Formulation of development strategy for tourism and hospitality industry

This article is devoted to formulation of development strategy for tourism and hospitality industry.

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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

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:

- 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

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

Figure 1 Stages of formulation of development strategy for tourism and hospitality industry

Analysis of mission, strategic goals of tourism

and hospitality industry

Formulation of strategic goals

Strategic analysis of development potential

Analysis of strategic alternatives

Strategy No 1 Strategy No 2 Strategy No n

Optimum strategy

1 Intelligent stage

Trends of strategy implementation

Mechanisms of strategy implementation

Criteria for efficiency evaluation

2 Diagnostics

3 Analysis of strategic alternatives of selection of

strategy

4 Strategy implementation

5 Control over strategy implementation

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)

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

Resources and capacities

of enterprises of tourism

and hospitality industry

Financial resources

Procurement

Technological resources

Trademark

Image

Personnel qualification

Management, marketing

policy

Competitive advantages of enterprises of tourism and hospitality industry

National operational environment of tourism and hospitality industry

National resources and possibilities (raw material, labor force, qualification levels, culture, infrastructure of tourism and hospitality industry)

Domestic market (scope, specificity) Available contacts in political and financial spheres

State policy and regulation in the field

of tourism and hospitality industry Currency exchange rate

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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