Strengthening Small and Medium Sized Enterprises in the Asia-Pacific Travel & Tourism Industry

A study prepared for presentation at ITB Asia, 24 October 2008, Singapore.

With the search for new, long-term oriented, equitable and sustainable social and economic systems now robustly under way, the travel & tourism industry is extremely well placed to prove that it can be a part of the solution.

This study is meant to draw attention to the importance of small and medium sized enterprises (SMEs) in the Asia Pacific travel & tourism industry. If travel & tourism is just as important an economic sector as telecommunications, agriculture and manufacturing, it important to recognise the immense contribution of its SMEs to job creation, foreign exchange earnings and poverty alleviation, as well as their contribution to creativity and innovation.

This study is not meant to be a broad-based report on the state of regional travel & tourism SMEs. It is intended to be merely an “appetiser”, a preliminary attempt to identify the problems and suggest solutions, which could be followed later by a more detailed and well-funded effort towards implementing the proposed solutions.

Table of Contents

1. INTRODUCTION.........................................................................1
2. OBJECTIVE OF THIS STUDY.....................................................2
3. IMPORTANCE OF SMEs ............................................................5
3.1. Definition of “Small and Medium Sized Enterprise”................. 6
3.2. Advantages of being “small” .....................................................7
3.3. Weaknesses and Threats ...........................................................8
4. SMEs WITHIN THE TRAVEL & TOURISM INDUSTRY................10
4.1. Challenges They Face............................................................. 11
4.2. The “big” are neither invincible nor unbeatable .......................12
4.3. The “Small” Can Strike It Rich ................................................. 15
4.4. Travel Marts to help SMEs....................................................... 16
4.5. Travel & Tourism SMEs in the OECD region.............................17
4.6. Rural Tourism Project In India ..................................................18
4.7. Thailand’s One Tambon, One Product project ..........................20
4.8. Indigenous Tourism Australia.....................................................21
4.9. Indigenous Tourism Canada .....................................................22
5. HELPING THE “SMALL” GUY IS A GLOBAL MOVEMENT ..........23
5.1. UN Conference on Trade and Development..............................23
5.2. International Labour Organisation.............................................26
5.3. Asia Pacific Economic Cooperation ..........................................27
5.4. Asian Development Bank ..........................................................28
5.5. Organisation of Islamic Conference ..........................................30
6. COUNTRY EXAMPLES ...............................................................31
6.1. Indonesia..................................................................................31
6.2. Laos .........................................................................................33
6.3. Singapore.................................................................................33
6.4. Philippines ...............................................................................34
6.5. Vietnam ....................................................................................38
6.6. Japan........................................................................................39
6.7. China........................................................................................40
7. CORPORATIONS TARGETTING THE SMEs, TOO.....................42
7.1. IBM...........................................................................................42
7.2. HSBC........................................................................................43
8. EMERGING “SMALL IS BEAUTIFUL” BUSINESS MODELS.........45
8.1. Mahatma Gandhi’s Need Vs Greed ..........................................46
8.2. Bhutan’s Gross National Happiness ..........................................47
8.3. Sufficiency Economy Concept of Thai King Bhumibhol ..........49
8.4. Grameen Bank .........................................................................50
9. KEY FINDINGS AND CONCLUSIONS ..........................................52
10. RECOMMENDATIONS AND NEXT STEPS................................55
II) FURTHER READING...................................................................II

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