Smart Tourism Destinations: Resource optimization and experience personalization

September 27, 2023

The tourism industry plays a vital role in the economy: according to the United Nations, tourism generates one in ten jobs worldwide.

In this context, the World Tourism Organization (UNWTO), which celebrates World Tourism Day every September 27, recalls the need to innovate in tourism. This involves embracing digital transformation in order to increase the knowledge of tourists and improve decision-making.

Smart Tourism Destinations (ITD) are places that make use of digitalization to optimize tourism management and provide tourists with a better experience through personalized, accessible, and sustainable services and products.

Key technologies for smart tourist destinations

Smart destinations implement next-generation digital technologies such as IoT, Artificial Intelligence, Big Data, and data analytics to collect real-time information, automate processes and improve the efficiency of tourism operations in an increasingly competitive and global market.

One of the most important aspects of ITD is that it has the ability to improve the tourism sector for both tourists and destinations:

They offer enriched and personalized experiences for tourists through digital services such as interactive guides, mobile applications, and online reservations to make the tourist experience more attractive and convenient.
They provide in-depth knowledge for tourist destinations, covering resource management, sustainability and the promotion of local culture and businesses, encouraging the participation of residents and achieving a more sustainable and attractive environment.

The importance of data analytics in smart tourism

The key to seizing this opportunity lies in the data economy. This concept refers to the use of technologies that enable the generation, capture, storage, and analysis of large volumes of information.

Data thus become valuable assets that drive informed decision making and improve tourism management, resources, and processes.

Data sources in smart destination management

In the travel industry, data generation and capture occur throughout the entire process, from the moment a tourist begins planning his or her trip until he or she returns home. This includes:

Destination and flight searches and hotel reservations.
Online and offline access to tourist information points
Apps to search for places of interest, restaurants or plan routes and itineraries.
Aggregated and anonymized data (that does not identify individuals) from cell phone networks.

These data allow us to know variables such as tourist flows and the length of their stay and time spent in different places and points of the destination. They also reveal their preferences and behaviors, which allows us to offer personalized experiences tailored to their needs and demands.

The application of machine learning algorithms and Artificial Intelligence on the captured data allows companies in the sector and tourism organizations to:

Extract insights to understand travelers and destination demand.
Anticipate trends and needs of both tourists and residents.
Improve the accuracy of tourism statistics without compromising privacy.
Develop tourism effectively, optimizing its economic, natural, and human resources.

The knowledge and insights extracted also provides valuable information on promotion and marketing strategies, for the adequacy of public services and the promotion of culture or the development of new local businesses.

Image from Wayhomestudio on Freepik

Technological components for successful intelligent tourist destinations (ITD)

Smart destinations share many of the ingredients of smart cities, including:

The Internet of Things (IoT) enables the capture of data through connected sensors to get a clearer picture of the needs of tourists and destinations, allowing for more efficient management of resources and informed decision making. In addition, tourists can receive real-time information and recommendations based on their location.
Cloud platforms allow applications to be managed and large volumes of data to be stored and processed in an efficient, scalable, and secure manner and are key to the data economy and data spaces applied to tourism. Data spaces enable the secure, organized, and transparent exchange of data between public and private tourism stakeholders, driving innovation and quality of services.
Big Data and Artificial Intelligence. As we have seen, a smart destination generates huge amounts of data from numerous sources, from analyzing thousands of comments and reviews on the internet to the flow of tourists. Big Data makes it possible to manage and analyze all this data to obtain knowledge by applying AI models that help to detect trends and optimize local resources.
Blockchain helps improve security and transparency in tourism transactions. Blockchain-based smart contracts can automate processes such as identity verification by reducing the need for intermediaries and minimizing fraud risks. In addition, Blockchain technology makes it possible to offer incentives and rewards to tourists and citizens who make use of city services.

Digitalization and sustainability in the tourism sector: Telefónica Tech

Telefónica Tech has the technology, knowledge, and experience to promote the digitalization and sustainability of tourism, both for companies and SMEs in the sector and for public entities and administrations, in order to build smart tourism destinations:

Helping numerous companies in the sector to advance in the digitization process, so they can design more personalized and efficient experiences and better management of resources.
Ensuring tourism businesses' continuity in and protecting the data economy with advanced Cyber Security solutions.
Providing technological solutions to drive smart tourism with sector-specific technologies and tools for tourism data analysis, such as Smart Steps.
Reducing our own and our customers' environmental footprint with the Eco Smart seal, verified by AENOR, to decarbonize the economy, promote renewable energy, and develop a green, inclusive, and fair digital economy.

We also cooperate with the World Tourism Organization (UNWTO) to promote tourism through sustainable, safe and competitive development and to boost its digitalization.

Conclusion

The transformation of tourist cities into smart destinations is a necessary step to move towards a more competitive and sustainable tourism.

In the new generation of digital technologies, such as IoT, Cloud, Big Data, and Artificial Intelligence, tourists receive more value, new businesses are created, and the environment, natural resources, and cultural heritage spaces can be managed more efficiently and sustainably, enhancing residents' involvement, participation, and quality of life.

Image from Wayhomestudio on Freepik.