Smart Tourism Empowered by Artificial Intelligence: The Case of Lanzarote

Smart Tourism Empowered by Artificial Intelligence: The Case of Lanzarote

Xavier Ferràs (ESADE Business School, Barcelona, Spain), Emma Louise Hitchen (University of Vic, Vic, Spain), Elisenda Tarrats-Pons (University of Vic, Vic, Spain) and Nuria Arimany-Serrat (University of Vic, Vic, Spain)
Copyright: © 2020 |Pages: 13
DOI: 10.4018/JCIT.2020010101

Abstract

Artificial intelligence (AI) is changing the rules of the game in many industries. This case details how the combination of open innovation and artificial intelligence generates new opportunities in the tourism sector. Specifically, how to create new customer experiences through searching tools, social platforms and cognitive interfaces to make intelligent decisions. The authors show that it is possible to increase tourist satisfaction by offering a set of customized activities and experiences according to their personal characteristics and motivations. The combination of cutting-edge digital technologies makes it possible to design new services in an automated and cost-affordable manner. The experience has been carried out in Lanzarote (Canary Islands, Spain), with support of IBM's Watson system. This is a good example of AI-fueled innovation in services, which is adequate for courses on innovation, technology, entrepreneurship and competitive strategy.
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Lanzarote’S Tourism Strategy: Towards A Smart Tourism Model

Tourism has a critical impact on the economy in different territories worldwide, with the Canary Islands being no exception. The Canary Islands are a set of seven tiny islands belonging to Spain located in the Atlantic Ocean, close to the Sahara Desert, and are one of the most visited tourist destinations in the world. As a matter of fact, tourism accounts for 31.4% of its GDP, 35.9% of employment, and 30.4% of total taxes collected in the Islands. Even during the crisis in 2008, tourism survived and sustained the islands despite the economic slump, with an average annual growth (from 2013) of 2% GDP. Thus, it may be confirmed and concluded that tourism is indeed the main driver of economic development of the region. Financial margins of tourism companies have improved over the past couple of years, with a consequent increase of 7.4% in the employment rate (Impactur Canary, 2014). Overall, the tourism sector in the Canary Islands has grown by 3.4% since 2013, exceeding the growth of the Spanish average of 2.4%.

However, the tourism industry has not escaped the impact of technological change. Together with new waves of tourists, since the crisis, new information and communication technologies (ICTs) have arrived in the islands. These technologies are transforming the customer experience and management systems of the tourism business. Among these technologies, we can find Artificial Intelligence (AI). In Lanzarote, a pioneering endeavor has taken place, introducing AI to the tourism experience. To some extent, and according to IBM Spain, Lanzarote has been a lead user of the new AI systems applied to tourism (in the words of Elisa Martin-Garijo, Chief Technological Officer of IBM Spain). The objective of this article is three-fold. Firstly, it aims to describe how digital transformation in the tourism sector, empowered by AI systems, can play a key role in safeguarding the maintenance and future growth of the industry. To do so, we use the case of CACT (Centers of Arts, Culture and Tourism). Secondly, this article seeks to shed light on how digital transformation and the application of IT systems to customer experience and processes of a mature industry can generate economic externalities. This fosters the development of new, successful startups (in this case, Red Skios). Thirdly, the example shows how advanced technologies such as AI, in combination with open innovation and customer-driven insights, can improve innovation in very mature industries, as is the case of tourism.

At a national (Spanish) level, the impact of the crisis on the tourism sector has been relatively moderate, since its beginnings in 2008 (Torres, Sala & Farré, 2014). The tourism sector has continued to generate income and employment during the most difficult times (Altimira & Muñoz, 2007). Therefore, valuing the quality of tourism services by customers is key to maintaining this engine of economic development. Although quality certifications are a good indicator (until recently tourist establishments demonstrated the quality of their services through quality certifications, such as ISO 9000), customer information stemming from digital sources is growing in weight as an index of quality (Fuentes et al, 2015). Clients consult opinion sites (TripAdvisor, HolidayCheck or Booking.com) while deciding on accommodation, restaurants or things to do once at their destination. Nowadays, we can see quality certificates issued by digital platforms, such as those mentioned above, on the websites of an increasing number of tourist establishments. Through an intermediate digital platform, customers now certify the quality of the services provided, thereby displacing professional quality certification.

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