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Hospitality & Tourism Management

Impact Of Tourism In Economic Growth Of A Country




Nigeria has over 7000 tourist centres and with the concerted efforts of government, tourism is becoming an essential part of the country’s economy. The World Travel and Tourism Council (WTTC) in 2014 also envisaged a growth of 6 percent per annum for period of ten years for the Nigerian tourism industry. In view of this, the study focuses on empirical investigation of the contribution of the rapidly developing tourism sector to economic growth in Nigeria. The popular time series data for the period spanning from 1995 to 2013 was analyzed with econometric view statistical package. The findings reveal a unilateral causality and positive long-run between tourism development and economic growth. The tourism-led growth is also thus confirmed for Nigeria. The study recommends adequate security, increase investment in infrastructure and tourist centres to boost tourism activities in the country.



1.1     Background of Study

Every tourist is different. Every tourist feels attracted by different tourist destinations, likes to engage in different activities while on vacation, makes use of different entertainment facilities and complains about different aspects of their vacation (Dolnicar, 2008). Tourism over the years has proven to be a strong resilient economic activity and a fundamental contributor to economic growth of nations by generating billions of dollars in exports and creating millions of jobs (Yusuff and Akinde, 2015). Tourism helps to balance regional equalities and has been an integral part of developmental policy and economic strategy in many countries (Sharpley, 1999). To bolster economic development, tourism make a major contribution to the income of the destination areas, creates employment opportunities, supports diverse range of industries, helps to diverse local economies and support existing infrastructure and help fund the development of new infrastructure (Shone, 2008).

Tourism plays important role in economic development at any community, national, regional and global levels by using natural resources and environments as key physical inputs. In making use of the environment and natural resources, the negative impacts have to be minimized to assure sustainable use, as well as generate enough tourism revenue to reinvest a certain portion of funds. The reinvestment should aim at enhancing the quality of the resources and build the management capacity at various levels. There is a complex relationship between tourism and the environment, such that tourism has inevitable and important environmental impacts, including: resource use, consumption, waste, pollution and effects from tourism-related transport. At the same time, beaches, mountains, rivers, forests and diverse flora and fauna make the environment a basic resource that the tourism industry needs in order to thrive and grow. While the viability of tourism could be threatened by negative environmental impacts, tourism could also contribute significantly to environmental protection.

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Tourism is a rapidly growing phenomenon and has become one of the largest industries in the world. The impact of tourism is extremely varied. On one hand, it plays an important and certainly positive role in the socio-economic and political development in destination countries by, for instance, offering new employment opportunities. Also, in certain instances, it may contribute to a broader cultural understanding by creating awareness, respecting the diversity of cultures and ways of life. On the other hand, as a tool to create jobs, it has not fulfilled its expectations. At the same time, complaints from tourist destinations concerning massive negative impacts upon environment, culture and residents‟ ways of life have given rise to a demand for a more sustainable development in tourism. Different parties will have to be involved in the process of developing sustainable tourism(UNCSD NGO,1999).

The potential of tourism development as a tool to contribute to economic growth and poverty reduction is derived from several unique characteristics of the tourism system (UNWTO, 2002). First, tourism represents an opportunity for economic diversification, particularly in marginal areas with few other export options. Tourists are attracted to remote areas with high values of cultural, wildlife and landscape assets. The cultural and natural heritage of developing countries is frequently based on such assets, and tourism represents an opportunity for income generation through the preservation of heritage values. Therefore, tourism enables communities that are poor in material wealth but rich in history and cultural heritage to leverage their unique assets for economic development (Honey & Gilpin, 2009). Tourism is the only export sector where the consumer travels to the exporting country, which provides opportunities for the poor to become exporters through the sale of goods and services to foreign tourists. Tourism is also labor-intensive and supports a diverse and versatile labor market; it provides small-scale employment opportunities, which also helps to promote gender equity. Finally, there are numerous indirect benefits of tourism for the poor, including increased market access for remote areas through the development of roads, infrastructure, and communication networks.

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1.2     Statement of Problem

Tourism today has become one of the engines of growth for Nigerian economy with a contribution of 3.20 per cent to national Gross Domestic Product (GDP) and providing 2.70 per cent of total employment in 2013 (WTTC, 2014). Tourism industry contribution to GDP, according to World Travel and Tourism Council (WTTC) is envisage to rise by 1.9 per cent in 2014 and rise by 6.1 per cent per annum from 2014 to 2024. Nigeria tourism sector is therefore growing and it is capable of generating employment and earning large amount of foreign exchange that rivalled agriculture and petroleum sectors.

Despite tourism’s increasing importance in Nigeria economy, the sector has attracted limited attention in terms of empirical research. Thus, this lack of research on the impact of tourism on economic growth in Nigeria is the major motivation for this study. With this backdrop, the objectives of this study are three-fold. First, the study provides an account of the economic contribution of tourism sector to the economy of Nigeria. The contributions are categorized into three areas namely to GDP, employment and export earnings. Second, the study empirically investigates the dynamics of the relationship between tourism sector development and economic growth of Nigeria for the period of 1995 to 2013. Third and lastly, the paper recommends possible strategic initiatives that stakeholders in tourism industry and government can adopt and implement in an effort to rejuvenate the potential of tourism as a veritable tool for economic growth in Nigeria. This study is limited by insufficient data on tourism activities in Nigeria.

1.3     Objective of the Study

This research work is set to explore on the impact of tourism in economic growth and development of Nigeria with other objectives as follows:

  1. To improve the sustainability of tourist centers and its long term survival by short-term considerations.
  2. To examine the relationship between tourism and sustainable development in the long term.
  3. To highlight, tourism and give recognition to it as a positive activity with a potential benefit to the local community.
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1.4     Research Question

The research work is guided with same research question, which will be administered and distributed among the researchers area of study. The questions was carefully structured to gather information for better understanding of the research work.

  1. What is the effect of improving the sustainability of tourist centers and its long term survival by short-term considerations?
  2. What is the relationship between tourism and sustainable development in the long term?
  3. To what extent has tourism been given recognition as a positive activity with a potential benefit to the local community?

1.5     Research Hypothesis

The researcher formed some of the hypothesis which will be tested to support this study. The hypothesis will be tested at 0.05 level of significance using the chi-square method and percentage analysis.

The research hypothesis are as follows.

Hypothesis 1: There is a significance between tourism industries to sustainable tourism development in Nigeria .

Hypothesis 2: Long term survival of tourism is significantly related to tourism industries to sustainable tourism development in Nigeria .

1.6     Significance of the Study

This research work highlights on the importance of tourism and management as a means of sustainable tourism development. It is believed that the findings of this research work should provide detailed information on the how to manage tourist centers for a sustainable development and long term survival. It is also expected that the study will benefit the hospitality industries and management.

The research will also have a significance difference to the researcher. This is because the study will expose the researcher to so many related areas in the course of carrying out his research. This will enhance the researcher’s experience, knowledge and understanding on tourism and management for a sustainable development.

Pages:  30

Category: Seminar

Format:  Word & PDF               

Chapters: 1-5                                          

Source: Imsuinfo                                     

Material contains Table of Content, Abstract and References.


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