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Economic Impact and Institutional Dynamics of Small Hotels in Tanzania

Iowa State University, amsharma{at}iastate.edu

The purpose of this article is to investigate the impact small hotels have toward economic development in Tanzania and to assess how institutional and policy dynamics can influence this impact. This article presents an alternative framework for developing baseline economic impact studies using reliable firm-level statistics and suggests ways to use these estimates to analyze policy and institutional support for small hotels. Results of this baseline study contribute toward the small-business literature in hospitality and tourism and economic impact assessment of individual tourism industries using primary firm-level data sets of selected but representative samples. Economic impact analysis for small businesses is sparse. Unless the economic importance of small hotels and the impact of policy and institutional factors are not presented clearly, small hospitality businesses will continue to remain outside of mainstream development planning.

Key Words: economic impact • small business • hotels • value added

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