The Economic Importance Of Hospitality Industry To The Nation

Project and Seminar Material for Tourism and Hospitality

The Economic Importance Of Hospitality Industry To The Nation


The major objective of this work was to examine the economic importance of hospitality industry to the nation.
A strategic random technique was used to select the respondents from the hospitality industries using interview and survey method.

In conclusion, the outcome of this study reveals that hospitality industry is of great importance to the economy of the nation.

Chapter One


1.1 Background to the Study

The hospitality industry is a broad category of field within the service industry that includes lodging, restaurants, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. The hospitality industry is a several billion dollar industry that mostly depends on the availability of leisure time and disposable income. A hospitality unit such as a restaurant, hotel, or even an amusement park consists of multiple groups such as facility maintenance, direct operations (servers, house keepers, porters, kitchen workers, bartenders etc), management, marketing and human resources.

The Oxford Advance Learner Dictionary (1995) defined Hospitality as the reception and entertainment of guests, visitors or strangers with liberty and goodwill.

The Longman Dictionary of Contemporary English (1995) defined Hospitality as friendly behaviour towards visitors.
The Hospitality industry can be broadly defined as the collection of business providing accommodation and or food and beverages to people who are away from home.

The hospitality industry is a service industry which provides food, drink and accommodation to meet the needs of the domestic and international leisure and tourism.

Hospitality industry is a major employer. Hospitality industry includes service sector work like tourism and food service. It suffers from more economic fluctuations compared to its peer industries.

The hospitality industry is a major service sector in the world economy. The industry encompasses an extensive variety of service industries that include food service, tourism and hotels.

Hospitality industry can be empirically divided into two parts: entertainment areas like clubs and bars, and accommodation. Accommodation takes the form of public houses, resorts, inn, campgrounds, hotels, hostels, serviced apartments, and motels. The clubs and bars category include restaurants, fast foods and night clubs.

The hospitality industry also includes tourism support commercial activities like airline cabin staff and travel agents. Travel technology like applied information technology (IT) and its workers in hospitality industry, travel and tourism are included in the hospitality industry. Corporate entertainment is also a very thriving activity amongst corporation.

A hotel is an establishment that renders lodging in Lieu of payment. This lodging is usually given in exchange for a specified predetermined amount of money. Modern hotel rooms come equipped with climate control and attached bathrooms. Higher end hotels offer guests internet connectivity within rooms and also throughout the premises. A combination of meals and accommodation comes as a package in most hospitality establishments. Hotels are usually managed by professionally qualified managers. Junior workers usually maintain the hotel. Functions like cooking is usually done by professionally trained chefs.

Hospitality industries are characterized by a large number of employees. Both white collar employees and blue collar workers may find gainful employment. Entry level jobs usually require no formal education. Professionals in the hospitality sector are usually qualified with trade certificates and college degrees. Many hospitality schools offer specialized courses of study in one particular aspect of the industry.

The hospitality industry is rather unique among the major industries of the country in that it is comprised of a great variety of skilled and unskilled occupations, many common only to the industry and others related to various outside trades and professions including chefs, managers, plumbers, carpenters, porters, book keepers, secretaries, engineers, sales people, printers, telephone operators, elevator operators, upholsters, painters, bell hops, accountants, cashiers, assistant waiters, electricians, foreign language interpreters, security people, public relations specialists and scores of other occupation.

In recent years the term hospitality has become increasingly popular as an all embracing nomenclature for a large grouping of organizations including hotels. As a collective term, the hospitality industry can be taken to include hotels, motels, guest houses, bed and breakfast; farm houses, holiday parks, restaurants, fast food outlets, cafes, departmental store catering; public houses, clubs; industrial catering, institutional catering and the related area of tourism and leisure.

1.2 Statement of the Problem

Hospitality industry is associated with some problems which are listed below

  1. Cost of construction
  2. Climatic change
  3. Technology and demographics
  4. Travel permit
  5. Wage levels
  6. Recruiting and retaining skilled labour
  7. Lack of importance given to training and satisfaction.

1.3 Significance of the Study

The economy of any nation is affected by the food served in both homes and in the eating establishments of the country. It is the primary responsibility of the hospitality industry to provide food for people of all ages, in all walks of life, at all times of the day or night, and in every situation. The caterer should not only identify the people’s hospitality needs, but should also ensure that customers get necessary services required.

The hospitality industry plays a very significant role in the following areas:

Provision of food and drinks:

One of the importances of the hospitality industry is the provision of food and drinks. This is done mostly in the hotels and restaurants.

Most hotels provide breakfasts, lunches, teas, drinks and snacks and banquets. Hotels ranges from the palatial, first class luxury hotels to small hotels owned and run as family business.

Restaurants will vary with the kind of meals they serve. While some will serve all types of meals, others will either serve lunch and dinner or lunch and tea. Banquet will also be part of the restaurant operations. There are exclusive top class restaurants and small roadside ‘bukar’ and cafeterias. Also, some restaurants are popular for some specialty foods e.g. Mr. Biggs, French Café etc.

Job Creation:

Another importance attached to the hospitality is in the areas of job opportunities. Many jobs are created in the hospitality industry. This includes both skilled jobs as well as semi skilled jobs.

As earlier mentioned, there are different sectors that make up the hospitality industry. These various sectors are hotels, restaurants, fast food shops, take away shops, welfare catering, outdoor catering, school meal serve etc. These various outlets provide job as opportunities in the areas of managers, administrative staff, security personnel, maintenance staff etc. This has helped in the overall development of the Nigerian economy.

Revenue Generation:

Revenue generation has been an importance contribution to the Nigerian economy. The government generates huge amount of revenue from the activities of the various sectors that make up the hospitality industry. Revenue is generated in the form of company tax, registration fees, monthly/quarterly subscription; Value Added Tax (VAT) among others.

Increase Tourism Participation

1.4 Scope and Limitation

Hospitality industry is divided into two types of catering establishment which include the following:

  1. Commercial catering
  2. Welfare catering

Commercial Catering: This may be defined as the operation in which profitability is the primary concern. Such outlets exist not only in private ownership but also in the publicly owned sector of the economy.

This research work will be limited to the commercial catering.

It could have been given a wider coverage but due to the time and financial constraint.

1.5 Aim and Objectives

The objectives of the study are to:

  1. Assess the various economic contributions that the hospitality industry makes to the wider economy.
  2. Provide scenario analysis of the potential future contribution of the hospitality economy under a range of different assumptions
  3. Spell out the importance of hospitality industry to government (incase of tax)
  4. Analyse the importance of hospitality industry to practitioners and travellers.
  5. Enhance their awareness of the growing importance of the tourism and hospitality industry to our society, nation and the world.

1.6 Definitions of Terms

White collar employees:

A person who performs professional, managerial, or administrative work.

Blue collar employees:

A worker whose job requires manual labour.


The commercial organization of holidays and services for tourists.


Time spent not working.


A place where people pay to eat meals cooked on the premises.


A self service restaurant.


A roadside hotel for motorists.


An establishment providing rooms and meals for travelers and tourists.

Guest house:

A private house offering accommodation to paying guest.

Take away:

A restaurant or shop selling cooked food to be eaten elsewhere.


A person whose job is to serve customers in a restaurant.

Cruise ships:

A voyage on a ship taken as a holiday.


An inn or pub


A building licensed to serve alcoholic drinks.


A thing kept as a reminder of a person, place, or event.

G D P:

Gross Domestic Product.

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary

This project was embarked upon to examine the economic importance of hospitality industry to the nation. From the data gathered through survey, library, internet and questionnaire method, it was discovered that hospitality industry is of great importance to the nation.

Although, the fact remains that it is expensive to establish the industry in large scale. It has been proved that if a proprietor starts with a little, it will become large in a very short time.

Also, we have seen it that hospitality industry has reduced unemployment to the bearest level on its own part and serve as a means of earning big in a short working period.

Furthermore, the government generates huge amount of revenue from the activities of the various sectors that make up the hospitality industry.

Moreover, hungers have been sent away with the activities of hospitality industry. Humans can now think of being recreated without much worry about what to do, and what to eat and drink. Hospitality industry has created a new world in the universe or we better say ‘PARADISE ON EARTH’.

Hospitality has helped to increase tourism participation.

This project has helped us to prove to people that one of the fastest ways to develop a nation’s economy is to invest in hospitality industry.

5.2 Conclusion

From the questionnaire distributed, we have put into consideration, the effects of the hospitality industry on the national economy and the interest of potential investors.

It has been deduced that the industry can help to solve both social and economic problems facing the country.
Also, to ensure that the aims of tourists and residents of the country are properly met.

It is obvious that we visited only the accessible Hospitality Industry in our locality; this was so in order to reduce stress and save time.

Apart from the comments and suggestions made by various respondents from the questionnaires, investing and patronizing the industry will definitely lead to rapid growth of the country’s economy and this can enhance commercial liability.

5.3 Recommendations

To make people develop more interest in the hospitality industry and recognize its positive effect on the nation’s economy, we recommend that the following steps should be taken.

1. Employing Professional:

Most proprietors would prefer employing people who are not trained hospitality professionals due to the fact that they will pay less, not considering their skills with which they will use in working with them. If professionals are employed, they would have known the implication of every action they take and find remedies to arising problems.

2. Government Intervention:

The government should give helping hands to investors who are willing to invest in the business. This will help to reduce the problem of unemployment. Also, government should regulate the price of commodities in the market.

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