Tourism meeting challenges 4.0 in the digital economy

Tourism meeting challenges 4.0 in the digital economy

Vietnam Economic Times sought the views of industry       stakeholders      on           the potential and challenges in tourism development in the context of the       digital economy.

MR. JASON LUSK, Director, Mekong Innovative Startup Tourism (MIST) program

Conservative tourism companies must adapt or customers will ditch them in favor of tech-savvy competitors. I’ve noticed that Vietnamese tourism companies reflexively avoid spending money on software. But instead of looking at software as an expense, they should look at it as an investment. Small companies should always be on the lookout for technologies that open new revenue opportunities, for example by connecting them to online travel agencies. They should also continuously evaluate software that makes operations more efficient, for example by automating business processes.

Larger tourism companies should also consider venture scouting. Last summer I visited Cockpit Innovation - El Al Airline’s corporate venture arm in Tel Aviv, Israel. Cockpit Innovation scouts the world for useful aviation technologies and then makes strategic partnerships and investments. It provides El Al with advanced intelligence about what emerging technologies may be strategic opportunities or threats. Venture scouting would benefit Vietnamese companies in transportation, hospitality, and tourism, and there are a range of consultancies in Asia that are able to facilitate it.

MS. TUYET VU, Principal of the Boston Consulting Group

Vietnam has seen outstanding growth in tourism. With the existing momentum, it is no surprise that the government continues setting ambitious target for 2019, especially when the country still has a lot of room to grow. Performance in the first quarter signals that the tourism industry is well on track to meet the overall annual target. Digital is more and more important in the age of digitally-native travelers, be they foreigners or Vietnamese. The question is how Vietnam’s tourism industry can effectively embrace digital. Digital has a different role to play in different stages of a journey, and each player in the tourism ecosystem has a different role to play. As such, each player should think holistically about the journey, what they would like to achieve in terms of delivering an outstanding travel experience, and how digital can help them achieve their objectives.

It is inspiring to see the commitment and determination to build a strong tourism industry from the highest level of the government. The tourism industry is growing so fast that it puts Vietnam’s tourism authority in a unique position to manage growth in a sustainable manner. The government has taken some good first steps in outlining its tourism strategy and vision for the next decade. To have a vibrant tourism industry such as those found in Thailand or Indonesia or Japan, however, Vietnam still has a long way to go.

From the digital adoption angle, Vietnam’s tourism authority should take the lead. To do so, it should firstly have a clear digital strategy that guides transformation within the organization and between the organization and its clients, be they travelers or different industry players it interacts with. It should also identify high impact case studies for piloting and should also encourage a few of the more important players in the value chain to do likewise. It must act quickly, though.

MR. PHAN XUAN THANH, Chairman of the Quang Nam Tourism Association

As in Vietnam’s tourism industry overall, tourism growth in Quang Nam province is quite rapid, at about 21.6 per cent in tourist numbers in 2018 compared to 2017. However, the province and others also face many challenges in the environment, human resources, and infrastructure, etc. In the years to come, the association will develop sustainable tourism and green tourism, in which travel, accommodation and services are all covered. Quang Nam has a great deal of untapped potential, with many land banks available for tourism development.

In the digital era, the provincial Department of Culture, Sports and Tourism is calling for private investment in tourism, and recently a local business sponsored the installation of cameras at a number of ticket booths in Hoi An to observe tourists, thereby collecting data on their age and gender and how many are foreigners. From this, it can analyze and offer products and services suitable to tourists. Industry 4.0 is a global trend, but Vietnam lacking awareness and knowledge to apply related technologies creates many risks. A range of digital technologies are being used overseas, but Vietnam gaining a workforce that can apply those technologies is an issue.

Vietnam does not have a full ecosystem to apply digital technologies in many fields, and the shortage of skilled workers is one factor that makes the ecosystem incomplete. Tourism service providers are still to move towards sustainable business models and applying Industry 4.0 in business development is often overlooked. We believe that in the short term, tourism businesses should focus on creating quality products, aim for sustainable development, and learn how to apply technology.

MR. NGUYEN PHI LONG, Deputy Chairman of the Binh Dinh Provincial People’s Committee

Binh Dinh province is located on the south-central coast, so road, rail and waterway traffic is problematic, while tourists seek to reach tourist destinations as quickly as possible. The province attracted more than 4 million domestic and international tourists last year, an impressive figure for the local tourism industry, with Phu Cat Airport making an important contribution to this growth. Binh Dinh is blessed by nature, with 134 km of coastline and a host of historical monuments. Smoother connections in transport infrastructure and promoting Phu Cat Airport would create key advantages in attracting not only tourists but also investors in hotels, resorts, and other facilities.

It is necessary for the province to more broadly apply digital tourism to promote tourism development. The application of technology would help the province and its tourism substantially cut costs. Binh Dinh should therefore coordinate with businesses, tourism investors, and travel agencies to adopt appropriate policy mechanisms and promote the development of digital tourism.

MS. VAN TRAN, General Director, Vietnam Hotel & Resort Pro (VHRPRO)

While Vietnam benefits from its natural assets, unique cuisine, and investment from local and international developers in growing its tourist numbers, we need to focus on quality rather than quantity. To improve its Tourism Competitiveness Index, the country should take advantage of digitalization trends in every facet of development, strategy, operations, and management, including AI, IoT, automation in the middle and back offices, robotics, mobile personalized customer applications, digitized customer interactions, customer feedback, and smart payments.

Other strategies in need of focus include sales and marketing, staff training, and employee branding, as well as increasing the involvement of the private sector and society in tourism promotions and the implementation of sustainable strategies. All of these should be applied throughout entire tourism supply chain, in order for green and smart tourism to be sustainable.

The tourism sector still holds promise for investors. We continue to see steady improvements in infrastructure, transportation, new carriers and direct flights overseas, and the development of the 5G mobile network. These help present opportunities to create new destinations and new services for foreign and domestic travelers. The opportunities are there, and with support from the government and the economy, investors who seize upon digitalization trends and focus on quality and a unique approach will go faster and further.

We see wonderful opportunities for investors in upscale and luxury spaces, including wellness and lifestyle hotels, co-working models (for millennials and “digital nomads”), sports and education centers, smart tourism destinations and sustainable green destinations, and tech startups in hospitality and tourism apps.

We focus on creating a hospitality ecosystem where the most advanced solutions can be shared through technology, from digitalization ideas and methods to networks of hospitality professionals, to improve productivity and the quality of hospitality staff. When hospitality professionals use our e-commerce platform, they can share information directly to an active hospitality community where they can develop their industry relations to the next level.

Our ecosystem solution helps hospitality organizations digitalize their products and services to reach potential clients. It also supports hospitality business partners to connect as the need arises. The e-learning solution helps hospitality organizations digitalize their training content and gain support from our e-learning trainers to train their staff and keep track of their improvements.

There is huge potential for tourism businesses from the development of the digital economy, much of which is already being realized. Digitalization can be applied in all operations and processes regarding travel services, as it is a trend that can’t be ignored. Businesses can apply and enhance their unique strengths towards trends in green and smart tourism for sustainable development.

(Source: Vietnam Economic Times, See this Link)

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