INTERNATIONAL JOURNAL OF TOURISM RESEARCH
Int. J. Tourism Res. 1, 97±109 (1999)
Marketing Practice in Small Tourism and
Hospitality Firms
Martin Friel
School of Business, University of Buckingham, Buckingham MK18 1EG, UK
ABSTRACT
There has been a paucity of research into the
marketing practices and approaches of small
tourism and hospitality ®rms, until the 1990s.
This paper goes some way towards
improving knowledge in this area by
reporting the ®ndings of the ®rst national
survey of small tourism and hospitality ®rms
in the UK. Four key areas of marketing
practice are highlighted: marketing planning,
promotion methods, pricing methods and
marketing research. The paper concludes that
although a great deal of small hospitality and
tourism ®rm marketing may be characterised
as haphazard and unsophisticated, there is
much to commend it in the UK. Copyright #
1999 John Wiley & Sons, Ltd.
Received 28 October 1996; Revised 15 August 1997; accepted 2
September 1997
Keywords: small ®rms; marketing planning;
marketing research; pricing; promotion;
practice.
* Correspondence to: M. Friel, School of Business, Uni-
versity of Buckingham, Buckingham MK18 1EG, UK.
Email: martin.friel@buckingham.ac.uk
CCC 1099±2340/99/020097±13 $17.50
BACKGROUND
S
mall ®rms in tourism and hospitality
make up the majority of ®rms in the
industry and yet little is known about
their marketing approaches or activities. There
has been a steady growth in interest in small
tourism and hospitality ®rms since the late
1980s, but there has not been a concomitant
growth in marketing-related studies. Until
recently, small tourism and hospitality ®rms
were thought to mimic the marketing activities
of their larger competitors. Indeed, much of
the small ®rms' literature in general, and the
tourism and hospitality literature in particular,
took the view that small ®rms were miniature
versions of larger ®rms. The small ®rms'
literature in many cases regurgitates the tenets
underpinning large ®rm marketing practice
and applies them largely unchanged to the
case of small ®rm marketing (see Dewhurst
and Burns, 1993; Scarborough and Zimmerer,
1996; and see Morrison (1996); Ahmed and
Krohn (1994); Witt and Moutinho (1994),
among others, for tourism and hospitality in
particular). As a consequence much of the
literature glosses over those characteristics that
help de®ne small ®rm marketing. It is becom-
ing increasingly clear, however, that small
tourism and hospitality ®rms, although having
much in common with larger tourism and
hospitality ®rms, operate according to often
quite different marketing imperatives. In short,
there is more that differentiates small ®rms
from large ®rms in terms of their marketing
than size alone. Differences are found, for
example, in business objectives, management
style and access to funding, all of which
in¯uence small ®rm marketing. The aim of
this paper is to outline some of the key
characteristics of the marketing practice of
Copyright # 1999 John Wiley & Sons, Ltd.
98 M. Friel

Figure 1. Principal activity of sample ®rms.

small hospitality and tourism ®rms in an
attempt to better understand the nature of
such marketing.
RESEARCH METHODS
The Centre for the Study of Small Tourism and
Hospitality Firms based at Leeds Metropolitan
University, UK, conducted the ®rst major
national survey of small tourism and hospital-
ity ®rms in 1996 (Thomas et al., 1997; The
National Survey of Small Tourism and Hospi-
tality Firms 1996± 1997, hereafter the National
Survey). The two key aims of the survey were
to identify the main concerns of small tourism
and hospitality business owners, and to
examine in some detail their business prac-
tices. The survey focused on four regions in
England: Cumbria, Heart of England, West
Country and Yorkshire and Humberside. The
regions were selected to be representative of
the variety of small ®rm experiences in
England and were de®ned by broad regional
tourist board boundaries. Cost considerations
did not allow for all regional tourist board
areas to be included. The approach, however,
does allow for the inclusion of other regions in
future surveys. The survey targeted a cross-
section of sectors (see Fig. 1) and comprised
almost 1400 ®rms employing fewer than 50

Table 1. Sample populations

Number of employees

Tourist Board region 1±5 6±10 11±19 20±50 Total

Cumbria 320 195 112 67 694
Heart of England 482 203 240 238 1163
West Country 572 321 274 285 1452
Yorkshire and Humberside 474 232 211 246 1163
Total all regions 1848 951 837 836 4472

Copyright # 1999 John Wiley & Sons, Ltd. Int. J. Tourism Res. 1, 97±109 (1999)
Marketing by Small Tourism and Hospitality Firms
Table 2. Response rates by region
Number of
Tourist board region responses
Cumbria 235
Heart of England 295
West Country 497
Yorkshire and Humberside 332
Total all regions 1359
people. The de®nition of a small ®rm adopted
for the survey is that proposed by the
European Commission, which emphasises
number of employees: a micro enterprise
employs fewer than 10 people and small
enterprises employ between 10 and 49 people.
The sampling frame for the survey was
constituted from the British Telecom Business
Database, which identi®ed a total of 30 548
®rms in the four regions. A disproportionate
strati®ed sample based on number of employ-
ees was selected from the four regions in order
to provide a cross-section of experiences (see
Table 1). A total of 1359 small businesses
replied, giving a response rate of 31% for the
survey (see Table 2).
Given the range and scope of the survey it
was anticipated that there would be variations
in the experience of sample ®rms and in their
willingness and ability to respond to the
survey. In an attempt to minimise the possibi-
lity of bias, a generic set of questions was
developed that could be readily understood
and answered by the majority of ®rms
sampled. The postal questionnaire developed
for the survey was tested on a small cross-
section of businesses to check comprehensi-
bility and to check whether the answers
received would provide the information
sought. In light of the pilot survey several
important amendments were made, including
reducing the number of open-ended questions,
improving instructions to respondents and
slightly shortening the length of the question-
naire. In addition, the pilot survey helped to
identify better the range of key issues and
procedures relating to small hospitality and
tourism ®rm marketing. There is an increasing
number of studies with small ®rms' marketing
as their focus, driven in part by government
Copyright # 1999 John Wiley & Sons, Ltd.
99
Response rate as Response rate as
a percentage of sample a percentage of total
for region sample
34 17
25 22
34 37
29 24
31 100
support, but there is relatively little that
pertains to the tourism and hospitality indus-
tries. One of the aims of the survey was to go
some way towards redressing this imbalance
in the light of growing interest in small tourism
and hospitality ®rms' marketing. This paper
considers the principal survey ®ndings in the
area of marketing in an attempt to provide an
insight into the marketing practices of small
tourism and hospitality ®rms. It must be
pointed out that although the ®ndings of the
National Survey of Small Tourism and Hospi-
tality Firms are based on simple descriptive
statistics they yielded much by way of insight,
particularly through the use of cross-tabula-
tions.
Although there may have been variations
amongst respondents in their understanding
of key marketing terms, the pilot survey
showed no evidence of this, and as speed of
completion and readily understandable and
manageable questions were two of the survey
requirements, detailed de®nition of terms was
not feasible. Nor was it an objective of the
survey to examine the process of small
hospitality and tourism ®rms' planning, re-
search, promotions and pricing. The survey
was intended to measure whether and to what
extent small hospitality and tourism ®rms
purported to undertake the above marketing
activities. The survey did not attempt to
explain why small hospitality and tourism
®rms do things the way they do, instead it
attempted to measure and quantify small
hospitality and tourism ®rm marketing rather
than determine cause and effect relationships.
Future research will need to examine the
process of marketing in small hospitality and
tourism ®rms in more detail in order to better
determine its nature, rationale, appropriacy
Int. J. Tourism Res. 1, 97±109 (1999)
100
Table 3. Type of marketing plan formulated
Type of marketing plan Number of ®rms (%)
Formal 14
Informal 44.5
None 41.5
and areas of convergence and divergence with
larger tourism and hospitality ®rms.
The marketing activities of small tourism
and hospitality ®rms are now examined across
a range of categories. These categories com-
prise marketing planning, promotion meth-
ods, pricing methods and marketing research.
In each category ®rms are examined on a
sectoral basis, although it is useful here to
recall March's (1994) insight that marketing
within different tourism sectors is not neces-
sarily homogeneous, and that it might be more
bene®cial to consider products that show
similar marketing practices and exigencies as
opposed to ®rms grouped together according
to business category or sector. In the present
case this proviso may also be extended to size
of ®rm.
MARKETING PLANNING
The prescriptive literature takes as its starting
point the assumption that most small ®rms do
not undertake formal marketing planning
(Scase and Goffee, 1980; Cox, 1993; Carson et
al., 1995). In the case of the National Survey
formal marketing planning was taken to mean
a written plan which directed action. There is
some evidence from the National Survey that a
number of small ®rms in the tourism and
hospitality industries do undertake formal
marketing planning, although it must be
pointed out that the number of ®rms attesting
to having a formal marketing plan was low, at
14% of the sample. The fact that those drawing
up a formal marketing plan constituted such a
low percentage of the National Survey's
respondents may lend support to the assump-
tion that most small tourism and hospitality
®rms do not plan. It must be borne in mind,
however, that almost 60% of all sample ®rms
had in fact formulated a marketing plan, even
if the majority of these did not formulate
Copyright # 1999 John Wiley & Sons, Ltd.
M. Friel
Table 4. Extent of marketing planning in sample
®rms
Devised a plan (formal or informal) 58%
Planned up to one year ahead 73%
Planned up to three years ahead 22%
Planned up to ®ve years ahead 5%
formal marketing plans (see Table 3). Problems
arise, however, in trying to determine the
extent to which a plan may be interpreted as
formal, as this was likely to have varied across
respondents. It is perhaps more appropriate to
view both formal and informal planning as
evidence of recognition on the part of small
tourism and hospitality ®rms of the impor-
tance of planning.
This recognition seems to extend, however,
mainly to considering the short term, as the
vast majority of small tourism and hospitality
®rms planned no more than one year ahead.
This is in line with the short-run, operational
imperatives of the tourism and hospitality
industries and indeed with small ®rms in
other industries (see Chell, 1985). Given that
the tourism and hospitality industries are
characterised as dynamic it is argued that
planning for the different stages of the life-
cycle and of the small ®rm itself is key to
survival and growth. It would appear that this
is done only ®tfully in tourism and hospitality,
with only 5% of all ®rms planning up to ®ve
years ahead and thereby taking cognisance of
the development routes of product and ®rm in
the process (see Table 4).
A majority of small tourism and hospitality
®rms in the sample formulated a marketing
plan, whether on a formal or informal basis,
over the previous 12 months. Of those ®rms
that did formulate a plan the overwhelming
majority planned up to one year ahead (73%).
Although this preponderance of ®rms plan-
ning no more than 12 months ahead may be
indicative of the short-term nature of activities
in the tourism and hospitality industries, it
may, as previously mentioned, also be a
positive sign that the bene®ts of planning are
appreciated by a majority of ®rms. Over one in
®ve small tourism and hospitality ®rms
planned up to three years ahead, with a small
percentage (5%) planning up to ®ve years
Int. J. Tourism Res. 1, 97±109 (1999)
Marketing by Small Tourism and Hospitality Firms 101

ahead (see Table 4). This stands in marked

Restaurant/
contrast to a number of other reports on small

cafes
®rms' marketing in other service industries,

52
82
16
2
where it is argued that small ®rms are reactive
in their response to external events rather than
proactive and are essentially ad hoc in their

take-aways
Fast-food/
marketing (see Scase and Goffee, 1980; Carson
et al., 1995). Although the ®ndings in the

45
83
11
6
present paper do not constitute a refutation
of the ®ndings of these previous studies, they
would seem to indicate that, in general, small
tourism and hospitality ®rms are more likely

houses
Public
to undertake some form of marketing planning

4
58
85
11
than not. When the sample is examined on a
sectoral basis, however, there is considerable
variation (see Table 5).

Self-catering
The visitor attractions and the self-catering
sectors, in particular, post an overwhelming

4
72
60
36
majority of respondents formulating market-
ing plans (72%), whereas the fast-food/take-
away establishments post numbers well below

breakfasts
Bed and
the mean for all sectors (58%). The reasons
behind such wide variation in values were not

52
63
32
5
addressed in the survey. However, one possi-
ble reason for the low numbers among fast-
food/take-away establishments might be their
operations-oriented, short-term perspective,
Hotels

4
61
54
29
exacerbated by intense local competition and
the need for a speedy response to competitor
marketing actions. Further research into these
variations between sectors is needed.
It is interesting to note that, although all
agents
Travel

3
61
69
28

sectors tended to prefer short-term plans to

longer-term ones, public houses, fast-food/
take-away establishments and restaurant/
Table 5. Extent of marketing planning by sector

cafes were much more likely to plan no more

attractions

than one year ahead, with more than four in

Visitor

72
60
26
14

®ve establishments formulating short-term

plans. It may be postulated that there is little
cognisance taken of the medium-to-long term
in these types of establishment. As a result just
mean for all
Percentage

over one-®fth of all establishments planned up

sectors
58
73
22
5

to three years ahead. This is interesting,

particularly in light of the reported paucity of
medium-term planning amongst small ®rms in
other industries. Also of note is the fact that for
Up to three years

the majority of sectors surveyed this ®gure

Up to ®ve years
Plan in general
Up to one year

rises to one-quarter, and in two sectors (bed

and breakfast and self-catering) even one-third
of establishments (see Table 5).
Those ®rms that relied most heavily on one
year planning were those that were least likely
Copyright # 1999 John Wiley & Sons, Ltd. Int. J. Tourism Res. 1, 97±109 (1999)
102
Table 6. Age of ®rm and likelihood of producing a marketing plan
Up to one year 1±4
Plan produced (%) 65 56
to undertake planning up to three years. This
may partly be explained by the greater
uncertainty of a business world that still has
strong memories of the recession of the early
1990s, forcing a longer term and more objective
perspective.
Very few ®rms in the sample formulated
long-term plans, that is, up to ®ve years ahead.
This is in line with the results of small ®rm
surveys in other industries. This short-term,
operational perspective may be attributed in
part to the intense competition and rapidly
changing environment in which small tourism
and hospitality ®rms operate, coupled with a
limited pool of experience and expertise upon
which to draw. The only sector that departed
markedly from the norm (5%) was the visitor
attractions sector, with 14% of ®rms planning
up to ®ve years ahead. However, this result
needs to be treated with some caution because
visitor attractions constituted less than 5% of
the total number of ®rms sampled.
The survey would seem to have provided
some evidence of a substantial degree of
marketing planning amongst small tourism
and hospitality ®rms, certainly in the short
term, where a majority of ®rms sampled
undertook such planning, and to some extent
in the medium term, where between one-®fth
and one-third of ®rms undertook planning.
This stands in marked contrast to much
previous research into the extent of marketing
planning in small ®rms, which contends that
very little planning is carried out at the small
®rm level and that small ®rm marketing is
operational, short-term, haphazard and reac-
tive in nature. Although the present study did
not explicitly examine all these putative
characteristics it can be reasonably inferred
that they do not apply in their entirety to the
tourism and hospitality industries as a whole.
Small tourism and hospitality ®rm owners/
Copyright # 1999 John Wiley & Sons, Ltd.
M. Friel
Age in years
5±9 10±14 15‡
52 47 54
managers do undertake some form of market-
ing planning and are therefore aware of the
potential bene®ts of such planning. It must be
remembered, however, that the survey did not
attempt to gauge the extent of marketing
planning other than how far ahead ®rms
planned, if at all. Nor was any measure taken
of the effectiveness of such planning alone. It
must also be borne in mind that increasingly
small businesses are required to produce
business plans in order to secure funding and
that marketing is a key element in such plans,
thereby perhaps boosting the number of ®rms
purporting to undertake marketing planning.
Some indication that this might be the case is
evident in the fact that the younger the ®rm the
more likelihood there was that they produced
a marketing plan (see Table 6). This may be
explained by relatively new ®rms availing
themselves of start-up courses and/or being
required to formulate a business plan to attract
funding.
PROMOTION METHODS
The pilot survey distilled nine principal
methods of promotion (see Table 7), and of
the nine methods four were used consistently
over the previous 12 months by the small ®rms
in the sample. These were: local advertising,
price promotions, sales literature and national
advertising.
Local advertising was the most widely used
form of promotion with over two-thirds of the
sample, and this is perhaps to be expected in
that small ®rms will tend to rely heavily on the
local market for trade. When juxtaposed with
national advertising, however, it is interesting
to note that national advertising was the third
most used form of promotion, accounting for
over one-third of the sample ®rms (see Table
7). This understates its importance as a
Int. J. Tourism Res. 1, 97±109 (1999)
Marketing by Small Tourism and Hospitality Firms 103

promotion method in some sectors, however,

Restaurants/
notably the accommodation sectors, where

cafes
national advertising took precedence over

41

3
72
34

14

20
12

14
local advertising.
This stands in marked contrast to a number
of research reports on the small ®rms sector in

take-aways
Fast-food/
general and to perceived wisdom on the
promotional activities of small ®rms, which

63
30
30

15
10

13
6

0
assert that, given the local nature of markets,
advertising nationally will diffuse the promo-
tional effort and dilute the bene®ts which may
accrue to the small ®rm. Indeed, for many

houses
Public
tourism and hospitality ®rms the national

55
76
29

16

26
41
35
19
2
market may be as important as the local
market, if not more so.
The second most used form of promotion

Self-catering
was price promotions (discounted prices). This
is perhaps not unexpected given the tourism

53
89
55
93

18
15

15
0
9
and hospitality industries' predilection for
discounting prices as a competitive tool, as a
result in part of the ready substitutability of

breakfasts
many of their products. Just under half of the

Bed and
sample ®rms used this form of promotion. A

5
3
4
53
68
43
75

12

26
similar number of ®rms used sales literature as
a form of promotion, not surprising perhaps in
an industry where location plays a pivotal role
and where many products and services are
Hotels

perceived as `high-risk' and therefore pur-

9
64
60
82

73

34
16

12
28
chased as a result of discretionary spend. Thus
information is key both to customer awareness
of the ®rm and its products and to the
customer decision-making process.
agents
Travel

As can be seen from Table 7 the least used

61
44
46
34

49
17
12
15
5
form of promotion overall was advertising on
the Internet, followed closely by sponsorship
and merchandising. Although advertising on
attractions
Table 7. Use of promotion methods by sector

the Internet was the least used form of

Visitor

promotion generally, this was not the case for

60
75
66

50

21
19
15
11
28

all sectors, particularly of the accommodation

sectors (see Table 8). It is of note, however, that
over 10% of sample ®rms advertised on the
mean for all
Percentage

Internet, which still constitutes a sizeable

sectors

number of ®rms. There is every likelihood that

63
48
48
37

23
20
14
13
11

use of the Internet will increase over the next

few years as the cost of maintaining a presence
on the Internet decreases and as small ®rms
Local advertising

Price promotions

recognise the potential of the medium, parti-

Personal selling

Merchandising
Sales literature

cularly as a competitive tool. There is some

Competitions

Sponsorship
advertising

evidence, however, from the USA to suggest

National

that the effectiveness of a presence on the

Internet

World Wide Web is unproven and that actual

purchases made via the Internet are rising only
Copyright # 1999 John Wiley & Sons, Ltd. Int. J. Tourism Res. 1, 97±109 (1999)
Copyright # 1999 John Wiley & Sons, Ltd.

104
Table 8. Promotion methods ranked within each sector
Visitor Bed and Fast-food/
attractions Travel agents Hotels breakfasts Self-catering Public houses take-aways Restaurants/cafes
1 Local Local Sales literature National National Local Local Local advertising
advertising advertising advertising advertising advertising advertising
2 Sales literature Personal selling National Sales literature Sales literature Price Price Price promotions
advertising promotions promotions
3 Price Price Price Local Price Competitions Sales literature Sales literature
promotions promotions promotions advertising promotions
4 National Sales literature Local Price Local Merchandising Personal selling Personal selling
advertising advertising promotions advertising
5 Internet National Personal selling Internet Personal selling Sales literature Sponsorship National
advertising advertising
6 Personal selling Competitions Internet Personal selling Competitions Personal selling Competitions Sponsorship
7 Competitions Sponsorship Competitions Competitions Internet Sponsorship National Competitions
advertising
8 Merchandising Merchandising Sponsorship Sponsorship Sponsorship National Merchandising Merchandising
advertising
9 Sponsorship Internet Merchandising Merchandising Merchandising Internet Internet Internet
Int. J. Tourism Res. 1, 97±109 (1999)

M. Friel
Marketing by Small Tourism and Hospitality Firms 105

slowly. It will be interesting to see whether this

Restaurants/
number changes substantially in subsequent
surveys.

cafes
64
18
18
Interestingly, merchandising accounted for
only one in seven responses from sample
®rms, which would seem to indicate a failure
on the part of most small ®rms to capitalise on

take-aways
Fast-food/
the presence on-site of visitors/guests by

52
29
10
maximising customer spend. Caution is urged,
however, as merchandising is a term some-
times misunderstood, although the pilot sur-
vey showed no evidence of this, and actual

houses
Public
numbers engaged in this activity may in fact be

67
12
10
higher, or indeed lower.
One category of business in particular
stands out from the others in its use of

Self-catering
promotion methods: the accommodation sec-
tors. Comprising bed and breakfast, hotel and

12
24
64
self-catering businesses, the accommodation
sectors were unusually heavy users of national
advertising for example, with three-quarters of
bed and breakfasts and hotels using this form

breakfasts
of promotion and nine in ten self-catering

Bed and
units. This may be partly accounted for by

13
41
44
inclusion in national accommodation direc-
tories and guides, but still represents a quite
sizeable disparity with other ®rms in the
Hotels
sample. It is interesting that the bed and
27
18
48
breakfast sector and the self-catering sector
show a remarkable similarity in their use of
promotion methods (with hotels as `the odd
agents
Travel

man out'), as do the fast-food/take-away

40
17
43

sector and the restaurant/cafe sector (see Table

8).
attractions
Visitor

PRICING METHODS
43
26
17

Price is one of the key tools in the marketing

toolbox and is particularly important in help-
Percentage

all sectors
mean for

ing to manage demand and sales. Many small

Table 9. Pricing methods by sector

50
21
29

®rms in tourism and hospitality are price

followers, responding to the dictates of the
market-place (Middleton, 1994). Scarborough
and Zimmerer (1996) contend that small ®rms
Follow local competition

generally cannot compete on price with larger

Respond to business

competitors and non-price competition is safer

and often more successful for small ®rms. It is
suggested that small ®rms in tourism and
hospitality use the tools of pricing much as
conditions
Cost-plus

larger ®rms do (Morrison, 1996). However,

one-third of respondents in the National
Survey used variable pricing approaches, that
Copyright # 1999 John Wiley & Sons, Ltd. Int. J. Tourism Res. 1, 97±109 (1999)
106
Table 10. Main areas of marketing research in
small ®rms in tourism and hospitality
Sample Firms
Research Area (%)
Customer needs 55
Customer service/quality 51
Local competition 46
Marketing effectiveness 40
New products/services 39
Business environment 21
is, they adjusted their prices according to
exigencies in the market-place. Indeed,
although half of all ®rms used a cost-plus
pricing approach, when the ®gures are ad-
justed to account for large numbers within
particular sectors that distort the mean, the
most used pricing technique across the tour-
ism and hospitality sectors surveyed was a
variable pricing approach. This provides some
tentative support for Curran et al.'s (1995)
contention that the price-setting approach of
small business owners is not the simplistic,
mechanistic process that it is frequently de-
picted as, at least not, it would seem, in the
small business element of the tourism and
hospitality industries. Indeed, Davis et al.
(1985) have suggested that small ®rms may
be more likely than larger ®rms to assess price
elasticity at the individual customer level. That
is, small ®rms can negotiate price changes but
increasingly nowadays larger companies seem
to be allowing their employees some latitude
in this area. Interestingly, the greatest prepon-
derance of ®rms using cost-plus was to be
found amongst the fast food, public house and
restaurant establishments. Generally, there is
some degree of consistency in the ®ndings of
the National Survey and those of other studies
where cost-plus is the predominant pricing
method, but there is substantial use of other
methods (see Table 9).
It is suggested (Storey, 1994) that small ®rms
can maintain higher prices and pro®ts than the
industry norm because many small ®rms
occupy niches by providing highly specialised
services, possibly in a geographically isolated
area, and often do not perceive themselves to
have clear competitors. In many cases, higher
prices are often equated with higher levels of
Copyright # 1999 John Wiley & Sons, Ltd.
M. Friel
service and better quality levels of service
(Carson et al., 1995). Carson et al. (1995) also
argue that perhaps as a result of feeling
vulnerable on price, particularly in relation to
larger competitors, small ®rms' marketing is
oriented around price. This may inhibit in-
novation in other areas of the marketing mix
and may ultimately cost the small ®rm dear as
a result of retaliatory actions by competitors.
Price-oriented marketing actions are still all
too common in tourism and hospitality, as
evidenced by the use of price promotions in
Tables 7 and 8.
MARKETING RESEARCH
Over 50% of all ®rms surveyed conducted
research into one or more aspects of marketing,
with the greatest focus being on customer
needs and customer service/quality issues (see
Table 10). This provides some indication of the
degree to which the marketing concept is
practised in small tourism and hospitality
®rms. This focus on customer issues is con-
sistent across the sectors.
Understandably, given the nature of the
intensely competitive environment within
which tourism and hospitality ®rms operate
and the importance of physical proximity to
their main markets, there is signi®cant re-
search into the local competition, although
again there is considerable variation across the
sectors (see Table 11). Perhaps the most
worrying aspect of small tourism and hospi-
tality ®rms' marketing is the reported relative
dearth of research into their business environ-
ment. Such research was undertaken by only
one-®fth of ®rms, and only 6% of visitor
attractions, the lowest of all the sectors (see
Table 11). It is often assumed that it is vital in
such intensely competitive and rapidly chan-
ging industries as tourism and hospitality that
®rms monitor their business environment in
order to better respond to and manage change
and exploit opportunities. Those who assert
this may ®nd evidence of business myopia and
introspection in the dearth of medium-to-long
range planning undertaken by small tourism
and hospitality ®rms and in the scarcity of
marketing research into the business environ-
ment (see above). The fact, however, that many
of the ®rms not undertaking research into their
Int. J. Tourism Res. 1, 97±109 (1999)
Marketing by Small Tourism and Hospitality Firms 107

business environment have not seen a down-

Restaurants/
turn in turnover, pro®ts or number of custo-

cafes
mers may indicate that taking cognisance of

23
49
49

40
43
29
the business environment is not necessarily a
prerequisite to growth. It may, however, point
to a degree of uncertainty as regards the
marketing terms used in the survey, although

take-aways
Fast-food/
this was not identi®ed as an issue in the pilot

19
50
44

46
42
19
survey. Further research into this particular
aspect of small ®rms' marketing is needed,
although some conclusions may be drawn
once data from the annual National Surveys

houses
Public
have been gathered for a number of years.

26
60
56

52
62
34
Rather surprisingly, relatively few ®rms
conducted research into developing new pro-
ducts or services (see Table 10). This contrasts

catering
somewhat with small ®rms in other research

Self-

11
60
57

21
28
66
studies, where they have manifested consis-
tently high levels of innovation with regard to
new services and products, and indeed are

breakfasts
often perceived to constitute the main drivers

Bed and
of innovation in their industries, albeit the

13
44
40
33
53
26
level of innovation may be adjudged incre-
mental rather than ground-breaking. This
seeming paucity of innovation may perhaps
be regarded as even more surprising in view of
Hotels

21
52
48
42
48
28
the dynamic nature of the tourism and
hospitality industries.
Overall, however, there is some evidence to
suggest that small hospitality and tourism
agents
Travel

®rms are aware of the importance of conduct-

14
47
44
36
25
ing research into key areas of their business. 33
Table 11. Areas of marketing research on a sectoral basis

Although research in small hospitality and

tourism ®rms may often be restricted to
attractions

keeping track of where and how customers

Visitor

6
58
52
18
39
24

and guests had heard of the establishment, it is

heartening that a relatively substantial number
of ®rms make some effort to research customer
needs, and how well these needs are being met
Percentage

all sectors
mean for

assesses the effectiveness of their marketing

21
55
51
46
40
39

actions. The survey, however, did not attempt

to gauge the methods that the small ®rms used
to undertake their research, assess marketing
Customer service/quality

effectiveness, the frequency with which it was

Marketing effectiveness
New products/services

assessed, nor whether follow-up action was

Business environment

taken as a result of the assessment.

Local competition
Customer needs

CONCLUSIONS

Small hospitality and tourism ®rm marketing

is dogged by perceptions of haphazard prac-
tice, lack of planning and research and an
Copyright # 1999 John Wiley & Sons, Ltd. Int. J. Tourism Res. 1, 97±109 (1999)
108
overreliance on a narrow range of pricing and
promotion methods. There is ample evidence
provided in this paper that although this may
be the case for a number of small hospitality
and tourism ®rms it is by no means the norm.
A wide range of marketing activities is
represented in the survey and some ®rms are
assiduous in their marketing and some are not,
much as is the case in larger tourism and
hospitality ®rms.
More than half of all ®rms sampled for-
mulated a marketing plan. This is an encoura-
ging ®nding, particularly in light of the
charges of ad hoc decision-making frequently
levelled at the tourism and hospitality indus-
tries. Indeed, more encouraging again is the
®nding that more than one-®fth of ®rms
planned up to three years ahead, although
the norm is to plan no more than up to one year
ahead. Small tourism and hospitality ®rms do
seem to recognise the bene®ts of planning, at
least on the evidence of the present survey. It is
important to remember, however, that many
small ®rms are required to produce business
plans and to address marketing issues therein.
Also, the exact nature of the planning that
respondents purported to undertake fell with-
out the scope of the survey and so it is not easy
to ascertain the degree of effort and thought
that went into the planning process.
Although cost-plus pricing methods in small
tourism and hospitality ®rms are popular, a
range of other methods of pricing is used:
overall, as many ®rms used other methods of
pricing as used cost-plus pricing. In this
regard, small tourism and hospitality ®rms
distinguish themselves somewhat from small
®rms in other industries, where cost-plus is
used by a majority of ®rms, and indeed from
larger hospitality and tourism ®rms.
As regards promotion methods, small ®rms
in tourism and hospitality do not limit them-
selves solely to local advertising (although this
is in fact the most commonly used form of
promotion), nor, it would seem, do they
con®ne themselves to local markets. In the
accommodation sectors in particular heavy use
is made of national advertising, although
further research is needed into the nature of
small ®rms' national advertising. Encoura-
gingly, over 50% of ®rms sampled conducted
marketing research, with the emphasis on
Copyright # 1999 John Wiley & Sons, Ltd.
M. Friel
customer needs and customer service. The
area of marketing least researched was the
business environment, with only one in ®ve
®rms conducting such research. Many of the
®rms, in spite of attesting to not doing such
research, posted increases in turnover, pro®ts
and customer numbers, although no correla-
tion can be shown.
It must be remembered that this is the ®rst
national survey of its kind into the marketing
practices of small tourism and hospitality
®rms and that although many interesting
results have emerged, any conclusions must
of necessity be tentative because the results
provide little more than a snapshot of the ®rms
at a particular point in time. The survey will
render more reliable and actionable conclu-
sions once it has been conducted over a
number of years. Also, in order to gain further
meaningful insights into the nature of market-
ing practice in small tourism and hospitality
®rms, comparisons with ®rms in other coun-
tries need to be undertaken, although at
present few national surveys such as that
completed in the UK have been done.
ACKNOWLEDGEMENT
The author gratefully acknowledges the sup-
port provided by the Centre for the Study of
Small Tourism and Hospitality ®rms at Leeds
Metropolitan University.
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