Tourist destinations include Ethiopia's collection of national parks (including Semien Mountains National Park), and historic sites, such as the cities of Axum, Negash Mosque, Sof `Umer Washa, Harar Jugol and Lalibela. Developed in the 1960s, tourism declined greatly during the later 1970s and the 1980s under the Derg. Recovery began in the 1990s, but growth has been constrained by the lack of suitable hotels and other infrastructure, despite a boom in construction of small and medium-sized hotels and restaurants, and by the effects of drought and political instability. One encouraging aspect is the growing popularity of ecotourism, with significant potential for growth in Ethiopia. Travel retail sales are expected to continue to grow, posting an increase of 7% in 2006 and with a forecast 5% increase in 2007. This study is conducted to assess the perception of tourism industry among the residents of Hawassa City, Ethiopia. This study is important to increase the performance of the county’s income from tourism.