G7 Tourism and Artificial Intelligence. Some points to build on for the growth of the sector

G7 Tourism and Artificial Intelligence. Some points to build on for the growth of the sector

On the occasion of the G7 Tourism, which is being held in Florence from today to 15 November, Eurispes has drawn up a study to observe the sector and try to identify some fundamental points on which to work to grow a sector that is so important, also (but not only) economically, for the country system. Among the issues to be addressed is first and foremost that of digitalisation, where the percentage of Italian accommodation and catering companies using e-commerce is still lower than the other European averages (equal, for example, to only 31% compared to 64% in Spain).

Some numbers

Investment in the tourism sector, which already grew by 26% in 2023, is still increasing in 2024 and will continue to do so in the coming years.

The special tourism section of the SME Guarantee Fund, aimed at facilitating access to credit and medium-sized investments with a 50 per cent reserve for green investments, is aimed at at least 11,800 tourism enterprises.

The tourism sector at EU level, in its narrowest definition (in terms of traditional providers of travel and tourism services), has 2.3 million enterprises, mainly small and medium-sized enterprises (SMEs), employing some 12.3 million people.

Tourism is one of the main economic activities in the Union, accounting for 10% of GDP, with a considerable impact on economic growth, employment and social development. In Italy, this percentage is even higher, reaching around 13%.

In 2023, the country with the highest use of artificial intelligence for travel planning was the US, where it was used by as many as 63% of users. No European nation holds a position in the top five. Sixth is Spain, which has a 16% adoption rate of AI by travellers. Just below at 14% is Italy, tied with Germany.

In Italy, travellers who already use generative AI to plan a trip are only 9%.

61% of large Italian companies have already initiated at least one AI project. Among SMEs, on the other hand, only 15% have at least one AI project started. Companies in the tourism sector that have implemented AI for booking automation and data management have recorded an average increase of 20 per cent in profits and a 15 per cent reduction in operating costs.

It should be remembered that the Digitalisation Index of the Economy and Society (DESI) places Italy 18th out of the 27 EU countries. The differences in terms of average turnover per employee between companies with a high Digital Intensity Index and those with a low index are also notable: the average turnover per employee of companies with more than 10 employees rises from EUR 162,400 for companies with a very low Digital Intensity Index, to EUR 408,500 for those with a high Index.

4 points to build on: Eurispes’ proposals

From virtual to experiential tourism

The impact of the digital economy has led to the formation of an experience economy, for which the ‘consumption’ of experiences is central to the offer of tangible goods and services. There is a need to move from static to dynamic websites, making the tourist experience increasingly personalised and increasing the visibility of destinations, which can also be enjoyed through virtual tourism. The competition for operators in the sector today takes place on the terrain of experiential tourism. Ultimately, innovation applied to the production of knowledge and new technologies can become a factor of growth and development for the territory and the country system, as also supported by Unesco, which, as early as 2020, launched initiatives in support of multi-level digital technology capable of influencing the behaviour of destination users, but also the image of the destinations themselves. And in this sense virtual reality can attract new types of tourists and perhaps constitute the cognitive premise for the subsequent ‘physical’ travel experience.

Towards Smart Tourist Destinations

Technology must be used to produce quality content and to bring people with more passion to the same technology, creating content that generates emotions. A challenge that also requires new professional skills. The aim must therefore be to invest in the digital transition to transform destinations into Smart Tourism Destinations. A smart tourism destination implies an approach, derived from the philosophy of smart cities, that aims at optimising resources, effective governance and safeguarding the quality of life for both residents and visitors. All this through a Destination Management Plan, understood as a plan that defines the strategic direction of the destination over a given period of time, in terms of vision, mission and objectives, and the actions to be implemented to achieve the set goals. At the heart of this strategy is data, produced, directed and processed through the destination’s technological infrastructure, so that institutions and businesses can make informed and targeted decisions. The Smart Tourist Destination works, in essence, on five different pillars: governance, innovation, technology, sustainability and accessibility, where, in particular, the sustainability pillar imposes a long-term perspective, so as not to compromise the future of local resources, nor the quality of life of locals and tourists themselves (also in function of contrasting so-called overtourism).

Artificial intelligence and robot tax

Over the next few years, also in the tourism sector, developments in the field of artificial intelligence could lead to the replacement of human workers by machines. The possible contraction of human labour due to technological developments and the spread of robots could, moreover, have consequences, also in Italy, on tax revenues in general. Therefore, it might be opportune to intercept this possible scenario, where, for example, the theorised forms of taxation on the activity of robots range from a direct (additional) taxation on companies that use this technology, to taxation on the virtual compensation that robots would have as substitutes for humans: the so-called ‘Robot Tax’. So far, however, automation seems to have created more jobs than it has destroyed. Tackling the issue in good time can be useful, however, where, in any case, what should be pursued should certainly not be to hinder technological development, but rather to redistribute the economic effects of technological innovations and their benefits. And this could be achieved by incentivising the reinvestment, for social purposes, of part of the profits that come from the productivity gains attributable to technological progress. The need, in essence, is not to hinder innovations that (eventually) replace labour, but rather to identify criteria that allow the potential benefits of such changes to be distributed across the whole of society. A reflection should also be made in terms of possible green taxes on the ‘technological pollution’ factor.

From digital tourism to tourism intelligence

The development of a centralised platform for accessing information and services for tourists would be key to building a smart tourism ecosystem, including through the use of advanced analysis techniques to extract value from every tourist interaction with the destination. A platform to be integrated with the smart city platform. Tools for segmenting and profiling tourists are also necessary to this end, including through management systems (collection, storage and processing) of information captured by Wi-Fi sensors, mobile data and digital media. Understanding and managing these flows, counteracting saturation and paying attention to the destination’s carrying capacity could also solve the critical phenomena related to so-called overtourism. Aggregating and centralising data on origin, reason for travel, socio-demographic information, mobility, most visited areas, length of stay, etc., can be fundamental in order to identify patterns, relationships and trends that can be used to plan and optimise services that improve the tourist experience and quality of life for local citizens. An ad hoc discipline for the ‘review phenomenon’ would also be fundamental, finding solutions that can guarantee its reliability and veracity.

The full study can be downloaded online by clicking here