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.