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- International Journal of Management (IJM)
Volume 11, Issue 3, March 2020, pp. 467–474, Article ID: IJM_11_03_050
Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=3
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ISSN Print: 0976-6502 and ISSN Online: 0976-6510
© IAEME Publication Scopus Indexed
FORMULATION OF DEVELOPMENT
STRATEGY FOR TOURISM AND HOSPITALITY
INDUSTRY
Elena Yurievna Nikolskaya
Plekhanov Russian University of Economics, Stremyanny lane, 36, Moscow, 117997, Russia
Marianna Mikhailovna Romanova
Plekhanov Russian University of Economics, Stremyanny lane, 36, Moscow, 117997, Russia
Olga Vladimirovna Pasko
RUDN University, Miklukho-Maklay Str., 4, Moscow, 117198, Russia
Marina Evgenjevna Uspenskaya
Moscow state Institute for physical culture, sports and tourism n.a. Yu.A. Senkevich,
Kronstadt Blvd., 43A, Moscow, 125499, Russia
Tatiana Anatolievna Saadulaeva
Russian Customs Academy, Komsomolsky Prospect, 4, Lyubertsy, Moscow region, 140000,
Russia
ABSTRACT
This article is devoted to formulation of development strategy for tourism and
hospitality industry. It has been established that in order to improve competitiveness of
sector markets and to create conditions for accelerated development of tourism and
hospitality industry due to expansion of spectrum and improvement of service quality,
it is required to consider for guarantied conformity of available capacities of existing
enterprises and newly established entities with demands of tourists while developing
strategic economic programs and their implementation in each region. It has been
proved that implementation of development strategy for tourism and hospitality industry
would allow to determine numerous attractive tourist and recreation proposals, create
modern procurement infrastructure of tourist and hotel business, improve transport
infrastructure of border area and arrangement of all required facilities, develop
information infrastructure of tourist and hotel business.
Key words: strategy, development, tourism and hospitality industry, infrastructure,
business, competitiveness, globalization.
http://www.iaeme.com/IJM/index.asp 467 editor@iaeme.com
- Elena Yurievna Nikolskaya, Marianna Mikhailovna Romanova, Olga Vladimirovna Pasko,
Marina Evgenjevna Uspenskaya and Tatiana Anatolievna Saadulaeva
Cite this Article: Elena Yurievna Nikolskaya, Marianna Mikhailovna Romanova, Olga
Vladimirovna Pasko, Marina Evgenjevna Uspenskaya and Tatiana Anatolievna
Saadulaeva, Formulation of Development Strategy for Tourism and Hospitality
Industry, International Journal of Management (IJM), 11 (3), 2020, pp. 467–474.
http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=3
1. INTRODUCTION
An important position under modern market conditions of each industry is occupied not only
by provision of resources required for achievement of preset goals but also by strategic long-
term development, without which efficient operation in market competitive environment is
impossible. Therefore, under modern conditions of economy globalization, each industry
requires for strategic development and development of universal formulation of development
strategy for tourism and hospitality industry.
At the same time, the development strategy for tourism and hospitality industry can be
defined as a set of solutions aimed at determination of opportunities, priorities and trends of the
industry development, formulation and efficient use of potentials, provision of dynamic and
sustained development of tourist and hotel enterprises. The development strategy should
combine interests of the branch and society, efforts of state and entrepreneur sector for solution
of challenging economic problems of tourism and hospitality industry under conditions of
globalization.
The issues of development of tourism and hospitality industry were studied by Vagapova
(2017), Gazmagamaev (2108), Ibatullova (2019), Saburina (2019), Chernov (2018), Shkuropat
(2019), and others. However, despite theoretical substantiation of development of tourism and
hospitality industry, the issues of improvement of approaches to formulation of strategies have not
been analyzed in details, development strategies for tourism and hospitality industry in
globalized world are unavailable. All this stipulates necessity and importance of additional
studies.
2. METHODS
Theoretical and methodological basis of the studies is comprised of abstract-logical method, as
well as the methods of induction, dedication, analysis, synthesis, systematization in order to
substantiate approaches to formulation of development strategies for tourism and hospitality
industry; statistic and economic as well as graphical approach to analyze level and trends of
variation of development of tourism and hospitality industry in globalized world.
The information base of the article is comprised of data of governmental agencies,
legislative and regulatory documents governing economic aspects of development strategy for
tourism and hospitality industry, evaluation of efficiency of strategic development under
conditions of globalization, as well as the available scientific findings (Konovalova et al., 2018;
Levchenko et al., 2018; Nikolskaya et al., 2018).
It is planned to develop conceptual approaches to formulation of development strategy for
tourism and hospitality industry, to consider peculiarities of the strategy formulation, to
determine the types of basic strategies and strategic approaches, to develop measures of activity
coordination between main participants in tourism and hospitality industry, to substantiate
economic provisions for strategic management of enterprises of tourism and hospitality
industry.
3. RESULTS
The studies evidence that the main problems of development strategy for tourism and
hospitality industry are as follows:
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- Formulation of Development Strategy for Tourism and Hospitality Industry
- Determination of legislative, regulatory, social and economic, management and
administration bases aiming at improvement of tourist and hotel business;
- improved implementation of state policy in the sphere of tourism and hospitality industry,
formulation and implementation of efficient model of state management aiming at coordination
and protection of interests of participants in tourist and hotel business;
- enhancement of role of public organizations in endorsement of development principles of
tourism and hospitality industry, improvement of existing and implementation of new
mechanisms of interaction between central and local executive authorities, organs of local self-
government, public organization, enterprises, research and education institutions;
- arrangement of tourist and recreation space aiming at efficient use of touristic, natural
curative, and recreation resources by development and maintaining tourism areas;
- Provision of safety of tourists as well as citizens requiring for medical rehabilitation,
protection of their right and legal interests;
- promotion of upbringing of children and youths on the basis of patriotism principles,
improvement of investment climate in tourism and hospitality industry, efficient use of financial
and material resources in the industry;
- provision of efficiency and competitiveness in tourist and hotel industry, creation of new
working places, development of small and medium scale entrepreneurship in the industry,
expansion of occupation degree of rural inhabitants in tourist and hotel industry;
- creation of equal conditions for all entities in tourist and hotel industry, backgrounds for
development of efficient and transparent tourist and hotel market, improvement of modern state
accounting, more stringent monitoring of tourist and recreation business.
The experimental results made it possible to highlight the most popular types of basic
development strategies in tourism and hospitality industry. In this case the leading position is
occupied by the strategy of cardinal variation which assumes concentration of efforts of public
and private sectors aiming at analysis of reasons of decrease in tourist number, active
investment and efficient planning of development, creation of supporting measures in the
industry.
Other strategies can also be mentioned. In this case the strategy of growth retention can be
applied under unfavorable external conditions, which is aimed at support of low growth level
due to attraction of tourists by additional service. The strategy of achieved growth can be used
at the stage of achieved development with constrained set of new product and development
projects, when tourist or hotel enterprise cannot be consolidated in a new market. It is proposed
to use the strategy of selective growth when only certain tourist segment should be covered by
targeted efforts.
However, any strategy should have tools and results of implementation. The tools of
implementation of development strategy for tourism and hospitality industry involve selection
of trends of future growth, the most efficient ways to achieve goals with consideration of
positions in environment. Results of strategy implementation can be comprised of goal
achievement, optimization of long-term revenue rate, consolidation of positions, satisfaction of
tourist demands, maximum return of capital investments, strengthening of competitive
advantages in targeted tourist and hotel markets.
The studies evidence that the development strategy for tourism and hospitality industry can
be characterized by purposefulness, clearly defined priorities, logically constructed schedule of
potential measures to achieve preset goal, set of principles of its formulation. The principles of
formulation of the development strategy for tourism and hospitality industry are comprised of
optimality, scientific substantiation, consistency, objectivity, dynamicity, adaptability, activity,
complexity, adequacy, specificity, logicality, transparency, legitimacy, and measurability.
http://www.iaeme.com/IJM/index.asp 469 editor@iaeme.com
- Elena Yurievna Nikolskaya, Marianna Mikhailovna Romanova, Olga Vladimirovna Pasko,
Marina Evgenjevna Uspenskaya and Tatiana Anatolievna Saadulaeva
Therefore, the development strategy for tourism and hospitality industry should be
consecutively formulated at certain steps and stages: intelligent stage, diagnostic step, analysis
of strategic alternatives and selection of the most perfect one, implementation of strategy,
estimation and monitoring of strategy implementation (Fig. 1).
At the first intelligent stage of strategy formulation, its mission is defined, that is, the main
goal, the reason of existence, the main functional purpose and role of tourism and hospitality
industry on long-term basis. The main purpose of strategy is to improve efficiency of tourism
and hospitality industry, create modern competitive industry. When the purpose is formulated,
it is necessary to determine long- and short-term goals: desirable results of operation and
development of tourism and hospitality industry in the future. In this case each goal should be
subdivided into strategic tasks to substantiate fields of reformations and priorities of
development of tourism and hospitality industry.
Analysis of mission, strategic goals of tourism
and hospitality industry
1. Intelligent stage
Formulation of strategic goals
Strategic analysis of development potential 2. Diagnostics
Analysis of strategic alternatives
3. Analysis of strategic
Strategy No. 1 Strategy No. 2 Strategy No. n alternatives of selection of
strategy
Optimum strategy
Trends of strategy implementation
4. Strategy implementation
Mechanisms of strategy implementation
Criteria for efficiency evaluation 5. Control over strategy
implementation
Figure 1 Stages of formulation of development strategy for tourism and hospitality industry
http://www.iaeme.com/IJM/index.asp 470 editor@iaeme.com
- Formulation of Development Strategy for Tourism and Hospitality Industry
The second stage of strategy formulation, diagnostics, is the basis for specification of
mission, goals, tasks and selection of strategy. This step should include strategic analysis of
development possibilities, studies of performances of development of tourism and hospitality
industry, macro- and micro-environment of functioning, evaluation of state, factors of industry
development, searching for competitive advantages.
The third stage of strategy formulation, analysis of strategic alternatives and selection of
strategy, is devoted to development and formulation of alternative variants of development,
simulation and evaluation of possibilities of strategy implementation in these fields, selection
of the most perfect strategic alternative for respective implementation and establishment of
general development of tourism and hospitality industry.
At the fourth stage of strategy formulation, strategy implementation, the strategy is
implemented in accordance with the schedule of specific actions, that is, the development plans
of tourism and hospitality industry are developed, budgets and procedures, which can be
considered as middle-term and short-term plans of strategy implementation, and strategic
variations are applied, strategic tasks and approved indicators and performances are performed.
The fifth, final stage of strategy formulation includes monitoring of strategy implementation, which is
carried out continuously from the start of strategy formulation by means of evaluation criteria of strategy
formulation. At this stage the results of strategy implementation should be compared with the goals; in
addition, it is required to analyze the strategy efficiency, the strategy implementation should be monitored
by feedback approach.
Implementation of development strategy for tourism and hospitality industry would allow
to determine numerous attractive tourist and recreation proposals, create modern procurement
infrastructure of tourist and hotel business, improve transport infrastructure of border area
including highways and international transport corridors, as well as arrangement of all required
facilities, develop information infrastructure of tourist and hotel business.
Information infrastructure of tourist and hotel business should include creation and support
of full-time and regularly updated site with tourist proposals of Russian regions; increasing
portion of tourism and hospitality industry in generation of gross domestic product; creation of
conditions for development of certain territories, timely and integrated solution to the issues of
environmental protection; revival of national culture and traditional crafts, generation of
national self-consciousness and upbringing of youths on the patriotic principles; protection and
recovery of unique natural and historical resources, historical sites; significant increase in
efficiency of state policy in tourism and hospitality industry; development of state and local
development programs of tourism and hospitality industry; development of international
cooperation and integration in tourism and hospitality industry, improvement of tourist and
health related image of state; increase in investments to the industry.
Herewith, the development strategy for tourism and hospitality industry is a specific
product: it has no real-valued form, it is indefinable, and in these terms, it cannot be referred to
services. Firstly, the strategy can be used by a buyer without participation of selling entity.
Secondly, the development strategy for tourism and hospitality industry can be considered as a
set of solutions, measures, targeted programs aimed at determination of potentials, priorities,
and tendencies of development, formation and efficient use of potentials, provision of dynamic
and sustained development of the industry. Thirdly, the strategy should combine the interests
of tourism and hospitality industry, consolidate efforts of state and entrepreneur sector to solve
challenging economic tasks of the industry.
Experience has shown that diversification of services in tourism and hospitality industry,
development of the industry in new territories, and market competition require for the
Government of the Russian Federation to reconsider its attitude to development of the industry
and to develop more thoroughly its strategy (Fig. 2).
http://www.iaeme.com/IJM/index.asp 471 editor@iaeme.com
- Elena Yurievna Nikolskaya, Marianna Mikhailovna Romanova, Olga Vladimirovna Pasko,
Marina Evgenjevna Uspenskaya and Tatiana Anatolievna Saadulaeva
Resources and capacities National operational environment of
of enterprises of tourism tourism and hospitality industry
and hospitality industry
National resources and possibilities
Competitive (raw material, labor force,
Financial resources
advantages of qualification levels, culture,
Procurement
enterprises of infrastructure of tourism and
Technological resources
tourism and hospitality industry)
Trademark
hospitality Domestic market (scope, specificity)
Image
industry Available contacts in political and
Personnel qualification
financial spheres
Management, marketing
State policy and regulation in the field
policy
of tourism and hospitality industry
Currency exchange rate
Figure 2 Achievement of competitive advantages in tourism and hospitality industry
At present tourism and hospitality industry should be developed on controllable and steady
basis. Only in this way it could be beneficial for regions without creation of serious
environmental, economic, and social problems.
While formulating development strategy for tourism and hospitality industry, it is required
to consider for approaches to steady development. Strategic approach to development of
tourism and hospitality industry allows to reduce negative consequences between necessity to
satisfy continuously growing demand for services of the industry and limited scope of natural,
social, and economic resources, their inefficient use leads to deterioration of environment in
tourist destinations.
4. DISCUSSION
Reliability of the presented approaches is confirmed by the fact that intensification of
international pattern of financial activity and business, expansion of tourist flows, strengthening
of international and cultural realties exert influence on development of tourism and hospitality
industry (Agamirova et al., 2017; Kozlov et al., 2018; Nikolskaya et al., 2018). In this case one
of the important conditions guaranteeing competitiveness of tourism and hospitality industry in
regions is the occurrence and consolidation of close relations and communication networks with
main leading regions which provide major portion of tourist flow at global service market.
While selecting a strategy variant, enterprises of tourism and hospitality industry should
consider for numerous factors of internal and external medium of operation. Among the major
internal factors, the following could be highlighted: the final goals of enterprise; priorities,
interests of top management; strategic potential of enterprise; enterprise size; competitive
advantages of enterprise; enterprise lifecycle phase; financial resources; degree of dependence
on enteral environment; obligations in terms of preliminary strategies; time factor upon strategy
selection.
In addition, attractiveness of strategic business area influences the strategy type and degree
of its aggressiveness in tourism and hospitality industry. Therefore, the business entities can
apply the strategy of concentrated or integrated growth, or the strategy of protection of its
market positions against business rivals. In declining segments, a variant of development of
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- Formulation of Development Strategy for Tourism and Hospitality Industry
enterprise in tourism and hospitality industry, which has competitive advantages, is the strategy
of diversification.
However, it is required to consider for regional specifics of development of tourism and
hospitality industry. It is necessary to develop such strategy which would allow to develop
proportionally a territory in social economical aspect and to expand regional competitive
advantages on long-term basis, while correlating with general state targets. Development
strategy for tourism and hospitality industry should supplement harmonically social economic
strategy of the country and include solutions to prioritized social economic tasks: increase in
scientific–engineering and innovation potential; improvement of investment attractiveness and
economic stability; improvement of quality of living.
While developing the strategy, it would be reasonable to consider for border location of
regions since this is one of the main conditions of efficient operation of tourism and hospitality
industry. In this case the strategy could be used which is based on the following postulates:
near-border orientation, transit options and seasonality of development, since exactly these
factors determine the tendencies of development and social economical orientation of a region.
5. CONCLUSION
Finally, it should be mentioned that in order to improve competitiveness of sector markets and
to create conditions for accelerated development of tourism and hospitality industry due to
expansion of spectrum and improvement of service quality, it is required to consider for
guarantied conformity of available capacities of existing enterprises and newly established
entities with demands of tourists while developing strategic economic programs and their
implementation in each region.
Implementation of development strategy for tourism and hospitality industry would allow
to determine numerous attractive tourist and recreation proposals, create modern procurement
infrastructure of tourist and hotel business, improve transport infrastructure of border area
including highways and international transport corridors, as well as arrangement of all required
facilities, develop information infrastructure of tourist and hotel business.
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