Entrepreneurship in the small and medium-sized hotel sector

Abstract

The purpose of this study is to gather information about the determinants and characteristics of the owners/managers of small- and medium-sized hotels (SMSHs) and identify various challenges in starting up and operating businesses in the United Arab Emirates (UAE). The paper also highlights key actions taken by the owners/managers of SMSHs to manage their business in the competitive business environment. To avoid any bias associated with a specific method, a multi-method research approach has been used for data collection. The results reveal that the majority of the owners/managers of SMSHs in the UAE are male, young and middle-aged with secondary- and higher-education levels, and relatively new to the tourism industry. With the characteristics of self-confidence, perseverance and independence, the motivations for the business ventures of the owners/managers include wanting to be financially independent, become one's own boss, involvement in family business and the opportunities of the hotel business. Among the key business challenges highlighted by the owners/managers of SMSHs are stiff competition in the hotel industry, increased operating costs, reduced demand and lack of skilled employees. Several key strategies have been employed to face these challenges. These include offering competitive pricing, improving the marketing and channels of promotion, enhancing the quality of service and providing superior customer service. At the same time, the owners/managers of SMSHs also felt that the government and policy-makers should play a more proactive role in promoting the tourism sector. This research provides a useful insight into the activities in the hotel tourism business sector and the challenges they encounter while operating in the UAE economy.