Risk Management of SMEs in Tourism Industry: A case study of a small domestic tourism agency in China

Liu, Rundong (2010) Risk Management of SMEs in Tourism Industry: A case study of a small domestic tourism agency in China. [Dissertation (University of Nottingham only)] (Unpublished)

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The research is focused on the risk management of SMEs in tourism industry. In estimation there are around 12,000 tourism agencies locate in 656 different cities in China. However, the current operations and regulations of small domestic tourism agencies are still immature and ready to trigger a major failure. In the mean time, these tourism agencies become quite vulnerable when facing the challenges bring about constantly changing external economic environment, natural catastrophes, and industry competition.

The researcher aims to create a whole set of risk management process which is simple to use, especially for those business owners who are lack of previous risk management experiences and those businesses which are financially incapable of hiring a professional risk management officer. Even though the proposed risk management methods are primarily originated from a case tourism agency in China, it also can to be applied to other SMEs in tourism sector of similar kind.

Risk identification has been recognized as the basic and indispensable stage in the risk management process. In the case tourism agency, risks are specific to each production process and each step in each process. By identifying the steps that need to be completed successfully, we can identify the specific risks. On the other hand, concerning case tourism agency’s risk assessment, both the probability and severity of potential losses has been tackled. The risk will be ranked in some way which enables risk management resources to be allocated in a more cost-effective manner. The probability and impact of future contingent losses were estimated by using a five point scale in each case, which is easy for the owner to understand and apply. In the mean time, a simple hypothetical approach of testing the correlation between risks has been proposed. This approach has not been widely covered in the literature and it provides another way of looking at and prioritizing the risk. More specifically, risk which possesses both a higher level of probability and size of contingent loss deserves more risk management attention as it indicates a non-ambiguous sign of risk. In terms of case tourism agency’s risk management, initial examination has been done to determine whether the risks are transferable or not. And an important conclusion has been drawn that the nature of the important identified risks meant that market insurance was not available, and so self-insurance and self-protection were considered as alternatives.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 20 Jan 2011 13:37
Last Modified: 16 Feb 2018 01:26
URI: https://eprints.nottingham.ac.uk/id/eprint/24018

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