ENTREPRENUERSHIP Essay Example
Table of Contents
32.0. Issues facing entrepreneurs in hospitality industry
32.1. Operating issues
42.2. Global changes
42.3. Evolving customer expectations
42.4. Emerging technologies
53.0. Entrepreneurial activity in the hospitality Industry
54.0. Factors promoting Hospitality entrepreneurship
54.1. Social factors
64.2. Political environment
64.3. Economic factors
74.5. Government policies
Hospitality industry is extensive and comprises of companies that focus on customer satisfaction as well as providing luxury services (Deale, 2015). Customer satisfaction is the key defining aspect of the hospitality industry. Hospitality industry comprises of general tourism, restaurants, airlines, cruise ships, and event planning. Effective entrepreneurs seek to understand how to satisfy clients with core business activities such as marketing, sales and finance. The industry revolves around people, guests as well as employees serving them. Hospitality industry is highly competitive and fast-paced; therefore, new entrepreneurs may encounter several challenges. The challenges facing most start-up entrepreneurs in the hospitality industry involves lack of clear understanding of the sector and the challenges it experiences (Bauer, 2009).
2.0. Issues facing entrepreneurs in hospitality industry
Hospitality is related to several disciplines such as politics, agriculture, economics, health, finance, transport, immigration, environment and education.
2.1. Operating issues
Labour shortage is among the most critical issues affecting development of a new hospitality enterprise (Jin-zhao and Jing, 2009). The industry is faced with a reducing labour force according to recent research by International society of Hospitality consultants. Globally, the industry is faced by the critical issues of attracting and retaining professional employees. Contributing factors include demography, wage levels, low worker satisfaction, and long working hours. Innovative hospitality experts should start to create strategies for retaining qualified employees.
2.2. Global changes
According to Bauer (2009) hospitality industry is very vulnerable to changes and trends in its operating environments and demand for services can change rapidly. The industry is vulnerable to changes such as political instability, natural disasters, pollutions, infectious diseases. The world today faces major climate changes, diseases, and terror attacks. For instance, the zika virus infection is expected to affect the hospitality industry significantly. The number of flights to the affected countries as well as number of tourists in hotels has reduced. Governments are trying to control risks affecting the hospitality sector by enacting restrictive visitation measures to minimize vulnerability to terrorism.
2.3. Evolving customer expectations
The ability to meet the ever-changing customer needs continues to be a significant challenge. For instance, the increasingly use of sophisticated technology to research, select, and pay for accommodation. Entrepreneurs are faced with the challenge of creating unique and customized experiences; therefore, it’s vital to adapt and update marketing techniques so as to reach clients (Jin-zhao and Jing, 2009).
2.4. Emerging technologies
Hospitality systems are rapidly moving to web-based technology (Jin-zhao and Jing, 2009). This enables dramatically easy and flexible integration; therefore, more complete operational information (Mackenzie and Chan, 2009). However, the significant capital required to upgrade the old and outdated systems hinders the entire process.
3.0. Entrepreneurial activity in the hospitality Industry
Entrepreneurship can be described as a creative process that pursues an opportunity to produce economic benefits (Pirnar, 2015). Entrepreneurs need desire, motivation and expertise to start and manage a successful business. Hospitality industry is a dynamic sector providing new opportunities to small and medium-sized enterprises (Jin-zhao and Jing, 2009). Also, the sector attracts several entrepreneurial and innovative ventures as well as different types of new businesses. The number of entrepreneurs investing in the hospitality industry has increased globally in the last 10 years. The dominance of small and medium sized hospitality enterprises in several countries has resulted in recognition of the importance of entrepreneurship in the hospitality industry (Shaw, 2004).
4.0. Factors promoting Hospitality entrepreneurship
Factors promoting hospitality entrepreneurship trend include liberalization of labour markets, globalization as well as friendly government policies which minimize barriers to competition and trade restrictions.
4.1. Social factors
The presence of positive social factors supports development of new enterprises. The society sets specific norms and values to determine behaviour of people (Lee-Ross, and Lashley, 2009). Certain restrictions are imposed in case an individual violates these norms and values. Societies that promote and celebrate entrepreneurs encourage many future generations to run effective enterprises. Social security promotes entrepreneurship development. Investors are more likely to take investments risks in secure social environments.
4.2. Political environment
The political stability of the country affects the development of entrepreneurship. Entrepreneurs tend to invest and operate effectively when there is political stability in a country (Lee-Ross, and Lashley, 2009). However, political instability affects and discourages investors willing to start-up businesses. The political system which encourages individual freedom, free market and private enterprise will encourage entrepreneurship.
4.3. Economic factors
The purchasing power of consumers influenced by income levels of the country plays a critical role in the efficiency of an enterprise. During recession or economic slowdown periods, the purchasing power reduces and consumers avoid investments, affecting entrepreneurship greatly (Jin-zhao and Jing, 2009). Availability of capital is essential factor to establish an enterprise. Capital allows an entrepreneur to purchase machines, get labour and raw materials required to operate the hospitality business. Readily available market promotes entrepreneurial activities. Basically, the market obtains revenue for the business. Entrepreneurs will hesitate to invest in a sector without sufficient market. Additionally, availability of future market opportunities is significant for the development of entrepreneurial activities (Pandey, 2013). Access to infrastructures and utilities such as communication facilities, good roads, energy sources, and transparency in obtaining such utilities supports success of a new venture.
Management is the major carrier of progress, changes and competitive edge in the hospitality industry (Morrison, and Thomas, 1999). Therefore, entrepreneurs should focus more on ethical behaviour training, code of conduct, proper selection of employees and business decision-making. Successful businesses implement strategies to identify need for change, obtain adequate knowledge and expertise to execute the changes successfully (Barrows, Powers, and Reynolds, 2012).
4.5. Government policies
Government policies and legislation encourage economic freedom by minimizing requirements for operating a business (Lee-Ross, and Lashley, 2009). While most entrepreneurs accept laws related to protection of labour and the environment, some nations have retrograde regulations that complicated nd delay the compliance process. Such legal hurdles discourage entrepreneurs willing to invest in the hospitality industry. Some governments’ agencies and non-profit organizations provide free consultation and start-up .grants. These initiatives have allowed the growth of small and medium sized enterprises (Obaji and Olugu, 2014). The economic policies implemented by the government as well as other financial organisations and the opportunities available in the community play an essential role in development of entrepreneurship. Governments provide incentives like subsidized power tariff, tax holidays, raw materials, and reduced transportation costs
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Bauer, T., (2009). Tourism and Hospitality Studies; Trends and Issues in the Tourism and Hospitality industry. School of Hotel and Tourism Management, The Hong Kong Polytechnic University.
Deale, C., (2015). Entrepreneurship and Sustainability in Hospitality and Tourism: Implications for Education and Practice, Tourism Travel and Research Association: Advancing Tourism Research Globally. Paper 1.
Jin-zhao, W., and Jing, W., (2009). Issues, Challenges, and Trends, that Facing Hospitality Industry, Management Science and Engineering, Vol.3 No.4, Canadian Research & Development Center of Sciences and Cultures.
Lee-Ross, D., and Lashley, C., (2009). Entrepreneurship and Small Business
Management in the Hospitality Industry, Elsevier Ltd.
Mackenzie, M., and Chan, B., (2009). Tourism and hospitality Studies, Introduction to Hospitality. School of Hotel and Tourism Management, The Hong Kong Polytechnic University.
Morrison, A., and Thomas, R., (1999). The future of small firms in the hospitality industry. International Journal of Contemporary Hospitality Management, 11/4 148±154, MCB University Press [ISSN 0959-6119].
Obaji, N., and Olugu, M., (2014). The role of government policy in entrepreneurship development , Science Journal of Business and Management, Vol 2(4): 109-115, ISSN: 2331-0634.
Pandey, S., (2013). Entrepreneurship in Recession Entrepreneurs, Firms & Performance, Norwegian School of Economics
Pirnar, I., (2015). The Specific Characteristics of Entrepreneurship Process in Tourism Industry, Vol, (34): 75-86.
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