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 Scale and scope economies (such as alliances);  ｷ Coordination of complementary assets (such as marketing synergies); and  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 They rapidly diffuse income into the economy through strong backward linkages into the economy of a destination;  ｷ Similarly, they contribute to employment;  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 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