Competitiveness of Small Rural Tourist Establishments in Northern Norway

Abstract

Competitiveness is a severe challenge for rural tourism including factors like authenticity, clean nature, and sustainable use of the environment. In this project, we collected data from six small rural tourist establishments in Northern Norway, three lodging activities and three tourism service providers. We compared and interpreted the competitive situation using two types of indicators: Porter-type strategy indicators based on structured interviews and financial Key Performance Indicators (KPIs). The theoretical discussion of the competitiveness of rural tourist establishments shows large differences in the understanding of competitiveness, depending on different theoretical frameworks and measurement methods. The results indicate that the KPI-based indicators are more relevant for short-term financial structural changes, one of them being how to develop products/niches that can be profitable for the company. The questionnaire-based analysis adds a longer-term perspective, introducing marketing options, key personnel developments, and environmental considerations. The important competitive factor, how to even out seasonal changes, is the best example where both types of analysis are applied. The novelty of this study is that the Porter-based strategic considerations often contain too much “wishful thinking”, while the KPIs point at rural tourism variations in profitability, and many businesses make too little money and have solvency issues, which indicates that they should focus more on survival. Of course, all companies, including rural tourism, must have a vision, but that must be based on a reasonably sound financial situation.