Chapter Preparing tourism businesses for the digital future Abstract

European Union: Following EU wide competitions, two European Capitals of Smart Tourism were selected for 2019 (Helsinki and Lyon) and 2020 (Gothenburg and Malaga). The European Capital of Smart Tourism is an EU initiative, which recognises outstanding achievements by European cities as tourism destinations in four categories: i) sustainability, ii) accessibility, iii) digitalisation, and iv) cultural heritage and creativity. The action promotes the development of smart tourism in the EU by showcasing exemplary practices by cities as tourism destinations. The aim of the initiative is to establish a framework for the exchange of best practices between cities and to create opportunities for co-operation and new partnerships. The compendium of best practices implemented by cities also raises awareness of smart tourism tools, initiatives and projects, and strengthens peer-to-peer learning and innovative development of tourism in the EU. The initiative is managed by the European Commission, the Directorate General for Internal Market, Industry, Entrepreneurship and SMEs, and originated from a preparatory action proposed by the European Parliament (www.smarttourismcapital.eu).
The aim of smart tourism is to develop information and communication infrastructure and capabilities to facilitate innovation, improve the visitor experience, and manage and collaboratively govern tourism more effectively (Gretzel et al., 2015). The technologies that facilitate convergence have been identified as the major source of value creation, innovation and productivity for the future of tourism (APEC, 2019). In recognition of the transformational economic and social power of smart technologies, countries such as Croatia, Korea, Portugal and Spain have introduced programmes to support the development of smart tourism destinations (Box 2.5).
An example of smart tourism in action at the destination level can be found in the smart wine tourism initiative by wine producers in the Napa Valley, United States, which utilises Wi-Fi, the Internet-of-Things, and geolocation software to target nearby tourists in a destination, and invite them to enjoy a wine experience during their visit. Facilitating such visits to wineries and other tourist attractions by providing internet access and geotagged digital directories (e.g. TouristWise) in popular tourism areas and along popular tourist routes will only become more important as destinations seek provide a seamless journey and enhance the visitor experience in an increasingly competitive marketplace.
When digital technologies are employed within innovative business models, the dynamics of competition, innovation and investment can change dramatically (OECD, 2016; Rachinger et al., 2018). The convergence of digital technologies creates a dynamic innovation system. This is illustrated in Table 2.2.
New business models, digital devices, content generated by multiple users, big data and digital commerce all work to create and share new value, to expand and reach global markets, and to create seamless visitor journeys and experiences. For example, a decade ago sharing accommodation platforms emerged as an innovative business model. However, with enabling technologies increasing accessibility across multiple devices for multiple users, and the co-creation of diverse value by these users have had disruptive and innovative effects on many destinations over this time. The case of Iceland between 2008 and 2019 illustrates the role that sharing accommodation platforms have had enabling tourism growth by filling a gap when there was a shortage of hotel infrastructure. In the pursuit of smart tourism, the challenge for governments is twofold: to engage the long tail of tourism SMEs with low levels of digitalisation to boost digital uptake and inclusion within digital business ecosystems; and to support innovative digital companies that energise business ecosystems. Policy initiatives can be targeted towards the creation of technology-enabling and business innovation environments and to encourage widespread participation in the co-creation of value. For example, in the UK, the Explorer’s Road tourist route north of London has been developed to engage with local SMEs and build their digital visibility and capacity along the way (Box 2.6).
Figure 2.2. Convergence of technologies to create the enabling digital environment

Promoting digitally-enhanced tourism business models and ecosystems
Digitalisation has expanded the number of stakeholders and the diverse kinds of value that can be co-created in tourism in digitally-mediated global networks. The extent and fluidity of these business ecosystems can, for example, help innovate products and services, improve efficiencies, increase access and market reach. Policies that support the development of business model innovation and regulatory systems that accommodate new business models and structures are important.
Business models have always been an important lever for growth, innovation and competitive advantage. To date, the digital transformation witnessed in tourism has been driven predominantly by new and innovative business models exploiting data analytics (i.e. by the digital natives turning data into intelligence), or through the adaptation and evolution of existing business models and value chains.