Investment Decision-Making and Foreign Direct Investment in Tourism and Hospitality: Concepts Exposition and Implications for Bangladesh

In many countries across the world, tourism is considered as the medium to promote business enterprises. Investment in the tourism and hospitality industry pertains to purchasing existing, opening, or relocating enterprises or investing in constructions or redevelopment projects. Positive decision-making for foreign public and private sector investments is important for both general economic growth and sectoral growth, for instance, the tourism and hospitality industry. Still, the knowledge in these areas is very limited in a developing country’ context, such as Bangladesh. This chapter explains the theoretical aspects of investment decision-making and Foreign Direct Investment (FDI) and relates to the particular context of Bangladesh. This chapter discusses the theoretical perspective of FDI and tourism development and their link-up. It also discourses different approaches and theories regarding investment decision making and the host country’s policy with empirical examples from the literature. The chapter explores both the general and the tourism and hospitality industry perspectives of investment decision-making followed by FDI and its role in the growth of the tourism and hospitality industry. The chapter then highlights the tourism and hospitality industry in Bangladesh, which reveal eventually that the country has been offering FDI benefits in this industry. Nevertheless, there are challenges, and this study puts forward some suggestions.