Miha Bratec, Dejan Križaj, Tadej Rogelja – AIRTH & University of Primorska, Faculty of Tourism Studies – Turistica, Slovenia

Florian Zach – AIRTH & Virgina Tech, USA

HOW TO CITE:

Bratec M., Krizaj D., Rogelja T. & Zach F. (2020). Digital transformation in tourism. In AIRTH Encyclopedia of Innovation in Tourism and Hospitality. Retrieved: <insert-date>, from http://www.airth.global

AIRTH’s take on the state of digital transformation in tourism

Digital transformation has been a buzzword[i] for the last couple of years. Ultimately, it became a heavily discussed topic in tourism academia; so far, with more contrasting views and limited agreement on what it should entail[ii] and how it should be studied[iii]. To take a position in this colourful discourse, AIRTH’s take on the subject matter, created in the summer of 2020 and fueled with our #TourismFromZero initiative insights, regards the state of digital transformation in tourism in the following five points: 

1. Acknowledge the nature of the business

Tourism is a rather conservative, hierarchical and traditional work environment, which, in general, only slowly embraces new technologies. While most of the sales and marketing in tourism nowadays happen online, other more operational dimensions of the sector remain traditional in their organisation. Although technology offers solutions leading to less administrative work, thus cutting down the number of employees in hospitality, these solutions are not really embraced and used very often; even less so among the tourism SMEs, which represent the vast majority of European tourism businesses. The owners and managers tend to see the investment in modern ICT solutions rather as a cost than as a way of long-term operational efficiency boosters and consequential labour-cost savings. For example, QR codes have existed for over the past 10 years, yet they came into use only this summer, as a way for restaurants and bars to present their menus. Traditional printed menus were not recommended by many health authorities in light of the COVID-19 pandemic.

2. Understand what is truly happening out there in the tech

The 2020 Digital Transformation Report by Skift and AWS states the following: “New types of software, systems, and digital tools offer new capabilities and advantages, whether connected to marketing, revenue management, e-commerce, operations, sales, or beyond. Companies that rely on outdated systems and technology risk being out-manoeuvred by more agile competitors” and at AIRTH we most certainly agree with this. The implementation of the above-mentioned areas is lagging in the majority of European tourism SMEs. It is also not very probable that the current generation of owners and managers will quickly adopt them. Even more so, the small, niche providers of tourism experiences in rural settings, outside of the main tourist hubs, are not amongst the most digitally capable or motivated.

3. Critically evaluate what is happening at the level of the tourism enterprise

AIRTH sees it as crucial for managers to have a critical understanding of the technologies and their potential contribution to their operation, otherwise, they can get lost in the labyrinth of different solutions available on the market, which often are not compatible with each other. This is often the case in large, independent tourism companies, as different managers and departments within the same company purchase separate IT solutions. This may lead to higher operational costs, while not making the workflow any easier, or more efficient. For this reason,  any mid-large tourism company should have a digital transformation manager, who would be capable of supervising the procurement of integrated solutions. Perhaps the policy should also stimulate the creation of such roles with subsidies, or at least subsidise efficient training and consulting in this area for tourism companies. Additional necessary skills in this process include a deep understanding of tourism business, as well as problem-solving skills, as a mere academic or IT consulting approach generally fails to produce proper digital transformation in tourism and hospitality. 

When it comes to workers, they must understand the necessity of adopting novel technologies and have to be properly trained to start using it. This is often lacking in the traditional, hierarchically managed tourism enterprises and thus the older employees develop negative attitudes towards the adoption of technological changes. At the same time, the younger generations, who should be empowered to guide such transition, are not even considered and often treated as “too green” to have any responsible role, which is the exact opposite of many start-up companies in the tourism technology, which mostly rely on 20-30somethings being the driving force behind their innovation and development.

4. Implement intra-generational collaboration business models

Based on the above, one of the main opportunities that we at AIRTH see as having a significant potential is to stimulate very focused intermediation: Novel talents (recent graduates and students towards the end of their studies), digitally literate and energetic, could step in, for a decent, non-astronomical fee, and offer their skills to popularise and make these tourism experience providers visible. Such system would need to be stimulated by the policy-making, as it, on the one hand, helps preserve local traditions and artisanal craftsmanship that is interesting for tourism and on the other hand offers the young talents the possibility to apply their skills and creativity in an entrepreneurial way by taking over the sales, promotional and organisational function. At the same time, such activities present an alternative opportunity to earn a living instead of traditional tourism employment, where young talents most likely end up in a non-challenging administrative role, sooner or later becoming redundant due to digital transformation. So basically, a policy that stimulates such sort of tourism intermediation also creates opportunities for intergenerational collaboration and equity, both preconditions for sustainable tourism development and implementation of new business models. 

5. Try and fail, but most importantly learn and progress – this is how the tech world works

At AIRTH we do not believe in research that is distanced from practice[iv]. So we tried to contribute to the digital transformation of tourism ourselves and are currently deeply involved in our action research process. What we see by observing the young talents in #LocalsFromZero project, a part of our larger #TourismFromZero initiative, is that these youngsters have the right attitude and capacity to learn by themselves and from online tutorials, and only need strategic guidance. Also, in the moment of crisis, local tourism experience providers are more than open to collaborate with them and give the youth a chance in exchange of a commission, as they see the value in their skills, which they do not possess, nor have the time/interest/capacity to develop soon. They are thus more than happy in sharing their profit with the young graduates in exchange for making them visible and prominent in the digital tourism marketplace.