Chapter Preparing tourism businesses for the digital future Abstract

Adrenaline Hunter – an online adventure sports booking platform acting as an intermediary between end users and the activity providers. 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. Equity investment of EUR 2 million enabled the development of a product roadmap, enhanced the automation of the reservation process, improved the back office and openness to providers, and developed business software for providers.
Skydiving Kiwis – software developed by skydivers for skydivers to manage scheduling, safety and accounts. It is designed to be sufficiently agile to evolve as the business grows and develops. Specialist digital marketing targets the Chinese market and the business now has presence on WeChat, the website has Chinese translation and Ali Pay is used to facilitate payment from China.
Walks – a redesigned concept of how tour guides meet clients and deliver services. 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. Walks took advantage of wider market potential to extend its network and operate across 13 cities in Europe and North America.
VenueLytics – a mobile app start-up that created a software integrating guest engagement and a digital concierge platform using AI and machine learning. "Digital concierges" are technologies that can have an impact on small hotels as they reduce human resource needs. The software replaces the front desk and acts as a hotel guest services platform using mobile, voice, chatbot and Wi-Fi, processes guest hotel requests, two-way chat, provides hotel information, check-in/check-out features, acts as a digital concierge and promotes hotel offers.
TouristWise – a tourism app with scalable properties that can be used by tourism organisations to develop, manage and grow visitor experiences, enhance engagement through AR, gamification, language translation, promotion and ticket sales. Data analytics and tracking also enhance destination management and scale up visitor attractions and experiences into journeys.
As a result of their capacity to scale up quickly, the absence of proprietary physical infrastructure (e.g. beds and cars) and global operations, many tech-driven digital native firms have been able to make use of gaps in planning, safety and labour laws and other regulations. Governments have struggled to address the discrepancies in the way laws and regulations are applied leading to a situation where digital native firms often enjoy a competitive advantages over traditional tourism businesses.
Traditional tourism businesses, in contrast, often have a pre-digital footprint and maintain physical infrastructure (e.g. hotel buildings), are product-focused and tend to rely on traditional production models (e.g. personal paper-based communication and inventory) which is difficult to scale (McKinsey, 2014). They also tend to operate within smaller, more defined value chains. They often have closer relationships with their customers and are able to provide personalised service due to repeat interactions.
The disruption created by new digital platforms has stimulated transformation in many tourism subsectors, and led to the development of hybrid business models. Traditional tourism businesses have pivoted storefronts and face-to-face service away from the street and created a presence online servicing expanded markets. Travel agencies, tour operators, destination management organisations and other traditional tourism businesses often work a dual model by maintaining their own internet webpage and social media marketing, while simultaneously offering their products and services on global platforms. This hybridity can lead to more complex and costly operations that many SMEs would struggle to afford (e.g. 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).
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. Policy initiatives that share knowledge and grow sustainable tourism ecosystems, such as New Zealand’s Lightning Lab Tourism, a three-month business acceleration programme focused on building a sustainable innovation ecosystem for the future of tourism in New Zealand. The programme brings together early-stage ventures and project teams from the tourism industry to address productivity, cultural, environmental and social challenges for the sector, and helps to break down the silos between digital companies and tourism SMEs, thus assisting the digital transformation processes.