entrepreneurship & tourism industry
TRANSCRIPT
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Entrepreneurshipand
Tourism IndustryProfessor Orhan z, Ph.D.
Yaar University
Faculty of Business & Economics
Dept. Of Tourism Management
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Contents
1. Basic definitions2. The concepts and types of entrepreneur and
entrepreneurship.
3. Whyand howto becomean entrepreneur.4. The common characteristicsof
entrepreneurs
5. Entrepreneurship opportunitiesanddomains in Tourism and Travel Industry
6. Future trendsof the industry
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Entrepreneurship defined
It is the innovatoryprocessinvolved in thecreation of aneconomic enterprisebased on anew product orservicewhichdiffers significantly from productsor services in the way itsproduction is organized, or in itsmarketing.
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What is Entrepreneurship?
1.The Process of Initiating aBusiness Venture, Organizing the NecessaryResources,
Assuming the Associated Financial,Psychological and Social Risks&Rewards
2. Having the Characteristicsof anEntrepreneur, e.g.
Brave, innovative, independent, andachievement oriented
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Entrepreneurship Defined
There is no universally accepteddefinition of entrepreneurship. Attemptshave traditionally been made to describe
it relative to: an economic function ownership structure
degrees of entrepreneurship size and life-cycle of firm and
resource base
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Process of entrepreneurship: Definition approaches and features
Approaches Features
Economic function
Ownership structure
Degrees of entrepreneurship
Resource base
Size and life-cycle of firm
Consolidation approach
Personal initiative of entrepreneur Risk-bearing function
Harnessing of factors of production
Creat ion of b usiness w ith entrepreneur as founder
Size of the firm
Personal financial risk
Creativity and innovation
Growth realization
Primordia l (pr im ary) to potent ia l product ion process
Association with young start-up firm
Conditions of uncertainty and competition
Entrepreneurial management and strategy
Initiation of change
Innovatory process
Ownership, structure and size of firm irrelevant
Personal initiative through the spirit of enterprise
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What is an Entrepreneur?
One who creates a new business
in the face of risk & uncertainty
for the purpose of achieving profit &growth
by identifying opportunitiesand assembling the necessary
resources to capitalize on them.7
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Who Are Entrepreneurs?
Persons who start and/or operateabusiness.
Individuals who discover market needs
and develop new ideasto meetthoseneeds.
Risk takerswho provide an impetus for
change, innovation, andprogress.All active owner-managers(founders
and/or managers of small businesses).
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Varieties of Entrepreneurs
Founder(Pure Entrepreneur)
A person who brings a new firminto existence.
Administrative EntrepreneurAn entrepreneur who oversees the operationsof an
ongoing business
FranchiseeAn entrepreneurwhose power is limitedby the
contractual relationship with afranchising organization.
Entrepreneurial Team Two or more people who work togetheras
entrepreneurs.
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Key Elements of Entrepreneurship
Elements Description
Change initiation Capability to identify an opportunity for
creation or innovation, and the ability to turn it
into a reality
Commitment to
employees
Application of appropriate management
practices and reward systemsdesigned toexact employee loyalty, retention and
efficiency
Creative
resourcing
Ingeniously (creatively) marshalling resources,
of both financial and managerial nature, from a
complex set of sources in order to mobilize
and realize the opportunity
Entrepreneurial
learning
Motivation to acquire the necessary knowledge
and expertisethrough relevant exploration and
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Key Elements of entrepreneursh ip
Elements Descr ipt ion
Innovation and
creativity
Renewal of products and servicesby adding
value through application of expertise and
imagination
Knowledgeleadership
Development of sources of managementinformation to enable first-mover capability,
and effective strategy formulationand
implementation
Opportunity
alertness
Continuous focus on emerging trendsand
opportunitiesto be captured and realized
Relationship
management
Maintenance of effective teams, networks,
and flexible managementstructures
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Key Elements o f entrepreneursh ip
Elements Descr ipt ion
Risk and
uncertainty
management
Evaluation of personal and financial risk
elements, self-confidence and
determination to succeed
Timing of action Acting within a limited window in which an
opportunity can be optimized
Vision and
strategic
orientation
Formulation of ambitions, and strategies to
realize them
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COMPARING ENTREPRENEURS TOPROFESSIONAL MANAGERS
ENTREPRENEUR PROFESSIONAL MANAGER
Founder and organizer Keeper and trainer
Committed to his firm Committed to his profession
Moderate risk taker Avoids taking risks individually
Long term strategic thinking Medium term operational thinking
Visionary Rational
Achievement oriented Power oriented
Centralizing authority Delegating authority
Comfortable on his/her chair Restless about his post
Commanding Both commanding and commanded
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Profit
Freedom from the limits
of standardized pay for
standardized work
Independence
Freedom from supervision
and rules of bureaucratic
organizations
Escape from an
oppressive culture
Personal Fulfillment
Freedom to achieve a
satisfying way of life
Escape from routine
and unchallenging work
Rewards of Entrepreneurship
Why to become an Entrepreneur?
MakeMoney
Be YourOwn Boss
Enjoy aSatisfying Life
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Rewards of Being an Entrepreneur
o High degree of independence-freedom fromconstraints
o Get to use avariety of skills and talents
o Freedom to make decisions
o Accountableto onlyyourself
o Opportunity to tackle challenges
o Feeling of achievementand pride
o Potential for greater financial rewards
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Benefits of Small BusinessOwnership
The opportunity to:
create your own destiny
make a difference
reach your full potential
reap unlimitedprofits
contributeto society and be recognized foryour efforts
do what you enjoy and have funat it
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Challenges ofBeing an Entrepreneur
Must be comfortable with change anduncertainty
Must make a bewildering number of decisions
May face tough economic choices
Must be comfortable with taking risks
Need many different skills and talents Must be comfortable with the potential for
failure
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Drawbacks of Small Business Ownership
Uncertaintyof income
Risk of losing entire investment
Long hours andhard work Lower quality of lifeuntil the business gets
established
High levels ofstress
Complete responsibility Discouragement
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Personal Qualities of Successful Entrepreneurs
Creativity6.2 %
Personality10.4 %
Need for Achievement
10.4 %
Leadership12.5 % Risk Taking
16.7 %Energy
43.8 %
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The Tourism Industry a glance at
Means millions of people moving from thecountries they live and work to anothercountry, or countries
The Third Largest Industryall over the worldafter Petroleum and Electronic,
Producing 935million international visitors(2010),and
$ 852Billion (US)Revenues (2009),and The largest and fastest growing services
industry
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On the Demand side
Tourists motivations and behaviors - traveling
people
On the Supply side
Sectors that satisfy tourist needs and supplying
products - tourism businesses and products
Infrastructure
Components that an areas residents rely on, such
as airports, highways, harborsthat serve visitors
Superstructure
Facilities built to accommodate tourist needs,
hotels, restaurants, theme parks, casinosetc.
Tourism Industry
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Narrow senseConsists of what the tourist buys (Mostly
goods and services) Wider sense
Combination of what the tourist does at
the destination and services used(package)
Tourism Product
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Tourism products are generally non-
tradable services, such as;
a dream,
total experience,
activity, or
business opportunity.
Tourism Product
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Characteristics of tourism products;
Mostly services, which is intangible(e.g., cannot be inspected physically)
Psychological in attraction
Varies in quality and standards
Supply fixed (e.g., more hotel roomscannot be instantly created to meet demand)
Meet/satisfy social needs, not necessities
The Tourism Product(contd.)
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Combination of phenomena andrelationships
Has 2important elements;
- dynamic (the journey)and- static (the stay / accommodation)
Movement to destinations is temporary
Not connected with paid work Tourist goes to the product, not to the
market
Characteristics(contd.)
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Tourism products are not used up
Mostly labor-intensive
Peopleoriented (face to facerelationships)
Multi-dimensional
Seasonal Dynamic
Characteristics (contd.)
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Tourism and leisure industry involves acomplex set of interrelated businesses
Hospitality, travel and tourism
businesses consist of; Retailers
Transportation sector(carriers)
Recreation or gaming facilities
Hotels and restaurants (Hospitality)
Interrelated Business
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Accommodation providers (1)
Hotels Most significant and visible subsector
The largest partof the industry
Major employer in the industry
Dominated by small, family-run operationsoffering a variety of accommodationtypes
Groups or chains of hotels account for about10
% of total accommodation The major chains continue to grow in terms of
number of hotels and number of rooms
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Accommodation providers (2)
Guesthouses, bed and breakfasts,farmhouse accommodation, innsprovide limited facilities and food and
beverage.
Self catering accommodation,
apartments, cottages, sitescompriseaccommodation, recreational facilitiesand food preparation facilities.
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Types of accommodation providers(3)
Time sharevery popular inMediterranean holiday resorts, thisprovides the opportunity to own an
apartment for a week or two per year.Youth accommodationYHAand
backpackers accommodation. This is
very popular in Australia wherebackpackers form approximately 10 % ofall international tourists.
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Accommodation providers (4)
Camping and caravan sitesrangingfrom basic fields with few amenities
to sophisticated resorts. Medical facility accommodation
providing accommodation for the
increasingly important medicaltourism industry
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The distinctive nature of accommodation
Accommodation is distinct from otherindustries in three basic areas:
It comprises both tangible(product) andintangible(service) factors;
The production and consumption ofaccommodation is inseparableand theguest must be present at both production
and consumptionAccommodation is highly perishable and
cannot be stored for future sale.
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Travel Intermediaries
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The Nature of Intermediation
Benefits
Producers are able to sell in bulk and so transferrisk to intermediaries
Producers can reduce promotioncosts by
focusing on the travel trade, rather thanconsumer promotion, which is more expensive
Consumers can avoid search and transactionscosts
Consumers can benefit from the specialistknowledge of intermediaries, their market powerand the resulting lower cost of products
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Other Industry Segments(1)
Lodging Operations
All Suit Hotels
Casino Hotels
Conference Centers
Full Service Hotels
Limited Service Hotels Resorts
Retirement Communities
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Industry Segments (2)
Food Service Operations Commercial Cafeterias
Education Food Service
Employee Food Service Full - Service Restaurants
Health Care Institutions
Lodging Food Services
Quick Service Restaurants Recreational Food Services
Social Caterers
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Travel Related Businesses andEntrepereneurship Opportunities (1)
Marketing Representative/Agent
Travel Agent
Recreation Specialist
Incentive Travel Specialist
Policy Analyst
E-tourism Expert/Specialist
Destination Development Specialist
Tourism Investment Projects Consultant
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Travel Related Businesses and
Entrepereneurship Opportunities(2)
Tour Wholesaler
Tour Broker
Travel Counselor
Meeting/Conference Planner
Advertising Agency
Entertainer/Animator
Health Specialist (Health SPA etc.)
Small Business Owner (Guest House, Hotel,Restaurant, Souvenir shop etc.)
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Doing Business in Tourism Industry
Tourism and travel Industry has the
reputation of being a relatively clean and
pleasantindustry in which to invest Requires relatively low start up capital
Setting up in the industry is often seen as
simple and requiring few skillsother thanthe off-claimed ability to get along with
people
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Doing Business in Tourism Industry
It is therefore attractive to those leaving from otherjobs and investments or do not enjoy them, to buyinto a bar, guest houseor travelbusiness forexample.
Provides opportunities for those who would like to useindividual skills in a beautiful environment. i.e., a chefmay happily work in pleasant resort and a tour
guide/travel agent use his/her talents in the relatedfield
Provides new business opportunities, such as eventmanagement
I d t F t
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Year # of tourists Total tourism income
1950 25 2.1
1960 70 6.8
1970 165 18
1980 285 105
1990 458 268
2000 698 475
2002 714 470
2008 913 941
2009 877 852
2010 935 -
2023(prediciton) 1700 2000
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Industrys Future
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Future Markets
Keep in mind that the new tourists are
Knowledgeable, discerning, seeks
quality and participationAgeing
Motivated by education and curiosity
Sophisticated and flexible
Technologically skilled44
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Before Starting up,ASK YOURSELF! - 1
Is Entrepreneurship For You? There is no way to eliminate all the risksassociated with
starting a small business. However, you can improve your chances of success with
good planning and preparation. A good starting place is to evaluate your strengths and
weaknessesas the owner and manager of a small business.Carefully consider each of the following questions.
1. Can you start alone? It will be up to you - not someone else telling you to
develop projects, organize your time and follow through ondetails.
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2. How well do you get along with different personalities?Business owners need to develop working relationshipswith a variety of people including customers, vendors,staff, bankers and professionals such as lawyers,
accountants or consultants. Can you deal with ademanding client, an unreliable vendor or cranky staffperson in the best interest of your business?
3. How good are you at making decisions?
Small business owners are required to makedecisions constantly, often quickly, under pressure,and independently.
Before Starting up,
ASK YOURSELF! - 2
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4.Do you have the physical and emotional stamina(power) to run a business?
Business ownership can be challenging, fun and exciting.
But it's also a lot of work. Can you face 12 hour workdays 6 or 7 days a week?
5. How well do you plan and organize? Research indicates that many business failures could have
been avoided through better planning. Good organization of financials, inventory, schedules,
productioncan help avoid many pitfalls.
Before Starting up,
ASK YOURSELF! - 3
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6. Is your drive strong enoughto maintain yourmotivation?
Running a business canwear you down. Some business owners feel burned outby having
to carry all the responsibilityon their shoulders. Strong motivation can make the business succeed
and will help you survive slowdownsas well asperiods of burnout.
Before Starting up,
ASK YOURSELF! - 4
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7. How will the business affect your family?
The first few years of business startup can be hardon family life.
The strain of anunsupportive spousemay be hardto balance against the demands of starting abusiness.
There also may be financial difficultiesuntil the
business becomes profitable, which could takemonths or years.
You may have to adjust to a lower standard of livingor put family assets at risk.
Before Starting up,
ASK YOURSELF! - 5
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You get to beyour own boss. Hard work and long hoursdirectly benefit you, rather
than increasing profits for someone else. Earning and growth potentialare far less limited. A new venture is exciting. Running a business will provide endless variety,
challenge and opportunities to learn.
It's true, there are a lot of reasons not to start your own business.But for the right person, the advantages of business ownershipfar outweigh the risks.
Before Starting up,
Motivate YOURSELF!
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End of Slides.
Thanks for attention!
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