MODULE 2

The Benefits of Digital Tourism

Digitalization is changing the way people live, work, and travel, and has opened up new opportunities for tourism businesses to compete in global markets. This chapter examines the impact of digitalization on tourism, with a particular focus on:

Productivity-enhancing technologies (e.g. data analytics, revenue management software) have generally received low uptake in tourism, while innovative technologies (e.g. augmented reality, geotagging) are generating, customizing, and delivering in ever more novel ways, new visitor products, and services and experiences (OECD, 2018c). 

Digital transformation is thus pushing tourism in new and often unpredictable directions. 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.

• Increased visibility and accessibility

Digitalization is expected to continue propelling the travel experience on its trajectory toward becoming seamless, frictionless, and high-quality.

Digital tourism has seen a huge increase recently, with many companies around the world creating free websites for people to visit. National Parks, UNESCO World Heritage Sites, castles, and museums all can be visited without leaving your home.

Especially during the Covid-19 pandemic, under the social distancing rules in place, self-guided walking tours become more popular, and apps such as GPSmyCity provide a huge amount of information about a certain place. They allow people to tour a city at their own pace without the need for a guide.

Empower local authorities to wield greater control over the services offered, fostering transparency and accountability among local businesses in areas like transportation and catering. By leveraging digital tourism, we can also combat illegal practices in tourism destinations, creating a fair and responsible travel environment. Moreover, digital tourism opens doors to increased transparency and accessibility, enriching the overall travel experience for all.

Improved Oversight: Digital tourism enables local authorities to better regulate services, ensuring quality and safety standards compliance. Shortly digital tourism assists local authorities in better controlling the services provided.

Transparent Business Practices: Businesses can provide transparent pricing and information through digital platforms, fostering trust among tourists. To ensure more transparency among local businesses (transportation, catering), entrepreneurs have to apply digital tourism. 

Combating Illegal Activities: Digital tools aid in identifying and eradicating illegal practices, protecting tourism destinations and supporting responsible tourism. Digitalisation in tourism eradicates illegal practices in tourism destinations.

Improvement in senior traveler’s experience: Digital tourism can provide senior travelers with access to emergency services in case of an accident or illness. For example, many travel apps now include a feature that allows users to call for help with a single tap. In addition, digital tourism can allow senior travelers to simulate the experience of visiting a destination before they actually go. This can be helpful for people who are not able to travel as easily as they used to, or for people who are looking for a specific type of experience. For example, there are now a number of virtual reality tours that allow users to explore historical sites or natural wonders from the comfort of their own home.

Smart travel facilitation

A simple device like the smartphone has transformed telecommunications and media, and a comprehensive smart travel model – one that includes smart visas, borders, security processes, and infrastructure – will revolutionize tourism. With the consolidation of these tools, passengers can book their flights and check-in online, have their boarding passes on their smartphones, go through automated clearance gates, and even validate their boarding passes electronically to board planes. These measures improve both travel facilitation and security.

Improved customer experience

Digital platforms are changing the way travel is traditionally researched, bought, sold, experienced, and shared. Facilitated by digital platforms, User-Generated Content (UGC) is fast becoming the most important and widely used source of travel information. This affects the traveler’s path to purchase and disrupts established travel agencies, guidebooks, conventional marketing approaches, and star rating systems. It also presents new opportunities for developing destinations to leverage these platforms for big data and cost-effective performance improvements. Additionally, by generating the Chatbot, you can help potential customers to find the answer to their questions.

Smart destinations 

Imagine a destination where technology, innovation, sustainability, accessibility, and inclusivity unite seamlessly throughout every journey- from planning to experiencing and even after the trip. This intelligent destination not only cherishes its visitors but also embraces its residents, celebrating diverse cultures, languages, and unique seasonal wonders in every aspect of its tourism planning. This is why smart destinations are key to the transformation of the tourism sector. By continuously and accurately measuring, integrating, and analysing data for efficient decision-making, prioritization, and anticipation of challenges, they create a seamless and exciting experience for tourists while managing local resources efficiently.

Smart destinations can make tourism governance more inclusive through inclusive entities, such as boards, trusts, or foundations, which represent all public/private stakeholders in the destination. They can help ensure maximum accessibility to sites, products, and services, eliminating barriers to mobility. Moreover, they allow us to analyse sustainable tourism management through different lenses.

Consider, for example, the challenge of seasonality, where population changes from variation in tourist flows makes tourism’s impact difficult to measure. Technology-based data tools, such as remote sensors and big data management systems, can help destination managers capture and process large volumes of data to understand more effectively the impact of seasonality on tourism and sustainability. Consequently, these tools can assist in predicting and managing tourist flows to effectively manage the destinations.

Smart Tourism Initiative in Europe

Under the umbrella of Smart Tourism, the European Commission has launched two competitions to promote smart and sustainable tourism in the EU, network and strengthen destinations, and facilitate the exchange of best practices.

The European Capital of Smart Tourism recognises outstanding achievements by European cities as tourism destinations in four categories: sustainability, accessibility, digitalisation, cultural heritage, and creativity.

The European Green Pioneer of Smart Tourism, the successor of the European Destinations of Excellence (EDEN) competition, rewards smaller destinations that have implemented successful strategies to boost sustainable tourism through green transition practices.

The initiative is currently financed under the COSME Programme and is a successor of the Preparatory Action proposed by the European Parliament. The initiative aims to:

• Promote the rich tourism offer of European countries and increase citizens’ sentiment of sharing local tourism-related values.

• Strengthen tourism-generated and innovative tourism development in the cities, their surroundings and their neighbour regions.

• Increase the attractiveness of European cities that are awarded the title and strengthen economic growth and job creation.

• Establish a framework for exchanging best practices between the cities and create opportunities for cooperation and new partnerships.

• Inform the travelers of the sustainable and outstanding tourism practices in destinations they are visiting.

• Encourage sustainable socio-economic development in tourism destinations across Europe.

The European Capital of Smart Tourism recognises outstanding achievements in smart tourism in European cities. The following cities were awarded in the 2023 competition.

In 2023, Pafos (Cyprus) and Seville (Spain) are the 2023 European Capitals of Smart Tourism. Check out the link  here to learn more about what these cities do.

• Increased efficiency and cost-effectiveness

Digitalization has the potential to boost innovation, generate economic and environmental efficiencies, and increase productivity, including in the highly globalised tourism sector (OECD, 2017a).

The digital economy is transforming the process of communicating with tourists, marketing tourism services, and opening up new and highly creative ways of delivering tourism services and enhancing the visitor experience. It is changing the way work is organised and services delivered and 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.

New opportunities for business and growth

Digitalization is bringing unprecedented opportunities for tourism SMEs to access new markets, develop new tourism products and services, adopt new business models and processes, upgrade their position in global tourism value chains, and integrate into digital ecosystems. Digitalization brings significant potential benefits to SMEs, such as 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 internationalize operations. 

Destinations, businesses, and the wider tourism sector must fully embrace these new technologies to remain competitive and take advantage of the innovation, productivity, and value-creation potential. 

Sustainable Development

A digitalized tourism sector must innovate and generate new business opportunities to ensure the sector's continued competitiveness, growth, and sustainable development. The ultimate goal is to make a solid contribution to achieving the Sustainable Development Goals of the United Nations and the global development community.

Digitalization has a positive environmental impact and can yet have a greater one, with innovations in manufacturing, smart assets, and efficient use of resources contributing to a more sustainable industry footprint.

Some major impacts on the sector as a whole are the development of smart travel facilitation, smart destinations, and a new wave of job profiles.

Job creation

The future of travel is technology-based, so tourism jobs will require technical and advanced soft skills to effectively implement and manage smart initiatives. Like in other economic sectors, intelligent automation will change the nature of some travel jobs and eradicate others altogether. However, digitally enabled growth will also generate new employment opportunities that could outpace the automation of existing roles, especially as strong growth is forecast for the sector.

Business and growth

Start-ups and micro, small, and medium enterprises (MSMEs) – drivers of technology-based innovation and entrepreneurship in tourism – will take on an increasingly important role in developing the skills needed for the jobs of the future. The sector should therefore prioritize strengthening start-ups and MSMEs to become integral parts of the tourism value chain and boost technology- and skills-based education, training, and policies that stimulate innovation and decent employment.

Understanding how value is co-created and shared between multiple collaborating stakeholders is important in unlocking the potential of the digital economy. For instance, social media platforms, including photo sharing and journey tracking apps, allow travelers to share geotagged photos with friends and ‘followers’. They also add value to SMEs in a destination who can use these high-quality photos at low cost to market their products and services.
On the other hand, Non-Governmental Organisations (NGOs) play a crucial role in the tourism industry by facilitating development. These NGOs raise public awareness of resources and tourism assets in relation to the growth of the tourism industry. They also demonstrate the proper course on which development ought to proceed. Given their important role in tourism, it is important for NGOs to make digital breakthroughs in these capabilities. Because of this important role, NGOs should be willing to implement some best practices.  Best Practices from NGOs in Digital Tourism are stayed as below:

• Using digital tools to improve communication and collaboration. NGOs can use digital tools to improve communication and collaboration with their partners, beneficiaries, and donors. This can be done using email, video conferencing, project management software, and social media.

• Using digital platforms to engage with tourists. NGOs can use digital platforms to engage with tourists and promote their destinations. This can be done through the use of social media, travel websites, and online travel agencies.

• Using data to track progress and make informed decisions. NGOs can use data to track their progress and make informed decisions about their tourism initiatives. This can be done with Google Analytics, Salesforce, and other data analytics tools.

• Being mindful of security and privacy concerns. When using digital tools, it is important to take steps to protect the privacy of tourists and beneficiaries. This can be done by encryption, password protection, and other security measures.

• Being adaptable and willing to experiment. The digital landscape is constantly changing, so being adaptable and willing to experiment with new digital tools and strategies is important (Mukherji, 2018).

On the demand side, this will be driven in part by the consumption habits of Millennials (born in the early-1980s to mid-1990s) and Generation Z (born in the late-1990s to early-2010s), who, along with other emerging generations will comprise the bulk of domestic and international tourists by 2040 (OECD, 2018a). Gen Z and the Millennials are digital natives. Having grown up with quick and direct access to information enabled by digital technology, the way they use and expect from technology will continue to influence how tourism services are delivered. 

Trends include:

• increased use of online sources and mobile platforms to source information in the planning stage (e.g. websites, social media), combined with decreasing use of offline sources (e.g. 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. 

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).

Conclusions

In this chapter, you had an introduction to the main principles and definitions of digital tourism; following up next, we discover how entrepreneurship and digital tourism meet. In addition, more concretely, which are the main entrepreneurial skills you must have in order to be successful in your adventure in the field of digital tourism?

Glossary

Chatbot: a computer program that uses artificial intelligence (AI) and natural language processing (NLP) to understand customer questions and automate responses to them, simulating human conversation.

Virtual Reality: images and sounds produced by a computer that makes you think a situation is real.

Augmented Reality: images produced by a computer and used together with a view of the real world.

Blockchain: a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.

Big Data: very large sets of data that are produced by people using the internet and that can only be stored, understood, and used with the help of special tools and methods:

Geotagging: the use of a piece of electronic data that shows where someone or something is and that can, for example, be attached to a photograph or comment on social media.

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