Impact of Social Capital Empowerments on the Businesses Success among the Micro and Small-Scale Tourism Entrepreneurs in Sri Lanka

Abstract

This paper endeavors to reveal the impact of competitive capabilities which were promoted by Community Based Tourism (CBT) empowerment projects on the success of rural tourism businesses and also key competitive capabilities which effect business success. The positivism approach was applied and a 250 sample of micro and small-scale tourism entrepreneurs (MSSTEs) from the rural tourism destinations of Panama and Arugam Bay in Ampara district and Kanneliya, Vihrahena, Mederipitiya, and Godahena in Galle and Matara districts who were empowered by the CBT projects namely, International Labour Organization and Ruhunu Tourism Bureau was selected by using the random number generator with the list of the MSSTEs of the two selected CBT projects. A structured questionnaire was used in collecting data and five hypotheses were formulated and tested to reveal whether any significant impact creates by the competitive capabilities empowered by CBT projects on tourism business success in rural destinations and which competitive capability affects mostly on creating a variance in business success. Results were obtained mainly through correlation and multiple regression analysis. Findings revealed that empowerment efforts of CBT projects affect significantly the business success of MSSTES. Among the five constructs of competitive capabilities, capacity enhancement, community collaboration and cohesiveness, and business know-how and management are the only predictors which affect significantly business success. Facilitating network building and sustainability practices are not good predictors. Though the impact of network building and sustainability practices on business success was reported as insignificant, a positive but weak correlation exists between these variables. This positive relationship implies that success of rural tourism businesses can be further enhanced by promoting these two capabilities and the concentration need to be given by policy planners and practitioners on the inappropriate assistance of the CBT projects for network building and sustainability practices among the MSSTEs in rural tourism destinations.