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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