Conference on “Global Tourism Growth: A Challenge for SMEs”


Hosted by the Ministry of Culture and Tourism (MCT), Republic of Korea
Gwangju, Korea
6-7 September 2005

The objectives of the Conference were to:

  • Clarify the meaning of Global Value Chains in the tourism-related industries and their contribution to sustainable growth and employment;
  • Exchange views on how to optimise the role of SMEs in the tourism economy in the framework of globalisation, in particular by examining the organisation of GVCs at national and sub national levels as well as at industry level and the role of innovation in new business models;
  • Increase the participation of tourism SMEs in the supply and distribution value chains and networks, through a better understanding of the cooperation issues among tourism enterprises and with the destination; and
  • Look at the role of the State and the policy implications in accompanying these changes.

Selected conference papers are available below:

Conference Programme

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 2005 OECD-Korea International Tourism Conference


Conclusions of the Conference

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 Conclusions and Policy Implications

 OECD Secretariat with the support of Korea Tourism Organisation


Opening Session

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 Global Tourism Growth: A Challenge for SMEs

 Peter Keller
 Chairman of the OECD Tourism Committee, Head of the Tourism Service, State Secretariat for Economic Affaires, Switzerland

Tourism is one of the world economy’s growth sectors. In view of the importance of tourism in most OECD countries there is a real need to think through the consequences of the restructuring now taking place as a result of the globalisation process and to develop new concepts to accompany tourism-dependent SMEs. This paper illustrates the crucial role of the destination in the tourism industry, particularly for the SMEs which suffer from the problems caused by their lack of size and resource. It also suggests that integration and cooperation strategies are a necessity for destination oriented SMEs.

 Enhancing the Role of SMEs in Global Value Chains

 Colin Johnson
 Professor and Chair, Department of Hospitality Management, San Jose State University, U.S.A.

This paper attempts to clarify the objectives and outlines of the on-going OECD project “Enhancing the role of SME in Global Value Chains (GVCs)”, which has a global scope. This paper also suggests that the project will provide a unique tool not only to study the patterns of cooperation between SMEs but also to draw appropriate policy conclusions and recommendations by addressing explicitly the role and place of SMEs in globalization, and their contribution to growth and economic development.

Overview of the Structural Changes in the Tourism Industries: the Perspective of SME

 Renzo IORIO
 Vice President, Federturismo / Confindustria, Italy


Session1: The Structural Changes in the Tourism-Related Industries

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 The Structural Changes in the Distribution System

 Mike Hatton
 President, World Travel Agents Association Alliance

In the tourism distribution sector we are now witnessing consolidation the like of which we have never witnessed before. Further structural change will come with increased use of technology. There is no doubt that much of the major structural change that we have already experienced and will experience in the future will be driven by major industry entities such as airlines. This paper, however, suggests that at the same time, SME’s are making their own mark as they too embrace change and in many instances due to their size can implement that change in a much more economical and faster manner.

Session 2: The Importance of Value Chains, Networks and Co-operation as Drivers for SMEs Growth, Performance and Competitiveness in the Tourism-Related Industries

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 The Impact of Technological Innovation in Managing Global Value Chains in the Tourism Industry
 Alexandros Paraskevas
 Senior Lecturer, Oxford Brookes University Business, UK

There is growing awareness that the SMEs in a value chain are strongly disadvantaged due to asymmetries of information and power in the chain, with few opportunities of upgrading. However, it is argued that technological innovation and the advent of the Internet have diminished many of these asymmetries between larger and smaller actors. This paper intends to offer an outline of the global tourism value chain, explore how technological innovations have impacted its governance. It also outlines the emerging paradigm shift as well as the increasing role of consumers in the Global Value Chains of the tourism industry.

 The Key Factors for a Successful Co-operation between SMEs and Global Players in Hotel Industry

 Minho Cho
 Professor, School of Tourism, Hanyang University, Korea

International hotel franchise companies (global players) should approach potential franchises (SMEs), especially independent local hotels by considering some important factors that are expected to inhibit them from being affiliates of franchisors. This study has identified seven factors that are deemed important to small and medium sized hotel franchising from the franchisee perspectives. The seven factors are local environment, brand name, partner characteristics, support services, system quality, cost, and communication. This study provides useful and effective ways for international hotel franchise companies to identify potential concerns that are likely to occur, and to understand why. Once the factors are recognized, international hotel franchise companies are likely to anticipate and cater for prospective franchisees’ desires and needs.

 Creating Value to Tourism Products through Tourism Networks and Clusters: Uncovering Destination Value Chains

 Patrice Braun
 Research Fellow, Centre for Regional Innovation and Competitiveness (CRIC), Australia

It is widely accepted that technological change underpins a global economy and that geographic location and concentration is of foremost importance for tourism development and competitive advantage. This paper discusses the role of tourism networks, clustering and destination value chains for micro and small and medium size tourism enterprises (SMEs) in freely assembled destinations. In discussing destination benefits and barriers surrounding SME clustering, SME positioning and performance are highlighted. It is proposed in this paper that SME clustering and value are not always naturally established. Successful destination clusters may be created by upgrading SME performance, analysing local value chains and matching both tangible and intangible sources of value, such as systems, leadership, relationships and brands with demand-side value segmentation.

Session 3: The Importance of Value Chains, Networks and Co-operation as Drivers for SMEs Growth, Performance and Competitiveness in the Tourism-Related Industries

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 The Impact of the Tourism Mega-Cluster in the National Export Strategy

 Jamaica Promotion Corporation (JAMPRO), JAMAICA

In Jamaica, the tourism industry is vital to the country’s economy in terms of its significant contribution to the GDP and foreign exchange earnings. There is stronger brand recognition of Jamaica as a destination, than of Jamaican-made products. Tourism is therefore important to the broader export sector and any related strategy. This paper aims to illustrate the ‘Tourism Mega-Cluster’ and national export strategy of Jamaica.  JAMPRO has proactively linked its ‘Tourism Mega-Cluster’ to the national export strategy through the linkages programme.

 An Asia Pacific Network Model – Total Tourism Management (TTM)

 Ian Kean
 Executive Director, APEC International Centre for Sustainable Tourism, Australia

 Enhancing the role of Tourism SMEs in Global Value Chains: A Case Study of Korean Hotel Industries

 Hong-bumm KIM
 Professor, Sejong University, Korea

The study examined how the SMEs hotels could adopt the concept of Global Value Chain (GVC) to achieve better performance in the global hotel market. 16 Korean hotels including 7 large and 9 SME hotels have been surveyed to identify how the underlying dimensions of GVC can vary in the generic management and operational activities with special emphasis on SMEs hotels in Korea. The study also highlighted the opportunities and challenges linked to GVCs for SMEs hotels to enhance their competitive advantages in the market.

 Enhancing the role of Tourism SMEs in Global Value Chains: A Case Analysis on Travel Agencies and Tour Operators in Korea

 Chulwon KIM
 Professor, Kyunghee  University, Korea

The Internet provides the tools for tour operators to communicate directly with consumers and to target specialized and niche markets. It allows tour operators to bypass travel agencies and to promote holidays directly to consumers, making significant savings on commissions paid to travel agencies, as well as reducing the costs of incentives, bonus and educational trips for retailers. Tour operators are also threatened with disintermediation, as the Internet enables consumers and travel agencies to build their own personalized packages and purchase them on-line. This paper attempts to answer some of these questions, while exploring the impact of the Internet on the value chain of the travel intermediaries and analysing two case studies of the Korean travel intermediaries.

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