Determinants of Performance among Small and Medium Tourism Enterprises in Tanzania

Abstract

The tourism sector is an important sector providing services based upon various attractions ranging from beaches to national parks. Millions of international tourists arrive in Tanzania to tour where tourism attractions contributing to the national economy. Consequently, Small and Medium Tourism Enterprises (SMTEs) may wish to pay attention to this sector. However, recently, it has been realised to dwindling market share as performance in SMTEs. Thus, the main purpose of this paper is to examine the influence of determinants on the performance of SMTEs. This research paper informs by the Information System Success Model, Networking Theory, Resource-Based Theory and Institutional Intervention Theory, which address the influence of determinants on performance among SMTEs. A total of 325 questionnaires were collected through a cross-sectional survey. A positivists’ philosophy underpins this research, and the research hypotheses were tested using Structural Equation Modelling. The findings indicate that the market share of SMTEs is influenced by service quality, business networks, and government intervention. Also, service quality, business network and government intervention are important factors in improving market share among SMTEs in Tanzania. However, the determinants do not influence the sales volume and number of tourists served yearly. Therefore, for performance improvement, SMTEs are recommended to formulate and implement strategies to improve a strong business network. Furthermore, the governments should review SMEs and tourism policies to ensure that optimal taxes, levies and licenses are charged to tourism firms.