The Emerald Handbook of Entrepreneurship in Tourism, Travel and Hospitality

Skills for Successful Ventures

Marios Sotiriadis

• Publisher: Emerald Publishing Limited
• Year: 2018
• Print ISBN: 9781787544840, 9781787435308
• eBook ISBN: 9781787439573
• Topic: Business
• Subtopic: Sviluppo di business
• Index: Business

This book is a practical handbook for entrepreneurship in tourism related industries. The book will provide students and prospective entrepreneurs with the knowledge, know-how and best practices in order to assist them in planning, implementing and managing business ventures in the field of tourism.

It constitutes a valuable contribution to developing the necessary knowledge, competencies and skills of entrepreneurial decision-making and ventures. It would serve as a guide for those studying entrepreneurship and preparing for entrepreneurial careers as well as a reference for the practical use of entrepreneurs at the planning, implementation, operation and evaluation stages of building a tourism business.

  

Examples from the industry/business world are provided to illustrate real-life practice and give readers a better understanding of entrepreneurship in tourism.

PART I
TOURISM: A CONSUMER-DRIVEN
BUSINESS FIELD

CHAPTER 1

ENTREPRENEURSHIP AND ENTREPRENEURS IN TOURISM

Marios Sotiriadis

ABSTRACT

Purpose - The aim of this chapter is to discuss and highlight the importance of entrepreneurship and entrepreneurs in tourism in order to engage the reader in the central topic of the handbook.

Methodology/approach - A literature review was conducted on conceptual issues and practical aspects of entrepreneurs and entrepreneurship. Case studies are included to illustrate the role and contribution of entrepreneurs in the tourism field.

Findings - This chapter highlights (1) practical definitions of the terms entrepreneurs and entrepreneurship; (2) main features of tourism entrepreneurs; and (3) the role of entrepreneurs in tourism activities and their contribution to the development of a tourism destination.

Research limitations/implications - This chapter is explorative in nature, because the discussion is mostly based on a literature review. Thus, more research-based knowledge and more empirical studies are needed in this field.

Practical implications - The chapter presents the main features and characteristics of individuals involved in entrepreneurship, as well as the need for developing the appropriate skills for successful business ventures.

Originality/value - This chapter deals with the question of why tourism entrepreneurship is so important in the contemporary context and in the business environment of tourism. The practical and entrepreneurial approach of the book is also discussed.

Keywords Entrepreneurs; entrepreneurship; tourism-related industries; features; contribution; skills

Learning Objectives

After studying this chapter, you should be able to:

• present the importance of tourism in the global economy/at the global level;
• provide a definition of entrepreneurship;
• discuss the role of entrepreneurs;
• describe the main features of entrepreneurs;
• briefly present the role and contribution of entrepreneurs in tourism activities and their contribution for the development of a tourism destination.

1.1. INTRODUCTION

The main idea of this volume is to highlight that ‘tourism entrepreneurship’ is the backbone of tourism-related industries. Therefore, this topic deserves the current and cutting-edge volume that is relevant to practitioners and academics alike. The tourism industry and related businesses are unique in the sense that, from a service perspective, the product is the experience that is co-created by the tourists. Thus, entrepreneurs entering the tourism arena are in need of a dedicated handbook on tourism entrepreneurship that goes beyond the more generic business entrepreneurship literature.

This chapter deals with the question of why tourism entrepreneurship is so important in the contemporary context and in the business environment of tourism. The chapter then discusses the framework of tourism and the business and market environments in which entrepreneurial ventures are designed, managed and developed.

The main aim of this chapter is, therefore, to discuss and highlight the importance of entrepreneurship and entrepreneurs in tourism in order to engage the reader in the central topic of the handbook. First, the importance of tourism-related industries is highlighted. Second, the concepts of entrepreneurship (the business activities) and entrepreneurs (the individuals involved) are discussed and clearly defined. Then, the contribution of entrepreneurship in tourism is outlined.

1.2. THE IMPORTANCE OF TOURISM AND ITS RELATED INDUSTRIES

Tourism and travel are important economic activities in most countries around the world. In 2015, international tourism marked an impressive above-average growth for six consecutive years in terms of international tourist arrivals, with a record total of 1.2 billion tourists travelling the world. Some 50 million more tourists (overnight visitors) travelled to international destinations around the world in 2015 than in 2014 (World Tourist Organization (WTO), 2016). This reflects a 4 per cent growth, or an increase of 50 million tourists who travelled to any international destination during the year.

The latest report by World Travel & Tourism Council (WTTC, 2016) indicated that, for the fifth successive year, the growth of tourism-related industries in 2015 (2.8 per cent) outpaced that of the global economy (2.3 per cent). In total, tourism generated US$7.2 trillion (9.8 per cent of global gross domestic product (GDP)) and supported 284 million jobs, equivalent to one in 11 jobs in the global economy. Tourism-related industries are a key force for good, and it has proven, in the past, that they are strong and adaptable enough to face any challenges. Prospects 2017 remain positive, with international tourist arrivals expected to grow by 4 per cent worldwide (WTO, 2016). Tourism will continue to grow, creating more jobs and bringing in more economic and social benefits.

Further, World Tourism Day 2015 was celebrated around the theme ‘One billion tourists, one billion opportunities’, which highlighted the transformative potential of one billion tourists. With more than one billion tourists travelling to any international destination every year, tourism has become a leading economic activity (WTO, 2016). Representing more than just economic strength, these achievements reflect tourism’s vast potential and increasing capacity to address some of the world’s most pressing challenges, including socio-economic growth, jobs creation, inclusive development and environmental preservation. As an economic activity that contributes to as many as one in 11 jobs worldwide, tourism is a valuable source of livelihood for millions of people. Built around the millions of cross-cultural encounters happening every day in different corners of the world, tourism is also a gateway to greater understanding of the world beyond our borders.

Nevertheless, a scanning of the WTO’s latest report revealed that the terms ‘job creation’, ‘talent development’, ‘employment’ and ‘revenues’ appear to be used frequently in tourism, which is not surprising at all. On the contrary, what is surprising is that the concepts ‘entrepreneurship’ and ‘entrepreneurial activity’ do not appear a single time and are, in fact, totally absent! There is no doubt that the outcomes and achievements of tourism, at global level, are attributable to micro-, small- and medium-sized enterprises as well as big companies. Further, it is estimated that the above-mentioned aims, set by the WTO, will not be addressed properly without enhancing and promoting entrepreneurship in tourism.

The creation of tourism enterprises – for that provide products and services in facilitation, transportation, attractions, accommodation, catering and travel-related retail businesses – is behind the such impressive achievements and performance. The creation and operation of tourism enterprises offer new employment opportunities, earning of real income, generation of tax revenues and stimulation of other industries and productive activities in the local/regional economic system. However, this business activity ‘is not an act of nature, but an act of the tourism entrepreneur’ (Koh & Hatten, 2002, p. 22).

The theme of this handbook is not to analyse the economic, social or other contribution of tourism to a region’s or country’s economic and social developments and well-being; instead, the theme is to provide practical guidance and assistance for the creation and operation of new ventures in tourism.

In this regard, it would be very useful to clarify the concepts of entrepreneurship and entrepreneurs, as there are a multitude of definitions of entrepreneurship and entrepreneur. Let us start by considering the business activity and then the individual.

1.3. ENTREPRENEURSHIP

Many definitions of entrepreneurship are offered by scholars. Some of these are cited below in chronological order. Entrepreneurship is:

• ‘the creation of an innovative economic organisation (or network of organisations) for the purpose of gain under conditions of risk and uncertainty’ (Dollinger, 1995, p. 7);
• ‘the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence’ (Hisrich & Peters, 1998, p. 9);
• ‘an activity that involves the discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of organising, markets, processes and raw materials through organising efforts that previously had not existed’ (Shane, 2003, p. 4; Shane & Venkataraman, 2000, p. 218);
• ‘a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced’ (Timmons & Spinelli, 2007, p. 79);
• ‘the result of a systematic and disciplined process of applying innovation and creativity to opportunities and needs in the market’ (Zimmerer & Scarborough with Wilson, 2008, p. 5).

It is evident that two ideas/principles are central to the entrepreneurship concept: (1) the creation and recognition of opportunities, inclusive of the will and initiative to seize those opportunities and (2) the creation of new businesses in conditions of risk and uncertainty in order to make a profit (Timmons & Spinelli, 2007; Zimmerer & Scarborough with Wilson, 2008). According to the latter authors, entrepreneurship involves the application of focused strategies to explore new ideas and new insights to create a product or a service that can either satisfy individuals’ needs or solve their problems. Some of these similarities in the definitions include the following terms, used to describe entrepreneurship, and constitute the key features of entrepreneurship: business opportunity recognition, innovation, risk-taking, idea creation, creativity, achievement orientation and resourcefulness.

Shane (2003) suggests that the notion of innovation constitutes a key attribute of entrepreneurship. Zimmerer and Scarborough with Wilson (2008, p. 43) define innovation as ‘the ability to apply creative solutions to problems and opportunities to enhance the lives of people’. In this case, creativity is described as the ability to develop new ideas and to discover new ways of looking at opportunities and problems. According to Drucker (1985), innovation is the tool used by entrepreneurs to exploit change as an opportunity. Entrepreneurial ventures thrive on innovation. There are three main types of innovation: process, organisational and marketing (Oberg, 2010). Innovation outputs can be either new ways of doing things, or the development of new products, services or techniques (Porter, 1990). These two concepts and their implications, in terms of tourism entrepreneurship, are discussed in Chapter 5.

It is worth pointing out that (1) successful entrepreneurship is a constant process that relies on creativity, innovation and application in the marketplace and (2) the individual is the main force behind, and at the beginning of, this entrepreneurship process (Zimmerer & Scarborough with Wilson, 2008).

1.4. ENTREPRENEURS

An entrepreneur can be defined as a person who sees an opportunity in the marketplace and establishes a business with the aim of meeting the market’s needs. There is a plethora of definitions of the term ‘entrepreneur’; some of these are cited below in chronological order. An entrepreneur is:

• ‘a person who carries out commercial innovation: modification of existing knowledge and/or practices. If innovation is successful, it leads to a state of creative destruction. Innovation could occur in five forms: offering of new goods/services; new production methods, new sources of supplies; new markets/distribution systems; and/or new management techniques’ (Schumpeter (1949), cited in Koh and Hatten (2002, p. 27));
• ‘a person who sees an opportunity and assumes the risk (financial, material, and psychological) of starting a business to take advantage of ...

Table of contents

• Cover
• Title Page
• Part I Tourism: A Consumer-Driven Business Field
• Part II Tourism Business Environment
• Part III Planning The Tourism Business Venture
• Part IV Managing The Tourism Business
• Part V Marketing The Tourism Business Offering
• Part VI Specific Topics of Entrepreneurship in Tourism
• About the Authors
• Index