STAKEHOLDER NETWORKS SUPPLYING RURAL TOURISM IN VIETNAM: WITH REFERENCE TO A JAPANESE CASE March 2014 HOANG NGOC MINH CHAU Graduate School of Environment Science (Doctor’s Course) OKAYAMA UNIVERSITY For Dad who is instilled me in my ambition of study and research and my beloved family Acknowledgements This doctoral dissertation contains my name as the author, but its development owes a great deal to many people. All of those people, even from long ago, since the very beginning of my education, they have contributed in shaping my mind and attitude towards study and research. To all those wonderful people who help me, I would like to say Thanks you very much! Firstly, I would like to show my deep gratitude and acknowledgment to my supervisor, Prof. Kim Doo-Chul. With a chance supporting his research survey in 2009, he gave me an opportunity to study PhD under his supervisor at the Okayama University, Japan. During over 3 years of studying and researching in Japan, Prof. Kim have shaped in my mind many precious knowledge, ideas, concepts, interpretations as well as his patience and support for guiding and supervising me to finish the hardest study in my life. I am not able to find the right words to express my feelings! So, one again: “Thank Sensei very much!” Besides, I would like to thank Asso. Prof. Fumikazu Ubukata, my second supervisor, who gave the significant comments relating to theoretical concepts and interpretations for my research. I am grateful for his valuable guidance I received throughout the research work. I also would like to thanks Prof. Fumikazu Ichiminami for giving many invaluable comments for me to improve the papers and thesis. I also would like to thank Assistant Prof. Yasuko Honda for her comments, academic supports, and encouragement during my studying. And thanks to Mrs. Nahoko Koeda for supporting an administration. In addition, I would like to thank Professor Mary Cawley, Department of Geography, National University of Ireland for sharing valuable academic papers relating to my topic concepts. In order to pursue my education in Japan, I have accrued array debts to my Vietnamese Prof. I would like to thanks Prof. Truong Thi Kim Chuyen, former vice president of the University of Social Sciences and Humanities of Ho Chi Minh City (USSH), for her encouragement and advices, gave me more energy to overcome difficulties. Besides, I would like to thank Prof. Nguyen Hoang Bao, Dean of School of Economics, University of Economics Ho Chi Minh City (UEH); Prof. Nguyen Trong Hoai, Vice president of UEH; Prof. Ngo Thanh Loan, Dean of Tourism Department of USSH, and all members of Geography Department of USSH for all their support, advices and encouragement. i There are many colleagues of the Laboratory of Environmental Science, who gave helpful feedback, suggestions, and other personal supporting, for which I would like to thank them: Dr. Truong Quang Hoang, Nguyen Trinh Minh Anh, Dr. Suk-Kyeong Kang. Dr. Hye Jin Bu, Hiroki, Ishimura, Ogawa, Phuong Quy, Ayaka, Jun, Miri, Yokohama, Sosuke, Genja, etc. All of them have all extended their support in a very special way, help me a lot of things during the time I study in Japan. Besides, I would like to thank for Vietnamese student community in Okayama for having familiar time together with many memorable events with tons of great food, drink and games. These memories will never leave me. Especially, thank Ms. Phan Nguyet Minh for helping me translation during the time of field survey in Shodoshima, Japan. I own debts of gratitude to the local government and local residents in Phu Quoc Island, Thoi Son Islet and Shodoshima Island. During the field survey, with their enthusiasm and support, they answered all my long questions and provided me all necessary information for my study. Especially, I would like to thank Mr. Ishitoko, manager of the Shodoshima Tourism Association, for his arrangement of interviews and his supports for my research. Most importantly, I want to express my gratitude to my family, especially my mother Mrs. Huynh Minh Nguyet, two little sisters Hoang Ngoc Nam Phuong and Hoang Ngoc Tuong An, with their love, helped me at every stage of my personal and academic life, and longed to see this achievement come true. Although being far from me, they always gave me inspiration and motivation which helped me overcomes the stress, challenges and difficulties in my living and studying in Japan. Especially, to my husband, Mr. Vo Khac Diep, I would like to say “Thank You … with Love!” With his support, I always feel sufficiency, safe, love and focus on the study. He has made too many sacrifices for me and without him, I cannot finish this study. And finally I would like to say: “Dad, Thank You! I do everything for You and because of You!” Once again, I would like to express my great appreciation and thank all of you. ii Abstract Upon the limitation of the studies from tourism supply side, that is, from the perspective of stakeholder networks in rural tourism, and the importance of the local stakeholders participation for sustainable rural development, the thesis aims to assess stakeholder networks in the operation and supply of rural tourism with three case studies - Phu Quoc Island, Thoi Son Islet in Mekong Delta region, Vietnam and Shodoshima Island, Japan. The results of Phu Quoc case study show that there are two different geographical dimensions, inter-regional networks and intra-regional networks in supplying rural tourism. For the inter-regional networks, the non-local stakeholders such as Ho Chi Minh travel agencies (HCMTAs) and non-locally owned accommodations, established the strong vertical networks due to their superiority over local stakeholders in the areas of power dominance in network and capital. In contrast, local travel agencies (LTAs) usually depend on HCMTAs in their networks and the local resident suppliers organize the businesses mainly based on the network with tour guides through the kickback competition, instead of increasing the quality of their services. As a result, the tour guide is key actor who connects these two divided dimensions, though most of them are unlicensed and not employed by any official tourism sectors. However, their income are mainly dependent on kickback, caused the price competition with low service quality among local resident suppliers. For Thoi Son Islet, the results show that in the current model, HCMTAs and LTAs have played the role of connectors, working as hubs to shift tourists (demand) to match local resident suppliers (supply) by the formal networks. At the local destination, the networks between LTAs and local residents are both formal and informal. Inter- and intra-networks among local residents are dominated by informal networks. However, among the LTAs and owners of tourist sites, there are no cooperating networks but high competition in price. This causes the little or no negotiating power of the local stakeholders when conducting their business. iii Therefore, for both Vietnamese cases, the results lead to the problems such as tourism revenue leakage out of the local region, the non-local stakeholders’ power dominance, and the high competition among the local stakeholders through kickback and price. Meanwhile, within the structure of Phu Quoc Tourism Association, the local resident suppliers have been recognized as unprivileged stakeholders and the Tien Giang Tourism Association is inefficient in fostering cooperation among local stakeholders to increase their negotiating power. Then, the Shodoshima Island provides the broader view on how the local stakeholders network to supply rural tourism. The results show that model of associations such as Somen Association and Shodoshima Tourism Association (STA) has good mechanisms for all the local stakeholders building the strong intra- regional networks. These associations operated successful because they set up based on the will or suggestion of the local stakeholders, are self-organizations as well as the collective voice of the local stakeholders. In addition, within the tourism supplying network, STA plays the role as a main hub, helps diverse local stakeholders cooperate and together sharing common objectives such as PR the local destination’s image, free tourism information center, bridge between local suppliers and tourists, and so on. In order words, the well- organized networks among the local stakeholders help the agricultural products become the tourism product and strengthen the local empowerment. Therefore, this successful model can be hints for the immature rural tourism industries such as Vietnam. iv CONTENTS I. INTRODUCTION .......................................................................................... 1 II. THEORETICAL BACKGROUND ............................................................... 4 2.1. The concept of “rural tourism” ................................................................. 4 2.2. The supply of tourism ............................................................................... 5 2.3. Stakeholder theory..................................................................................... 7 2.4. Network perspective .................................................................................. 9 2.5. Dimensions of sustainable tourism development.................................... 10 2.6. A community-oriented approach to tourism planning and management 11 2.7. The evolution of a tourism destination.................................................... 14 III. BACKGROUND OF TOURISM IN VIETNAM AND RURAL TOURISM IN THE MEKONG DELTA REGION ....................................................... 17 3.1. Background of Vietnam tourism industry ............................................... 17 3.2. Rural tourism in Vietnam ........................................................................ 19 3.3. Rural tourism in Mekong Delta region ................................................... 24 IV. METHODOLOGY ....................................................................................... 30 V. SUPPLIER NETWORKS IN RURAL TOURISM - THE CASE OF PHU QUOC ISLAND, KIEN GIANG PROVINCE, VIET NAM ...................... 33 5.1. Introduction ............................................................................................. 33 5.2. General Background ................................................................................ 38 5.2.1. Study area - Phu Quoc Island ........................................................... 38 5.2.2. Tourist behavior ................................................................................ 42 5.3. Stakeholder Identification................................................................. 42 5.3.1. Local stakeholders ............................................................................ 43 5.3.2. Non-local stakeholders ..................................................................... 49 5.4. Stakeholder’s Network Analysis ............................................................. 55 5.4.1. Networks between HCMTAs and LTAs .......................................... 56 5.4.2. Networks between HCMTAs and accommodations ........................ 59 5.4.3. Networks between LTAs and accommodations ............................... 61 5.4.4. Networks between tour guides and local resident suppliers ............. 62 v 5.4.5. Networks among HCMTAs and networks among LTAs ................. 64 5.5. Conclusion ............................................................................................... 65 VI. STAKEHOLDER NETWORKS SUPPLYING RURAL TOURISM IN THE MEKONG DELTA, VIETNAM - THE CASE OF THOI SON ISLET, TIEN GIANG PROVINCE ................................................................................... 67 6.1. Introduction ............................................................................................. 67 6.2. Outlines of Thoi Son Islet and tourist behavior ...................................... 71 6.2.1. Outlines of Thoi Son Islet ................................................................. 71 6.2.2. Tourists behavior .............................................................................. 73 6.3. Identifying the supplying stakeholders of tourism in Thoi Son Islet ...... 74 6.3.1. Local residents .................................................................................. 75 6.3.2. Entrepreneurs: Ho Chi Minh travel agencies (HCMTAs) and local travel agencies (LTAs) ..................................................................... 77 6.4. Stakeholder network analysis .................................................................. 79 6.4.1. Cooperation among Ho Chi Minh travel agencies (HCMTAs)........ 80 6.4.2. Between HCMTAs and LTAs .......................................................... 82 6.4.3. Among LTAs .................................................................................... 87 6.4.4. Between LTAs and tourist-site owners ............................................ 88 6.4.5. Between LTAs and motorboats ........................................................ 88 6.4.6. Tourist-site owners networking with traditional music teams and rowboat teams ................................................................................... 89 6.5. Conclusion ............................................................................................... 92 VII. THE NETWORKS AMONG LOCAL STAKEHOLDERS IN SUPPLYING RURAL TOURISM - THE CASE OF SHODOSHIMA ISLAND, KAGAWA PREFECTURE, JAPAN .......................................................... 95 7.1. Introduction ............................................................................................. 95 7.2. Study area - the Shodoshima island ........................................................ 97 7.2.1. History of growing Olive tree in Shodoshima and the Olive Image ..... 100 7.2.2. Tourist behavior .................................................................................... 103 7.3. Identifying Stakeholders In Shodoshima Island ................................... 103 7.3.1. Local resident suppliers .................................................................. 103 vi 7.3.2. Accommodation sector in Shodoshima .......................................... 105 7.3.3. Shodoshima Tourism Association (STA) ....................................... 105 7.4. The Networks Among Local Stakeholders ........................................... 106 7.4.1. Shopping center : both private and public shopping ...................... 107 7.4.2. Accommodation sector ................................................................... 108 7.4.3. Somen association (SA).................................................................. 110 7.4.4. Shodoshima Tourism Association (STA) ....................................... 113 7.5. Conclusion ............................................................................................. 117 VIII. DISCUSSION & CONCLUSION ............................................................. 119 8.1. The involvement of all stakeholders in sustainable tourism development – model of associations – Comparison among three case studies (Vietnam and Japan) .............................................................................................. 119 8.1.1. Form ................................................................................................ 120 8.1.2. Objectives and Location of Tourism Association Office ............... 121 8.1.3. Membership .................................................................................... 122 8.2. Integrated discussion in terms of “inter-regional networks” and “intra- regional networks” among three case studies ....................................... 124 8.2.1. Comparison between Phu Quoc Island and Thoi Son Islet ............ 125 8.2.2. Shodoshima case: strong inter-regional networks and strong intra- regional networks............................................................................ 126 8.2.3. Comparison between the Vietnam and Japan ................................. 128 8.3. The tourism destination life cycle and the structure changes of stakeholders’ networks .......................................................................... 132 8.4. Challenges to sustainable development for the local destinations ........ 137 8.5. Conclusion ............................................................................................. 139 REFERENCES ..................................................................................................... 144 ANNEXS .............................................................................................................. 152 vii LIST OF TABLES Table 1. Community-oriented approach ………………………………….….. 13 Table 2. Models of tourism development in the agricultural ecology regions ... 23 Table 3. Four clusters in tourism planning development ……………………… 26 Table 4. The interviewed local resident suppliers ………….…………………. 43 Table 5. The interviewed LTAs ……………………….……………………… 46 Table 6. The interviewed local freelance tour guides …………………………. 47 Table 7. The interviewed locally owned accommodations ….…………..……. 49 Table 8. The interviewed HCMTAs …………….....……………………..…… 50 Table 9. The interviewed non-locally owned accommodations.………….….. 52 Table 10. Methods for interviewing main actors ………….…………………. 71 Table 11. Network matrix in supplying tourism among stakeholders in Thoi Son islet ...................................................................................................................... 79 Table 12. Advantages and disadvantages of cooperation networking among HCMTAs ……………………………………………………………………… 81 Table 13. Advantages and disadvantages of networking between HCMTAs and LTAs ………………………………………………………………………….. 84 Table 14. Number of motorboats (at My Tho wharf) for some LTAs at My Tho wharf ………………………………………………………………………… 89 Table 15. List of interviewees …………………………………….…………. 97 Table 16. The interviewed accommodation about their networks …….…….. 109 Table 17. Comparison of the tourism association among three cases ………. 120 viii LIST OF FIGURES Figure 1. Hypothetical evolution of a tourism area (Butler, 1980) ……………… 15 Figure 2. Vietnam’s tourism administration structure …………….……….……. 19 Figure 3. Number of tourists in Vietnam, 2001-2010 ………..…………………. 20 Figure 4. Tourism GDP in entire GDP of the country …….……………….……. 20 Figure 5. Main agricultural ecology regions of Vietnam ….……………………. 22 Figure 6. Four main clusters in tourism planning development …………….….. 25 Figure 7. Number of tourists visiting Mekong Delta region ……….…………… 27 Figure 8. Ratio of tourist arrivals in Mekong Delta region ………………….….. 31 Figure 9. Map of Phu Quoc Island’s airways and seaways ………………….…. 38 Figure 10. Study area of Phu Quoc Island ……………………………………… 39 Figure 11. Number of tourists visiting Phu Quoc Island …..…………..……… 40 Figure 12. Total number of accommodations and rooms in Phu Quoc Island … 53 Figure 13. Investment capital in Phu Quoc Island in 2012 ………….…………. 53 Figure 14. Links among the rural tourism stakeholders in Phu Quoc Island ….. 56 Figure 15. Main influencing factors of networks between HCMTAs and LTAs, from LTAs’ point of view …………………………….…………….……. 57 Figure 16. Main influencing factors of networks between HCMTAs and LTAs, from the HCMTAs’ point of view ………………………………...……… 58 Figure 17. Main influencing factors of networks between accommodations and HCMTAs ……………………………………………….…….……. 60 Figure 18. Main influencing factors of networks between LTAs and accommodations …………………………………………………….. 61 Figure 19. Main influencing factors of networks between tour guides and local resident suppliers – from the viewpoint of local resident suppliers … 62 Figure 20. Main influencing factors of networks among HCMTAs ……….…… 64 Figure 21. Main influencing factors of networks among LTAs …….………….. 65 Figure 22. The framework for stakeholder network analysis ….……………….. 69 Figure 23. Location of the study area ……………..……………………………. 73 ix Figure 24. Key factors influencing cooperation networking between HCMTAs... 80 Figure 25. Key factors influencing cooperation networking between HCMTAs and LTAs …………………………………………………………………..83 Figure 26. Differentiation in profit margins between LTAs and HCMTAs……... 86 Figure 27. Kagawa prefecture and Shodoshima Island …………………………. 98 Figure 28. Location of the study area - Shodoshima Island ………………….… 99 Figure 29. Number of passengers getting on the Shodoshima by years ………... 99 Figure 30. The local networks among the involved stakeholders in supplying tourism in Shodoshima ……………………………………………... 106 Figure 31. Example on the networking between shopping centers and tour operators ………………………………………………………………………107 Figure 32. Involved stakeholders participated in Shodoshima Tourism Association ………………………………………………………………………114 Figure 33. Involved stakeholders participated in Shodoshima Tourism Association …………………………………………………………………….116 Figure 34. The inter- and intra- regional networks of three case studies ….…... 124 Figure35. The inter-region and intra-region networks in supplying rural tourism.132 Figure 36. Phu Quoc tourist arrivals for the period 2001-2012. The evolution phases are illustrated and local authority control is discussed ………..…… 133 Figure 37. Thoi Son tourist arrivals for the period 1995-2010. The evolution phases are illustrated and local authority control is discussed …………..… 135 Figure 38. Shodoshima tourist arrivals for the period 1950-2012. The evolution phases are illustrated and local authority control is discussed …….. 136 x ABBREVIATIONS DCST: Department of Culture, Sport and Tourism HCMTA: Ho Chi Minh Travel Agency ITTPC: Investment and Trade-Tourism Promotion Center LTA: Local Travel Agency MARD: Ministry of Agriculture and Rural Development MCST: Ministry of Culture, Sport and Tourism PC: People Committee PQTA: Phu Quoc Tourism Association SA: Somen Association STA: Shodoshima Tourism Association TA: Tourism Association Tien Giang TA: Tien Giang Tourism Association xi I. INTRODUCTION Tourism industry in general is complex in nature. They are heterogeneous and compound, consisting of many different service components supplied by numerous stakeholders such as accommodations, tour operators, local residents, etc. (Zhang et al., 2009). Due to the complexity of the tourism supplied by the diverse stakeholders, the tourism sector involves more collaboration, partnerships, and networking than most other economic sectors. From this point of view, tourism needs to be analyzed from an integrated perspective—that is, as a network (Zhang et al., 2009). Another important aspect is that the studies on the supply side of the tourism industry have largely been neglected (Sinclair et al., 1997). The lack of attention to supply networks is not unique to tourism research (Zhang et al., 2009); most service industry studies focus on the marketing rather than the supply side (Smith, 1994). Saloheimo (2008) pointed out that the network approach is suitable for analyzing the tourism supply side, maybe even to the extent that the term “tourism network” should be used instead of “tourism industry.” March et al. (2009) proved that network and stakeholder analyses in tourism studies typically offer schema, typologies, and frameworks that contribute to conceptual development. In tourism studies, rural tourism has been a topic of concern for researchers because of its important role in rural development, including positive benefits in economic, quality of life issues and an enhancement of regional conservation efforts (Brown, 2013). Moreover, rural tourism may represent a sustainable form of rural development (Bramwell et al., 1994). Many rural communities have turned to tourism as a way to diversify their economic base (Briedenhann & Wickens, 2004). Tourism development in rural areas is characterized as a form of locally situated development that uses tourism to generate economic, social, and cultural benefits within a community. Therefore, rural tourism is often considered as important tool of planning for sustainable rural development because of the community 1 participation in decision making, compatibleness with the rural context, and sustainable development of both natural and cultural. Though the benefits of rural tourism are generally recognized, actual benefits to the community can be difficult to achieve. Its fails are presented in some situations such as (a) being too focused on industry development compared to community empowerment, (b) ignoring the internal dynamics of communities, and (c) ignoring the external barriers, such as inequality between developers and community members that affect the degree of local control (Johnson, 2010). These critiques are made with reference to a development context where external private investment is attempting to enter a rural community (Johnson, 2010) and in this way, the community is subjected to the outcome of a development, rather than being an equal partner in the process of developing rural tourism (Bahaire and Elliott-White, 1999). In tourism studies, rural tourism has been a topic of concern for researchers because of its important role in rural development, including positive benefits in economic, quality of life issues and an enhancement of regional conservation efforts (Brown, 2013). Moreover, rural tourism may represent a sustainable form of rural development (Bramwell et al., 1994). Though the benefits of rural tourism are generally recognized, actual benefits can be difficult to achieve due to some main reasons such as (a) being too focused on industry development compared to community empowerment, (b) ignoring the internal dynamics of communities, and (c) ignoring the external barriers, such as inequality between developers and local community that affect the degree of local control (Johnson, 2010). These critiques are made with reference to a development context where external private investment is attempting to enter rural areas (Johnson, 2010) and in this way, the local stakeholders are subjected to the outcome of a development, rather than being an equal partner in the process of developing rural tourism (Bahaire and Elliott-White, 1999). Upon the limitation of the studies from tourism supply side, that is, from the perspective of stakeholder networks in rural tourism, and the importance of the local 2 stakeholders participation for sustainable rural development, the thesis aims to assess stakeholder networks in the operation and supply of rural tourism with three case studies - Phu Quoc Island, Thoi Son Islet in Mekong Delta region, Vietnam and Shodoshima Island, Japan. With the broader view from two countries and a systematic point of view from the stakeholder networks, the results provide the deep understanding on the tourism supplying structure for the two Vietnamese case studies, figure out strategic weaknesses in these structures that considered to be crucial challenges to sustainable rural development. Additionally, given the long history of tourism development in rural area in Japan and consider the mature rural tourism, the case in Shodoshima contributes some hints for applying to the countries which have the immature rural tourism such as Vietnam to consider for future development. Research questions o How do rural tourism supply and operate by the diverse stakeholders involved? o How these stakeholder networks influence on the operation of rural tourism at the local destinations? o What are main determining factors in establishing these stakeholder networks? And why? o Which stakeholder is the most powerful player or dominant the tourism supplying networks? Who is the unprivileged stakeholder in the tourism supplying networks? Sub research questions: o Are there the leakages of tourism revenue out of the local destination and why? o How about the role of Tourism Association in rural tourism operation at the local destinations? How does it operate? 3 II. THEORETICAL BACKGROUND 2.1. The concept of “rural tourism” According to Keane at el. (1992), there are a variety of terms used to describe tourism activity in rural areas: agri-tourism, farm tourism, rural tourism, soft tourism, alternative tourism and many others which have different meanings from one country to another. In a simple way, based on Lane (1994) rural tourism is the one which takes place in the countryside or merely be located in a rural area. Therefore, research on the tourism in rural areas or rural tourism (hereafter) needs to recognize the essential qualities of what is ‘rural’. While national governments use specific criteria to define ‘rural’, often based on the population density of settlements, there is no universal agreement on the critical population threshold which distinguishes between urban and rural populations. According to Cloke (1992), rural places have been traditionally associated with specific rural functions: agriculture, sparsely populated areas, geographically dispersed settlement patterns, and rurality has been conceptualized in terms of peripherality, remoteness and dependence on rural economic activity. Based on Lane (1994), rural tourism in its purest form should be:  Located in rural areas;  Functionally rural – built upon the rural world’s special features of small- scale enterprise, open space, contact with nature and the natural world, heritage, ‘traditional’ societies and ‘traditional’ practices;  Rural in scale – both in terms of buildings and settlements – and, therefore, usually small-scale;  Traditional in character, growing slowly and organically, and connected with local families. It will often be very largely controlled locally and developed for the long-term good of the area; and  Of many different kind, representing the complex pattern of rural environment, economy, history and location. 4 More recently, according to Tribe (2000), the concept of rural tourism can be understood in three different ways: all tourism and recreation activities taking place in the countryside; a number of activities usually accepted by participants and providers as being rural; or any activities taking place in any setting that participants perceive as rural and within which they behave accordingly. Each region understands rural tourism differently according to its background and resources, with regions interpreting the practice as farm tourism, green tourism, agritourism, ecotourism, and so forth based on their types of activities (Tribe, 2000). Bramwell (1994) suggests that rural tourism is a small-scale and functional relationship between open space and nature-oriented, heritage, or traditional societies that makes them “rural.” Visits to museums and historical attractions, festivals, farmers’ markets, guided walks, and themed routes are examples of rural tourism activities (Bramwell, 1994). 2.2. The supply of tourism According to Tshililo Nelwamondo (2009), tourism supply has to do with the provision of the key elements of the tourism industry by the host governments or destinations. Such provision should extend to maintenance, promotion and management of the tourism facilities and resources. Tourism resources that are necessary for tourism supply range from natural to man-made. Infrastructure required would include telecommunication, accommodation and transportation. Tourism reception services include travel agencies, tourist offices, hire companies and visitor managers. The one underlying characteristic of tourism supply that distinguishes it from other services is the way in which the mobile population who visit destination areas consume a tourism product, service or experience. In contrast, the supply elements are often fixed geographically at certain places (e.g. hotels, restaurants or visitor attractions). This means that businesses are required to sink considerable capital costs into different forms of tourism services and centres of production on the basis of the expectation that the destination will appeal to visitors and assist in the promotion of their individual product and service. 5 The “tourism supply chain” concept originated from economics. It has been used to explain how different businesses enter into contractual relationships to supply services, products and goods, and how these goods are assembled into products at different points in the supply chain. Tourism is well suited in the supply chain because the product, service or experience that is consumed us assembled and comprises a wide range of suppliers (Tshililo Nelwamondo, 2009). The supply of tourism products basically involves how various components of the tourists product are placed at the disposal of tourists. Tourism suppliers can be classified under the following headings: hospitality, transport and attractions/products. As far as hospitality is concerned, this is where a tourist will look at the appropriate forms of accommodation, different types of food service provisioning, entertainment and leisure activities. Tourism supply can also be explained through the “distribution system” in tourism analysis. The distribution system makes the supply of tourism available and accessible to the demand side. There are four components in the tourism distribution, system namely, suppliers of tourism services, the distribution of information, travel intermediaries and consumers (Tshililo Nelwamondo, 2009). Gunn and Var (2002) suggest that tourism supply components can be classified according to the four different elements: natural or environmental resources, built or man-made resources, transportation, and hospitality and cultural resources. Within most conventional texts on tourism, the issue of supply attracts comparatively little attention (Hall and Page, 1999). According to Sinclair and Stabler (1992), “past research on the tourism industry can be classified into three main categories: first, descriptions of the industry and its cooperation, management and marketing; second, the spatial development and interactions which characterize the industry on a local, national and international scale; and third, the effects which result from the development of the industry”. However, Shaw and Williams (1994) prefer to view the issue in relation to two other concepts: production and consumption. Shaw and William (1994) acknowledge that the production and consumption of tourism are important 6 approaches to the analysis since Production is the method by which a complex array of businesses and industries are involved in the supply of tourism services and products, and how these are delivered to consumers, and Consumption is how, where, why and when the tourist actually consumes tourism services and products. Sessa (1993), however, considers “tourism supply” is the result of all those productive activities that involve the provision of goods and services required to meet tourism demand and which are expressed to tourism consumption’ which comprises: resources for tourists, infrastructure, receptive facilities, entertainment, sports venues as well as tourism reception services. Urry (1990) describes concept of “spatial fixity”. Specifically, tourists are mobile consumers and able to consume at a global level. This contrasts with most forms of supply which are fixed at specific locations. Underlying the concept of spatial fixity is the nature of tourism entrepreneurs who are largely small scale in their operations and less able to access forms of capital to relocate to new sources of demand. Thus, supply is often unable to respond geographically to demand beyond a fixed point and this means that peaks and troughs in demand at particular locations need to be managed through differential forms of pricing (Seaton and Bennett, 1996) and the use of seasonal labour (Ball, 1989). 2.3. Stakeholder theory [Based on manuscript of Seldjan (2003)]. Freeman (1984) who introduced the concept to strategic management defined ‘stakeholder’ in a management and organizational cext to include any individual or group who can affect the firm's performance or who is affected by the achievement of the organization's objectives. The definition of stakeholders varies among scholars. Some define stakeholders broadly like Freeman (1984) did and some prefer to use a narrower definition. Clarkson (1995) argues that stakeholders are risk-bearers: They have financial or human capital at risk and therefore have something to lose or gain depending on the organization's behavior. Savage et al. defined stakeholders as groups or individuals who "have an interest in the actions of an organization and ... the ability to influence 7