Value co-creation in smart tourism destinations

Abstract

Purpose

This study aims to describe the concept of smart tourism, placing emphasis on the smart tourism ecosystem and value co-creation concept within the system at a destination level. The work also summarizes the key challenges associated with smart tourism implementation and development.

Design/methodology/approach

The study was conducted as a critical literature review, discussing the outcomes of a wide range and scope of relevant academic literature on the chosen concepts.

Findings

Smart tourism can be described as the use of information and communication technology (ICT) technologies to facilitate and enrich tourism products, services and experiences. Within the smart tourism ecosystem, all stakeholders – customers, suppliers, intermediates, the public sector, service providers, destination management organizations and others –participate in the synergies and value co-creation, also share the benefits from it. The ultimate aim of a smart tourism ecosystem is to create sustainable economic, social and environmental benefits for all and promote destination competitiveness. Smart tourism implementation is also associated with several challenges, of which the most important are participation, an overwhelming amount of data, data privacy and technology adoption.

Originality/value

The paper provides a critical review of the recent and relevant literature in order to define and discuss the mechanisms of value co-creation in a smart tourism ecosystem and the challenges associated with it.

Citation

Garanti, Z. (2023), "Value co-creation in smart tourism destinations", Worldwide Hospitality and Tourism Themes, Vol. 15 No. 5, pp. 468-475. https://doi.org/10.1108/WHATT-06-2023-0070

Introduction

Technological developments in recent decades have initiated changes in all areas of our lives, including travel habits. Generally, technology includes many types of machines, software, programs and other tools that help tourists, tourism enterprises and stakeholders to provide overall experiences. Currently, information and communication technology (ICT) developments are shaping overall tourism (Xiang et al., 2021). Developments include: digital city guides, applications to help tourists plan and organize their trip with sites to visit with public transport, interactive walking and cycling tracks, an augmented reality application for tourism sites, digital tours, virtual intelligence-powered help to tourists, use of robots in services, intelligent tools to make tourism sites more accessible for all kinds of disabilities. These are just some of the examples as to how technology is embedded in tourism product and services.

Smart tourism is a concept that “refers to initiatives and approaches, usually at the destination level, that aims at harnessing the unique capabilities of smart technologies to achieve specific development goals” (Gretzel, 2021). There are several concepts used to describe smart tourism at the destination level: smart city and smart destination. Gretzel and Koo (2021) think that a smart city is a concept that can be used because it offers much scope to residents and smart tools can be applied to enhance the quality of residents' life. The smart destination is touristic, aiming to use smart tools to provide superior experiences to tourists. The authors also introduce the concept of a smart tourism city, which is a more holistic approach to achieving synergies and the well-being of all stakeholders.

Without a doubt, technological advancements are the key driving force behind smart tourism development. Yet smart experiences are rich and efficient and cannot rely on a single hardware or software system. Rather, technology is an integrated infrastructure (Bhuiyan et al., 2022) that promotes meaningful technological interaction with human and non-human actors. It is also very clear that one tourism site or object using interactive points, or one city application is not enough to consider a destination “smart”. Smart tourism destinations are those that integrate various tools and personalization in order to create an overall tourism experience (Buhalis and Amaranggana, 2015). From public Wi-Fi to smart device charging stations, from memorable and personalized experiences at cultural sites to applications that help plan a personalized trip, tourists want to live unique experiences.

The concept of personalization and smart tourism experiences can only be implemented and managed with stakeholder involvement (Buhalis and Amaranggana, 2015) in a systematic way, by forming an adaptive system (Jovicic, 2019). Tourism ecosystem is a concept used to explain the customer-public-private sector collaboration within the networked system, in order to promote smart tourism at a destination. The concept of value co-creation suggests that the value of a particular tourism product or service is not generated solely by the firm that created a specific product or service, but rather co-created by the firm together with stakeholders (Zhang et al., 2023). The pre-conditions of value co-creation are both “hard smartness” (infrastructure and technology) and “soft smartness” (innovativeness, leadership, creativity) (Gretzel and Koo, 2021).

Within the networks, value is co-created by all stakeholders, aiming to create sustainable economic, social, and environmental gains for all. It is also important to note that tourism destinations' competitiveness largely depends on the implementation of smart tourism tools (Cimbaljević et al., 2019), as visitors not only become more tech-savvy and use technologies more frequently but also demand unique smart experiences and products. In a highly competitive tourism market, destinations have to distinguish the unique properties that all stakeholders have identified and developed. The concept of value co-creation in the smart tourism ecosystem is further explored in this article.

Methodology

This study provides a critical literature review of the smart tourism concept. The literature search was conducted on Google Scholar, and a wide range and scope of academic studies were selected and included in the work. The search terms included “smart tourism”, “smart tourism ecosystem”, “smart tourism destination”, “smart tourism value co-creation” and “smart tourism challenges”.

Results and Discussion

Smart tourism and smart destination

“Smart” is extensively used as a buzzword to describe anything new and technology-driven, however, the “smart’ concept is actually an abbreviation of the concept self-monitoring analysis and reporting technology (SMART) (Papadopoulou and Maniou, 2021). Smart technologies in tourism and hospitality “use big data analysis, machine learning, and artificial intelligence to provide cognitive awareness to the objects which were in the past considered as inanimate” (Thakur, 2022). Smart tourism has achieved extensive interest not only in the tourism business environment but also academia. Kontogianni and Alepis (2020) conducted an extensive literature review of the period from 2012–2019 and concluded that the number of articles written on the topic of smart tourism significantly increases every year. Summarizing the key conceptual work on smart tourism, Mehraliyev et al. (2020) conclude that smart tourism comprises three main components “smart business ecosystems, smart destinations, and smart experiences, which are supported by data creation, processing, and exchange”.

Smart tourism is a complex system, that promotes the interaction of environment, network and technology, all supported by ICT developments (Shafiee et al., 2019). Smart tourism consists of three significant elements, namely:

1. The Internet-of-things (IoT)-connectivity among devices anywhere anytime,

2. Cloud services and

3. The end-user Internet service system (Bu et al., 2020).

These elements are used purposefully to enhance “tourist-centred” value co-creation activities and products, information sharing and the creation of tourist experiences. The destination can be considered truly smart when the real and virtual components of it are aligned in structural cohesion (Del Chiappa and Baggio, 2015).

In smart tourism destinations, the main advantages arise from (1) technology-embedded environments, (2) responsive processes at micro and macro levels, (3) end-user devices in multiple touch-points; and (4) engaged stakeholders that use the platform dynamically as a neural system (Buhalis and Amaranggana, 2013). However, in order for a destination to become a smart destination, several conditions have to be met. Shafiee et al. (2019) proposes a complex model that explains the adaption and penetration of the smart tourism concept at a destination. First, the context conditions are important predictors of destinations' ability to implement sustainable smart tourism strategies, which include economic, technological, environmental, social, cultural and infrastructure factors. Second, the causal conditions, such as ICT technology and its adoption, connectivity, the emergence of smart cities, global trends and economic and social development play a significant role. Government support is classified as a third and intervening condition. When all the conditions are favourable, the destination can develop as a sustainable smart tourism destination. Further on, Gretzel and Koo (2021) argue that integrated efforts by stakeholders are required to further develop smart tourism destinations and cities.

Smart tourism: ecosystem and value co-creation perspective

Gretzel et al. (2015a, b) propose that in the environment in which tourism businesses operate, there are sets of relationships among economic entities that are required to ensure the production, exchange and consumption of value. This is also the case for smart tourism, as there are two distinct concepts: the “smart” concept, which requires some sort of technological advancements and the “tourism’ concept, which requires interactions among tourism stakeholders to create tourism products. As defined by Baggio et al. (2020), a smart tourism ecosystem is: “a networked physical system integrated by a technological infrastructure shaping a digital environment that aims to favour cooperation and knowledge transfer”. “Smartness’ requires technological developments and sees technology and people as equal actors in creating this ecosystem.

Key factors identified as drivers of smartness in the ecosystem are ICT, innovation, leadership, human and social capital and leadership (Boes et al., 2016). Within the smart tourism ecosystem, multiple stakeholders (consumers, residents, suppliers, destination organizations, media, intermediaries and others) work with technology and data to co-create value and embed smart technologies that support it. The visual concept of a smart tourism ecosystem developed by Gretzel et al. (2015a, b) is shown in Figure 1.

It can be concluded that a smart tourism ecosystem is a set of dynamic processes and networks (Murphy et al., 2000) geared to co-create value. As further summarized by Vaz Serra et al. (2022), the smart tourism ecosystem is the integration of:

1. Systems with players that exchange knowledge, skills and experiences;

2. Institutions that provide resource integration based on a shared set of social arrangements;

3. Technology, which creates and updates social structures.

The proposed components work within the network, creating synergies and positive outcomes for all and contributing to value co-creation. The ecosystem should be seen as a living organism (Perfetto and Vargas-Sánchez, 2018), constantly evolving and adapting to the business climate and changes that are occurring.

There has been an overall paradigm shift from product and producer orientation to service orientation and the service-dominant (S-D) logic framework is addressing the issue of value co-creation in smart tourism destinations (Boes et al., 2016). S-D logic proposes that value creation is an outcome of collaboration between heterogeneous actors, who voluntarily exchange resources and information within the tourism ecosystem. The key here is the voluntary participation-each stakeholder is willing to contribute to the overall goals of the ecosystem with shared information, knowledge, know-how, financial investments and other resources. By engaging various stakeholders – consumers, residents, government and public institutions, city and regional planning authorities, destination management organizations, tourism intermediaries, travel agents, tour operations, hospitality, cultural heritage organizations and others – in dialogue about their interests and responsibilities, the value co-creation is facilitated (Koo et al., 2019).

Traditionally, tourism value creation happened on-site, when the tourist visited the destination and consumed tourism products and services. The technologies have enabled the value co-creation process to extend to pre-travel, on-site as well as post-travel stages. In this way, the tourist is engaged with the destination before and after the actual trip, by searching, sharing, asking, reviewing and engaging in other activities. Balancing virtual experiences with physical experiences in these stages is the key objective of value co-creation (Buonincontri and Micera, 2016). In essence, more value can be created in the traditional form from the ownership and, new forms of value within the tourism chain can be created from access to shared data and resources (Xiang and Fesenmaier, 2017).

Personalization, context awareness and real-time monitoring and synchronization create meaningful smart tourism experiences, adding and co-creating value to one's tourism experiences on-site (Gretzel et al., 2015a, b). The pivotal source of value co-creation is Big data. Each tourist leaves a large number of digital footprints when they visit a destination online. From tags, online searches, questions and reviews to likes, posts, pictures, suggestions and comments, valuable information is created at each step of the journey. Big data can help to improve decision-making at the destination, build tourist experiences, develop new products and services and provide smart tourism ecosystem interconnectedness (Del Vecchio et al., 2018). The destination's ability to use this information to guide decision-making and other processes will depend on its capacity and knowledge (Bu et al., 2020). The key is to use the Big data as a source of destination decision-making and to co-create meaningful and useful value and experiences that align with the overall destination's strategy and goals. Technology together with leadership and innovative ways of thinking allow rethinking and reengineering new ways of value co-creation, promoting also synergies within the ecosystem, both up and down the value chain (Buhalis et al., 2023).

The ultimate aim of value co-creation is to create sustainable economic, social and environmental gains fuelled by the use of new technologies by all stakeholders (Buonincontri and Micera, 2016). While many of the smart destination and sustainable destination objectives have synergies, Ivars-Baidal et al. (2021) suggest that conceptually we have to re-think how we measure and think about smart tourism sustainability in order to explore the full spectrum of benefits. Nevertheless, the public value of smart tourism destinations is created, and Cavalheiro et al. (2020) argue that all forms of value: economic (job creation, economic growth), social and cultural (destinations' capacity for learning and innovation, pride, sense of belonging, entrepreneurial capacity); political (developing new channels of communication among stakeholders and improving citizen and other stakeholder involvement); ecological (better management of natural, cultural and environmental resources) is created within a smart tourism destination.

Xiang et al. (2021) propose that smart tourism design requires an overall paradigm shift from a value chain to a value network, from a physical to a virtual focus, from a product focus to a capability focus, from static and fixed to evolving and shapeable and from linear and sequential to a matrix and simultaneous design in order to create and sustain value. Within the ecosystem, guests gain value from their memorable experiences at a destination, tourism service providers benefit from operational and marketing efficiencies and profitability and intermediaries benefit from enhanced marketing and frequency of services, while destination management organizations benefit from increased cooperation and networking (Buhalis et al., 2023). Overall, everyone within the value network engaged in co-creating the value should benefit from it (Díaz et al., 2023), including customers.

Smart tourism and value co-creation challenges

While smart tourism provides many benefits to stakeholders and is applied in a growing number of destinations worldwide, one of the main challenges of smart tourism is the size of data which is constantly increasing, reaching the level of “overwhelming” (Kontogianni and Alepis, 2020). Dealing with large data storage and processing to make sense of it and guide decision-making is increasingly difficult. Destinations have to attract more knowledge, capabilities and resources to store and process the data.

Another challenge identified is the issue with users' privacy (Buhalis, 2020). In a general sense, smart tourism relies upon the use of personal data, which is later processed to develop and improve products and services. Smart tourism promoters argue that users are and will be willing to share their personal data, in exchange for better and more personalized future service offerings (Femenia-Serra et al., 2022). However, there is a growing trend of not disclosing information, which smart tourism stakeholders will have to deal with.

When specifically addressing the ecosystem and value co-creation, the participation of all stakeholders is required for the transactional perspective of this relationship. However, it also brings the challenge of how to ensure that all stakeholders place overall long-term benefits over short-term personal interests. Finding the balance between the well-being and profitability of all stakeholders remains the challenge of smart tourism (Pan et al., 2021). It is not clear to what extent tourists will give up their privacy for personalization, or whether tourism businesses will undertake large investments to build smart tools, not knowing whether tourists and local residents will adopt them.

Moreover, not all technology is equally accepted and adopted by users. As shown in the example by Buhalis (2020), the robots from the robot hotel in Japan had to retire due to the cost and lack of acceptance by consumers. It seems that smart tourism is about balancing technology and its potential and possibilities with human interactions to ensure tourism experiences are adapted by users. Finally, many destinations, objects and attraction sites aim to use smart tools, either because it is required in the policy, or because the importance of smart tools and technology is emphasized by other stakeholders. However, if smart tools do not support the visitors' journey and experience and do not align with the overall destination strategy, scope and aims, they cannot provide sustainable benefits.

Conclusion

The concept of smart tourism describes the use of ICT developments in interaction with the environment, network and technology to promote and facilitate access to tourism and hospitality products, services, spaces and experiences. Smart tourism implementation requires several conditions to be met, for example, overall contextual and causal conditions, such as ICT adaption, economic situation and growth, social development, global trends and others. Government support is yet another significant driving force of smart destination development.

Effective and sustainable smart tourism is implemented from an ecosystem perspective and promotes the synergies and interactions among various stakeholders and technology at different points, in order to provide an overall visitors' journey and support future decision-making at the destination. Within the ecosystem, visitors, locals, suppliers, service providers, the public sector, media, destination management organizations, intermediaries and other organizations and stakeholders interact to co-create overall value, from which all are benefiting. The ultimate aim of synergies within the ecosystem is to create sustainable economic, social and environmental value.

While developing sustainable smart tourism destinations, one of the major concerns is the increasing size of constantly created data. It requires more knowledge, resources and capabilities to store and process overwhelming amounts of data. Data privacy and balance between stakeholder interests are other problematic areas of smart tourism. Developing a smart tourism destination requires the involvement of a large number and scope of stakeholders, each of whom wants to see benefits in return for their input. Technology adaption and the use of developed technologies are also problematic, especially when a balance between technology and human interaction is not provided. Finally, the smart tools implemented should always align with the overarching destination strategy, scope and aims and promote overall efforts to become a more attractive destination.

Figures

Figure 1

Smart tourism ecosystem