Distinguishing between digital native and traditional tourism businesses When considering the impact of new technologies in tourism it is important to distinguish between so called “digital native” firms and traditional firms, as the irregular uptake of digital tools is largely an issue of ‘who’ is participating and ‘how’. Table 2.3 summarises the differences between these business models.
Digital firms in tourism tend to be young and global in terms of users and product delivery. They often do not have a pre-digital footprint. Digital native firms are customer-facing businesses, often delivering value to two or more customer groups (i.e. multi-sided).
Table 2.3. Typical differences between digital native and traditional tourism businesses
No pre-digital footprint (founded in the digital era)
No or limited physical assets
Likely to have a more fluid business structure
Customer-facing, often to two or more customer groups
Works in agile ways and innovates rapidly
Use a combination of technologies to leverage market advantage that make it easy to scale
Global value chains and ecosystems
Established prior to digital era
Often have physical assets which are resource intensive
Grounded in a physical location
Product-facing, focused on production and distribution and matching to customer needs
Relies on traditional production, sales and marketing supplemented with digital technologies
Smaller (often local) value chains and ecosystems
They tend to disrupt traditional business models and combine different technologies (e.g. a digital platform, social marketing, data analytics, automation and relationship management) to increase efficiencies, extend their distribution channels to global markets, and develop economies of scale (WEF, 2019). They are also able to scale up rapidly, access new markets, build complex products, and have few physical assets, while data and talent are important assets and different kinds of intangible value such as loyalty and trust are co-produced with users (Gal and Witheridge, 2019; WEF, 2017).
Well known examples of digital native firms include meta-search engines (e.g. Skyscanner, Kayak, Trivago), and online travel agents (OTAs) (e.g. Expedia, Opodo) and booking platforms that aggregate and curate third-party products and services (e.g. Booking.com, Priceline, Agoda), as well as collaborative platforms like BlaBlaCar, HomeAway, Airbnb and Lyft. Small tourism businesses are also developing business models which are digital at the core (Box 2.4).
Box 2.4. Digitally enhancing tourism business models
