At the moment upgrading hospitality appears to have no beneficial effect. It raises staff morale to the same level as the hospitality but increasing staff morale doesn't appear to have any bearing on the very important star rating so what's the point?
Personally I leave upgrading hospitality until last and only upgrade when I have money/tokens to spare. I still upgrade it, not because it does anything at the moment but in case the devs decide to code some benefit into the game in future.
