Following a review of internationalization literature, this chapter presents the findings of a questionnaire survey among small and medium-sized Swiss tourism enterprises, and examines the process of their internationalization. It deals in particular with the major structural and strategic variables which affect the degree of internationalization of tourism establishments.

In generic terms, there are many schools of thought on internationalization, and the literature is rich and complex. Space does not permit a full discussion, and the following is intended to provide only a necessary outline. The establishment chain model was one of the first major attempts to conceptualize the way in which firms internationalize. According to this model, internationalization is a process that follows an orderly sequence of growth in incremental stages (Johanson & Wiedersheim-Paul 1975, later modified by Johanson & Vahlne 1979). Two of the major elements of the model are knowledge and commitment. Knowledge of the foreign markets is crucial in determining the commitment of the company to entry into them. As the company learns more about the new markets, more resources are committed. Although influential for many years, it has been argued that the model stays at a general, deterministic level, and has no explanatory power concerning the reasons why internationalization occurs, or the conditions that would encourage it (Turnbull 1993). Other major criticisms of the model are that the theory does not take into account the operating environments of the respective companies, or the managerial strategies of the companies, which have been shown to be crucial in the internationalization process. Finally, with the “born global” outlook of contemporary companies, it is clear that companies do not nowadays follow the sequential process. Among service companies, too, the “instantly international” outlook is becoming increasingly prevalent today (McAuley 1999). In addition, transnational hotel corporations pursue a mixture of expansion strategies combining both equity and non-equity concurrently (Contractor & Kundu 1998).