Chapter Preparing tourism businesses for the digital future Abstract

Designing regulation for the digital tourism economy
The rapid pace of change in digital transformation has created challenges for policy makers. The existing policy environment and processes have struggled to keep up with rapid change and restructuring of business models and ecosystems, work, and global investment. Existing policies and regulations have also at times stymied innovative solutions and adaptation of traditional businesses, while global digital platforms have avoided local regulations designed for the pre-digital era. This has given rise to an uneven playing field, and the inequitable application of existing policies and regulations on place-based businesses.
The UNWTO (2019b) examined the challenges and complexity associated with enforcing existing rules and regulations in a review of new business models in the accommodation sector. The review highlighted that implementation is often hindered by lack of capacity, clear division of responsibilities and co-operation between the different responsible entities. Some governments, such as Australia, Austria and Switzerland have undertaken inquiries into these issues and have sought to develop more agile, flexible and responsive solutions. For example, Australia examined the policy responses to digital disruption finding that governments must enable the creation and take-up of digital opportunities without favouring particular technologies; governments should review their institutional and regulatory arrangements ensuring new technologies can compete for market share; standards should support interoperability; and investment in infrastructure can help with technological diffusion (Australian Government, 2016).
The size and revenue earning capacity of tourism technology companies like Booking Holdings, AirBnB and Expedia enable these companies to develop new technologies and improve service offerings to travellers, and the intensely competitive nature of the sector will drive ongoing development. Facilitating access to low cost technology and digital solutions to enable uptake would help create the level playing field and fair competition crucial to SMEs and essential to the development of the digital ecosystem.
International exposure has been recognised as an important factor in competitiveness, allowing regions and countries to benefit from the gains of globalisation (OECD, 2013). In many industries, benefits from globalisation come from factor cost differences (primarily labour) or from differences in availability of specific resources, leading to relocation of activities. In tourism, many activities in the value chain are locally anchored.
The policy challenge is predicated on a two-pronged approach: to address the challenges and opportunities inherent in the existing policy environment; and to introduce new measures that enhance digital innovation, take up, and integration of tourism businesses into tourism value chains and ecosystems. Governments may wish to consider the impact of existing policies and work to reduce any barriers that may impede the digital transformation of tourism SMEs, including macro-economic issues, consumer protection and privacy issues, competition and regulation issues, information and education, and taxation.