Chapter Preparing tourism businesses for the digital future Abstract

Perceptions of risk and benefits: A lack of resources, uncertain benefits and fear of the unknown were widely identified in survey responses as being barriers to tourism businesses adopting advanced, costly or novel digital technologies, such as cloud computing services.

Changing privacy requirements on data protection across the globe can complicate data collection, analytics and storage while private decision makers face competing priorities between capital investment in technology and operational expenditure. Although, companies that are data-driven can make better decisions (Brynjolfsson et al., 2011).

Table 2.2. Barriers and opportunities for digital transformation of tourism SMEs
Issue	Barrier	Opportunity
Uptake of technologies	Lack of access to digital infrastructure can slow digitalisation processes Lack of availability of high speed broadband in regional and rural areas can impede business operations Lack of availability of high speed Wi-Fi connection can impede visitor experience innovation	Innovation and customisation of products, services and experiences increases visitor satisfaction Increased connectivity facilitates scaling, market reach, product and service innovation
Access to resources	Lack of access to capital or eligibility to apply for traditional loan products Absence of skills and expertise and lack of resources to support skills development and training	Co-operative funding initiatives reduce initial costs and reduce perception of risk Policy supports where technologies can be trialled, costs shared and network support developed
Information exchange, learning and research	Restructuring of workforce – fewer frontline jobs and demand for ICT expertise growing Demand for new skill sets may not be available and SMEs may not have resources to employ experts and consultants	Collaborative programmes incentivise universities to work with business and government toward digital transformation Technologies enhance production of data driven business planning
Business Innovation	Business models, culture and practices influence willingness to transform Data Protection Regulations (e.g. 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
Perceptions of risks and benefits	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
Source: OECD country survey results; Dredge et al., (2018); European Commission (2016).