct sectors such as health and education]
 Event management (including conference and exhibition organizers)

The beginning of the evolution of the hospitality industry as an organized activity or sector
in Nigeria dates back to 1962 with the creation of Nigeria Tourist Association (NTA) by group
of tourism practitioners in the country (Ashikodi 2010). In 1976, the Nigeria Tourist
Association (NTA) was dissolved giving room to the establishment of the Nigeria Tourism
Board (NTB) by the government. By 1990, when the Ministry of Trade and Industry was
created, the status of the NTB was changed into a Corporation (Ashikodi 2010). Despite the
organization of the industry, the attention accorded to remained insignificant in an economy
overly dependent on oil revenues.
Efforts to boost and revitalize the tourism industry were taken by the government in
partnership with the United Nations World Tourism Organization (UNWTO) and the United
Nations Development Programme (UNDP) in 2006 leading the production of a National
Tourism Development Master Plan (NTDC, 2006).
By 2017 the government accelerated its drive to diversify the economy having witnessed a
recession and fall in oil prices by the introduction of a new visa policy that aimed at
facilitating entry into the country for business as well as to boost tourism within the overall
context of the administration’s economic diversification agenda.

2.3 CONCEPTUAL FRAMEWORK

2.3.1 Hospitality Industry and Macroeconomic indicators
As time evolves, scholars continue to investigate new drivers and mechanisms for boosting
economies. Research and empirical evidence have demonstrated the significant
contribution of the hospitality industry in developed economies like Greece, Spain and
7
France. Increasing, developing economies are awakening to the enormous prospects that
this sector holds for their economic development in areas such GDP growth, employment,
foreign exchange earnings and capital investment.
H1: The hospitality industry contributes significantly to the economy of Nigeria in major
macroeconomics indices.
GDP growth
According to the Travel and Tourism Economic Impact (2014), the tourism industry currently
accounts for nearly 9.5% of the worldwide GDP and is projected to increase to 10.3% by
2024.
Yusuff and Akinde (2015) investigated the impact of the tourism sector to economic growth
in Nigeria using time series data from 1995 to 2013. The results of the study pointed to
positive long-term relationship between the tourism sector and economic growth of Nigeria,
validating the existence of tourism-driven economic growth hypothesis demonstrated to
exist in other countries in Nigeria
In the Guaranty Trust Bank report, Nigeria: From Tourism to Economic Growth (2017), ‘’the
contribution of travel and tourism to the global economy was estimated at $7.6 trillion in
2016, around 10 percent of the global GDP of $75.6 trillion. In Nigeria, the contribution of
the tourism industry is estimated at around $1.5 billion, figures that are not only a tiny
fraction of the global industry but also demonstrate the golf between the present reality
and the potential for tourism for Nigeria.’’
Foreign Exchange Earnings
An acceptable index for measuring growth of tourism is usually in term of international
arrivals and receipts, thus, over the past forty years, global tourism has expanded at an
average of 7% a year in arrivals and 12% a year in receipts, a growth record unmatched by
any other economic sector (Omotosho, 2000). This can be analysed within the framework of
Hoarrold - Dormarmodel, who saw growth and development as dependent on capital
formation. In this analysis, foreign visitor exports represent the amount spent by foreign
visitors (tourists) in the destination country. This includes, but not limited to expenditure
purchases on such things as accommodation, car hire as well on curios etc.

Employment
The World Travel and Tourism Council (WTTC) in 2004 estimated that the tourism industry
created around 214.7 million jobs worldwide (i.e., 8.1% of world employment) and
accounted for over 10% of global GDP.
Ryan (2000) pointed out the considerable impact of the hospitality industry on employment;
especially in small countries by citing that some Caribbean countries had as much as 50% of
their labor force engaged in the sector.
The scope for job creation and employment in and by the hospitality industry is enormous
owing to the labor-intensive nature of the industry; especially in developing economies. In
countries such as India, the hospitality industry employed as much as 25 million people in
2019 and was projected to reach 40 million by the year 2022.ref.

8
Seychelles, Mauritius and Namibia are the three countries where the hospitality industry
contributes highly. In the case of Seychelles, more than half of the country’s recorded
employment is in the tourism sector, while for Mauritius and Namibia (since 2006), around a
quarter of employment was in the tourism sector.
In Nigeria, according to Yusuff and Akinde (2015), the contribution of the tourism sector to
employment generation is still very low. In term of percentages, the industry contributed
4.9% of employment in 2005, rose and fell; eventually dropping to a mere 2.7% in 2014.
Larry (2005) asserted the over one thousand five hundred hotels established and registered
by the Cross River State had a manpower of over 5000 skilled and unskilled workers. Aniah
(2009) points to the multiplier effect of hotel infrastructure growth in terms of employment
by point to the growth of job creation in jobs such laundry services, catering, restaurants,
recharge operators, tour guides.
Capital Investment.
The interaction between the hospitality industry and capital investment is two dimensional:
As the number of tourist arrivals increases, so too does the demand for hospitality-related
amenities and facilities (such as hotels, bars, casinos, beaches, theme parks) that would
require more investments. International restaurants, hotels, and food chains are investing in
every potential corner of the globe to meet the increased tourism demand. Sanford and
Dong (2000) suggest that foreign investors visit the destination country to identify potential
investment opportunities. Investment in tourism leads to better infrastructure, new tourist
attractions, and better transportation. Tang, Selvanathan (2007) found a unidirectional
relationship between FDI and tourism in China, and suggested that the rapid growth in
tourism was due to FDI.
In Africa, countries in which hospitality contribution to capital investment has consistently
been above 10 percent of GDP especially since 2008 are Seychelles, Namibia, Tanzania and
Madagascar. In the Seychelles, it is very clear that the country’s investments are largely
dependent on tourism sector, with around 40% of national capital investments coming from
this sector alone. Namibia follows, with around 10 percent of national investment being
contributed by the hospitality industry.

9
 GDP Growth Foreign Exchange Earnings
job generation, SME development,
foreign direct investment, increase in
export, revenue, increase demand for
local products and services
HOSPITALITY
INDUSTRY Employment
Capital Investment
construction, customer service provison,
attracting foreign direct investment in transportation , agriculture, demand for
construction oh hotel chains, food local food and cuisine, improved linkages
chains, resort development, road and between suppliers and buters
energy infrastructure.

ECONOMIC DEVELOPMENT

Figure 1: Conceptual model, Tourism development and economic development

2.3.2 Prospects and potential of the hospitality industry to developing economies

H2: The hospitality industry possesses great potential to contribute to the economy of
Nigeria.
In 2019, the hospitality industry contributed 5.1 percent to the economy of Nigeria before
witnessing a drop in 2020 due to the COVID – 19 pandemics. In PricewaterhouseCoopers
2019 Hotels outlook, it projected that Nigeria will be the fastest growing hospitality market
with a projected growth of 12 percent compounded annually from 2019 – 2023. Though
there has been disruption to the global hospitality industry, the potential for growth of the
hospitality industry in Nigeria abound. The attractiveness and potential of the industry in in
Nigeria lies in three key factors considered below.

The size of Nigeria

Nigeria is the most populated country in Africa with a land area of 945,203 km2. In terms of
its natural landscape, it boasts of a vast rainforest, savannah, waterfall and other natural
attractions. Culturally, Nigeria is very diverse with the three main ethic groups being the
Fulani’s in the north, Yoruba in the South West and Igbos in the South East. These ethic

10
groups serve as the source of artifacts found in its many museums, festival, cuisine and
fashion.
Growing population
Not only is the population of Nigeria growing, there has also been a growing affluence
among its middle class. This trend is expected to reflect in the growth in the demand of
hospitality goods and services, especially as the local tourism market pick steam. Adventure
tourism is becoming more popular and the growing interest in experiences is allowing
Nigeria to attract visitors interested in the local culture.
Variety of its hospitality assets.
Many scholars and practitioners believe the diversity of Nigeria’s hospitality industry is an
asset that she is yet to fully capitalize on. Due to the sheer size and spread of the country,
diverse cultural landscape and growing economy, the opportunities for the hospitality
industry abound. From Sahelian climate and landscape in the northern states to the
rainforest in the southern and eastern states, forest reserves, pristine beaches and caves;
there is an abound of nature for the nature-driven tourist. Nigeria’s rich cultural heritage
means a plethora of cultural events and festivals, museums, cuisine and fashion are
available to be savored. In recent years, huge investment has gone into increasing and
upscaling the hotel infrastructure leading to an increase in not just the amount of hotel
rooms, but also in the growth of a niche market in the luxury hospitality industry in cities
like Lagos, Abuja and Port Harcourt. Major brands like Marriott, Radisson, Hilton, Best
Western, Sheraton, Novotel, Westin and Mövenpick are planning new hotels in Nigeria
during the next five years. On the continent, Nigeria will be witnessing the largest increase
in available rooms by a large margin. This trend has been spurred by investment in
conference centres, spas and wellness centers, cruise companies’ medical tourism, theme
parks and fitness and sports organizations.

2.3.3 Constraints of the Hospitality Industry

H3: The Hospitality industry is faced with enormous hindrances that hamper and slow down
the full extent to which it can contribute to the Nigerian economy
Bankole (2002) highlighted the many constraints faced by the hospitality industry in Nigeria.
From the absence of a multi-dimensional approach to tourism sector development that
focuses on the interconnectedness of Nigeria's sociopolitical and economic problems is
required rather than one that emphasizes stand-alone sectoral development to the poor
image of image and reputation of the country internationally due to its security situation.
The lack or inadequate availability of information of the hospitality industry has also been
cited as a major limitation. A survey carried out by the Cross River State Tourism Bureau in
2009 reveals that 32% of tourists got information about tourist destinations in the state
through television as against 44% who got such information through word of mouth.
Tourism infrastructure is below international standards while governments allocation to the
sector has been limited.

11
2.3.4 The role of policies and strategies in boosting Hospitality potential to contribute to
economy
H4: Right policies and properly implemented strategies could boost the hospitality industry
growth and contribution to the Nigerian economy.
The Hospitality industry in Nigeria is showing signs of having the capacity to deliver enduring
and inclusive economic growth. However, the leadership role of governments is vital to
optimizing the potential contribution and benefits while mitigating the associated costs. The
success of the hospitality industry in OECD countries has been attributed to vital role played
by policies and governance. According to the OECD Tourism Trends and Policies 2020,
shared policy priorities in the area of: developing forward-looking tourism structure, policies
and action plans to deliver on strategic objectives; promoting and delivering a greater level
of sustainability and inclusiveness; ensuring effective country and place marketing; creating
a competitive and high quality tourism sector, encouraging entrepreneurship and
stimulating business growth etc. have formed the content of the policies and governance
framework which has delivered superior performances.

2.4 CHANNEL OF ECONOMIC IMPACT

The hospitality industry has been shown to produce a multiplier effect on the host
community. The arrival of visitors has a multiplier effect on the economy where expenditure
rise increasing the revenue of both the government and the private firms associated with
the tourism activities (Marin (1992). The impact of the hospitality sector is in three folds:
through direct impact (that involves expenditures by tourist within the tourism sector on
the typical tourism products), through the indirect impact (that entails consumption of all
intermediate goods by the tourism sectors such as goods that they buy from their suppliers.
This usually forms the hospitality supply chain and is crucial for the promotion of locally
produced goods) or through induced impact (that includes expenditures by employees of
the tourism sector or companies that benefit from tourism on locally produced goods and
services).

12
 Direct Impact
Hotels and related activities, restaurants and related activities, catering and event

Indirect impact
E.g., manufacture of food Induced impact
& beverages, business E.g., retail outlets,
services (such as companies producing
advertising and market consumer goods and in a
research), agriculture and range of service industries
communications

TOTAL ECONOMIC IMPACT

Figure 2: The Economic Impact of the Hospitality Sector (Economics, 2015)

2.5 METHODOLOGY FOR ECONOMIC IMPACT ASSESSMENT

Economic impact analyses is a technique used to calculate tangible estimates of these
economic interdependencies and a clear understanding of the role and importance of
hospitality industry in a region’s economy. Over the years, several constructs have been
used to assess the contribution of the hospitality industry to an economy. Both theoretical
constructs and methodological approaches (Mayer & Vogt, 2016; Odunga et al 2019b) have
been utilized in such assessments. However, most studies can be broadly categorized into
quantifiable economic (monetary) terms and into qualitative terms (Mayer & Woltering,
2018). Quantitative studies usually emphasize the contribution of industry to the labour
market, the gross domestic product and household income, as well as earnings from foreign
exchange.
The economic impacts of hospitality industry contribution can be estimated using economic
models that identify and quantify the linkages between different sectors of the economy.
The standard approach is to estimate the economic impacts of hospitality expenditure by
using Input-Output models (1-0), Social Accounting Matrix (SAM) and/or Computable
General Equilibrium (CGE) models. For this study, Input-Output models has been employed
in analyzing the impact of hospitality to the economy of Nigeria.

13
2.6 GAPS IN THE LITERATURE
Despite the growing body of research on the impact of the hospitality industry to the
developing economies, there has been little attention paid to similar research on the subject
in Nigeria. The most notable work that investigates the contribution of the hospitality
industry to the economy of Nigeria is that by Yusuff and Akinde (2015), which considers the
impact on Gdp growth, employment and foreign exchange earnings using time series data.
Due to the difficulties of calculating the economic impacts of their hospitality industry in
Nigeria owing to the absence of accurate data for the industry, it is difficult to use economic
modeling techniques to attain accurate results. This study exploits this gap in the literature
by evaluating the impact of the hospitality industry on the State with the most developed
hospitality sector (Cross River State) in the areas of GDP growth, employment, foreign
exchange earnings and capital Investment, in order to extrapolate this to the rest of the
country.

14
 CHAPTER THREE
METHODOLOGY

3.0 INTRODUCTION
This chapter elaborates on the research process that was employed in conduction the study.
It specifies and describes the research design, the research Area of study, sources of data,
method of Data collection, sample size, research instruments, sampling technique, validity
and reliability of instruments and method of data analysis.

3.1 RESEARCH DESIGN

The research design defines the systematic process or procedure for generating, collecting
and analyzing the data required for solving a specific problem. Descriptive survey method
was used for the study.

3.2 STUDY AREA

The area of concern for the study is Nigeria, an emerging hospitality hotpot on the West
coast of the African continent. Nigeria has 30 states with a population of about 215 million
people and a surface area of 923,768 km2. Its capital is Abuja, while is largest and most
populated city is Lagos - almost 16 million people.

3.3 TARGET POPULATION

Since it is usually not possible to study the entire larger population of the hospitality
industry, the researcher has chosen Cross River State given that it is one of the State where
the Hospitality industry is most developed. Cross River State is one of Nigeria’s 36 States,
created in 1987 and located in the southeastern part of the country. It shares a common
boundary with Benue State to the North, the Republic of Cameroon to the East, Ebonyi State
to the North West, Abia State and Anambra states to the West and Akwa Ibom State to the
South. The State is home to about 3.2 million people, covers an area of 23,072,424 square
Kilometers and is traversed by the Cross River from which it derives its name. its capital is
Clabar. in Nigeria as the studied population in order to find a possible solution to which
involve a total of 90 operators (including hotels, restaurants, travel agencies, parks etc.)
were included.

3.4 SAMPLING TECHNIQUE

The simple random sampling technique is employed, giving each member of the population
an equal chance. A sample size of 100 persons was selected at random, using Bourley (1998)
proportional allocation formula, it was distributed as follows: tourist management board
officials (60) and executives of hotelier’s association of Nigeria (40). Eighty (85) were used
for data analysis.
A pre-test was conducted and outcome yield “r” = 0.92 indicating a high degree of
consistency and reliability. The instrument was 8- term survey questionnaire with a - 5 Likert

15
scale response options of Very Relevant (VR), Relevant(R), No Effect (NE) Irrelevant (I), and
Very Irrelevant (VI). The questionnaire was structured in line with the research objectives,
questions and hypothesis of the study. The Pearson product moment correlation coefficient
was used to confirm formulated hypotheses.

3.5 SAMPLE SIZE

To achieve a sample size that represents the entire population, a statistical formula referred
to as the Taro Yamani formula was applied. The population was narrowed down by
undertaking the following calculation:
n= N
1+ N (e)2

Where n=sample size

N=total population size
1 is constant
e = the assume error margin or tolerable error which is taken as 5% (0.05)
n= N

1 + N (e)2

Where N=250
e = (0.05)2 0.0025

n= 100

1 + 100(0.0025)

= 100

1.25

= 100

1.25

n = 80

Source: Yamane, Taro. 1967, Statistics, An Introductory Analysis. 2 nd Ed. New York: Harper
and Row.
Using the formula above, a sample size of 80 was chosen, distributed as follows: Executives
of hoteliers Association of Nigeria, Tourist management Board officials, Management of key
Tourist attraction/venues and restaurant chains in Cross River State.

16
3.6 DATA COLLECTION TECHNIQUE
The data for the study was collected through the use of the following instruments:
For this study, data was collected for the year 2022 from State government sources and
Federal government estimates. The descriptive statistics shows the contribution of the
hospitality industry to the economy of Cross River State; relative to the data from 2010 –
2019 and the impact of other sectors of the economy.
Questionnaires
At the level of primary data, limited primary data was collected through Facebook and
LinkedIn to assess the availability of data on the contribution of the hospitality industry in
the Nigerian economy. Based on the preliminary results of the pilot study, a questionnaire
titled ‘’The current and Future contribution of the Hospitality Industry to the economy of
Cross River State’’ and a cover letter which provided the explanation for the survey were
personally administered by a student in the Department of Marketing of the University of
Calabar to tourist management board officials, Executives of hoteliers Association of Nigeria,
major restaurants chains and management of the top five tourist attractions. The research
structured both open- ended and close- ended questions. Double barrel questions that are,
those questions capable of attracting multiple interpretations were cautiously avoided. In
the close ended questions, respondents were given a number of alternatives from which to
select options they consider appropriate. In the open-ended questions, respondents were
provided with blank spaces in which to write down their own answers in their words.
Dichotomous type of questions that demands “yes or No” type of answers was also used. A
total of 100 questionnaires were administered. A total of 85 questionnaire representing 85
% return rate was achieved.
Interviews
We had the opportunity to interview the branch manager of Air Peace airlines using semi-
structured questions that had been developed and tested.

3.7 VALIDITY AND RELIABILITY

To ensure the fitness of the data to be collected, the validity and reliability of the data
collection instruments were assessed. To ascertain the validity of the questionnaires,
content validity technique was employed to measure the adequacy of the questions for the
purpose of the study. Expert opinion and review/judgement from academics at the
University of Calabar’s departments of Tourism Studies, Marketing and practitioners in
industry was sought after and obtained. Corrections and recommendation were
incorporated before roll-out. A pretest was further used to determine the reliability of the
questionnaire.

3.8 DATA ANALYSIS

The research objectives, questions and hypothesis guided the structuring of the
questionnaires and interviews. Descriptive and economic modeling techniques were

17
employed for data analysis. Graphical presentation and tabulation were greatly relied upon
to convey the data collected in a manner as to facilitate understanding.
The Pearson product moment correlation coefficient was used to confirm formulated
hypotheses which show the magnitude of the discrepancy between the variables,
expectation and observation. The test was carried out at 0.5% level of significance using
SPSS statistical tool.

Pearson correlation is represented as follows: R = NΣXY-(XY) (ΣY)

[𝑵XY2 -(X) 2] [𝑵 ΣY2 -(Y) 2]

The test is based solely on the primary data gotten from the use of questionnaire.
DECISION RULE: Reject Null Hypothesis if calculated value of (X2) is greater than the critical
value and accept Null Hypothesis if calculated value of (X2) is less than the critical value.
The Degree of freedom = (n - 1) (k - 1)
Where Df =Degree of freedom
n = Number of rows
k = Number of columns

18
 CHAPTER 4
DATA ANALYSES

4.0 INTRODUCTION
The section presents the study results from the empirical analysis and discusses their
economic interpretation.

4.1 DESCRIPTIVE STATISTICS

Descriptive statistics was mainly carried out in this study to ascertain the statistical
characteristics of the data used in the model. This study uses annual time-series data
between 2010 and 2019. The main variables under study include GDP growth rate and the
receipts from international tourism (indicating the performance of the tourism sector) while
other variables like total expenditure in education, gross fixed capital formation, real
exchange rate (an indication of the international competitiveness), share of ICT on exports,
trade openness, debt burden, GDP per worker (a proxy of the average wage) ,the ratio of
M2 and GDP (proxy of financial deepening) and internal shocks acted as control variables.
Most variables were obtained from the world development indicator (WDI, 2015) while
some were from the UNCTAD (2015) online website.

Table 1: Number of rooms, guest nights, occupancy rates and revenue from 2013 -2019

Hotels in Nigeria
2013 2014 2015 2016 2017 2018 2019
Available rooms 8.4 8.8 9.2 9.4 9.7 9.9 10.3
(thousand)

5.0 4.8 4.5 2.2 3.2 2.1 4.0

% change
Guest nights (millions) 1.7 1.6 1.5 1.5 1.6 1.8 1.9

% change 6.3 -5.9 -6.3 0.0 6.7 12.5 5.6

Occupancy rates (%) 55.4 49.8 44.7 43.6 45.2 49.8 50.5

ADR (US$) 107 112 117 124 131 140 145

% change 1.9 4.7 4.5 6.0 5.6 6.9 3.6

Total room revenue (US$ 182 179 176 186 210 252 276
millions)

8.3 -1.6 -1.7 -5.7 12.9 20.0 9.5

19
 % change
Adapted from: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

Table 2: Contribution of Tourism and Hospitality Industry to GDP of Nigeria.

DATE VALUE CHANGE, %

2019 5.1 2.85 %
2018 5.0 -8.51 %
2017 5.4 5.74 %
2016 5.1 15.30 %
2015 4.4 -2.28 %
2014 4.6 0.45 %
2013 4.5 16.71 %
2012 3.9 9.61 %
2011 3.5 -9.57 %
2010 3.9 -28.48 %
Source: Knoema. Com (2022)

Table 3: Contribution of Tourism and hospitality industry to employment as a share of GDP

in Nigeria.

DATE VALUE CHANGE, %

2019 4.8 2.38 %
2018 4.7 -8.50 %
2017 5.1 4.28 %
2016 4.9 16.90 %
2015 4.2 -2.24 %
2014 4.3 0.48 %
2013 4.3 16.90 %
2012 3.6 2.65 %
2011 3.6 -11.17 %
2010 4.0 -21.29 %
Source: Knoema.com (2022)

4.2 FIELD DATA

Table 4: Demographic information of respondents

20
 VARIABLES FREQUENCY PERCENTAGE
(%)

Sex Distribution Frequency Percentages

Male 40 47
Female 45 53
Total 85 100
Age Distribution Frequency Percentages
18-25 years 20 23
26-45 years 35 41
46 years and above 30 35
Total 85 100
Level of education Frequency Percentages
Primary education 25 29.4
Secondary education 25 29.4
Tertiary education 35 41.2
Total 85 100
Occupational attainment Frequency Percentages
Student 10 11
Casual 25 29
Junior 35 41
Senior 15 17
Total 85 100
Source: Field survey, (2022)

Table 5: Distribution and return of questionnaires

S/N Option No of
Questionnaires
1 Total distributed 100
2 Total No returned 15
Total Analyzed 85
Source: Field survey, (2022)

Table 6: Distribution of questionnaires to tourism industries

S/N Hospitality Location Frequency

1 University of Calabar, Calabar 1

21
 Calabar, Nigeria.
2 Marina Resort Calabar 1
3 Tinapa International Calabar 1
4 Cross River Tourism Calabar 1
Bureau
Source: Field survey, (2022)

Table 7: Response on whether hospitality and tourism has contributed to the Nigeria in
terms of GDP, employment, foreign currency earnings and capital investment

Option Points Respons xy x2 y2

e
(Y)
VR 5 11 55 25 121
V 4 9 36 16 81
NE 3 30 90 9 900
I 2 12 24 4 144
VI 1 23 23 1 529
Total 15 85 228 55 1775
Source: Researcher’s computation (2020). Key: Very Relevant (VR), Relevant(R), No Effect
(NE) Irrelevant (I), and Very Irrelevant (VI).

Table 8: Response on whether Nigeria’s hospitality and tourism potential is significant to

make it a leading destination for tourists and tourist on the African continent.

Option Points Respons xy x2 y2

e
(Y)
VR 5 21 100 25 441
V 4 14 60 16 196
NE 3 25 75 9 625
I 2 13 30 4 169
VI 1 12 10 1 144
Total 15 85 275 55 1575
Source: Researcher’s computation (2020). Key: Very Relevant (VR), Relevant(R), No Effect
(NE) Irrelevant (I), and Very Irrelevant (VI).

Table 9: Response on whether challenges and constraints hampering the development of the
hospitality industry in Nigeria are adequately being handled.

22
 Option Points Respons xy x2 y2
e
(Y)
VR 5 10 50 25 100
V 4 11 44 16 121
NE 3 29 87 9 841
I 2 11 22 4 121
VI 1 24 24 1 576
Total 15 85 227 55 1759
Source: Field survey, (2022)

Table 10: Response on whether the policies and strategies implemented by the government
of Nigeria have positively and significantly influenced the hospitality and tourism industry.

Option Points Response xy x2 y2

(Y)
VR 5 9 45 25 81
V 4 11 44 16 121
NE 3 32 96 9 1024
I 2 14 22 4 196
VI 1 19 19 1 361
Total 15 85 226 55 1783
Source: Researcher‟s computation (2020). Key: Very Relevant (VR), Relevant(R), No Effect
(NE) Irrelevant (I), and Very Irrelevant (VI)

Table 11: Summary of Hypotheses Test Results

H/N QS Cal. ‘’r’’ LS Inference Correlatio Decision

(X) n
1 0.47 0.5 r<x Accept Null
Hypothesis
2 0.55 0.5 r>x Reject Null
Hypothesis
3 0.05 0.5 r<x Accept Null
Hypothesis
4 0.5 0.5 r=x Reject Null
Hypothesis
Source: Research computation, (2020). Keys: HN=Hypotheses Number; QS=Questionnaire
section; LS= Level of significance

Hypothesis 1

23
Ho; The hospitality industry has not contributed significantly to the economy of Nigeria in
major macroeconomics indices.
H1; The hospitality industry contributes significantly to the economy of Nigeria in major
macroeconomics indices.
Here, using table 6 to answer to test hypothesis 1. We apply
the formula stated above;

R = NΣXY-(XY) (ΣY)
[𝑵XY2 -(X) 2] [𝑵 ΣY2 -(Y) 2]

= 5(228) -(15×85)
[(5×55) -(15)2] [(5×1775) -(85)2

= 1140 – 1275
√ (275 – 225) (8,875 − 7,225)

= 135
287
= 0.47 (47%)
In hypothesis1, the r calculated of 0.47 < 0.5 level of significance. The null hypothesis is
accepted. This shows that the rate of contribution on Nation GDP is low.

Hypothesis 2
Ho; The hospitality industry does not possess great potential to contribute to the economy
of Nigeria.
H1; The hospitality industry possesses great potential to contribute to the economy of
Nigeria.
Here, using table 6 to answer to test hypothesis 1. We apply the formula stated above;

R = NΣXY-(XY) (ΣY)
[𝑵XY2 -(X) 2] [𝑵 ΣY2 -(Y) 2]
= 5(275) -(15×85)
[(5×55) -(15)2] [(5×1575) -(85)2

= 1375 – 1275
275 − 225 (7,875 – 7,225)

= 100
180.3
= 0.55(55%)

24
In hypothesis2, the r calculated of 0.55 > 0.5 level of significance. The null hypothesis is
rejected. This shows that the potential of the hospitality and tourism industry is on a level to
make Nigeria a leading tourism destination in Africa.

Hypothesis 3
Ho; The Hospitality industry is not faced with enormous hindrances that hamper and slow
down the full extent to which it can contribute to the Nigerian economy
H1; The Hospitality industry is faced with enormous hindrances that hamper and slow down
the full extent to which it can contribute to the Nigerian economy
Here, using table 6 to answer to test hypothesis 1. We apply
the formula stated above;

R = NΣXY-(XY) (ΣY)
[𝑵XY2 -(X) 2] [𝑵 ΣY2 -(Y) 2]
=
5(227) -(15×85)

[(5×55) -(15)2] [(5×1759) -(85)2

= 1135 – 1275
(275 – 225) (8,795 – 7,225)

= 140
280
= 0.05(5%)

In hypothesis3, the r calculated of 0.05 < 0.5 level of significance. The null hypothesis is
accepted. This shows that the hospitality industry is faced with enormous hindrances that
hamper and slow down the full extent to which it can contribute to the Nigerian economy.

Hypothesis 4
Ho; Right policies and properly implemented strategies would not boost the hospitality
industry growth and contribution to the Nigerian economy.
H1; Right policies and properly implemented strategies could boost the hospitality industry
growth and contribution to the Nigerian economy.
Here, using table 6 to answer to test hypothesis 1. We apply
the formula stated above;

R = NΣXY-(XY) (ΣY)
√ [𝑵XY2 -(X) 2] √[𝑵 ΣY2 -(Y) 2 ]

25
= 5(226) -(15×85)
[(5×55) -(15)2] [(5×1783) -(85)2

= 1130 – 1275
(275 – 225) (8,915 – 7,225)

= 145
290
= 0.5(50%)

In hypothesis1, the r calculated of 0.5 = 0.5 level of significance. The null hypothesis is
accepted. This shows that the rate of contribution on Nation GDP is low

CHAPTER 5

26
 DISCUSSIONS

5.0 INTRODUCTION
The purpose of this study is to assess the role of the hospitality industry and its current and
potential contribution to the economy of Nigeria; measured through the mechanism of GDP
growth, capital investment, employment and foreign exchange earnings.

5.1 TEST OF HYPOTHESIS 1

This investigation discovered that the rate of contribution of the Hospitality and Tourism
industry to major macroeconomic indicators such as GDP, employment, capital investment
and foreign currency earnings is low at less than 0.5 significance level. Data from 2010 –
2019 reveal fluctuations in contribution in GDP, never exceeding 5.1%; while the percentage
of people employed by the industry remains below 5%. Measures such as the provision of
high level of connectivity and openness (such as investments in transportation
infrastructure, communication, favorable policies, and sustainable management) and
encouraging collective partnerships (such as public-private partnerships, community
participation, linking value chain and local economic development strategies) are vital for
harnessing greater contribution from the industry.

5.2 TEST OF HYPOTHESIS 2.

The findings suggest that Nigeria has hospitality and Tourism industry has the potential
make it a leading tourism destination in Africa. At 0.55 significance level, the data points to a
good potential to attract tourist and investment. Areas which should receive great attention
are increasing the quantity and standardization of hotel rooms and hotel industry staffs. The
increase in the demand for hotel rooms is need as the industry begins to attract greater
numbers.

5.3 TEST OF HYPOTHESIS 3.

The data reveals that the industry faces enormous challenges that hamper its development
and growth. At 0.05 significance level, the data show that the industry is grappling with
problems that have been ignored for too long. The full potential of the industry has been
blocked from being unleased by these difficulties.

5.4 TEST OF HYPOTHESIS 4

The results of this study point to right policies and properly implemented strategies could
boost the sector. The 0.5 significance level confirms the place of such action in ensuring that
the full potential of the industry is released in the nations development. The Nigerian
government has to invest in the formulation of policies and such as: actions to develop a
strong tourism value chain and integrated system (such as policy-making, integrated
planning, new product development, marketing operations) and improving on the business
climate and ease of doing business (reform policies, rules, and regulations, institutions that

27
govern business activities).

CHAPTER 6

28
 SUMMARY, CONCLUSIONS AND POLICY IMPLICATIONS

6.0 INTRODUCTION
This chapter summarizes the findings, concludes and proffers some policy implications and
recommendations.
6.1 MOTIVATION OF THE STUDY
Over the past two decades, it has become obvious to the government of Nigeria that an
overemphasis on the oil and gas industry for revenue and growth is no tenable. The need to
invest in other sectors of the economy particularly agriculture and manufacturing, which
were hitherto the major contributors to GDP and employment generation is imperative.
Most developing economies have awakened to the potential of the hospitality industry for
economic development and poverty alleviation in a highly interconnected world.

6.2 SUMMARY
It was observed that the hospitality industry in Cross River State has offered a variety of
benefits to the local economy. It was discovered that the industry had both direct and
indirect impact on the local economy. The direct impacts involved benefits through salaries
to staffs and tax to the state government while the indirect impacts involved its contribution
to the supporting industries like the transport sector, restaurants, food and beverages
outfits, local craftsmen, farmers, super markets, fruit sellers, drinking spot etc. However,
Accordingly, the study concludes that the tourism sector has the capacity to be a major
player in the economic activities of the country. This is because of the diverse tourism
attractions and tourism potentials of the country which cannot be underestimated. The
capability and capacity of the tourism sector to be an alternative means for economic
growth is not far-fetched. As the tourism attractions of the country are majorly natural and
cultural/historic hence the only responsibility of the government is to invest in tourism
infrastructure which at the long run will be able to ensure sustainable tourism development.
The study recommends that a comprehensive effort be made to rejuvenate the Obudu
Mountain Resort which is germane for economic development and diversification. As noted
earlier, this can be achieved in the field of infrastructure, economic growth in the region by
attracting foreign investment and by introducing appropriate security measures.

6.3 POLICY IMPLICATION

There is the need for the development of a new and encompassing hospitality industry
policy which answers to current needs and challenges of the industry. Issues of
sustainability, equitable and responsiveness so as to contribute to Nigeria’s economic
development and in effect raise the quantity of life of all her people. Investment into the
marketing and promotion of Nigeria cultural, historical and archaeological treasures and
tourism potential through effective collaboration and coordination with the different States
and ministries. Increase funding is imperative given that Nigeria is projected to be the
biggest market in the coming years. The collection and collation of tourism statistics and the
establishment of tourism satellite accounts as is done across the world be vigorously

29
pursued. Tourism information should as a matter of significance be available on Internet for
users and investors. There is the need to embark on aggressive manpower development
required in the tourism industry, such as in hotels and catering, training schools and
institutions should be established
Given the shock witnessed as a result of the COVID-19 pandemic, the government should
support economic diversification in the medium and long-term immediately. The Hospitality
industry has shown itself to be prone to global shocks, therefore, the government should
pursue economic diversification through regional integration and by focusing on investment
into programs in the area of training and education to mitigate the impact of the shocks on
the economy.

6.4 LIMITATION OF THIS STUDY AND FURTHER RESEARCH

This study has some limitations, which may contribute to other researches in the future.
Since this research used a great amount of secondary data, similar studies in the future may
concentrate on more empirical based approach to investigate the correlation between the
hospitality industry and the economy of Nigeria. Future studies may also seek to uncover
the sustainability of Hospitality industry in Nigeria using the triple bottom line approach that
considers the environmental, social and economic impact of the Hospitality industry in
Nigeria.

30
REFERENCES

1. Aiyamenkhue, E. 2010. Tourism in Nigeria: challenges and prospects. Lecture

delivered at the 6th Benin National Merit Award. 27th December
2. Ajake, A., 2012. ‘The relevance of tourism on the economic development of Cross
River State, Nigeria’. Journal of Geography and Regional Planning, 5(1), pp.14-
20.
3. Eugene J., A., E. I., E., Judith E., O. and M. A., U., 2009. ‘Resort Potentials as a
Strategy for Sustainable Tourism Development in Plateau State, Nigeria’. Journal
of Sustainable Development, 2(2).
4. Ashikodi, T.I, 2010. ‘Tourism Development in the coastal region of Nigeria:
Economics of Tourism development a shift from oil dependence’. From
http://www.worldculturelink.org
5. Bankole, A., 2002. ‘The Nigerian Tourism Sector: Contribution, Constraints, and
Opportunities’. The Journal of Hospitality Financial Management, 10(1), pp.71-89.
6. Fayissa, B., Nsiah, C. and Tadasse, B., 2008. ‘Impact of Tourism on Economic
Growth and Development in Africa’. Tourism Economics, 14(4), pp.807-818.
7. Kushal, D., 2017. Hospitality and Tourism Sector contributed 4.8% to Nigeria’s GDP in
2016 – Jumia. Retrieved March 9, 2022, from
https://www.prosareng.com/news/Travel%20&%20 Tours/Hospitality-and-Tourism-
Sector-contributed-4.8Percent-to-Nigeria%E2%80%99s-GDP-in-2016-Jumia-Trvel/
33602
8. Mouton, J. 2001. ‘How to succeed in your Master’s and Doctoral Studies: A South
African Resource Book’. Paarl. Van Schaik.
9. Ogundele, S. O. 2002. ‘Tourism Development in Nigeria: A Grassroot Perspective’. In
Aremu, D. A. (ed.) Tourism and Development in Nigeria. Ibadan: Hope Publications
10. Omotosho O. 2000, ‘Tourism Development, Oppurtunities, Benefits and Challenges
in Nigeria’, - A paper presented at Annual Conference of world conference of Mayors
October 15- 19th Abuja.
11. Sanford, D.M.; Dong, H. ‘Investment in Familiar Territory: Tourism and New Foreign
Direct Investment’. Tour. Econ. 2000, 6, 205–219.
12. Tang, S.; Selvanathan, E.A.; Selvanathan, S. ‘The Relationship between Foreign Direct
Investment and Tourism: Empirical Evidence from China’. Tour. Econ. 2007, 13, 25–
39.
13. Twinning-Ward, L., &Shiels, Damien 2017. ‘20 Reasons you should integrate tourism
into your development agenda’. Retrieved March 10, 2022, from
https://blogs,worldbank.org/psd/20-reasons-you-should-integrate-tourism-your-
development -agenda.
14. United Nations World Tourism Organization (UNWTO). 2002. Tourism and Poverty
Alleviation. Madrid: United Nations World Tourism Organization.
15. UNWTO, (2006). Nigeria Tourism Development Master Plan: Institutional Capacity
Strengthening to the Tourism Sector in Nigeria. Madrid: UNWTO.

31
16. World Tourism Organization, (1998), “Unleashing Tourism‟s Job Creation Potential”
News from World Tourism Organization, Madrid (27/1/98)
17. Yusuff, M. A. and Akinde, M. A, 2015. Tourism development and economic growth
nexus Nigeria experience. European Journal of Hospitality and Tourism Research 3(4)
1-10
18. “PwC Hotels outlook: 2019–2023: South Africa - Nigeria - Mauritius - Kenya -
Tanzania, www.pwc.co.za/outlook” in your article.

32
APPENDICES

Schellhammer Business School

Department of Global Hospitality Management

Dear Respondent,

REQUEST TO COMPLETE RESEARCH QUESTIONNAIRE

I am an undergraduate student of the above department of Schellhammer Business School. I

am conducting a study on Hospitality Industry and Economic Development in Nigeria; An
Investigative Approach. Kindly complete the questionnaire attached. Do not write your
name or your position. Your responses are used for academic research and will be treated
with utmost confidentiality. Thank you for your cooperation.

Ezinne Jenifer Uzoigwe

SAMPLE QUESTIONNAIRE

Hospitality industry contribution to Cross River State in terms of GDP, employment,

Capital Investment and Foreign currency exchange.
S/N ITEM Strongly Disagree Neutral Agree Strongly
disagree agree
Business activities have
increased tremendously
1 since the inception of
tourism in CRS.
Tourists bring a lot of money
2 from their countries to
tourism sites for site seeing
Site seeing has brought
money exchange in terms of
3 goods and services
The level of
commercialization and social
interaction amongst different
4 groups in and outside the
state has expanded.
Tourism development does
not contribute positively to
the socioeconomic well-
5 being of the people of CRS
The level of patronage from
tourists help to generate
6 income from Tourism

33
 development
Tourism development has
been observed as a major
7 source of income generation
8 Tourism development is a
source of job creation to the
host communities with
tourism potentials
9 Tourism industry is sustained
in CRS because it has met the
basic needs of the people
10 Tourism industry has
improved the quality of lives
of the people of CRS
11 Due to tourism
development, the teeming
youths have employment
opportunities

Prospects and potential of the hospitality industry to Cross River State

12 The hospitality industry holds
the potential to be the largest
employer of labor in CRS
13 The exploitation of CRS tourism
and hospitality assets is still in
infancy stage
14 Tourism and hospitality
industry can serve as a catalyst
to unleash the economic
development of CRS.

Constraints of the Hospitality Industry

15 Insecurity is not a problem
affecting tourism in the state
16 Infrastructural development of
the state is at the standard to
attract visitors
17 The management structures
put in place to manage the
sector in the state are effective
and efficient

Policies and strategies for boosting Hospitality potential to contribution to economy

18 The government of CRS has
invested adequately in
Marketing the tourism

34
 potentials and assets of the
State
19 Investment in infrastructure in
CRS is significant to attract
tourists to the state
20 Measures to combat crime and
insecurity are creating an
environment conducive for
tourism to flourish
21 The prevailing structures that
manage tourism in the State
are sufficiently funded and
effective in their activities

35
36