CHAPTER ONE

1.1 BACKGROUND TO THE STUDY

There is an increasing need to diversify the Nigeria Economy from Oil base to other viable sector due to high

population growth rate and growing unemployment. One of the segments that have great potentials to replace

oil is tourism and recreation. The activity of people visiting places outside their unusual environments for a

period of time for leisure, business, and other purposes is referred to as Tourism (Adeleke 2009).If Tourism is

embraced with genuine practices and discipline, it could reduce the countries poverty and reliability to the Oil

sector. with Tourism development in Nigeria, the country could be able to create job opportunities, unite

together in peace and help develop the rural communities. Here is an increasing need to diversify the Nigeria

Economy from Oil base to other viable sector due to high population growth rate and growing unemployment.

One of the segments that have great potentials to replace oil is tourism and recreation. The activity of people

visiting places outside their unusual environments for a period of time for leisure, business, and other purposes

is referred to as Tourism (Adeleke 2009). If Tourism is embraced with genuine practices and discipline it could

reduce the countries poverty and reliability to the Oil sector. With Tourism development in Nigeria, the country

could be able to create job opportunities, unite together in peace and help develop the rural communities.

There is lack of modern infrastructural facilities in some part of the country ,acute conditions of under develop,

poverty and inadequate access of tourism information such as tourist guide maps can be seen which many

potential Nigeria and foreign bound tourist may not like to be confronted with (Abangma2011)

Some of the Tourist hubs in Nigeria are sited in Abuja Municipal Area council (AMAC) due to huge tourist

potentials that exist in the at area. this includes excellent road Network ,a beautiful rolling terrain ,good and

Modern Nigeria Architecture good climate especially optimal temperatures ,abundant tourist activities and

many others. Therefore there is need to develop tourism in AMAC. The study will discuss the role of tourism

in revenue generation in AMAC.

Tourism is characterized by three elements. These 3 elements give rise to travellers: 1.tenancity of travel

2.Origin of traveller 3.length of stay at destination (weaver 1998).leisure industry is a combination of activities,

facilities, services and industries, which gives a travel experience that includes

transportation,accomodationa,eatinganddrinking,entertainment,recreations, shopping and amenities available to

travellers away from house hold. In vocational industry, travelling to areas of natural or ecological interest for

the purpose of observing wildlife, the environment, and water body, natural vegetation, rocks, hills and

mountains gives knowledge of conservation of the environment. Tourism development in the world has made

tourist development so significant in economic terms.

There has been a rapid growth in the industry since 2005 where tourism was registered as industry. The

developing countries are working hard to embrace tourism for socioeconomic development (WTO 2006).

According to Ayeni et al (2001) Tourism could be divided into 3 major classes.

A. Traditional and cultural Tourism: this tourism are based on cultures and tradition, they include museum,

traditional, spiritual and general festivals, structures of art and crafts.

B. Ecological/Natural tourism: this includes geomorphological features, geological and geophysical

features.

C. Modern features and amenities: here it includes oil rigs, hydro-electric power, man–made dams, sporting

facilities and other engineering structures.

The role of tourism has become recently more recognized as a potential industry that contributes to a country’s

revenue, economic growth, balance of payments, and foreign exchange earnings. Tourism has also proven to be

a growing source of revenue to the private sectors as well as a major source of income to individuals, creating

various employment opportunities and contributing to their individual welfare. This has given governments

enough reasons to support and promote for tourism as a source of both revenue and FDI. (Foreign direct

investment)

Tourism has become a major source of export earnings to many countries in the world, especially, The

developing countries that do not have competitive advantage in a particular industry and do not enjoy other
sources of revenue such as; Natural resources like, Oil, Gas, Gold etc. Tourism is the first or second source of

export earnings in 20 of the 48 Least Developed Countries and has been generating a steady growth in at least

10 other countries. As such, tourism has become one of the main engines for stimulating economic activities in

many countries in the world, especially the developing ones.

The tourism industry started by 1960 and has grown rapidly during the last 50 years in terms of the income it

generates and the number of tourists who travel domestically and internationally. Tourism has proved to be a

strong source of revenue even during the economic crisis, despite the few fluctuations in tourism that have been

caused by events such as terrorist threats as well as the SARS disease scare. In this paper, I analyses the

importance of tourism as an opportunity for diversifying a country’s earnings, an opportunity for economic

development and growth. I will also discuss how countries could promote and build a competitive advantage in

tourism to attract more visitors around the World.

1.2 STATEMENT OF THE PROBLEM

Abuja is endowed with huge tourism potentials, but it still lacks enabling environment and innovation in the

tourism sector. Private and public investments in tourism are inadequate for maximum economic benefits from

the sector. At the federal level, crude oil, the major source of foreign exchange earnings is a non-renewable

resource that can get exhausted after a period of time. When crude oil gets exhausted or less useful then the

major source of income to most State will cease, when that happens, it may lead to chaos and collapse of

government. the oil sector is very volatile as frequent fluctuations in the international market often lead to a

negative multiplier effect on mono economies, this negative effect usually trickle down to the various States

making it difficult to accomplish development objectives in the various States. Diversification makes economies

less vulnerable to fluctuations in demand, more dynamic and more agile in the face of change (Arts, 2011). The

need for economic diversification in most developing countries is overwhelming because of their defining

mono-cultural economic characteristics where only one or two commodities dominate exports and provides the

bulk of foreign exchange. Nigeria’s position as a major oil exporter is threaten by several factors mentioned

above, because of this, it is expedient on the Nigerian government as well as the State Governments to give
more attention to the other sectors of the economy (Ojeka, 2011). It is in this regard that Abuja Municipal Area

Council (AMAC) should increasingly look inward and develop the sectors which it has comparative advantage.

Tourism is no doubt top in the list if not the first.

1.3 OBJECTIVE OF THE STUDY

This study seeks to find out the impact of the tourism sector on the internally generated revenue of AMAC. It is

the intension of the study to use available data to test and find out if the tourism sector is contributing

significantly to the IGR of AMAC or otherwise. The study will also make recommendations on how the tourism

sector can be developed to make it a major source of revenue, employer of labor, catalyst for infrastructural

development and a major contributor to the IGR of Abuja Municipal Area Council (AMAC)

The specific objectives of the study are to:

1.Delineate and map out existing tourist sites and its revenue potentials in AMAC.

2. Examine the physical features of the tourist site.

3. Examine the suitability for tourism

1.4 RESEARCH QUESTIONS

The research is guided by the following research questions:

1. Does tourism has any significant contribution to the internally generated revenue of Abuja Municipal Area

Council (AMAC) ?

2. What are the factors working against public-private investments in the tourism sector in the Area Council?

3. How can the tourism potentials of AMAC be harnessed for maximum economic growth?

1.5 SCOPE OF THE STUDY

This work covered Abuja Municipal Area Council the federal capital city of Nigeria. This study tries to identify

The Role of Revenue Generation in AMAC.

1.6 SIGNIFICANCE OF THE STUDY

The study is very timely, especially today that the nation is striving towards better economic development and

growth. This study will be of immense benefits to both the operators of internally generated revenue of AMAC

because it will give a thorough insight into Tourism and the economic viability and revenue mopping.

1.7 Limitation of the Study.

The study is limited to tourist attraction sites within Abuja Municipal Area Council.it does not cover luxury and

hotels; it dwells on natural site attractions. The tourist sites are mostly very far from each other. Tourist industry

should be able to give details on the sites and they should be friendly and accommodating
 CHAPTER TWO

2.1 LITERATURE REVIEW

The term tourism according to Tunde (2012) is derived from ‘tour’ meaning a journey at which one returns to

the starting point. A circular trip usually for business, pleasure or education during which various places are

visited and for which an Itinery is usually planned. The United Nations world tourism organisation (Untwo,

2013) defined tourism as an activity involving the travels of persons to places outside their usual environment

for not more than once for leisure. Olorunfemi and Raheem (2008) defined the concept of tourism as “the

activities of persons travelling to and staying in places outside their usual environment for not more than one

consecutive year for leisure, business and other purposes not related with the exercise of an activity

remunerated from within the place visited”

Tourism the world over has continued to witness growth as more numbers of people are involved in travel and

tours. Untwo (2014) estimated that international tourist arrivals grew by 5% in 2013, reaching a record 1,087

million, the organisation added that this is despite the global economy in ‘low gear’ it went ahead to forecast a

4% to 4.5% growth, again which is above the long term projections in 2020. Africa has not been left out of the

growth experience in the tourism sector; Elsha Grancourt in Untwo (2013b) said tourism has become a sector of

great importance in Africa. In 2012 for the first time; Africa broke the record in terms of international tourism

with 52.3 million tourist arrivals and us$ 33.5 billion in tourist receipts. It is evident that developing countries

are beginning to attract tourists as maintained by Neumayer (2017), who averred that many developing regions

in the world increase their market share rapidly and also derive a much higher share of their Gross Domestic

Product (GDP) from tourism receipts than developed countries. Arts (2011) in its findings posited that tourism

is growing faster in the world’s emerging and developing regions than in the rest of the world. The study further

added that in 2007, tourists spent us $295 billion in developing countries almost three times the total

international development assistance. Tourism is increasingly viewed as one of the best opportunities and most

viable option for the sustainable economic and social development of developing countries (Shali and Nowak,
2005).the important role tourism plays in job creation and income generation for countries as well as regions in

countries cannot be underestimated.

For example page 87 cited in Makochekanwa (1999) conducted a research using data from tourism sector found

that tourism was more labor intensive in low labor cost countries. His findings further revealed that tourism’s

contribution to employment was second to agricultural sector in terms of contribution to employment in the case

of South Africa. Leventis and Gani (2000) in Neumayer (1999) said tourism provides low skilled and labor

intensive services that can provide a relatively stable income stream than the volatile receipts from natural

resources extraction. Tourism is a beacon for pro-business policies and reforms that can help Small and

Medium Enterprises (SMES) development and stimulate foreign investment (arts, 2011). For a country like

Nigeria and its various States in the federation longing for effective economic diversification, tourism presents

such an opportunity. Tourism is profoundly important for economic development through its impacts on

employment, exports, stimulation of infrastructure provision, generation of revenue and promotion of

international culture appreciation, peace and harmony (Frangialli, 2001) in Olorunfemi and Raheem (2008).

Ayeni and Ebohan (2017) averred that tourism has become a major source of diversification...allowing new

employment and income earning opportunities. Tourism can be a leading industry in the fight against poverty.

Tourism can bring many benefits to the government, local authorities and the private sector through the

generation of foreign revenue, financial returns on investment and tax revenue. Tourism sector is a magnet for

foreign direct investment and affords developing countries the opportunities to attract inward direct investments

both for soft and hard tourism infrastructures (Ayeni and Ebohan, 2017). Despite the tourism potentials in

Nigeria and Plateau State some challenges are encountered. According to Adeleke (2000), peace and stability

are important prerequisites to tourism development. Plateau State has had a bitter experience of ethno-religious

crisis and political instability which affected the tourism image of the State. It is well known that crime, ethnic

crisis and political instability send tourist arrival plummeting (Adeleke, 2000). Adeleke further added that

tourism will never flourish as long as there is instability. Peace is a prerequisite for robust tourism sector to

prevail in Plateau State.

2.2 TOURISM AS AN INDUSTRY:

Tourism is an Industry that consists of a group of firms involved in marketing of service related activities and

tangible souvenirs to the end users, represented by international and domestic Consumers. Example of such

services include hotel & hospitality rooms, restaurant meals, air tickets, therapy, guided tours, other recreational

and medical services sold to tourists and medical tourists (patients tourists who travel for health therapy/medical

reasons seeking diagnostics and hospital treatment).Tourism is an active and economically viable industry that

requires the ability to continuously adjust to customer’s changing needs and wants, as the customer’s

satisfaction, safety, and enjoyment are the main focus of the industry.

In the 1980s, individuals questioned whether tourism was a blessing or a curse, but today, the issue is now

essentially academic, given the value of tourism as the world’s largest industry and its role as a global employer

and customer (Smith, 2001).

What Makes a Country a target of attraction for FDI in Tourism?

Foreign Direct Investment (FDI) may occur when a firm invests directly in new facilities to produce a product

and/or service in a foreign country (Hill, 1994). Tourism has given many reasons to the developing countries,

such as Jordan, Egypt, Israel, South Africa, Jamaica, Lebanon etc. to promote Foreign Direct Investment (FDI)

inflow to their territories realizing the fact that, tourism generates major revenue to such countries that may not

have access to revenue through other types of industries or natural assets like oil, gas or uranium.

FDI, including its facets of capital investment, transfer of technology and access to global markets, is one of the

routes through which developing countries can carry out sustainable development. For example, in a study by

Kyrkilis, Delis,& Pantelidis (2020) on FDI & the tourism industry it was revealed that the volume of FDI inflow

to China has increased tremendously as a result of the expectation that China will be receiving 120 million

tourists on annual basis by year 2020 favoring the inflow of FDI to the Tourism sector. By the end of 2021
Given the importance of FDI in tourism in stimulating the economic activities in many countries around the

world, we should discuss below some the major determinants of FDI that can make a Country a potential place

for attracting foreign direct investments:

 Infrastructure: Infrastructure plays a very important role when it comes to investing in the tourism sector in

the host country because of its inherent cost implication on the investor. Infrastructure includes man-made

establishments such as domestic and international airports, roads, and boarder checking points in addition to

transportation facilities and constructions like power stations, dams, bridges and so on.

 Location: Tourism mainly depends on strategic locations. For example, investors would look at whether the

host country can be easily accessed by air travel, by land or by sea so that it would attract the largest number of

tourists. Geographical location also includes the climate, landscape, and terrains.  Natural Resources &

Historical Attractions: The Natural attractions are God made, such as spring water, water falls, wildlife,

mountains, land features and natural landscape. While the historical attractions are ancient man made that

includes historical, archaeological and religious places. Many host countries are excellent in their historical

background and their cultural heritage. For example, Egypt is famous for its pyramids, many tourists travel to

Egypt for ancient site seeing purposes.

 Economic Status Indicators: The most important indicators are the employment rate and the per capita

income since they are important for domestic tourism and indicate the ability of nationals to travel for leisure

and the purchasing power to spend within the country.

 Security: In the wake of catastrophic natural disasters and rising threats of terrorism, the hotel industry has

been hit hard by declining revenues and increasing competition.(Min, Jong Joo, Kim 2009). There are many

factors that affect whether a country is a potential place for tourism, one of which is security. Security includes

safety from natural disasters such as the recent Japan Tsunami. It also includes the social stability and political

stability status of the host. For example, the total number of international tourists who travel to Syria has

declined tremendously in recent years due to the political and social instability in the country.
 National Policies: Include the host country’s entry visa requirements and restrictions. For example, EU and

US nationals are granted entry visa upon arrival in Queen Alia International airport in Jordan, while other

nationalities are restricted and are required to have an entry visa stamped on their passports prior to their

traveling date. E.g. the nationalities of India, Kenya, Djibouti etc. A study made by UNCTAD, found that the

impact of Tourism Foreign Direct Investment (TFDI) depends on the national policy framework in each country

& the corporate policy of investors. UNCTAD found that national policy initiatives should be tailored to

specific country needs and resources, and to their position in the tourism industry life cycle.

 Regulatory Business Laws: Important to the foreign investors such as the environmental laws, tax law, the

minimum wage and maximum law & working hours law

 The Market size: The larger the number of the population, the more economic activities available in the host

country. Nigeria, Egypt and Brazil are all good examples of this.

Types of FDI in The Tourism Industry: Foreign investments in the tourism industry vary widely depending on

the experience level and interest of the foreign investor and the host’s potential status.

The following are some of the different types foreign direct investments in tourism:

 Travel Agencies: Many international travel agencies operate as foreign investment outside their home

countries to provide flight reservations, hotel bookings and tour operating services and other travelling related

services. The UNIGLOBE travels company is an example of this type of foreign investors.

 Hotels: World chain hotels are established in many host countries to provide room booking services and other

recreational facilities to domestic and international tourists. Hotels are also established to provide conference

facilities such as conference rooms and meetings arrangements to business travellers. Examples of

Multinational Hotel outfits include but not limited to the following: Marriot, Hiltons, Sheraton, Holiday Inn,

Premier Inn, Hotel Western and so on

 Hospitals: Large hospitals are established in host countries to provide room bookings and medical treatment

facilities to domestic and international patients who come from different regions in the host country or from

their home country for therapy purposes and medical treatments.

 Restaurants: Many franchise and chain restaurants, coffee shops and fast food operations are established in the

host country to provide meal services to domestic and international tourists such as TGI, Starbucks, KFC,

Fuddruckers and so on

2.2.1TOURISM AS AN AGGREGATE SOURCE OF REVENUE.

International tourism is considered as part of the export industry to the home country since it creates foreign

currency revenue into the country’s economy. This leads to a favorable balance of payments for the country.

Such revenue inflow creates great benefits for business turnover, welfare of individuals, household income,

employment, private revenue etc. and also increase in government revenue. Furthermore, part of this revenue is

considered a secondary revenue since it is re-spent within the country creating more economic activities. For

example, in some large countries such as USA and Brazil, these secondary and indirect revenues that are

generated domestically sometimes exceed the benefits from the direct revenue bases. This will be discussed

later in detail when we identify some of the other sectors of the economy that also benefit from the tourism

industry.

In addition to being a major source of revenue for countries worldwide, tourism is also an industry where long-

term growth prospects are good (Ennew 2003). For example, the growth rates in the tourism revenue have

exceeded the growth rates made by most other service sectors. According to The World Tourism Organization

forecasts (year 2002), the annual growth rate in international tourists’ arrivals in Jordan is expected to reach

4.1% by year 2020.

We should remember that tourism growth rates have not always been stable. Just like any other economic good

or service, tourism has been affected by fluctuations in quantity of demand. For example, following the war and

the crises that is taking place in Countries like Iraq, Syria, Lebanon etc. and the worldwide SARS infections and
scare of Ebola fever, the rate of international tourists who travel to and from the USA has dropped considerably

and as low as by 11% in some cases.

2.2.2TOURISMS ECONOMIC CONTRIBUTION IN GOVERNMENTS AND THE PUBLIC

SECTORS:

One of the chief reasons that governments support and promote tourism throughout the world is that, it has a

positive impact on economic growth and development (Ivanov & Webster 2006). Tourism industry is an

important source of revenue especially to countries that do not have a competitive advantage in other industries

or in natural resources. Tourism generates major economic benefits to these countries ranging from economic

stimulation, GDP growth and to providing access to foreign exchange used in improving balance of trade.

Counties such as Jordan and Egypt do not have natural resources or technological industries that would put

them in a favorable competitive advantage over other nations in the region. However, their income from tourism

has contributed to their economic development to a great extent.

2.2.2.1Economic contribution of tourism to governments:

 Tourism is a major source of foreign exchange earnings to governments, and thus provides the basis for export

lead economic growth (Ennew 2003). For example, incoming international tourists would need to supply their

currency to be able to purchase products inside the host Country and to purchase the currency of the host

country that they are travelling to. This will increase the foreign currency earnings of the host Country and will

create a demand on its local currency resulting in the appreciation of the host’s Country exchange rate.

According to WTO records, foreign exchange earnings from international tourism were $476 billion in year

2000 generating a higher value than exports from oil and automobiles .Foreign exchange is important to

developing countries that depend on importing essential goods such as capital and industrial goods.

 Tourism improves the balance of payments & trade of the developing countries. As more international tourists

travel to the host countries, the demand to purchase its local products, services and its local currency would

increase resulting in an improved balance of payments and balance of trade. For developing countries that
depend on monoproducts, tourism provides such count positive effect on their balance of payments. According

to John Brohman (1996), “Earnings from trade and tourism may foster macroeconomic stability by contributing

to a more favorable balance of trade and external accounts, which is important for attaining better ratings in

international financial markets and thus easier access to foreign loans and other investment capital and credit

facilities.

 Tourism diversifies governments’ sources of revenue and offsets governments’ losses attributable to certain

industries. One of the greatest effects of tourism on governments is that it reduces the country’s dependence on

primary commodities such as natural resources of oil and gas as the main sources of revenue. This would

minimize the risk that would most probably arise from depending on one source of revenue rather than

diversifying such resources and would offset losses made by other sectors in the economy.

 Tourism diversifies governments’ sources of revenue and offsets governments’ losses attributable to certain

industries For example, according to a study made by the Dept. of Statistics in Canada (2007) on Government

Revenue Attributable to Tourism, Tourism in Canada accounts for a higher share of government revenues. In

this study, it was found that tourism accounts for 3.9% of the Canadian government revenue in year 2006. This

revenue was generated from various taxes imposed by the Canadian government on different types of goods and

services bought by tourists, such as entrance fees, parking fees, alcohol, and fuel. The study also found that

tourism in Canada accounted for 2.0% of Canada's gross domestic product (GDP).

 Rising fiscal responsibilities combined with growing reluctance of residents to pay higher taxes have induced

many state and local governments to enact new taxes or increase rates on existing hotel room taxes (Bonham,

Fujii, IM &Mak, 1992).In Canada, the goods and services taxes (GST) and the provincial sales taxes make the

largest sources of government revenue from tourism. According to the same study, tourism generated revenue

of $19.4 billion for all three levels of government in Canada in 2006 as opposed to $15.0 billion of revenue

generated by tourism in previous year.

2.2.3Tourism’s Economic Contribution to the Private Sector:

Global competition is emerging in the health care and hotel industries. The tourism industry is a combination of

a group of firms that provide services to the end customers. Such firms include hotels, restaurants, travel

agencies, transportation companies and hospitals. Competition among the private firms who provide services to

international tourists and patients is increasing due to the high volume of revenue generated from tourism.

The following discusses the major private sectors to which tourism generates revenue:

 Tourism generates revenue to private hospitals: Many studies have found that there is a positive relationship

between medical tourism being another type of tourism and its being a large source of revenue to hospitals and

medical centres which represent part of the private sector. There are more patients, nowadays, who travel from

developed and wealthy nations to developing countries such as India and Jordan looking for high quality health

care at reasonable charges. Available statistics on the number of patients traveling for medical treatments and

surgeries indicate that 500,000 Americans travelled outside the USA for treatment in year 2005 of which, most

travelled to Mexico and other Latin American countries. Reports also indicate that 250,000 patients travelled to

Singapore for health care purposes and 500,000 patients travelled to India for medical purposes while 1,000,000

patients travelled to Thailand for the same reason.

 While this represents a large source of revenue to hospitals, it also represents a significant saving to the

international patients, leaving them with additional savings to procure other goods and services. A quick

comparative analysis of cost of medical services is offered below to buttress this assertion.

1. Apollo Hospital in New Delhi, India, charges $4,000 for cardiac surgery, compared to about $30,000 in the

United States.

2. Hospitals in Argentina, Singapore or Thailand charge $8,000 to $12,000 for a partial hip replacement — one-

half the price charged in Europe or the United States.

3. Hospitals in Singapore charge $18,000 and hospitals in India charge only $12,000 for a knee replacement that

runs $30,000 in the United States.

According to the National Centre for Policy Analysis 2020, Internationally-known hospitals, such as

Bumrungrad in Thailand and Apollo in India, report revenue growth of about 20 percent to 25 percent annually.

McKinsey & Company estimates that Indian medical tourism alone will grow to $2.3 billion by 2012. This

reflects a significant volume of revenue that such hospitals generate from this type of tourism in developing

countries. Prices for medical and health care treatments are lower in hospitals located in developing countries

due to few reasons, e.g. labor costs in such developing countries are much lower than those in developed

countries. In addition third parties charges such as insurance fees and governmental fees are much less involved

in the billing process in these Countries. In 2006, the medical tourism industry grossed about $60 billion

worldwide. McKinsey & Company estimates this total will rise to $100 billion by 2012.

 Another private sector that we need to look is the hotels which make tremendous revenue from the sales of

rooms and accommodations. However, rooms are not the only service which tourists consume at hotels; many

hotels include restaurants in addition to indoor and outdoor leisure activities such as night clubs Gyms and

health spas provided to domestic and international tourists.

For instance, Tourism functions and activities made revenue of US$73.3 million in year 1997 in Lao Republic

where the hotels and restaurants sectors grew by 62.8% 1995 representing the largest increase in the services

sector in the Republic of Lao. As a result of the large volume of sales revenue made from the hotels rooms

services, the supply for the rooms increased accordingly and the number of hotels has more than tripled between

years 1992 and 1997, and the number of rooms has doubled during the same period. Accordingly, the volume of

foreign investment in this sector increased to a great extent. For example, the foreign investments in Lao has

increased from 34 tourism projects representing 8.8% of the total foreign investments in year 1998 to 82% of

total investments in Lao by today.

 In addition, tourism creates a continuous chain of supply and demand to those who are involved directly and

indirectly in the travel and tourism business. For example, hotels, Airlines, restaurants and entrepreneurs spend

part of their sales revenue on purchasing on goods and services which are needed to further serve their tourist

customers. Such purchases include food, beverages, fuel, equipment, and other related items. While, their
suppliers will in turn purchase and demand for other products and services from other suppliers too. As a result

of this continuous chain of demand and supply, more income and employment opportunities are created within

the economy.

2.2.4Tourism’s Economic Contribution to Individuals:

Economic impact studies in travel and tourism are undertaken to determine the effects of specific activities in a

given geographic area on the income, wealth and rate of employment in such areas’ residents. The results

should indicate the contribution of tourism activity to the economic well-being of residents of the area studied,

usually in monetary terms (Wiley & Sons 1994).

The following discusses the benefits brought by the tourism industry to individual residents:

 Tourism creates employment opportunities. It has brought many benefits to the nations. Many jobs have been

created as a result of the growing volume of incoming tourists into the countries. In addition, lots of new small

tourism related businesses have been created as a result of the increasing types of tourism. Such services include

handicrafts, souvenir shops, translation, and transportation services to tour guide services. The quality of life

and living standards of those who are involved in travel and tourism industry has very much improved than

before.

Many developing countries perceive tourism as a fast track to economic growth. They assume that tourism

development requires less investment than other industries; and they believe tourism to be an effective means of

creating job opportunities and increasing local income (Mingsarn Santikarn Kaosa-ard 1994).

 Tourism is an effective industry in creating employment opportunities as well as income to many nations

especially, those living in less developed countries where tourism positively effects and are quite effective and

significant. Such as in the African Countries including Ethiopia and Kenya. In such places, most of the locals

have simple skills and have basic types of jobs such as farmers or fishermen and their becoming involved in

such industry as
 Tourism would increase their personal income significantly.For example; the tourism in Costa Rica generates

140,000 jobs on annual basis.

 Tourism stimulates the movement of skilled labour which is part of the factors of production from their home

countries to the host Countries to work in different parts of the tourism sector within the host country. For

example, Dubai attracts many Indian skilled labour who travel from India to work in Dubai hotels, restaurants,

and hospitals at high income.

 Tourism generates large amount of revenue to real-estate owners. For example, the increase level of tourism

has created demand for real estates, such as lands and buildings where large hotel and hospital establishments

are built. This high demand has increased the prices of lands and generates more revenue to landlords and land

speculators.

2.4 BUILDING A COMPETITIVE ADVANTAGE THROUGH TOURISM

Tourism plays a major role in reducing poverty among nations. The United Nations World Tourism

Organization has developed several programs to boost and promote tourism as an important tool for economic

growth, and for attracting foreign direct investments into host countries as well as stimulating employment..

Investment Guarantee Agency’s technical assistance focused on attracting foreign direct investment (FDI) in the

tourism sector. The tourism industry is considered to be highly competitive as opposed to other industries that

also generate revenues to nations such as; the oil and automobile industries. For this reason, developing

countries need to think about what sets them apart from other potential destinations and focus on building a

competitive edge that would differentiate them from other competitors in the same industry, such a strategy

would make it easier for them to attract foreign direct investment into their respective countries. Given the

increased level of competition in the worldwide tourism industry among nations, the ability to compete relies

heavily on the ability of each hosting nation to deliver a combination of a better travel quality experience at

better prices to ensure satisfied customers (tourists).

Some Determinants of a competitive advantage in the tourism industry:

 Availability of natural resources such as the sea, mountains and other natural landscape. For example, Turkey

is situated along the Mediterranean sea as well as the black sea with natural waterfalls located in the northern

and southern parts of Turkey.

 Availability of skilled labour such as tour guides, transportation drivers, hotel receptionists and travel

consultants. Many countries have started attracting cheap skilled labour from India and Philippines so that they

can compete with other countries in providing a lower cost of travel leisure facilities to the end users (tourists).

 Reduction in the government taxes of the host country. This would stimulate the incoming travel activities

into the host country and would generate more sales revenue. For example, Jordan has reduced the government

tax fees on hotel rooms from 10% to 8% per night. This has resulted in increasing the number of room’s

occupancy rates in the hotels that are located in Jordan and attracted more FDI into the country. Other countries,

exempt international travellers from duty fees paid on purchases of products such as cloths that are below a

certain limit. For example, Turkey has exempted its international visitors from the duty fees for each cloth

purchased above 500 TL.

 Availability of archaeological, historic &religious sites that would differentiate each county from the other,

e.g. The seven wonders of the worlds. For example, Jordan is well known for Petra, Egypt for the pyramids and

France for Tour Eiffel. This will maximize the travel experience for those who are seeking the joy and the

historic satisfaction visiting such places

 Upgrade of tourist facilities such as hotels, restaurants, museum, and hospitals to attract more tourists

especially those with high purchasing power such as US, European, Japanese tourists. This would also stimulate

internal tourism inside the country.

 Efficient Integration between facilities such as the travel agencies, hotels, business practices operating in the

host country, to maximize the tourist experience and to achieve a better quality in traveling than those offered

by other competing countries, for example, the availability of an efficient network of many different operations,

from airport and transport facilities to restaurants and hotels to food suppliers and adventure sports providers,
will form a diverse supply chain of travel related goods and services that would maximize the whole traveling

experience for Tourists. Countries that compete over quality in the travel industry, such as USA, Canada,

European countries and New Zealand have built a tourism industry that is characterized by its consistency,

safety, reliability, efficiency and value for money when delivering a memorable experience.
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

This chapter provides a general overview of the research processes and methodologies utilized in data

collection and analysis for the research conclusion. The chapter is divided into ten sections: it discusses the

research design, provides a general description of the study area, describes the characteristics of the targeted

population, describes the sampling techniques and procedure, describes the research instruments for the

study, and provides a pilot study for the research instruments, which includes the validity and reliability of the

instruments. The chapter also discusses data gathering strategies, data analysis methodologies, and ethical

considerations, with the final subheading providing the chapter's overall conclusions.

3.2 RESEARCH DESIGN

A cross-sectional exploratory study design with both a quantitative and qualitative approach was

adopted (Creswell, 2009). This design allows for a full explanation and declaration of the

problem's general research strategy and approach (Carroll, 2010). It provides the overarching

operational pattern or framework of the project, stating what information is to be gathered from

which sources and how.

As a result, this approach is appropriate for this study because its primary goal to ascertain The role of tourism

in revenue generation in AMAC, Abuja. In other words, Aluya (2011) recommends employing surveys 'for

cross-sectional, longitudinal, and pooled investigations using questionnaires or structured interviews for data

gathering with the purpose of generalizing from sample population'. The study investigates and explains

current situations by employing a large number of people and questionnaires to properly define the issue

(Carroll, 2010). Yet, the mixed approach structure was deemed appropriate for this investigation. According to

Bryman (2004), merging the qualitative and quantitative approaches is more likely to yield better results in

terms of project scope and quality.

 3.3 STUDY AREA

Abuja is the capital of Nigeria. It is currently the 8th most populous cities in the country. The well planned city

was built in the 1980s. On 12th of December 1991, Abuja replaced Lagos (the most populous city in the

country) as the capital of Nigeria. The geography of Abuja is defined by Aso Rock. Aso Rock is a 1,300-ft

monolith, a remain of water erosion. Buildings like the The Presidential Complex, Supreme Court,

National Assembly, and a large part of the city are on the South of this rock. Abuja also houses Zuma Rock.

This rock is a 2,598-ft monolith. It sits to the northern part of the city, just on the expressway leading to

Kaduna. The population of Abuja city (after the 2006 census) was 776,298 – it is among the top ten cities with

the most population, at number eight. A study conducted by the United Nations (UN) concluded that the city of

Abuja had grown from 2000 to 2019 by about 239.7%. This makes Abuja city the fastest growing city across

the world. Now let’s dive into who runs this city. The city of Abuja is run by the Abuja Municipal Area Council

(AMAC).

Among the key Local Government Area in Abuja is the Abuja Municipal town. As a town within the Federal

Capital Territory of Nigeria are Kuje, Bwari, Kwali, Abaji, and Gwagwalada. Also known as the Abuja

Municipal Area Council, the town is located in the Eastern region of the Federal Capital Territory. The Abuja

Municipal Area Council is also close to the Suleja road along the North. The Municipal Area leads to the Keffi-

Nyanya road, in the East. A travelers could drive through the Gwagwalada-Lokoja road, in the Western region.

Towns in Abuja municipal area council

Also in the Abuja Municipal Area Council are twelve wards. The wards includes

 Wuse, Nyanya,Orozo,Karshi,Kabusa, JiwaKaru, Gwarinpa, Gui, Garki, Gwagwa, City Center

Each if these wards are represented by a Councilor.

It is also important to note that the headquarters of the Abuja Municipal Area Council is located at Garki.
Abuja municipal area council address

The Abuja Municipal Area Council is located at Suite 334, Second Floor Rock of Ages Mall, 247 Mofemi

Crescent, by Obafemi Awolowo Way, Utako, FTC Abuja.

TOURIST SITE WITHIN AMAC

Tourist Sites SID Tourist Sites Distance from Road(m)

1 Wonderland Musuem Park 117.95
2 Art and culture Area 10 77.57
3 Old Parade Ground Area10 24.09
4 Ecumenical Centre 10.45
5 National Mosque 19.09
6 Millenium Park Maitama 90.76
7 Begger Dam 38.44
8 Katempe Hills 382.82
9 Tobix Recreation park Jahi 881.05
10 Water parks Kado 912.71
11 Polo club Maitama 882.63
12 IBB Golf Course 802.69
13 Aso rock 2672.51
14 Secretariate Park Aso,3 Arms zone 15.69
15 Maitama garden park,IBB way 21.41
16 Wuse park,city parlous 89.12
17 Jabi lake 3.85
18 Zoological garden garki,Area 1 42.75
19 Queen's field garden,Garki 17.64
20 D E's garden Garki Area 1 64.22
21 Heritage garden Area 3 33.75
22 National stadium 10.43
23 Wuse Rock Park 58.84
24 Julius Bergger water front park 233.37
25 Gwagwa Forest Reserve 1782.53
26 Children Development Park 4.98
27 J.Useni parks 30.42
28 Maitama Neigborhood park 96.89

3.4TARGET POPULATION

The population of this study was sites of the tourism center. The staffs of these tourism centre within AMAC

and the management of the internally generated revenue department AMAC was the targeted population.

3.5 SAMPLING TECHNIQUES

Exponential non-discriminative snowball sampling method was used to reach the targeted

population. Snowball sampling is especially useful for this study because the study is interested in

knowing the motivating factors in the organization (Brown, 2011). The researcher was able to

approach the management of internally generated revenue AMAC and the workers at the tourism
site to seek their participation.

Therefore, for the purpose of external validity of this study, the study purposively selected a total

of 5 staffs from each tourism site and 10 Staff of AMAC internal revenue generation department.

Babbie, (2014) views that, purposive sampling provides opportunity for more precise

representative of target population, saves time and only suitable respondents are targeted.

3.6 SAMPLE SIZE DETERMINATION

To get a sample size of the population of recent graduates in the study area, the study considers

sample size formula proposed by Fisher, Laing, Stoeckel and Townsend (1998) the formula to

determine sample size for populations less than 10, 000 is:

nf = 1+ n

Where n= Z2pq

Therefore, n = (1.96)2 (0.5) (0.5) = 384

0.052

Thus; the sample size now is calculated in table 3.1 below:

nf = 384

1+ 384 = 266

870

3.7 RESEARCH INSTRUMENTS

Two semi structured questionnaires were used to draw information for the study. A questionnaire

on 20 important factors influence the high level of revenue generation questionnaire was

developed by Kyriacou and Coulthard (2000). Richardson (2009) adapted the questionnaire for use

with tourism and hospitality students and later Brown (2011) used for collecting data from tourism
site staffs and internal revenue generation department. This study also adapt similar questionnaire

with some modifications and additions. The questionnaire is a researcher developed factor

analytically derived questionnaire using five-point Likert scale type. The most common Likert

scale is presented as 1 to 5. Interpreted as 1=strongly disagree, 2=disagree, 3=not sure, 4=agree,

and 5=strongly agree (Richardson, 2009 and Brown, 2011). It consists of three sections A-D.

Section (A) deals with demographic data; section B Tourism site revenue potentials, section C the

significant contribution of tourism to AMAC IGR D On how the IGR has been affected through

tourism.

As the research was intended to explore more issues on the types of benefits which motivate

employees in the hospitality industry and evidences show that there are few studies made on the

subject. The research also had two focus group discussions with the participant. Brown (2011)

conducted focus group discussion with the participant and established their perception on tourism

and revenue generation. Moreover, Focus Group discussion checklist was used to collect

qualitative data from a cross section of the focus group discussion (Brown, 2011).

3.7.1FOCUS GROUP DISCUSSION GUIDES

Data collection through the use of focus group discussions accords the opportunity to be in direct

contact with the respondents in a face to face interaction. A focus group discussion guide was set

of questions that a focus group interviewer asks when discussion with participants (Orodho, 2009).

The researcher introduces the schedules to the participants. The focus group discussions was used

in gathering some information about the participant including the process of revenue generation

and remittance.

3.7.2 VALIDITY

Validity is the appropriateness of the instrument in measuring whatever it is intended to measure.

Therefore, content validity for the instruments of this study were checked to determine the extent

to which the instruments for this study were appropriate to achieve the purpose of this study. This
was done through expert judgment technique and peer critique, where the instruments were given

to experts to judge whether all items in the instruments are really related to and representatives of

the intended objectives. Their opinions and judgments were incorporated before administering the

instruments for data collection process (Babbie, 2014). In addition, the item validity was also

measured using test and retest.

3.7.4 RELIABILITY

The reliability for internal consistency of the instrument was tested using Cronbach Alpha

coefficient. This measure the extent to which the measurement is without bias (error-free) and

offers consistent measurement across time and across the various items in the instrument (Brown,

2011 and Sekaran and Bougie, 2010). The reliability coefficient ranges from 0.6-1.0, the most

acceptable factor is 0.67 and above, the more the coefficient gets to 1.0, the more reliable of the

instrument.

3.8 DATA COLLECTION

The research assistant set up a series of interviews with the managers of the 12 out of the 27 tourist

centre within the AMAC Abuja during which the possible mode of revenue generation was

discussed. The purpose of these interviews was for the researcher’s assistant to learn about the how

revenue was generated and remitted to the Internally Generated Revenue Department. The research

assistant has also asked permission from the Department of Tourism AMAC to distribute the

research surveys.

Having received the cover letter stating the purpose of the study as well as a sample of the research

questionnaire the Director granted the permission to distribute the surveys.

A pretest was conducted and ten surveys were distributed to a random group of workers to determine if the

questions were well correctly translated and are easy to read and understand. The pretest surveys were

completed and analyzed by the researcher, additional changes were made to the questionnaire which was

then distributed among the workers of the workers on Site Abuja.

The questionnaires were written in English and were distributed by the research assistant to the
employees .

The surveys were being distributed in the beginning of a work day, during employee breaks and at

payroll times to be collected a week later. The completed surveys were gathered by the research

assistants and taken for a statistical analysis.

DATA ANALYSIS

The questionnaires were statistically analyzed by the researcher and the research assistant. To analyze the data,

the Statistical Package for Social Sciences (SPSS) was used to calculate frequencies, percentages, mean, and

standard deviation. Also an analysis of variance (ANOVA) was performed to compare demographic data to

those survey questions that pertained to employee motivation.

3.9 LOGISTICAL AND ETHICAL CONSIDERATIONS

The main ethical consideration is the use of human subject. Informed consent for the use of human

subject was obtained from the appropriate authority. In addition, there is the use and manipulation

of secondary data. Where necessary all articles or information used were fully acknowledged in the

way of quotation and references.

Dear Participant

My name is Melody Onynyechi Ukaegbu a post-graduate student of National Institute of Hospitality and
Tourism, department of Hospitality management and Tourism. I am conducting a research study on The
role of tourism in revenue generation in AMAC ABUJA

You are invited to participate in this study voluntarily. You may withdraw at any time. The duration and
time will take up to 45-60mins. At the point of your withdrawer all material and document will be
collected from you at no cost. The result of this study will be communicated to you if you choose to the
study. Your identity will be kept confidential and data will be stored in a safe house

Informed consent participant 25 years of age and above

If you have any question you can reach the researcher at: phone no:08074090954

Thank you for your anticipated cooperation and kind consideration.

Signature of participant……………………………………………………Date…………….

Signature of researcher……………………………………………………. Date……………

Please tick appropriately

1. Gender:

a. male [ ]

b. female [ ]

2. Age [ ]

a. 18 to 24 [ ]

b. 25 to 34 [ ]

c. 35 to 44 [ ]

d. 45 to 54 [ ]

e. 55 and over [ ]

3. What is your educational background?

a. SSCE [ ]

b. B.sc [ ]

c. vocational school [ ]

d. M.sc [ ]

e. other [ ]

4. How long have you worked in this Tourist Center?

a. less than 1 year [ ]

c. 4 to 6 years [ ]

b. I to 3 years [ ]
d. more than 6 years [ ]

5. How long have you worked in this Department?

a. less than 1 year [ ]

b. I to 3 years [ ]

c. 4 to 6 years [ ]

d. more than 6 years [ ]

Do you think that tourist that visit this site are satisfy with the level of infrastructure, and what are they

satisfy about this site? Please rate using the following scale: "SD" being "Strongly Disagree", "D" -

"Disagree", "U" - "Undecided", "A" - "Agree", "SA" - "Strongly Agree"

a. The location SD[ ] D[ ] U[ ] A[ ] SA[ ]

b. The road leading to the location SD[ ] D[ ] U [ ]A[ ] SA[ ]

c. The level of security SD[ ] D[ ] U[ ] A[ ] SA[ ]

d. The amenities at the site SD[ ] D [ ]U [ ]A[ ] SA[ ]

e. The prompt response of the management and staffs SD[ ] D[ ] U [ ]A [ ]SA[ ]

f. The transport system SD [ ]D[ ] U[ ] A[ ] SA[ ]

g. The hospitality of the host community SD[ ] D [ ]U[ ] A[ ] SA[ ]

Overall how do you rate the value that tourist are getting on this site?

a. excellent [ ]

b. b. above average[ ]

c. c. average [ ]

d. below average [ ]

e. extremely poor[ ]
How can the tourism potential be harness for economic growth? Please rate by using the following scale:

"SD" - "Strongly Disagree", "D" - "Disagree", "U" - "Undecided", "A" - "Agree", "SA" - "Strongly

Agree"

a. Government should invest more in tourism SD[ ] D[ ] U[ ] A [ ]SA[ ]

b. Public-private partnership should be encouraged SD[ ] D [ ]U [ ]A [ ]SA[ ]

c. Qualified and capable hands should be allow to manage tourism site SD[ ] D[ ] U[ ] A[ ] SA[ ]

d. bonuses paid in shares SD[ ] D[ ] U[ ] A[ ] SA[ ]

Did you think the following factors are working against public-private partnership Please rate these

factors using the following scale: "SD" - "Strongly Disagree", "D" - "Disagree", "U' - "Undecided", "A" -

"Agree", "SA" - "Strongly Agree"

a. undue political influence SD[ ] D [ ]U[ ] A[ ] SA[ ]

b. Corruption in government SD[ ] D[ ] U[ ] A[ ] SA[ ]

c. lack of interest on the part of the private investors SD[ ] D[ ] U [ ]A [ ]SA [ ]

d. huge capital involved SD[ ] D[ ] U[ ] A[ ] SA[ ]

e. low return on investment SD[ ] D[ ] U[ ] A[ ] SA[ ]

Does tourism has any significant contribution to AMAC IGR? Please rate these factors using the

following scale: "SD"- "Strongly Disagree", "D"- "Disagree", "U"- "Undecided", "A"- "Agree", "SA"-

"Strongly Agree"

a. Attracts foreign direct investment SD[ ] D[ ] U[ ] A [ ]SA[ ]

b. Attracts private investment SD[ ] D[ ] U[ ] A[ ] SA[ ]

c. Increases the patronage of craft and arts of the locals SD[ ] D[ ] U[ ] A[ ] SA [ ]

d. Increases the production of local food SD[ ] D[ ] U[ ] A [ ]SA[ ]

How suitable do you find this tourism site for foreigners and the locals? Please rate these factors using

the following scale: "SD" - "Strongly Disagree", "D" - "Disagree", "U" - "Undecided", "A" - "Agree",

"SA" - "Strongly Agree".

a. the infrastructure are up to date SD[ ] D[ ] U[ ] A [ ]SA[ ]

b. There is an adequate security SD[ ] U[ ] A[ ] SA[ ]

c Accommodation are within reach and in a secured environ SD[ ] U[ ] A[ ] SA[ ]

d. The internet service are functional SD[ ] U[ ] A[ ] SA[ ]

e. The staffs are well trained and responsive SD[ ] D[ ] U[ ] A [ ]SA [ ]