Is smart tourism better tourism?

Nowadays, Information and Communication Technologies (ICT) are omnipresent. The digital age and its innovations in ICTs have changed society as well as economic and environmental development profoundly. ICT innovations are perceived and identified as one of the crucial game-changers in reaching Sustainable Development Goals.1 In this context, “smart” has become a buzzword. Gretzel, Sigala, Xiang and Koo define the concept as technological, economic, and social developments supported by technologies that are based on big data, exchange of information and the interconnectivity between different technological innovations in the physical and digital world. For instance, economies benefit from innovation, competitiveness, and entrepreneurship by allowing value creation and new forms of collaboration through smart technologies.2

Given that tourism, as an information-intense industry, is highly dependent on ICTs, it is no surprise to see the concept of “smart” being applied to the field of tourism. 2 In recent years, smart has become a new industry standard, especially within public organizations, and is somewhat praised as the new solution for pressing problems and challenges such as sustainability, overtourism or the efficient use of resources. The European Commission, for example, implemented the “Smart Tourism initiative” in order “to promote smart tourism in the EU, network and strengthen destinations, and facilitate the exchange of best practices”3. The initiative awards cities for their innovative achievements regarding sustainability, accessibility, digitalization, and cultural heritage as tourism destinations.

 

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Smart tourism, the saviour?

To understand the challenges as well as opportunities of smart tourism, it is crucial to get familiar with the concept itself. As stated by Gretzel et al., smart tourism can first and foremost be identified as the logical progression from traditional tourism and e-tourism.2 While e-tourism refers to the broad adoption of ICTs or social media within the tourism value chain, smart tourism takes you even one step further in the transformation process of ICTs in the industry. Instead of only implementing new and innovative ICTs, the smart tourism concept follows a more holistic approach to bridging the digital and physical world. Through the application of advanced and intelligent ICTs, stakeholders at tourism destinations collect, exchange and process data from different sources (physical infrastructure, government, organizations, etc.) and transform it into on-site experiences and business value propositions. Hereby the focus lies on efficiency, sustainability, and experience enrichment.2

Moreover, smart tourism consists of smart destinations, smart experiences, and smart businesses. Finally, as noted by Pencarelli, the optimal outcome or vision of smart tourism are smart tourists that are supported by smart technology to behave more responsibly towards the environment as well as the local community.4 Taken one step further, they even go through a transformation process towards establishing sustainable daily habits for greater well-being and sustainability. The theoretical concept of smart tourism almost sounds too good to be true. Therefore, I asked myself the question if the smart tourism concept is feasible. Does smart automatically mean good solutions for everyone? And does smart tourism really make tourism better, and hence, more sustainable? Or does the smart tourism conversation produce tunnel vision?

The ecosystem challenge

In contrast to a tourism business-centric ecosystem supported by technology, a smart tourism ecosystem is much more complex. It includes a variety of stakeholders such as touristic and residential consumers, DMOs, different (non-touristic) suppliers and social media companies, that are not necessarily interacting with or are not dependent on each other in a linear value chain. Furthermore, a smart tourism ecosystem is not a closed system and allows new business models to enter at any time.5 For example, touristic and residential consumers are capable to act as producers, becoming destination marketers by sharing their experiences on social media or directly consuming data provided by others in the ecosystem. Moreover, data, as well as ICT, is used by businesses to create new services of value or enrich tourism experiences.

 

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From my point of view, this complexity of the smart tourism ecosystem makes it more difficult for destination managers or decision-makers in businesses and governmental organisations to identify and understand the relevant interaction points to form and prioritize their strategies, objectives, and tactics accordingly. DMOs are not yet agile enough to address the challenges arising from the ever-changing environment in which they are operating. This could involve risks of mismanagement and potential negative impacts for all tourism stakeholders that are difficult to even be considered in the first place.

In this context, it should also be noted, that smart tourism ecosystems cannot be created but rather evolve from the technological infrastructure and regulatory foundations provided by external (non-touristic) stakeholders5. Therefore, the outcome of smart tourism development and its formation of smart tourism ecosystems might not even lie within the managerial control of tourism decision-makers. This becomes clearer by looking at the impacts of sharing economy concepts in tourism: next to its benefits sharing platforms have had also disruptive effects on the competitiveness of e.g. hotels, leading to tensions in the housing markets and hence, have resulted in historic centres with little authentic local communities to be experienced by tourists.

The data challenge

The involvement of new, innovative technology and the use of big amounts of personal data brings its own challenges to smart tourism development. Here, the effects of technology-supported life should be explored in more detail. ICTs, such as the smartphone, are part of daily routines and their influence alters global economies, society, and individuals. In the past, consumers used technologies to mainly support their lives. Nowadays, they form digital identities with social networks and the dependency on ICTs is ever-growing. As a result, social interactions, identity formation, mental capabilities, opinion-making, and of course consumer choices are impacted profoundly by the ICT economy.6

 

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According to Gössling, ICT innovations are widely accepted as a positive input to the development and its many affordances, meaning its support with information and advice, services related to tourism, social networks, or orientation, are embraced by consumers – and businesses. However, this overlooks the many social costs and risks of ICT innovation.6 Today, consumers are willing to share their personal information and data concerning social interactions, health, views and opinions, personality, and economic situation mainly with corporations such as Facebook, Google, Airbnb etc. Those have almost limitless opportunities for private data collection and can easily gain consumer control for their own economic benefit.6

Yes, data can be helpful, but how it is used and managed lies still with humans. In the context of smart tourism, it is important for destination managers and decision-makers in the public sector to understand the affordances and concessions of ICTs, so the purpose of smart tourism development is not to just track and profile tourists for simple revenue growth. Especially social but also environmental issues need to be considered. Therefore, smart tourism development should aim to gain certain independence from big players in the ICT economy, implement supporting and ethical regulations and drive its own ICT innovations and investments. This comes with another challenge. DMOs, which often exist solely for marketing purposes, do not have the power within the ecosystem to influence or even implement certain guidelines or regulations needed to build a sustainable, smart infrastructure.

In addition, privacy concerns and cyber security can be identified as key factors for touristic and residential consumers to use smart tourism technologies. If governmental and public organisations, as well as businesses within the smart tourism ecosystem, fail to address tourists’ needs for privacy and security, it would present a definite exclusion criterion for visiting the destination. 7 Although the need for privacy and security can vary from one individual to another, it must be a conditioning variable for governmental and public organisations in smart tourism development.

The technology challenge

The trust in smart technology and enjoyment of technology-enriched experiences also plays a critical role in smart tourism development. To benefit from experience co-creation, smart tourism destinations must capture touristic and residential consumers’ level of acceptance and usage of smart technologies. However, this is rather complex. At destinations, consumers’ willingness and ability to use technology vary widely. Moreover, the potential negative impacts of intensive technology use on consumers and their experiences should be considered. Such effects could be information overload or loss of authenticity.8 Consequently, not every destination might be equally suitable for smart tourism development and implications for smart technology should be examined carefully according to their target groups. Furthermore, once smart technologies are implemented, it is important to evaluate and analyse their real impacts.

 

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Towards better tourism

Research shows that ICTs and specifically social media, support and can assist in sustainable development in tourism9. By using technological, human, and social resources smart tourism destinations seek sustainability to improve the life of local communities and enrich the tourist experience. However, it should not be the goal of destination managers and decision-makers in public organisations to just implement smart technologies to follow a megatrend. And although the theoretical concept of smart tourism is indeed promising better tourism, smart tourism ecosystems and the development of smart tourism destinations bring several challenges – especially related to the human factor, hence, the managers, decision-makers etc. Those call for further research to get a deeper understanding, develop comprehensive frameworks and identify managerial implications.

To fully benefit and create competitive and sustainable destinations, collaboration between the different stakeholders is key.10 Governmental and public organizations in cooperation with the local communities and the relevant tourism stakeholders need to become more agile and provide strategic and regulatory groundwork as well as the relevant technological infrastructure. Moreover, smart destinations and tourism businesses should concentrate on a human-centric experience design approach.11 By understanding how humans are impacted by smart technology, and how technology can assist in creating more meaningful experiences or even support transformations to greater well-being and sustainability, smart tourism can become better tourism.

 

References

1 Sachs, J. D., Schmidt-Traub, G., Mazzucato, M., Messner, D., Nakicenovic, N., & Rockström, J. (2019). Six transformations to achieve the sustainable development goals. Nature Sustainability, 2(9), 805-814.

2 Gretzel, U., Sigala, M., Xiang, Z., & Koo, C. (2015). Smart tourism: foundations and developments. Electronic markets, 25(3), 179-188.

3  European Commission. (2021). European Capitals of Smart Tourism. Retrieved 13th October 2021: https://smart-tourism-capital.ec.europa.eu/index_en

4 Pencarelli, T. (2020). The digital revolution in the travel and tourism industry. Information Technology & Tourism, 22(3), 455-476.

5 Gretzel, U., Werthner, H., Koo, C., & Lamsfus, C. (2015). Conceptual foundations for understanding smart tourism ecosystems. Computers in Human Behavior, 50, 558-563.

6 Gössling, S. (2021). Tourism, technology and ICT: a critical review of affordances and concessions. Journal of Sustainable Tourism, 29(5), 733-750.

7 Jeong, M., & Shin, H. H. (2020). Tourists’ experiences with smart tourism technology at smart destinations and their behavior intentions. Journal of Travel Research59(8), 1464-1477.

8 Femenia-Serra, F., Neuhofer, B., & Ivars-Baidal, J. A. (2019). Towards a conceptualisation of smart tourists and their role within the smart destination scenario. The Service Industries Journal, 39(2), 109-133.

9 Gössling, S. (2017). Tourism, information technologies and sustainability: an exploratory review. Journal of Sustainable Tourism25(7), 1024-1041.

10 Cavalheiro, M. B., Joia, L. A., & Cavalheiro, G. M. D. C. (2020). Towards a smart tourism destination development model: Promoting environmental, economic, socio-cultural and political values. Tourism Planning & Development, 17(3), 237-259.

11 Stankov, U., & Gretzel, U. (2020). Tourism 4.0 technologies and tourist experiences: a human-centered design perspective. Information Technology & Tourism22(3), 477-488.

How can a chatbot influence the customer experience of your tourism business?

With the constantly ongoing advancements of Industry 4.0, several interconnected developments can be seen affecting both the digital and operational environments of tourism businesses. These so-called Tourism 4.0 innovations refer to Industry 4.0 innovations (Big Data, Internet of Things, Blockchain, Artificial Intelligence etc.) that have been specifically refined to suit the needs of the tourism industry, ultimately bringing additional value to customers¹. To scratch the surface of this multidimensional phenomenon, this blog post will focus on technology-mediated communication tools, specifically chatbots, and their influences on customer experience.

Yet, we must notice the other side of the equation. In addition to addressing the influences of chatbots on customer experience, the issue will also be appraised from the perspective of Customer Experience Management (CEM). But first, as stated by Opute, Irene and Iwu², it is vital to define the concept of “customer experience” before addressing topics related to the leveraging of digital technologies. Thus, in order to fully comprehend the complexity of the topic, we first need to create a framework of understanding.

Understanding the fundamentals of customer experience

Customer experience is a common topic of interest in both general business research and tourism-specific research. Due to differences in industry-specific characteristics, it is vital to understand the difference between online customer experience and (overall) customer experience.

In their conceptual model of online customer experience, Rose, Clark, Samouel and Hair³ identify various antecedent variables affecting the Cognitive Experiential State (CES), as well as the Affective Experiential State (AES) of customers. While antecedents affecting CES are closely related to the concept of flow (e.g., interactive speed, online presence, challenge, and skill), antecedents influencing AES are often associated with individual perceptions of website functionality, aesthetics and assumed benefits. The above-noted Experiential States lead to the preferable outcomes of an online customer experience: (1) customer satisfaction; (2) trust; and (3) repurchase intentions.

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Stankov’s and Gretzel’s¹ conceptualization addresses similar concepts in a different context. Their conceptualization showcases the role of Tourism 4.0 technologies in creating tourist experiences. Similarly, concepts related to the state of flow (i.e., object-oriented factors) are seen to have an effect on the user experience. Conversely, their Human-Centered Design (HCD) approach gives great emphasis to additional variables, specifically subject-oriented factors (e.g., previous experiences, behavioural patterns, and contextual differences). Ultimately, the aforementioned factors result in a subjective user experience. However, this is just a part of the full story. The main idea of the conceptualization is to illustrate the user experience as a mediator, supporting the formation of the overall tourist experience. In other words, a user experience is a tool creating either goal-surpassing or goal-limiting effects, which have an essential impact on the overall experience.

Hwang’s and Seo’s⁴ findings also emphasize the role of technology-mediated experiences as middlemen between the customer and the overall customer experience. Their conceptualization reviews the topic from a CEM perspective, thus giving greater emphasis to the characteristics and consequences of the overall customer experience. According to this broader description, the overall customer experience is shaped according to a set of internal factors (e.g., customer demographics) and external factors (e.g., online environment, technology, and service attributes). As a result, the overall customer experience revolves around aspects of co-creation, authenticity, transcendence, and transformation. What is the final outcome of the overall customer experience? Mentioned outcomes include emotional and behavioural outcomes, changes in brand perception, as well as other subjective outcomes.

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Chatbots: What, How, Why & Why not?

What are chatbots?

Essentially, chatbots are auto-generated software having some sort of ability to interact with its user. This interaction can take place in the forms of audio or text⁵. These natural language-based dialogues between chatbots and users⁶ take place on multiple platforms, including company websites and mobile applications⁷, to name a few.

How do chatbots work?

Chatbots require certain prerequisites to function. At this point it is vital to understand the differences between the two most common chatbots of today – rule-based chatbots and AI-chatbots. Rule-based chatbots operate on a basis of set rules. These chatbots can only function within the framework of these set rules, which limits their functionality⁸.What happens when a rule-based chatbot is not able to process your request? Melian-Gonzalez, Gutierrez-Tano and Bulchand-Gidumal⁷ highlight the complementary relationship required between chatbots and humans. Consequently, when a chatbot is not able to process a piece of information, the request is transferred to a human (i.e., a customer service representative of a company). Another limiting factor is the inability to learn from previous interactions; rule-based chatbots cannot storage processed information into a knowledge base or a data storage⁸.

Conversely, AI-chatbots have the ability to utilize complex datasets and even predict customer behaviour (to a certain extent). These highly intellectual chatbots have a Natural Language Processing (NLP) layer, or they utilize an Artificial Intelligence Markup Language (AIML) to obtain and process customers’ textual and/or oral requests. Moreover, AI-chatbots are often associated with the concept of Machine Learning (ML). ML functions enable AI-chatbots to not only process customers’ requests, but also to make assumptions about customer behaviour and deliver suggestions accordingly⁹.

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Why do customers choose or choose not to interact with chatbots?

In Pillai’s and Sivathan’s¹⁰ study, a total of 1480 Indian customers as well as 36 senior managers were surveyed to identify different antecedents of chatbot adoption. Their findings indicate that the main antecedents of chatbot adoption include perceived ease of use, perceived trust, perceived intelligence, and the human-like characteristics of the chatbot (anthropomorphism).

Conversely, a more recent study identifies several negative antecedents affecting the adoption intention (AIN) of chatbots. In the above-mentioned study, undergraduate students from two Spanish Universities were surveyed, obtaining a total of 476 valid responses. The findings imply that individual habits, such as previous use of chatbots, inconveniences in communication (i.e., having to adopt own language in order for the chatbot to understand), as well as having a negative general attitude towards Self-Service Technologies (SSTs) have a negative effect on adoption intention⁷.

Chatbots & customer experience: providing value or increasing frustration?

Chatbots contribute to the customer experience in various ways. A recent Malaysian case study, conducted in co-operation with Air Asia Berhad, analyses the influences of chatbots on customer experience. The study presents a variety of positive outcomes. Firstly, the ease of use is highlighted; utilizing a chatbot requires little or no technical competence. Secondly, the constructed AIRA chatbot is able to operate 24/7, providing immediate responses to customers’ queries. This notion was greatly emphasized, since prior to the case study, the service quality of the company was on an insufficient level¹¹.

The findings of Suanpang’s and Jamjuntr’s¹² case study add to the above-mentioned notions. During their study, an AI chatbot was constructed for tourists visiting the Active Beach Zone in Thailand. Their findings indicate the following: (1) chatbot usage minimized the cognitive overload of customers; and (2) chatbot usage contributed to overall customer satisfaction. A mention-worthy element adding to the overall customer satisfaction was the chatbots ability to provide personalized information and customized content.

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Boiano’s, Borda’s, Gaia’s, Rossi’s and Cuomo’s¹³ case study addresses the opportunities presented by chatbots in the context of museums and heritage organisations. The results of their pilot project in Milan imply that chatbot usage increased the immersion of museum tours, encouraging younger customer segments to pay more attention to historic environments and objects.

Conversely, a vital element of experiences, co-creation, divides opinions among scholars. While Bowen and Morosan¹⁴ state that chatbots among other technical developments add to the co-creation of remarkable visitor experiences by efficiently utilizing customer data, other scholars recognize the disruptive elements of the same phenomenon. According to a statement, autonomous devices are seen to “dehumanize co-created experiences” because of their power of overtaking the responsibilities of human beings¹⁵.

Be ahead of the game: identifying future opportunities and threats of chatbots in tourism

By now you should understand the following topics:

      1. The fundamentals of customer experience
      2. The adoption, use, and functionality of chatbots
      3. How do chatbots influence the customer experience?

Adding to the understanding of these topics, a conceptual framework has been constructed.

Source: Author
What about the future of chatbots? What kind of opportunities and threats do you need to acknowledge as a manager?

One of the biggest mistakes you can make as a manager is to focus only on the more direct outcomes of chatbot usage. Chatbots can certainly minimize labour costs, create additional value for customers, as well as give you a competitive edge over your competitors. However, there are additional (indirect) focus points that you should consider.

Firstly, we must acknowledge that advancements in technology increase customer expectations. Consequently, you must consider how your chatbot can be developed to suit the changing needs of customers. Could you utilize Deep Learning practices or additional Application Programming Interfaces to train your chatbot? Do these training practices fit your budget?

Secondly, let us review the situation from an experience design perspective. As said, technology is just a mediator for the overall experience; the overall experience includes holistic and human-centred elements¹⁶. Still, as technology develops, Bowen and Morosan¹⁴ question whether it is the technology that primarily drives value creation. In other words, this would require rethinking the whole experience, since technology can provide more value to the client in the form of a better product, a lower price, or both.

Thirdly, we must address the threats of chatbot usage. The more apparent negative outcomes of chatbot usage include frustration and skepticism towards technology. Could this be affected by determining whether it is mandatory or voluntary for customers to use your chatbot? Furthermore, there is a future threat to consider. Researchers have questioned whether the trend of replacing the human labour force with chatbots will have negative influences on how customers perceive chatbots. This negative perception ultimately affects adoption intentions⁷.

Acknowledgements

This blog post was written as a part of the Information and Communication Technology in Tourism Business course at the International Master’s Degree Programme in Tourism Marketing and Management (University of Eastern Finland Business School). Read more about the programme at https://www.uef.fi/tmm

References:

¹Stankov, U., & Gretzel, U. 2020. Tourism 4.0 technologies and tourist experiences: a human-centered design perspective. Information Technology & Tourism, 22(3), 477-488.

²Opute, A. P., Irene, B. O., & Iwu, C. G. 2020. Tourism service and digital technologies: A value creation perspective. African Journal of Hospitality, Tourism and Leisure, 9(2), 1-18.

³Rose, S., Clark, M., Samouel, P., & Hair, N. 2012. Online customer experience in e-retailing: an empirical model of antecedents and outcomes. Journal of retailing, 88(2), 308-322.

⁴Hwang, J., & Seo, S. 2016. A critical review of research on customer experience management: Theoretical, methodological and cultural perspectives. International Journal of Contemporary Hospitality Management.

⁵Kumar, V. M., Keerthana, A., Madhumitha, M., Valliammai, S., & Vinithasri, V. 2016. Sanative chatbot for health seekers. International Journal Of Engineering And Computer Science, 5(03), 16022-16025.

⁶Dale, R. 2016. The return of the chatbots. Natural Language Engineering, 22(5), 811-817.

⁷Melián-González, S., Gutiérrez-Taño, D., & Bulchand-Gidumal, J. 2021. Predicting the intentions to use chatbots for travel and tourism. Current Issues in Tourism, 24(2), 192-210.

⁸Alotaibi, R., Ali, A., Alharthi, H., & Almehamdi, R. 2020. AI Chatbot for Tourist Recommendations: A Case Study in the City of Jeddah, Saudi Arabia. International Journal of Interactive Mobile Technologies, 14(19), 18-30.

⁹Calvaresi, D., Ibrahim, A., Calbimonte, J. P., Schegg, R., Fragniere, E., & Schumacher, M. 2021. The Evolution of Chatbots in Tourism: A Systematic Literature Review. Information and Communication Technologies in Tourism 2021, 3-16.

¹⁰Pillai, R., & Sivathanu, B. 2020. Adoption of AI-based chatbots for hospitality and tourism. International Journal of Contemporary Hospitality Management.

¹¹Kasinathan, V., Abd Wahab, M. H., Idrus, S. Z. S., Mustapha, A., & Yuen, K. Z. 2020. Aira chatbot for travel: case study of AirAsia. In Journal of Physics: Conference Series, 1529(2), 022101. IOP Publishing

¹²Suanpang, P., & Jamjuntr, P. 2021. A Chatbot Prototype by Deep Learning Supporting Tourism. Psychology and Education Journal, 58(4), 1902-1911.

¹³Boiano, S., Borda, A., Gaia, G., Rossi, S., & Cuomo, P. 2018. Chatbots and new audience opportunities for museums and heritage organisations. Electronic visualisation and the arts, 164-171.

¹⁴Bowen, J., & Morosan, C. 2018. Beware hospitality industry: the robots are coming. Worldwide Hospitality and Tourism Themes.

¹⁵Buhalis, D., Harwood, T., Bogicevic, V., Viglia, G., Beldona, S., & Hofacker, C. 2019. Technological disruptions in services: lessons from tourism and hospitality. Journal of Service Management.

¹⁶Tussyadiah, I. P. 2014. Toward a theoretical foundation for experience design in tourism. Journal of travel research, 53(5), 543-564.

Will blockchain shake the paradigm of tourism?

Understand the Blockchain

Traditionally, when referring to information and communication technology, we are familiar with the concepts of the Internet of Things (IoT), robotics, contactless technology, and social media since these technologies are highly implemented in our everyday life.

Conversely, when blockchain is addressed on the table, we tend to avoid this concept due to its complex nature. Like a ghost cat, the concept of blockchain gradually infiltrates and blends into our life at an unnoticeable pace.

So, what is blockchain after all? Blockchain is a list of transactions or a record that is kept up by a network of clients (Sharma et al., 2021). To understand the blockchain in a simple way, a block is an entity to store the information, and each block is connected to its initial block while can build up new connections with new blocks, which enables all the blocks linked together within the same data structural system (Sharma et al., 2021).

Also, what can we do with blockchain? Several applications such as smart contract, tokenization, inter-organizational data management, governmental digital system construct, healthcare system, and financial service have been proposed, implemented for revolutionizing our society (Sharma et al., 2021).

Understand the Paradigm of Tourism

It is without a doubt that new technologies are required to be implemented in tourism, could blockchain become the next tipping point in the tourism industry?

Before answering this question, it is necessary to review the current paradigm of the tourism industry from a broader perspective and investigate whether blockchain technology is an appropriate fit for certain stances.

What is a paradigm? This question bothers me as I had encountered this term quite often. From the explanation of the Oxford English Dictionary, ‘a typical example or pattern of something; a pattern or model’. In the book “The Structure of Scientific Revolutions”, Thomas Kuhn (1962) introduced the phenomenon of a paradigm shift, which to me is a better way to understand the paradigm.

In my understanding, a paradigm shift occurs where new disciplines, conceptual models, and theoretical frameworks could not fit into the existing body that encompasses all knowledge and theories, which requires a shift to a new body. In another word, the paradigm is the body that includes all relevant knowledge and theories that fits into its system.

Now we understand the term “paradigm”, but what’s the paradigm of the tourism industry? To see the bigger picture, Tribe et al. (2015) raised three critical questions: “How is the tourism knowledge system constructed?”; “What are the dynamics of change in the tourism knowledge system”, and “Paradigms, global structure, and processes”.

By reflecting on his own article “The Indiscipline of Tourism” (Tribe, 1997), Tribe concluded that tourism exists in the emerging fields of traditional academy knowledge and knowledge that is yet set within a disciplinary framework. In a broad sense, tourism till today can be considered a field of study instead of a discipline, which answers the first question.

As we understand the position of tourism as a field of study, two approaches cover the field of business of tourism (Fletcher, Fyall, Gilbert, & Wanhill, 2017) including:

• Tourism Demand
• The Tourism Destination
• The Tourism Sector
• Marketing for Tourism

and social science (Hannam & Knox, 2010).

• Regulating Tourism
• Commodifying Tourism
• Embodying Tourism
• Performing Tourism
• Tourism and the Everyday
• Tourism and the Other
• Tourism and the Environment
• Tourism and the Past

Tribe et al. (2015) pinpointed that ideology and discourse aspects should be added as an addition to complement Kuhn’s explanation of “paradigm”, while from the perspective of neoliberalism, the core concepts address:

• Competitiveness
• Deregulation
• Efficiency
• Free Markets
• Profit
• Consumerism
• Capitalism
• Globalization
• Individualism
• Growth

However, neoliberalism cannot stand for the ultimate universal worldview. Hence, Tribe et al. (2015) addressed the other values:

• Inclusivity
• Equity
• Equality
• Beauty
• Sustainability

Furthermore, Tribe et al, (2015) reflected on the consequences that tourism is mainly driven by the forces of the neoliberal’s values and ideology, while tourism research in a sense amplifies and re-visits these core concepts, which deepen the imbalance of tourism development as “tourism paradoxes”.

Discussion of the Practicality of Blockchain in the Tourism Industry

Since we understand the paradigm of the tourism industry, its evolving development, and its deeper values, it is time to put our attention back to the blockchain once again.

Kizildag et al. (2015) argued that blockchain could result in a paradigm shift, though blockchain technology is still at the “early adopter” stage. Two theories are suggested to implement blockchain technology including the diffusion of the innovation theory, and the agency theory.

The diffusion of the innovation theory indicates that hospitality and tourism companies are distant from blockchain technology unless the concept of value co-creation is recognized by those companies as indicated.

The agency theory on the other hand emphasizes the forthcoming contradictions that can be caused by the distinctive interests of the principals and the agencies. As the agents and the principals have different interests (Jesnsen and Meckling, 1976), the inconsistency of the operation and management may result in miscommunication (Altin et al., 2016).

Studies of the agency theory implied that blockchain could resolve the pain points of institutionalized communication, such as information asymmetry, trust issues, transaction transparency, and security issue (Altin et al., 2016). Additionally, Kizildag et al. (2015) highlighted the decentralized feature and the transparent environment of blockchain technology.

Accordingly, three research propositions were presented to further the practicality of blockchain in the tourism industry (Önder & Treiblmaier, 2018):

• Research proposition 1: New forms of evaluations and review technologies will lead to trustworthy rating systems.

• Research proposition 2: The widespread adoption of cryptocurrencies will lead to new types of C2C markets.

• Research proposition 3: Blockchain technology will lead to increased disintermediation in the tourism industry.

Proposition 1 addressed that the user identities do not need to be revealed since all online reviews will go through an end-to-end private system so that nobody can duplicate their reviews to manipulate the rating system (Önder & Treiblmaier, 2018).

Proposition 2 discussed that business can be doable without the unnecessity of trustworthy intermediaries, while the adoption of cryptocurrencies can trigger the formation of new C2C business markets (Önder & Treiblmaier, 2018).

Proposition 3 implied that the increasing disintermediation effect caused by blockchain technology (Colombo & Baggio, 2017) has the potential to eliminate new intermediaries (Ford, Wang, & Vestal, 2012), which is good for the smaller business to remove the entry barriers (Önder & Treiblmaier, 2018).

Similarly, Tyan et al, (2021) emphasize the positive impacts of the application of blockchain in sustainable tourism based on the Sustainable Development Goals (SDG) of the UN. Other than the disintermediation, review system as we discussed, four more extensive applications were addressed as:
• Food supply chain management and food waste mitigation
• Service customization and tourists’ satisfaction
• Awareness rise
• Tourists’ sustainable behavior

In comparison to the previous research, identical implementations are revisited, and that is how I realize that the research of blockchain technology used in tourism has come to a saturated state. Looking back to the question: will blockchain shake the paradigm of tourism, here are the final wrap-ups and the takeaways of my thinking.

Connected floating cubes background

Will Blockchain Shake the Paradigm of Tourism?

To enable the paradigm shift, it requires the disruptive innovation of technology, while large amounts of research, hypothesis-building, and theory-construction are necessary. From a development perspective, we observe tourism being questioned as indiscipline to an extent, while we also notice that tourism extends its reach from business and social science to other disciplines.

It is very difficult to deconstruct the previous built and long-lasting theories and knowledge, meaning that the process of shaking the well-built paradigm is a long journey. But it is common when new things are introduced and threaten the existence of the current paradigm, which occurs in the case of blockchain technology as well.

In a sense, the inevitable appearance of blockchain indeed commences the process of research, but to what extent that blockchain reaches a state of having the absolute influential power to trigger further and deeper research is yet to be uncovered. Without a doubt, scholars and researchers had invested their efforts to investigate the positioning of blockchain in the tourism industry, while it appears that a bottleneck is reached as identical conclusions are drawn.

To recap this article, we are aware of blockchain technology, but seldom actually understand what it is and how to use it. It occurs to me that the increasing attention to blockchain technology has aroused many researchers, and that many of them have established the relevance of blockchain and tourism is solid proof that the blockchain is shaking the paradigm of tourism. However, to what extent that blockchain affects the development of the tourism paradigm requires a tremendous of cooperative work among researchers who share the similar field of studies.

1. Altin, M., Kizildag, M., & Ozdemir, O. (2016). Corporate Governance, Ownership Structure, and Credit Ratings of Hospitality Firms. The Journal of Hospitality Financial Management, 24(1), 5–19. https://doi.org/10.1080/10913211.2016.1166022
2. Colombo, E., & Baggio, R. (2017). Tourism Distribution Channels: Knowledge Requirements. In N. Scott, M. De Martino, & M. Van Niekerk (Eds.), Bridging Tourism Theory and Practice (Vol. 8, pp. 289–301). Emerald Publishing Limited. https://doi.org/10.1108/S2042-144320170000008016
3. Fletcher, J., Fyall, A., Gilbert, D., & Wanhill, S. (2017). Tourism: Principles and Practice. Pearson UK.
4. Ford, R. C., Wang, Y., & Vestal, A. (2012). Power asymmetries in tourism distribution networks. Annals of Tourism Research, 39(2), 755–779. https://doi.org/10.1016/j.annals.2011.10.001
5. Giannopoulos, Antonios, Skourtis, George, Kalliga, Alexandra, Dontas-Chrysis, Dimitrios-Michail, & Paschalidis, Dimitrios. (2020). Co-creating high-value hospitality services in the tourism ecosystem: Towards a paradigm shift? https://doi.org/10.5281/ZENODO.3822065
6. Hannam, K., & Knox, D. (2010). Understanding Tourism: A Critical Introduction. SAGE.
7. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
8. Kizildag, M., Dogru, T., Zhang, T. (Christina), Mody, M. A., Altin, M., Ozturk, A. B., & Ozdemir, O. (2019). Blockchain: A paradigm shift in business practices. International Journal of Contemporary Hospitality Management, 32(3), 953–975. https://doi.org/10.1108/IJCHM-12-2018-0958
9. Kuhn, T. (2021). The Structure of Scientific Revolutions. In Philosophy after Darwin: Classic and Contemporary Readings (pp. 176–177). Princeton University Press. https://doi.org/10.1515/9781400831296-024
10. Önder, I., & Treiblmaier, H. (2018). Blockchain and tourism: Three research propositions. Annals of Tourism Research, 72, 180–182. https://doi.org/10.1016/j.annals.2018.03.005
11. Sharma, N., Shamkuwar, M., Kumaresh, S., Singh, I., & Goje, A. (2021). Chapter 10—Introduction to blockchain and distributed systems—Fundamental theories and concepts. In S. Krishnan, V. E. Balas, E. G. Julie, Y. H. Robinson, & R. Kumar (Eds.), Blockchain for Smart Cities (pp. 183–210). Elsevier. https://doi.org/10.1016/B978-0-12-824446-3.00002-8
12. Tribe, J., Dann, G., & Jamal, T. (2015). Paradigms in tourism research: A trialogue. Tourism Recreation Research, 40(1), 28–47. https://doi.org/10.1080/02508281.2015.1008856
13. Tyan, I., Yagüe, M. I., & Guevara-Plaza, A. (2021). Blockchain Technology’s Potential for Sustainable Tourism. In W. Wörndl, C. Koo, & J. L. Stienmetz (Eds.), Information and Communication Technologies in Tourism 2021 (pp. 17–29). Springer International Publishing. https://doi.org/10.1007/978-3-030-65785-7_2

Facial recognition systems – the key to a more seamless future of tourism services?

Biometric systems are becoming a more mundane part of our everyday lives. We use for example our fingerprints and facial recognition systems to unlock our devices, to make mobile payments and to pass the border control routines at airports. These technologies are developing all the time, making them more accurate and simpler to use, pervading to a growing extent of the services and systems we use. One of the fields that could benefit from the opportunities that biometric systems create, is the tourism industry and its different sub-fields. In tourism, technologies like this are already widely in use in some areas, and during recent years, partly because of the pandemic situation that forced the companies in this field to develop themselves further, the adoption of contactless services has been increasing rapidly (Ivasciuc, 2020).

Although biometric technology has a huge potential to make businesses better and create more satisfying service experiences for the customers, there are still some concerns and suspicion amongst the customers towards these solutions. (Pai et al. 2018) These doubts can prevent the greater scale implementation of these technologies, regardless of the convenience and possibilities they create. Biometric systems can refer to a variety of technologies that examine human characteristics to verify the user. (Jain et al. 2011). This blog post focuses mainly on the usage of facial recognition technology (FRS) in the tourism industry.

Utilizing facial recognition technologies can create several advantages for tourism businesses, as well as for businesses in general. Adopting FRS based solutions is particularly useful in the tourism field, because of the specific features that the industry has. For example, in hospitality, the businesses must simultaneously take care of two major areas, security and customer satisfaction. Morosan (2019) suggests that FRS represents an ideal solution for hotels that are constantly balancing between these two quality challenges. (Morosan, 2019)

According to Mills et al. (2010), biometric technology creates advantages for the tourism and hospitality field in the areas of safety, customer convenience and operational efficiency. An increased level of convenience can lead to greater customer satisfaction when customers do not have to carry their key cards or loyalty cards and wait in massive lines of people. Biometric solutions, or in this case, facial recognition systems, could also lead to an increase in sales and revenue when payments are being made easier for the client. And even though FRS creates advantages in customer satisfaction and safety, perhaps the most critical benefits are related to operational efficiency, since tourism businesses and services usually must handle large volumes of people for example at airports. (Mills et al., 2010)

Facial recognition systems are already widely in use in the aviation industry, where passengers usually must undergo a repeated set of identification processes and check-ins at airports. Travel documents are usually presented to a variety of authorities such as the immigration department or customs, and of course to the airlines themselves. Since this process is very time-consuming and frustrating for the passengers, automation via FRS is an efficient tool to make air travelling more comfortable. At airports, FRS solutions are already a popular solution for example in border-control formalities. (Samala et al. 2020)

To make the airport experience even more convenient, some airports started to offer a fully automated airport experience. For example, at the beginning of 2021, Delta airlines launched the first domestic digital identity test in the U.S which makes the contactless airport experience possible. Customers can now use facial recognition as an identification verification in every service touchpoint with their mobile application. Traditional ID verification is not needed at any point of the travel. (Delta-news hub, 2021; Parker, 2021) The growing numbers of tourists are forcing the aviation industry to increase its performance with more efficient contactless solutions, and of course, the development has also been pushed by the Covid-19 pandemic. (Ivasciuc, 2020).

Facial recognition in the hospitality industry

One other field within tourism that would gain benefits from the FRS is the hospitality industry. As Pai et al. (2018) demonstrate with their findings, as users start to trust biometrical systems such as FRS, they will eventually become more satisfied with hotels using this technology. FRS is still at an early adoption stage in the hospitality industry, which means that the early adopting companies could gain a competitive advantage. (Pai et al. 2018)

Even though there are some existing examples of hotels implementing FRS in their services, especially in the Asian countries, automated hotel services that utilize FRS are not widespread regardless of the possibilities that they create. Automated FRS services have been launched for example in China, in two of the Marriott-chain hotels. At these facilities, it is possible for the client to execute the whole check-in process simply with an ID and facial data. (Marriott international, 2018). A more recent example comes from Vietnam, where a pioneering Vinpearl-resort chain launched the use of FRS in its hotel facilities in Nha Trang (Vinpearl, 2021).

What are the advantages of FRS for hotels?

As Wang (2018) presents, at Marriott hotels, an intelligent check-in system reduces the check-in time from three minutes to one minute which is a remarkable advantage compared to more traditional hotel services (Wang, 2018). According to Morosan (2020) FRS is a promising technology for the hospitality industry since it makes it possible for hotels to optimize consumer tasks such as authentication and payments and increase security in the facility. FRS brings major possibilities to enhance both security and service quality. (Morosan, 2020) Intelligent property management systems could use integrated FRS to identify familiar guests already when they are approaching the service desk to offer a more personalized experience (Hertzfeld, 2018).

Utilizing FRS would be a major step for businesses operating in the hospitality field toward a more seamless and satisfying customer experience. According to Morosan (2020), it is the legacy process of guest authentication that creates the most critical service bottlenecks in the hospitality industry. These bottlenecks are very frustrating for both the guests and the workers, especially during peak hours.  Even though solutions such as self-check-in kiosks or mobile check-in systems have already been deployed by some hotels to answer this problem, service bottlenecks seem to still be an inevitable part of hotel services. Self-check-in solutions create a possibility of security risks, which may be one of the reasons why many hotels prefer to operate on traditional patterns. (Morosan, 2020) However, FRS differs from other self-check-in solutions with its ability to create automated services accurately and also safely (NEC Corporation, 2018).

In the hotel service ecosystem, guests are identified in many service touchpoints, such as in the check-in situation, payments and when accessing different facilities such as the guest’s room, gym or spa area. As Morosan (2020) describes “a repeated need for guest authentication is one of the idiosyncrasies of the hospitality industry”. Typically, guests use keys or key cards to access different areas of the facility, but often these keys end up being lost or damaged, which creates frustrating, unnecessary situations for the guests during their stay. With FRS, it would be possible to create a key that is rather hard to lose, the customers own face.

FRS brings possibilities to create more personalized service encounters and ultimately, it could even be used as a tool to understand the guests’ feelings more deeply as AI is increasingly becoming better at recognizing human emotions. The so-called emotion recognition technology (ERT) aims to detect emotions from facial expressions and is a growing multi-billion industry.  (Hagerty & Albert, 2021). This could also be used as a tool in the hospitality industry, where the staff’s ability to recognize customers’ feelings play a critical role. As Koc & Boz (2019) argue, as the emotion/facial recognition abilities of the staff improve, it is likely that also the interactions between the customers and the employees improve too. According to them, improving staff’s ability to recognize customer feelings drives the development in service encounters. (Koc & Boz, 2019).

For example, far-fetched and simplified, if the check-out kiosk that is utilizing ERT technology recognizes that a significant number of guests leave the facility showing more stress signals than when arriving, it might be an indicator that there is something terribly wrong with the service provided. This kind of data is something that the service employees could never be able to collect and examine during their hurries. Of course, applying these kinds of solutions collides with privacy issues very quickly and sounds more like a dystopian future in some people’s ears than service development.

What does research tell about customer attitudes towards FRS?

Applying facial recognition technology raises concerns in people’s minds, which may be one of the factors putting breaks into this development in the tourism industry. (Morosan, 2019) For example, in Russia, privacy issues were quickly brought up when Moscow launched its new FRS based payment option in the city’s metro system. (The Guardian magazine, 15.10.2021).

Privacy issues have also been brought up by Xu et al.  (2020). They argue in their study on FRS usage in hotel check-in services, that perceived privacy has an even bigger impact on customers’ trust than security. Their research demonstrates that perceived privacy, security and trust in the system significantly affect the acceptance of FRS in hotel services amongst the guests (Xu et al., 2020).

Pai et al. (2018) studied the Chinese tourist’s perceived trust and intentions to use biometric technology in Macau. Their study also revealed that privacy and security concerns were the main sources creating distrust of biometric use in hospitality. (Pai et al. 2018). There are also concerns regarding the accuracy of these systems and their equality. For example, research done by Buolamwini & Gebru (2018) demonstrates this by pointing out algorithmic fairness, as FRS technology examined in their research was more capable of recognizing white males than females with a darker tone of skin. (Buolamwini & Gebru, 2018)

However, some studies indicate that privacy seems not to be that big of a deal in preventing the adoption of FRS, especially among young people. Norfolk & O’regan (2020) studied biometric technologies in the music festival context using an extended technology acceptance model. They found that as opposed to security and convenience, privacy, accuracy, and reliability did not have a significant impact on the acceptance of biometrics in a music festival setting. Their findings argue against the very common view that privacy, accuracy, and reliability are the most critical factors impacting the usage of biometrics. For young festival-goers, it seemed to be more about the actual usefulness of the technology than fears of lost privacy and security. (Norfolk & O’regan, 2020)

Cifti et al. (2021) studied the customer acceptancy of FRS in fast-food restaurants, which is another industry heavily pushing automated encounters to provide quicker service. Their findings support the notion that the impact of perceived privacy on the willingness to adapt FRS is not that significant. As Cifti et al. conclude, the differences regarding the issue of privacy might vary depending on the nationality of the user, culture type or hospitality service level. (Cifti et al. 2021)

Examining the existing research and cases of the adaption of FRS in the tourism industry, it seems an opportunity for many businesses in this field. FRS solutions have already spread into a variety of service encounters, that must handle large volumes of people and verify their personal details. FRS makes these encounters more fluent for the traveller as well as creates efficiency for the service provider.

As research points out, adopting FRS raises concerns amongst some people. Is my data safe and how is it used? That’s a question many people are asking when given an opportunity to use biometrical identification for the first time in a business setting. This is what companies adopting FRS should put emphasis on to create pleasant encounters between the customers and the technology. Overall, adopting FRS would develop tourist business’s security, efficiency and convenience, but only if the critical points that are preventing the usefulness and the trustworthiness of the system in the customers’ eyes are addressed and dealt with properly.

References:

Buolamwini, J. &amp; Gebru, T.. (2018). Gender Shades: Intersectional Accuracy Disparities in Commercial Gender Classification. <i>Proceedings of the 1st Conference on Fairness, Accountability and Transparency</i>, in <i>Proceedings of Machine Learning Research</i> 81:77-91 Available from: https://proceedings.mlr.press/v81/buolamwini18a.html.

Cifti, O. Choi, E & Berezina, K. 2021. Lets face it: are customers ready for facial recognition technology at quick-service restaurants? International journal of hospitality management Vol. 95, 102941

Delta-airlines news hub. 2021. Retrieved 14.10.2021 from: https://news.delta.com/delta-launches-first-domestic-digital-identity-test-us-providing-touchless-curb-gate-experience

Hertzfeld, E. 2018. Agilysys adds facial recognition to its PMS, hotel management, available at: https://www.hotelmanagement.net/tech/agilysys-adds-facial-recognition-to-its-pms

Ivasciuc, I. 2020. “Augmented reality and facial recognition technologies. Building bridges between the hospitality industry and tourists during pandemic”. Available at: https://www.proquest.com/docview/2491984008?OpenUrlRefId=info:xri/sid:primo&accountid=11739

Jain, A.K., Ross, A.A. and Nandakumar, K. (2011), Introduction to Biometrics, Springer, New York, NY.

Koc, E. & Boz, H. Development of hospitality and tourism employees emotional intelligence through developing their emotion recognition abilities. Available at: https://www.tandfonline.com/doi/full/10.1080/19368623.2019.1608885

Norfolk, L. & O’regan, M. 2020. Biometric technologies at music festivals: An extended technology acceptance model. Available at: https://doi.org/10.1080/15470148.2020.1811184

Mills, J. Meyers, M & Byun, S. 2010. “Embracing broadscale applications of biometric technologies in hospitality and tourism: Is the business ready?” Available at: https://www-emerald-com.ezproxy.uef.fi:2443/insight/content/doi/10.1108/17579881011078377/full/html#b21

Marriott International, Alibaba Group trials facial recognition check-in. (2018). SMB World Asia (Online), http://ezproxy.uef.fi:2048/login?url=https://www.proquest.com/trade-journals/marriott-international-alibaba-group-trials/docview/2069110987/se-2?accountid=11739

Morosan, Cristian. (2019). Disclosing facial images to create a consumer’s profile: A privacy calculus perspective of hotel facial recognition systems. International Journal of Contemporary Hospitality Management. ahead-of-print. 10.1108/IJCHM-08-2018-0701.

Morosan, C. 2020. Hotel facial recognition systems: insight into guest’s system perceptions, congruity with self-image, and anticipated emotions. Journal of electronic commerce research, VOL 21 (1) Available at: http://www.jecr.org/sites/default/files/2020vol21no1_Paper2.pdf

NEC Corporation, Face Recognition Solution Lemon Tree Hotels – NEC Corporation. 2018.
Norberg, P.A., D.R. Horne and D.A. Horne, “The privacy paradox: Personal information disclosure intentions versus behaviors,” Journal of Consumer Affairs,, Vol. 41, No 1:100-128, 2007.

Pai, C. Wang, T. Chen, S. & Cai, K. 2018. Empirical study on Chines tourists perceived trust and intention to use biometric technology. https://www.tandfonline.com/doi/full/10.1080/10941665.2018.1499544

Parker, J. 2021. First look:delta, tsa launch facial recognition at atlanta airport. Retrieved 12.10.2021 from: https://www.forbes.com/sites/jenniferleighparker/2021/10/27/first-look-delta-tsa-launch-facial-recognition-at-atlanta-airport/?sh=19ee4e454dc2

Samala, N. Katkam, B. Bellamkonda, R & Rodriquez, R. 2020. ”Impact of AI and robotics in the tourism sector: a critical insight” available at: https://www.emerald.com/insight/content/doi/10.1108/JTF-07-2019-0065/full/html#sec003

The guardian magazine, 2021. Privacy fears as moscow metro rolls out facial recognition pay system. Retrieved 15.10.2021 from: https://www.theguardian.com/world/2021/oct/15/privacy-fears-moscow-metro-rolls-out-facial-recognition-pay-system

Vinpearl, 2021. Check-in by facial recognition technology at Vinpearl. Retrieved 15.10.2021 from: https://vinpearl.com/en/check-in-by-facial-recognition-technology-at-vinpearl

Wang, J. 2018. You can now check-in with a facial scan at marriott in China. Retrieved 12.10.2021 from: https://www.forbes.com/sites/jennawang/2018/07/24/you-can-now-check-in-with-a-facial-scan-at-marriott/?sh=498547393f7a

Xu, F. Zhang, Y. Zhang, T. & Wang, J. 2020. Facial recognition check in services at hotels. Journal of hospitality marketing & management, Volume 30, 2021, 3

 

 

 

How technology can contribute to more sustainable future of tourism?

The economic importance of tourism globally is recognized. It creates jobs and some places are dependent on it. In recent years its impacts and development have been discussed although these tend to stay behind the focus on the economic benefits. Tourism has negative environmental and socio-economic impacts, and the industry needs to find a balance between the level of economic growth, environmental conservation and socio-cultural impacts. 1 United Nations 2030 Agenda for Sustainable Development including Sustainable Development Goals (SDGs) was represented in 2015. Tourism was clearly mentioned in goals 8 (decent work & economic growth), 12 (responsible consumption and production) and 14 (life below water). 2 The development and role of information and communication technologies (ICTs) have become evident in tourism, and it is an especially significant player in the implementation of the SDGs in the industry. 3 This blog explains how technology can contribute to sustainable tourism by helping to achieve SDG’s!

The relationship between tourism, technology and sustainable development

Four stages of ICT development can be differentiated in tourism: opportunity, disruption, immersion and usurpation. These stages enabled things like computerized reservation systems, global distribution systems, websites of tourism companies, speed and easiness of reservations, and price competition. Through these stages, ICT became an evident part of the everyday life of many consumers. We use social media and innovations like Airbnb.4 ICT systems are widely used in tourism to support important activities in tourism, like accommodation, transportation and communication benefitting both suppliers and tourists. The adoption of them has been affected by changing the competitive scope. 5

Photo by Danila Hamsterman on Unsplash

The Sustainable Development Goals (SDGs) by United Nations consist of 17 goals related to for example environmental conservation, climate, equality and poverty alleviation. According to the UN, “tourism can and must play a significant role in delivering sustainable solutions for people, the planet, prosperity and peace” and it “has the potential to contribute, directly or indirectly to all of the goals”. 2 The broad categories, in which the 17 SDGs for tourism can be grouped under, are economic (Goals 1, 7, 8, 9, 10, 11, 12), environment (Goals 6, 13, 14, 15), social-cultural (Goals 2, 3, 4, 5, 16) and governance (Goal 17). 3 ICT innovations in turn are often perceived as socially enriching and supportive of the SDGs. 4 Below are listed three things enabled by technology and how these contribute to the SDG’s!

Sharing economy platforms

 Let’s start with a small bite. A potential contributor to a sustainable future with promising outcomes for SDGs is the sharing economy with its platforms widely used in tourism enabled by technology, like Airbnb and Couchsurfing. These platforms may enhance for example cultural learning and intercultural friendships and economic sustainability by providing access to the market for people from developing countries, women entrepreneurs and empowering small or rural businesses. It can be said that platforms provide access to underutilized resources, generate employment and could reduce resource consumption. 6 Thus, sharing economy platforms could contribute to multiple SDG’s 2:  no poverty (1), gender equality (5), decent work & economic growth (8), industry innovation and infrastructure (9), sustainable cities & communities (11) and responsible consumption & production (12).

Tools for DMOs

 Applying ICTs in destination management can boost sustainable tourism. Information and communication technologies can help destination management organizations (DMOs) in their work for sustainable tourism development by enabling several applications or tools that can be used for information management, fulfilling tourist satisfaction, supporting community participation, and trying to manage energy usage and its impacts, among others. These include for example Destination Management systems (DMS), Environment Management Information Systems (EMIS), Location Based Services (LBS), Community Informatics (CI), virtual tourism and carbon calculators. 7 ICTs can also offer new distribution channels and raise the level of communication and interaction with and between stakeholders. They have a major role in information collection, analyzation, management and distribution. They help to measure impacts, monitor and report. 8

Photo by Windows on Unsplash

One of the most important tools for destination managers for supporting efforts in sustainable tourism development is Destination Management Systems (DMS) which can be used for actions such as information management, marketing, resource management and tourist education. Environment Management Information Systems (EMIS) helps tourism planning and decision-making by offering valuable data on tourism impacts at the destination and monitoring emissions and waste management. Location Based Services (LBS) provide information on tourists’ specific locations helping destination management in terms of informing the tourists about sites and attractions to visit and educating them about sensitive locations, appropriate tourist behavior and sustainable choices in the destination. Community Informatics (CI) can be used to aid community engagement, heritage and tradition preservation, interpretation, community cohesion and education of tourists. It includes community involvement in decisions regarding tourism development and planning at the destination. Virtual Tourism (VT) in turn offers a new option for experiencing tourism products or service offerings. It can reduce the degradation of attractions by reducing tourist numbers and providing information about the destination leading to positive environmental impacts. Finally, a carbon calculator is a product innovation that informs tourists about their carbon footprint before and during their trip. 8 The use of technology-based tools in destination management help to achieve at least the SDGs 2 of reduced inequalities (10), sustainable cities & communities (11), responsible consumption & production (12), climate action (13), life on land (14) and partnerships for the goals (17).

Empowerment of local communities

ICTs can have significant direct and indirect impacts on the local community. Tourism literature has emphasized local communities as a key resource for sustainable tourism development, indicating the importance of their inclusion and involvement of them. Tourism, often utilizing the natural and cultural heritage of the communities, is important for community development and poverty alleviation offering employment also to women. With the help of ICTs, it is possible for small businesses to promote and manage their business and bookings. In addition to economic benefits for locals, it enables benefits such as skills development, better access to education, exposure to the world outside the community and strengthened confidence and community engagement. For example, the research found that ICTs had a big role in community development in Malaysia. The use of ICTS in homestay accommodations enabled the community more opportunities for education and ICT training. The local community learnt to use the various booking platforms for accommodation. Communities could improve their access to higher education and skills in hospitality due to the success of the business enabled by ICTs. In addition, with access to the internet the locals were able to educate themselves about environmental conservation. 9

Photo by Adismara Putri Pradiri on Unsplash

Wrap up

The use of ICT is not new in tourism, but it could be said, that the use for trying to move towards sustainable tourism is.8 For tourism, technology has enabled innovations and phenomena, such as sharing economy platforms, tools for destination management and empowerment of local communities. These contribute to several SDG’s aiming at poverty reduction, creating employment, economic growth and battle against inequality, simply a more sustainable future. Technology-based tools used by DMO’s help to tackle environmental issues in destinations and make their work more efficient and effective. Involvement of ICTs in tourism has been important, especially for local communities of destination as those help in support and inclusion of local communities in decisions, education of both locals and tourists, and provides opportunity and help to communities to preserve and share their local cultures and languages. The negative impacts of tourism can be mitigated with the help of ICT. 7

United Nations established 17 Sustainable Development Goals some years ago and stated that tourism can contribute to all of the goals. The application of technology for tourism and hospitality can contribute to the achievement of the SDGs. This blog post gives only some examples. The recovery of COVID-19 is, by the way, a unique opportunity in the tourism industry to evaluate the supporting role of tourism in the achievement of SDGs with the use of technology. 3 Could we say that technology is the way to sustainable tourism? At least it is safe to say that it is one of those that will get us there.

Sources

  1. Ali, A. & Frew, A.J. 2014. ICT for sustainable tourism: a challenging relationship? Information Technology & Tourism 14, 261–264. https://doi.org/10.1007/s40558-014-0020-x
  2. Tourism for SDGS 2021. Tourism & Sustainable Development Goals. [Tourism for SDGS website] Referenced on 15.12.2021. https://tourism4sdgs.org/tourism-for-sdgs/tourism-and-sdgs/
  3. Ali, A., Rasoolimanesh, S.M. & Cobanoglu, C. 2020. Editorial – Technology in Tourism and Hospitality to Achieve Sustainable Development Goals (SDGs). Journal of Hospitality and Tourism Technology,11(2), 177-181. DOI:10.1108/JHTT-05-2020-146
  4. Gössling, S. 2021. Tourism, technology and ICT: a critical review of affordances and concessions. Journal of Sustainable Tourism, 29(5), 733-750. DOI: 10.1080/09669582.2021.1873353
  5. Morais, E., Cunha, C., Sousa, J. & Santos, A. 2016. Information and communication technologies in tourism: Challenges and trends. Paper presented at 27th IBIMA Conference, 4-5 May 2016, Milan, Italy.
  6. Gössling, S & Hall, C.M. 2019. Sharing versus collaborative economy: how to align ICT developments and the SDGs in tourism? Journal of Sustainable Tourism, 27(1), 74-96. DOI: 10.1080/09669582.2018.1560455
  7. Ali, A. & Frew, A. 2010. ICT and its Role in Sustainable Tourism Development. Paper presented at the ENTER 2010: 17th International Conference on Information and Communication Technologies in Tourism, 10-12 February 2010, Lugano, Switzerland.
  8. Ali, A. & Frew, A.J. 2014. Technology innovation and applications in sustainable destination development. Information Technology and Tourism 14, 265–290.
  9. Gan, S., Inversini, A & Rega, I. 2018. Tourism, Development and Digital Technologies: Insights from Malaysian Homestays. In: Stangl, B. & Pesonen, J. (eds.) Information and Communication Technologies in Tourism 2018. Cham: Springer, 52-63.
  10. Roztocki, N., Soja, P. & Weistroffer, H.R. 2019. The role of information and communication technologies in socioeconomic development: towards a multi-dimensional framework. Information Technology for Development, 25(2), 171-183. DOI: 10.1080/02681102.2019.1596654

 

 

 

 

 

 

Why should Smart Tourism Destinations invest in IoT solutions – or should they?

In recent years, the tourism industry has embraced the idea of Smart Tourism Destinations, emerging from the concept of Smart Cities. In both, the beating heart is the marketing word ‘smart’, representing all things that can be embedded or enhanced by technology¹. In fact, technologies such as cloud computing and the Internet of Things (IoT), and their application to complex logistic problems within cities, originally triggered the concept of ‘smart’ to arise².

IoT particularly has been stated as the next big thing and put at the vanguard of digitalization over the last decade. Somehow, however, this technology still hasn’t hit the great breakthrough in tourism. Why is it so, as it has such a strong correlation with smart destination development? What is holding the tourism destinations back from investing in IoT solutions big time? 

Ok wait – a short recap on IoT, please

IoT is a paradigm that involves the presence of a variety of connectable devices such as gadgets, sensors, machines, actuators, and other objects that become interconnected to each other and to higher-level systems and protocols (e.g. Wi-Fi, Bluetooth, GPS), producing automatically-collected data to create services and applications adapted to users’ needs ⁴ ⁵. Sounds complex but is more straightforward in practice. For instance, IoT technology can help making your home smart by enabling you to adjust your lighting, washing machine and other connected devices at your house through one mobile application. In a smart tourism destination, it can denote monitoring the mobility of tourists or tracking visit times in each attraction by turning the presence of nearby devices into statistical data – all in order to gain actionable insights for destination development and for tourism businesses benefit.

Development gaps of IoT

The use of aggregated data, which is integrated into a single decisional platform, has been said to make the IoT concept the key technological solution for the development of smart urban environments⁵. Furthermore, IoT’s capabilities to collect data and transfer it over a network, based on defined algorithms, all without the need for human intervention in the process, have been praised⁶.

If it only was that easy.

Indeed, the economic value of IoT platforms originates from their ability to connect a mass of diverse sensing and actuating devices, yet each solution has different restrictions and capabilities. The gap in the IoT platforms is caused by the lack of communication standards and communication protocols⁴. Jérémy Robert et al. translate the whole IoT abbreviation into “Intranets of Things”. They refer to vertical silos, which cannot easily and efficiently interact with each other⁷. We simply don’t speak the same language – not us nor the IoT systems. 

In the context of DMOs (Destination Management Organizations) and their adoption of IoT, running one IoT project is already demanding, not to mention if the collected data should also be harmonized with other data sources. Additionally, there are different IoT solutions available for different purposes: one efficiently tracks the number of visitors while the other intelligently models the mode of transportation. This means you would need multiple IoT solutions to be able to cohesively understand your visitors’ behavior. Moreover, the tourism industry retains such a diverse variety of other kinds of data. Combining all this into a single decisional platform seems practically impossible.

Impediments for DMOs

In reality, IoT still needs quite a lot of human touch. What’s more, IoT solutions most often produce massive, dynamic, varied, detailed and inter-related big data². Big data solely on its own is like the ocean: it’s unbearable and infinite if you don’t know how to navigate with it. Somehow it seems that especially the DMOs tend to be lost at this sea. 

Kim Boes, Dimitrios Buhalis and Alessandro Inversini studied the core components of smartness in tourism destination development⁸. By running an in-depth case study analysis on forefront smart destinations, including also IoT projects in their analyzed data set, they found out that along with the distinct presence of technology, there are four additional components of soft smartness: social capital, human capital, innovation and leadership. Technology on its own is insufficient to introduce smartness. Correspondingly, IoT technology can automate the collection of desired data, but someone still needs to plan it, implement it, analyze it and turn it into actions. So what is holding the DMOs back?

Scarcity of suitably qualified staff

This leads us to a burning question of human resources. Being able to sort, analyze and visualize big data consists of a diverse set of skills and knowledge, and DMOs rarely have such resources in-house⁹. If the tourism industry’s future is set to be built on big data, practically all of us who work in destination management would need to be some sort of data gurus. We can of course acquire external services, but we must also look in the mirror: do we have the right skills and knowledge or are we still living in the previous era with our skillset?  

Culture of experimentation

Another impediment is agility. Deploying IoT solutions is ideal for agile experiments in smart tourism destinations but are DMOs agile enough as organizations to run them? It’s also a skill to adopt new technologies and these technologies evolve fast. In other words, by the time a DMO makes the decision to acquire an IoT solution, after a thorough investigation and procurement process, the exact technology might already be outdated. Therefore, we should focus on building a culture of using the Internet of Things¹⁰.

Cost-effectiveness

Concerns are raised about the length of time required to implement IoT solutions and their economic viability⁴. These are not necessarily long-term investments, but still, the experiments should be long enough in order to be able to point out regular and irregular fluctuation in the collected data and draw conclusions out of it. And they cost money. Moreover, IoT is developing technology and unexpected costs can occur during the process of deployment. For DMOs, these are red flags.

Dependency on others

Smart tourism destinations are dependent on smart city infrastructure. DMOs cannot assemble IoT infrastructure alone. Such things require collaboration and collaboration within the smart city requires finding mutual goals and interests. However, the tourism industry might have niche requirements. Moreover, IoT integration should follow a certain vision and idea¹⁰ and the architecture needs to be designed in line with the requirements of the destination⁵.  It might be challenging for a DMO to drive the change for tourism purposes.

IoT in overtourism management

Despite the obvious challenges, some destinations did still succeed with IoT. In Ávila, Spain, IoT technology was successfully deployed in overtourism management as a part of a wider visitor-flow monitoring system¹¹: An IoT based pedestrian monitoring system was installed in the historic centre of Ávila. Together with urban 3D modelling Mikel Zubiaga, Jose Luis Izkara,  Alessandra Gandini, Itziar Alonso and Unai Saralegui were able to calculate occupancy patterns and through this create a dynamic occupancy monitoring system. Smart tourism management applications were introduced both for tourists and city managers. These applications were designed to tackle the imbalance of overcrowding in one place and emptiness in another.

Eventually, the research findings resulted in the creation of a sustainable management strategy for the Ávila historic centre. Moreover, the deployed system has proven its value in assuring long-term social, environmental, and economic sustainability of tourism activities, securing the heritage conservation of the historic center. Outcomes like these are immeasurably valuable, especially when it comes to tackling sustainability issues such as overtourism.

IoT might still be an effort worth taking.

It’s a risky business?

The dangers related to data risks and confidentiality issues have been recited as the main disadvantages of IoT¹⁰ . Data risks include security, protection, quality, accurate analysis and compatibility, whereas confidentiality issues emerge from legal issues and, as already mentioned earlier, the lack of standards, protocols and interoperability.

These disadvantages seem to be the major roadblock for DMO adoption of IoT. Echoing from the disadvantages, reputation risks possess probably the greatest impediment for tourism destinations. Is it ethical to follow the behavior of tourists, even if only statistically? No tourism destination organization wants to be labelled as a ‘big brother’. This might even be a legitimate fear. Only recently the Dutch city of Enschede was fined 600,000 euros by the national data protection authorities for the city’s use of Wi-Fi sensors to measure the number of people in the city center¹². Despite the evidence of not having intentions to track individual people, the authorities still interpreted the case to be in breach of the General Data Protection Regulation (GDPR).

This is of course an example of an escalated case, and it should be noted that such technologies can still be deployed in a privacy-compliant way. Respectively, GDPR compliance has grown to be the core requirement for IoT solutions¹³. So, are DMOs just risk-resistant? We could argue that smart destinations don’t even dare to test IoT solutions as they are so afraid of the ethical and legal issues.

Rule no.1: ask the consumers what they think

The adoption of IoT technologies in tourism has been carefully studied from the system design, data analysis and risk management point of view⁶. However, research on consumer behavior has been left vague.

Interestingly, Vasile Dinu, Sorin Paul Lazăr and Iustin Atanasiu Pop examined the causal relationship between the level of IoT adoption in tourism applications and consumer trust in these systems⁶. Their research hypothesis was that the level of adoption of IoT technologies in tourism is influenced by TAM (Technology Acceptance Model) components: convenience, social influence, habits, confidentiality and safety, awareness, and costs. With an ordered logit model, using a database consisting of 431 Romanian tourists, they were able to showcase a significant influence of behavioral variables connected to awareness, convenience, habits, and cost. However, there was no correlation between the frequency of IoT use and privacy or data security issues found. Consumers seemed to not be seriously concerned about these issues with tourism-related products and applications.

Adam D. Thierer connects the dots by addressing security concerns without derailing innovation¹⁴: “Privacy and security are important values worthy of attention, but so too are innovation, entrepreneurialism, economic growth, price competition, and consumer choice … Although formidable privacy and security challenges are ahead, individuals and institutions will adjust in an evolutionary, resilient fashion, just as they adjusted to earlier disruptive technologies.” 

Hence, if the applications enabled by IoT technology are what the customers ask for, then IoT experimentation in tourism needs to continue. Privacy and security concerns about IoT are legitimate and deserve responses, yet DMOs should not paralyze in front of them. Consequently, consumer adoption of IoT enabled applications should be addressed by further research.

Defining end-value

The probing question regarding IoT’s worthiness for smart destinations seems to be the end-value. What do these solutions bring in as a return of investment? For this tourism destinations should weigh the social, economic and technical value these solutions create. At best, IoT technology can help to optimize the whole tourism service chain by producing truly customer-centric solutions: services and applications that the visitors need, not what destination managers or tourism businesses think they might want. Consequently, it can enhance visitor experience and destination competitiveness.

Then again, for smart destinations, the greatest value of IoT might simply lie in innovation. We cannot speak about smart destinations if we don’t have the guts to try something new. Kim Boes, Dimitrios Buhalis and Alessandro Inversini state that “smartness is driven by innovation and innovation drives smartness”⁸. Smart destinations should therefore consider that succeeding with IoT might even make them gain a good reputation. Do you want to be the first mover with IoT technology or let other destinations figure it out first?

References 

¹ Boes, K., Buhalis, D., & Inversini, A. (2015). Conceptualising smart tourism destination dimensions. In Tussyadiah, I. & Inversini, A. (Eds.), Information and Communication Technologies in Tourism 2015 (391-403). Lugano, Switzerland: Springer International Publishing.  

² Kitchin, R. (2014). The real-time city? Big data and smart urbanism. GeoJournal, 79(1), (1-14).

³ Nicolescu, R., Huth, M., Radanliev, P., & De Roure, D. (2018). Mapping the Values of IoT. Journal of information technology33(4), 345-360. 

⁴ Albastroiu, I. (2021). Challenges of IoT Technologies for Businesses and Consumers. Amfiteatru economic, 23(57), 321-323. 

⁵ Nitti, M., Pilloni, V., Giusto, D., Popescu, V. & Ardagna, C. (2017). IoT Architecture for a Sustainable Tourism Application in a Smart City Environment. Mobile information systems, 2017, 1-9. 

⁶ Dinu, V., Sorin, P., & Pop, I. (2021). Factors That Influence the Adoption of the Internet of Things in Tourism by Romanian Consumers. Amfiteatru economic, 23(57), 360-375. 

⁷ Robert, J., Kubler, S., Kolbe, N., Cerioni, A., Gastaud, E. & Främling, K. (2017). Open IoT Ecosystem for Enhanced Interoperability in Smart Cities – Example of Métropole De Lyon. Sensors , 17(12), 2849. 

⁸ Boes, K., Buhalis, D., & Inversini, A. (2016). Smart tourism destinations: ecosystems for tourism destination competitiveness. International Journal of Tourism Cities, 2(2), 108-124. 

⁹ Zach, F. (2016). Collaboration for Innovation in Tourism Organizations: Leadership Support, Innovation Formality, and Communication. Journal of hospitality & tourism research, 40(3), 271-290. 

¹⁰ Angelova, N., Kiryakova, G. & Yordanova, L., (2017). The great impact of internet of things on business. Trakia Journal of Sciences, 15(1), 406-412. 

¹¹ Zubiaga, M., Izkara, J., Gandini, A., Alonso, I. & Saralegui, U. (2019). Towards Smarter Management of Overtourism in Historic Centres Through Visitor-Flow Monitoring. Sustainability 11(24), 7254. 

¹² Autoriteit Persoonsgegevens. (2021). Dutch DPA fines municipality for Wi-Fi tracking. Retrieved 30 October from: https://autoriteitpersoonsgegevens.nl/en/news/dutch-dpa-fines-municipality-wi-fi-tracking 

¹³ Badii, C., Bellini, P., Difino, A. & Nesi, P. (2020). Smart City IoT Platform Respecting GDPR Privacy and Security Aspects. IEEE access, 8, (23601-23623).

¹⁴ Thierer, A. (2015). The Internet of Things and Wearable Technology: Addressing Privacy and Security Concerns without Derailing Innovation. Richmond Journal of Law and Technology, 21(2). 1–118. 

How can we apply Harry Potter’s sorting hat into tourism marketing?

 

The novel Harry Potter and the Philosopher’s stone by J.K. Rowling (1997) is the first to introduce the concept of the Sorting Hat. The Sorting Hat is a hat that has a magical ability to sort the first-year pupils of Hogwarts School of Witchcraft and Wizardry into their “houses”, i.e. the groups of pupils that they will represent through their school years. The House-system is used in schools across the English-speaking world but evidently, the Sorting Hat exists mainly in J.K. Rowling’s fantasy literature. But does it really have to?

In the book, the Sorting Hat bases its conclusions on pupils’ values and characteristics. Each of the houses possesses different sets of qualities and values that they expect their pupils to share. The Hat divides pupils into houses most suitable for their characteristics. Although being quite strict in the novel due to there being only four houses, the concept is interesting from the marketing point of view. The idea of a marketing factor guiding customer behavior towards goods and services closest to their likings and values sounds almost too good to be true. What kind of sorting hat could we utilize in tourism marketing and what could it do for the tourism industry and tourist experience? What would happen if we could outsource the destination and activity decision-making process and turn around the basic idea of targeted marketing? Let’s find out.

Why do we travel?

To utilize a sorting hat -concept in the tourism industry, we must understand the basic nature of tourism: why do we travel? What good do we achieve by sitting in an airplane for hours or by staring at some reindeers in Lapland? According to Philip Pearce (2005) reasons for travelling and decisions made before, during and after a trip can depend on numerous variables. Demographic and psychographic qualities, style of travelling and destination for example are qualities that can be used to categorize tourists. Sine Heitmann (2011) proceeds to define tourism motivation through a tourist’s cultural background. But on our way to find out why do we travel; the answer lies in psychology like it so often does.

To understand tourism motivation, it is essential to understand the concept of motivation. Seppo Iso-Ahola (1982), has defined motivation as guiding energy that makes one pursue goals and make essential decisions on the way there. Motive, a reason for pursuing something, is an awareness of future satisfaction. Satisfaction is a collaboration of push and pull factors – a theory often used to describe a person’s reasons for travelling. Push and pull factors form the decision by giving a tourist a reason to leave and a destination to pursue. Awareness of future satisfaction provides energy to make essential decisions and to pursue one’s goals and therefore the motivation to travel is formed.

Sine Heitmann (2011) adds the need for travelling into the definition of tourist motivation. She sees a more practical approach to decision-making and sees there a need and series of actions made to fulfil that need. This is highly similar to push- and pull- theory. The need for travelling is a kind of push factor and the pull factor needs something touchable from tourists’ desires and needs. Therefore, the need and fulfilling that need can be a link in a tourist’s decision-making process and defines the question of why we travel; we travel because we have a need or desire to do so.

Targeted marketing in a nutshell

By understanding who we are dealing with and what guides their motivation, we can start to understand why they travel. A tourist’s values, qualities, travelling experience, area of living and especially personal desires determine a lot when making decisions. But, as a tourism marketing student, I can’t ignore the impact of marketing on a tourist’s decision-making process. After all, marketing is a bridge between customers’ needs and desires and the market’s offerings, a way to match supply and demand if you will (Dolnicar & Ring 2014). But tourists aren’t a homogenous group with their needs and desires. Therefore, we need to decide who we are selling our products for and to recognize our main customers.

Targeted marketing is a way of marketing that allows marketers to target marketing efforts for distinct customer segments (Camilleri 2017). This happens by categorizing our customers and by defining the mutual qualities between our customers and their needs and desires. So, in a nutshell, targeted marketing is a way of marketing your products for those who are willing to buy them and need them by identifying needs associated with your products. This seems quite simple: by knowing my customers and products I could avoid wasting my resources on selling stuff for someone who isn’t interested. Targeting my marketing efforts can have a nice effect on both customer retention and satisfaction and my company’s cash flow.

When written like this it seems that someone already has invented the Sorting Hat long before J.K. Rowling did. But what about if you don’t know that you are part of someone’s intended customer segment and target group? Probably someone must have thought of this and marketing today probably can reach even those not aware of their status as someone’s target group. But could there be a slight niche or even a little bit of Blue Ocean (cf. the Blue Ocean Strategy by Kim and Mauborgne from 2004) for Harry Potter’s Sorting Hat in that small question?

What is a personality quiz?

According to Verywell Mind -webpage, a personality test or a quiz is a test or a tool that defines different qualities and characteristics of a tested person and assesses human personality. Personality tests are used in the medical world and can help diagnose, therapeutic processes and is closely associated with studying human behavior. Personality tests can also be used as entertainment. When talking about entertaining personality tests the term is usually personality quiz. The Internet offers a wide variety of different personality quizzes and, not surprisingly, there are also many quizzes that tell the tested persons their Hogwarts houses, like the Sorting Hat.

Photo by Unsplash.com

Apparently, the author of Harry Potter -novels has constructed an online quiz to work as a Harry Potter fans’ sorting hat. There have even been several studies concerning this personality test and according to Jacob et al. (2019) the test possesses some slight accuracy from behavior study and psychology point-of-view. They figured that the test works mainly by defining qualities and values in the books commonly associated with each of the houses and by forming heavy stereotypes the test can guess with some accuracy the house most suitable for the one taking the test.

The Sorting Hat

Although not being the most accurate personality test available and working mainly on stereotypes, the idea behind the study and the value-guided functionality of the test is highly interesting. After all personal values have, according to Pearce (2005), Iso-Ahola (1982) and Heitmann (2011), a major role in all consuming-related decisions and are a key element in brand communication according to Lisa Sounio (2010). Therefore, this sorting hat theme isn’t that far-fetched. Could we transport this into marketing tourism products?

Targeted marketing might not recognize all the potential customers due to it focusing commonly on recognized customer personas and tourist segments. This means that those who don’t realize they are someone’s target group can get left out of fulfilling and interesting products and services. The companies behind these services lose potential income and visibility by missing people who might be interested in their products. But this scenario can’t be totally avoided because targeting marketing for specific segments depends highly on potential tourists knowing what they want. If a tourist is unaware of being possibly part of a target group, the tourist can’t be reached due to a lack of former activity and interest. Then that tourist might stay as a potential customer also in future. But hypothetically, could we turn the situation above upside down and outsource the customer segmentation for the tourists themselves?

When thinking about the push- and pull- factors, the necessary part is the push, the need and the desire to travel. Would it be possible to focus as a marketer, a representative of a tourism agency or an OTA only advertising the pull factors of a given area? Then we could let the tourists determine their traveler profile and suitable locations, travelling styles and other characteristics that usually are done by marketing specialists. Mehmetoglu et al. (2010) have studied the significance of values in tourist behavior and decision making. They defined personal values to be reliable predictors of consumer behavior. This is supported by Pearce’s (2005) and Iso-Ahola’s (1982) findings. The meaning of values in consumer behavior is an interesting finding in the context of Jacob’s & al. (2019) study. The view of Harry Potter’s sorting hat is highly based on personal values in both novels and Harry Potter’s author’s Sorting Hat -quiz.

Photo by Unsplash.com

At this point, an OTA-based, semi-entertaining tourist personality test is starting to sound quite interesting to me. A common OTA possesses quite a few tourism companies more on its site than the Hogwarts School possesses houses. Therefore, the accuracy of an OTA-based tourist personality test should be higher than that introduced by J.K. Rowling – at least when executed properly. This could take some pressure of segmenting and categorizing targeted groups. Through the test’s psychological and value-guided base the decision of a tourist would be scientifically valid. An OTA-based tourist personality test could therefore improve tourist retention and satisfaction.  This concept would also reach those potential tourists that get left out of target groups because the only upfront information needed here is if there is a need or desire to travel.

This is highly hypothetical and out of my own substance but as an idea, I think it is worth playing with. After all, marketing is an innovative field of work and what would be a more innovative approach than Harry Potter. Sometimes it can be useful to rattle one’s way of thinking because it can bring up something no one hasn’t thought about before. OTA-based, psychological and value-guided tourist personality test definitely is something ponder. Would you like to get sorted for your next journey?

 

References

Camilleri, M. A. (2018). Market Segmentation, Targeting and Positioning. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 4, pp. 69-83). Springer, Cham, Switzerland.

Dolnicar, S., & Ring, A. (2014). Tourism marketing research: Past, present and future. Annals of Tourism Research, 47, 31-47.

Iso-Ahola, S. (1982). Towards a social psychological theory of tourism motivation. 1982 Annals of Tourism Research, 256-262.

Jakob, L., Garcia-Garzon, E., Jarke, H., & Dablander, F. (2019). The science behind the magic? the relation of the harry potter “Sorting hat quiz” to personality and human values. Collabra. Psychology, 5(1)

Mehmetoglu, M., Hines, K., Graumann, C., & Greibrokk, J. (2010). The relationship between personal values and tourism behaviour: A segmentation approach. Journal of Vacation Marketing, 16, 17-27.

Pearce, P. (2005). Tourist behavior: Themes and conceptual schemes 

Robinson, P., Heitmann, S., & Dieke, P. (2011). Research themes for tourism. International Journal of Contemporary Hospitality Management, 24(6), 31-45.

Sounio, L. (2010). Brändikäs

 

 

Why travel businesses should utilize data-driven marketing in tourism?

We have moved to an era where data is omnipresent and available to us with a few clicks. People are able to access desired information whenever and wherever they need it thanks to the various information technologies and the world wide web.  When considering the travel industry, not only are the tourists benefitting from the abundance of information but so are the travel companies. The tourists leave behind a great deal of traces (i.e. data) when considering, where to travel and what to do in the destinations. This available data in turn creates huge opportunities for the travel companies on how to communicate, interact and offer services for the tourists1. Essentially, this is what data-driven marketing (DDM) is trying to accomplish.

This blog covers what the DDM really means, and why travel businesses should take advantage of it in their marketing operations to stay competitive in the market. Its application brings many benefits for the travel companies, but this text highlights the 3 key benefits.

 

What is Data-Driven Marketing in Tourism?

Data-driven marketing is a marketing approach and a process of collecting complex data through online and offline channels that intends to analyze the data to understand the behaviour and purchasing patterns of the consumers. The data, which is gathered with the help of information technologies, assist to identify the needs and influencing factors of the consumers at each stage of their decision-making process. Consequently, the collected information supports companies to develop a marketing strategy and in connecting with their target audience2.

To understand DDM better, it is crucial to get familiar with the term “Big Data” that is nowadays often used with data-centric marketing due to the omnipresent information. Big Data refers to storing and collecting massive amounts of complex, structured and unstructured data, which is later used to gain a competitive edge by companies3. It offers the companies the capacity to collect and analyze data with an unprecedented scale and manner4.

Next in the following sections, I uncover how the era of Big Data and its influence can help travel companies to excel their DDM approaches. As a result, 3 key benefits of DDM are presented.

 

#1 Better understanding of the customers

Tourists roaming on the internet and communicating with their peers and their preferred brands entails of leaving a lot of information behind. What the travel companies can do with this information collected from various digital sources such as websites, social media, review sites and mobile applications, is that they can analyze it to better understand the customer. By knowing what their key customers want, desire, need and are talking about helps the companies to better serve, communicate and build a meaningful relationship with them. In other words, using Big Data helps travel companies in delivering customer-centric marketing5.

 

Picture from Unsplash.com

 

I personally regard that the issue of travel companies is not the ability to collect customer data, but rather how to make sense of it and utilize it in a customer-centric manner. The answer lies in data mining techniques, such as RFM-model (Recency, Frequency, Monetary value), that allows marketers to better segment and analyze their customers6. Daqing Chen, Sai Laing Sain and Kung Guo conducted a case study using data mining techniques to help a UK online retailer to better comprehend its customers, and as a consequence, practice customer-centric marketing more effectively. RFM-model formed the foundation of the study by segmenting the customer groups, but also techniques such as K-means clustering algorithm and decision tree induction were used to gain information about the key customers7. With the help of the research, they were able to find the most valuable customer groups and identify key features of them. The results provided valuable data for the companies that can be used for customer-centric marketing to personalize the communication with each customer segments.

Aforementioned data mining techniques can similarly be used for tourism companies to identify the key characteristics of various target groups and to become aware of the most valuable customers. Understanding these key customers, and providing them with personalized content and communication will subsequently open doors for building stronger relationships and ultimately even customer loyalty.

 

#2 Enables informed tactical and strategic marketing decision-making

One of the most important skills of data-driven marketers is the ability to comprehend business analytics. As Kean, Prentice, and Ferguson refer, analytics means “the use of data and related business insights developed through applied analytical disciplines … to drive fact-based planning, decisions, execution, management, measurement and learning.” Making use of business analytics can provide valuable insights in marketing strategic-decision making by utilizing its three functions: descriptive (i.e. understanding the past and current business performance), predictive (i.e. predicting future performance) and prescriptive (i.e. identifying the best alternative to achieve business objectives) analytics9. Exploiting these various analytics interchangeably will help travel companies to make more informed marketing decisions in a tactical and strategic level.

 

Picture from Unsplash.com

 

Wolfram Höpken, Tobias Eberle, Matthias Fuchs and Maria Lexhagen studied how autoregressive time series forecasting approach (i.e. prediction based on past arrivals alone) together with travellers’ web search behaviour can be used for predicting tourist arrivals. More precisely, the study was conducted for Swedish mountain destination Åre using the arrival data and Google Trend-based search data from a time period of 2005-2012 of four major target markets (i.e. Denmark, Finland, Norway, and the United Kingdom)11.

The findings revealed that the travel-related search queries indicate the opportunity to increase the accuracy of predicting tourist arrivals compared to using only past arrivals. The results also showed the various travel planning and search behaviours of the studied target markets. For instance, Finnish travellers started first searching for lodging options in Åre, followed by the destination queries as a whole. The closer the arrival of the Finnish tourists came, the more skiing-oriented the search queries became. These insights imply that these results can be used in marketing to better understand the market trends and the decision-making process of tourists11. Therefore, travel companies that are collecting similar data can steer their tactical and strategic marketing approach to reflect the data. To use such data for the personalization of the interactions, more informed targeting and segmentation of the key customer segments will assist in creating valid and justified marketing tactics and strategies, which eventually lead to increased business opportunities.

#3 Increases profitability

When a company collects sufficient amount of relevant marketing data of its customers and executes it as a part of its tactical and strategic marketing approach in a customer-centric manner, the likelihood of driving successful marketing performance is obviously much higher. As a consequence, marketers should harness big data by engaging in data-driven marketing to assist travel companies in detecting the right customers to attain profitable business outcomes. Applying DDM in decision making improves effectiveness and optimizes the return on marketing investment (ROMI). Moreover, DDM techniques focus on the analysis of internal and external data of the company. By integrating the information into valuable insights, travel companies are able to acquire new customers or strengthen the relationship with existing ones. Eventually, this can result in reduced costs and an increase in the company’s productivity and efficiency2.

 

Picture from Unsplash.com

 

In 2012 Columbia Business School surveyed 253 corporate marketing executives, with a purpose to find out the changing practices among large corporate marketers (90% of the corporates had global annual revenue of over $50 million) in the following areas: data collection and usage, marketing measurement and ROI (return on investment), and the integration of digital and traditional marketing12. The found out that nearly all (91%) believed that successful brands use customer data to drive marketing decisions. In addition, 70% regarded that their marketing practices are more informed than ever before and that they are aware of the need to justify the decisions financially. The somewhat contradictory result to this was that 57% of the respondents were not basing their marketing budgets on any ROI analysis12. In my opinion, this suggests that even though their marketing was conducted largely on the basis of data, its contributions in terms of monetary value were not evaluated. This is problematic as in this case the marketing practices are more inclined towards “gut-feeling” than on real monetary value. The practices that are based on historical data and can indicate to be increasing ROI are invaluable for the managers in any business. To conclude, being able to verify marketing ROI on the basis of past and predictive data should be regarded highly by the travel business marketers to make right and cost-effective decisions.

Make data-driven marketing in tourism your competitive edge

By now you should be able to understand what the phenomena of data-driven marketing means and be more familiar with some of its interrelated concepts. Most importantly, you are now aware of its capabilities and of the three key benefits it provides for travel businesses. As a conclusion, in order for travel companies to flourish and differentiate from the competitors in the era of Big Data, the data-centric approach needs to be taken into the centre to make informed marketing decisions to satisfy the ever-demanding customer needs. Not only will it enable to gain a competitive edge over others, but also increase the cost-effectiveness and ROI of the marketing approaches.

Acknowledgements

This blog post was written as a part of the Information Technology in Tourism Business course at the International Master’s Degree Programme in Tourism Marketing and Management (University of Eastern Finland Business School). Read more about the programme at https://www.uef.fi/tmm

References:

1 Camilleri, M.A. 2019. The Use of Data Driven Technologies in Tourism Marketing. In Ratten, V., Alvarez-Garcia, J. and De l Cruz Del Rio-Rama, M., Entrepreneurship, Innovation and Inequality: Exploring Territorial Dynamics and Development, 1st Edition, Routledge, Oxford, UK.

2 Grandhi, B., Patwa, N. & Saleem, K. 2020. Data-driven marketing for growth and profitability. EuroMed Journal of Business. Vol. ahead-of-print No. ahead-of-print.

3 Shah, D, & Murthi, B. P.S. 2020. Marketing in a data-driven digital world: Implications for the role and scope of marketing. Journal of business research. Vol. ahead-of-print No. ahead-of-print.

4 Lazer, D., Pentland, A., Adamic, L., Aral, S., Baraba´si, A., Brewer, D., Christakis, N., Contractor, N., Fowler, J., Gutmann, M., Jebara, T., King, G., Macy, M., Roy, D. & Van Alstyne, M. 2009. Computational social science. Science, vol. 323, no. 5915, pp. 721–723.

5 Camilleri, M.A. 2015. Using Big Data for Customer-Centric Marketing. In Evans, C. (Ed) Handbook of Research on Open Data Innovations in Business and Government, IGI Global, Hershey, USA.

6 McCary, J.A. & Hastak, M. 2005. Segmentation approaches in data-mining: A comparison of RFM, CHAID, and logistic regression. Journal of Business Research 60 (2007) 656–662.

7 Chen, D., Sain, S. L., Guo, K. 2012. Data mining for the online retail industry: A case study of RFM model-based customer segmentation using data miningJournal of Database Marketing & Customer Strategy Management. 19 (3), 197-20.

8 Kiron, D., Prentice, P. K., & Ferguson, R. B. 2014. Raising the bar with analytics. MIT Sloan Management Review, 55(2), 29–33.

9 Kunc, M., & O’Brien, F. A. 2018. The role of business analytics in supporting strategy processes: Opportunities and limitations. Journal of the Operational Research Society Published Online.

10 Kumar, V., Chattaraman, V., Neghina, C., Skiera, B., Aksoy, L., Buoye, A., & Henseler, J. 2013. Data‐driven services marketing in a connected world. Journal of service management. 24 (3), 330-352.

11 Höpken, W., Eberle, T., Fuchs, M., & Lexhagen, M. 2018. Google Trends data for analyzing tourists’ online search behavior and improving demand forecasting: the case of Åre, Sweden. Information technology & tourism. 21 (1), 45-62.

12 Rogers, D., & Sexton. 2012. Marketing ROI in the Era of Big Data. The 2012 BRITE/NYAMA Marketing in Transition Study. Accessed on the 1st of November 2020. https://www.iab.com/wp-content/uploads/2015/05/2012-BRITE-NYAMA-Marketing-ROI-Study.pdf.

 

 

Sharing economy – five things everyone in the tourism business should know

 

The sharing economy has grown its popularity as a phenomenon in the past ten years a lot. Still, it is surprising how hard the definition is or how academics are finding the same issues which need further research. Defining sharing economy (from now on SE) is difficult since it has many other names such as collaborative consumption, access economy, peer-to-peer services and the gig economy. Roughly, SE is people using internet to share items or services. Botsman and Rogers (2010) have defined a great practical example of SE. In American households, there are 50 million power drills just collecting dust. Often people would have just needed to make a hole, not necessarily buy the tool. How easy it would be just to borrow someone’s power drill when you know that you need it only once? SE is about utilizing already existing unused resources better.

Sharing itself is not a new idea, it’s something you learn as a child. SE can be found in several fields, for example, accommodation, transportation, finance and consulting. Sutherland and Jarrahi, M. (2018) found out in their review article that the most common examples referred are Airbnb, Uber, Amazon mechanical Turk, Taskrabbit and Zipcar. Other examples in Finland are for example Facebook ridesharing groups, Restaurant day, Mesenaatti.me or Nappi Naapuri. Moreover, in Finland houses often have a common sauna or washing machine, which are simple forms of SE.  Why in the tourism business you should pay attention to SE?

Nature of sharing economy

The first thing everyone in the tourism business should know is the nature of SE and the relationship to tourism and hospitality. Cheng (2016) has studied in his literature review about SE in general, but also how it’s related to tourism and hospitality. In his other article with Edwards (2017) he continued with this topic by using automated content analysis to compare the current academic literature and news topics about SE in tourism and hospitality. Tourism is a pioneering field in SE. It is possible to share homes, cars, bikes, working space for business travelers, meals, expert local knowledge (local guides) or the experiences and knowledge in general (social media or Wikipedia). It’s important to recognize your competitors as a traditional tourism entrepreneur or seek alternatives when planning to start a new business. SE is about matchmaking (Sutherland & Jarrahi 2018). By using digital platforms, users can find people offering their resources. Additionally, companies can utilize the platforms to find workers, which is the key concept in flexible gig jobs. Temporary workers are vital to many tourism businesses. (Cheng 2016; Cheng & Edwards 2017; Sutherland & Jarrahi 2018)

Picture 1: https://images.unsplash.com/photo-1558420488-0ed4bebf615d?ixlib=rb-1.2.1&ixid=eyJhcHBfaWQiOjEyMDd9&auto=format&fit=crop&w=1189&q=80

Changes in consumption trends and lifestyle

In order to understand why SE is blooming, we move on to the second point, being current trends in consumption. New generations are becoming to the peak of consuming age and digitalization is not a new thing for them. According to European Travel Commission (2016) more and more people have mobile access and mobile internet. On the other hand, 65 % of consumers are carefully budgeting their money every month.  Hawlitschek et al. (2018) researched consumer motives for peer-to-peer sharing. They found out that motives could be connected and presented with the theory of planned behaviour. Motives to choose SE service are financial benefits, uniqueness, variety, social experience, ubiquitous availability, ecological sustainability, anti-capitalism, modern lifestyle and sense of belonging. This is supported by a study about SE and lifestyle changes by Niezgoda and Kowalska (2020). Respondents wanted to embody their lifestyle when travelling and it affects the choices made. SE offers consumers better value for money, sustainability and authentic experiences. (ETC 2016; Hawlitschek et al. 2018; Cheng 2016; Niezgoda & Kowalska 2020)

Create trust

A dealbreaker in SE is trust. If you can create trust between users and providers, you are on the way to success. Factors beneficial to trust-building are reputation scores, review systems and profile pictures. It’s better if the platform only allows us to make a review after actually using the service to guarantee the trustworthy of the rating. Möhlmann et al. (2019) suggest that data is transferrable between platforms and one option could be to transfer good reputation from one online platform to another. Therefore, when creating a new account, you could in a way prove to be a reliable person. Linking pages is possible, but in practice, this idea is controversial regarding GDPR and data security. It’s not only about trusting “a stranger” but also about trusting the platform. Indicators that are the functionality of the platform and how it is managing the community of all users. (Möhlmann et al. 2019; Sutherland & Jarrahi 2018)

Picture 2: https://images.unsplash.com/photo-1521791136064-7986c2920216?ixlib=rb-1.2.1&ixid=eyJhcHBfaWQiOjEyMDd9&auto=format&fit=crop&w=1050&q=80

Another issue in the trust is instructions for both parties what to do if something goes wrong. What if you crash with a carsharing vehicle? What if the Couchsurfing host doesn’t show up? According to the European Commission’s study (2017) around half of the users had faced a problem over the past year using SE platforms. More than half of the respondents did not know or was not sure how to act in a problem scenario. Here rises the issue many studies state too, the slowness of new regulations and inflexible insurances. One way to tackle this problem is to have transparent and clear practices of trust and safety (Park & Tussyadiah 2019). For instance, the platform could have Q&A-page or a trust advisory board.

Tackle the most common problems

As a fourth thing to know about SE, it’s good to be aware of the most common issues. The government level with regulations has not developed as fast in research or in practice (Cheng 2016). Paying taxes, social security of workers, impacts on rents and apartments available on the market, unfair competition and searching loopholes instead of a legitimate business model are worrying people (Cheng 2016; Cheng & Edwards 2017). In some cities, such as Berlin or Paris, the policymakers want to ban Uber or/and Airbnb. The confusion between stakeholders is not creating trust. According to Tussyadiah and Pesonen (2016) the lack of regulation is decreasing trust between users and SE’s acceptance in the market. Then again Dredge and Gyimóthy (2015) are criticizing SE in their article by for example paying attention to the circumstances of the workers. Workers don’t have safety nets or union protection. In SE there is a risk for the black market. If that was not enough, SE and mainly Airbnb have been accused to amplify over-tourism.

Sometimes the users’ motives/impacts are questionable. If users are not receiving economical benefits, they are not willing to use SE services. If the cost for an Uber ride is remarkably cheaper, it may encourage people to use a taxi instead of public transportation, which is not very sustainable. When the main motivation is just to have a cheaper price, it’s wrong to claim to be interested in the environment. (Tussyadiah & Pesonen 2016; Cheng & Edwards 2017)

Picture 3: https://images.unsplash.com/photo-1577401239170-897942555fb3?ixlib=rb-1.2.1&ixid=eyJhcHBfaWQiOjEyMDd9&auto=format&fit=crop&w=1100&q=80

Extended reach

Finally, the fifth point: extended reach of SE. The costs of starting a new tourism business by utilizing SE and API (Application programming interface) platforms are low. Never before it has been easier to reach a large crowd of providers, consumers or resources. This works both ways, when you are in the need to buy or when you have a skill or an asset to sell. Bigger platforms offer visibility and more potential users. However, if you are starting a new SE system, it’s challenging to compete against the big platforms, e.g. Airbnb. (Sutherland & Jarrahi 2018)

Sharing economy for future

https://images.unsplash.com/photo-1552986916-199296e1dfb9?ixlib=rb-1.2.1&ixid=eyJhcHBfaWQiOjEyMDd9&auto=format&fit=crop&w=334&q=80

SE has the potential for making the future more sustainable. For example, Guo et al. (2019) studied the impact of Didi Chuxing and Uber on new cars sales in China. Turned out that these platforms reduced the sales of new cars in the examined years 2013-2015. If this trend would continue, there wouldn’t be a need to produce so many new cars, which is influencing the amount of private motoring in a long run. In tourism, this same could be implemented in e.g. activity equipment. You don’t need your canoe or tent all the time, so instead of buying a new one and using it once, you could borrow it from someone. Furthermore, SE is one way to deduct the need for new products and to influence the environment. It can also be a way to have social interaction by helping people. SE cannot be overlooked, but it does require more research and development. Hopefully, by solving the main issues, it is possible to enjoy the best SE has to offer.

Acknowledgements

This blog post was written as a part of the Information Technology in Tourism Business course at the International Master’s Degree Programme in Tourism Marketing and Management (University of Eastern Finland Business School). Read more about the programme at https://www.uef.fi/tmm

References:

Botsman, R. & Rogers, R. (2010). What’s Mine Is Yours: The Rise of Collaborative Consumption. Harper Collins, 2010. ISBN: 0062014056, 9780062014054

Cheng, M. (2016). Sharing economy: A review and agenda for future research. International Journal of Hospitality Management, 57, 60–70. https://doi.org/10.1016/j.ijhm.2016.06.003

Cheng, M., & Edwards, D. (2017). A comparative automated content analysis approach on the review of the sharing economy discourse in tourism and hospitality. Current Issues in Tourism, 22(1), 35–49. https://doi.org/10.1080/13683500.2017.1361908

Dredge, D., & Gyimóthy, S. (2015). The collaborative economy and tourism: Critical perspectives, questionable claims and silenced voices. Tourism Recreation Research, 40(3), 286–302. https://doi.org/10.1080/02508281.2015.1086076

Guo, Y., Li, X., & Zeng, X. (2019). Platform Competition in the Sharing Economy: Understanding How Ride-Hailing Services Influence New Car Purchases. Journal of Management Information Systems, 36(4), 1043–1070. https://doi.org/10.1080/07421222.2019.1661087

European Travel Commission (2016). Lifestyle trends & tourism: How changing consumer behaviour impacts travel to Europe. ISBN: 978-92-95107-06-9

Hawlitschek, F., Teubner, T., & Gimpel, H. (2018). Consumer motives for peer-to-peer sharing. Journal of Cleaner Production, 204, 144–157. https://doi.org/10.1016/j.jclepro.2018.08.326

Jourová, V. (2017). Key findings about problems consumers face in the collaborative economy. European Commission fact sheet June 2017. Available: https://ec.europa.eu/info/sites/info/files/key_findings_about_problems_consumers_face_in_the_collaborative_economy.pdf [Accessed 30.10.2020]

Möhlmann, M., Teubner, T. & Graul, A. (2019). Leveraging trust on sharing economy platforms: reputation systems, blockchain technology and cryptocurrencies. In Belk, R., Eckhardt, G., Bardhi, F., & Arvidsson, A. (2020). Handbook of the sharing economy, 290-302. Edward Elgar Publishing. IBSN: 9781788110549

Niezgoda, A., & Kowalska, K. (2020). Sharing Economy and Lifestyle Changes, as Exemplified by the Tourism Market. Sustainability (Basel, Switzerland), 12(13), 5351–. https://doi.org/10.3390/su12135351

Park, S., & Tussyadiah, I. (2019). How Guests Develop Trust in Hosts: An Investigation of Trust Formation in P2P Accommodation. Journal of Travel Research, 59(8), 004728751988465–1412. https://doi.org/10.1177/0047287519884654

Sutherland, W., & Jarrahi, M. H. (2018). The sharing economy and digital platforms: A review and research agenda. International Journal of Information Management, 43, 328–341. https://doi.org/10.1016/j.ijinfomgt.2018.07.004

Tussyadiah, I., & Pesonen, J. (2016). Drivers and barriers of peer-to-peer accommodation stay – an exploratory study with American and Finnish travellers. Current Issues in Tourism, 21(6), 703–720. https://doi.org/10.1080/13683500.2016.1141180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

How to manage digital customer relationships in tourism?

Have you had problems to manage customer relationships? Don’t you know how to keep your customers satisfied and loyal? Are you unsure, how to maintain customer relationships, especially in a digital world? This blog post will help you to understand how to deal with customers in tourism. Before we move on to the practical part it is worthwhile to take a little sneak peek behind the curtains to understand the history and reasons for relationship marketing.

Meaning of customer relationship marketing

 Francis Buttle studied the history, meaning and characteristics of relationship marketing.¹ He found that it is about healthy relationships including concern, commitment, trust and service. Meaning of relationship marketing started to grow as a term and strategy in early 1990 after the booms of mass marketing and customer segmentation. Behind this rising was incremental competition. Also, a need to stand out other ways when it was not possible to compete with the quality of products anymore.

Nowadays your product only is not enough to beat your rivals. Rather you need high-class service and focus on your customers. Marios Sotiriadis has researched business relationships in online distribution channels.² He discovered that internet has changed tourism markets from a consumer-centric market to a consumer-driven market. That means there is more competition in the online tourism industry. So, markets are today more consumer- and technology-driven. But what are the profits of relationship marketing and why it should be maintained?

Goals and benefits of customer relationship marketing

Rodoula Tsiotsou and Ronald Goldsmith have studied the goals and benefits of relationship marketing to understand, why it is so valuable for companies.³  They showed that relationship marketing is nowadays one of the most important tasks of marketing managers. The main goal is to create long-term connections and involvements with consumers. You need to attract customers, maintain the relationships and enhance them.  Your customers will get lifetime value. Simultaneously your company will have a revenue stream, positive word-of-mouth (WOM) and repeated transactions.

Here are five steps what need to be considered if you want to reach customer relationships.³ Firstly, acquire your customers with advertisement, promotions or WOM. Before that, you, of course, need to know, who your customers are. Secondly, you have to retain your customers and create an emotional bond with them to keep them loyal. When you know your current customers there’s a possibility to develop your products and services even more personal. You can also ask for help from your loyal customers and have consultation and co-creation with them. Finally, you can try customer conversion with influencers to spread the positive WOM. But is relationship marketing always just positive and are there some risks to fail?

Christina Öberg has studied the pros and cons of relationship marketing.⁴ She founded that there can be both negative and positive effects in short- and long-term. Let’s focus now more on the long-term effects. If you are having a positive long-term relationship with your customer, it will give a great opportunity to develop your products and services more to personalize them. You will enjoy a stream of satisfied customers and get even more through positive WOM. That probably increases your revenue.

How to balance between different customer's needs? @Joshua Coleman / Unsplash

The risk to fail?

But there is the risk to develop your products too much to fulfil the need of one specific customer. People are individuals and not all of them want the same personalization. Try to find a balance between different customers. Developing products is expensive and when it is not working, it decreases your incomes and may affect a bad reputation. Both Öberg⁴ and Tsiotsou and Goldsmith³ stated that it is cheaper to keep your current customers than get new ones. Also having negative WOM is a larger risk than the benefits you will get through positive WOM. But how to avoid these risks and get more benefits? Keep reading if you want to learn how to manage digital customer relationships in tourism.

Irene Gil-Saura, María Eugenia Ruiz-Molina and Beatriz Moliner-Velázquez have researched customer relations and their loyalty in the tourism industry.⁵ They agree that it is better to maintain long-term relationships with the customer to give more value and to achieve commitment and loyalty. They also stated that in B2C business can be seen three aspects of relation benefits – confidence benefits, social benefits and special treatment benefits. These confidence benefits are psychological factors. Social benefits are bonding with customers and special treatment benefits are service customization and economic benefits. When all these three aspects are taking into account and balanced, it is easier to get a higher level of loyalty and create better relationships with customers. Special treatment benefits are the most used ways to achieve customer’s heart.

How to convert a connection to a relationship in 5 steps?
 1 Know your customers

Before you can manage and create relationships, you need to know your customers. Who they are and what they really want from your company? Why they are your customers and what you want to offer them? When you find the answers to these questions, you can move on to the next step.

2 Listen to your customers 

Christopher Reichstein and Ralf-Christian Härting have studied potentials of changing customer needs in the digital world.⁶ They found that customer relationship marketing is one of the core assets of the company to fulfil customer’s needs. That is why it is important to recognize needs and meet them. Especially in tourism digital services, digital marketing, data mining and online travel communities are important potentials of changing customer’s needs.

To be effective and offer something special, you need to listen to your customers. Anna Krizanova, George Lazaroui, Lubica Gajanova, Jana Kliestikova, Margareta Nadanyiova and Dominika Moravcikova have researched the effectiveness of marketing communication.⁷ They stated that to cover customer’s needs you need to focus on stimulating, developing and increasing sales.

3 Give Value

Not only needs play an important role in relationship marketing. Martina Gallarza, Irene Gil-Saura and Morris Holbrook have researched customer value in tourism services in meaning for a relationship marketing approach.⁸ They stated that relationship marketing is one of the most closely linked to the role of customer value. It makes it an important component of the customer’s decision-making process. When your products and services co-create value, it will also boost the positive WOM and increase transactions.

 4 Use Big Social Data to analyze and develop

In the digital world using and analyzing Big Social Data is necessary to beat your rivals. Maria Teresa Duomo, Debora Tortora, Pantea Foroudi, Alex Giordano, Giuseppe Festa and Gerardino Metallo have studied digital transformation and tourist experience co-design.⁹ They found that the meaning of creating value is in a key role. It is also essential to understand how to use Big Social Data and how it can strengthen digital collaboration and customer experience.  Technology has increased information sharing and value co-creation together with customers. Participate your customers to share their experiences by storytelling and giving value to encourage potential customers to choose your company.

Big Social Data and user-generated content appear to be key sources by managing customer relationships. You can utilize Big Social Data to develop your products and services to fulfil better your customer’s need.⁶ Social media and influencer marketing provides you with good opportunities to characterize your products. But remember to not personalize too much and follow ethical practices in data management.

 5 Know your business and be one step ahead

Especially in the tourism business is better to be careful with one’s own actions. The effects of negative WOM might be crucial. Do not overthink but keep your focus on customers and their needs. The tourism industry is now a consumer-driven market.

Ibrahim Yilmaz has researched service quality and marketing.¹⁰ He has used as a base of his research the refreshed version of the Service Quality (Gap) Model by Zeithaml, Berry and Parasuraman (1988). That model focuses on gaps between customer expectations and management perceptions in service quality. So, the dilemma is, how to fulfil the expectations and give quality service maintaining customer relationships at the same time. When the quality of your products and services are good, you will more likely get positive WOM and more loyal customers.

 

To sum up, remember to attract, maintain, develop and enhance your customer relationships. You cannot fully please everyone but try to find a happy medium and enjoy the flow. Give your customers a stage to express themselves in social media channels and encourage them to tell about their experiences and feelings. Listening is in a key role. Remember to reward your customers and create something new with good taste. Be you and people will value your achievements.

Acknowledgements

This blog post was written as a part of the Information Technology in Tourism Business course at the International Master’s Degree Programme in Tourism Marketing and Management (University of Eastern Finland Business School). Read more about the programme at https://www.uef.fi/tmm

References:

¹Buttle, F. 1996. Relationship Marketing – Theory and Practice. London: Paul Chapman Publishing Ltd, 1-8.

²Sotiriadis, M. 2018. Evolving destination and business relationships in online distribution channels – Disintermediation and re-intermediation. In Gursoy, D. & Chi, C (Editors),  The routledge handbook of destination marketing (488-501). New York: Taylor & Francis Group.

³Tsiotsou, R. & Goldsmith, R. 2012. Strategic marketing in tourism services. UK: Emerald Group Publishing Limited, 139-146.

⁴Öberg, C. 2011. Pros and cons of long-term customer relationship. In Farkas, V. (Editor), Customer Relations – Business issues, competition and entrepreneurship (129-141). New York: Nova Sciences Publisher.

⁵Gil-Saura, I., Ruiz-Molina, M-E. & Moliner-Velazquez, B. 2011. Customer relations and loyalty-based segmen-tation: A B2B approach in the tourism industry. In Farkas, V. (Editor), Customer Relations – Business issues, competition and entrepreneurship (115-128). New York: Nova Sciences Publisher.

⁶Reichstein, C. & Härting, R-C. 2018. Potentials of changing customer needs in a digital world – a conceptual model and recommendations for action in tourism. Elsevier: Procedia Computer Science 126.

⁷Krizanova, A., Lazaroui, G., Gajanova, L., Kliestikova, J., Nadanyiova, M. & Moravcikova, D. 2019. The Effectiveness of Marketing Communication and Importance of Its Evaluation in an Online Environment. In Cristobal-Fransi, E., Ramón, N., Ferrer-Rosell, B., Marine-Roig, E. & Martin-Fuentes, E. (Editors), Sustainable Tourism Marketing (28). Basel: MDPI.

⁸Gallarza, M., Gil-Saura, I. & Holbrook, M. 2012. Customer Value in Tourism Services: Meaning and Role for a Relationship Marketing Approach. In Tsioutsou, R. & Goldsmith, R. (Editors), Strategic marketing in tourism services (147-162). UK: Emerald Group Publishing Limited.

⁹Cuomo, M.T., Dordora, T. Foroudi, P., Giordano, A., Festa, G. & Metallo, G. 2020. Digital transformation and tourist experience co-design: Big social data for planning cultural tourism. Elsevier: Technological Forecasting & Social Change 162.

¹⁰Yilmaz, I. 2018. Service quality and marketing. In Gursoy, D. & Chi, C. (Editors), The routledge handbook of destination marketing (92-99). New York: Taylor & Francis Group.