Small Hospitality Businesses: Enduring or Endangered?

Article excerpt

The last two decades has seen an increase in research attention on the small hospitality business. This indicates a recognition of the important role this sector plays within the industry and potentially valuable contributions to rural and perhipheral communities and local economies. However, it is of concern that researchers and analysts tend to merge generic small business findings with those of a sector specific nature. This may serve to distort knowledge pertaining to this sector and cloud understanding as to the actual nature and characteristics associated with these businesses. Thus, this paper untangles literature, and interogates statistics and definitions in order to compare and contrast traditionally accepted and contemporary perspectives of small hospitality businesses. The paper takes into account factors of import internal and external to the enterprise and draws conclusions as regards whether or not small businesses represent an enduring or endangered phenomena within the international hospitality industry.


It has become generally accepted that small-scale suppliers of commercial hospitality represent a significant part of the industry structure. Whether this situation will continue into the future has been questioned over the last two decades. This paper aims to review literature that reflects traditionally accepted perspectives and analyse the contemporary positioning of the small hospitality business sector. The objective is to establish the extent to which it represents an enduring or endangered phenomenon towards informing political agendas. Discussion reveals that caution should be used in the interpretation and generalisation of findings arising from generic and sector-specific literature without adequate critical analysis. For example, the extent of resonance within the hospitality industry of Mazzarol's (2000) generic observation could be questioned:

   at the commencement of the new millennium small businesses are being
   heralded as the engine of economic growth, the incubator of innovation, and
   the solution to decades of persistent unemployment. The fulfilment of the
   enormous potential of the sector has been a consistent theme since the
   commencement of the industrial revolution. (p. 1)

Consequently, a case for small hospitality businesses is presented to be recognised as a distinctive category, albeit embedded in and connected to the tourism infrastructure. Thus, this paper starts by exploring the statistical significance of, and definitions associated with, small businesses and the hospitality sector. There follows an analysis of the sector's traditional and contemporary positioning within the industry structure, with a specific focus on internal and external factors that may impact on realisation of potential contributions to the economy, society, and environment. Conclusions are drawn regarding the enduring and endangered characteristics, and a contribution is made towards informing and shaping appropriate policy interventions relative to the support infrastructure of small hospitality business.

Statistics and Definitions

Small businesses are well recognised and acknowledged worldwide as vital and significant contributors to economic development, job creation, and the general health and welfare of both national and international economies (Morris & Brennan, 2000). The sector represents a statistically significant proportion of the economy. For example, small businesses represent 99.7% of all employers in the United States (Small Business Administration, 2000), 96% of all businesses in all the non-agricultural industries in Australia (Australian Bureau of Statistics, 1999), and in the European Union only 1% of businesses have more than 50 employees (Department of Trade and Industry, 2000). These statistics are reflected within the hospitality sector, where the small rural business model continues to be dominant in most developed and developing countries (Baum, 1999; Middleton, 2001). …