Assessing the Influence of Foreign Direct Investment in the Development of Hospitality Industry in Kinigi Sector, Musanze District, Rwanda
DOI:
https://doi.org/10.53819/81018102t5407Abstract
This study investigated the influence of Foreign Direct Investment (FDI) on the development of the hospitality industry in Kinigi Sector, Musanze District, Rwanda, an area often overlooked by studies that predominantly focus on urban centers. The research addressed this gap by examining how capital inflows and infrastructure development, technology and knowledge transfer, and employment opportunities generated by FDI contribute to hospitality sector growth in a rural tourism hub. Anchored in investment and development theories, the study employed a descriptive correlational design with a mixed-methods approach. The target population comprised 555 hospitality stakeholders, from which a sample of 180 respondents was selected using stratified sampling techniques. Primary data were collected through structured questionnaires and interviews, while secondary data were obtained through documentary review. Reliability and validity were ensured using Cronbach’s alpha, expert review, and a pilot study. Data analysis involved descriptive statistics and inferential techniques, including Pearson correlation and multiple linear regression. The study achieved a high response rate of 96.7%, enhancing the credibility of the findings. Results revealed that FDI significantly influences hospitality development in Kinigi. Capital inflows and infrastructure development improved hotel facilities, road networks, utilities, and communication systems, with mean scores ranging from 3.91 to 4.13 and a strong positive correlation with hospitality growth (r = 0.731, p < 0.01). Technology and knowledge transfer enhanced operational efficiency, service quality, and staff competencies, reflected by mean scores of 3.93–4.11 and a strong positive relationship (r = 0.764, p < 0.01). Employment opportunities created through permanent and seasonal jobs, improved working conditions, and skills development also positively affected the sector, with mean scores of 3.95–4.10 and a correlation coefficient of r = 0.721 (p < 0.01). Overall, the findings confirm that FDI plays a critical role in driving rural hospitality development through infrastructure improvement, technology adoption, and employment creation, generating both sectoral growth and community socio-economic benefits. The study recommends prioritizing infrastructure investment, technology integration, skills development, and supportive policies to maximize FDI benefits. Future research should explore long-term impacts, environmental sustainability, financial outcomes, and cross-regional comparisons.
Keywords: Foreign Direct Investment, Development, Hospitality Industry, Kinigi Sector, Rwanda.
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