International Journal of Hospitality and Tourism Systems

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Significance of Venture Capital in Tourism and Hospitality Sector: a Lesson for India from Menasa Region.


Affiliations
1 Faculty of Commerce, Goa University Taleigao Plateau, Goa – 403206., India
2 Department of Tourism and Service Management Institute for Strategic Management, Marketing and Tourism University of Innsbruck; Universitätsstr. 15, A-6020 Innsbruck., Austria
3 Department of Management sciences Oriental School of Hotel Management, Wynad, Kerala., India
     

   Subscribe/Renew Journal


Around the world, tourist's flow is increasing year after year. The flow of international tourists increased from a mere 25 million in 1950 to 898 million by 2007 (with a CAGR of 4.7% during 1980-2007). The international tourism receipts was only US$ 2.1 billion in 1950, but increased to over US$ 738 billion by 2006 (with a CAGR of 8.3% during 1980- 2006). The written history of the world reveals that Arab traders (basically from Middle Eastern region) were the pioneers of retail and distribution industry and it was the result of the adventurous nature of those traders to explore the potentiality of goods and services from the Asia Pacific and African region, which they succeeded by identifying the market for these products in the European market. This is in a way can be considered as the ancient form of business travel. From 1818 onwards, European colonial powers took over the Arab supremacy, and till 1940's most of the countries in Middle East, North Africa, and South Asian (MENASA) region was under colonial rule. From 1940's onwards there seems to be a complete reversal of the scenario from Western and European dominance towards MENASA region. This is because of the growth and development of tourism and travel industry, coupled with parallel growth in hotel and hospitality industry. The major source of funding was found to be venture capital, which has the inherent characteristics of generating / creating / adding wealth in a manifold way. Though there was a decline in the global venture capital activity after 9/11; the picture from MENASA region shows a positive growth completely deviating from the global pattern. Utilising on the significance of venture capital financing, a socially responsible growth can be seen in tourism and hospitality industry in MENASA region in the near future. India can learn a good lesson from this changing scenario and take the lead; then in the near future the world can witness a harmonious growth and development in the entire MENASA region; which will act like ripples in water and the result will be global prosperity.

Keywords

Travel And Tourism, Hospitality, Venture Capital, Menasa Region, India
Subscription Login to verify subscription
User
Notifications
Font Size


  • ABRAAJ (2006), The Infrastructure Investment Requirements of the MENASA Region, An Abraaj Capital Publication.

  • Arab News (2006),Private Equity Firms to Drive IPOs in Gulf. March 8.

  • Borrell, J (2006), The Birth of Venture Capital in Arabian Gulf. PEWeek, March 6, 2006.

  • Bruton, Gary.D (2002). Venture Capitalists in Asia: A Comparison with The USA and Europe. Vlerick Working Paper, Vlerick Leuven Grent Management School, 2002/15.

  • CERT (2006). The Future of Learning: Research, Innovation, Education, and Entrepreneurship. Centre of Excellence for Applied Research and Training. Published with Global Agenda, the magazine of the World Economic Forum Annual Meeting 2006.

  • Choudhury, M.A (2001). Islamic Venture Capital: A Critical Examination. Journal of Economic Studies. 28/1. pp. 14–33.

  • Ehrlich, Sanford. B; Noble, Alex. F. De; Moore, Tracy; and Weaver, Richard. R (1994). After the Cash Arrives: A Comparative Study of Venture Capital and Private Investor Involvement in Entrepreneurial Firms. Journal of Business Venturing. 9/1. pp. 67-82.

  • Eid, Florence (2005). Institutional Complementaries and Entrepreneurial Finance in Emerging Markets: Evidence from the Middle East and North Africa. Venture Capital. 7/4. pp 319–341.

  • Fried, V. H., and Hisrich, R.D (1995). The Venture Capitalists: A Relationship Investor. California Management Review. 37/2. pp 101-113.

  • Gorman, M., and Sahlman, W. A (1989). What Do Venture Capitalists Do?. Journal of Business Venturing. 4. pp. 231-248.

  • GPE (2008). Seeking Differentiation at the Time of Change: Global Private Equity Report 2008. Pricewaterhouse Coopers.

  • GVCA (2006). Private Equity and Venture Capital in MENA Region 2006. GVCA & KPMG.

  • Kasim, Azilah (2007). Towards a Wider Adoption of Environmental Responsibility in the Hotel Sector. International Journal of Hospitality & Tourism Administration. 8/2. pp 25-49.

  • Khaleej Times (2006). Gulf Venture Capital ‘06 to begin in Bahrain on February 20. 29th January 2006.

  • Koh, Francis.C.C & Koh, Winston.T.H (2000). Venture Capital and Economic Growth: An Industry Overview and Singapore’s Experience. Working Paper, Singapore Management University, Singapore, 2000.

  • MacMillan, I.C.; Kulow, D. M; and Khoylian, R (1998). Venture Capitalists’ Involvement in their Investments: Extent and Performance. Journal of Business Venturing. 4. pp. 27-47.

  • Orwin, Alexander (1999). The Privatisation of Water and Wastewater Utilities: An International Survey. [http://www.environmentprobe.org/enviroprobe/pubs/evs542.html last checked on 18th February 2008].

  • PWC (2007). Private Equity Trend Report 2007. Outlook and criteria for international investment in Germany. Pricewaterhouse Coopers. 2007.

  • Qorchi, Mohammed El (2005). Islamic Finance Gears Up. Finance and Development: A Quarterly Magazine of the IMF. 42/4. 2005.

  • Rosenstein, Joseph; Bruno, Albert. V; Bygrave, William. D; and Taylor, Natalie. T (1990). 20 How Much Do CEOs Value the Advice of Venture Capitalists on their Board ?. Frontiers of Entrepreneuriship Research. pp. 238-249.

  • Subhash, K. B and Nair, T. Govindankutty (2004). Globalisation and Indian Venture Capital System. Udyog Pragati. 28/3. pp. 1–14.

  • Subhash, K. B (2006). How to Teach the Big Baby to Walk: Case of Indian Venture Capital Industry. The Journal of Private Equity. 9/4. pp 76-91.

  • Subhash, K. B (2007a). Geography of Venture Capital Financing: A Global Perspective. The Journal of Wealth Management. 9/4. pp 13-28.

  • Subhash, K. B (2007b). Geography of Venture Capital Financing in Canada. The Journal of Private Equity. 11/1. pp 93-107.

  • Subhash, K. B (2008a). Changing Pattern of Global Venture Capital Financing and its Impact on Retail and Distribution Sector. In “Globalisation of Retailing: An Indian Perspective”. (Eds) K.G.S. Narayanan and P.K. Sudarshan. The Associated Press. India. Pp 150-188. 2008.

  • Subhash, K. B (2008b). Empowerment at the Bottom of the Pyramid: Poverty Reduction through Rural Tourism. A Social Venture capital and Micro Financing Perspective. Paper presented at the Eurasia Workshop on “Poverty Reduction through Rural Tourism” organised by Management Development Institute, Gurgaon; on 26-27th November 2008.

  • UNWTO (2006). Tourism Market Trends 2006. Annex 10. World Tourism Organisation.

  • UNWTO (2007). World Tourism Barometer. 5/3. October 2007.

  • UNWTO (2008). World Tourism Barometer. 6/1. January 2008.

  • White, Bracken, J (2008). The Emergence of MENA as an Economic Tiger and Its Implications for Commercial Real Estate. The Journal of Private Equity. 12/1. pp 85-91.

  • WFB (2007). World Fact Book 2007.

  • WTTC (2003). Blue Print for Tourism. World Travel and Tourism Council. 18th September 2003.

  • WTTC (2007). South Asia: Travel & Tourism Navigating the Path Ahead. The 2007 Travel & Tourism Economic Research. World Travel & Tourism Council. 8th March 2007.

  • WTTC (2007 a). India: Travel & Tourism Navigating the Path Ahead. The 2007 Travel & Tourism Economic Research. World Travel & Tourism Council. 8th March 2007.


Abstract Views: 428

PDF Views: 0




  • Significance of Venture Capital in Tourism and Hospitality Sector: a Lesson for India from Menasa Region.

Abstract Views: 428  |  PDF Views: 0

Authors

K. B. Subhash
Faculty of Commerce, Goa University Taleigao Plateau, Goa – 403206., India
Klaus Weiermair
Department of Tourism and Service Management Institute for Strategic Management, Marketing and Tourism University of Innsbruck; Universitätsstr. 15, A-6020 Innsbruck., Austria
Vinu George
Department of Management sciences Oriental School of Hotel Management, Wynad, Kerala., India

Abstract


Around the world, tourist's flow is increasing year after year. The flow of international tourists increased from a mere 25 million in 1950 to 898 million by 2007 (with a CAGR of 4.7% during 1980-2007). The international tourism receipts was only US$ 2.1 billion in 1950, but increased to over US$ 738 billion by 2006 (with a CAGR of 8.3% during 1980- 2006). The written history of the world reveals that Arab traders (basically from Middle Eastern region) were the pioneers of retail and distribution industry and it was the result of the adventurous nature of those traders to explore the potentiality of goods and services from the Asia Pacific and African region, which they succeeded by identifying the market for these products in the European market. This is in a way can be considered as the ancient form of business travel. From 1818 onwards, European colonial powers took over the Arab supremacy, and till 1940's most of the countries in Middle East, North Africa, and South Asian (MENASA) region was under colonial rule. From 1940's onwards there seems to be a complete reversal of the scenario from Western and European dominance towards MENASA region. This is because of the growth and development of tourism and travel industry, coupled with parallel growth in hotel and hospitality industry. The major source of funding was found to be venture capital, which has the inherent characteristics of generating / creating / adding wealth in a manifold way. Though there was a decline in the global venture capital activity after 9/11; the picture from MENASA region shows a positive growth completely deviating from the global pattern. Utilising on the significance of venture capital financing, a socially responsible growth can be seen in tourism and hospitality industry in MENASA region in the near future. India can learn a good lesson from this changing scenario and take the lead; then in the near future the world can witness a harmonious growth and development in the entire MENASA region; which will act like ripples in water and the result will be global prosperity.

Keywords


Travel And Tourism, Hospitality, Venture Capital, Menasa Region, India

References