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: