Competitive advantage and management development in small hospitality firms: The need for an imaginative approach

Abstract

The significance of small firms in delivering a substantial part of the total output of hospi tality goods and services is a long-established feature of the hospitality industry. Indeed the very origins of the industry in domestic settings — providing accommodation, food and drink — suggests that hospitality is a small scale, interpersonal activity. That said, the growth of a small number of hunge national and inter national organisations which control dispro portionately large sections of lodging, restaurant and public house markets, is a remarkable feature of the current hospitality industry.

In theory, the small hospitality enterprise, located close to its market and in personal contact with its customers, has considerable advantage in being able to respond quickly to customer needs and demands. These firms, owned and managed by individuals intimately ittvolved in creating the hospitality experience with customers, should enjoy considerable competitive advantage over larger organisa tions, that perhaps as a consequence of their organisational formality, have more remote and less personal relationships with customers. There are many small hospitality firms which do successfully compete in their local market, yet small firms in general are losing market share to the bigger operators. Some commenta tors go so far as dismiss the future existence of the small firm in hospitality provision! While the economic might of large firms to establish brands and operate at lower costs because of scale advantages goes some way to explain the loss of market share to small firms, the level of skills and talents together with the limited aims and objectives of those who own and manage small hospitality firms are also signifi cant factors.