(Last updated on: 21/04/2020)
Stakeholders in tourism. This is a phrase often used in both academia and the tourism industry, but what does it actually mean?
The word stakeholder is a term that often throws people. In fact, it is commonly confused with the term shareholder. Whilst the two terms are not entirely dissimilar, the two mean two different things. So, lets clarify this- what exactly do we mean by stakeholders in tourism?
- Stakeholders in tourism: What does it mean?
- Stakeholder Theory in tourism
- Stakeholder analysis in tourism
- Who are the stakeholders in tourism?
- Stakeholders in tourism: Conclusion
- Further reading on stakeholders in tourism
Stakeholders in tourism: What does it mean?
A stakeholder is quite literally anyone who is involved with a particular project, organisation or industry. To put it simply, they hold a metaphorical ‘stake’.
A stakeholder in tourism can be an individual person, such as a tourist or a taxi driver. They could be a group of people such as a student group or a family. They could be a company or organisation.
A stakeholder is different from a shareholder. A stakeholder is a person, group or organisation who is in some way involved with a project. Whereas a shareholder is a person, group or organisation who owns part of the project (i.e. a share).
Therefore a stakeholder and a shareholder are two different things.
As such, when we refer to a stakeholder in tourism, we are NOT talking about somebody who is necessarily financially involved. Instead they could have a wide range of involvements, that are not necessarily related to ownership or money.
Stakeholder Theory in tourism
Stakeholder Theory is all about the way in which stakeholders should be taken into account when making business decisions.
Most of the world nowadays is built upon a capitalist society, within which there is a complex web of interconnected stakeholders. From customers through to suppliers, employees, investors and local communities, it is important that their needs and desires are taken into account in order to yield optimal results.
As such, Stakeholder Theory presupposes that an organisation should take into account and create value for all stakeholders when undertaking their planning and operational activities.
Stakeholder Theory was first introduced by R. Edward Freeman in 1984. Since this time businesses and organisations in a range of industries throughout the world have utilised Edward’s theoretical contributions in their operational plans.
Stakeholder Theory has become a key consideration in the research of business ethics and has served as a platform for further research and development in the area.
Stakeholder analysis in tourism
In order to ensure that a business, whether in tourism or in another industry, is effectively considering stakeholders needs and requirements, the organisation must carry out some form of stakeholder analysis.
Stakeholder analysis is a process whereby key stakeholders are identified and grouped according to levels of participation, interest and influence. The organisation must then determine how best to work with and satisfy said stakeholders.
In the context of tourism this could involve considering how best to work with the host community or working with the Government on tax policies, for example. Or it could involve investigating what products would be most popular with the tourists and what working conditions must be provided to yield the best outcomes from company employees.
To put it simple, stakeholder analysis is a complex task where each person, group or individual must be assessed in terms of their value to the organisation and what their needs and requirements are.
Theoretically then, if the organisation operates with all of its stakeholders’ needs and requirements in mind, they are more likely to satisfy stakeholders and therefore to conduct successful business operations.
Here is a bit more on exactly what stakeholder analysis is-
Who are the stakeholders in tourism?
The tourism industry is one of the biggest industries in the world. This means that there are many individuals, groups and organisations who are involved at some level or another.
As demonstrated in the diagram above, there are a number of key stakeholders who are commonly involved with the tourism industry. Through his work on the stakeholders in tourism, Peter Burns has classified stakeholders according to the type of engagement that they have: External, secondary or primary. This is demonstrated below.
I will provide a brief outline of the typical involvement that the above stakeholders are likely to have.
The Government plays in a key role in the tourism industry. Throughout the different levels of tourism policy and planning, the Government will dictate a variety of rules, requirements and practices.
From visa policies to the maintenance of public infrastructure, most tourism business will operate closely with Government,ent.
Tourism organisations and operators
There are a wide range of tourism organisations and operators.
From travel agents and airlines through to DMOs (Destination Management Organisations) and travel bloggers, to restaurants, hotels and tourist attractions, all of these organisations are key players in the tourism industry.
Small and medium enterprises
There are a wide range of businesses that are seen as stakeholders in tourism.
These may be directly associated with travel and tourism, such as an airline.
They may also be indirectly associated with tourism, such as a waste removal company (who deals with the waste created by tourism).
There are also many NGOs (non-governmental organisations) that are associated with the tourism industry.
Tourists are at the very heart of the tourism industry. Without tourists there would be no tourism!
The tourism industry relies on a wide range of suppliers.
From factories producing bedding used in hotels, to farmers growing the vegetables served in restaurants, there are many suppliers who work either directly or indirectly with the tourism industry.
One of the key stakeholders in tourism is the workforce.
Some have argued that the travel and tourism industry employs more people, directly and indirectly, than any other industry in the world (see my post on the economic impacts of tourism for more details).
Employees in the tourism industry are commonly undertaking low-paid jobs in areas such as hospitality, catering and customer service.
The education sector is also a stakeholder in tourism.
Many educational courses will involve visits to tourism areas to enhance the educational provision offered. For example a school history trip to the D-Day beaches in France.
Education is also offered to many employees who work in the tourism industry in the form of training.
Utilities and infrastructure
In order for the tourism industry to function, certain utilities and infrastructure is required.
This means that the local power plant is a stakeholder in tourism, because it provides energy.
It also means that the builders, road workers and engineers are stakeholders in tourism, because they provide and maintain the necessary infrastructure.
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There is a strong relationship between transport and tourism.
In fact, the very definition of tourism, prescribes that a person must travel away from the place that they live in order to be a tourist (although with the growth of virtual tourism I would argue that there is a need to revise this widely used definition).
As such, the method of transport between point A and point B is an integral part of the tourism system, thus making the transport providers (airlines, trains, taxi etc) important stakeholders in tourism.
The final stakeholder in tourism that is worth mentioning is the community. In fact, many would argue that this is one of the most important stakeholders in tourism.
In my post on the social impacts of tourism, I outline how important it is for tourism organisations to work with the local community and what the consequences can be if tourism operators do not listen to the needs and requirements of the host community.
Good tourism management often involves community-level briefings, consultations and ongoing communication in order to ensure that this important stakeholder is empowered throughout the process of tourism development planning and operation.
Stakeholders in tourism: Conclusion
Hopefully this post has helped you to understand what is meant by the term stakeholders in tourism. You should also now be familiar with the concepts of stakeholder theory and stakeholder analysis. There are many, many stakeholders in tourism and in this post I have provided you with lots of examples. Want to learn more? I have suggested some key texts for additional reading below.
Further reading on stakeholders in tourism
- Strategic Management: A Stakeholder Approach– R. Edward Freeman’s foundational work on stakeholder analysis, connecting capitalism and business with ethics.
- Project Management: A Strategic Planning Approach– A comprehensive overview of project management practice, while carefully balancing the unique aspects of project management curricula with the more general business skills, including quality, risk, teams, and leadership.
- Sustainable tourism management and monitoring. Destination, Business and Stakeholder Perspectives– The interplay of sustainable tourism, management, monitoring, destination life cycles, and stakeholder involvement, through a case study approach based on several international tourism destinations.