Instructor: MS. MARY ANTONETTE H.
DUDAS, MBA
Course Title:
Entrepreneurship in Tourism and Hospitality
Course Description: This course describes the skills, knowledge and performance outcomes
required to plan and develop a feasible Business Plan by understanding the
nature and scope of entrepreneurship, scanning the market of potential
entrepreneurial venture opportunities, and identifying and evaluating the
methods of venturing into business including but not limited to starting one's
own business, buying existing businesses and the process of franchising. It
also emphasizes on assessing the possible characteristics and mindset of
entrepreneurs, analyzing typical entrepreneurial venture challenges, errors
and rewards, identifying effective strategic management, developing product
and service innovations and introducing the concepts of environmentally
sustainable practices, social entrepreneurship and intellectual property
management.
Credit hours: 3 hours
Pre-Requisite:
MODULE 2 Perspective on Entrepreneurship
A. LEARNING OUTCOMES
1. explain the contributions of entrepreneurship to society, business firms, and customers;
2. discuss the concept of entrepreneurship; and
3. explain the entrepreneur’s task
B. PRETEST
Identify a business in your area which became successful due to innovation and prepare a list of five innovative
products or services currently introduced in the market.
C. CONTENT
Entrepreneurship is a very important component of a capitalist economy like the Philippines. It thrives in the
economic systems that support innovation and hard work. When entrepreneurs become successful, the nation is
immensely benefitted.
What is entrepreneurship and how does it affect the economic well-being of many people? What is the task
of entrepreneur regarding economic development? This module will answer all the concerns stated above.
Entrepreneurship and Economic Development
Economic Development is a scheme aimed at improving the living standards of the nation’s citizenry. To
achieve economic development goals, proper management of the following elements is necessary:
1. human resources (labor supply, education, discipline, motivation);
2. natural resources (land, minerals, fuel, climate);
3. capital formation (machine, factories, roads); and
4. technology (science, engineering, management, entrepreneurship).
The effective and efficient utilization of the various resource elements contribute to the economic growth.
This happens when the element of entrepreneurship is performed well. The abundance of natural resources like
fertile land, minerals, fuels, and good climate are plus factors. There is a need for entrepreneurs to perform the
function of harnessing the potentials of any of any or all of the various elements, determining the right quantity of
resources needed, and applying elements at the right time.
Entrepreneurship refers to the economic activity of a person who starts, manages, and assumes the risk of
a business enterprise.
The entrepreneur identifies an economic need, considers offering a business solution, proceeds to
assemble the resources required, and assumes the risk of either succeeding or failing. An example of these
activities is properly shown on Table 1.
Entrepreneur’s Concern Problem at hand Entrepreneur’s Action
1. Identifying an economic need 1. High income families are not 1. Establish a tourism
satisfied with the services destination with higher
provided by tourism destination standards than the current
2. Assembling resources in their area. tourism destination is providing.
required 2. Resources must be made 2. Acquire funds, hire people,
available constructing buildings, and the
3. Assuming risk 3. Venture must be made like.
3. Prepare project study,
advertise, maintain good
relationship with employees
and customers, among others.
Table 1. An Example of Entrepreneurship Activity
The Entrepreneur’s task
If all the requirements in a capitalist economy are in place, the entrepreneur can assume his assigned role
in the development of the economy. A review of the contributions of entrepreneurs will reveal that no business, big
or small, started without the hand of the entrepreneur. This is made possible because the surviving enterprises are
responsible for providing the following:
1. products and services for customers and producers;
2. employment;
3. taxes;
4. demand for supplier’s products and services; and
5. training facilities for future entrepreneurs.
Land Labor Capital
(Natural Resources) (Human Resources) (Financial Resources)
Entrepreneur
Entrepreneur
Entrepreneur
Figure 2. The Entrepreneur’s Task
In the attempt to make profits, the entrepreneur performs the following specific functions:
1. to supply the necessary capital;
2. to organize production by buying and combining inputs like materials and labor;
3. to decide on the rate of output, in the light of his expectation about demand; and
4. to bear the risk inherent to the venture.
Entrepreneurship and Innovation
The freedom of competition afforded by the capitalist economy serves to drive the entrepreneur to innovate
and get ahead of his competitors lest he is driven out of the market. Buyers of commodities have a tendency to
patronize innovative offerings of any kind and if one wants patronage, he must remember this motivation.
Innovation may be defined as the introduction of a new method, procedure, custom, device, among others.
Innovation could be any of the following;
1. new product;
2. new process of production;
3. substitution of a cheaper material in an unaltered product;
4. reorganization of production internal function, or distribution arrangement leading to increased efficiency,
better support for a given product, or lower cost; or
5. improvement in instruments or methods of doing innovation. Innovation may also be viewed as the last
stage in an important process consisting of the following:
a. Invention- which refers to the discovery of devising of new products and processes;
b. Development- which refers to the process by which the ideas and principles generated from the
stage of invention are embodied in concrete products and techniques; and
c. Innovation- which refers to the actual introduction of a new product or process.
Innovation, if it must be made successful, must provide value to the buyers over and above those offered
by competitors. To achieve this, innovation must reduce costs or improve the quality of products or services offered
for sale.
Examples of successful innovations are the following:
1. cordless microphone;
2. microwave oven;
3. cellular phone;
4. kung fu fight scenes developed by Bruce Lee in the movies;
5. karaoke music appliance;
6. use of Laser in the treatment of eye conditions; and
7. use of computers by engineers and architects in the design of buildings.
New Ventures and Long-term Enterprises
A new venture cannot remain as such forever. The entrepreneur must develop it into a small business or
make it grow into a mature and bigger company if he is to recoup the cost of opening a new venture and take
advantage of the opportunities presented by a mature business.
The transition from a new venture to a successful long-term enterprise consist of four major stages:
1. pre-start-up stage- happens when the entrepreneur starts to question the feasibility of an idea, product or
service. He seeks answers to questions regarding potential markets, production, and financing. This is the very
important stage that the entrepreneur must consider.
2. start-up stage- includes the activities such as formation of the business, generation of necessary capital,
purchase of facilities and equipment, constructing prototype products, and testing market. No full-scale activity must
be undertaken at this stage for the simple reason that feasibility must be established and verified.
3. early growth stage- follows after establishing feasibility. Activities will be on a small scale. If losses occur, it will
naturally be limited also. If the enterprise is successful at this stage can be exercised.
4. late growth stage- is the final stage before the new venture matures into a stable enterprise. This is when
management is structured, long-term financing is established and facilities planning are undertaken. This is also the
stage where the skills of the entrepreneurs are less needed. Instead, the skilled manager begins to take over.
The Entrepreneur’s Predicament
In the race for winning the all-important consumer’s pesos, the business will have to offer products or
services that have certain advantages over the competition wares. In the creation of a new venture, the
entrepreneur may be successful in offering innovative products or services. At this stage, he will reap the profits for
being ahead of the competitors. This situation may be temporary because the competitor may attempt to improve
his position by making moves to outpace the entrepreneurs in the race. The competitor may either imitate or offer
better innovations. If the competitor is successful, the profits of the entrepreneur will decline. To be ahead again,
the entrepreneur will consider offering newer and better innovations.
Entrepreneurship and Business Size
To many people, entrepreneurship means running a small business. New business ventures, however, can
also be undertaken on a larger scale. Both small and large business are confronted by problems that are
entrepreneurial in nature. The examples of innovations are following:
1. offering business services during Sundays and holidays;
2. manufacture and sale of new products; and
3. selling on a deferred payment scheme
Although entrepreneurship is generally regarded as a useful means of running a small business, it is also
conducive in maintaining the growth of large corporations.
D. LEARNING ACTIVITIES
1. Why is entrepreneurship an important component of economic development?
2. What is entrepreneurship? Who is the entrepreneur?
3. What role doe entrepreneur play?
4. To make profits, what specific functions are performed by the entrepreneur?
5. Why innovation an important entrepreneurship activity?
E. ASSESSMENT
Case Study: Rose Restaurant: What Now My Love?
On any given day, Rose’s Restaurant is full of customers. It is not surprising because of two factors: first, its
location in the center of the commercial district of Santiago City, and second, the dynamism of its owner and
manager, Mrs. Rose Ginez. She is more than happy because she was able to realize her dream of becoming
successful in the food business. She now owns the building and the lot she used to rent. Served in its large air-
conditioned function hall are native and Chinese delicacies. The place has ample parking space for 20 cars. It was
in the restaurant where she first met her future husband. He is a government employee and is assigned to work in a
nearby town. Rose’s husband is a native of San Jose City and his widowed mother is operating a big palay trading
firm. Apart from owning 10 cargo trucks, his mother also owns one and a half hectares of commercial land in the
city’s business district. Just as Rose was considering opening a branch of her restaurant in Cauayan City, her
mother-in-law died. Two weeks later her husband informed her that being the heir, he needs to move quickly to San
Jose City and manage his mother’s business and other properties. Even if her husband operates her mother’s
business, Rose could still continue managing her restaurant. Both of them, however, are aware of difficulty of
maintaining the two businesses which are four hours away by car from each other. They will miss each other for
days every week if they decided to keep both businesses. Her husband is indifferent, however, on whatever Rose’s
decision will be. Rose is now mulling over her family’s chance of succeeding in business if she decides on
maintaining only the palay trading firm. Her decision making is made more complicated when her assistant reported
a 49 % increase in last year’s profits of her restaurant.
Guide Questions:
1. Should Rose stop operating her restaurant?
2. If you were Rose, what additional information would you need before making a decision?
F. REFERENCES
Arenas, C.D. (2020). Entrepreneurship in tourism and hospitality industry. Edric Publishing House
Banastao C. (2008). Entrepreneurship, Philippines. Katha Publishing Co., Inc.
Brookes, M. (2015). Entrepreneurship in hospitality and tourism. Goodfellow Publishers Limited
Medina R. G. (2014). Entrepreneurship and small business management. Sampaloc Manila. Rex Bookstore
Ross, D. L (2009). Entrepreneurship and Small Business Management in the Hospitality Industry. Butterworth-
Heinemann is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK
Saidali M. R (2015) The Entrepreneur. Intramuros Manila Mindshapers.Co., Inc.
Tieng, S. (2019). Entrepreneurship management in hospitality industry. Society Publishing
RUBRICS
Problem Solving and Research Capability 50%
Answer to the Case Study Question and Potential Solution to the Case Study 30%
Problem
Written Communication
Critical Thinking
Analysis and Synthesis of the Articles 20%
____
TOTAL: 100%
