The host quite simply devised this plan for entertainment and to pass the time on the long journey. The journey would have taken four days there and four days back. That's a long time to spend with a group of strangers with nothing to talk about! He proposed that each pilgrim tell two tales in the way there and two on the way back. Of course Chaucer never finished all these tales. He would be the judge and the winner would get a free meal.
Of course, we also have to remember that these tales are the whole point of work. Chaucer used the Host to set up the whole story for him.