The Importance of Entrepreneurship in the Hospitality Industry

Published in

VivaioLab

3 min readSep 17, 2018

The hospitality industry is in the undergoing some of the most drastic changes in its history: everything from the costumer shift to virtual and mobile booking, to changing travel habits, to new industry players like Airbnb, are bringing novel challenges and numerous business opportunities for entrepreneurs in the field of hospitality. A changing landscape, in combination with new investment potential, indicates that the importance of entrepreneurship is at the forefront of the growing industry. Overall, the hospitality industry’s successes, as well as its failures, point towards a need for entrepreneurship as a deciding factor in the industry’s future.

The current landscape of the European hospitality industry presents a unique opportunity for novel business ideas to grow and succeed. Spain alone has remarkable promise as a destination, with investment in the country’s hotel market reaching 3.6 billion Euros in 2017. The appeal of the Spanish hotel industry is obvious: tourism. After France, Spain is the world’s second-most visited country; the industry has been a driver of Spain’s economic recovery and continues to suggest unparalleled potential for innovation, entrepreneurship, and growth. This industry has remained remarkably stable throughout its expansion; even during crisis years, tourists have continued to prioritize visits to Spain, as well as other European countries, thus showing that the business landscape of the hotel industry is more than capable of absorbing hotel supply.

This business potential accentuates the importance of entrepreneurship, with overseas investors focusing on unique hotels in European cities. As shown in recent growth of the industry, the type of tourism to Spain has changed, and with it, the kind of hotels, especially in urban areas. A few years ago, the industry was mostly populated by a few international luxury brands, but not today: everyone is looking to have the best hotel in town coupled with a genuine experience. This originality and creativity can ultimately only be the result of entrepreneurship. In fact, even high caliber professional and traditional hotel operators did not have any business competitive advantage over entrepreneurial hospitality. Rather than appealing to tourists, long-standing chains did not have leverage over newer players in the field due to frequent mismanagement focused only on the short term. While hotel operators created rigid bureaucratic systems, entrepreneurs have the chance to push creative ideas to advance the industry and gain attention from consumers. Guests have undoubtedly evolved; as Gilles Lipovetsky wrote: “Guests, at the present are more unpredictable, variable, and, of course, have less loyalty to brands”. Overall, an entrepreneurial environment typically has the lowest level of leakage and creates a new framework for the hospitality industry as a whole.

Overall, opportunity is at an all time high, with European cities attracting luxury brands as well as investors with the power to increase hotel prices, funding, and tourist appeal. Spain’s tourism boom — and its evolution — will translate into large profits for those who invest and create new experiences now.

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The Importance of Entrepreneurship in the Hospitality Industry

Written by Eva Westphal