Small Business Development in the Tourism Industry - Literature review Example

Small Business Development in the Tourism Industry Entrepreneurship is both a practical and educational discipline that has been present for a long period of time. Past societies such as the Mayans, Greeks and Romans were well versed with the practice (ATELJEVIC, J AND PAGE, S.J., 2009, 325). Entrepreneurship has since grown to become a global activity where people across the planet identify market gaps to consequently engage in trade. Over the last few decades, aspects such as liberalization of markets, establishment of entrepreneurial friendly policies and globalization have significantly increased the entrepreneurial practice. In addition, presently, it is easier to commence and run a business entity as entrepreneurship education and resources are freely and widely available. Contrary, in the past, numerous barriers to starting businesses existed. For instance, trade restrictions and presence of obstacles to a free and competitive market just to mention but a few factors, made enterprising a difficult and overwhelming process. In essence, entrepreneurship entails the action of bringing varying factors of production together particularly where a market gap exists so as to start a business venture that will ultimately bridge the identified market gaps as well as fetch profits. The 20th and 21st centuries have presented an exceedingly thriving market for small and medium-sized businesses in emerging as well as developed economies (MOSCARDO, G., 2008, 121). These markets are in particular widespread in tourism and hospitality sectors. These two sectors have and continue to attract entrepreneurs due to their lucrative nature. Tourism and hospitality industries’ expansion have availed a means of boosting entrepreneurial activities. The growth witnessed in the tourism and hospitality sectors is a major part of policy support in various countries. For example, these two sectors remain key players for donor-assisted financial support and backing in many countries. Although, relatively noteworthy exceptions of links between tourism, hospitality and entrepreneurship are yet to be adequately addressed, most of these links have already been served to subsequently provide evident synergies between the three subjects. Many countries have implemented policies that have helped advance the level of innovation and creativity among their populace. Such policies increase the potential of countries to boost their economic development through tourism entrepreneurship. In detail, small micro-business ventures in the tourism and hospitality sectors are evident in many of these countries. Arguably, the two sectors function as important avenues that provide unmatched economies of scale due to their requisites for identification of market gaps and turning these gaps into profitable and consumable end products (CHAFFEY, D., 2012, 147). However, a number of complexities underline the two sectors’ relationship with the entrepreneurship discipline and this has resulted to minimal information being available to business enthusiasts seeking to venture into the two lucrative industries. Despite limited educational resources being availed to prospective entrepreneurs, the tourism and hospitality industries have continuously featured vast entrepreneurial skills. Most significant milestones achieved in the tourism sector for example include strong presence of travel and tour enterprises as well as theme parks just to mention a few. On the other hand, luxury and the increasing numbers of for-profit hotels spread across the globe are a solid indication of major entrepreneurial skills. Businessmen and investors who have succeeded in establishing entities in the two sectors are those who were driven by a need to achieve and excel. In this regard, one can characteristically summarize entrepreneurs as individuals who remain ardent and devoted to their brands and passion therefore managing to traverse the major setbacks associated with the sectors. One common issue that surrounds the two sectors is that the tourism product is more than often intangible, immeasurable and invisible per se. Consequent to this fact; any tourism product becomes inferior to the varied money-making activities prevalent in the sector making it almost unfeasible to make sense of the industry’s products market value. Additionally, both sectors are accustomed to an ever-increasing degree of tourism. In essence, both industries are among the fastest growing globally (WILLIAMS, S., 2011, 39). As a result, they both are driven by a need to fulfill the diverse and complex market demands. Examples of market demands in both the industries include growing consumers’ desire to travel and explore new places as well as their extensive curiosities that have to always be satisfied. Contrary to other industries’ needs and market opportunities that are always subject to constancy thus can be easily met, demands of the tourism and hospitality industries can only be realized through commercialization of foods, nature, traditions, history among other key elements that surround humans (GETZ, D., CARLSEN, J., & MORRISON, A., 2004, 382). Human-based tourism activities have therefore caused the emergence of various segments of tourism such as nature-based tourism, mountain tourism, religious tourism and maritime tourism among others. The past 5 decades have witnessed growth of tourism as a industry. The growth which is attributable to related factors such as technological advancement, trade liberalization and globalization as mentioned before, have led to the industry literally growing to accommodate international trends. There is increased mobility of factors of production internationally which has in turn led to the growth of tour and travel resulting to growth and development of not just tourism but also other industries such as banking and information and communication (TASSIOPOULOS, D. 2008,72). Each of these industries supplements one another in the sense that one shapes the economic realities of the other. This interrelation of industries has enabled participants in the tourism industry come close to achieving their objective of meeting market demands. Essentially, the tourism industry avails a product commonly referred to as an experience which mainly entails customers’ general needs such as transportation, meals and accommodation brought to the market as a package. The experience given to the tourist is evaluated in terms of overall price, destination’s attractions and facilities, accessibility and image. This wholesome package also goes a long way to separates the industry from others. Also, consumer products in the tourism industry do not have a precise utility (DEAKINS, D & FREEL, M., 2009, 283). For instance, the experience a tourist derives by visiting a tourist destination depends on his/her own perception. Therefore, for an entrepreneur to maximize in the sector, he/she needs to understand the dynamics of the industry so as to know what tourists will spend more on. Ideally, for maximum profitability, tourism entrepreneurship requires the entrepreneur to identify what exactly makes the market to tick as this will allow one to manipulate the market needs. In the tourism industry, market needs implies tourists’ expectations. Therefore, by concisely understanding tourists’ expectations, entrepreneurs are capable of manipulating them for maximum profitability and eventual prosperity. Literature concerning entrepreneurship documents that entrepreneurs possess distinct attributes that enable them to become successful. Most of them are regarded as risk takers and display significant desire to achieve. These two attributes are outlined as the most important in matters concerning entrepreneurship. In addition to the two key traits, entrepreneurs are also regarded as highly confident, learned individuals more likely to live in middle income nations or survive in high income ones. They are more likely to be opportunity driven as opposed to necessity-oriented and most are between the ages of 25 and early 30s. Going by this theory, one can argue that entrepreneurship is founded on specific individuals actively engaged in creation of businesses. Darren Lee-Ross and Lashely C. (2008, 4) are of different opinion as they reveal that attributes alone do not contribute to success in entrepreneurship. In the book, the authors altercate that other elements such as one’s aspirations, experience, cultural background as well as political, technological, economic and social factors that are prevailing among other aspects are all necessities towards rewarding entrepreneurship. As a matter of fact, many businesses have failed yet the people behind their inception were devoted entrepreneurs with the above-outlined characteristics. In particular, the tourism and hospitality industry demands all the factors necessary for successful growth of a business entity to complement each other so that the desired results and objectives can be achieved. As a sector that contributes immensely towards economic and political, tourism began gaining international acknowledgment in the 1960s. (DRUCKER, P.F., 2006, 417). The industry has grown drastically that presently, its outlay encompasses various other minor industries. Consequently, the importance of tourism entrepreneurship is becoming more and more apparent due to its influence in encouraging and boosting development in this vital industry. Factually, thanks to the practice, poverty has been considerably reduced through creation of more employment opportunities. Employment opportunities, increased competition among other implications of entrepreneurship are among the notable benefits all of which have helped advance economic prosperity of nations/regions across the world. The economic potential and benefit of this industry of essence is simply inconceivable. Many countries rely on tourism as it forms the backbone of their economies. However, its economic benefits are difficult to measure due to its complex nature. Moreover, tourism entrepreneurship entails a diverse set of multipliers with a potential to affect spending in country by both the government and its populace. In addition to affecting government and citizenry expenditure, the sector possess a huge production structure where income can be generated in unlimited number of ways. Tourism industry also deals with an immeasurable product (RIMMINGTON M., WILLIAMS, C. & MORRISON A., 2009, 382). The tourists experience is what qualifies as the product in this industry. Unlike in other industries which are classified according to goods and services produced, the tourism industry is defined by the nature of the tourist who demands the product (HALLAK, R., 2011, 481). These among other factors make it a daunting task to calculate the true implications of tourism entrepreneurship. In order to fully serve the tourism market, potential tourism destinations must be fully exploited so as to achieve maximum productivity. Additionally, entrepreneurial education needs to be availed to destinations with relatively limited expertise in the industry as this will enable these regions to avail a suitable product fit for the international market. Bibliography ATELJEVIC, J AND PAGE, S.J. (2009). Tourism and Entrepreneurship: International Perspective. London. Butterworth-Heinemann CHAFFEY, D. (2012). E-Business and E-Commerce Management Strategy, Implementation and Practice. New York. Pearson publishers. DEAKINS, D AND FREEL, M. (2009). Entrepreneurship and Small Firms. Berkshire, McGraw Hill DRUCKER, P.F. (2006). Innovation and Entrepreneurship. New York. Harper Collins publishers. GETZ, D., CARLSEN, J., & MORRISON, A. (2004). The Family Business in Tourism and Hospitality London, CABI Publishing. HALLAK, R. (2011) Tourism And Hospitality Entrepreneurship: Examining the Factors That Influence the Performance of Small and Medium Enterprises. Texas. LAP LAMBERT Academic Publishing. LEE-ROSS, D. AND LASHLEY, C. (2008). Entrepreneurship and Small Business Management in the Hospitality Industry. London. Butterworth-Heinemann. MOSCARDO, G. (2008). Building community capacity for tourism development. Wallingford, CABI. RIMMINGTON M., WILLIAMS, C. &  MORRISON A. (2009). Entrepreneurship in the Hospitality, Tourism and Leisure Industries. New York. Routledge Publishers. TASSIOPOULOS, D. (2008). New tourism ventures: an entrepreneurial and managerial approach. Cape Town, South Africa, Juta. WILLIAMS, S. (2011). The Financial Times Guide to Business Start Up 2012 Financial Times. Prentice Hall Read More