Starting and Running a Tourism Business

Whether you are a for-profit operator, or you are a not-for-profit organization, starting and operating a tourism business/project can be a rewarding experience.

The first steps are performing the necessary research and business planning activities. The tourism industry uses certain research and planning methods to ensure that projects are both feasible - from a market demand, technical and financing perspective - and financially viable.

Feasibility has much the same meaning whether it's a for-profit or a not-for-profit organization, based on the project. Here are some questions to ask before starting your own tourism venture:

  • Is there sufficient market demand for the project?
  • Can financing be raised for the initial start-up and ongoing operations?
  • Can you secure the necessary land, development, and regulatory approvals?

Financial viability, in regards to a for-profit entrepreneur or developer, refers to:

  • Sufficient profit to compensate for the risks

As for not-for-profit organizations, it refers to:

  • Ability to breakeven, at the very least
  • Organization does not rely on external sources to cover operating costs
  • Revenue generated from operations will cover operating costs

Some of the unique characteristics and challenges when undertaking a tourism project include:

  • Seasonal nature of some tourism businesses
  • Transient nature of workers
  • Difficulty in raising capital and or bank financing
  • Airline access issues
  • Grant programs for private sector businesses are essentially non-existent
  • Grant programs for not-for-profit based projects are shrinking
  • Significant focus on environmental protection
  • Costs in bringing utilities and services to remote areas
  • Consumer's vacationing habits depend on the state of the economy

The following information may also assist you in further assessing the feasibility and viability of your project: