Chapter Preparing tourism businesses for the digital future Abstract

Augmented reality/Virtual Reality (AR/VR). Augmented reality systems show virtual objects in the real world. Uses in tourism can include replacing paper-based marketing and advertising materials, gamification and augmented visitor experiences in the destination, and travel assistants that guide users through complex public transport systems in real time.
Blockchain. Smart contracts, based on blockchain, can be used across the supply chain. Future gains would see user-friendly apps tailored for wide diffusion to tourism businesses of all sizes to enhance end-to-end user transparency.
Due to the information-intensive nature of tourism services, the breadth of information available on the internet, and ease of booking, tourism outperforms other sectors when it comes to the share of businesses making online sales in the 28 OECD countries for which data is available, with the exception of Canada, Finland and the United Kingdom (Figure 2.1). OECD (2019f) data show that on average 77% of the accommodation and food and beverage service businesses in OECD countries have a website or homepage and 70% use social media. The tourism sector has embraced e-commerce, as online platforms and payment systems have changed the way people buy travel products.
A report on electronic commerce (e-commerce) in the EU highlights that over 70% of internet users made at least one online purchase of goods and services over the previous 12 month period for private use. 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%). E-shoppers in the 25-54 age group were most likely to purchase travel and holidays (57%). The findings also indicated that the proportion of e-shoppers varied considerably across the EU, ranging from 29% in Romania, to 91% in the United Kingdom (Eurostat, 2020).
Figure 2.1. Share of tourism businesses making e-commerce sales, 2018 or latest year available

Note: Accommodation and Food and beverage service activities as a proxy for tourism sector
Source: OECD (2019f).
While the digital transformation progressively touches all sectors in the economy, it does so with differing speeds and extents. 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). In a taxonomy of sectors by digital intensity (Table 2.1), accommodation and food service activities is ranked low for digital intensity, while arts, entertainment and recreation activities are ranked medium-high based on seven different metrics (OECD, 2019c).
These results highlight that tourism businesses have significant untapped potential when it comes to the adoption and application of digital solutions, although they may benefit from ICT investments in other sectors through the outsourcing of certain business activities (e.g. sales and online advertising).