TABLE OF CONTENTS Dimitrios Buhalis and Mike Peters
Small and medium-sized enterprises (SMEs) prevail in the tourism sector. European tourism is a 'fragmented industry' as it consists of many SMEs producing and selling undifferentiated products or services in a highly competitive marketplace. Fragmentation is far stronger in leisure tourism, as compared to business tourism. It is also less of an issue in under-developed economies where tourism arrived late and with the helping hand of multinational enterprises. This chapter discusses the importance of SMEs in the tourism industry, presents their strategic strengths and challenges while exploring strategies for their future evolution.
Micro, small and medium-sized enterprises are socially and economically important. The European Commission defines as SMEs, all organizations with less than 250 employees, less than 50 m turnover or total balance sheet of less than 43 m (Table 13.1).
| Enterprise category | Personnel headcount | Turnover | or | Balance sheet total |
|---|---|---|---|---|
| Medium-sized | <250 | = 50 million | = 43 million | |
| Small | <50 | = 10 million | = 10 million | |
| Micro | <10 | = 2 million | = 2 million | |
| Source: European Commission, 2004 |
The Observatory of European SMEs (2003) demonstrated that 93 per cent of all enterprises have less than 10 employees (Table 13.2). There are 20.5 million enterprises in the European Economic Area (EEA) and Switzerland, providing employment for 122 million people. Some 93 per cent of these enterprises are micro (0 9 employees),6 per cent are...
