DIGITAL TRANSFORMATION IN TOURISM – A VITAL TREND FOR THE POST-COVID TRAVEL INDUSTRY

In the 4.0 era, numerous challenges and opportunities have emerged for the global tourism industry, and Vietnamese travel companies are no exception. Although tourism may not be among the leading sectors affected by digital transformation, the shift is accelerating and becoming increasingly critical for businesses.

Amidst the vibrant wave of industrial revolution, the digital economy is driving transformation in the tourism sector, gradually reshaping communication methods and enhancing the experience of both domestic and international travelers. The digital transformation of tourism in Vietnam has achieved remarkable milestones. So, how can the tourism industry undergo digital transformation effectively? Let’s explore with BPO.MP in the article below.

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What is Digital Transformation?

WHY DIGITAL TRANSFORMATION IS A MUST

Understanding Digital Transformation in Tourism

Digital transformation in tourism is the process of applying digital technologies to the tourism industry in order to deliver better experiences for travelers and enhance the operational efficiency of tourism businesses. Digital transformation solutions in tourism include the development of mobile applications, websites, or online platforms for booking accommodations, searching for travel destination information, and purchasing tickets. In addition, artificial intelligence technology is also being used to provide smart support and personalized recommendations for travelers.

Understanding Digital Transformation in the Tourism Industry

Digital transformation in tourism also enables more effective data management and customer communication. It provides data analytics tools to understand traveler trends and preferences, allowing businesses to offer personalized recommendations and services. However, digital transformation in tourism also requires staff training to adapt to new technologies and ensure that systems remain stable and secure. At the same time, enhanced security measures and risk management practices are essential to protect travelers’ personal information and transactions. Overall, digital transformation brings numerous opportunities and benefits to the tourism industry—from improving customer experience to boosting productivity and operational efficiency for businesses.

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The Current State of Digital Transformation in Vietnam’s Tourism Industry

Recognizing that successful digital transformation can bring significant benefits and opportunities for the development of the national tourism sector, Vietnamese authorities, organizations, and travel companies are actively implementing various technological solutions to reshape the industry. These efforts aim to create practical and innovative approaches that accelerate digital transformation and deliver more positive experiences for travelers.

Notably, since 2018, the Prime Minister has issued Decision No. 1671/QD-TTg approving the “Master Plan for IT Application in the Tourism Sector for the Period 2018–2020, with Orientation to 2025.” This plan emphasizes Vietnam’s priority in developing digital and smart tourism.

In 2022, the focus shifted toward a people- and enterprise-centered approach to digital transformation, emphasizing inclusivity and broad engagement. As a result, a strategic national digital platform initiative has been promoted in various regions, aiming to provide travelers with comprehensive information and seamless online experiences. This movement serves as a driving force for each travel company to evolve into a modern, tech-enabled enterprise.

Digital Transformation Brings Significant Benefits and Opportunities for the Growth of the Tourism Industry

Across the country, regions have simultaneously adopted and implemented numerous digital transformation applications to adapt to trends and enhance the efficiency of the tourism industry:

• In Ho Chi Minh City, the tourism sector has made significant progress by deploying smart tourism software on both Android and iOS platforms. In 2022, the city applied 3D technology for promoting tourism information, vividly recreating the soaring urban landscape, offering travelers an immersive and visually engaging experience. Additionally, the city has updated 366 tourism resources on Google Earth and Google Maps, and placed tourism products on online shopping platforms like Shopee and Traveloka, making it easier to reach potential tourists.
• In Hanoi, a tourism portal and numerous smart tourism applications, as well as digital tourism maps, have been developed. The information system for over 300 tourist sites is integrated and harmonized. Within the portal, travelers can use various multimedia options, including viewing, listening, and reading, to fully explore and appreciate Hanoi’s rich cultural heritage.
• Da Nang has also been actively transforming its tourism sector by introducing the VR 360 virtual reality app, “One Touch to Da Nang,” at the end of 2021. Through this app, travelers can explore the city’s famous landmarks in English, with automatic voice calls in Vietnamese, 360-degree images, and other digital transformation tools designed to improve the quality of services for global visitors.

The Importance of Digital Transformation in the Tourism Industry

After addressing the challenges mentioned above, businesses have begun to recognize the importance of digital transformation in the tourism industry, gaining several notable benefits:

• Enhanced Customer Experience: Digital transformation improves the customer experience by providing convenience and flexibility in booking, travel reservations, and payments. With numerous websites and online applications, customers can easily compare and book the travel services they need from the comfort of their homes, bypassing the long and complex traditional consultation process.
• Increased Efficiency and Productivity: The digital transformation of the tourism sector acts as a catalyst for optimizing operational systems and improving management efficiency. Companies in the industry can save both time and costs by adopting modern technologies. Tools like Big Data and IoT play a crucial role in helping travel companies manage data reliably, optimize operations, and enhance service quality.
• Creation of New Products and Services: Digital transformation allows tourism companies to create new products and services in response to market shifts and advancements in technology. This includes creating new travel experiences, virtual tourism services, and simulations that capture the public’s attention and contribute to sales success.
• Flexible Response to New Challenges: Digital transformation helps companies become more proactive. Businesses can respond flexibly to emerging challenges, such as global pandemics. Technology enables advisors and customers to minimize direct contact while enhancing the online customer experience through smart applications and related technologies.

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Opportunities and Challenges in Digital Transformation of Vietnam’s Tourism Industry

Opportunities

Promoting digital transformation in tourism opens up numerous opportunities for companies within the industry. New technologies such as artificial intelligence and blockchain provide transparency and security in payment and transaction processes. Additionally, the use of online services enhances the customer experience by offering convenience, simplicity, and increasing the competitiveness of companies.

Digital Transformation Plays a Key Role in the Tourism Industry

With digital changes, companies in the tourism industry can create new products and services that meet the diverse and demanding needs of the market. Examples include virtual tourism, simulated tourism, and virtual reality tourism, all of which offer fresh and exciting experiences for customers.

Facing new challenges, digital transformation helps companies predict and ensure their operations even when external conditions change and become unfavorable (such as a global pandemic). While there is still a long road ahead, this is achievable with the right strategy. Digital transformation in the tourism industry enhances a company’s position, significantly improves the customer experience, and optimizes costs for businesses.

Challenges

In reality, the implementation of digital transformation and information technology in tourism is still not synchronized or unified. In many areas, there are still differences in digital technology adoption. Regions with better conditions for tourism digitization are mostly limited to large cities and provinces.

Digitalization efforts in this sector are still fragmented, piecemeal, and not integrated into a successful database system. As a result, the process of management, control, reporting, and statistical information in these areas faces many difficulties.

Like many other sectors, the tourism industry is currently facing numerous challenges related to a lack of resources. Specifically, there is a shortage of modern technology, financial resources, and digital human resources with the necessary knowledge and skills. Successful digital transformation requires skilled human resources and a team of competent IT experts. However, Vietnam’s current education system still has many gaps in nurturing digital tourism talent and developing human resources.

Most restaurants, hotels, travel agencies, tourism shops, and domestic tourist destinations have not yet allocated staff with sufficient digital tourism experience to meet the needs of digital transformation for travelers.

Furthermore, data is scarce because it is difficult to fully update all the data, reports, and analyses from various sources. Many regions are unsure where to begin with digital transformation, which remains a significant obstacle on the path to successful digital transformation in the tourism industry.

Advice for Tourism Businesses in Vietnam

Starting from Within the Company

Before beginning the digital transformation process, companies must answer three key questions, which can also be seen as three challenges:

Why are we doing this? Does it help identify business problems? What should companies change to achieve this? Rather than following trends, companies should seriously consider their own pain points, starting from within the organization.

Taking Small Steps

One of the main misconceptions preventing most small and medium-sized businesses in the tourism sector from even starting their digital transformation journey is the perceived high cost. Starting with digitizing documents to reduce paper usage, digitizing tasks, receiving and organizing work via cloud solutions… A culture of innovation is gradually forming within companies. From there, you can consider larger applications such as ERP, Big Data, Data Analytics, AI, Blockchain, etc.

Reviewing Common Workflow Processes

When implementing any technology, companies must be guided by an overarching strategy and operational processes, rather than focusing on a specific need at any given moment.

Solutions to Accelerate Digital Transformation in the Tourism Industry

Two major challenges in the digital transformation of the tourism industry are the lack of data synchronization nationwide and the uncertainty about where to begin, which leads to stagnation in the industry’s development. Understanding these needs and concerns, BPO.MP, a leading provider of digital transformation solutions for tourism in Vietnam, has developed a digital transformation ecosystem with a data-centered approach.

With years of experience implementing technologies and digital solutions for thousands of clients, including large organizations, businesses, and corporations, BPO.MP is ready to help the tourism industry overcome these challenges.

BPO.MP recognizes that for successful digital transformation in tourism, businesses need to have key solutions such as:

• Develop Mobile Applications: Create mobile apps that allow users to easily search for information about tourist destinations, book tickets, reserve hotel rooms, and manage their travel schedules.
• Promote Online Payments: Build a secure and convenient online payment system for customers. This saves time and reduces the reliance on in-person transactions.
• Implement Artificial Intelligence (AI) and Chatbots: Use AI and chatbots to provide quick assistance and answer customer inquiries about their travel journey, such as destinations, timing, prices, etc.
• Upgrade the Booking System: Improve the booking system so customers can easily search, compare, and book hotel rooms according to their preferences. Additionally, enhance booking management capabilities, ticket retrieval, and implement a hotel rating system.
• Utilize Big Data Techniques: Process and analyze big data to provide useful information and recommendations to customers. This helps improve the travel experience and increase customer interaction.
• Leverage Social Media Platforms: Develop a marketing strategy across social media platforms like Facebook, Instagram, and Twitter to showcase travel programs, promotions, and events hosted by BPO.MP.
• Train Employees: Ensure that employees are trained to use new technologies and are well-versed in advancements in digital tourism. This improves employee capabilities and enables them to better meet customer needs.

Recognizing that digital transformation in the tourism industry after COVID may require significant time and resources, it nonetheless offers substantial benefits in both customer experience and business management. MP BPO understands the importance of having a clear strategy and strong commitment to investment in order to successfully accelerate digital transformation.