Tourism: Contemporary Issues and Technological Advancements

Desklib provides past papers and solved assignments for students. This report analyzes the impact of technology on the tourism industry.

TOURISM: CONTEMPORARY
ISSUES

TABLE OF CONTENTS
Assessment 1...................................................................................................................................1
1.0 Introduction............................................................................................................................1
2.0 Critical review of key theories of technological innovation..................................................3
3.0 Technological development & tourism.................................................................................6
4.0 Discussion of key concepts....................................................................................................8
5.0 Critical discussion of the changing nature of tourism industry structure............................11
6.0 Critical evaluation of the competitiveness of the tourism industry.....................................12
7.0 Conclusion...........................................................................................................................14
Individual Reflection.....................................................................................................................15
References......................................................................................................................................17

LIST OF FIGURES
Figure 1: Five forces in tourism sector............................................................................................4
Figure 2: Competitiveness in tourism countries..............................................................................5
Figure 3: Tourism technology trends...............................................................................................6
Figure 4: Tourism value chains.......................................................................................................9

Assessment 1
1.0 Introduction
The tourism industry is service sector that is constantly facing several changes due to consumer
needs. The tourism firms manage its business operations in competitive area that introduces rapid
changes and high turbulence. It is important to initiate change, create new services and accept
market changes for better performance of industry. There are very less firms that are innovating
with research based minds. The innovations done in tourism are always not technical. The use of
digital transformation has helped in earning more, provided job, developed relations with buyers
that makes essential to understand technology in tourism that helps in identifying consumer
experience either offline or online.
ICT refers to Information Communication Technologies that is globally transforming the tourism
industry. It is aimed at driving new paradigm shift that has altered structures of sector with fresh
threats and opportunities. It dispenses power to customers by purchasing, customizing as well as
identifying tourism products with certain tools of development that distributes, manages as well
as develops products across world. It brings organisational competitiveness with strong tools of
promotion in tourism sectors (Xiang, et.al, 2015).
Schumpeter’s Theory for Technological Innovation (1939)
The business operations gets fluctuated when monetary investments are change that slower plans
of business expansion but theory says that innovation is determined as reason that fluctuates and
boost investments in tourism sector. The innovation in business brings changes in production, the
transportation, new product development, different industrial organisation, setting new market
etc. In context to tourism industry, innovation do not depict invention instead it is determines as
commercial applications for new technology, methods, energy sources and materials. It has two
approximation first aims on primary affect recieved from innovative ideas and approximation
second focuses on responses recieved in favour of innovative applications.
Semantics of Connection
1

Tourism sector has got tremendous development with Internet that has helped in transforming
society with regular information. The use of internet has helped in knowing consumer behaviour
and marketing research with websites and advertising strategies. It has provided opportunity to
information technology for reaching global customers displaying services and products of firms
that are planning tour packages and deals (Ukpabi and Karjaluoto, 2017). The semantic
connections has increased knowledge or growth of customers using mental models that helps
marketers to display in effective manner by online platforms by removing discrepancies by
models with improvement in information way. It has benefits by understanding communication
research, firm’s culture, structure and marketing research that plays important role in tourism
industries.
2

2.0 Critical review of key theories of technological innovation
Technological innovation in tourism is conceptualised for the innovation. It refers to process that
states significance of technology in organisation for innovating products and services of tourism
sector that is considered as success factor of boosting market competitiveness. It improves value
of business using technology that develops goods and services of tourism sectors. The tourism
industry requires technical innovation at regular times so that customers are attracted that raises
profits and revenues that will contributed in country economy (Benckendorff, et.al, 2019). Thus,
following is technological innovation model that is listed below:
Theory of Innovation Diffusion
The model of innovation diffusion depicts notion that says planned and spontaneous fresh ideas
are involved for developing product (Santacreu, 2015). Based on theory, it is crucial to focus on
change perception. If the person has through any idea that it is required to convert in product
innovation. There are various examples of innovation diffusion that includes vocational training,
creativity, Internet growth, and information technology outsourcing and information systems.
This is best model for increasing tourism product innovation that is based on latest technologies
that helps in solving various issues that might be faced by customers as well as employees
appointed in tourism firms. The theory contains four aspects such as innovation characteristics,
communication channels, social systems and time passage.
Porter’s Five Forces Theory in Tourism
The market of tourism has five factors that will directly impact business competitiveness. Thus,
it is important to analyse such factors to determine issues in industry that affects profitability, the
competitiveness and growth of tourism sector that includes:
 Threat of Substitute Goods – In tourism sector, firms are affected from new entree as
new businesses in sector progresses well enough. The competitors generally enter with
fresh ways and techniques to attract customers by services and several amenities (Boes,
et.al, 2015). Threat of product substitution is high as internet is taken as source of
promotion.
3

Figure 1: Five forces in tourism sector
(Source: Rodrigo, 2012)
 Bargaining Powers of Buyers – The tourist are vulnerable to internet platform that allow
to access price comparison within several competitors that increases bargaining power of
customers. Even internet has eliminated need of travel agencies, consultancies etc for
obtaining better services.
 Entry Barriers – At initial level the investments are high but strong communication
channels through internet platform helps in accessing potential resources and suppliers. It
has to expert competitiveness from rivals that make entry tougher.
 Rivalry within Existing Customers – The competition is fierce due to lower prices offer
by competitors. The industry has numerous services that make it more competitive. For
instance, customer wanting historic site for which nearest tourist firm can be selected
with low price that makes trip in budgets (Neuhofer, 2016).
 Bargaining Power of Suppliers – The industry has fewer chances of problems from the
supplier side. It gets affected when labour cost is high due to service handling in wider
section. Thus it is essential to bring skilled staff so that extra services can be managed in
low cost.
Competitiveness in Tourism Industry
4

Figure 2: Competitiveness in tourism countries
(Source: Strong Points of Tourism Industry, 2017)
There are various countries that are indulged in travel and tourism industry. The competitiveness
of tourism industry index helps in measuring various policies and factors set that aid in enabling
sustained growth of tourism development. It focuses on joining all stakeholders together so that
teamwork can be achieved with aim to improve competitiveness to boost national economies
(Knežević Cvelbar, et.al, 2016). It is thus, important to maintain market competitiveness with
innovation, new technologies, best ideas to preserve natural resources etc.
5

3.0 Technological development & tourism
In current world, technology has played significant role in travel and tourism industry growth by
last decade. It has provided huge help to sector by reducing cost, improved consumer experience
and services and increased operational efficiency. It helps in benefitting firms and consumers by
improving guest service systems, communication and reservations. The technology in tourism
sector has eliminated excess human labour by technical machines and tools. It is directly linked
with tourism industry as technology advancement changes working criteria of tourism sector that
helps in eliminating several issues that are associated with tourism (Giaoutzi, 2017). Following
are developments that have been done in tourism sector through technological advancement that
includes:
Figure 3: Tourism technology trends
(Source: Top Technology Trends, 2018)
Mobile Communications – It is latest and new way of reaching customers that has been adopted
by travel firms. The mobile is best technology that has served tourist by becoming travel agency,
6

tour guide, restaurant locator and map. In survey it was found that 45% of tourist utilise phones
while journeys and vacations that has make easier for them to reach expected and desired place
or destination.
Marketing and Internet – The tourism has gained success from internet platform. The first
impression is last that give positive experience from firm’s website. The consumer checks view,
pictures, destination etc from past customers (Kiráľová and Pavlíčeka, 2015). Thus, technical
method helps tourism to use ways of online advertising, online purchasing, blogs and social
media that helps in providing strong experience that is memorable to consumers that makes
bookings and journeys easier.
Therefore, it concludes that technology and travel industry is directly linked with each other as
development in technology helps in introducing new methods for maintaining travel industry that
makes easy for customers to obtain services and products according to their choice. Hence, factor
of technology has boosted operational quality of tourism goods and services by making it more
efficient that it helps in managing tough competitions in national and international markets. It is
provider of latest updates of services and destinations that creates consumer attraction successful.
7

4.0 Discussion of key concepts
In today’s businesses, there is attribute called competitive advantage that helps firms to perform
much better in front of rivals. It focuses on accessing natural resources, power sources, locations,
skilled labour, accessing fresh technology etc. In tourism sector, it is crucial to gain competitive
advantage for making firms successful and sustained by providing quality products and services.
The competitiveness in tourism helps to identify ability of firm by developing value of economy.
Thus it is important to utilise tourism resources and materials in better manner that can give the
services to customer for longer time. The tourism industry related firms must have competitive
advantage so that rivals can be managed easily (Evans, 2016). Thus, to maintain and identify
competitiveness in business there are various models that need to be initiated by firms so that
areas of development can be determined and success can be obtained at higher level.
Competitive Advantage Model
Treacy and Wiersema’s Model – The model is created using three value disciplines that requires
organisation to select one for gaining competitive advantage. There are disciplines that need to
be followed in tourism industry that includes the following:
 Operational Excellence – The creation of products and services using effective plans of
execution and operations that helps in reducing product cost. The major aim of factor is
on streamlining activities, volume counts, efficiency, supply chain management etc. This
is best disciplines that can be used for improving quality of tourism products in low rates
that helps in boosting sales and competitors will not be able to manage situation at all.
 Customer Intimacy – It states that firms needs to excel in consumer service and attention.
The packages must be tailored in such a manner that it provides best products, timely
deliveries for completing consumer expectations, reliability and concepts of lifetime
(Della Corte and Aria, 2016). This motive helps tourism industry to grow at rapid speed
by obtaining higher success that will be gained by satisfying consumer that will make
organisation more competitive.
 Product Leadership – It is important for becoming strong in brand marketing, innovation
and operational dynamics. Its aim is to innovate, develop, design, higher margins and
8

timey deliveries in short time. The best marketing plans and innovative ideas in tourism
products and packages will attract customers from global world.
Thus, it is important to use competitive models that help in dealing with market rivals that create
best reputation and profits by serving customers at whole level.
Concepts of Tourism Industry
The tourism industry is highly demanded sector that generate high revenues and profits by giving
various services and products (Iniesta-Bonillo, et.al, 2016). It includes various concepts that aims
on displaying services based on consumer requirements. It includes:
Figure 4: Tourism value chains
(Source: Gary Gereffi, 2018)
Value Chains – there are various services and products that are provided to customers that are
linked with each other according to categories. For instance, distribution department will focus
on independent people, agents and operators that provide information related to products as well
as destinations. Similarly, the service that is linked with each other is determined as value chains
that fulfil demand of customers by availing people and services within chains. Just like, lodging
provides small, large or luxurious hotels based on consumer needs (Cardenas and Byrd, 2016).
Disintermediation – It refers to strategy that helps suppliers to take use of websites and internet
for selling products to consumers that is determined as direct channel. In tourism, technologies
9