Keywords

1 Introduction

This chapter looks at innovation within the strategic smart destination management (DTI) model and follows the same structure as the other chapters dedicated to the pillars of the model (Fig. 1).

Fig. 1
A flow diagram starts with pillar conceptualization with innovation in tourism. It further leads to this pillar within the D T I model, elucidating its areas of work, requirements, and indicators. Additionally, it explores the implications for destinations, offering standard recommendations for implementing this pillar in practice.

Chapter outline

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As shown, after the introduction, there is an initial section to bring the reader closer to the theme of the pillar, in this case, the concept of innovation; followed by a section that describes how the DTI model defines innovation as a differential strategy for smart tourism destinations; and in conclusion, a section is dedicated to providing a practical overview of the innovation pillar, offering the reader examples of the typical recommendations usually made to destinations in this area of the DTI model’s management. This chapter also includes a list of bibliographical references associated with innovation.

In relation to the section where the concept of innovation is addressed to provide context, the reader is hereby informed that the scope of this section does not extend to providing an exhaustive review of the complex concept of innovation, which has been widely studied from a variety of perspectives and on many subjects to a significant subjective burden. However, it does aim to bring the reader closer to the concept of innovation through a series of simple and commonly accepted operational definitions, for them to contextualize and understand the innovation management proposal for tourism destinations as part of the methodology set out under the DTI model.

About the methodological section, it provides a detailed description of the innovation pillar in the latest available edition of the model, referring to the first quarter of 2022. Each of the areas of action that make up the pillar is listed objectively, detailing the requirements referred to in each innovation management area and the indicators for monitoring compliance.

Finally, the fifth section serves a propositional nature, as it sets out “standard” recommendations in the field of innovation that are usually extended to destinations in the smart destination management adoption process. Furthermore, this section sets out the shared reflection of the SEGITTUR team responsible for the implementation and monitoring of the model in tourism destinations that have adopted the smart destination methodology and illustrates the main difficulties and challenges that destinations face when implementing the strategic DTI model in relation to innovation.

2 The Concept of Innovation in Tourism

Innovation is a critical factor both for tourism destinations and for companies that operate in them; it represents a strategic commitment to be competitive in both the medium and long term (Teixeira & Ferreira, 2018; Tugores & García, 2015). In 1934, Schumpeter defined innovation as the process of creating knowledge, or combining existing knowledge, which translates into improvements in the competitiveness of an organization. This initial definition has been developed on significantly, having been studied from different perspectives, which have given rise to a complex conceptualization and as varied as the perspectives taken to analyze it (Hjalager, 2015). The different approaches adopted complement one another, helping to define it appropriately (Pikkemaat et al., 2019). Furthermore, innovation has been studied aiming to determining in which contexts it occurs (Divisekera & Nguyen, 2018) or how the processes that give rise to innovations are configured (Kozak, 2014; Yeh & Ku, 2019). Its relationship with the knowledge and technology available at any given time has also been explored (Del Chiappa & Baggio, 2015; Nieves & Haller, 2014). Other authors have studied innovation from specific contexts, such as SMEs, with a view to identifying the factors that define it (Kallmuenzer, 2018; Tejada & Moreno, 2013). How users of products and/or services can promote innovations has also been subject to study (Gardiner & Scott, 2018).

In the field of tourism, particular efforts have been dedicated to studying how the governance of a destination, especially collaborative governance, encourages innovation (Halkier, 2014; Marasco et al., 2018). Furthermore, the role of “eco-innovation” and how it can help both tourism destinations and companies to be more sustainable has received considerable attention (Buijtendijk et al., 2018; Triguero et al., 2013). Another aspect subject to analysis is how public policies can promote innovation in destinations and at companies (Mei et al., 2015; Rodríguez, et al., 2014; Romão et al., 2013).

The common element shared by all definitions of innovation is the concept of “novelty,” on the basis that innovating always implies a change based on incorporating something “new.” The necessary change can be introduced at any stage of the production process and can consist of a variety of activities: renew or expand the currently supplied tourism products and services, incorporate new methods of production, supply and distribution, or make changes to the management and organization of work and human resources, to name just a few. In the tourism sector, these “changes” associated with innovation can be introduced as part of the destination management process: for instance, changes to reduce environmental impacts, rationalizing the consumption of resources and reducing the amount of waste generated, or generally speaking, making changes and improvements to the process of providing the tourism service. Moreover, innovation in tourism may be also associated with changes in the management of an SME, which, on account of its size, does not have access to the technology and economies of scale accessible to larger companies, but may benefit from open innovation.

One general reflection regarding the innovation process is the practical difficulty inherent into the identification, measurement, and transfer of innovations. In the United Kingdom, a very revealing report was published, under the heading “Hidden Innovation,” (NESTA and the Government of the United Kingdom, 2007), which presented a category of innovations known as “hidden,” identified across six strategic sectors in the country. Innovations were classified as “hidden” because they had not been registered, patented, or disclosed, despite offering solutions that optimized the competitiveness of these sectors and significant transfer potential.

One possible definition that summarizes the many existing conceptualizations in the field of innovation is the definition offered by the European Commission (1996, p. 4),Footnote 1 which defined it as the process of “producing, assimilating and successfully exploiting a novelty, in economic and social spheres, in such a way that it provides unprecedented solutions to problems and thus makes it possible to respond to the needs of people and society.”

More recently, the OECD/Eurostat (2018) generalized the definition of innovation to any process that leads to the production of a new, improved product or to the improvement of an existing process, leading to a substantial improvement in the pre-existing product or process.

In Spain, the COTEC Foundation,Footnote 2 set out a more all-encompassing definition, describing it as “any change based on knowledge that adds value.” It also clarified that “the change” does not necessarily have to consist of the introduction of a new technology, that the “knowledge” from which said change starts does not have to be scientific, and that the “value” provided does not have to be economic, rather, it could be social or environmental, for example.

Although the initial definitions meant that for an innovation to be considered as having occurred, there must be a “significant change” as regards the starting situation (Souto, 2015), the existence of “incremental innovations” has subsequently been acknowledged. These are understood as processes that lead companies or destinations on a path of continuous improvement, of subtle transformations, which in the long term give rise to relevant changes when compared to the starting situation, although in the short term the changes may not seem significant, there is a sustained improvement over time (Johannessen et al., 2001). With this in mind, innovation is by no means a single process. Additionally, in the context of the tourism sector, where services are provided rather than products, the concept of innovation must be more refined (Coombs & Miles, 2000). In the provision of tourism services, the interaction between the service provider and the tourist will be a determining factor in the latter’s experience (Chang, 2017; Dimanche & Andrades, 2018); therefore, as part of innovation processes in the tourism sector, the tourist often plays a leading role in the co-creation of value (Chen et al., 2017).

With a view to cataloguing the types of innovation in tourism, Hjalager (2010) proposed distinguishing between innovations in products that involve launching a new development on the market; innovations in processes that improve the production or distribution system, the latter being key in the field of tourism; innovations in the organizational structure, in the management or in the marketing of destinations or companies, which entail an improvement in the organization of certain areas or a greater customer orientation, better responding to their needs and/or desires. Another author who has contributed significantly to listing the innovations that take place in the tourism sector is Gomezelj (2016). Taking all the foregoing into account, there are areas in the tourism sector where innovation is particularly important, as is the case of human resource management, as this is a labor-intensive industry and the ultimate tourist experience is determined based on their interaction with the service provider, meaning that the employee acts as the “touch point” between the company (Bani-Melhem et al., 2018; Sørensen & Jensen, 2015) or destination (Zopiatis & Theocharous, 2018) and the tourist. Below, the Managing Director of COTEC foundation for innovation, a Spanish private non-profit organization aiming boosting innovation as a driver for economic and social developmen, explains how the DTI Model supports innovative management for tourism destinations.

2.1 The DTI Model Represents an Excellent Opportunity to Include Innovation at the Heart of Tourism Management

Innovation is a core pillar for the economic and social development of any country. Not only is it a catalyst for growth, it is also an essential strategy in adapting to changes and overcoming the challenges facing society.

At the COTEC Foundation, we analyze and promote innovation, on the understanding that for the Spanish economy to make the qualitative leap that it needs, it is important for this commitment to be extended across all sectors of activity. It is essential that it do this in the sectors that contribute most decisively to the generation of activity and employment, as is the case of tourism. To this end, we have celebrated the inclusion of SEGITTUR as a member of the foundation because this allows us to enhance our work agenda in promoting tourism innovation.

SEGITTUR is a key agent in promoting the Smart Destination model. The adoption of the smart destination model represents a paradigm shift in tourism management, as innovation represents one of its core pillars. This not only implies the use of new technologies, but also the transformation of business processes and models.

At COTEC, we believe that the smart destination model represents an excellent opportunity to include innovation at the heart of tourism management and, as a result, contribute to the development of tourist destinations that are sustainable, attractive, and competitive, adapted to the needs of the 21st century.

I am convinced that the future of tourism depends on innovation and the adoption of the Smart Destination model. Working together, we can make innovation a core pillar in the construction of tourist destinations that truly set the benchmark on a global scale.

Jorge Barrero

Managing Director of the COTEC Foundation

https://cotec.es/en

3 Tourism Innovation Within the Framework of the DTI Model

As explained previously, in the tourism sector, innovation represents a strategic tool for overcoming the challenges that the industry faces. These challenges can be attributed to the fact that this is a highly globalized sector, which operates in a very competitive environment, in interconnected markets and very sensitive to any change that occurs, both within and beyond the sector’s borders. Furthermore, the tourism sector, given its unique nature, is closely linked to climate change, sustainable mobility, digitalization and the incorporation of new stakeholders in the tourism value chain, safety and health management in destinations and, generally speaking, will be significantly affected by any type of economic turbulence that occurs and disrupts tourism demand (disposable income and consumption capacity, the cost of transportation, the option of travelling or not in case of pandemics, etc.).

All these specific features explain why it is ideal for the tourism industry to introduce gradual and constant innovations, allowing it to evolve as changes occur, while optimizing its processes, becoming more sustainable, economically, socially, and environmentally. Innovating helps the sector to overcome the challenges it faces and represents a lever of change in itself for the creation of value: saving time and resources, simplifying procedures and processes, improving the tourist experience, enhancing communication channels between tourists and destination service encounter points, allowing tourists participation on the value co-creation process at destinations, enabling positive interactions between host community and tourists, assuring residents wellbeing and enhancing the quality of life of the population residing in the destination and, ultimately, increasing business competitiveness and the competitiveness of the destination as a whole.

Despite the numerous advantages offered by innovation, in practice, there is a high level of resistance to changes that prevent the adoption of innovations in the sector. Reluctance that can usually be traced to the very structural nature of the sector: the lack of human resources with innovation training; the absence of stable financing to support innovation, sometimes meaning that projects undertaken end up being nothing more than a “flash in the pan”; insufficient public leadership in promoting innovation; limited commitment from the business sector, combined with the difficulty of systematically integrating innovation processes into the company as part of its business culture; the difficulty of transferring innovations between the different links of the tourism value chain; and finally, the huge inequality between the different subsectors active in the tourism sector.

Despite all these obstacles, innovation is essential to strengthening the competitiveness of the Spanish tourism sector, so SEGITTUR proposed the strategic smart destination management (DTI) model to consider it as a core pillar on which it rests. For a destination to consolidate its position and consider itself “smart,” it must necessarily be an innovative destination, open to change, which encourages the continuous improvement of its processes, and that stimulates the introduction of technological tools that facilitate the accomplishment of its objectives.

Through the different areas of innovation, and the corresponding requirements and indicators, the smart destination model offers destination managers a practical guide for promoting the successful development of innovations in their destinations, being more competitive, identifying and harnessing opportunities, minimizing risks, designing new strategies that allow it to stand out and generate additional value for tourists and residents, exploring new ways of preserving the environment, reducing consumption and waste, etc.

As the reader will have been able to deduce in the previous section, for an organization to be innovative, it must have an atmosphere that is conducive to creativity, entrepreneurship, and innovation, while ensuring the necessary resources are available. The DTI model, when establishing the areas of action under the innovation pillar, started based on these premises and, as a result, established the three areas divided into 9 requirements on which to work for destinations that intend on being innovative. The following section provides details of these areas, with the corresponding requirements and measurement indicators.

4 Areas of Action, Requirements and Indicators in Relation to Innovation in the DTI Model

The innovation pillar is articulated in destinations around three areas of action, encompassing the mechanisms and resources for planning and managing innovation in the destination, the innovative activities in which such management is realized, and the effort to foster an environment conducive to the emergence of innovations in the destination, under an open innovation paradigm. These three areas of action are specified in 9 requirements and 14 indicators.

4.1 Area of Action 1: Innovative Governance/Management

In area 1, the DTI model sets out 4 requirements (Table 1), with the corresponding achievement indicators, which have been defined to ensure that the DMO plans its innovative actions and sets out its internal organization in such a way that it is possible to coordinate them, placing them at the service of its strategic objectives. Furthermore, planning the allocation of financial and human resources for the development and systematization of innovation management, both internally and externally, is highly appreciated, designing actions that contribute to the stimulation of an open innovation environment that optimizes innovation in the destination.

Table 1 Innovation pillar in the DTI model: Area 1: Requirements and indicators
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4.2 Area of Action 2: Innovation Activities

Area 2 reviews the innovation activities performed in the destination based on four requirements (Table 2). The requirements in this area correspond to two lines of work. First of all, innovation applied to the resolution of social problems in the destination, from a broad perspective and with particular attention paid to problems attributable to tourism activity in the territory. Secondly, the active work of innovation applied to the search for new products, services, and processes or the improvement of existing ones. Furthermore, this area also looks at the need for the DMO to understand how this innovation is relayed to residents and visitors and their perception of the work that the destination does in this field.

Table 2 Innovation pillar in the DTI model: Area 2 requirements and indicators
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4.3 Area of Action 3: Innovation Ecosystem

This area aims to encourage tourism destinations to design environments capable of stimulating the economic competitiveness of the territory, facilitating the efficient development of innovation projects by companies, businesspeople, organizations, and other stakeholders. As a result, the established requirement ambitions to generate the necessary conditions for transforming knowledge into innovation. Furthermore, the aim is to ascertain the real and potential innovation capacities of tourism companies in the destination (Table 3).

Table 3 Innovation pillar in the DTI model: Area 3: Requirement 9 and indicators
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5 The Innovation Pillar in Practice: Standard Recommendations

With a view to offering an idea of the practical implications of applying the pillar in tourism destinations that aspire to be a DTI, this section sets out, by area of action, some of the most common recommendations made to destinations after the diagnosis phase (described in detail on chapter “Methodological Framework of the Spanish Smart Tourism Destinations Model”).

5.1 Main Recommendations, Area 1

Area of action 1 of the innovation pillar was established to encourage innovative management and governance of the destination, ensuring that public resources are provided for innovation, that tenders encourage innovation, and that open innovation (Chesbrough, 2003) is also fueled. Table 4 provides an example of a recommendation that is usually made to destinations for each requirement.

Table 4 Examples of recommendations for improving the innovation of the destination in area 1
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5.2 Main Recommendations, Area 2

Area 2 of the innovation pillar has been designed first of all to stimulate innovative actions in the destination, fostering social innovation, innovation in processes and the development of innovative products and services as well as to learn about the perception of both residents and visitors regarding the innovation in the destination. Thus, “typical” recommendations, reflected in Table 5, offer examples of how the destination can put these objectives into practice.

Table 5 Examples of recommendations for improving the innovation of the destination in area 2
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5.3 Main Recommendations, Area 3

As area 3 specified for promoting the generation of an innovation ecosystem in the destination, the recommendations referring to this area of ​​work provide the destination with a series of guidelines for developing a variety of actions that together facilitate and boost this innovative atmosphere in the destination (Table 6).

Table 6 Examples of recommendations for enlightening the innovation of the destination in area 3
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6 Lessons Learned in the Field of Innovation in DTIs: Challenges

The application of the smart destination model in destinations represents a new and ambitious commitment by local entities to promote the smart development of their territory through the implementation of a strategic smart management model. This commitment, as well as representing an opportunity to reinforce the competitiveness of the destination in the area of tourism, constitutes a challenge for the public managers responsible for leading the smart destination diagnosis process and implementing the corresponding action plan.

In relation to the innovation pillar, the implementation of the DTI model is additionally complex on account of the triple challenge posed: first of all, the subject matter itself, since innovation is not an easy concept to approach: it requires familiarization with the definition and its nature based on the most commonly accepted standards; secondly, the application of innovation to a field such as tourism, insofar as industrial activities and not services have been most frequently associated with innovation processes; and, finally, the challenge of transferring this to the field of public administration at a local level, where innovation has not traditionally been a specific part of aspects that make up its powers, pursuant to those attributed to local authorities by Article 25 of Law 7/1985, of 2 April, regulating the bases for the local system (LRBRLFootnote 3).

Innovation is not and should not be considered as a specific matter where the local entity exercises its own powers, within the list of areas defined by the LRBRL, rather it must be understood as a cross-cutting tool at the service of a better and more efficient management of these powers, in particular those that directly or indirectly interact with tourism. Innovation provides us with new ways of identifying and addressing the problems facing a local entity and new tools to solve them; it is also an attitude, a way of working, a management system, and a different way of interacting.

In fact, bringing destination managers closer to the phenomenon of innovation and clarifying its scope and attributes in the case of innovation in tourism is not only one of the main challenges faced when embarking on the diagnosis process, but also a critical aspect that must be addressed in order to successfully collect information about the process of preparing the smart destination diagnosis. When the smart destination model is applied to smaller destinations, with limited resources and that are embarking on the smart development process, one unexpected initial result of the diagnosis is this improvement in the knowledge of the destination’s managers in relation to innovation and its possibilities in the public sector. As a result, the diagnosis process becomes a process of self-knowledge, where the smart destination diagnosis serves as a tool for discovering potential that the destination was previously unaware of and opportunities for improvement not previously detected.

Bidding for projects under the Innovative Public Procurement approach, the certification of management systems under UNE 166001 (R&D&i Management: requirements of an R&D&i project) and UNE-166002 (requirements of an R&D&i management system), the promotion of local entrepreneurship and support for SMEs, or the potential of social innovation to address the problems caused by tourism activity are just a few examples of the new areas of work, which are determined as part of the diagnosis interviews. These were often previously unknown to tourism managers because they fall outside their traditional mission.

This widespread and apparent initial ignorance does not mean that innovations are not being developed in destinations. In practice, the preliminary clarification of terminology and concepts helps innovations undertaken and promoted by the local entity, but not identified as such, to flourish. This is particularly significant in the case of product innovations where, often, the tourism manager does not recognize successful improvements made to products and services as innovations, often supported by the manager’s (often tacit) knowledge.

That being said, the difficulty of measuring this pillar in line with the requirements and indicators established in the DTI model is also closely related to the usual non-existence of areas or departments within local entities assigned specifically to innovation activities. In the case of smaller, often rural, destinations, it is common for the technology area to assume the role of promoting innovative projects in the destination. To this end, this area also often participates as the provider of key information for the diagnosis of the pillar, introducing a strong technological bias in the type of innovations deployed and identified. This factor must be taken into account and addressed by the evaluator.

In most of the destinations diagnosed with this shortcoming, the non-existence of an area dedicated to innovation is compounded by the failure to allocate both budgetary and human resources, which are specific and sufficient for the development of innovative activities. This represents a significant obstacle when it comes to addressing the actions set out in the action plan in the short term.

The lack of strategic planning when it comes to innovation, the absence of dedicated internal capacities or systematization in relation to the management of innovative projects are elements that are usually present in these destinations, where innovation is not managed separately. However, these elements are not unique to smart destination model; rather, they correspond to the barriers to innovation that the public sector generally experiences when addressing the challenge of innovation.

In contrast, when applying the diagnosis of the innovation pillar, there is an additional and particular difficulty that local entities face in this pillar, which has to do with two main factors. First and foremost, the internal consideration of tourism as a sector with potential for innovation. Second, the role that a key piece of the DTI model plays within the corporation: the tourism area. This area is responsible for the tourism management of the destination, for driving the smart management project forward and for many of the actions to be implemented. However, this department is often far removed from the internal structures where transformational projects are traditionally promoted, a separate structure that does not facilitate the implementation of the DTI model.

This reality is also manifested in destinations that dedicate more resources to innovation and that have a particularly noteworthy territorial position when it comes to R&D&i. Even in these cases, the tourism area does not usually participate in interdepartmental bodies, nor in cross-cutting projects with an innovative component that the destination embarks upon, such as Sustainable and Integrated Urban Development (DUSI) Strategies, despite the fact that they have a direct relationship with the performance of tourism activity in the territory.

To this end, a critical task of the DTI model in this pillar is to reinforce the consideration of the tourism area and of the sector itself, not only as an economic activity and source of wealth for the destination, but also as a priority sector for innovation.

The very performance of the diagnosis and the definition of the action plan for this pillar, placing tourism managers and tourism at the heart of a project as ambitious as the conversion of a destination into a smart destination, which affects almost all institutions in the destination, facilitate the subsequent development of lines of work in this area: transferring experience and know-how in the management of innovations to tourism projects; incorporating the tourism area into the interdepartmental teams that define innovation projects; or ensuring the specific dedication of the innovative capacities available to new tourism actions are clear examples of this.

Looking beyond the internal dimension and the specific conditions that destinations may present, there is an additional complexity when addressing the pillar, which lies in the fact that local entities are agents that develop their innovations within an ecosystem with a multitude of interconnected stakeholders that must operate, pursuant to the DTI model, under the paradigm of open innovation.

Measuring the success of the deployment of innovation in tourism or assessing the perception of visitors and residents of innovation is a challenge that requires that the destination manager have knowledge of the real capacities of the ecosystem in which it innovates and develop collaborative innovation management strategies in which entrepreneurs and tourism companies participate, in a special way.

In short, experience in the application of the innovation pillar in destinations demonstrates that there are common problems, but also allows non-explicit tasks of the model to be performed. Bringing innovation closer to managers, placing tourism at the heart of the innovative impulse, and connecting the local entity to its innovation ecosystem are, at the same time, tasks to be addressed in the diagnosis and lessons learned that lay the foundations for managing entities not only to develop, but also to lead tourism innovation in their destinations.