Last updated: Tuesday, March 26, 2019


Industry 4.0: Pressures for Change in Traditional Tourism Industry

Posted: Wednesday, January 09, 2019

Information technology development has a great impact on the tourism industry. The online tourism business trend is reaping certain successes as Industry 4.0 or the Fourth Industrial Revolution is applied.

Great advantages of Industry 4.0
Previously, travel companies had to spend a lot introducing their promotion programmes to customers via traditional communication channels like newspapers television, radio and leaflets.

Today, with the boom of the Internet, particularly with the broad availability of smartphones and social networks, it is much more simple and effective to access customers, even potential customer segments. In addition, advertising and marketing costs and time funds have been greatly reduced. These advantages are produced by Industry 4.0.

Mr. Ira Wolfe, President of Success Performance Solutions Company, an expert on research and evaluation of labour force trends, said, over the next 20 years, about 50 per cent of industries affected by the Fourth Industrial Revolution or simply the Industry 4.0. Even, some trades will disappear, including traditional travel companies. The demand to place services directly through specialised web-based services is growing. With just a computer or a smartphone with internet connection, customers can find services they need at affordable prices.

The Industry 4.0 has created an unbelievable “touch point”, the spreading speed of travel-related images is rapid and effective. This has imperceptibly stimulated demands of travelling enthusiasts and beget the need to explore and study destinations. Photos, stories or information shared and liked through Facebook, famous and novel tourist spots with high-quality services can quickly create crowd effects, immediately brand destinations, even to the world global class, in the era of the Industry 4.0.

In recent years, MICE tourism (Meeting, Incentive, Convention and Event) have grown robustly in Vietnam as the country is considered a new destination because of its attraction and security. In addition, Vietnam is also an attractive investment destination.

Dr. Tu Manh Luong, Director of Science, Technology and Environment Department under the Ministry of Culture, Sports and Tourism, said, the Fourth Industrial Revolution is unprecedentedly fast, powerful and inclusive in all sectors and fields. The Ministry of Culture, Sports and Tourism targets to focus on building key tourism, sport and cultural products, with the list of key products in the 2017 - 2020 period, including smart tourism and cultural products.

Traditional travel companies must change or die
Mr. Le Tuan Anh, Deputy Director of the International Cooperation Department under the Vietnam National Administration of Tourism (VNAT), said that Vietnam's tourism has developed very strongly and the number of international visitors has kept growing impressively. In the period 2011-2017, international tourist arrivals increased 2.1 times, from over 6 million to more than 12.9 million. Domestic tourists also climbed 2.4 times, from 30 million to 73.2 million. Tourism revenue rose 3.9 times, from VND130 trillion (US$5.6 billion) to VND511 trillion (US$22 billion).

Mr. Vu Quoc Tri, Representative of VNAT, said that the tourism industry needs to improve its competitiveness based on appropriate strategic programmes and information technology application to enhance efficiency and shape a smart eco-tourism environment.

“Because the Fourth Industrial Revolution is the opportunity for Vietnam to make breakthroughs in developing tourism into a spearhead economic sector,” he said.

In analysing smart travel development platforms, he said Vietnam now has platforms for each field such as TripAdvisor and Yelp for information, Airbnb and homeAway for accommodation, Grab and Lyft for transportation, and EatWith and Feastly for food and drink locations.

“Nevertheless, information sharing is poor and fragmented. Not many businesses can take advantage of these platforms,” Mr. Tri stressed.

These shortcomings are attributed to weak capital, finance and technology of domestic companies, while their cooperation with technology firms is not effective.

Dr. Ta Cao Minh, Vice President and General Secretary of the Vietnam Automation Association, said that tourism is a closed service sector, starting from when visitors look for tourist addresses till when they finish their trip and return home.

The Industry 4.0 has impacts on every stage of this process. Therefore, the Tourism 4.0 should be developed cleverly with the support of digital technology to create information and provide best services for tourists, making visitors really satisfied and relaxed when they are in Vietnam.

According to the Vietnam Travel Business Association, in 2017, up to 71 per cent of international tourists came to Vietnam after they searched on the Internet and 64 per cent used online travel and booking services.

Mr. Vo Anh Tai, Deputy General Director of Saigontourist, said that the number of customers booking tours via the internet is increasing very rapidly in comparison with conventional methods. In 2017, Saigontourist's revenue from online bookings was about VND130 billion. Although this was a small share, it was a rising trend.

Like previous revolutions, the Fourth Industrial Revolution has significantly improved the life quality of human beings on the green planet. Consumers in general, businesses or tourists in particular will benefit most from this technological revolution, although there are drawbacks.

Luong Tuan

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