The hotel and restaurant sector in Pakistan has emerged as a pillar of employment and economic activity, engaging nearly 1 million workers across 256,926 establishments, according to the Pakistan Bureau of Statistics (PBS). This makes the industry a larger employer than even government offices or hospitals, reflecting its vital role in job creation and livelihood support.
Beyond employment, the hospitality sector plays a crucial role in promoting tourism, supporting local agriculture, and maintaining supply chains that span from food producers to transportation services. Restaurants and hotels not only serve as hubs for social and cultural interaction but also act as gateways for international visitors, shaping Pakistan’s global image.
Institutions like the College of Tourism & Hotel Management (COTHM) are at the forefront of promoting the growth of Pakistan’s hospitality sector. Working in collaboration with more than 20 leading international hospitality institutes, COTHM provides globally recognized education and training, equipping professionals with the skills required to meet international service standards. By building industry-ready human capital, COTHM plays a pivotal role in strengthening Pakistan’s tourism and hospitality infrastructure, while also enhancing its competitiveness on the global stage.
However, despite its significance, the sector has remained largely informal, unregulated, and untaxed, resulting in lost revenue opportunities and weak oversight. Recognizing this gap, provincial tax authorities are now introducing new sales tax rates and encouraging digital payment systems to ensure compliance and transparency. These measures aim to bring the sector into the formal economy, broaden the tax base, and support sustainable growth.
Industry experts note that effective regulation and taxation will help professionalize hospitality services, improve customer trust, and attract more domestic and international investment. With Pakistan’s growing youth population and rising tourism potential, the sector is expected to remain a major engine of employment and economic resilience.
