Competitive Capabilities of Small and Medium-Sized Accommodations (SMSAs) in East Coast of Malaysia

The number of small and medium-sized accommodations (SMSAs) has increased in Malaysia in tandem with the growth of the tourism industry worldwide. The states involved in this study were Terengganu, Kelantan and Pahang. The SMSAs in these states are rated using Orchid rating, namely 1-Orchid, 2-Orchid and 3-Orchid, generated by the Ministry of Tourism, Arts and Culture Malaysia (MOTAC). This study applied the Resource-based View (RBV) theory to investigate four factors (marketing management, human resources management, innovation capability management and information technology) assumed to be competitive capabilities that may influence accommodation’s performance. The objective of the study is to examine whether the four factors influence the performance of Orchid-rated accommodations located in the East Coast of West Malaysia. The results revealed that the four factors do not have any relationship with the accommodation’s performance. The analysis also singled out one argument of the director of SMSA that competitive capabilities are not important to their business. This argument coincides with the results of the analysis that the four factors are not significant with regards to the accommodations’ performance.