Innovative Activity in SMEs: Critical Success Factors to Achieve Sustainable Business Growth

Abstract

During the pandemic, the tourism and hospitality sector was one of the worst-hit sectors in Seychelles. Due to the uncertainties in the 'new normal' environment, businesses had to devise strategies and tactics to survive and emerge from the turmoil. This event or the new normal was unexpected, and there is a lack of studies on this phenomenon in Seychelles. This qualitative study aimed to ascertain the impact of the pandemic and, subsequently, the tactics and strategies to survive and sustain the growth of SMEs in Seychelles. This research was a qualitative study in which semi-structured open-ended interviews were conducted. The objective was to collect in-depth data from the target population who were owners or operators of SMEs engaged in the tourism sector in Seychelles. Judgemental sampling was utilized. The researcher's professional judgment was used to select the participants who could enable the researcher to address the research questions. A total of six business owners were interviewed. The thematic analysis identified the themes that emerged from collected through interviews and transcribed data. The key impact of the pandemic uncovered in this study encompass increased uncertainty, a drop in sales leading to cash flow shortage, changes in customers, and an increase in operating costs. The main strategies to deal with the effect of the pandemic include cost-cutting, managing cash on hand, CSR involvement, flexible pricing, and implementing intensive growth strategies. The results are expected to provide policymakers in Seychelles with additional information that could be useful in forming policies that would help ease the struggles that businesses are encountering. The study also suggested that SMEs be more innovative and search for new opportunities to sustain and grow. To the researcher's knowledge, this is among the first studies exploring the impact of the COVID-19 on SMEs in the tourism sector in Seychelles.