Regional Environment of Destination and the Entrepreneurship of Small Tourism Businesses: A Case Study of Dali and Lijiang of Yunnan Province

Small tourism businesses play vital roles in tourism destinations. However, an understanding of the extent to which the destination where the business is located influences decisions made by tourism entrepreneurs has not received the attention it deserves. Based on 173 questionnaires and 50 interviews in Dali and Lijiang, and using factor analysis, the author explores the effect of regional environmental factors on the entrepreneurship of small tourism firms. Seven factors were derived with a cumulative variance of 66.8% explained. Tourism attractiveness, including the natural and human environment as well as regional economics, drives the macro-location of small tourism firms and is the most important influence factor, followed by information and communication factors. The market potential and accessibility, which are keys to success, are also important factors that entrepreneurs considered. The family background provides support for entrepreneurs. Also, emotional supports among entrepreneurs with shared values, hobbies, and experience are crucial for lifestyle entrepreneurs to start a venture. However, the influence of financial environment, government policy, and labor conditions are not perceived to be significant to the entrepreneurs.