Abstract
In theory, 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? The
contributions of the hospitality industry (represented by Hotels and Restaurants) to the Nigerian economy
(represented by the Gross Domestic Products – GDP) and the GDP itself from 1980 – 2006 (27 years) were
analyzed, using simple regression analysis. Lag variables were introduced in order to safe guard against
autocorrelation while white noise heteroscedasticity tests were performed in order to make the conclusions
more reliable. It was found that a positive correlation exists between the hospitality industry and the GDP and
that the industry depends almost entirely on the economy, thereby confirming a priori expectation. What this
means in effect is that for the hospitality industry to continue to be relevant, government must at all times
ensure a stable but steadily rising economy.
