A guide to sustainable tourism in developing countries
Issue link: https://viewer.e-digitaledition.com/i/1274933
90% of Tourism products are supplied by small businesses Tourism relies on small businesses, which makes it an ideal economic sector for communities to enter and improve their economic position and well-being. The problem is that 50% of small businesses fail within 5-years, and 70% by year 10. The reasons for this are many, but can involve events and circumstances external and internal to the business operation (Figure 2). A successful tourism business must work within the tourism system, be resilient to external influences, but plan and manage its internalities. SMALL-BUSINESS CHARACTERISTICS Externalities • Civil strife, recession, high taxation, high interest rates, excessive regulation COMMUNITY BASED TOURISM (CBT) CHARACTERISTICS • Lack of needed skills • Inequitable distribution of benefits proportionate to inputs • Costs (social, environmental, economic) outweigh benefits • Decline in the quality of tourism assets • Decline in valued community assets • Internal conflict and social disharmony Figure 2. Some compounding influences on the lack of CBT sustainability. TOURISM BUSINESS CHARACTERISTICS Externalities • Poor regional planning, inadequate access, no destination differentiation • Insufficient product (attractions and services) to hold tourists Internalities • Poor quality product and service • Failure to work with others of the tourism system • Failure to understand that tourism is about delivering memorable experiences Internalities • Insufficient capital • Cash flow problems • Insufficient marketing • Poor management • Inadequate business planning • Inability to compete with similar businesses • Lack of market for the business product QUESTIONS? What are the implications for a tourism business within the tourism system? With whom do managers need to interact? How do the differences that characterise a business that caters mainly for tourists affect sustainability? How can the factors that lead to business failure be managed at the time of establishment and during operations? 19