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Time to cherish small and medium-sized tourism businesses

The ongoing financial and economic crisis is again threatening the survival of small and medium-sized enterprises (SMEs) in Asia Pacific’s travel and tourism industry, according to a new study commissioned for ITB Asia by Messe Berlin.

The study, entitled “Strengthening Small and Medium-sized Enterprises in the Asia Pacific Travel & Tourism Industry,” says that governments should place a higher priority on protecting their most valuable -and most vulnerable- entrepreneurs.

“It is time for some serious soul-searching about ensuring and insuring the future of SMEs in travel and tourism,” warned the study’s author, Imtiaz Muqbil, Executive Editor of Travel Impact Newswire. He presented the study 24 October, during the ITB Asia B2B travel show in Singapore.

“SMEs are caught in a double-whammy,” he said. “On one hand, they have to work harder to establish themselves, secure business and gain access to finance. On the other, they are the first to be hit by all the forces of evolutionary change plus the unexpected external shocks and crises affecting the industry.

“If they suffer, the markets will just continue to consolidate in the hands of the major companies, which is not in the interest of any country.”

According to the study, travel and tourism SMEs range from small inns and lodges and niche-market tour operators to restaurants, souvenir shops, guides, MICE event organisers, etc. They include small, independently or family-owned companies and/or small companies set up by groups of friends or partners, many of which are women.

In addition to identifying the size and importance of SMEs in Asia Pacific’s travel and tourism sector, the aim of the study was to underscore the need for them to gain the recognition and respect they deserve.

“It is also critical for SMEs to get organised and make a strong case to governments to have access adequate assistance and support, so as to ensure their progress in good times, and their survival when times are bad,” Mr Muqbil said.

“The aim was also to encourage governments to recognise the importance of travel and tourism SMEs and give them as much priority as SMEs in other economic sectors such as agriculture and manufacturing.”

The study cites the example of technological advances that affect thousands of travel agents when airlines cut commissions, as a result of the advent of direct bookings. This pressure is growing due to the power of alliances, formidable databases and frequent flyer programmes. At the same time, online websites are gaining strength, as tour operators and their subsidiaries control millions of bookings.

However, technology can become a blessing once SMEs get the hang of it, the study says. Low-cost airlines have proved that an alternative business model which takes on the major players can succeed, even though many expect it to fail. Boutique hotels are also emerging, often set up by people who once worked for the major chains.

Co-Founder & Chief Editor - TravelDailyNews Media Network | + Articles

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.