Chapter Preparing tourism businesses for the digital future Abstract

Evolving business strategies and practices
The development of business acumen in the digital economy should be an integral component of SMEs business strategy in tourism. There is a proven relationship between business management capabilities and the capacity of a firm to attract capital investment (Andrews, Nicoletti and Timiliotis, 2018). This suggests that tourism SMEs that receive support to refine and innovate business strategies may be in a better position to raise capital. Traditional scientific management approaches, that see strategy and business planning as separate to the conduct of business operations, are increasingly outdated. Tourism businesses must develop business acumen, new agile ways of working, and undertake dynamic management if they are to compete in the global tourism system. Governments may assist with business strategy innovation and mentoring programmes.
New Zealand has recently completed a pilot initiative in the tourism sector, promoting sectoral partnerships to engage small tourism businesses about the opportunities of digital technologies and encourage their better use to improve productivity in the sector. The initiative aims to build a ‘digital mindset’ and encourage all tourism businesses to go on a digital journey. A sector-specific toolkit has been developed, to support digital workshops with small tourism business owners and develop a network of trusted intermediaries with tourism and digital expertise. The toolkit is a shared resource to support small businesses wanting to embrace digital tools and start to build professional networks. A key takeaway from the initiative was the importance of trusted intermediaries to accompany businesses on their journey to build a lifelong digital mindset. This is supported by research on SMEs in general, confirming community intermediaries are central to the adoption of critical e-aggregation applications provided by service providers (Lockett and Brown, 2006).
One potential approach to support SMEs may be in the form of a ‘Chief Tourism Entrepreneur’ to champion the digital transformation. Champions that are trusted intermediaries in the sector that have demonstrated success with digital tools, would have credibility, knowledge, and would likely increase policy effectiveness. For such initiatives to offer long term benefits, it is important that they sit within a broader innovation framework for the digital economy that encourages boundary spanning between tech, tourism and other sectors (Lockett and Brown, 2006). This approach has been successfully applied to support digital uptake more broadly, at the state level in Australia. In Queensland, the office of the Chief Entrepreneur aims to: support the development of the state’s start-up ecosystem by working with incubators, accelerators and co-working spaces; connect with regional and remote areas to encourage and foster state-wide entrepreneurship; showcase the state’s start-up and entrepreneurial talent; stimulate and attract investment and venture capital; and connecting local entrepreneurs, start-ups, and small businesses with the right opportunities, people, places and spaces to help them grow, scale and create jobs.
Adopting advanced technologies such as meta-search engines, social media, e-commerce, cloud technologies, and the collection, sharing and analysis of data are increasingly important in developing and maintaining competitive advantage. SMEs may lack resources, expertise and skills and must therefore consider in their business strategy making how to address such concerns. Governments may provide such assistance via co-operative funding mechanisms, talent attraction programmes and delivery of expertise through accelerators and incubators.
In Austria, digitalisation is a key part of the new Plan T – Masterplan for Tourism (Box 3.6). Under the Plan, a new central innovation hub has been established to support the development of technological applications and process for tourism enterprise, as well as for regions. The Next Level Tourism Austria hub will act as a future lab to encourage digital and digital-physical convergence. It will serve as an interface between traditional tourism enterprises and the technology sector, and will support the development of new technological applications and processes for tourism enterprises as well as regions.
The convergence of new technologies is having an impact not just on tourism businesses, but also destination. In Switzerland, based on an in-depth analysis of the implications of digitalisation for tourism destinations, highlighted the impact on destination marketing among other things, and this is the focus of the Swiss Innotour project Tourist Office 3.0 is an intra-industry support lab among tourist offices as well as a linkage with external service providers in the digital area. Further key elements are an exchange of experience, an empowerment to increase innovation and professional knowledge management.
In Malta, the Ministry for Tourism and the Malta Tourism Authority has introduced a Digital Tourism Platform to use AI to better target marketing activity and improve strategic planning by combining psychological characteristics with demographic data to enhance personalisation. This will be enhanced by machine learning as the platform matures. These developments are expected to generate positive benefits for businesses, including generating higher value added, improved business activity and cost mitigation through predictive analytics.
The Wallonia region of Belgium has focused on increasing the tourism offer through the use of digital facilitators. Five digital facilitators, each of one covering a part of the Walloon territory have responsibility for raising interest of tourist providers (tourist offices, accommodation providers, tourist attractions) to the use of digitalisation, and to help them to develop new ways of promotion and new quality (and customised) products according to the territory (and also increasing their turnover), in accordance with the digital strategies of Wallonia. The objective is to co-ordinate the administration and mutualisation of touristic information between operators. They aim to federating tourist providers to develop the digital Wallonia of tomorrow.
In Slovenia, a complete package of incentives for the digital transformation of companies is available, including to the tourism sector. Financial incentives are offered by the Ministry of Economic Development and Technology to support the creation of digital innovation hubs, e-commerce supports for companies entering new markets and public supports for the digital transformation of businesses. Digital vouchers of up to EUR 10 000 are a practical tool for use by SMEs to raise digital competencies, developing a digital business strategy, move to digital marketing and improve cyber security. Investment supports are also available.