Contemporary Tourism
The Tourism Industry:
Contemporary Issues
Lecture Objectives
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Understand that tourism businesses have a range of objectives
Be familiar with the causes of globalisation
Recognise the responses of tourism businesses to globalisation
Appreciate the benefits of knowledge management for tourism businesses
Realise the explanatory power of network analysis for understanding the
tourism industry
Be aware of the importance of embedding within networks for tourism
businesses
Recognise the distinction between small businesses and entrepreneurs
Understand the characteristics of tourism small businesses
Appreciate the critical importance of human resources to tourism businesses
Be aware of the challenges facing tourism human resources
The Industry
• Tourism businesses allow the tourism
experience to happen
• Business Objectives:
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Profit
Sales
Prestige
Output
Satisficing
A quiet life
Key Issues
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Globalisation;
The knowledge economy;
Networks;
Small businesses; and
Human resources
Globalization
• Boundarylessness
• Drivers
– Technology
– Economy
– Politics
– Culture
– Environment
– Business
Service Sector Strategies
• Strategic capability to develop national
responsiveness
• Administrative structure to allow
networking flexibility
• Alliances and partnerships
• Internationalization
Managing Knowledge in the
Sector
• Generation and transfer of knowledge to the
tourism sector
• Knowledge-based economy based on the
production, distribution and use of knowledge
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Technology facilitates
Depends on people
Abundance of knowledge
K-commerce
Types of Knowledge
• Tacit knowledge
• Explicit knowledge
• Transfer the key for tourism
The Issue of Scale
• Knowledge management traditionally for
individual organizations
• Destinations are networks of many
organizations
• Articulation of knowledge from individual
organizations through networks is the
key
Benefits of KM
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Cuts learning time
Encourages smart solutions
Enhances responsiveness
Effective
Enhances staff performance
Uses intellectual assets
Leverages partners
Networks
• Organizations changing
– Flatter structures
– Instant communication
– Flexible specialization
– Alliances
• Loosely articulated networks as
destinations or value chains
• Businesses can ‘embed’
Approach Useful for Tourism
• Tourism needs collaboration to deliver
product
• Acts as a flexible diagnostic tool
• Give insights into business behaviour
• Shows how destination networks can be
optimized
Tourism Networks
• Networks
– Actors
– Relationships
– Resources
• Types
– Innovative
– Networks of
businesses
– Networks of
destination
organizations
Benefits
• For tourism businesses membership of a network
delivers a range of benefits including:
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Scale and scope economies (such as alliances);
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Coordination of complementary assets (such as
marketing synergies); and
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Higher strategic benefits where the members of the
network share a common vision (such as destination branding).
Networks in the Future
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Internal
Vertical
Inter-market
Opportunity
Small Businesses
• Tourism dominated by SMEs and
entrepreneurs
• No agreed definition of small
businesses
• SMEs protected by policy
• SMEs seen as force for good
• BUT - undermanaged?
SMEs and the Destination
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They rapidly diffuse income into the economy through
strong backward linkages into the economy of a destination;
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Similarly, they contribute to employment;
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They provide a localised welcome and character by
acting as a point of direct contact between the host community
and the visitor; and
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In a market that increasingly demands tailored
experiences, SMEs play an important role in responding to
tourists’ demand and so facilitating ‘flexible specialisation’
(Ateljeic and Doorne, 2001).
Entrepreneurs
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Who are they?
Are all SMEs run by entrepreneurs?
They play a key role in tourism development
Three features
– Expertise
– Motivation
– Source of capital
• No blueprint for success
Tourism Human Resources
• Tourism is labour intensive
• Opportunities for women, the young and the
less advantaged
• Essential for tourism product delivery
• Not taken seriously
• Issues
– Demographics
– Jobs and working conditions
– Management