Socio-economic sustainability of family businesses in Tyrolean tourism

This project was carried out in cooperation with the MCI Family Business Center and the Leisure and Tourism Research Center at the LFUI.

Background

Germany is the most important source market for tourism in Austria, and Generation Y in particular is described as a promising market segment (Löw, 2019; Strozzi, 2018). Furthermore, as the role of family businesses in tourism is undisputed (Austrian Federal Economic Chamber, 2018; Zehrer, 2017), this research project examines the significance of the special features of family-run hotels for Generation Y.

Objective

The aim of the research project is to survey potential customers of the "early Generation Y", who are considered a solvent clientele, because their needs and values in relation to family businesses lead to sustainable product and service development in family-run tourism businesses.

Central questions

• What values do family businesses have for Generation Y and how can these values be used for the sustainable product and service development of family-run tourism businesses in Tyrol?
• Which values influence the "early Generation Y" segment in their travel decisions?
• What tourism offers does the "early Generation Y" segment value?
• What opportunities and risks will family-run tourism businesses have with the affluent "early Generation Y" in the future?

Approach

Following a literature analysis on research into the development of offers by family businesses and Generation Y, a qualitative survey was conducted with 20 people from Generation Y (people born between 1980 and 2000, living in Germany).

The results

Excerpts from the results:

• In addition to the original, natural offer (location), derived offer factors such as wellness offers also play a role for Generation Y.
• Food is mentioned in connection with several topics - as a motive when choosing a hotel, when considering booking the same hotel again and also with regard to sustainability.
• The study shows that the interplay of services (overall impression) is important when (re)choosing a hotel. Companies must therefore focus on the entire service chain when developing their offer, ensure completeness and harmony and communicate the elements of the offer well.
• The hotel's own website is just as important as social media in the information process for the travel decision, and reviews are also actively sought. Above all, it is about good value for money, which customers want to have confirmed by reading the reviews, among other things. Posts from influencers appear to be slightly less important. Direct recommendations from family, friends and acquaintances also play a special role.
• Soft, intangible supply factors are also very important. A cozy, warm and personal atmosphere is important to respondents, and family-run companies have a potential advantage here, as their informal character and the values they live by help to make interactions more personal and familiar.
• Management by the family is perceived positively and positive characteristics (personal, likeable, etc.) are attributed to the companies. Even if family-run businesses are not explicitly sought out in many cases, this can still influence the travel decision.

Conclusion

This project illustrates that the special features of a family business such as tradition, loyalty to guests and employees, regionality and authenticity contribute to differentiation, the development of competitive advantages and the strengthening of customer relationships. It is essential to integrate the special features of family-run businesses into the offering and to communicate them. Generation Y is characterized by a socio-politically critical attitude, increased use of the internet and social media, as well as a focused interest in sustainability (Moskaliuk, 2016; Viswanathan & Jain, 2013), which family-run companies can use in their communication. The large group of Generation Y should be further segmented according to psychographic and behavioral criteria.