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.
1.1. INTRODUCTION
The main idea of this volume is to highlight that âtourism entrepreneurshipâ 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 âOne billion tourists, one billion opportunitiesâ, 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 tourismâs vast potential and increasing capacity to address some of the worldâs 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 WTOâs latest report revealed that the terms âjob creationâ, âtalent developmentâ, âemploymentâ and ârevenuesâ appear to be used frequently in tourism, which is not surprising at all. On the contrary, what is surprising is that the concepts âentrepreneurshipâ and âentrepreneurial activityâ 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 â for that provide products and services in facilitation, transportation, attractions, accommodation, catering and travel-related retail businesses â 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 âis not an act of nature, but an act of the tourism entrepreneurâ (Koh & Hatten, 2002, p. 22).
The theme of this handbook is not to analyse the economic, social or other contribution of tourism to a regionâs or countryâs 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:
- âthe creation of an innovative economic organisation (or network of organisations) for the purpose of gain under conditions of risk and uncertaintyâ (Dollinger, 1995, p. 7);
- âthe 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 independenceâ (Hisrich & Peters, 1998, p. 9);
- âan 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 existedâ (Shane, 2003, p. 4; Shane & Venkataraman, 2000, p. 218);
- âa way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balancedâ (Timmons & Spinelli, 2007, p. 79);
- âthe result of a systematic and disciplined process of applying innovation and creativity to opportunities and needs in the marketâ (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 individualsâ 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 âthe ability to apply creative solutions to problems and opportunities to enhance the lives of peopleâ. 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).
