With the rapidly growing scope of tourism and accelerating pace of competition in this industry, it is becoming imperative for entrepreneurial ventures to improve customer satisfaction from the services they offer if they wish to better their business performance. Focusing on the factors affecting satisfaction from tourism ventures, the present paper suggests an integrated model based upon a threefold perspective: environmental, organizational, and entrepreneurial. This perspective is based upon the notion that business success relates to these three dimensions.

For many countries tourism has become an important source of business activity, income, employment, and foreign exchange. Enterprises in the industry range from large transnational corporations, usually foreign owned and managed, through medium-sized facilities, either foreign or locally owned, to small-scale businesses, usually locally owned. One of the advantages of small tourism ventures is that they are not necessarily capital intensive and are thus less dependent on massive foreign investment and limit the financial risk. Moreover, small tourism ventures tend to enhance community stability, do less harm to the physical environment, and generally raise the level of popular participation in the economy. Important as they are, little research attention has been paid so far to small ventures in the tourism industry worldwide.

In tourism, as in other service industries, the emergence, survival, development, and failure of ventures depend heavily upon customer satisfaction. Peters and Waterman (1984) in their bestseller In Search of Excellence found that firms that valued their customers above all else out-performed those that did not. Insofar as satisfaction means the intent to purchase again and the high probability that the satisfied customer will recommend the goods or services to others, increasing customer loyalty can lead to higher profitability. Moreover, bearing in mind that tourism is an experience made up of many different interdependent parts, some more tangible than others, customer satisfaction may be treated as a cumulative measure of total purchase and consumption experience over time.

Since tourism and the physical and social environments are inseparable, the multidimensional model of the factors affecting customer satisfaction includes these environmental aspects of the operation. Thus, venture location is a dominant feature of the tourism experience. The competitive advantage of a host region and/or a venture is also expressed in the variety of its touristic resources. Research shows that the range of services is the main factor in growth or decline of most destinations. The model also includes the organizational aspects of the operation, of which the quality of service is dominant. Anderson et al found that quality has the greatest impact on customer satisfaction, and that it is primarily a function of current quality and past satisfaction. Providing the service often includes the concurrent execution of marketing, operations and human resource management tasks. Each of these functional areas has a part in delivering high-quality service. Reflecting the central role of entrepreneurs in small businesses, the model also relates to the entrepreneurs individual features. An extensive body of research has focused on these attributes. Thus, on the basis of a meta-analysis, Cooper and Gimeno-Gascon 1992 concluded that the need for achievement and ability to manage risk are both related to performance.

The general research hypothesis derived from the model is that tourist satisfaction is positively related to the attractiveness of the tourism ventures location; the areas of strength of the ventures and the number of services offered; and the entrepreneurs management skills and personal entrepreneurial features. The data were gathered by means of in-depth interviews conducted in 1995 at 53 tourism ventures in the Negev, southern Israels scenic, desert-like region. The research sample covered 65% of the total population of small tourism ventures in the area: more than three-quarters of them had up to eight employees, 26.4% employed only one other person; 11% were one-person businesses. The questionnaire was based mainly on that of Brush and Hisrich (1985), certain changes and additions being made, mainly for the sake of relevance to the industry. It was checked for internal consistency and validity.

With the rapidly growing scope of tourism and accelerating pace of competition in this industry, it is becoming imperative for entrepreneurial ventures to improve customer satisfaction from the services they offer if they wish to better their business performance. Focusing on the factors affecting satisfaction from tourism ventures, the present paper suggests an integrated model based upon a threefold perspective: environmental, organizational, and entrepreneurial. This perspective is based upon the notion that business success relates to these three dimensions.

For many countries tourism has become an important source of business activity, income, employment, and foreign exchange. Enterprises in the industry range from large transnational corporations, usually foreign owned and managed, through medium-sized facilities, either foreign or locally owned, to small-scale businesses, usually locally owned. One of the advantages of small tourism ventures is that they are not necessarily capital intensive and are thus less dependent on massive foreign investment and limit the financial risk. Moreover, small tourism ventures tend to enhance community stability, do less harm to the physical environment, and generally raise the level of popular participation in the economy. Important as they are, little research attention has been paid so far to small ventures in the tourism industry worldwide.

In tourism, as in other service industries, the emergence, survival, development, and failure of ventures depend heavily upon customer satisfaction. Peters and Waterman (1984) in their bestseller In Search of Excellence found that firms that valued their customers above all else out-performed those that did not. Insofar as satisfaction means the intent to purchase again and the high probability that the satisfied customer will recommend the goods or services to others, increasing customer loyalty can lead to higher profitability. Moreover, bearing in mind that tourism is an experience made up of many different interdependent parts, some more tangible than others, customer satisfaction may be treated as a cumulative measure of total purchase and consumption experience over time.

Since tourism and the physical and social environments are inseparable, the multidimensional model of the factors affecting customer satisfaction includes these environmental aspects of the operation. Thus, venture location is a dominant feature of the tourism experience. The competitive advantage of a host region and/or a venture is also expressed in the variety of its touristic resources. Research shows that the range of services is the main factor in growth or decline of most destinations. The model also includes the organizational aspects of the operation, of which the quality of service is dominant. Anderson et al found that quality has the greatest impact on customer satisfaction, and that it is primarily a function of current quality and past satisfaction. Providing the service often includes the concurrent execution of marketing, operations and human resource management tasks. Each of these functional areas has a part in delivering high-quality service. Reflecting the central role of entrepreneurs in small businesses, the model also relates to the entrepreneurs individual features. An extensive body of research has focused on these attributes. Thus, on the basis of a meta-analysis, Cooper and Gimeno-Gascon 1992 concluded that the need for achievement and ability to manage risk are both related to performance.

The general research hypothesis derived from the model is that tourist satisfaction is positively related to the attractiveness of the tourism ventures location; the areas of strength of the ventures and the number of services offered; and the entrepreneurs management skills and personal entrepreneurial features. The data were gathered by means of in-depth interviews conducted in 1995 at 53 tourism ventures in the Negev, southern Israels scenic, desert-like region. The research sample covered 65% of the total population of small tourism ventures in the area: more than three-quarters of them had up to eight employees, 26.4% employed only one other person; 11% were one-person businesses. The questionnaire was based mainly on that of Brush and Hisrich (1985), certain changes and additions being made, mainly for the sake of relevance to the industry. It was checked for internal consistency and validity.

Although the ventures business strength index did not add to the explanation of the variance in tourist satisfaction, it did correlate significantly and positively with it (r = 0.30*). Each of the business strength areas was ranked highly by the entrepreneurs, especially product quality and customer service. The latter stands out as being highly correlated with customer satisfaction (r = 0.40**). Contrary to the general hypothesis, no significant correlation was found between the number of services offered and tourist satisfaction, suggesting a trade-off between the quantity and the quality of the services offered, especially if one takes into account the relatively young age of most ventures studied.

In line with the accepted view that service management aims at maximizing customer satisfaction as well as profit, the findings show that the subjective perception of the entrepreneurs regarding tourist satisfaction is positively and significantly correlated with the ventures profitability (r = 0.35*), suggesting that tourist satisfaction is expressed in the financial performance of the ventures. Furthermore, most of the environmental and entrepreneurial variables were significantly correlated with profitability, indicating the impact of entrepreneurial features, management skills, and attractiveness of the venture location on the success of running a tourism venture. However, due to the relatively small size of the present research sample and the self-report data, further research is clearly required. Evaluation of other possible interfering variables that could explain customer satisfaction would serve to substantiate the results. Furthermore, conducting a direct consumer study might have provided some different results regarding their preferences. Nevertheless, the results suggest that applying the three-fold perspective for explaining customer satisfaction of small service ventures, particularly in this industry is a worthwhile enterprise. Practically, the results show that tourism entrepreneurs and managers should orient themselves to achieving customer satisfaction by developing their management skills and entrepreneurial characteristics. The findings further suggest the importance of studying the interface of entrepreneurship and tourism.