NAVIGATING THE ELUSIVE INDUSTRY: A GROUNDED INVESTIGATION INTO HOTEL BUSINESS MANAGEMENT IN A DEVELOPING PACIFIC ISLAND COUNTRY

Tyler S. Stumpf

In that most industries with the potential to advance increased economic self-reliance in developing Pacific Island countries (PICs) have proven ineffectual over time, tourism has emerged as one of the only economic activities characterized by a comparative advantage. Despite this theoretical comparative advantage, some PICs have been unable to develop tourism into a viable industry. In addition to various intrinsic barriers to tourism development, many such PICs are also characterized by environments where ease of doing business is very low. Despite the gamut of micro and macro-level challenges, some hotel businesses in these low-performing PICs have continued to survive. How this is accomplished has yet to be systematically studied and accounted for. As such, hotel entrepreneurs and the entities that support them have lacked relevant guidance on how to develop successful business models in these challenging contexts. The aim of this research is to elucidate a grounded theory on how to design and maintain a workable hotel business model in a developing Pacific Island country that does not have a workable tourism business model, and where ease of doing business is low. The Federated States of Micronesia is used as the setting for this research. Grounded theory method is used as the research method, and transaction cost economics is used as the meta-theoretical lens for the data collection and analysis. Two rounds of data are collected via semi-structured interviews with hotel operators and other relevant subjects via on-location field work. The result is an endemic theory on hotel business management grounded in practitioner expertise. The theoretical insights of this research stand in stark contrast to the status quo approach to business management and development frequently advocated for in PICs. As opposed to either ignoring normative systems or predicating the success of business on their reform, the present findings reveal an alternative theoretical perspective on how hotel entrepreneurs structure transaction cost economizing business arrangements by effectively working within these systems. By accepting the contextual realities businesses must navigate, it is argued that this solutions-oriented perspective yields a more realistic and relevant approach for use by researchers and managers in PICs.

NAVIGATING THE ELUSIVE INDUSTRY: A GROUNDED INVESTIGATION INTO HOTEL BUSINESS MANAGEMENT IN A DEVELOPING PACIFIC ISLAND COUNTRY

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