CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The tourism and hospitality industries are one of the world's largest sectors, amounting to 'over 10% of Gross Domestic Product (GDP)' (Cooper et aI., 2005:4), and employing huge numbers of people; ‘tourism employs 8% of the global workforce.The hospitality industry, with its roots in the centuries old tradition of Inn-keeping (Jones, 1996), has experienced huge growth in recent years: it recorded between 1990 and 1998 'a growth of over 25% in the number of units (Brotherton, 2003:9) and a total of '29.4 million bed spaces In hotels and similar establishments worldwide in 1997 (WTO, 2000). In the UK, the hospitality industry employs '1.7 million people  (6% of the working population)'with the industry valued in the region of ‘￡55-60 billion a year’. BPP Learning Media (July 2009). Fifty years now into its independence from British colonial

rule, Nigeria is gradually developing into a player on the world economic stage. As of 2010, more than 170 million people live in Nigeria, making it the most populated country in Africa and the most populated country in the whole of black race. Hospitality (Tourism) is becoming more and more a vital part of the Nigerian economy with the rapid expansion and growth of the

hospitality industry even though most of the population is urban with the rural gradually coming up and still works in agriculture.

Hospitality industry is a major sector in the tourism industry, which, in turn is one of the most rapidly expanding fields in the service industry. According to the World Travel and Tourism Council (WTTC), travel and tourism has become the leading economic contributor to the world and national economies in terms of gross output, value added, capital investment, employment and tax contributions.

Hospitality industry has brought tremendous growth to the global economy by providing services ranging from accommodation, sightseeing as well as other services related to the tourism industry. It not only provides employment but also plays a vital role in the economic returns of a country in the form of foreign exchange. Also the interaction with people from different cultures, thus educating people, is brought about by the hospitality industry. Hence, Hospitality industry plays a major role in the development of economy of Nigeria.

In principle, it is expected that many people patronize the hospitality industry when the economy is buoyant, thereby signifying a positive correlation between the industry and the economy. But is this true of the Nigerian situation? It is to ascertain the extent to which hospitality industry contributes to the economy in both potential and in real term that is the driving force

behind this study.

1.2 STATEMENT OF PROBLEM

In 2011, more than 2 million tourists visited Nigeria. The various international church crusades and conferences coupled with foreign investors on business tourism make the bulk of the tourists and spent an equivalent of $3.7 million U.S. dollars, and this figure is expected to rise by 10 percent in the coming year and the growth also expected to increase year by year. Jacobson (2012)

Nigerian population has continued to grow on daily basis with the census population of 2006 and current estimates at 150 million and 170 million respectively. This places the country the most populous country in Africa and black nation in the world.

Despite this trend, the country though endowed with diverse natural resource and tourism potentials that gives it an edge over, other countries have concentrated on the exploration of crude oil as the main source of revenue and in turn the driver of economic development. Studies from other countries portray that hospitality cum tourism have contribute meaningfully to their economic development contributing a significant percentage of the GDP and employee a teaming population of the workforce.

Going by this it will be imperative to investigate the contribution of this industry to Nigerian economic development by so doing unearthing meaningful avenue for investment, diversification and GDP growth.

1.3 OBJECTIVES OF THE STUDY

The objective of this study is to investigate the contributions of the hospitality industry to economic development of Nigeria. This study amongst others will pursue the following specific

objectives:

1. Investigate the contribution of the hospitality industry to Gross Domestic Product (GDP)

2. Investigate the employment rate of the hospitality industry in Nigeria.

3. Investigate the volume of foreign exchange generated via the hospitality industry.

4. To identify the hindrances to the full exploitation of tourism industry potential

5. To ascertain whether, the pre-requisites for effective development of tourism industry.

1.4 RESEARCH HYPOTHESES

The following hypotheses are postulated to be tested in this study to enable the researcher reach conclusions.

1. Hospitality Industry contribute to Nigerian economic development

2. Hospitality industries employs a notable percentage of the Nigerian workforce

3. Hospitality industries contributes meaningfully in boosting Nigerian Gross Domestic Product (GDP)

4. The hospitality industries have contributed in reshaping the image of the country thereby attracting investors.

1.5 RESEARCH QUESTIONS

To enable the researcher attain the above objectives, the following questions are formulated?

1. Does the hospitality industry have any contribution to Gross Domestic Product (GDP) of Nigeria?

2. What is the rate of employment of the hospitality industry in Nigeria?

3. What is the volume of foreign exchange generated via the hospitality and tourism industry in Nigeria?

4. What are the general contributions of the hospitality and tourism industry in economic development of Nigeria?

5. Does the hospitality industry have a role to play in Nigeria economic development?

1.6 SIGNIFICANCE OF THE STUDY

This study will explore the contributions of the hospitality and tourism industries in the economic development of Nigeria an investigative approach. It is intended to be of interest to policy makers, hospitality industry operators and companies who would find the study very essential as a guide in structuring the hospitality sector make it a contributor to national economic development, putting all the necessary facilities in place to enhance efficiency and also

increase the level of their contributions.

1.7 SCOPE OF THE STUDY

The study is designed to cover the hospitality industries in Nigerian while investigating operators in Enugu Zone. Efforts have been specifically made to find out how the hospitality industries

contribute to national economy.

1.8 LIMITATION OF THE STUDY

This study is limited to Hospitality industries within Enugu Zone in the investigation due to time and logistics constraints, which made extensive coverage of other operators very difficult.

1.9 Definition of Terms

The following terms as embodied in the work will be defined.

Hospitality: hospitable treatment, reception, or disposition. Thus hospitality industries involve the enterprises engaged in providing hospitable treatment.

Industries: a distinct group of productive or profit-making enterprises in a particular field of endevour.

Economic development: the process whereby simple, low income national economies are transformed into modern industrial economies. Although the term is sometimes used as a synonym for economic growth, generally it is employed to describe a change in

a country's economy involving qualitative as well as quantitative improvements. The theory of economic development—how primitive and poor economies can evolve into sophisticated and

relatively prosperous ones—is of critical importance to underdeveloped countries, and it is usually in this context that the issues of economic development are discussed.

Nigeria: country located on the western coast of Africa. Nigeria has a diverse geography, with climates ranging from arid to humid equatorial. However, Nigeria's most diverse feature is its people. Hundreds of languages are spoken in the country, including Yoruba, Igbo, Fulani, Hausa, Edo, Ibibio, Tiv, and English. The country has abundant natural resources, notably large deposits of petroleum and natural gas.

The new national capital is Abuja, in the Federal Capital Territory, which was created by decree in 1976. Lagos, the former capital, retains its standing as the country's leading commercial and

industrial city.

Gross Domestic Product (GDP): total market value of thegoods and services produced by a nation's economy during a specific period of time. It includes all final goods and services—

that is, those that are produced by the economic resources located in that nation regardless of their ownership and that are not resold in any form. GDP differs from gross national product (GNP), which is includes all final goods and services produced by resources owned by that nation's residents, whether located in the nation or elsewhere. In 1991 the United States substituted GDP for GNP as the main measure of economic output.

Hotels: building that provides lodging, meals, and other services to the traveling public on a commercial basis. A motel performs the same functions as a hotel but in a format designed for

travelers using automobile.

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