Contemporary Tourism

The Tourism Industry:Contemporary Issues

Lecture Objectives

• 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:• Profit• Sales• Prestige• Output• Satisficing• A quiet life

Key Issues

• 1. Globalisation;• 2. The knowledge economy;• 3. Networks;• 4. Small businesses; and • 5. 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• 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

• 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:

• ｷｷ Scale and scope economies (such as alliances);• ｷｷ Coordination of complementary assets (such as

marketing synergies); and • ｷｷ Higher strategic benefits where the members of the

network share a common vision (such as destination branding).

Networks in the Future

• 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• ｷ ｷ They rapidly diffuse income into the economy through

strong backward linkages into the economy of a destination;• ｷｷ Similarly, they contribute to employment;• ｷｷ They provide a localised welcome and character by acting

as a point of direct contact between the host community and the visitor; and

• ｷｷ 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

• 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