Does Firm Size Matter in Innovation in Small Accommodation Businesses in Developing Economies?

Abstract

The tourism industry and in particular the accommodation sector is fast growing and competitive. To survive, accommodation businesses need to engage in sustainable innovation. However, literature is fragmented on the drivers of innovation in the accommodation sector specifically on small accommodation businesses (SABs). Such limited empirical information exposes small businesses to intense competition from their large business counterparts. The study sought to establish whether firm size influences innovation in SABs in South Africa and Zimbabwe. The study examined and compared the influence of different sizes of SABs (micro, small and medium (SMMEs) on different dimensions of innovation (Product/service, process, marketing and organisational (PPMO) in Zimbabwe and South Africa where owner/managers of small accommodation businesses were participants. A cross sectional comparative research design was used. Using stratified random sampling, two samples each of 139 were drawn from target populations of 257 and 331 SABs from Manicaland and Free State provinces in Zimbabwe and South Africa respectively. Data was collected using questionnaires and analysed using ANOVA F tests. The results of the study showed that regardless of nationality, there is strong evidence of no association between firm size (SMMEs) and innovation. Specifically, SMMEs have no influence on the different dimensions (PPMO) of innovation. Hence firm size does not matter on innovation among SABs in Zimbabwe and South Africa. It is recommended that owner/managers of SABs in Zimbabwe and South Africa should not use firm size as a driver of innovation but instead explore, embrace and invest in those drivers that stimulate sustainable innovation. Furthermore, future studies should consider including qualitative information from owner/managers of small accommodation businesses in order to retrieve and add more depth to the study.