Digitalization is defined as the use of digital technologies to manage and grow a business; this usually involves changing a business model and providing new revenue and value-producing opportunities that were not previously possible.

COVID-19, which accelerated the evolution and use of digital technologies, profoundly changed the way people live, travel and do business, and in the process, they are transforming the tourism sector.

Searching online using a mobile device has become the norm, especially with younger consumers. This younger demographic is more likely to discover travel destinations via travel aggregator and tour operators’ websites, travel blogs, and travel media and influencers on various social media platforms.

Small traditional tourism businesses can reap the benefits of digitalization by starting with experimenting with social media platform, leveraging websites or e-commerce platforms and investing in full-fledged ERP systems.

1. Social media platforms for reaching new markets, engaging customers and building your brand

Social media is free. Many people use Facebook, Instagram and Twitter (to name a few) for personal social media as it’s often easier to get onboard and more familiar than, say, using a website builder or blog. With billions of active monthly users, social media brings what small businesses need the most: access to a growing customer base. This may seem like a no-brainer as it immediately allows you to go where the people are.

Tech wise, social media platforms are backed by huge company with billions of registered users or subscribers. It’s safe to say that you can count on regular updates and continual optimization. Small business owners can then use social networking sites to effectively promote their businesses in powerful ways. Social media is one of the best ways to connect with your customers and quickly build a following for your company. If you’re just getting started, this allows you to experiment and make a fair assessment on whether to continue a project or not.

2. Custom-built website and e-commerce

Cheap and ease of use comes with a price. While Facebook, as an example, allows customization of the main page, store layouts and the content you share, that’s the limit. Your business branding must stay within the guidelines established by Facebook and the same goes for your offers, promotions, and updates; they are subordinate to the Facebook brand. If you want the appeal of exclusive, unique content, the main ways of selling your travel products directly to travelers is then through your own website. When you work with, say a web agency, you have greater control and input over the look, the content, and on which features are a priority and which are not. Furthermore, more and more consumers are choosing to make purchases online. This includes travel products such as airline and bus tickets, hotel accommodation, holiday packages, car renting and so on. The world is a busy place and being able to provide speedy transactions has become extremely important to customers across all consumer groups; the biggest benefit to consumers from making purchases online is convenience. Finally, your website should be clear, informative and transparent so potential buyers will be reassured of the quality of your offer and engage in business with you.

3. ERP TOOLS and Business KPI

Productivity-enhancing technologies such as cloud computing, data analytics, revenue operation platform have generally received low uptake in tourism. Much attention to date has focused on digital marketing and e-commerce as a quick way of reaching new markets, engaging customers and building brand. While social media tech and custom-built website might facilitate market access and build awareness, increase connectivity and democratize financial transactions, they are generally less effective in enhancing productivity in an increasingly competitive global marketplace. If they want to enable the best facets of their operations and increase business’s value, SMEs need to invest in software solutions and software development to enhance their competitive advantages.

Digitalization brings significant potential benefits to SMEs - it can help them to become more efficient, increase their capacity to develop innovative business models and access global marketplace.