Zanzibar Commission For Tourism Tourism Essay

Published Date: 23 Mar 2015

1.0 INTRODUCTION

1.1 Background of the Zanzibar Commission for Tourism

Under that Act ZCT is responsible with many functions including licensing (operation) of all the tourist establishment in Zanzibar, Monitoring and supervision of the Zanzibar tourist, Assisting potential investors, etc (ZCT, 1992 )

1.2 Mission

Zanzibar Commission of Tourism (ZCT) on regarding the development tourism in Zanzibar has the mission to be the most interesting, miscellaneous island targeted in the Indian Ocean constituency that will be more interesting in the world.

According to that mission ZCT combines various types of tourism such as: Culture & Tradition, Performing Arts, History & Archaeology, Beaches, Culinary (spices), Medical (herbs) ,etc (ZTPS, n/d)

1.3 Introduction and background of the problem

In order to survive in today's business environment,in small companies, particulaly Small and Medium Enterprises (SMEs) in tourism industry utilize innovative techniques as a basis of competitive advantage. At the moment globalized world, SMEs have turn out to be more imperative for developed and developing countries since they produced high percentages of overall production, employment and revenue collection to the government.

The most important and the greatest growing sectors of the overall economy, tourism in Zanzibar contains many SMEs that make an effort to be doing well in aggressive and quickly changing business situation. SMEs play a critical role not only in national trade but also in international trade. The previous information from different sources such as the Organization for Economic Cooperation and Development (OECD) shows SMEs in many countries account for a very substantial proportion on local and export market (Knight, 2001). Porter (1991) argues that in order for any industry to compete within the business environment, it has to adopt competitive advantage strategy, so the owners and stake holders should be able to identify their competitors.

The competitive advantages for any organization are superior skills and resources. Therefore any source of advantage is like a drivers of cost or differentiation advantages. (Porter, 1985). Like any SMEs, in order for tourism SMEs to survive in competitive business environment, SMEs should be more entrepreneur and innovative,it means that should perform well in dynamic locations and not in regulated markets.

SMEs could have low performance and unstable environments due to delay of product innovations, the working operation was not aggressives even throw the enterprenuership could be benefited in various ways but does not provide a sustainable competitive advantages. (Hult and Ketchen, 2001). Above all, the innovation, promotion, lowering of the price, differentiation, creativity, all these cannot be performed well without the adoption of ICT(Kotler and Armstrong ,2008). Indeed, the nature of any industry cannot compete with its competitor to bring the superior value to their customers without the appropriate adoption of ICT. ICT is regarded as the main force of sustainable competitive advantage and a strategic weapon especially in the tourism and hospitality industries (Poon, 1993). Generally, most of the tourism industry should be well equipped with ICT, which include radio, television, as well as newer digital technologies such as computers and the Internet, have been touted as potentially powerful enabling tools for tourism change and reform. These changes and reforms include services such as e-commerce, e-booking, e-reservation and not only that ICT facilitate the information processing system.

In order to survive strong competition and current economic crisis in the region, SMEs involved in hotel industry have to improve the quality of its services. What is the role of tourism SMEs in the process in order to gain customer's satisfaction through service quality and business improvement? It is generally accepted that ICT is a modern instrumental tool that enables the SMEs entrepreneurs to modify their tourism methods. It is used in order to increase the tourist interest. The extended use of ICTs drove the society into a new knowledge based form where information plays an important role for the SMEs as well as tourist satisfaction.

In Zanzibar there is a significant research gap on small tourism business and failure to identify critical weakness of small and medium sized tourism enterprises. A number of studies on tourism have been conducted, however very little has been studied about tourism SMEs and particularly how these SMEs engaged in adopting ICTs for more productivity and overall total economic growth of the Zanzibar .The need to undertake a thorough tourism analysis in Zanzibar has been realized recently. For example, It is important to have a database on tourism development if, students, policy analysts, planners, decision makers and entrepreneurs to be up to date with drive of tourism industry .As a large number of tourism SME's are involved in the delivery of tourism products and that they are also potential for future development of tourism is a need to carry out studies that might show how small and medium tourism business develop, function, conduct business and how they contribute to local and national economic development. Zanzibar has many tourist attractions and contributes high percentage of economy of the country and that the tourism sector is dominated by SME's. However there is a continued absence of studies on small tourism firms, therefore it is important to do research on tourism SMEs.

1.4 Statement of the problem

There are different kinds of ICTs used in tourism activities such as e-reservation, tele- and video-conferencing and e-booking tools. The extent into how these products services are used by the SMEs involved in Zanzibar and their potential to improve the sector has not been explore enough. Challenges facing these SMEs in application of ICT are not known and areas for improvement have not been investigated. Given the mounting global demand on usage of ICTs in tourism, there is therefore a need to look at the impact of ICTs application on SMEs engaged in tourism sector in Zanzibar. This study is learning to address the issued.

1.5 Aim of the research

To examine /explore the role and use of Information Communication Technology (ICT) in enhancing the competitiveness advantages of Small and Medium Enterprises (SME's) in Zanzibar Tourism operation.

1.6 Research objectives

The main objective of this study is significantly examined how ICT help to create competitive advantage in tourism sector in Zanzibar. Not only that but also to identify constraints facing SMEs using ICT.

Specific objectives:

To examine the awareness and the extent of ICT utilization in Zanzibar tourism SMEs sector

To identify constraints and opportunities of ICT usage in tourism sector in Zanzibar

To find out solution options to overcome the shortcoming of the ICT utilization in tourism SMEs in Zanzibar

1.7 Research questions

For the purpose of meeting the above objectives, the study comes up with the following questions:

How do Zanzibar tourism SMEs aware and utilize the ICT in their business?

How do Zanzibar SMEs perceive profitability and performance of their business in relation to use of ICT in their business?

What measures have been taken to solve the problems of lack of use of ICT?

1.8 Scope of the study

This study was conducted to investigate how usage of ICT and its application in sectors, involved in tourism industry could help the way business is run and hence contribute increased efficiency and effectiveness. Due to the time constraint this study covered the part of Zanzibar Islands which is Stone town and the portion of North East Coast zones which includes Kiwengwa village, Matemwe village and Nungwi village because this area is more active in tourism activities in Zanzibar.

1.9 Significance of the study

This study intends to disclose the influence of the ICT as a competitive advantage strategy that can be applied in SMEs in the tourism industry. The study is expected to be of much value to a number of peoples and organization as follows:-

The results obtained from this study will provide some recommendation to the Governing Authority, which is expected to bring insights into Zanzibar's SMEs on how ICTs usage can bring competitive advantages against their competitors so as to accelerate economic growth of Zanzibar. It will help the policy makers of the country to appreciate the implications on ICT in SMEs in tourism to increase the quality of services in hospitality industry.

The research will provide sufficient information to be used as a reference on this area of the study and to fulfill the requirement for the Degree of Master of Business Administration in Information Technology Management in Coventry University.

1.10 Limitations of the study

Some data are confidential so it was difficult to get the current data.

Financial constraints, so it could be difficult for a researcher to cover all the Zanzibar regions due to financial constraints.

1.11 Summary of the chapter

This chapter was introduced the introduction of the study, the introduction of Zanzibar Commission for Tourism (ZCT) was done under this chapter where all services offered were summarized and the mission statement of ZCT were also started.

Also in this chapter the researcher discussed something about the aim of the research, research objectives, research question and statement of the problems. Not only that but also the researcher briefly discussed the significance of the study, scope of the study and limitation of the study.

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This part provides definition of the important terms and concepts which are used in this study including ICT in tourism sectors, the conceptual frame work of this study, the performance of tourism in SME's, and the opportunity and challenges of tourism in Zanzibar.

2.2 Definitions of the terms and concepts

2.2.1 Small and Medium sized Enterprises (SMEs)

Morrison (1996) argues that it is difficult to define the term SMEs because there are no universal criteria that can be used to determine the size of the business, as a result, Olomi (2009) noted that although the SMEs all over the world contribute a major role in social development, its definition varies from one country to another and even from one institution to another in the same country. An enterprise may be perceived as small in terms of physical facilities, production/service capacity, market share, and number of employee. Olomi (2009) cited that ,the United States Agency for International Development-USAID (1993) ,suggested that SMEs can be defined by considering combination of both qualitative and quantitative criteria and should include one among the aspects such as number of employee, capital investment, share capital, number of share holders, number of stakeholders, total asset, turnover, market share, geographical market coverage, organizational complexity, composition of management and degree of formalization.

In Tanzania, the SMEs Development Policy (2002) classifies SMEs under the consideration of employment size and capital investment of the organization. A micro-enterprise is one with fewer than five employees, a small enterprise with 5-49 employees, a medium enterprise with 50-99 employees and a large enterprise with more than 100 employees. In contrast with the Capital investments the definition was based at the range from less than Tshs 5 million to over Tshs 800 million. For the purpose of this research, the Tanzania SMEs Development Policy of (2002) definition will be adopted because it is based on the local environment of Tanzania, where SMEs are characterized by family ownership and local area of operation, which is not the case to other countries. This illustrated in the table below:-

Table: 1 Category of SMEs in Tanzania

Category

Employees

Capital investment in machinery Tshs

Micro enterprise

1-4

Up to 5mil

Small enterprise

5-49

Above 5mil to 200mil

Medium enterprise

50-99

Above 200 to 800mil

Large enterprise

100+

Above 800mil

Source: SMEs development policy (2002)

Accordind to Zanzibar Youth Employment Action Plan.(2007), Zanzibar has a large informal sector operation where more than 80 percent of the workforce is believed to be engaged in. Majority of the establishments in the informal sector are micro, own account or employing less than 5 people. This situation is linked to low skills base as a result of limited opportunities for skills training, working capital and inadequate support for off-farm activities in rural areas. From a gender perspective,women have low participation rates and fewer skills than men. Women account for only 19 percent of total employees compared to 81 percent for men in this sector. This sector is dominated by private individuals through 1,541 registered businesses in 2002. Out of this number, only 6% employs more than 10 people while 79% of the industry employs less than 20 people and only 3% of registered industry employs more than 100 people (SME Policy, 2006). The potential is still there for more employment opportunities especially to out of school youths and those from different vocational training centers. The Zanzibar SME policy (2006) is aiming at developing and creating conducive environment through participation of public and private sector for the purpose of increasing employment provision, income generation and poverty reduction. The policy and the MKUZA aim at increasing job opportunities through SMEs. SMEs are important to the national economic, but they are facing a number of problems, both administrative and financial and thus fail to contribute fully in employment creation.

Apart from the SMEs sector, Zanzibar has a small manufacturing sector. Manufacturing sector in general is at infant stage and has not been fully exploited to its maximum potential to increase its contribution to the economy and welfare of the people. There is a wide potential for investors to come in, invest in big industries and thereby generates employment on the youth. The importance of manufacturing sector in terms of employment creation and development of linkages with the rest of economy is well understood. Employment opportunities that exist in manufacturing take into consideration its linkages with agriculture, tourism, and trade. Other opportunities that could be generated include those from agro-processing, production of souvenirs, transportation, and other new activities that will meet demands of tourism and trade.

2.2.2. Importance of Small and Medium Enterprises (SME's)

There are many benefits that obtained from SME's in day to day operation forexample there will be about 1.7 millions business engaging, in micro enterprises operation which is about 3million persons that will be about 20% of Tanzanian labour force (URT,2003)

The SME's was be the labour intensive by creating the employment opportunity at different level of investment.The estimation will be shown as about 700,000 new entrants in every year as a labour force, not only that about 500,000 of it are school leavers with few skills, while the employment trend in public sector will show about 40,000 are the new entrants and about 660,000 remained to be unemployed (URT,2003) as cited in Temba(n/d)

According to that the trend will be shown in Tanzania will be characterised by low rate of capital formation and normally the SME's will tend to be more effective in the utilisation of employment situation in the country (URT,2003) as cited in Temba(n/d)

The development of SME's will promote the distribution of economic activities within the country and boster the technology in easierst way,this is because due to lower overheads and fixed costs in their normally operation, therefore the owners of SME's must be tend to show the greater resilience in the face of recession by holding their business (URT,2003)

2.2.3 Information Communication Technology (ICT)

The literature shows that there is no universally accepted definition of ICT, because the concepts, methods and applications involved in ICT are constantly evolving on an almost daily basis.

Blurton (2002) as cited in Badnjevic and Padukova (2006) defines ICT as a diverse set of technological tools and resources used to communicate, and to create, disseminate, store, and manage information. Kumar (2001) claimed that ICT is the study, design, development, implementation, support, or management of computer-based information systems, particularly software applications and computer hardware. ICT deals with the use of electronic computers and computer software to convert, store, protect, process, transmit, and securely retrieve information.

2.2.4 The adoption of ICT by SMEs:

Obviously, ICTs are more than computer or internet even though they focuse on business technology.Therefore ICTs include the software and hardware telecommunicaton and information management techniques, also the ICT can be used to creates,receive, retrives and distribute/ transform information in a wide range. (Porter and Millar, 1985, Brady et al,2002)

SME's in tourism operation are important tools on contribution of the economy in the country in particulaly ICT has more effective use and better position of working performance and rapidly change the new technologies and creates the tourism organization in more competitive.(Hartigan, 2005)

In recent years, SMEs have acquired direct access to digital technologies for individual task development.In previous this opportunity only for large companies to use computing and communication capabilities to coordinate their work. On the other hand, ICT reduced the expenditure on cost consumption and improve the performance in organization due to certain kinds of communications and coordination can occur. (Summut-Bonnii and McGee, 2002).

(Ragaswamy and Lilien, 1997).On the business today their was certain changes that global interdependencies are becoming more critical thus, companies/organization realized they need to take advantage of ICT capabilities for improving their competitiveness and productivity.

2.2.5 ICT and SME competitiveness

The presence of ICT and use it could lead to increase the competitiveness of SME's due the faster and more conscientious communication channel, it means the use of ICT has increase the competitiveness of SME's also enables the establishment of litheness associated with different trading partners due to more consistency of channel of communication. In addition the increases of the biggest enterprises it comes through introduced of ICT in many organizations and adapt quicker to changing operational conditions. For that reason the aggressive compensation of SME's possibly will turn down.

Normally well-built enterprises not relay comfortable information as SME's; therefore the realistic decision is not costless if needed appropriate information. However SME's contain the improvement of slighter interior harmonization expenditure as each and every one resolution is completed by a small number of assessment makers. (Raymond 1993, Müller-Falcke 2001)

The economies of extent can be condensed due to lowering the operational expenditure with the presences of ICT, particularly internet monitor the enterprises situation for appropriate information to obtain the exacting information concerning sellers, buyers and clients that was absent of accomplish. In addition delivery of goods, funds transmission and banking system facilities are reliable, this will enables SME's to be expanded regionally and internationally.

Finally most of the SME's are located in outside the town areas due to competition of larger enterprises,transportation and communication costs that, ICT might increases the competition for enterprises and becomes more effectivelly and productivity or the enterprises to be close down. (Annual Forum at Misty Hills, Muldersdrift (2001))

2.2.6 ICT as a business tools

The use of Information, Communication and Technology is very important in current business operations. Entrepreneurs need to understand the market situation before doing any business and the preferred types of products at particular time. This knowledge can be sought through ICT system. The use of media is important in advertising and promoting business inside and outside the country. The available public and private media institutions can be utilized to publicize the available potential of products and services undertaken by youth and others.(Zanzibar youth Employment Action Plan, 2007).

ICT is technology's version of economic growth, to satisfy the needs and wants of the community over time. Organizations are forced to adjust and take advantage of the opportunities provided by ICT in order to stay competitive. Businesses that do not take advantage of the ICT will run the risk of losing customers and their competitive advantage (Sharma, 2002). Some of the functions that technology has impacted are information search, advertising, consumer buying patterns and behaviors (Hanson, 2000). On a global scale, all industries have been affected by the emergence and implementation of technological advances. All above, ICT can be employed to give users quick access to ideas and experiences from a wide range of people, communities and cultures. The positive impacts of ICT can be seen in the following aspects:

Economic impacts: ICT, in combination with globalization and the information uprising have reshaped the employees. By raising the momentum of international communication, ICT has enabled corporations to subcontract jobs, both in the industrialized as well as professional sector (Lippis, 2007).

Social impacts: ICT has influenced societies on numerous levels. They have comprehensive the contact of public administration, leading to a centralization of district administration into city centre. They have lead to new forms of employment in innovation and production of ICT and a stipulate for highly accomplished specialists. On the other hand, ICT has enabled professionals in certain industries to be replaced by unqualified human resources, or even completed exclusively redundant.

Lifting productivity: Investing in ICT can have a powerful effect on productivity in almost every industry, driving innovation, cutting costs, and opening up new opportunities. ICT can boost profits, help small firms overcome limitations of size, and enable even small enterprises to establish a global presence. Nevertheless, to take full advantage of the opportunities of ICT, we need to develop the skills of our workforce at every level, from front-line staff to senior management.

In summing up, ICT has the potential to change the tourism SMEs in improving the productivity at a lower cost and to raise the quality of information. It contributes to make the tourism penetration around the globe. In today's world, people want to find the appropriate tourist destination, booking and buying airline ticket, check in and getting boarding pass when they are sited at their home or working place. All these can be done with the support of ICT.

2.2.7 Tourism

Holloway (2004) defines Tourism as the business of providing for different types of visitors; overnight or longer stay and day visitors and includes accommodation, car parking, entertainment and attractions, food and drinks. According to Beech and Chadwick (2006), the widely accepted modern definition of tourism is that given by the World Tourism organization (WTO) which describes as the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business or other purposes.

In tourism sector, various travel operators, hotels, restaurants and travel agencies have been active in development of Internet and e-commerce. The Internet allows travellers to access and recommend the tourism information directly as well as , reviews the local tourism information, this was done previously through the physical offices of large travel agencies. Therefore most of Information Communication Technology (ICT) capture the compensation of direct discounted sales of airline tickets and travel packages, due to both online/offline agencies have shifted on selling leisure products involve high operating expenses. Given that Internet and others travel agencies allow the customer to make comparisons in a price of air tickets and other services of the online travellers (OECD, 2004)

2.2.8 The competitive advantage

Porter (1985) views that a competitive advantage is an advantages over competitor gained by offering consumer greater value than competitors offer. His view on competitive advantages is at the heart of a firm's performance in competitive market. He argued that a firm's ability to outperform its competitors lay in its ability to translate its competitive strategy into competitive advantages.

Kotler and Armstrong (2008) suggested an advantage that firms has over its competitors, the way of building relationship with targeted customer, understanding their needs better than competitors do and deliver more customers value. That is it is the extent a company can differentiate and position itself as providing superior customer value.

The competitive advantage is a way of giving a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders. The more sustainable the competitive advantage, the more difficult for competitors to neutralize the advantage (Walker et al, 2006)

2.3 Performance of Tourism SME's

2.3.1 Trade, industry and tourism

Zanzibar Povery Reduction Policy Report (2003) has the broad objective of this sector in order to create a competitive manufacturing and trading sector, which is geared towards for economic diversification in order to ultimately alleviate poverty. The sector is aimed to provide opportunity for further participation of the private sector. The fundamental goal is to equip and facilitate this sector in building its capacity, create better working environment and institute legal and institutional framework for the enhancement and expansion of its activities. The tools to be used are the National Trade policy, Promotion of Small and Medium Enterprises (SMEs) and Private Sector Involvement and Development. Zanzibar has a strong determination to develop tourism as an economic sector to provide foreign exchange earnings, creating employment opportunities, stimulate local economy and diversify the economy.

On the other side most of the tourist guides and/or RoGZ believes that on development of tourism factors, tourism is a vital socio economic that participate effectively and successfully in order to manage their life and to be more development. This can be implemented through the Zanzibar National Tourism Policy and the Indicative Tourism Master Plan.

Since the inception of the ZIPA in 1991, the investment process has been very positive and progressive. Statistics shows that by the end of 2002, ZIPA had approved about 242 projects with a total proposed investment value of USD 403 million. Tourism sector takes the lion share with 70% of total projects with proposed capital of USD 313.8 million. In 1985, the number of tourists who visited Zanzibar was 19,368; while the number of tourists has reached in the range between 85,000 and 100,000 annually. In 2001 Zanzibar earned approximately US$ 46 million in forex from international tourism, this accounts for approximately 15% of the GDP. This contribution is projected to increase to around $ 116 million and 21% of the GDP by 2012. (Zanzibar Povery Reduction Policy Report, 2003)

2.3.2 Contribution to GDP

Tourism already makes a significant contribution to the economy of Zanzibar. It is provisionally estimated that the sector accounted for about 14% of GDP in 2001, with 12% for Tanzania as a whole. This contribution is projected to increase to around 21% by 2012.(Indicative tourism master plan ,2003)

2.3.3 Foreign exchange earnings

According to the preliminary results of the International Visitor Exit Survey Zanzibar earned some $46 million from the spending of International tourists in 2001. To this must be added an allowance for the spending of tourists traveling to Zanzibar on internal flights (who are not presently covered by the official statistics). This raises total visitor expenditure to $55 million in 2001. Allowing for the imports from foreign countries that are utilized by the tourism sector, net foreign exchange earnings from tourism are estimated at $46 million in 2001. This figure is projected to increase to some $116 million by 2012. Even allowing for leakages on imports, it is clear that tourism is a most important sources of foreign exchange, and helps considerably to offset the trade deficit which widened from $51 million in 1997 to $86 million in 2000, reducing to an estimated $50 million in 2001.( Indicative tourism master plan final report,2003)

2.3.4 Contribution to employment

According to (Indicative tourism master plan final report,2003), there exists no official data on the employment generated by the tourism sector, it is estimated that currently some 5,800 persons are directly employed by the tourism industry in Zanzibar, of whom approximately 4,400 persons (76%) are employed in the hotel/guest houses sub-sector. The remainder is employed in tourist restaurants, tourist shops, ground tour operators, airlines (state-owned and private), the Commission for Tourism and other tourism-related government departments or as tour guides. In addition to those directly employed in the tourism sector, there are many more-perhaps, as many again, who derive part or all of their employment from supplying goods or services to hotels, restaurants, etc, or who otherwise benefit from the spending of persons who are directly or indirectly employed in tourism. Thus, total tourism-generated employment in Zanzibar could presently be in the order of 37,000 jobs or full-time job equivalents. This number should further increase to around 48,000 jobs by 2021, if, as is hoped, the tourism sector returns to a path of sustained growth. Indeed, Zanzibar Vision 2020 envisages that as much as 50% of all jobs in the modern sector could be provided in tourism and the free zones by 2020.

Zanzibar Growth Strategy (2007) has accorded tourism as one among the three lead sectors of the economy. In recent years the economic growth in Zanzibar has been driven by the increasing contribution and growth of the service sector, (including tourism) which represents up to 43 percent of GDP (2006).According to Zanzibar Youth Employment Action Plan(2007),arque the employment in tourism sector they believed to employ 56,000 people most of them in hotel operations of which 60% are Zanzibari youth. They are mostly engaged in building of the hotel and other infrastructure as well as in services such as tour guiding, transportation and hotel services. The potential is still there, and the government hopes more people especially youth with further be employed in this sector.

2.3.5 Contribution to government revenues

The tourism sector makes a substantial contribution to government revenues through the wide range of fees, licenses and taxes levied on the sector. While precise figures are not yet available, it is estimated that for 2001 receipts from the tourism sector amounted to some Tsh. 8 billion, representing almost one-fifth of total government revenues in that year. By 2012, this contribution could increase to Tshs 21 billion. A strong case can be made for returning a certain fixed percentage of these revenues to the ZCT for tourism development and promotion. (Indicative tourism master plan final report,2003)

2.3.6 Investment

Since the mid-1980s, a total of $57 million has been invested in hotel and tourism projects facilities by the Zanzibar Investment Promotion Agency (ZIPA), plus a further $6.6 million in 214 smaller tourism projects facilitated by the Commission for Tourism. (URT, (2005))

2.4 Opportunity and Challenges of Tourism in Zanzibar

2.4.1 Assistance for Small and Medium-sized tourism Enterprises (SME's)

(Jamieson W et al, 2004) Small and Medium-sized Enterprises (SME) face a number of obstacles both in terms of their original establishment as well as in their ongoing operations There must be recognition that the small-scale tourism related businesses can have an important impact on poverty reduction. In many countries there is a lack of access to technical expertise and credit at reasonable interest rates due to which many new businesses find it difficult to obtain the necessary capital to start. Governments should support the creation of tourism oriented small and medium-sized enterprises. Policies should be designed to assist the poor in the development of enterprises or in some cases support the development of an enterprise with employment of the poor as its central focus. What are required are micro-credit funds to be used by both the formal and informal sectors. Guiding enterprises, bicycle rental operations, small restaurants, retail operations meeting the diverse needs of the tourist, the creation of small transportation outfits and providing accommodation are a few examples of SMEs that can be created. The accommodation business provides several opportunities for poverty reduction. Initially development can be in the form of a homestay where a portion of a dwelling is rehabilitated to meet the accommodation needs of tourists. This can be expanded

possibly into a stand-alone small-scale inn or lodge. Very often the capital outlay is minimal, but there is a clear need for technical expertise and access to small amounts of money to finance construction and the purchase of equipment. Governments should be concerned with providing capacity building, helping in the development of business plans, providing credit through its own funds and most importantly providing advice to small-scale enterprises. (Jamieson W et al, 2004)

According to Olomi D (2006) a host of problems make it difficult for SMEs to exploit the existing potentials for further employment and wealth creation. One of the most serious impediments is the limited capacity of people who start and operate the businesses, in terms of the attitudes, motivation, exposure, skills and experiences. This capacity limitation exacerbates the effects of other problems including a cumbersome regulatory framework, limited access to finance and working premises. At the same time, services related to entrepreneurship development are underdeveloped and not readily available or affordable to SMEs. The institutions and associations supporting SMEs are weak, fragmented uncoordinated. Their services are quite basic, mainly focusing on helping the poor eke out a living. There are hardly any initiatives for targeted, comprehensive and sustained support specifically to facilitate upward mobility of micro and small enterprises. As a result of the above situation, the majority of small enterprises have permanently remained micro and informal, limiting their access to markets and some support services, quality of jobs created by them, their capacity to pay taxes and eventually poverty reduction at the grass root level. This situation is likely to worsen as competition intensifies with the ongoing globalisation.

2.4.2 Local people benefits

According to the Zanzibar tourism policy statement (n/d) the quality of local people is life can be determined the development of tourism due to the following reasons:-

The enjoyment of the most visitors as far as resident population was interested due to development of the tourism in the country.

Beaches is more interested area in tourism sectors, for the benefit of local people in Zanzibar beaches is a public ownership

As we know local materials are more attractive in tourism therefore RoGZ encourage the industrialization and/ or artist to use locally available materials and not from the outside, this means that the local business creates mechanism for technical assistance.

The RoGZ gives the priority and/or opportunity to local residents for all jobs connected with tourism sectors.

Finally the community funds benefited by development of tourism in restricted villages, with severe systems and assurance intelligibility with stakeholders.

2.4.3 Minimizing leakage

When tourist product comes from outside Zanzibar in tourism sectors becomes the loss of income in the country this means a leakage (Zanzibar tourism policy statement (n/d)).

To ensure the business encourages to maximize local content as a vital,the visitors consume locally goods and services to make sure the foreign currency remained in the country therefore the product ,services and items from local people is sold to tourists. For the purpose of minimizing the leakage the following strategies must be considered:

Establishing the full internal control in any source of market and all payments made by tourist outside Zanzibar will be taxed regarding the competitive market value of services provided.

The Ministry of Trade encourags and rewards the programme such as tour operators, tour guiding and hotel sectors in various areas such as (furniture, fabrics/sewing etc) this activities should consider the benefit of the country.(Zanzibar tourism policy statement (n/d)).

2.5 Challenges of Tourism in Zanzibar

2.5.1 Infrastructure:

There are lacking the number of airlines servicing, and internal services such as transport and utilities (water and electricity).

2.5.2 Degeneration (deterioration) of stone town:

Unique buildings of cultural values re-maining unchanged and without proper maintenance, increasing use of drugs among the youths in Stone Town and beaches which has become a security threat to tourists.

2.5.3 Banking as well as financial services:

In Zanzibar tourism there are ledge deficient international banking facilities to make available in support of growing tourism activities, including insurance services and a financial assistance programme for both domestic and foreign investors.

2.5.4 Extreme seasonality pattern:

In tourism, the low season is the month of May which is the rainy season,with tourist arrivals peaking in August and December/January (European summer and Christmas holidays).

2.5.5 Over- reliance (confidence) on a small number of originating markets:

With approximately 70% of tourist arrivals from Europe and 43% from Italy, normally there is a risk of key markets and can be affected by external events, such as an economic declained as well as political events, a high majority of arrivals will be lost. In order to avoid such a scenario risk must be minimized. (Steck B,et al (2010))

2.6 EMPIRICAL LITERATURE REVIEW

Jennifer et al (2003) in china the ICT and internet gradually changed the tourism industry day after days. In order to examine the impact of ICT applications in the tourism industry must have used the existing theoretical frame work on ICT and e-tourism developments in other areas of the world like Europe and American. Its means that they have been wonderful development at the targeted levels in the latest years, therefore Internet and Intranet have been incorporated their execution procedure and accomplished the scheme more efficient and effectively.

The emergence of the new media technology such as internet, world wide web, e-commerce, e-business that provide a wide range of online business activities reshaped the tourism into new form as e-tourism. According to.(Karmer and Derick, 1992) as cited in Shanker (2008)

In Africa e-tourism enables the business to reach the delivery of the product directly to the consumers through Information Communication Technology ,due to that ICT the tourist lodges, International hotels even if the governments use the website for promoting special features, booking order, promoting tourism activities, for the purpose of attracting more tourists. (Karmer and Derick, 1992) as cited in Shanker (2008)

Not only attract more tourist but also increase efficiency and effectiveness in market firm to the developing countries.Finally its improved the business culture,cost savings and reductions in the inventory cost which leading to the better management performance. Also they contributes the business opportunities to inceased trade and investment in relation between ICT development and economic growth. (Karmer and Derick, 1992) as cited in Shanker (2008)

Nielinger (2003) study investigating the ICT-utilization of small and medium Enterprises (SMEs) in Tanzania. From his study, he found that ICT is under-utilized and most of the SMEs use mobile phone as a newly available and cheapest technology to improve their business situation with respect to basic telecommunication services. However, the ICT applications such as World Wide Web and internet utilization highlights the dominance of email usage in Internet communications and email traffic suggests that computer based communications increasingly play an important role in business, especially to serve the customers, who receive almost 30% of all emails sent.

2.7 CONCEPTUAL FRAMEWORK

The SMEs awareness of the ICT use is very crucial aspect. The firm before adopting the ICT there is a need to analyze from the resources possessed, the capabilities development, the competencies attained and the competitive advantage either if they are sustained or not. The tourism SMEs require the ongoing commitment, involvement and should be well prepared with the adoption of the ICT. The adoption of ICT is a competitive advantage to tourism SMEs as the result of both global forces and internal demands of the tourism SMEs. As the tourism SMEs want to be well known globally, it becomes imperative to use intensively the ICT. The ICT application is also significant when the tourism SMEs want to facilitate the operational and administrative functions. The pre-requisite in order the ICT to take effort accordingly depends on the use to create enabling environment such as the competitive business environment and readiness to use the ICT. The competitive environment is the only approach that will ensure that ICT services and system give the SMEs a competitive edge.

In fact, the ICT is a new hybrid sector and it is a complex in terms of its uses, coast, knowledge and skills. It is not a matter of ICT creating opportunities and change but requires a lot of expertise, a lot of money and very advanced skills. The tourism industry should be well equipped with the competent Human Resources in the knowledge of ICT and overall Management. Those competent personnel should be willingly to have continuous learning as ICT has the tendency of changing so fast sometimes faster than individuals can cope or change. The access to the tourism SMEs to obtained sustainable competitive advantage is associated with the access of the new information, reducing production costs, business transaction costs and supports the customers' (tourist) satisfaction. The customers can be satisfied to their tourism needs and wants easily with minimum cost in terms of money or time at online basses. Generally, ICT is important in decision making process. It assists in storing and retrieving data quickly; assist in providing timely data that is tracking the problem when it occurs and ability to present information in different formats.

2.8 Summary of the chapter

In generally this chapter was discussed the literature review of the study by looking the definitions of the terms and concepts in relation of this study, importance of Small Medium Enterprises (SME's) and the adoption of Information and Communication Technology (ICT) by Small Medium Enterprises (SME's).Not only that the researcher looked on performance of tourism in Small and Medium Enterprises (SME's) but also the opportunity and challenges of tourism in Zanzibar.

Through ICTs the tourism organizations have performed in efficient and cost effective way to build their capacity in effective way, increase the awareness and promotion in newspapres, magazine,websites either internally or through partners. Further more this chapter discussed empirical literature review and conceptual frame work in relation to tourism situation.

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

Thus Chapter highlights on the research design that was used, area of the study, population of the study, sample selection methods and size, data collection methods, validity and reliability, ethical issues and analysis methods that were used.

Also this study its involves selected staff in random samples from Zanzibar Commission of Tourism, Managers/Supervisor of selected hotels, and International Tourist that was willing in this study, and could be gender sensitive in the selection of respondents to ensure that both men and women participate.

3.2 Research design

The choice of a research design is determined by the nature of the problem and the method of data collection employed. Research design is a systematic plan of what is to be done, how it will be done, and how the data will be collected and analyzed Kothari (2008).

Also according to (Selltiz et al. (1962:50) as cited in Kothari (1990)) "A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure" The design which was employed in this study is descriptive survey. Descriptive survey is the method of collecting information by interviewing or administering a questionnaire to a sample of individuals and it involves measurement, classification, analysis, comparison, and interpretation of data (Kerlinger, 1973).

Rationale for the selection of survey method is that the survey allows the use of multiple methods, and with it, it is easier to contact respondents. Questionnaires will be prepared with questions designed to collect the information on the effectiveness of the ICT in tourism Small Medium Enterprises in their day-to-day operations in Zanzibar.

3.3 Population and sample

The targeted population for this study was hotels in Unguja Island which are licensed and legally registered by Zanzibar Commission for Tourism. The study sample was carried out taking into consideration the number of hotels present in the area, the distribution of the sample, time duration and resource available. The field research was conducted for Hotels with a number of employees ranging from 1 to 99.

3.4 Sample size

In order to obtain representative sample, simple random sampling method was employed and this enabled the researcher to give each respondent an equal chance of being selected therefore could be minimizing bias in the research. (Kothari, 1990).

According to that, the study involved 55 respondents of which 13 were Manager/Supervisors of random selected hotels, 40 international tourists that are willing to take part, and remaining 2 the staff of Zanzibar Commission for Tourism. These methods ensured that correct and reliable information was obtained from relevant respondents as supported by (Mugenda & Mugenda 2003).

3.5 Data collection methods and procedures

Data were collected from two main sources primary and secondary. Primary data are those data which are collected the first time, and happens to be original in character, on the other hand secondary data are those data which have already collected, and normally have been passed through the statistical process.

In primary source the data obtained through observation, direct communication with respondents or through personnel interviews and questionnaires. Secondary sources included relevant documents and reports. The researcher use both of the two approaches at the same time which enables to get relevant information concerning the study. (Kothari, 1990:95).

3.6 Questionnaires

The researcher prepared and presented the questionnaires with exactly the same phrasing, same order to all respondents, in order to ensure all respondents reply to the same set of questions. (Kothari 1990:100-101)

The researcher employed questionnaires to obtain data, which could not be obtained through interviews. The aim of such questionnaires was to get the general and specific information regarding the role of ICT in tourism SMEs. Operation, so the researcher will be prepares three different questions for the three different respondents. Verbal

3.7 Interview

This method of collecting data involves face to face communication and reply in terms of spoken responses. This method can be used through personal interviews as well as telephone interviews. The researcher use this method because it provide a safes, also it's required less skills for interviewer as well as more economical. (Kothari, 1990:98)

In this method the researcher needed to know the use of ICT and the overall development of tourism industry in Zanzibar. Therefore the information about the challenges, opportunities and overall concern of the government on the impact of ICT toward hotels productivity and performance was being obtained from Zanzibar Commission of Tourism.

3.8 Document review

Data were also collected by using documentary review. The documents may be hardcopy or softcopy (electronic copy), which include reports, program logs, performance ratings, meeting minutes, newsletters and marketing materials. Reviewing the existing documents helped the researcher to understand the history, philosophy and operation of the program that evaluated and the organization in which it operates. (CDC,2009)

During this method the researcher employed to get secondary data mostly from Zanzibar Commission for tourism , Zanzibar tour Guide, and different tourism sectors also to determining the accuracy of the documents the researcher may involved comparing the documents that contained similar information, by checking the information against the other data that will be collected, and finally if possible to speaking with people that will be involved in the development of the document (CDC,2009)

In order to obtain the existing information in SME's enhancing the role of ICT in tourism operation it's better for collecting that kind of data.

3.9 Data analysis technique

The analysis of data was both qualitative and quantitative technique. Quantitative technique was captured, the structured questionnaires, interviews, and focused group discussion and analyzed by using Exel and SPSS methods. While Qualitative technique historical review, and analyzed by using deductions and induction's methods. From the above mentioned sources the researcher used the reasonable instrument, whereby the data will be edited to be in a position to identify errors and omission (if any) followed by coding and classification.

3.10 Validity and reliability of data

To ensure reliability and validity of data, the questionnaires were used in pre-tested. The researcher was direct a few questionnaires as a pilot, so that unclear questions are corrected to ensure accurate and consistent data are collected.

3.11 Ethical consideration

Under this study, the researcher considered all the ethics involved and informed the respondents about the purpose/ importance of the study and assured them of confidentiality. All the information that could have led to psychological torture and harm were concealed in order to protect and respect the dignity of the respondents in the field.

3.12 Summary of the chapter

This chapter discussed about the reseach design and methodologies.Area of the study, population of the study as well as sample size.Data collection method and procedure that involved questionnaire, interview and other data through ZCT website as well as various literature review.The validity and reliability of data, ethical consideration and data analysis technique was also discussed in this chapter.

CHAPTER FOUR

4.0 PRESENTATION ANALYSIS AND INTERPRETATION OF DATA

4.1 Introduction

This chapter contains presentation of findings from main data source (field survey) and thus presentation is based on the research objectives. This means that findings in relation to the role of ICT in enhancing tourism's SME's operation. The data appearance in this chapter is done qualitatively and quantitatively. The chapter begins by giving response rates from questionnaires and the profile of the respondents, precise interpretation and finally a discussion of the findings.

In the study, the researcher sampled and administered 55 respondents. Out of 55 respondents 53 of them the researcher administered by questionnaire, while the remaining 2 respondents were interviewed. The number of administered by questionnaire include Managers/Supervisor of selected hotels, the International tourism, and remaining 2 staff from Zanzibar Commission for Tourism were interviewed. The researcher used these methods in order to come up with findings.

The distributions of questionnaire are shown in table below.

Table: 2 Response rate analyses

Respondents

Questions given

Questions Return

Percentages of return

Managers/Supervisors

13

11

21.15%

International Tourism

40

39

75%

Staffs ZCT

2

2

3.85

Total

55

52

100%

Source: Field survey data (2012)

The above data are shown in the figure below:

Fig 1: Distribution of questioners

Source: Field Survey data (2012)

From the above data, observed that 53 copies of questionnaires were distributed to respondents and only 50 copies were returned, which is equivalent to 94.34% while 3, copies remained in the field which equivalent to 5.66%. The researcher could not for several times meet the respondents due to the time frame for collecting data have elapsed. On the other hand on the side of interview were conducted with all 2 respondents who were subjected to these methods, which equivalent to 100%

4.2 Characteristics of respondents

4.2.1 Gender

During data collection the respondents were asked to tick their appropriate gender during the study process.Table 3 illustrates the summary of the gender of respondents for those who answer the questionner in International Tourist as shown below

Table 3 Gender of respondents

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Male

21

53.8

53.8

53.8

Female

18

46.2

46.2

100.0

Total

39

100.0

100.0

Souce: Field Survey data(2012)

On the side of International Tourist the gender issue was considered in this study, 53.8% of respondents were males while females formed 46.2% of respondents. On the other hand 63.6% of the Manager/Supervisors of the selected hotel were males while 36.4% were female as shown in table 3 below

Table 3 Gender of respondents

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Male

7

63.6

63.6

63.6

Female

4

36.4

36.4

100.0

Total

11

100.0

100.0

Souce: Field Survey data(2012)

The statistics shows that there is large number of responders (56%) while female is about 22, which is equivalent to 44% out of the total responder in the field analysis.

4.2.2 Age Patterns of the Respondents

Age group of respondents was also one of the aspects in the demographic characteristics of respondents. Respondents were asked to tick their relevant age interval as indicated in table 4

Table 4(a) Age patterns of the respondents

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Under 21years

6

15.4

15.4

15.4

21-30years

13

33.3

33.3

48.7

31-40years

10

25.6

25.6

74.4

41-50years

8

20.5

20.5

94.9

Over 50years

2

5.1

5.1

100.0

Total

39

100.0

100.0

Source: Field survey data (2012)

This analysis shows 33.3% of the responders in the age about 21-30years for the case of the International Tourist and the mean age are about 2.67 while the standard deviation is about 1.132 out of the 39 responded as shown below in fig 2

Source: Field survey data (2012)

Age group of respondents was also one of the aspects in the demographic characteristics of respondents as shown but for the case of the selected Manager in different hotel as shown below in Table 3.1(b)

Table (4b) Age Patterns of the Respondents

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

21-30 years

2

18.2

18.2

18.2

31-40years

3

27.3

27.3

45.5

41-50years

3

27.3

27.3

72.7

Over 50years

3

27.3

27.3

100.0

Total

11

100.0

100.0

Souce: Field survey data (2012)

On the other hand the analysis for the Manager/Supervisor of the selected hotel shows 27.3% of the responders in the randomly age about 31-40years,41-50years and others over 50years and the mean ages are about 3.64 while the standard deviation is about 1.12 out of the 11 responded as shown fig 2b below

Field survey data 2012

4.3 Types and class of the hotels

According to the study, the types and class of the hotels surveyed, respond select the categories others which represent Boutique hotels that represented the largest percentage of respondents (54.5%) followed by Bungalows hotels which covered 27.3% of the respondents. 36.4% of the hotels belong to three stars class, followed by one and two star which almost contains 18.2% and also the same percent remains silence i.e. no respond at all. The table 4 below analysis the findings in detailed.

Table 5: Types and class of the hotel

Types of Hotels

Class of Hotel

Types of Hotels

Frequency

Percentage

No. of Stars

Frequency

Percentage

Luxurious hotel

1

9.1

One star

2

18.2

Retreat hotel

1

9.1

Two stars

2

18.2

Bungalows

3

27.3

Three stars

4

36.4

Others

6

54.5

Four stars

1

9.1

No respond

-

-

No respond

2

18.2

Total

11

100

Total

11

100

Source: Field survey (2012)

4.4 The time duration in the hotel position

The analysis shows that the respond who had one to two years of working contained 36.4%managers, while 27.3% managers had less than one year of working experience, also 18.2% all managers who had the experience of ten and above, but all in all the analysis found the three to five years and the six to nine years has equal working experiences its about 9.1% Table 5 below explains the findings in details.

Table 6: Time duration in the hotel position

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Less than one year

3

27.3

27.3

27.3

One - Two years

4

36.4

36.4

63.6

Three - Five years

1

9.1

9.1

72.7

Six -Nine years

1

9.1

9.1

90.9

Ten-and above

2

18.2

18.2

100.0

Total

11

100.0

100.0

Source: Field Survey (2012)

According to analysis there are some variation of working experience in this study in a large gap, this means that most of the hotels in Zanzibar had no policy of retaining staffs in their jobs/ position of work but the only thing that there are in appropriate motivation packages to hold the potential employees. The mean and standard deviation of the working experience as shown in the fig 3 below of the whole managers of the selected hotels was 2.45 and 1.368. The figure 3 below illustrates the field data in histogram for more explanation.

Fig 3: Time duration in the hotel position

Source: Field survey (2012)

4.5 ICT responsiveness and operation

The main target of this part to show in what extent the hotel prioritize the use of ICT by investigative different ICT tools and its applications also the level of the employees to be aware with the usage of ICT facilities like internet and website in day to day operation. The consequence of tourism manufacturing to occupy into professional and competent ICT staff was also investigated. Not only that but also the accessibility of having ICT unit/department updating the system and the budgeting to support ICT systems were among the issues have been examined.

4.6 Prioritization of ICT utilized

The analyses of the extent of hotel prioritize the use of ICT in Tourism SME's operation indicates that 63.6% response argues as the important, while 27.3% of response agreed to be Extremely important and only 9.1% disagreed as illustrated in detail in table 6 below.

Table 7: Prioritize the use of ICT in hotel

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Extremely important

3

27.3

27.3

27.3

Important

7

63.6

63.6

90.9

Less important

1

9.1

9.1

100.0

Total

11

100.0

100.0

Source: Field Survey (2012)

According to this analysis the tourist proprietor should be aware of ICT operation and also should be known how to utilize it effectively for the purposes of sustain the customer satisfaction. In order to support this argument one among the member of ZCT interview says" ICT communicates and makes other business transaction more rapidly easier and more convenient".

4.7 Updating and budgeting ICT services

In general according to the new technology there is a different version of updating the ICT systems. Therefore any organisation especially tourism operation should make effort to kept the updated budget, for day to day operations of ICT and could be carefully for updating the ICT system. According to the analysis 82% of respondents update their ICT services while only 18% argues not update the system.

On the other side, for any successful business must have operated with the guide of budget, budgeting is very useful to any business operation; it means the businesses have realistic plans for their staffs, maintenance and all production costs. Therefore the analysis shows 54.5% of respondents said &q