The complexity of the policy environment combined with the unique characteristics of tourism SMEs can adversely affect the uptake of digital technologies, perceptions of risk, trust and confidence. It is changing the way work is organised and services delivered, and also presents opportunities to take advantage of digital advancements to handle transactions, capture and process information and data on tourism supply and demand, and improve and connect operations along tourism value chains and ecosystems. SSRN Electronic Journal. Luxury hotels, business travel and conference demand have been slowest to recover due to the lack of international tourists. It is complemented by a Tourism App for consumers, the Connect Tourism programme focusing on the digitalisation of the product across the entire country, and the wider Transform Tourism initiative which together seek to build the enabling environment for the digital transformation of tourism businesses. Four archetypes of the digitally enhanced business model are identified (Figure2.3): Vertically integrated businesses - These businesses own the customer relationship and know their customer well. The project is being implemented in a partnership between national tourism development organisations and universities. Geneva. With the ultimate goal of collecting and showcasing meaningful travel and tourism data, Jurni aims to support sound, strategic decision-making by providing an unbiased centralised digital data platform and integrated digital solutions. 2 Leisure travel accounted for 80% of all U.S. domestic travel in 2019. Management and Content Provision for ICT and Tourism Business Support Portal. Productivity-enhancing technologies (e.g. This will be enhanced by machine learning as the platform matures. Rachinger; M., Router, R., Mller, C., Vorraber, W & Schirgi, E. (2018). Digitalisation brings significant potential benefits to SMEs - it can help them to become more efficient, free up time and resources to focus on strategic tasks, and increase their capacity to develop new business models, enter new markets, or internationalise operations. Research also indicates that companies that derive more than 50% of their income from digital ecosystems understand their customer better, and have higher revenues and profit margins (Weill and Woerner, 2015). augmented reality, geotagging) are generating, customising and delivering in ever more novel ways, new visitor products, services and experiences (OECD, 2018c). Financial support from the Bpifrance Tourism Investment Fund allowed the founders to accelerate the development of the business and strengthen the performance of its platform. https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/a-two-speed-it-architecture-for-the-digital-enterprise. This is illustrated in Table2.2. Booking.com, Priceline, Agoda), as well as collaborative platforms like BlaBlaCar, HomeAway, Airbnb and Lyft. Digital technologies have important implications for tourism businesses of all sizes, for the structure and operation of tourism value chains and for the sector as a whole. Innovative walking tours, for example, might rely on Wi-Fi access to cloud services, geotagging, and augmented reality to bring to life historical visitor experiences and simulations such as those curated by the Heritage in Motion initiative. March 2017. they outsource to the apartment owner who wants to share their accommodation). Adrenaline Hunter an online adventure sports booking platform acting as an intermediary between end users and the activity providers. Digital networks enable the scaling of production outside the firm shifting from traditional vertical integration to demand-product matching. Such initiatives encourage SMEs to reassess their business models, and make key changes to both strategy and practice. Automation and robotics are a key trend in tourism with applications developed for physical tourism businesses as well as online. Policy initiatives that support innovation more broadly are often not sufficiently targeted to deal with the particular barriers, opportunities and operational characteristics of tourism SMEs (Table2.2). World Bank (2018), Tourism and the sharing economy: Policy & Potential of Sustainable Peer-to-Peer Accommodation, The World Bank Group, Washington (online), available at: www.worldbank.org (24-05-2019). Supporting innovation is a key concern for all governments, and policy initiatives fostering innovation in general are widespread. Governments may provide such assistance via co-operative funding mechanisms, talent attraction programmes and delivery of expertise through accelerators and incubators. Each of these factors is in turn influenced by a number of elements. Utah may just be the last place in the world that makes you think of surfing. Digital Economy and Tourism The tourism sector is challenged by a growing demand for customer orientation, increasing international competition, volatile markets in an insecure environment, changing customer demands towards individualization and significant potential in various market segments. Informed by digitally derived data, tourism products and services are evolving toward hyper-personalisation and customisation (Skift and Adobe, 2018; Visa, 2017). Domestic business travel increased 1.1% from 2018 to 464 million person . Collaborative, networked commerce, open architectures, multi-sided platforms blur roles of consumers-producers (prosumers). Unpublished presentation. While the extent and implications of the digital transformation in tourism are difficult to assess in the absence of comprehensive data, available evidence suggests that the adoption of digital technologies in the sector has been inconsistent, and there remains much that governments can do to support the digital transition. While there are advantages to be derived from expanded markets and productivity gains from value adding, such as increased information enhancing visitor awareness, the complexity of the marketplace reduces the control that tourism organisations have over the curation and presentation of the destination. 6.3. (2018), The digital transformation report. (2018). This may be organised and carried out through local tax systems or through funds established by the tourism industry for local community . SMEs that do not invest in their digitalisation will not survive, let alone thrive in the future. Recent OECD work (Calvino et al., 2018) assesses the digital intensity of sectors by looking at the technological components of digitalisation (tangible and intangible ICT investment, purchases of intermediate ICT goods and services, robots), the human capital required to embed technology in production (ICT specialist intensity), and the ways in which digital technology impacts how firms interface with the market (online sales). The aim of the initiative is to establish a framework for the exchange of best practices between cities and to create opportunities for co-operation and new partnerships. It also provides a self-diagnosis tool for businesses to learn how to digitise their tourism business. Digitalisation is the process through which technology and data-driven management is transforming our social and economic systems and lives. WEF (2019), Platforms and Ecosystems: Enabling the Digital Economy. Accommodation and food service activities, Note: Calculations are based upon businesses with 10 or more employees, Source: OECD, 2019, adapted from Calvino et al. Exchange rate is considered as an important determinant of this demand (Witt and Witt 1995 ), an important factor affecting the competitiveness of a destination (Dwyer et . Beginning as two tour guides in Rome, the founders created an extensive platform, using 28 technology products and services including Google Analytics, WordPress, and Vimeo to aggregate and sell walking tours by tour guides in popular cities. This requires investment in the skills and technical inputs needed to facilitate the adoption and effective use of new technologies, but also in organisational change, process innovation and new business models, otherwise referred to as knowledge-based assets (OECD, 2018c). March 08, 2021 09:10 ET | Source: Research Dive Follow add_box New York, USA, March 08, 2021 (GLOBE NEWSWIRE) -- As per a latest report published by Research Dive, the global adventure tourism. However, digitalisation of SMEs has been identified as a particular challenge in relation to productivity in micro and small business that are often resource-constrained (European Commission, 2017; OECD, 2019a). In the pursuit of smart tourism, the challenge for governments is twofold: to engage the long tail of tourism SMEs with low levels of digitalisation to boost digital uptake and inclusion within digital business ecosystems; and to support innovative digital companies that energise business ecosystems. The sector is also information intensive, which means many tourism services are ripe for digitalisation. Employees of SMEs must develop skills to be part of this data driven ecosystem and issues of privacy, data sharing are key concerns of government. Integrated and coherent policy approaches are needed to leverage the opportunities of digitalisation while also addressing challenges and minimising any negative consequences that may emerge. Business models have always been an important lever for growth, innovation and competitive advantage. To develop policies fit for the digital age, it is necessary to: Be aware of the main elements of the evolving digital technology ecosystem and some of the opportunities (and challenges) resulting from their application. The platform will provide tourists with information and guidance, making the planning process easier. Monday, June 6, 2022 Office of Public Affairs [email protected] The 2022 National Travel and Tourism Strategy was released on June 6, 2022, by U.S. Secretary of Commerce Gina M. Raimondo on behalf of the Tourism Policy Council (TPC). In addition, it has sought to develop relationships with a range of suppliers with expertise in areas including design, print, training, and photography. Digital disruption: What do governments need to do? mobile technologies/cloud computing, automation and advanced robotics, blockchain, data analytics, cloud computing), to technologies that produce innovative tourism products, services and experiences (e.g. In this respect, the Ministry of Tourism of Greece has accordingly adapted tourism education provided by its institutions. Management and strategy-making capabilities, which shape the extent to which business owners sense opportunity, perceive risk and are motivated to seize opportunities (Rachinger et al., 2018). This is supported by research on SMEs in general, confirming community intermediaries are central to the adoption of critical e-aggregation applications provided by service providers (Lockett and Brown, 2006). (2018), Digitalisation in Tourism: In-depth analysis of challenges and opportunities. https://usa.visa.com/travel-with-visa/global-travel-intentions-study.html. Cloud technologies allow SMEs to manage their business from anywhere high speed internet is available. The National Tourism Sector Strategy 2016-26 identified the need to provide critical tourism information for decision makers and to develop a clear picture of the size, nature, and characteristics of tourism sector. Yet, tourism businesses may not have the financial or management capacity to employ tech experts or invest in workforce training. Mexico City, https://www.oecd.org/cfe/smes/ministerial/documents/2018-SME-Ministerial-Conference-Plenary-Session-3.pdf. Read the Article. Technological advancements are having a deep impact on the tourism sector. Examples include Airbnb Handsfree, key concierge services and equipment rentals. Expedia, Opodo) and booking platforms that aggregate and curate third-party products and services (e.g. Blockchain. Many current policies are the legacy of the pre-digital era, and difficulties in understanding the changes underway and their implications may delay the review and adaptation of these policies. Koreas Smart Tourism Strategy began by creating the infrastructure for smart tourism. Dredge, D., Phi, G., Mahadevan, R., Meehan, E. & Popescu, E.S. It also acts as a central data hub providing insights to inform business strategies and decision-making across the tourism value chain. Measures that help to innovate business models and management practices, and transform traditional work practices will complement other policy initiatives. 8, 2019. The size and revenue earning capacity of tourism technology companies like Booking Holdings, AirBnB and Expedia enable these companies to develop new technologies and improve service offerings to travellers, and the intensely competitive nature of the sector will drive ongoing development. Imperial College London. To this end, the study attempts to examine the relationship between inbound tourism, financial development and economic growth . The interoperability of sensors, data, and automation produces real time insights and information for marketing and managing tourism, for improving visitor experiences, increasing operational and resource efficiencies while also reducing environmental impacts. Furthermore, shifts are occurring in the way consumers search, book, travel and engage in the destinations they travel to (WEF, 2017; Garcia Sanchez, 2019), and governments are taking steps to utilise newly available data to maintain the quality of the tourism offer and market their country as a desirable destination to visit. In tourism, this convergence is happening in two key areas: the coming together of digital technologies, and digital technologies merging with the physical world (e.g. Making high speed available internet for all Canadians will allow rural and remote tourism companies to extend their reach and potentially find new tourism companies. The tourism industry can and must take initiatives to implement that polluter(s) pay a principle (or other forms of internalisation of externalities) for pollution related to tourism operations. Strength in Numbers: How Does Data-Driven Decisionmaking Affect Firm Performance?. Tourism is vital to its interests, and its role as a business activity brings demand and growth to many industries. Eurostat (2020), E-commerce statistics for individuals - Statistics Explained, Luxembourg, https://ec.europa.eu/eurostat/statistics-explained/pdfscache/46776.pdf. This includes interactions between living and non-living entities (e.g. PATA/Oxford Economics, (2018), Data and Digital Platforms: Driving tourism growth in Asia Pacific. Input-output method has been used to derive the employment . Month-on-month jet fuel sales fell 6.7% when compared with 323,500 tonnes in June 1-15, 2023. The stock is expected to pay a dividend of $3.00 per share at the end of the year and the. Interim Report. Furthermore, Millennials and Gen Z have embraced sharing over ownership more than previous generations, and as such have higher levels of engagement in the sharing economy (accommodation sharing, ride sharing, currency swap and crowdsourcing). 1. digital natives, hybrids and tourism SMEs with low levels of digitalisation). Briefing Paper. However, the travel industry has been one of the hardest-hit sectors in the coronavirus pandemic. Understanding digital uptake by tourism SMEs is particularly relevant as around 85% of those enterprises with a major role in the delivery of tourism services in OECD countries are SMEs (e.g. For example, a decade ago sharing accommodation platforms emerged as an innovative business model. To get on track with the NZE Scenario, emissions must fall by an average of 3% annually through to 2030. Tourism sector is now considered as a harbinger of inclusive growth, especially after recognising its potential in generating employment (both directly and indirectly). The OECD report on Going Digital: Shaping Policies, Improving Lives, highlights that the gap between technological developments and public policies will need to narrow significantly in order to reap the benefits and address the challenges of the digital age. Small tourism businesses are also developing business models which are digital at the core (Box2.4). Encourage business model and ecosystem innovation through convergence, interoperability and the adoption of data analytics and other enabling technologies. PwC (2016), Global Industry 4.0 Survey: Building the digital enterprise, PwC, www.pwc.com/gx/en/industries/industrial-manufacturing/publications/assets/pwc-building-digitalenterprise.pdf. Encourage public-private partnerships and collaborations between traditional SMEs and digital native enterprises and education institutions to enhance knowledge sharing, innovation and diffusion. Gal, P. and Witheridge, W., (2019), Productivity and innovation at the industry level: What role for integration in global value chains? The evolution and application of digital technologies are profoundly changing the way people live, work, travel and do business, and in the process, they are transforming and reshaping tourism. These business models are often characterised by high productivity as a result of innovations in the way they have engaged multiple customer groups, co-create content, collect and use data to engage and expand markets, access underused resources, and share value across multiple users or customers (Autio, 2017). This document, as well as any data and map included herein, are without prejudice tothe status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. These trends have contributed to a productivity gap between traditional tourism SMEs and their digitally enabled counterparts. Weill, O., Woerner, St. (2015), Thriving in an Increasingly Digital Ecosystem, MIT Sloan Management Review, 56, 27-35. An understanding of these drivers and trends, and the challenges for tourism SMEs in particular, provides the foundation for developing appropriate and effective policy responses. Policy makers have an important role to play to help tourism businesses of all sizes, including the more traditional and smallest firms, to engage with the digital revolution, and thrive in response to these paradigm-shifting technologies. Skift and Adobe. Policy initiatives can be targeted towards the creation of technology-enabling and business innovation environments and to encourage widespread participation in the co-creation of value. Not only are producers and consumers globally dispersed, but there are a growing number of online intermediaries, and the production of tourism products and services can be quite complex. About; Archives; Book of Lists; Events; In Print; Subscribe; TOP . Governments have an important role to play in creating the right framework conditions for the digital transformation of tourism business models and the wider tourism ecosystem. Build the evidence base on the key aspects and impacts of digitalisation for tourism SMEs. Tourism statistics identify tourism characteristic products as those products (following the Central Product Classification - CPC) which, in the absence of visitors, in most A 2018 report of findings delivers recommendations on enhancing the uptake of digitalisation of tourism in the EU. Of that group, over half (54%) purchased travel and holiday accommodation, behind only clothes and sports goods, which were purchased by around two-thirds (65%). Realising the benefits from the digital revolution will depend on a combination of investment in digital infrastructure, as well as the skills development of human capital and innovation in business models and processes (OECD, 2019d). Planning a single national platform to connect as many services as possible. The France Tourisme Lab is a national network of thematic incubators and accelerators specialised in tourism, which aims to boost innovation, promote new ideas and increase the visibility of innovative companies in the sector. Anne Graham, Frdric Dobruszkes, in Air Transport: A Tourism Perspective, 2019. visitor information centres, print media, hotel concierge); a propensity to stay online/connected in the destination to search and explore, share experiences and get updates in real time; and an increase in the use of e-commerce payment methods over the use of cash. Facilitate strategic leadership appointments such as Chief tourism entrepreneurs with specific mandate to evolve tourism business ecosystems and span boundaries between tourism, tech and other sectors. Tourism businesses must develop business acumen, new agile ways of working, and undertake dynamic management if they are to compete in the global tourism system. Policy approaches aimed at supporting digitalisation in tourism should consider the different challenges and issues faced by traditional incumbent tourism businesses and digital native firms, as well as hybrid business models. Digitisation is the conversion of analogue data and processes into a machine-readable format, while digitalisation is the use of digital technologies and data as well as interconnection that results in new activities or changes to existing activities. Value chains are vertical linkages in the production-consumption process that describe how private sector firms in collaboration with government and civil society receive or access resources as inputs, add value through various processes (e.g. It will serve as an interface between traditional tourism enterprises and the technology sector, and will support the development of new technological applications and processes for tourism enterprises as well as regions. Augmented reality systems show virtual objects in the real world. This reflected businesses' ability to keep workers by using JobKeeper support and reducing hours. Reseller businesses - provide plug and play products and services, adapt to different ecosystems, and constantly innovate in products and services. In the digital era, consumers and businesses alike are in perpetual generation of new data. Data analytics and algorithms can work to favour certain suppliers, customising and bundling products and prompt customer engagement before, during and after travel. . VenueLytics a mobile app start-up that created a software integrating guest engagement and a digital concierge platform using AI and machine learning. https://media.anz.com/content/dam/mediacentre/pdfs/mediareleases/2018/August/ANZ%20The%20digital%20economy%20web.pdf, Australian Government, 2016. It can extend to developing capabilities in e-commerce, social media and data analytics, as well as more advanced technologies. tourism networks) to encourage uptake, catalyse tourism business ecosystems, and promote a digital mindset. http://reports.weforum.org/digital-transformation/wp-content/blogs.dir/94/mp/files/pages/files/wef-dti-aviation-travel-and-tourism-white-paper.pdf. The digital economy is transforming the process of communicating with tourists and marketing tourism services, and opening up new and highly creative ways of delivering tourism services and enhancing the visitor experience. However, while these technologies might build market access and awareness, increase connectivity and facilitate financial transactions, they are less effective in enhancing productivity or innovation in an increasingly competitive global marketplace. A number of common findings have been identified in research on digital business model innovation that may help tourism SMEs concretely consider their business model innovation: Know your market Customer-facing businesses that put the customer (not the production process) at the centre have been shown to perform better. Overall tourism, for While the digital transformation progressively touches all sectors in the economy, it does so with differing speeds and extents. In tourism, digital-physical convergence is demonstrated by augmented reality, wearable technologies, and the Internet-of-Things to generate new hybrid products, services and experiences. The existing policy environment and processes have struggled to keep up with rapid change and restructuring of business models and ecosystems, work, and global investment. EU) and privacy requirements exacerbate the challenge of data collection, analysis and storage, Lifestyle and micro-businesses tend to be risk averse, Incubators, accelerators labs that encourage collaboration between tech and tourism companies improve openness to innovation, Enhancing the focus on travel-tech as opposed to the process of building a start-up will benefit tourism, Uncertain benefits, fear and anxiety of the unknown in relation to costly or novel technologies, Demands of day-to-day operations take away from strategic management and create time pressures, Demonstration projects that provide hands-on awareness raising of the benefits of digital technologies, Timely and evidence-based decision-making from enhanced data collection and analytics. Governments may assist with business strategy innovation and mentoring programmes. The disruption created by new digital platforms has stimulated transformation in many tourism subsectors, and led to the development of hybrid business models. wearable technologies, AR, image recognition, etc.). Abstract This chapter explores the economic, social and environmental benefits and costs associated with tourism growth, and the need for policy makers and industry to better understand the potential implications for destinations striving to achieve more sustainable tourism growth. Drive economies of scale through demand Business ecosystems driven by demand tend to perform more strongly than the product-driven models that characterise traditional firms. post innovation costs such as maintaining servers) is traded off against expanded markets and the capacity to access data and global value chains (OECD, 2018c). SMEs may lack resources, expertise and skills and must therefore consider in their business strategy making how to address such concerns. They aim to federating tourist providers to develop the digital Wallonia of tomorrow. The objective is to co-ordinate the administration and mutualisation of touristic information between operators. https://dx.doi.org/ 10.2767/823980. OECD (2017b), Enhancing the Contributions of SMEs in a Global and Digitalised Economy, Meeting of the OECD Council at Ministerial Level, Paris, 7-8 June 2017. Equipping SMEs with digital tools and training, including, dedicated one-to-one support to develop booking functionality and help businesses take advantage of new distribution channels, the route currently showcases 118 businesses, 19 destinations and 9 counties. However, with enabling technologies increasing accessibility across multiple devices for multiple users, and the co-creation of diverse value by these users have had disruptive and innovative effects on many destinations over this time. The Government is committed to supporting and promoting the digital transformation of the tourism sector, making use of new technology to enhance the promotion of the country, providing tourists with better information to help informed decisions and improve their experience while visiting.
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