I was curious if entrepreneurship is vital for tourism, so I researched the topic and thought of writing an article about it. Tourism is one of the industries from which a country and its individuals can profit a lot in seasons.
Why Is Entrepreneurship Important For Tourism Industry? Entrepreneurs create innovative businesses in the tourism niche, which ultimately creates jobs. Therefore, the country’s unemployment rate goes down, and the country’s GDP starts to increase. Government, in turn, begin to spend more on the tourism industry to attract even more tourists to the country. It is benefiting both the business owners and the government.
If you want to learn more about the role of entrepreneurship in the tourism industry, keep reading.
The Role of Tourism Entrepreneurship Businesses In the Economic Development
Tourism entrepreneurship refers to tourism-related business ventures within the country. These businesses involve transport, accommodation, catering, natural resources, entertainment, other facilities, and services, such as banks and other tour operators.
There is quite a difference between tourism entrepreneurship and other types of entrepreneurship. Tourism entrepreneurs are attracted more towards the tourism sector to attain a higher standard of life because of many more opportunities and more profits. Tourism businesses are mainly small to medium-sized enterprises and are initiated by entrepreneurs who supply leisure and recreational opportunities.
Entrepreneurship plays a vital role in tourism development, especially in rural communities. Entrepreneurs start new businesses in the area, such as a hotel that employs local people, benefiting both the local people and the tourists.
Entrepreneurship is important for the creation of a new organization or new business.
Tourism Entrepreneurship makes employment that helps generate income for the entrepreneur and develop their standard of living. Travel and tourism businesses create 370 million employment opportunities in total, according to World Travel and Tourism Council (2016).
Tourism-related goods/services create jobs for the local people, especially for the women who reduce the unemployment rate and stimulate the local economy.
Local people also act as entrepreneurs as they provide goods/services to the locals and foreign tourists. These people are known for their goods which attract more people to the area, making it a tourist spot.
Issues Faced by Entrepreneurs in Tourism Industry
Many countries rely on the tourism industry to generate foreign exchange earnings. However, in some third-world countries, the tourism industry faces socio-economic problems and structural deficiencies, which reduce the industry’s efficacy as a tool for local, regional, and national sustainable development.
Main Challenges Faced by Small Businesses
Micro and small businesses face the top five challenges: competition, insecurity, debt collection, lack of working capital, and power interruptions. However, not all small businesses meet these challenges. Competition is ranked as the most pressing challenge, followed by insecurity.
Managing Business Challenges
Competition: Competition can be won by providing good customer service followed by discount offers. Price can be used as a competitive edge by selling more cheaply than your competitors. Using price to compete may lower profits even if the volume is higher.
Poor Security: Security threats pose a significant challenge to businesses, and many small business owners and managers employ various means to help prevent thefts. Some entrepreneurs make use of security guards to safeguard their businesses. Doing businesses cost more for entrepreneurs as they respond to security challenges.
Different Characteristics of a Tourism Entrepreneur
- Passion, Drive, and Determination:
Succeeding as a tourism entrepreneur requires hard work. If your work ethic is fueled only by motivation, then soon will it run out of fuel. Passion, drive, and determination are what make an entrepreneur stand out.
Focus is what helps entrepreneurs channel their energy into a business that gets them through rough times. - Clear Vision and Strategy:
Passion alone won’t make a business successful. Clear vision, together with a great strategy, is the second most important thing entrepreneurs need. Entrepreneurs face problems during their careers, and to deal with those problems, they need a clear vision. - Strong Networking:
The third essential characteristic of successful tourism entrepreneurs is their ability to network and connect with their local community. Networking is about helping one another towards a goal. Regularly finding opportunities to help your contacts strengthens the relationship. Strengthening of relationship sows the seeds for mutual assistance when you need help to achieve your goals. - Business Plan:
To succeed as a tourism entrepreneur, you need to plan your business. Your plan for your business should cover at least the next five years. It needs to be precise and detailed as it will avoid many hurdles on the way. Many entrepreneurs fail due to vague business plans. They don’t take the business plan seriously at the beginning and later on complain their business failed. - In-depth Knowledge About Your Market:
Knowing your market inside out is another most vital success factor in tourism entrepreneurship. Understanding the market and identifying trends can open vast business opportunities. - Value-Driven Leadership:
Leadership characteristics are as important as any other characteristic. Successful entrepreneurs are great leaders. As a leader, you have to ensure your staff is motivated to do their best at work. Successful entrepreneurs are not born with leadership qualities; instead, they learn them.
“The most dangerous leadership myth is that leaders are born-that there is a genetic factor to leadership. That’s nonsense; in fact, the opposite is true. Leaders are made rather than born.” said Warren Bennis. - Courage: Ability to take risks:
Another trait of successful tourism entrepreneurs is taking calculated risks, mainly at the beginning of their careers. There is a difference between calculated risks and stupidity. A calculated risk is when the entrepreneur knows they can lose a specific amount when things don’t work out. In comparison, stupidity, on the other hand, is when the entrepreneur bets all his money against the market. A knowledgeable entrepreneur will always analyze the market before investing in it.