Entrepreneurial Essay

Entrepreneurial Essay

Introduction

          The global tourism industry has grown by leaps and bounds in recent years, resulting in considerable employment opportunities and economic benefits for the sector and other related industries. Besides providing novel opportunities for SMEs (small and medium-sized enterprises), the tourism sector also welcomes various types of entrepreneurs, some of whom have gone on to establish firms with a global reach (Lashley 2008). The global tourism sector is a leading employer, with 284 million people working in the sector. This translates into 1 in 11 job positions globally. In 2015, the sector posted a 9.8% rise in its contribution to world GDP, or the equivalent of US $ 7.2 trillion (World Travel & Tourism Council 2015). In 2016, the sector grew by 3.3% and is expected to maintain an average of 4% annual growth in the coming decade (World Travel & Tourism Council 2016).  Entrepreneurs have been quite influential in spurring growth in the global tourism industry by not only identifying opportunities, but by also developing innovative products to fend off competition and drive sales. The global tourism industry attracts entrepreneurial ventures in all forms, be they SMEs or multinational corporations (Aghapour et al. 2012). According to Hall and Williams (2008), entrepreneurs are a crucial link between invention and innovation. This is true of any industry, including the tourism sector. This ability to be innovative and develop new products has played a key role in sustaining the growth of the tourism sector despite a slump in the global economy.  The tourism industry requires good economic, political, and social conditions for the growth of the business. Moreover, the tourism industry needs support from the government and local communities. Tourism entrepreneurs find themselves entangled in all these relationships as they play a crucial role in the development of destinations. Seeing as innovation and entrepreneurship are the key requirements for success in this sector, the entrepreneurship approach is essential in the development of existing and new businesses.

Entrepreneurial Skills and Talents in the Hospitality Industry

          Entrepreneurship is one of the most crucial factors that play a key role in the growth and sustenance of the global economy. According to Russell (2006), entrepreneurs have helped to shape modern tourism through their flair, innovation, and vision.  Besides discovering new markets, sources of supply, and technology, entrepreneurs also help to start new enterprises that are also more efficient. In this way, they not only create new opportunities, but also seize existing opportunities with the energy and willpower needed to surmount the resistance brought about by the cultural, economic, social, and political environments (Morrison et al. 2003). 

          Sewell and Pool (2010) are of the view that entrepreneurship focuses on such traits as motivation, skills, and desire crucial in starting and managing a business venture successfully. According to Hansen, Shrader, and Monlorr (2011), the working definition of entrepreneurship differs depending on the kind of opportunity under the definition. Elsewhere, Kobia and Sikalieh (2010) underscore the importance of recognising entrepreneurship as a form of innovation. It seems, therefore, that whatever definition of entrepreneurship is adopted, it ought to encompass compulsory components relating to environmental opportunities and an entrepreneur’s individual characteristics.  It also appears as though the individual characteristics of an entrepreneur are more important than the environmental opportunities because an astute entrepreneur can identify gaps in the market and work towards filling that gap, thereby creating a business opportunity.

          The global tourism and hospitality industry has traditionally manifested an entrepreneurial spirit (Li 2008). This is a constantly changing and dynamic industry that requires players in it to adjust to the changes in the environment in order to fulfill consumer needs effectively. In this case, the entrepreneur acts as the principal agent of change in the tourism and hospitality industry by identifying marketing opportunities and mobilising the necessary resources in order to fill the gaps identified in the market. Nonetheless, although entrepreneurs play such a key role in shaping the tourism and hospitality sector, their contribution has not received much attention from scholars (Ramos-Rodriguez, Medina-Garrido & Ruiz-Navarro 2012). Zhao and Getz (2008) report that the tourism and hospitality sectors are largely dominated by family businesses and SMEs whose key contributions include product innovation, economic revitalisation, job creation, and destination development  (Scott & Laws 2004).

          Zapalska (2013) notes that successful entrepreneurs in the tourism and hospitality sectors endeavour to develop a robust competitive advantage in the market by focusing on a specific service, product, or niche market. To survive in a highly competitive business environment, successful entrepreneurs offer their customers better products and services in order to not only experience rapid growth but also to ensure their survival. 

Destination development

          Entrepreneurs in the tourism and hospitality sectors contribute towards destination development through inter-firm cooperation and competition. Ritchie and Crouch (2003) opine that such inter-firm competition develops an ideal environment for business excellence in a destination. Accordingly, entrepreneurs in the tourism and hospitality industry can make a considerable impact on the operation and development of a particular destination (Mottiar & Tucker 2007).  Scott and Laws report how small firms in the Australian tourism industry played a key role in the development of Hervey Bay as a preferred destination for whale watching.  Elsewhere, Johns and Mattsson (2005) report how the entrepreneurial effort of a single individual played a crucial role in the emergence of Hay-on-Wye as the cultural center destination. In the same way, Keen and Hall (2004) while conducting their study of tourist destinations in New Zealand reported that community or social entrepreneurs acted as the key facilitators of development. Hall et al. (2009) note that even in rural and regional areas, entrepreneurs develop a tourism product, amass the resources needed to deliver the tourism reality, and make the region an attractive and accessible tourist destination. 

Innovativeness

          Innovativeness entails doing things differently. According to Voss and Zomerdijk (2007) innovation has proven essential in unlocking business growth because it not only involves doing things differently from the competition but oftentimes, better than them. Like any other entrepreneurs, those in the tourism and hospitality industry also wish to experience growth in their businesses. In this case, entrepreneurs in this industry turn to innovations in an attempt to spur growth (Sundbo 2009). It is important to note that industries in themselves are not innovative. Rather, most innovations are brought about by individual companies that act as rule breakers or fast movers, and in case these innovations prove successful, they are adopted by the competition. Considering the dynamic nature of innovations, this means that innovators have to rely on creative destruction as a means of sustaining growth and development in the industry. According to Hja-lager (2010), the tourism industry is less innovative in comparison with the other industries. Moreover, the fact that most firms in the tourism industry tend to be small in terms of market share and number of employees and this too has been faulted for the lack of innovation (Orfil-Sintes & Mattson 2007). Moreover, the tourism industry is quite popular with lifestyle and family businesses, and this further stifles innovation (Getz & Carlsen 2005).

           Innovation entails the deliberate utilisation of imagination, initiative, and information in order to obtain different or better value from available resources. Entrepreneurs in the hospitality industry recognise the value of being innovative in developing new products and services, thereby improving the competitiveness and growth of the firms. Innovation in the hospitality industry entails new services, new products, as well as new processes. Innovations in the hospitality industry come in many forms and often encompass: (i) process innovation, product innovation, market innovation, or logistic innovation. Product innovation entails the development of new services and products, while process innovation is concerned with developing new ways to deliver services to customers. On the other hand, logistic innovation is concerned with the design of novel means of supplying services and products to customers, whereas market innovation is concerned with novel means of marketing services and products to consumers. 

          The use of innovations in the hospitality industry is associated with numerous benefits, including improved profit margins, increased efficiency, enabling the business to fend off competition, decreased costs, and increased ability to fulfill the changing consumer needs.  An example of a hospitality establishment that has embraced innovation is the Residence Inn in Century Boulevard, Los Angeles. This hotel, which is owned by Marriott Group, has replaced its human workforce in room service with robots. The robots make all the standard room delivery services, including coffee from the hotel lobby (Mettler 2016). Other Hilton and Marriott properties have also replaced keycards in hotel rooms with the mobile phone-activated app.

Leadership

          Entrepreneurs who exercise leadership traits set the tone of their businesses and that of the industry. They possess conviction and courage in what they do. The hospitality sector is awash with pioneers who possessed the leadership traits that are desirable in entrepreneurship, and who consequently went on to leave a lasting legacy in the industry. Examples include Conrad Hilton, J.W. Marriott, and Steve Wynn, among others (Roberts & Shea).  Mendez, Coyle, and Alongkornpradap (2014) have identified Steve Wynn as among the most influential entrepreneurs in the global hospitality sector. He played a key role in reinventing the gaming resort industry in Las Vegas several times and is doing the same in Macau. Besides transforming the global resort and gaming industry, Wynn also helped to redefine the meaning of luxury.   Conrad Hilton, through his visionary leadership, implemented various strategies in order to remain ahead of the competition and to ensure that his business remained relevant to the needs of customers in the hospitality industry. For example, in 1940, his Hilton hotel became the first establishment in the global hospitality industry to install television in all its guest rooms. Hilton hotel was also a pioneer of the reservation system known as HILCRON (Bailey et al. 2014). This new reservation system enable customers to make reservations using telegram, telephone, or Teletype and was hence instrumental in enhancing the hotel’s growth and customer appeal.

Identifying opportunities

          Entrepreneurs are gifted in identifying business opportunities that others cannot see. They do so by envisioning what the future is likely to bring and then designing a business model to address the future needs of the people.  Brockman (2011) opines that entrepreneurs possess optimism, critical thinking skills, creativity, risk-taking propensity, and high psychological success factor, traits that enable them to recognise opportunities and mobilise resources needed to fulfill unmet needs and wants. This is best exemplified by the story of William Becker. Tired of enduring run-down motel rooms during his many trips across the country, he came up with the idea of starting an affordable lodging facility where the family could seek accommodation, and experience uniform quality of service, at a uniform price (Hevesi 2007). His idea metamorphosed into the famous Motel 6 chain, with clients paying only $ 6 per night, regardless of the location. In this case, Becker identified an opportunity for no-frills motel services even as other competitors like Holiday Inn preferred to establish their business away from the highway. 

Conclusion

          The global hospitality industry has enjoyed steady growth in recent years, even as other sectors of the economy have zero or no growth at all. This has largely been the case due to the innovativeness and entrepreneurial spirit of key players in the sector. This, even as the industry is identified by experts as least innovative owing to the fact that small firms constitute a large part of the businesses, while family businesses are also dominant. However, there are various examples of successful entrepreneurs in the industry who have relied on specific entrepreneurial traits to build and sustain their business empires. Conrad Hilton and Steve Wynn's strong leadership traits enabled them to build businesses that have completely redefined the hospitality industry. William Becker identified a business opportunity that gave birth to the Motel 6 chain even as other businesses like Holiday Inn were relocating. Entrepreneurs also tend to be highly innovative and this enables them to develop products and services that meet the needs of the market. In this way, they are able to sustain business growth and realise profits. Innovations such as keyless entry systems and robot room services are an indication that some entrepreneurs in the hospitality industry have embraced innovation in order to differentiate their products from the competition.

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