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Understanding of Technological Innovation within the Tourism Industry

University: UK College of Business and Computing

  • Unit No: 3
  • Level: Diploma
  • Pages: 9 / Words 2334
  • Paper Type: Dissertation
  • Course Code: BAA612
  • Downloads: 697
Question :

Information communication technology denotes unified communication as well as the integration of telecommunication that enables users to deal with the information. The scenario of this report determined how advancement is working as a tool for a business and the overall industry as well.

  • Provide a clear understanding of technological innovation by implementing different theories.
  • Analyze the effectiveness of technological advancement within the tourism industry.
  • Access a clear discussion of the crucial concept of technological innovation.
  • Demonstrate numerous variations in the nature of the tourism industry.
  • Critically analyze the tourism industry and existing competitiveness.
Answer :
Organization Selected : Tourism industry


Technological development has revolutionised business world by developing opportunities for growth and competition. The advancement is tool which is helping millions of firms across the globe in making innovation, attaining competitive advantage and maximizing organisational functions. It is source which has boosted success of worldwide enterprises by assisting management in easy interaction with consumers across the globe (Law, Buhalis and Cobanoglu, 2014). However, information and communication technology is an integration of wireless signals and telephone liens which comprise devices like software, storage, social networking tweeting, blogs, etc. It will outline the theories which assist entities in technological innovation and will evaluate role of social interaction in development of business operations. Thus, it can be said that it is the transformation of digital era which has transformed changes like infrastructure, social interaction and modern computing. Further, the report will analyse technological development in tourism and key concepts of industry like value chain analysis and business models. However, competitive and value chain evaluation are the tools which help organisation in managing changes of advancement in order to stand out in competition.

Key theories of technological innovation

Information and communication technology is an advancement which is related to wireless interconnection. It created boom in tourism industry because the functions of organisations are consumer centric. To reach at consumers time to time, it is important for company to making appropriate record of traveller’s information and their different requirements. The components of ICT has created big time growth opportunities for business by establishing easy management system. It is a helpful advancement which helps tourism companies in societal, interpersonal and economic interactions (Ye, Law and Chen, 2011). Tourism industry is considered as the fastest growing industry of economy as it is focused on direct interaction with travellers.

As per the advancement, it has been analysed that ICT has changed the pattern of working of tourism marketing and operational activities. Innovation with technological change is assisting firm in diversifying services as per needs of global buyers. For example: the use of Web Cam facilities is helping industry in determining travelling needs of buyers which are effective for making desirable trip as per needs of customers. Schumpeter's theory of technological evolution (1939) is based on innovation and its role in the economic growth. In accordance with authors, innovation is the key to success of entrepreneur as it is focused on social progress of firm. As per the theory, innovation is based on two distinctive concepts that are economic and social (Information and Communication Technologies in Tourism, 2014).

Further, as per scholar innovation is the term which relates to invention but it has distinctive aspect which is invention, however invention can be in any field but innovation is a specific term that relates only to social activity and economic sphere. The theory of innovation is focused on economic development and progress. Thus, as per this innovation concept, the invention by firm in its services focuses on encouraging economic progress. There are four features of Schumpeter's theory which are related to economic development which are described as below:

  • Circular Flow: It is based on stationery state where flow of services and economic conditions are defined in one direction. Apparently, it is focused on optimum utilisation of resources in order to minimize the resources (Sotiriadis and Van Zyl, 2013). In this, the innovation of tourism industry is focussed on aggregate demand of services and adequate supply. The combination of economic and innovation factors in this process helps entrepreneur in managing systemic flow of activities.
  • Role of entrepreneur: This defines the functions and responsibility of management in managing innovation and economic progress hand in hand.
  • Business cycle and cyclic process: In this, the innovation of firm ensures safe economic condition in order to make safe and progressive adoption of technological changes and inventions.
  • Decay of Capitalism: It is the focus on per capita output and rate of profits in comparison to innovation.

Thus, consideration of these factors in theory helps the business in technological innovation with regard to economic development. Apart from this, there is diffusion theory of innovation which is proposed by Rural Sociologist Roger in 1962. The theory by author is focused on spread of new idea and technology for specific purpose (Bethapudi, 2013). Apparently, the theory is based on 5 characteristics of innovation diffusion which assist tourism industry in managing successful implementation of technological advancement. The characteristics of theory are described as below:

  • Relative Advantage: In this, company focuses on identifying the acceptance of idea of innovation with regard to profits, social prestige and economic benefits. In accordance with views of Roger, characteristic is the source which helps organisation in managing safe adoption of changes and innovation.
  • Compatibility: This characteristic defines ways in which the innovation will be perceived. However, focus of this step is on experience of innovation and values of firm on the basis of which enterprise plans changes in its services. Apparently, this step of innovation diffusion assists in determining compatibility of innovation and rate of adoption.
  • Complexity: It is the critical step of theory as it focuses on difficulty aspect which can occur at time of managing innovation services. Basically, it is focused on complexity of changes which can occur at the time of adoption (Buhalis, Leung and Law, 2011).
  • Trialability: The characteristic of innovation is based on experimentation. It is the step with the help of which tourism industry determines response of travellers in case of changing services. However, this is the most effective practices because it helps in minimizing future errors and uncertainties.
  • Observability: In accordance with this, scholar believes that it is important for the companies to seek attention of buyers because observability in public areas assists in determining effectiveness of adoption. However, for this, tourism industry implements the use of media, commercials, public events, etc.

Development in social interaction due to information technology is the advancement which is assisting tourism industry in managing successful growth functions. It has enabled various sources for connecting with buyers, like social media advertising which owns strong control over worldwide travellers. Social interaction with customers assist tourism industry in deriving needs to manage change in services. Social media platforms are common across the globe and has made easy for interaction. Further, it helps the enterprises in expanding their knowledge over consumer’s response and participation. Moreover, semantic social web provides ways for tourism to inter operate across domains by sharing knowledge about their services and innovation (Neuhofer, Buhalis and Ladkin, 2014). Nevertheless, it can be stated that analysing competitive advantage at the time of technological innovation is the tool which helps in determining changes which are required to manage innovation in tourism services. Porter’s five forces business strategic tool helps industry in deriving the needs of changes in order to stand out in accordance to global rivalries. The model is described below:

  • Threat of Substitute goods: Tourism industry holds strong control over substitution because in this the services are focused on effective marketing strategies used by firm. Technological advancement has increased the chance of substitute products because now the firm are targeting on deriving needs of travellers through direct interaction before planning innovation
  • Bargaining Power of Buyers: The bargaining power of consumers were less but due to emergence of digital marketing and communication the travellers has full control over prices because the individual has opportunity to compare prices offered by different tourism company.
  • Industry rivalries: Advancement in technology has increased competition for the industry by widening services. The use of technological tools has made services consumer centric, which has encouraged social interaction between company and travellers. However, the innovation in services according travellers needs and wants has increased competition in tourism industry (Ghobakhloo, Sabouri and Zulkifli, 2011).
  • Barriers to Entry: Entry barriers in tourism industry restricted new entrants as it requires huge investment but with the emergence of e commerce and digital marketing the tourism enterprises are growing with rapid pace.
  • Bargaining Power of suppliers: Emergence of internet services has made easy for tourism industry to communicate with suppliers. Further, it is the tool which assisted in deriving various way to minimize management functions such as, employee recruitment, exceptional experience and analysing power of rivalries in comparison to supplies.

Thus, it can be sated that technological development has promoted transparency in functions of organisation which helps the enterprise in deriving use of best strategies which can helps in managing impact of globalisation and innovation management.

Technological development & tourism

Technological development and tourism industry shares core relation as it helps the firm in deriving needs of travellers by connecting with users via social media platform. Further, it helps the companies in gathering reviews of customer views on different tourist destination and plans. The knowledge about needs of worldwide buyers helps the industry in making innovation in tourism plans according to market requirement (Kiráľová and Pavlíčeka, 2015). Apart from this, it is considered as effective because it helps the organisation in determining climatic conditions of different tourist attraction in order to plans safe and profitable trip. In accordance, it can be said that technological development has led to SMART tourism where the information between consumers to tourism firm, whereas connection between travel firm and tourism organisation is on online platform. The exchange of information on online platform emerge with E commerce and social media advertising where the buyers and sellers are directly connected to each online. It assisted the firm in easy exchange of information and launch of commercials for promotion. For instance, Thomas Cook, one of the leading tourism firm has been continuously launching promotional campaign on Facebook to attract majority of population at one time. The upcoming activity by tourism organisation is after positive response from a current Facebook competition to win a £20,000 holiday (Thomas Cook to extend social media activity, 2012).

Every booking is done online in order to protect monetary interest of travellers (Smart tourism tools: linking technology to the touristic resources of a city, 2017). Further, the tourism development is prominent innovation because it helped the industry in established easy and convenient services by people across the globe. ICT development has established e Tourism where management of every bit of detail has become systematic and authentic for the company and its customers. The components like cloud computing is assisting enterprises in analysing users demand and evaluating functional links. Thus, it can be aid that SMART tourism has established connection between core responsibilities that is social. Commercial, infrastructure and physical tourism.

Also Read: Impact of Digital Technology on Business Activities - Exponential-E

Discussion of key concepts:

There are various strategies which act as base for tourism business operations. Like the value chain model of industry is focused on enabling appropriate travel services to customer across the globe. The value chain model of industry is described under:

  • In first step of Value chain the company focuses on creating value of its product by creating awareness among travellers about different travel and trip plans of an organisation.
  • Second step and further the focus of firm is to analyse transport services in order to seek best travelling experience to buyers. It is focus on connecting with travelling firms.
  • In third step the tourism industry focuses on analysing the best accommodation facilities at the time trip. In this the management aims at analysing views of travellers over accommodation services (Onyije and Opara, 2013).
  • Division of people into different cultural group according to their requirements and services and travel plans of firm.
  • Further the last step of firm is to determine transportation services of company in other country which helps in easy convenience to tourist destination.

Thus, technological development has assisted the tourism in managing effective coordination in value chain tourisms service. It helps the organisation coordinated with changing needs of travellers and emerging market trends.

Tourism supply chain management is combination of diverged services of industry which comprise marketing of services, management of data, planning and organising trips, dealing with suppliers and engagement of travellers. Information communication technology has assisted the firm in managing systemic record of services and enhancing values of business functions. Like the marketing communication is done by tourism industry with the help of social media advertising (Supply chain management performance in tourism continental hotels chain case, 2013). This is the tools which helps the firms in establishing global networks. Apparently, it can be stated that social media commercials has made easy for the company to attract travellers. Apart from this, technological advancement has assisted tourism industry in minimizing gaps and errors in consumer services which arise due to lack of communication. However, it can be said that development has increased product life cycle and competition but on the other hand its tools are enabling support to business by helps the management in easy management of consumer data. Further the supply chain managing of industry is based on improving customer experiences therefore with advancement the firm has launched new system of booking packages online according to their convenience. In this the firm allow the customer to choose one best hotel at location according to their level and affordability (Information and Communication Technologies in Tourism. 2014).

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