Successful Entrepreneurship in Family Owned Small to Medium Sized Enterprises (SMEs): The Case of the Hospitality and Tourism Industry

Family businesses, in many areas around the world, form the foundation of innovation and entrepreneurship. Such businesses have many particularities that should be investigated in understanding their business model, nature and the entrepreneurial purpose. For example, regarding the Hospitality and Tourism industry, family businesses are usually established to satisfy the aspiration, needs and preferences of the owners and their families. In many cases these needs and preferences differ from the traditionally widely held goals of profit maximization and business growth. In the case of the Cyprus tourism industry family businesses tend to focus more on the quality of customer service and building close long-term social relationships with their customers. Such an entrepreneurial approach leads to repeat sales and a robust sustainable tourism industry. It is important to note that the tourism industry in Cyprus consists of a plethora of such Small to Medium Sized Enterprises (SMEs), which are family owned. One might claim that it is due to these family SMEs that Cyprus became a significant tourist destination during the last decades. Thus, it would be quite interesting to carry out an investigation on these business in order to explore their particularities and analyze their key success factors. This paper carries out such an investigation by examining entrepreneurial aspirations, business models and pros and cons of running a family owned hospitality and tourism business. Specifically, an analysis is carried out on the challenges, issues that family businesses face as well as their strengths and how they become successful. For this purpose a series of interviews were conducted with owners and family members of prominent Small to Medium Sized Enterprises in the Cyprus Hospitality/Tourism Industry. As a result, innovative ways and tactics are derived and recommendations are given in order to survive and prosper in the highly competitive environment of the Hospitality/Tourism industry.