The role of crowdfunding in delivering entrepreneurship within the hospitality sector: A case study analysis
Keywords:crowdfunding, entrepreneurship, hospitality sector, challenges, benefits
Over the last decade, crowdfunding, has emerged as a hugely disruptive force within the financial landscape worldwide. Crowdfunding, the process of raising relatively small sums of money from the crowd, via the internet, enables entrepreneurs, particularly at the innovative and new start-ups stage, to access much needed funding, overcoming a “funding gap”. The growth of crowdfunding has been phenomenal. In 2019, an estimated €14 billion was crowdfunded worldwide (Statistia 2020) and the forecast is for the sector to grow to €30 billion by 2025 (Mordo Intelligence, 2020).
Initially, crowdfunding gained prominence through funding creative and artistic projects, but over the last number of years, this appeal has spread across a diverse range of businesses and sectors (Bradford 2012 and Research and Markets 2022). In the wake of the 2007-2008 financial crisis and more recently the COVID-19 pandemic, crowdfunding offers entrepreneurs and businesses access to much needed seed funding, but also non-financial benefits in the form of market and product testing, media exposure and customer feedback.
Crowdfunding is a relatively new domain for businesses in the hospitality sector. As noted by Belavin, Marinesi and Tsoukalas (2020), crowdfunding offers huge potential for the sector, who often face funding challenges thereby limiting new innovative start-ups, critical for the sector’s long term viability. This case study examined how one entrepreneur in the hospitality sector, successfully crowdfunded an innovative business idea in the wake of the COVID-19 pandemic. The case traces the idea and the factors that shaped the decision to crowdfund. Additionally, the case examines the benefits and challenges involved in successfully crowdfunding the business idea and closes with the entrepreneur reflecting on the key learning from the experience.
The contribution of this case study is twofold. Firstly, it serves to highlight the potential of crowdfunding as a funding source of enterprise development, particularly among new, innovative businesses. Secondly, it adds to the current debate, as noted by Belavin, Marinesi and Tsoukalas (2020), of the potential crowdfunding in fostering entrepreneurship and economic development within the hospitality sector.