ENTREPRENEURSHIP IN

HOSPITALITY:

A COMPARATIVE STUDY OF ITS

SUSTENANCE AND CRISIS

Chapter 1: INTRODUCTION

Sustainable tourism has been a focus of tourism worldwide. As the hospitality industry is a
part of tourism which includes hotels and resorts and contributes a lot towards food and
lodging, sustainability is a concern for the industry. Individuals have a perspective that
hotelier's relationship toward environmental and societal concerns is rather secluded and
intangible.

Considering the size and the rapid growth of the hospitality industry, it makes it clear that
environmentally sustainable action is essential. For sustainability to be effective, the best way
is to engage the people from local communities. The aim is to promote socio-economic
development of the tourist destination and the community considering the ecology best cared
for by the locals. Tourism has to be developed in a manner so that the ecosystem is conserved
with diversification of the economy leading to dispersal of ownership.

The main finding is that sustainable resources are not used effectively and in depth mainly
due to the negative economic condition of the tourism business and the crisis in general
which leads to low profitability, the attitude of entrepreneurs that tourism does no harm to the
environment and thus they don’t need to be environmental sensitive, the lack of team spirit
among tourism entrepreneurs and local authorities even though they believe that a good
promotion strategy has been implemented. The results are under the limitation of the local
sample and the type of tourism business as for example it would be interesting to see how
entrepreneurs who run travel agencies behave.

The practical implication of the research is that economic crisis must not consider as an alibi
to the loss of business from entrepreneurs but as a point of new start in order to enhance their
business competitive advantage combined with a change in national culture of how they are
doing business to the direction of collectivity and team spirit.

The paper brings the new approach of crisis as a chance for the development through the
combination of sustainable resources exploitation in the tourism sector in India and especially
in the rural areas.

Tourism And Entrepreneurship

Tourism could help and assist the entrepreneurs to invest which will lead to employment,
economic and market growth of a country. Tourism as it provides a huge employment
opportunity can assist the entrepreneurs to invest leading to rapid economic and market
growth.

Many tourism businesses are being initiated by the entrepreneurs who have a major role in
providing leisure and recreational activity. Various tourism and hospitality business
consisting mostly of small and medium sized enterprise which include homestays, farms and
family style restaurants and cafes have been added which caters to the diversity of people
(Chang, 2011). (UNWTO, 2002)

Entrepreneurship
Entrepreneurship is derived from the French term entrepreneur who partakes accountability,
pursue prospects, monetary needs and wants by innovating and operating a commercial
business (Burch, 1986). Entrepreneurship has a vital role in transforming the supply of leisure
and entertaining opportunities (Chang, 2011)

For a country as well as across the world entrepreneurship is considered as a critical factor for
tourism development. (Khanka, 1999) defines ‘tourism entrepreneur’ as a person or a group
of persons who are either creating and or managing tourism products.

Tourism entrepreneurship helps in providing a planned support for business development

particularly in the rural area (Koh & Haltten, 2014) acknowledged the importance of
entrepreneurs in tourism development and claimed tourism business is born not by an act of
nature but by the deeds of the tourism entrepreneur.

The importance of tourism in entrepreneurship leads to increase in revenue which cushions

the economic problems of our society such as high unemployment and low income of
families. (Javier & Elazigue, 2009) have emphasized upon the role of local government units
for the success of tourism business.

The local government units should try to increase the living standards of the society and
retain the ecological balance. Both the central and the state governments should work
together for establishing the policy and strategy for sustainable tourism business.

They should incorporate all the stakeholders to represent all their viewpoints and welfares
associated with the sector (Brokaj, 2014). Corporate social responsibilities in the field of
tourism businesses have an important role in promoting partnerships which is responsible for
both environmental and social issues. Entrepreneurship with innovation are the two important
significant factors for the success of tourism and tourism development in global and regional
arena (Samiei & Akhoondzadeh, 2013)

Types of entrepreneurs

Ethnic

The term "ethnic entrepreneurship" refers to self-employed business owners who belong to
racial or ethnic minority groups in the United States and Europe. A long tradition of academic
research explores the experiences and strategies of ethnic entrepreneurs as they strive to
integrate economically into mainstream U.S. or European society. In the 2010s, ethnic
entrepreneurship has been studied in the case of Cuban business owners in Miami, Indian
motel owners of the U.S. and Chinese business owners in Chinatowns across the United
States.

Institutional

The British economist Edith Penrose has highlighted the collective nature of
entrepreneurship. She mentions that in modern organizations, human resources need to be
combined to better capture and create business opportunities. The sociologist Paul DiMaggio
(1988:14) has expanded this view to say that "new institutions arise when organized actors
with sufficient resources see in them an opportunity to realize interests that they value
highly".

Cultural

According to Christopher Rea and Nicolai Volland, cultural entrepreneurship is "practices of

individual and collective agency characterized by mobility between cultural professions and
modes of cultural production", which refers to creative industry activities and sectors. In their
book The Business of Culture (2015), Rea and Volland identify three types of cultural
entrepreneur: "cultural personalities", defined as "individuals who build their own personal
brand of creativity as a cultural authority and leverage it to create and sustain various cultural
enterprises"; "tycoons", defined as "entrepreneurs.

Feminist

A feminist entrepreneur is an individual who applies feminist values and approaches through
entrepreneurship, with the goal of improving the quality of life and well-being of girls and
women. Many are doing so by creating "for women, by women" enterprises.

Social

Student organizers from the Green Club at Newcomb College Institute formed a social
entrepreneurship organization in 2010. Social entrepreneurship is the use of the by start-up
companies and other entrepreneurs to develop, fund and implement solutions to social,
cultural, or environmental issues. This concept may be applied to a variety of organizations
with different sizes, aims, and beliefs. For-profit entrepreneurs typically measure
performance using business metrics like profit, revenues and increases in stock prices, but
social entrepreneurs are either non-profits or blend for-profit goals with generating a positive
"return to society" and therefore must use different metrics. For example, an organization that
aims to provide housing and employment to the homeless may operate a restaurant, both to
raise money and to provide employment for the homeless people.

Nascent

A nascent entrepreneur is someone in the process of establishing a business venture. In this

observation, the nascent entrepreneur can be seen as pursuing an opportunity, i.e., a
possibility to introduce new services or products, serve new markets, or develop more
efficient production methods in a profitable manner. With this research, scholars will be able
to begin constructing a theory of the micro foundations of entrepreneurial action. Scholars
interested in nascent entrepreneurship tend to focus less on the single act of opportunity
exploitation and more on the series of actions in new venture emergence; indeed, nascent
entrepreneurs undertake numerous entrepreneurial activities, including actions that make their
businesses more concrete to themselves and others.

Project-based

Project entrepreneurs are individuals who are engaged in the repeated assembly or creation of
temporary organizations. These are organizations that have limited life spans which are
devoted to producing a singular objective or goal and get disbanded rapidly when the project
ends. Industries where project-based enterprises are widespread include: sound recording,
film production, software development, television production, new media and construction. A
project entrepreneur who used a certain approach and team for one project may have to
modify the business model or team for a subsequent project. Project entrepreneurs are
exposed repeatedly to problems and tasks typical of the entrepreneurial process. Resolving
the first challenge requires project-entrepreneurs to access an extensive range of information
needed to seize new investment opportunities. Resolving the second challenge requires
assembling a collaborative team that has to fit well with the particular challenges of the
project and has to function almost immediately to reduce the risk that performance might be
adversely affected. Another type of project entrepreneurship involves entrepreneurs working
with business students to get analytical work done on their ideas.

Millennial

The term "millennial entrepreneur" refers to a business owner who is affiliated with the
generation that was brought up using digital technology and mass media—the products of
Baby Boomers, those people born during the 1980s and early 1990s. Also known as
Generation Y, these business owners are well equipped with knowledge of new technology
and new business models and have a strong grasp of its business applications. There have
been many breakthrough businesses that have come from millennial entrepreneurs such as
Mark Zuckerberg, who created Facebook. Despite the expectation of millennial success, there
have been recent studies that have proven this to not be the case. The comparison between
millennials who are self-employed and those who are not self-employed shows that the latter
is higher. The reason for this is because they have grown up in a different generation and
attitude than their elders. Some of the barriers to entry for entrepreneurs are the economy,
debt from schooling and the challenges of regulatory compliance.

Importance of Sustainability in Entrepreneurship

Tourism is one of main economic pillars in India as it represents an estimated 6.8% of its
GDP. The economic growth is achieved through the tourism entrepreneurs the majority of
them run an SME which means that the spirit of entrepreneurship is the most important lever
of national economy.

The main tourism activity is focused in mass market tourists which means mainly recreation
tourism and a small percentage of the whole tourism economic transactions, which is
estimated to be less than 10% is coming from alternative forms of tourism such eco-tourism,
educational tourism, religious tourism, third age, health tourism, wine tourism, sport tourism
or professional tourism etc.

The last form of tourism however, which includes congresses and incentives tours is one of
the most important economic resources among the variety of tourism forms offered in India.
Sustainability in tourism can be applied to all forms of tourism, which means that tourism
entrepreneurs must not compromise the life of the next generations for their own benefit.
Sustainability has three main axes the environment, the economy and the society or the
human capital in general (Fotiades, 2009).

It is obvious that tourism has a number of implications (Markandya, Taylor & Pedroso, 2003)
which are not only economical but namely in the environment but of course in the society,
the local culture, the ecosystem etc. The question is how tourism entrepreneurs perceive
tourism sustainability in India and if this is an important factor to consider when they come to
take entrepreneurial decisions. To answer the question, it is useful to consider the distribution
of employment in the area according to the National Statistical Agency.

Companies and organizations who have built sustainability into the DNA have only one
choice to succeed: make sure that everyone is engaged with the sustainability goals. Internal
and external stakeholder engagement results in several benefits. Here is a glimpse of those
business benefits:

1. It provides competitive advantage

Placing climate actions in business strategy, showing environment, social and governance
impacts and communicating transparently about what you do, give you competitive edge
against competitors. A sustainable company attracts new talents, new customers and new
investors because they positively affect the society. In other words, companies who make a
difference for customers, employees and other groups in society attract impact investors and
increase the overall stakeholder engagement.

2. It increases the bottom line

Businesses who create sustainable growth will be eventually rewarded. Providing products
and services that are sustainable throughout their life cycle and social aspects, attract clients
who are increasingly aware of the responsible production and consumption patterns. The fact
is that customers are more and more seeking sustainable products and services and companies
who answer to this need are growing quicker than their unsustainable competitors.

3. It reduces costs

All businesses look for growth but what matters is how its achieved. Becoming more circular
in design state of everything by applying circular economy principles or making investments
for equipment and innovations that optimize product manufacturing process all save costs.
One single aspect that increases costs are stranded assets, unnecessary loss and waste of
materials that are composed in production phase. By reducing or completely eliminating this
waste and infra trails, business increases savings.

4. It builds employer image and brand

The company consists of values, goals and practices that form the working culture. A
sustainable business commits in zero tolerance of discrimination, bullying, illegal practices
and inequalities linked to diversity (sex, age, status, nationality and disability) as well as
making no harm to the environment. It builds your image as an employer and how
stakeholders see your brand.

5. It is absolutely necessary
Speaking of planetary boundaries, the global pressure and what we already experience, there
is only one option; to develop businesses into more sustainable direction. Companies must
adapt and improve reactivity in the rapidly changing world.

CHAPTER – 2 HISTORY AND OVERVIEW

HISTORY OF ENTREPRENEURSHIP

17th-century

Walloon-Dutch-Swedish businessman Louis de Geer was a pioneering entrepreneur and

industrialist at the dawn of modern capitalism.

Emil Jellinek-Mercedes (1853–1918), here at the steering wheel of his Phoenix Double
Phaeton, was a European entrepreneur who helped design the first modern car "Entrepreneur"
is a loanword from French. The word first appeared in the French dictionary entitled
Dictionnaire Universel de Commerce compiled by Jacques des Bruslons and published in
1723. Especially in Britain, the term "adventurer" was often used to denote the same
meaning. The study of entrepreneurship reaches back to the work in the late 17th and early
18th centuries of Irish-French economist Richard Cantillon, which was foundational to
classical economics. Cantillon defined the term first in his Essay sur la Nature du Commerce
en Générale, or Essay on the Nature of Trade in General, a book William Stanley Jevons
considered the "cradle of political economy". Cantillon defined the term as a person who pays
a certain price for a product and resells it at an uncertain price, "making decisions about
obtaining and using the resources while consequently admitting the risk of enterprise". Dating
back to the time of the medieval guilds in Germany, a craftsperson required special
permission to operate as an entrepreneur, the small proof of competence, which restricted
training of apprentices to craftspeople who held a Meister certificate. This institution was
introduced in 1908 after a period of so-called freedom of trade in the German Reich. In 1935
and in 1953, greater proof of competence was reintroduced, which required craftspeople to
obtain a Meister apprentice-training certificate before being permitted to set up a new
business
20th century

In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and
other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek.
While the loan from French of the word "entrepreneur" dates to the 1850, the term
"entrepreneurship" was coined around the 1920s.

According to Schumpeter, an entrepreneur is willing and able to convert a new idea or

invention into a successful innovation. Entrepreneurship employs what Schumpeter called
"the gale of creative destruction" to replace in whole or in part inferior offerings across
markets and industries, simultaneously creating new products and new business models, thus
creative destruction is largely responsible for long-term economic growth. The idea that
entrepreneurship leads to economic growth is an interpretation of the residual in endogenous
growth theory and as such continues to be debated in academic economics. For Schumpeter,
entrepreneurship resulted in new industries and in new combinations of currently existing
inputs. Schumpeter's initial example of this was the combination of a steam engine and then
current wagon making technologies to produce the horseless carriage. In this case, the
innovation (i.e., the car) was transformational, but did not require the development of
dramatic new technology. For Schumpeter, the entrepreneur did not bear risk: the capitalist
did. Schumpeter believed that the equilibrium was imperfect. Schumpeter (1934)
demonstrated that the changing environment continuously provides new information about
the optimum allocation of resources to enhance profitability. Some individuals acquire the
new information before others and recombine the resources to gain an entrepreneurial profit.
Schumpeter was of the opinion that entrepreneurs shift the production possibility curve to a
higher-level using innovations.

21st century

In 2012, Ambassador-at-Large for Global Women's Issues Melanne Verveer greets

participants in an African Women's Entrepreneurship Program at the State Department in
Washington, D.C. In the 2000s, entrepreneurship has been extended from its origins in for-
profit businesses to include social entrepreneurship, in which business goals are sought
alongside social, environmental or humanitarian goals and even the concept of the political
entrepreneur. Entrepreneurs are leaders willing to take risk and exercise initiative, taking
advantage of market opportunities by planning, organizing and deploying resources, often by
innovating to create new or improving existing products or services. In the 2000s, the term
"entrepreneurship" has been extended to include a specific mindset resulting in
entrepreneurial initiatives, e.g., in the form of social entrepreneurship, political
entrepreneurship or knowledge entrepreneurship.

HISTORY OF ENTREPRENEURSHIP IN INDIA

Entrepreneurship has been in vogue right from ancient times in India. During the medieval
and early modem periods, it did not have the same vigor that was experienced in the
contemporary period in the Western countries. Rather, the people who took entrepreneurship
during the British rule had to face insurmountable problems. In this chapter unit we would
look into the factors that were mainly responsible for dampening the entrepreneurial spirit in
India. Certain policy decisions were made during that period, which were detrimental to any
kind of enterprise by the Indian people. Yet, in certain parts of India, despite the unfavourable
conditions, Indian entrepreneurship could not be curbed.

Some of the major historical conditions for entrepreneurship development in India are as
follows: 1. Non-agricultural Production in Traditional India 2. Caste-based Organization of
Production 3. Rise of Indian Entrepreneurial Class.

History of modern industrial production in India is not old but non-agricultural industrial
production in country is really so. Handicrafts of artistic quality manufactured by the
indigenous artisans occupied pride of place during the 17th and 18th centuries.

Silk weaving in Varanasi, woollen shawls of Kashmir, stone carvings of Rajasthan and
woollen carpets of Bhadohi-Mirjapur are some of the items that can quoted as examples. Rise
of Indian entrepreneurship in India has been staggering. Political, social and cultural factors
have been considered to be responsible for this state of affairs. Indian entrepreneurship,
therefore, can be understood only by taking into account the broad historical conditions.
1. Non-agricultural Production in Traditional India:

Although, factory-based industrial production in India started hardly a century ago, evidences
prove that the non-agricultural manufacturing existed even during the Mughal period, which
occupied place of excellence in the world.

Highly skilled artisans of the country were engaged in manufacturing cotton textiles, means
of transport (ship building in particular), house construction, metal and stone works. Cotton
textile was mainly manufactured and produced in almost every part of the country.

Dacca, Patna, Banaras, Lahore, Multan and Allahabad were the places of repute for the fine
quality cloth. Technology used for production was simple and cheap. Production was a
household affair and its supply was confined to meeting the demands of people of the same
village. The urban market was very small and only the remains of the production after village
consumption were transported there.

2. Caste-based Organization of Production:

In pre-colonial India, manufacturing was mainly a rural activity. Agriculture and non-
agricultural manufacturing activities were organically linked with the caste-based social
organization of the village to provide self-sufficiency to the village life. The manufacturing
was carried out by the artisan castes.

Artisan castes like weavers, potters, carpenters, blacksmiths and some lower caste with fixed
hereditary occupations like barbers, grain-roasters, water-carriers and washer men used to
serve the land-owning higher castes people. The service-providing occupational castes and
service-receiving higher castes were traditionally tied with each other into a relationship of
client-patron type.

The former served the latter by their occupations which, in turn, provided shelter to them
which included payments in kind (agricultural produce at the time of harvesting and a piece
of land for their own cultivation).

This socio-economic institution was called ‘jajmani’ system. The ‘jajmani’ system has been
appreciated by functionalists like William Wiser and K. Ishwaran as a healthy rural economic
system but the elements of dominance had been glaring in it.

TRACES OF ENTREPRENEURSHIP IN ANCIENT INDIA

Indian society, prior to the Muslim and British rule, was confined to villages with its base in
the rural economy. A village, or at the most, a group of adjacent villages within a particular
area was the primary object of focus. This was due to minimalist demands of the people. The
nature of consumption, therefore, was far less diversified, in comparison to that during the
later periods. This self-sufficient characteristic of the rural society & economy, in fact,
protected the artisans from external pressures of competition.

In ancient India, Guilds became an increasingly important factor in the urban life, both in
their role in "organization of production and in shaping of public opinion". Artisans, being
unable to compete with the guilds in their individual capacity, had no alternative but to join
them. Besides, the Guilds offered general security and social status. Guilds, like present day
companies, had to register in a particular locality and had to take prior permission from the
authorities in order to shift their location. Artisans of different crafts formed different Guilds.
There were Guilds of potters, metal workers, carpenters, and so on of others. To cope with
the demand for certain commodities, Guilds had to, at times, hire labour and slaves.
Manufacturing activity took place in areas where raw material was easily found, or where
there was a tradition of a particular craft. Artisans migrated to these areas from the
surrounding places. This was more so especially with the spinning and weaving of cotton and
silk. Guilds also played the role as centres of technical education. Besides imparting
knowledge related to a specific craft, it also improved upon it. The Guilds took out
processions with banners and insignia on festive occasions. It was a kind of publicity.

Modern industrial activity in India started around the middle of the nineteenth century. It was
a very modest beginning and most of manufacturers in the beginning were the British. Tata
Iron and Steel Works was perhaps the first Indian enterprise to start in the year 1911.

Cotton, jute and coal were the first fields which constituted the industrial sector. This was the
time which marked the end of the dominance of the traditional industries and opening of the
gate for the supply of indigenous entrepreneurship.

Journey of Indian industries began with cotton textile. The first cotton mill was established in
the year 1854 by a member of the Parsi community – a successful cotton merchant of that
time. Industrial growth in the country accelerated during the Second World War, but the
emergence of entrepreneurs was very slow.

Two major factors have been considered to be responsible for the poor entrepreneurial
supply:
(a) Policies of the British Rule

(b) Indian social structure

The British administrators, after the Industrial Revolution in England, needed the Indian
market to supply the finished goods produced in huge quantities by the machines and
transport the raw material of the country to their factories.

This was made possible by them by way of implementing the policies which discouraged
indigenous industry. Therefore, the British administrators transported the raw material to
Britain and discouraged indigenous manufacturing to allow the British products to find a
market in India.

Apart from the British inhibitive industrial policies, the Indian social structure did not support
the growth of entrepreneurs in the country. The caste-based traditional social structure had
fixed occupation for each individual and provided very little liberty for occupational
mobility.

Traditional business caste people, due to their occupational heritage and training in business
activities, entered entrepreneurial arena first. Other caste people could not pace with them in
this field due to their non-conducive social background. The scheduled castes had and have
the lowest representation in the business field.

The rise of Indian entrepreneurial class is marked by the entry into manufacturing sector
initiated by the three communities of the country: the Parsis, the Gujaratis and the Marwaris.
The probable reasons of such an entrepreneurial plight of these communities may be
ascertained.

These communities were initially traders and also did not occupy a clear-cut defined social
position in the caste hierarchy. Gujaratis were the first after Parsis, to have entered the
business field. These communities had a background of business family. The Parsis were
ship-builders, The Gujaratis were the traders and the Marwaris had the background of money
lending.

Gujaratis from the Hindu community were the first to enter the manufacturing field. Parsis
and Marwaris were significant business communities during the period between 1911 and
1931. Indian society is marked by an assemblage of different castes and communities
characterized by their specific social and occupational norms. These communities influenced
the course of development in the country. It is because of this perhaps that the Indian
entrepreneurship has always been numerically dominated by traditional trading castes. Over
the last three decades, radical changes have taken place in the Indian social structure as a
result of drastic urbanization and social and occupational mobility, which have contributed to
significant entrepreneurial supply from the non-business castes of the country.

HURDLES CREATED FOR INDIAN ENTERPRISE

Other services like banking, insurance and shipping, for which the Government of India had
to pay, constituted the invisible services. Such services were not a free

choice that India could make among the best available in the international market. The Indian
efforts to build such service industries were throttled by the monopolistic tendencies of
Britain. It stunted the growth of the indigenous business complex of Evolution of
entrepreneurship in India understanding entrepreneurship banking, insurance, ship building
and shipping which had at one time thrived in Gujarat. India also had to pay for all the White
people invited to be employed as businessmen, professionals and administrators. Remittances
on private account of such people wiped off quite a substantial amount of the gains from her
export of goods. The imported labour was the most expensive in the world. India had little
choice in its import and it was made to work often against the Indian interests. Factors
elaborated above were obviously responsible for stunting the organic growth of the Indian
economy. Rather it accentuated the mal-integration between the various sectors in the
economy. In doing so it led to further impoverishment and perpetuation of a dependent
economy and low level of development till the beginning of the Wars. The rapid spurt of
industrial enterprises was not without shortcomings. In spite of the failure of many of the
Ventures due to the British policies of discrimination and colonial policies that stiffed the
Indian enterprises led to the growth and development of the country as a whole.
 CHAPTER-3 OBJECTIVE OF THE STUDY

• To understand previous practices used in tourism & hospitality

entrepreneurship and is there a window of improvement?

• To find out how does tourists’ psychology affect tourism in respect to tourism
and hospitality entrepreneurship?

• To understand what are the global and local trends in reference to the hospitality
and tourism entrepreneurship?

The hospitality industry particularly lends itself to entrepreneurship. Every property, whether
it’s a restaurant or a hotel, has its own specific market characteristics which are determined
by its location and by the services on offer. Understanding the local market is the key to
success and requires an entrepreneurial mind set in order to succeed.

For instance, McDonalds, the biggest restaurant chain in the world, was actually developed
by Ray Kroc, a milkshake machine salesman. While the McDonalds brothers launched the
first drive-in restaurant, it was Kroc, who, after observing the long queues in the brothers’
establishment, saw the potential for leveraging the format into a massive worldwide network
through offering franchises. In fact, his first franchisees were his golfing buddies.

You may think that, since nowadays, the hotel industry is dominated by the big chains, like
Marriott Hilton and AccorHotels, that there’s no more room for the entrepreneurial spirit. It
should be noted these great hotel companies trace their origins to entrepreneurs. For example,
the original Marriott business was a stand selling root beer (an American soft drink) in
downtown Washington DC. Willard Marriott and his wife, Alice Sheets Marriott, opened
their nine-stool root beer stand in 1927, which subsequently grew into the Hot Shoppes
Restaurant chain that evolved into today’s Marriott International hotel company, the biggest
hotel company in the world. For the next 85 years (until 2012), Marriott was run by either J
Willard or his son, Bill Marriott, even though Hot Shoppes was introduced into the stock
market in 1953.

Conrad Hilton, the founder of the eponymous chain, got onto the hotel business almost by
accident. In 1919, he was on his way to buy a bank in Cisco, Texas, but ended up purchasing
a local hotel, the Mobley, instead. What gave him the idea to buy the property? Having
arrived in Cisco, the 31-year-old Hilton stayed at the rather featureless Mobley Hotel. The
young entrepreneur immediately noticed the queue of people lined up, hoping to get a room.
But there were no more available rooms and the owner was so tired of running the property
that he did not want to expand. Thus, customers had to be turned away and shunted off to
sleep in other hotels. The owner just wanted to retire, so was glad to turn over the hotel to
Hilton at an attractive price. While hard work and determination are crucial, entrepreneurial
success also depends on being in the right place at the right time.

Society is constantly evolving and the hospitality sector along with it. New concepts can take
over and disrupt markets in a very short period of time. Just witness the rise of Airbnb, which
celebrates its tenth anniversary this year and will book well over 100 million arrivals in its
affiliated properties during 2018. The multi-billion-dollar firm was founded by two design
school graduates, Brian Chesky and Joe Gebbia, who were just desperate to pay the monthly
rent.

POLICIES OF ENTREPRENEURSHIP IN HOSPITALITY INDUSTRY

Good strategy and governance proposals are the foundation for effective business growth in
all fields, and hospitality is no different. The history of the hospitality industry in many parts
of the world has proven that the long-term commitment to improving this business sector will
provide rewards and sustain the respective consumer sectors' satisfaction. In reality, the
entrepreneurial scenario in the Indian hospitality vis-à - vis Assam is the product of policy
interventions over the years. The current controversy highlights several policy proposals
related to the hospitality industry.

Central Initiative
As India became independent in 1947, it encouraged rapid industrialization of the country,
not only a road to national growth but also national sovereignty. The Industrial Policy of
India developed in the following years with successive Industrial Policy Decisions and
Industrial Policy Speech. The subsequent Five-Year Strategies have identified clear goals for
economic growth. The hospitality industry relies solely on the development of the primary
and secondary industries. The hospitality industry also expands as there is development in the
main and secondary industries. There is also a connection between general industrial policy,
ensuing industrial development and the development of the hospitality industry, which in
subsequent planning efforts became manufacturing.

The Govt introduces various manufacturing policies. Since 1948, India. In 1948, the first
Industrial Policy Resolution declared large contours of the industrial growth plan. It rendered
a significant distinction between enterprises which were solely controlled by the state, that is,
the public sector, private sector businesses and the joint market. In January 1950, the
Planning Committee in March 1950 was created and the Industrial Department and Control
Act was passed in 1951 to allow the government to take appropriate action to control, by way
of licenses, the trends of industrial production. The resolution of 1956 on industrial policy
implied that a focus on heavy industry would take the economy on a long-term higher growth
course. The legislation broadened the public sector's focus. The goal was to speed up
economic development and accelerate the industrialization process as a way to create a
democratic model of society. The Resolution on Industrial Policy – 1956 divided sectors into
three groups. There were 17 businesses in the first tier. This involves roads, air travel, arms
and bombs, iron, steel and nuclear energy. The second group contained 12 sectors which
would eventually be state-owned, but which would complement state efforts. The third group
covered all remaining sectors, and the private sector was supposed to develop these sectors
but stayed available to the state. The Industrial Policy Resolution of 1956 has sought to
reduce geographical inequalities by creating areas with a low manufacturing base. Thus,
sufficient infrastructure was properly emphasized for the economic growth of such areas.

The Committee of Inquiry into Industrial Licensing Policy of 1967 proposed that the licenses
to major industrial firms should be issued only for the development of enterprises in core and
heavy investment sectors, which would entail a reorientation of industrial licensing policy. In
1969, the MRTP Act was developed to allow the government to efficiently regulate the
accumulation of economic influence. The latest 1970 Industrial Licensing Program grouped
sectors into four divisions. The first group, defined as the 'heart sector,' was the primary,
essential and strategic sectors. The second group defined as "Large Construction Market"
featured more than Rs.50 million investment ventures. The third group, "Lower Market,"
consisting of Rs. 10 million to Rs.50 million investment ventures. The fourth group was the
'De approved Market,' with fewer than 10 million Rs. contributions and licensing exemptions.
The industrial licensing policy of 1970 restricted the position of major enterprises and
international firms to the central, heavy and export-oriented industries.

The Industrial Policy Declaration of 1973 gave priority to small and medium-sized business
companies in setting up new capacities, especially for the development of mass consumer
products, with the objective of preventing excessive concentration of industrial operation in
large industrial homes. New undertakings with fixed assets up to Rs. 10 million were
excluded from the licensing conditions for major asset growth. This exception does not
extend to monopolies and discriminatory market practices (MRTP) businesses, international
firms and current approved or registered firms with fixed assets amounting to or exceeding
Rs. 50 million.

The Industrial Policy Statement of 1977 stressed the decentralization of the regional, regional
and cottage enterprises in the industry with increased position. Near contact often occurred
between the manufacturing and agricultural industries. Strom generation and transmission is
assigned the highest priority. According to the Foreign Exchange Control Act (FERA) 1973,
international firms that reduced their international stock to up to 40% should be handled at
the same time as Indian businesses. In the 1980 Industrial Policy Declaration, focus was put
on fostering internal competitiveness, developing technologies and modernizing industries.
Any of the socio-economic goals mentioned in the declaration were

i) maximum network power usage,

ii) improved efficiency,

iii) higher rate of employment,

iv) ethnic inequalities elimination,

v) reinforcement of the agricultural base,

vi) assistance to export-oriented enterprises and

vi) security of the customer from rising costs and low service.
Political steps to revive the productivity of public sector enterprises (PSUs) were announced
by establishing management systems in functional areas such as logistics, financing,
marketing and knowledge.

The world is undergoing a major shift in decision-making and buying power, and it’s
changing the hospitality industry. The only way to see continued success is to prepare for
these inevitable changes.

Let’s look at a few facts about this generation:

1.Millennials say: sustainability is the future of hospitality

55% of global travellers say that they are more determined than ever to choose sustainable
accommodation than they were last year — but lack of appealing options makes it difficult to
put this into practice.

87% of millennials believe that the success of a business should be measured by its impact on
the world.

Millennials have a hard time trusting businesses. They used to think 61% of businesses in the
world had a positive impact on society — now, only a year later, only 55% of them do. And
that number is projected to keep falling unless hospitality (and other industries) prove that
they’re interested in more than just the bottom line.

Today, hotel sales and catering professionals need to expand how they engage with millennial
attendees on a few different levels. They’re focusing on:

• Removing single-use plastics from their dining centres and restaurants

• Monitoring use of water

• Sourcing foods from local farms

2. Hospitality professionals need to think globally

We often plan events locally, but the hospitality industry needs to start thinking
internationally.

Global hotel studies say the industry is expected to see a significant increase in the market
need for up-and-coming tourism destinations that previous generations of travellers hadn’t
even considered (like Central & South America and Canada).
Demand for international travel is flourishing thanks to low unemployment rates and post-
recession spending, causing top airlines like American Airlines to add more direct flights
routes to foreign countries. The airline added a direct flight from Newark to Cape Town this
year, with plans to expand even further in the future.

3.Old threats will become new inspiration

Airbnb now offers more than 4 million places for guests to stay, and recently announced an
upcoming partnership with Century 21 that will officially place the travel giant into the real
estate industry as a builder and seller of houses. In the past, hoteliers viewed companies like
Airbnb as a threat. But things are changing, to their benefit.

Pressure from Airbnb and other competitors has pushed hoteliers towards better practices —
like adopting more creative and unique properties distinctly different from the traditional
hotel experience. The success of Marriott’s Moxy hotel is a great example of what we have to
look forward to in the coming years.

As Airbnb continues to expand into hotels, hotels are expected to continue to expand into
home sharing, which means more opportunities for profitability. Especially when you
consider the advantages of staying in affordable rentals that are regulated and owned by a
corporate entity rather than the privately owned versions that are often hit or miss (or
downright creepy) all around.

The basics of the hospitality industry haven't changed much over the last few hundred years.
The innkeeper of yesterday offered a safe and hopefully clean place to sleep and perhaps a
hot meal. Modern day hotels offer much the same. What does change is who travels, why
they travel and what the travellers want.

Staycations on a Downtrend

During a recession, travellers forgo expensive vacations at destination resorts and stay closer
to home, if they travel at all. As the economy brightens, vacationers are resuming their travel
plans. This bodes well for not only resorts, but hotels located near major vacation
destinations, theme parks, national parks and major cities. Even smaller cities and towns
benefit as travellers visit friends and families more frequently.
International Travelers on the Uptrend

International travel is on the increase, with China leading the way according to
HotelExecutive.com. Some 10 million Chinese travellers are expected to visit the United
States at time of publication. The average stay is seven days, which means 70 million room
nights. If the average daily rate is $120, that's $8.4 billion in additional revenue for the
domestic hotel industry.

Social and Mobile Media

Social media and mobile marketing are on the upswing, while traditional marketing is
waning. The impact on the hotel's bottom line can be positive, since television, print and
radio advertising are far more expensive than social and mobile media, but it requires hiring
or training your staff in these mediums. Designate a staff member to become well-versed in
social and mobile media, establish the media accounts, update the accounts and recruit
followers and friends. Encourage hotel guests to become friends and followers by offering a
discount on a future visit. Meeting planners are also leaning more on social networking than
before when making decisions on which hotels to book.

Direct Booking Increases

Discounting through online hotel reservation or travel sites does fill rooms, but at a
substantial price per room night discount. That's good news for the traveller and not so good
news for the hotel. Savvy hoteliers are realizing that visitors to their hotel's website want
more than a sales pitch or description of the hotel's facilities. Content has become king,
including videos and virtual tours of the hotel's facilities. Hotels are finding ways to
encourage travellers to book through the hotel's website rather than through a third party,
saving commissions.

Now's the Time to Sell

When interest rates drop and profits increase, now could be the time to sell the hotel,
according to speakers at the 2013 annual Lodging Conference. Hotel owners wanting to cash
out of well-performing hotels have several factors going for them including increased interest
from investors, a bright outlook for the future and available financing.

CHAPTER-4 IMPORTANCE OF ENTREPRENEURSHIP

WHY IS ENTREPRENEURSHIP IMPORTANT?

Entrepreneurship is important for a number of reasons, from promoting social change to

driving innovation. Entrepreneurs are frequently thought of as national assets to be cultivated,
motivated, and remunerated to the greatest possible extent. In fact, some of the most
developed nations such as the United States are world leaders due to their forward-thinking
innovation, research, and entrepreneurial individuals.

Great entrepreneurs have the ability to change the way we live and work, on local and
national bases. If successful, their innovations may improve standards of living, and in
addition to creating wealth with entrepreneurial ventures, they also create jobs and contribute
to a growing economy. The importance of entrepreneurship is not to be understated.

It can be considered a national asset, and entrepreneurs are the drivers of that asset for any
country. It is a dynamic process that not only increases wealth and but can also create value
that results in improved well-being. It plays an important role in changing society, so it
makes sense to cultivate, motivate, and remunerate this greatest asset to the greatest extent
possible.

In entrepreneurship, unutilized resources, labour, and capital are utilized most efficiently.
Entrepreneurs take on risks in the hopes of making profit, or in the case of social
entrepreneurship, of solving a problem facing communities. So, the significance of
entrepreneurs and the role of entrepreneurship go beyond the business world. The importance
of entrepreneurship is so broad that it’s quite tough to explain all the aspects of it in a short
blog post. However, I would like to shed some light on the importance and role of
entrepreneurship in economic development and society

HELPS IN ECONOMIC GROWTH

New products and services created by entrepreneurs can produce a cascading effect, where
they stimulate related businesses or sectors that need to support the new venture, furthering
economic development.

For example, a few information technology companies made up the IT industry in India
during the 1990s. The industry quickly expanded and many other sectors benefited from it.
Businesses in associated industries, such as call centre operations, network maintenance
companies, and hardware providers flourished. Education and training institutes nurtured a
new class of IT workers who were offered better, high-paying jobs.

A large number of new jobs and opportunities are created by entrepreneurship.

Entrepreneurship creates a huge number of entry-level jobs that are very much important to
turn unskilled jobholders into skilled ones. It also prepares and provides experienced workers
to large industries. The increase in the total employment of a country largely depends on the
rise of entrepreneurship. So, the role of entrepreneurship in creating new job opportunities is
huge.

By bringing innovation to every aspect of businesses, entrepreneurial ventures enhance

production utilizing the existing resources in the most effective ways. Entrepreneurs develop
new markets by introducing new and improved products, services, and technology. Thus,
they help generate new wealth and add more to the national income. So, the government can
offer the citizens more national benefits.

ENTREPRENEURSHIP PROMOTES INNOVATION

Believe it or not, business entails creativity, and not just a little, but a lot. Taking into account
the fact that all things and all results start out from a single idea – which requires a lot of
creativity – then it makes sense that business or entrepreneurship should also give a lot of
credit to creativity. That is why there is such a thing as “entrepreneurial creativity”.

Through the right practices of research and development, entrepreneurs bring new innovation
that opens the door of new ventures, markets, products, and technology. Entrepreneurs have a
role to play in solving problems that existing products and technology have not yet solved.
So, by producing new products and services or bringing innovation to existing products and
services, entrepreneurship has the potential to improve peoples’ lives.

relativity, in general, is a precursor to innovation, and Entrepreneurship has always been

about innovation. The combination of creativity and an entrepreneurial spirit in the person of
the entrepreneur will inevitably end up into innovation in business and value-creation. It goes
without saying that creativity is already inherent among entrepreneurs; it is in their make-up.
This entrepreneurial creativity is what sets them apart from your usual cardboard cut-out
businessman or typical investor.

You have the idea, you have the resources, and you even have a lot of motivation and passion
to bring your idea to life. Now it is time to bring your brilliant idea to reality. This is called
innovation.

ADDS VALUE TO THE NATIONAL INCOME

Entrepreneurial ventures help generate new wealth. Existing businesses may remain confined
to existing markets and may hit a limit in terms of income. New and improved products,
services, or technology from entrepreneurs enable new markets to be developed and new
wealth to be created.

Additionally, increased employment and higher earnings contribute to better national income
in the form of higher tax revenue and higher government spending. This revenue can be used
by the government to invest in other struggling sectors and human capital. Although it may
make a few existing players redundant, the government can soften the blow by redirecting
surplus wealth to retrain workers.

Some of the roles of entrepreneurs are: -

1. Capital Formation

2. Improvement in Per Capita Income

3. Generation of Employment

4. Balanced Regional Development

5. Improvement in Living Standards

6. Economic Independence

7. Backward and Forward Linkages

8. Inspire Others towards Entrepreneurship

9. Create Knowledge Spill overs

10. Augment the Number of Enterprises

11. Provide Diversity in Firms

12. Organising of Society’s Productive Resources

13. Production of New Articles

14. Development of New Production Technique and a Few Others.

CREATES A SOCIAL CHANGE

Through offering unique goods and services, entrepreneurs break away from tradition and
reduce dependence on obsolete systems and technologies. This can result in an improved
quality of life, improved morale, and greater economic freedom.

For example, the water supply in a water-scarce region will, at times, force people to stop
working to collect water. This will impact their business, productivity, and income.

COMMUNITY DEVELOPMENT

Entrepreneurs regularly nurture ventures by other like-minded individuals. They also invest
in community projects and provide financial support to local charities. This enables further
development beyond their own ventures.

Some famous entrepreneurs, such as Bill Gates, have used their money to finance good
causes, from education to public health.
Success breeds success, and once one entrepreneur has flourished in a given market more
often than not another businessman or woman looks to enjoy their own slice of the pie.

As we know, competition is a good thing for the consumer, as it requires companies to

deliver a better-quality product in order to survive. This can also create price wars (take a
look at the ongoing battle between the Xbox and PlayStation as a good example), and it is
true that often only the strongest will prosper. But the benefits to the general public are
obvious.

THE DRAWBACKS

You could be forgiven for assuming that the work of entrepreneurs is solely positive, but
unfortunately there are some concerns attached to entrepreneurial activity...

Use of natural resources

While there is a subset of business owners whom we can class as social entrepreneurs,
unfortunately not all are blessed with an environmental conscience.

Pretty much every company that operates today uses natural resources in some way –
electricity, water, gas, paper etc – and this is simply unavoidable. Some entrepreneurs will
offset their use of resources by donating to relevant charities and organisations; a form of
self-taxation, if you will. Alas, not all do.

Governmental control

While no relevant statistics exist to back up this theory, it is believed that governments that
seek to nurture entrepreneurship can actually unbalance a market by creating an environment
which can be exploited by business. This can manifest itself in monopolies, unfair pricing,
corruption and even fraud.

Furthermore, Wim Naude, a prominent economist and scholar at the Maastricht School of
Management, writes: "While entrepreneurship may raise economic growth and material
welfare, it may not always result in improvements in non-material welfare (or happiness)."
Unemployment

Of course, this is not true in all cases, but it can also be said that while one new market
entrant flourishes, so too must an existing company – who is unable or simply unwilling to
compete with this innovative new player – depart the scene.

This is often the case in the UK retail sector, where a national chain may open a new store in
a village or town which forces independent, local retailers into a forced ultimatum: slash
prices or die.

IMPORTANCE OF ENTREPRENEURSHIP IN INDIAN ECONOMY

Entrepreneurship is our most important driver, kicking off a virtuous cycle driving the Indian
economy.

• Entrepreneurship drives business creation: People who are entrepreneurs are

constantly innovating, finding new market opportunities and products that can serve them.
Anyone who is creating a new business is attempting to do something innovative, pushing
both technical and human capabilities.

• Businesses creation drives value addition: Businesses create products and services
that add a lot of economic value. They solve problems for businesses or consumers, and the
activities they engage in add value. This value is captured in the GDP and is reflected in the
market value - for e.g., venture capital backed companies account for 4.3 trillion of US
market cap.

• Value addition drives job creation: For a country with more than 50% of its
population below the age of 25, generating employment is critical. India has a troubling issue
where more than 30% of the youth is unemployed - creating jobs is the only solution to this
problem which can be destabilizing. Companies that are able to generate value will hire more
people to generate even more value.
• Job creation drives consumption: Once people find employment and have jobs, they
have a steady stream of income. With income comes the ability to purchase and consume - a
country that has more employed people is also able to spend and consume more.

• Consumption drives entrepreneurship: As people begin to consume more, a larger

market is created. Higher consumption also means varied consumption, people have more
evolved needs and wants. Who serves these more complex, large, new needs? Entrepreneurs.

India is incredibly entrepreneurial on a micro scale i.e., as individuals we are incredibly

entrepreneurial. You will see this in our daily behaviour, as well flourishing tiny businesses.
This is not the poster boy entrepreneurship of our start-ups; it is what we have been seeing for
decades.

Where we need to get better is at a macro scale - the ability to build mammoth businesses and
at a faster pace. 40% of the ten largest businesses by market cap in India were founded after
the 70s (HDFC, Reliance, Infosys and Suzuki). On the other hand, 40% of the ten largest
businesses in the US were founded (or had roots) before the 70s (Berkshire, Johnson and
Johnson, Exxon and JP Morgan Chase). There is thus more disruption of status quo in the US
than India despite the fact that TCS won’t even rank in the top 20 globally on a PPP basis.
 CHAPTER-5 CRISIS IN ENTREPRENEURSHIP

AND SUSTENANCE OF HOSPITALITY

The super competitive business world brings many challenges to entrepreneurs. This is the
reason behind the launch of entrepreneurship programs such as Start-Up India and Make in
India by the government for imparting adequate importance to business minds for our
country’s economic growth. In spite of a blooming start-up ecosystem, it is impossible to
ignore the challenges that act as roadblocks. Today we are going to discuss these challenges
hindering the growth curve of start-ups.

Major challenges faced by Entrepreneurs

• Cash Flow Management

• Time Management

• Hiring Of Employees

• Choosing The Product

• Delegation Of Tasks

Cash Flow Management

Cash flow as we all know is an integral part of all business ventures. However, instances are
not rare when entrepreneurs struggle with bill payment while waiting for bills to get cleared.
Delayed invoicing is a major trigger of these challenges of entrepreneurs.

Time Management

This is the biggest challenge faced by multi-tasking entrepreneurs who often fall short of time
while accomplishing their objective.

Hiring Of Employees

In reality, entrepreneurs dread job interviews more than the prospective candidates as it is
usually very time-consuming.

Entrepreneurs need to review resumes, conduct interviews and filter out unqualified
candidates for finding the ones who are best suited for the job.

Once the screening process is completed, entrepreneurs need to negotiate on the salary aspect
for retaining those candidates without bleeding the company’s exchequer.

Choosing The Product

Entrepreneurs are often unsure about the products and services they wish to sell. However, it
is imperative to take the right pick which can determine the ultimate success and failure in a
competitive scenario.

Delegation Of Tasks
The successful delegation comprises of building the right process apart from providing the
resources and authority required for its enactment. However, finding the right resources and
choosing the delegation drive can be a very complicated task.

Solution to problems faced by entrepreneurs

Proper planning and budgeting can be of great assistance in maintaining proper cash flow.
These, however, cannot save you at all times from having to stress over bills. Entrepreneurs
can improve their cash flow by demanding a down payment for services and products
provided.

The down payment demanded should cover all associated expenses apart from guaranteeing a
profit margin. Accelerating the invoice payments process can also improve the cash flow
process.

The problem regarding time management can be solved by creating a goal list broken down
into annual, monthly and even weekly objectives. Tasks which do not sync with your goals
need to be eliminated while the ones which do not require the interference of the entrepreneur
can be delegated

Another type of challenge faced by the entrepreneurs while starting a business is fulfilling all
the legal requirements to start a business.

When starting a new business venture, entrepreneurs should make sure they’re complying
with all the legal obligations of running a small business. There are a range of legal
requirements for new businesses and start-ups, including financial regulations, tax obligations
and employment laws. Make sure your new company complies with all its legal
responsibilities so you can get back to focusing on growing your business.

What Are the Legal Requirements for Starting a Business?

You may have a terrific new business idea, but in order to get your start-up off the ground,
you first have to make sure you comply with all the legal requirements involved in starting a
business. Here’s an easy-to-follow guide for starting your business legally:

Create an LLC or corporation

The first legal requirement you’ll need to meet as a new business owner is to choose the
business structure of your company. You can choose between forming an LLC or a
corporation. There are advantages and disadvantages to both structures, so do your research
before selecting a business structure for your start-up.

• LLC: an LLC, or Limited Liability Company, protects you from personal liability under
most circumstances. This means that if your business is sued or if it declares bankruptcy,
your personal assets including your home and vehicle won’t be at risk. With a LLC you’ll be
able to file your business income as part of your personal income taxes, but you will likely
need to pay self-employment tax.

• Corporation: A corporation, or C corp., is a company that is legally a separate entity from

its owner or owners. Corporations offer the greatest level of personal protection from liability
out of all business structures. However, they’re more expensive and complicated to form.
Corporation’s file separate income tax on their profits.

Once you’ve decided on a business structure, you’ll need to register your business name.
Choose a name that reflects your brand and make sure it hasn’t already been claimed. You
can then choose to register your business. There are four ways to register it, each serving its
own purpose:

• An entity name: legally protects your business at a state level

• A trademark: legally protects your business at a federal level

• A DBA (Doing Business As): doesn’t offer legal protection, but may be required depending
on your location and business structure

• A domain name: claims your business’s web address

Apply for a federal tax id number

Your federal tax identification number is known as an Employer Identification Number (EIN)
and it allows you to legally hire employees, pay federal taxes, apply for business licenses and
open a business bank account. You can apply for an EIN through the IRS website. Your
business will need an EIN if you plan on doing any of the following:

• Hiring and paying employees

• Filing employer tax returns

• Operating as a corporation

• Using a tax-deferred pension plan

Check if you need a state tax id number

Do some research to find out whether your start-up needs a state tax ID number. You’ll only
need one if the state you operate in collects taxes from businesses. Since tax obligations vary
from state to state, it’s best to visit your own state’s website and check the local laws related
to your income and employment tax obligations.

Obtain business permits and licenses

You will need to apply for business licenses and permits at the federal and state government
level, but the specific licenses you need depend on the industry you work in and your
business location. The Small Business Administration has a list outlining common federal
business licenses required based on industry, which is a good starting point for your research.

At the state level, the licenses and permits needed and the fees owed will depend on where
you’re located and what your primary business activities are. Research requirements at the
state and local levels based on where you do business.

Protect your business with insurance

Business insurance can protect you in cases where the personal liability protections offered
by your specific business structure aren’t enough. Business insurance can protect not just
your personal assets, but your business assets as well. Some types of insurance are required
by law, such as unemployment and disability insurance. It’s also a good idea to purchase
business insurance to protect your start-up from other potential risks.

Some common business insurance options include:

• General liability insurance: Protects your business from various forms of financial loss,
including property damage, injury, medical issues, lawsuit settlements or judgements

• Product liability insurance: If your business sells products, this insurance protects you in the
case that one of your products is defective and injures a customer
• Commercial property insurance: Protects your business from loss or damage to company
property, as a result of natural disaster, accidents or vandalism

open a business bank account

From a legal perspective, it’s important that you separate your personal and business finances
before you start collecting payments from clients. Choose a bank that’s convenient and serves
your needs, maybe by offering lower banking fees for small business clients. When you’ve
chosen a banking institution, you’ll need to provide some information about your business to
open an account, including:

• Your Employer Identification Number (or Social Security Number, in the case of a sole
proprietorship)

• The formation documents for your business

• Your business licenses

• Ownership agreement documents

Consult the professionals

To ensure you’ve covered all your legal responsibilities as a new business, it’s a good idea to
consult professionals for advice. Consider sitting down separately with both a lawyer and an
accountant to make sure that your company is covered from a legal and a financial standpoint
before opening for business.

Challenges relating to Human Capital

The challenges to entrepreneurs relating to human capital can be solved by being exclusive in
terms of ultra-specific advertisements which assist in pre-qualifying candidates. The
employee hunt needs to be approached in the same manner as that of a customer-centric
marketing campaign.

A “walk-in interview” can be conducted for acclimatizing candidates with the working
environment. Candidates can be enquired about their experiences, expectations, dedications
as well as long-term goals during the screening process. Real references pertaining to
candidates given by people who can attest to their potential and work ethic also need to be
considered.

If entrepreneurs are not confident about selecting a prosperous niche, they can delegate the
task to someone having adequate knowledge regarding the same. Be it service industry, retail
e-commerce or publishing, adequate market research needs to be conducted for a complete
SWOT analysis.

Challenges relating to Delegation

Challenges to entrepreneurs pertaining to delegation of tasks can be overcome by being ultra-

specific. In spite of being time-consuming, entrepreneurs are bound to benefit out of the
efficiency as they write down the detailed steps along with the individual responsibilities of
work personnel

Impact of stress on a business

The impact of stress in the business world usually manifests among business workers. When
employees are faced with strenuous workload levels, low morale, job dissatisfaction, and lack
of motivation from their superiors they could possibly experience work-related stress.

While stress cannot be completely absent from a business workforce, extremely high levels of
stress could be dangerous to the business’ overall performance.

Below are some effects of stress on businesses:

• Decline in productivity and employee health

• High employee turnover rates

• Frequent absenteeism

• Legal costs

• Increased training and recruitment costs

Decline in productivity and employee health

Physical cues are the most evident signs of stress, particularly for businesses with a labour-
intensive working environment. As employees get subjected to unmanageable levels of stress,
they could experience depression, anxiety, and lose focus on their job. As a result, employees
can commit more mistakes and quality of work may be compromised. This can make
employees constantly seek medical attention and take more time off work. In addition to
health-related complications, chronic stress among employees could lead to a decline in
productivity, which isn’t good news for any kind of business.

High employee turnover rates

High rates of employee turnover within businesses are one of the more direct effects of work-
related stress. Since stressed employees are most likely not satisfied with their jobs and there
working environment, they tend to simply leave the organization if they see that the company
itself will not be able to help them in addressing these concerns. A lot of businesses and
organizations tend to overlook this and fail to realize that their business might not be
handling their employees’ stress well.

Frequent absenteeism

Employees who experience chronic stress are more likely to get sick, prompting them to take
more time off from work to properly recuperate. Absenteeism could also be caused by
employees who feel that they cannot cope with the stress levels of their work environment—
prompting them to work from home to avoid stress. worse is that a lot of businesses and
companies dismiss these occurrences as mere irresponsibility and lack of discipline among
employees, unaware of the fact that the stressful work environment could affect performance.

Legal costs

If an employee feels that the business failed to provide a safe and healthy working
environment during their stay at the organization, they have the option to settle matters by
seeking legal assistance. A safe work environment includes a harassment- and bully-free
workplace, satisfactory safety guidelines (for labour-intensive workplaces), and proper
training provisions for employees. Legal disputes could be very costly for business owners
and can lead to irreversible damage to the overall reputation of the business. Increased
training and recruitment costs Businesses experiencing high levels of employee turnover will
also have to spend more on acquiring new workers as replacements for resigned employees,
leading to additional training and induction costs. Moreover, business owners might be
compelled to spend more on additional training to make sure employees remain satisfied and
motivated as part of efforts to avoid increased turnover levels.

What can business owners do?

The impact of stress management on business organizations can be seen in improvements in

employee productivity and decreased employee turnover rates. If business owners notice that
some, if not all, of their employees experience high levels of stress, consider incorporating
wellness and stress management programmes for employees. This will help alleviate stress
and increase motivation. Business owners should also re-evaluate employee workload and
discuss them in order to determine whether workload is too strenuous or otherwise. Learn
more about the benefits of meditation here. Employers should also take corrective action
within the organization and address possible working environment issues, such as cases of
bullying or harassment. This can be done by setting up meetings with employees and
discussing their individual concerns.

Pinpoint the root cause of their concerns and addressing them with some of the stress-busting
strategies business owners can use. Ensure employees are motivated enough to accomplish
their tasks and thrive in a stress-free working environment to reduce their stress levels. While
investing on stress management might be regarded as unnecessary by some businesses and
employers, keep in mind that these will be beneficial for the business in the long run and will
ensure that employees remain loyal to the business while helping the business grow.

SUSTENANCE OF HOSPITALITY

The idea of enjoying oneself at the expense of others’ meeting their basic needs doesn’t sit
well with most people.
Sustainability — the mindful use of a resource so that it isn’t used up or damaged — plays a
vital role in the hospitality industry. Hospitality organizations’ success depends on their
preserving the natural and cultural attractions that compel tourists to visit their destinations.
Not doing so has consequences. In 2018, the Thai government shut down one of its most
famous beaches, Maya Bay, for three years after daily visits of 5,000 tourists ended up
destroying most of its coral and threatening the very beauty that drew people to the area in
the first place. Local tourism operators went out of business.

With the right leadership, hospitality organizations can adopt sustainable business strategies.
Sustainability-minded hospitality leaders can also improve efficiency and attract a growing
number of customers looking for environmentally and socially responsible products and
services. Pursuing an online leadership and management degree or certificate can prepare
professionals to lead their organizations to success through sustainability in hospitality.

Why Sustainability in Hospitality Matters

“All tourism relies on the natural and cultural resources that attract tourists and act as the
main driver of growth and development in the tourism economy. Some destinations, such as
those in the Caribbean, rely on pristine beaches and crystal-clear waters to bring in tourists.
Others, such as Paris, rely on their cultural heritage—architecture, museums, cuisine—to
drive tourist visits,” explains Sergio Alvarez, assistant professor at the University of Central
Florida’s Rosen College of Hospitality Management. “As diverse as these destinations may
seem, they all share one thing in common: the attractions that make them world-class
destinations are threatened by human activity, and in many cases, tourism itself is a main
threat to these attractions.”

Sustainable practices make hospitality organizations stand out. Today’s travellers, restaurant
patrons, hotel bookers and shoppers care about sustainability. They want to know that the
companies they give their business to follow environmentally, socially and culturally sound
practices. An overwhelming majority of millennials and Generation Zeros will pay more for
products and services that don’t harm the environment, deplete natural resources, or
negatively affect the lives of people or wildlife.
As a case in point, a Nielson study found that nearly 75% of the respondents from these
younger generations are willing to take action to support this attitude. A growing number of
people from older generations also want companies to become environmental stewards. In
fact, the Nielson study found that 51% of baby boomers will spend more for sustainable
products and services as well.

To stand out, hospitality organizations can focus on a few key aspects:

Conserving Energy

Energy conservation in the hospitality industry entails a two-pronged approach: reduction and
efficiency. Organizations can start by training employees in behaviours that reduce energy
use. These behaviours can range from turning off lights to changing the settings on washing
machines and adjusting thermostats appropriately. Energy conservation may also include
friendly reminders to guests about their use of towels or electricity. For efficiency,
organizations can look for opportunities to use green technology or products. For example,
they can install solar panels for heating and cooling or switch to energy-efficient LED lights.

Reducing Waste

Organizations have numerous opportunities to limit their waste. To cut down on food waste,
companies can source their food locally or grow it on site. This reduces how much food
spoils and ensures fresher products. Businesses can also adopt food-donation policies that let
patrons know unused food will make it to the local food kitchen as opposed to just being
discarded. Installing water-efficient products, such as water-saving filters, can also make a
difference in reducing waste.

Using Organic Amenities

“At a global level, tourism is responsible for 8% of carbon emissions, which are causing
changes in our climate and rising sea levels,” notes Alvarez. “Tourism’s substantial carbon
footprint is not only caused by transportation of tourists, but also by the production and
transportation of supplies such as food, beverages, towels and linens that are a must-have in
every hotel.”
Organic products leave a lighter carbon footprint than others. By switching to organic,
businesses demonstrate a commitment to sustainability. Organic amenities can include
products made of all-natural ingredients and no harsh chemicals. For example, hotel
toiletries, cleaning supplies, food and fragrances can all come in organic forms. Additionally,
organizations can choose products that come in recyclable packaging or biodegradable
cartons.

Incorporating sustainable strategies into how an organization operates not only makes a good
impression and potentially saves money; it can also protect the natural and cultural attractions
guests have come to see.

The Benefits of Sustainability in Hospitality

Practicing sustainability in hospitality comes with many benefits. Aside from attracting more
customers and responding responsibly to what many consider a moral imperative, in light of
the current climate crisis, sustainable initiatives offer hospitality businesses incentives.

The federal government, along with states and some local governments, have enacted several
programs to promote “green” business. Using renewable energy, reducing waste and
implementing measures that enable reuse and recycling can add up to more than just energy
conservation. Incentive programs reward businesses with tax write-offs, discounts on
insurance premiums, financial grants and faster regulatory permitting. In addition, innovative,
environmentally friendly technology can result in long-term cost savings. Though sustainable
practices can require initial spending, the combined effects of energy efficiency, waste
reduction and the like can lead to spending less money in the long run.

Many hospitality organizations have adopted sustainability plans. This intentional approach
involves incorporating sustainable practices that reach across all business operations.
Sustainability plans can help improve brand image. Most consumers care about sustainability,
according to a recent Trip Advisor survey. It found that 62% of travellers had opted for more
environmentally friendly hotels, food and transportation, and 69% of survey respondents said
they intended to make even more environmentally responsible travel choices in the future.

In tourism, for instance, people often vote with their feet. If tourists learn that a business does
not take the necessary steps to eliminate or significantly reduce its negative impact on the
environment, this information will affect their perception of the company brand. Conversely,
when organizations demonstrate their commitment to green practices, they can improve their
brand image and draw more tourists. Additionally, business cultures that embrace
sustainability can also better attract the elite work talent of younger generations looking for
companies who share their values.

Challenges and Trends

While sustainability in hospitality offers clear advantages, professionals in this industry must
still overcome challenges to build sustainable strategies. For one, they must correct
misconceptions that sustainability costs more money and those consumers do not care about
it, when in fact becoming more energy-efficient saves money and developing a brand known
as sustainable attracts more patrons.

Advances in technology related to renewable energy have also lowered the costs for using
sources such as solar or geothermal energy. Additionally, tour operators who protect
ecosystems that serve as their main attraction, while cooperating with and supporting local
economies and culture, also win financially in the long run.

Some organizations worry sustainable practices can disrupt guest experience. However, if
organizations carefully focus on what guests need and customize their services accordingly,
they can improve this aspect of their business. Hersha Hospitality Trust, which owns 48
upscale hotels, has instituted sustainability initiatives that actually enhance customer
experience, including:

 Smart thermostat technology in each room that allows guests to customize

temperatures while lowering energy use
 Recycling options in guest rooms that allow guests to maintain their green habits
while away from home
  Locally sourced foods and products that allow guests to support local vendors and try
something unique to the area
 Free access to bicycles that allow guests to both get around and explore the new area
while reducing their carbon footprints

Hospitality leaders can incorporate other current and emerging trends into their
sustainability strategies, such as:

 Eliminating single-use plastic

 Creating paperless environments
 Sourcing from sustainable suppliers
 Purchasing green cleaning supplies
 Developing recycling programs

Explore How to Become a Hospitality Leader in Sustainability

“It is clear that tourism causes problems. However, leaders in hospitality and tourism have
the power to be part of the solution, rather than being a part of the problem,” says. Alvarez.
“The three pillars of sustainability — social, environmental, and economic — provide a
roadmap for visionary leaders to transform their businesses and ensure that our cherished
natural and cultural attractions are available for future generations of tourists to enjoy.”

The growing importance of sustainability in hospitality is obvious. Today’s hospitality

organizations need leaders who can help implement sustainable practices and build a culture
of social, environmental and economic responsibility.
 Breakeven Analysis towards Business

Break-even analysis is a technique widely used by production management and management

accountants. It is based on categorizing production costs between those which are "variable"

(Costs that change when the production output changes) and those that are "fixed" (costs not

directly related to the volume of production).

The Break-Even Chart

In its simplest form, the break-even chart is a graphical representation of costs at various

levels of activity shown on the same chart as the variation of income (or sales, revenue) with

the same variation in activity. The point at which neither profit nor loss is made is known as

the "break-even point" and is represented on the chart below by the intersection of the two

lines:
In the diagram above, the line OA represents the variation of income at varying levels of

production activity ("output"). OB represents the total fixed costs in the business. As output

increases, variable costs are incurred, meaning that total costs (fixed + variable) also increase.

At low levels of output, Costs are greater than Income. At the point of intersection, P, costs

are exactly equal to income, and hence neither profit nor loss is made.

CONCLUSION

The most important part of any project or research is its conclusion and justifying that if your

efforts, sources and methods were successful and were parallel to your study.

After doing our research on the topic “ENTREPRENEURSHIP IN HOSPITALITY: A

COMPARATIVE STUDY OF ITS SUSTENANCE AND CRISIS” we came to a firm
conclusion to sum up everything that has been stated so far-

That there are many ups and downs in a business and starting a business requires pre-
planning & proper implementation at every step during your journey. Market study has major
significance during both planning and implementation.

An entrepreneur will definitely face crisis as we have seen in the research, thus they must
follow the trends of sustainability in the hospitality industry so that they can have a
successful future as an entrepreneur.
With the new and changing society, there are new and changing trends in the hospitality
industry and to sustain as an entrepreneur in this industry one has to cope up with these new
trends.

Keeping in mind the psychology of the tourists’ themselves, the entrepreneur must take
needed steps and act in accordance to them.

In the end we can conclude saying that entrepreneurship in the backbone of the hospitality
industry and has a very bright future as a career option. People who wish to run their own
businesses should choose the hospitality and tourism.

Moreover, the study tells us about the efforts done and the challenges faced by an individual
in any business and this study puts forward the success rates in any new business.