Management and Leadership for Digital Transformation in Tourism

Juho Pesonen, University of Eastern Finland, juho.pesonen@uef.fi

Information and communication technologies are major drivers of change. Also in tourism, businesses and
entire destinations have to find new business models to stay competitive and relevant. Utilizing the
possibilities of digital technologies in developing new business models is called digital transformation. This
chapter examines what digital transformation in tourism is and how technology affects leadership and
management in tourism organizations. Digital transformation is conceptualized as a creative process
activated by knowledge management and knowledge transfer which, in turn, aims at creating new business
possibilities and models, respectively. By drawing on extensive literature on topics connected to digital
transformation, such as tourism management, leadership, knowledge and change management, as well as
creativity, the chapter at hand discusses the current state of digital transformation management in tourism.
A research outlook for the future of digital transformation management in tourism is finally proposed.

Keywords: Digital transformation, management, leadership, creativity, destination management,

knowledge management

Cite this entry as:

Pesonen J. (2020) Management and Leadership for Digital Transformation in Tourism. In: Xiang Z.,
Fuchs M., Gretzel U., Höpken W. (eds) Handbook of e-Tourism. Springer, Cham.
https://doi.org/10.1007/978-3-030-05324-6_68-1

1. Introduction

Already in the 1990s, new technology, global economic restructuring, environmental limits to growth and
more experienced consumers were listed as major challenges that the tourism industry will be facing
(Poon, 1993). Poon (1993) stated that information technology will become the key tool for facilitating
major processes of value creation in tourism. It is now clear that the evolving information technologies
have become central to virtually every type of tourism organization (Xiang, 2018). Developments in
information and communication technologies (ICTs) have drastically affected tourism and will continue to
do so (OECD, 2020). Digital platforms and sharing economy, automation and artificial intelligence (AI),
blockchain technology, and virtual reality (VR) are among those technologies that are are shaping tourism
today and will do so in the future (Werthner et al., 2015). However, besides technology, political,
environmental, social, societal and economic forces have also affected and will continue to impact tourism
businesses and travelers alike. How tourism is changing as a whole mainly depends on its inherent ability to
respond to these drivers of change.

The ability of an organization to respond to changes is mainly related to those people working for and with
that particular organization (Moran & Brightman, 2001). Notably, technology is not just one of the forces
causing change, but it can also be utilized to respond to changes. Organizational change caused by the
development and application of digital technology in business is called digital transformation (Larjovuori et
al., 2018). This notion needs to be differentiated from digitalization, which is defined as “the use of digital
technologies to change a business model and provide new revenue and value-producing opportunities; it is
the process of moving to a digital business” and is, thus, stongly connected to digital business
transformation, which is defined as “the process of exploiting digital technologies and supporting
capabilities to create a robust new digital business model” (Gartner, 2020). In fact, digitalization requires
companies to transform their businesses mainly by revisiting their business models (Gretzel et al., 2015;
Xiang, 2018), by focusing on customer experiences (Stamboulis & Skayannis, 2003), by rethinking a
company’s or a destination’s brand (Munar, 2011; Chekalina et al., 2018), and by facilitating innovations
(Buhalis & Law, 2008; Baggio, 2014; Fuchs & Baggio, 2017). One can, therefore, conclude that digital
transformation, beyond ICT adoption and use, is strongly related to organizational change. Focusing mainly
on the complex ICT adoption process without accompanied business model adjustments and organizational
re-structuring and re-design can even lead to an overall decrease of productivity as has been
demonstrated, for example, for the Austrian hotel industry (Scholochow et al., 2010).

This chapter focuses on digital transformation in tourism. It examines the organizational change process
that is undertaken to ensure the overall viability of an organization to respond to emerging digitgal
technolgies. The focus is on understanding the role of management and leadership in increasingly digitally
operated and connected tourism organizations. First, the concept of digital transformation in tourism is
examined and clarified. Then, the concepts of management and leadership in the context of e-Tourism are
introduced and critically analyzed. The particular focus is on change and knowledge management processes
since these processes have been identified as the critical factors in organizational change theory and are
linked to entrepreneurial processes, as well. Finally, a critique of digital transformation research in tourism
is presented and a research outlook is proposed.

2. Digital transformation in tourism and change management

ICTs have radically changed tourism supply and demand (Buhalis, 1998). Since the 1990s, technology has
revolutionized information distribution and communication channels used in the tourism industry (Li et al.,
2017). ICTs have further affected intra- and inter-organizational communication and all major functions of
strategic and operational management (Buhalis, 1998; Werthner & Ricci, 2004; Cetin et al., 2016). ICTs
particularly facilitate strategic planning, competition analysis, financial planning and control, marketing
research, strategy and implementation, pricing, and many other managerial tasks in tourism (Buhalis, 1998;
Werthner & Klein, 1999). Especially airlines have found ICTs advantageous in managing their operations
(Poon, 1988). Additionally, hotels have been using ICTs for a long time for their core information processing
centers of front and back office as well as food and beverage control (ibid, 1998; Werhtner & Klein, 1999).
From hotels and airlines, the use of ICTs has expanded to all fields of tourism (Xiang, 2018; Benckendorff et
al., 2019).

Lately, the smart tourism era has been entered, where tourism organizations utilize huge amounts of data
gained from sensors and smartphones in order to understand technology-mediated value co-creation in
real-time (Gretzel et al., 2015; Boes et al., 2016; Femenia-Serra et al., 2019; Cavalheiro et al. 2019; Gretzel
& de Mendonça, 2019). In fact, information and communication technologies keep creating new
opportunities, but also new threats for businesses in the tourism industry. Novel technologies, such as real-
time consumer intelligence, artificial intelligence, real-time contextualization and personalization and
dynamic business analytics, will keep ICTs as major focus area of tourism research that will bring changes to
the industry (Werthner et al., 2015; Buhalis & Sinarta, 2019; Gretzel et al., 2020). Transforming the
organization to benefit from smart technologies (Gretzel & de Mendonça, 2019) implies changing the
organizational culture, introducing new ways of thinking, working, and building capabilities to match the
changes in the marketplace (Parviainen et al., 2011; Gretzel et al., 2020).

Moroever, evolving digital technologies constantly create new possibilities for customer value co-creation
(Ramaswamy & Ozcan, 2014; Neuhofer et al., 2014; Neuhofer, 2016; Chekalina et al., 2018; Buhalis &
Sinarta, 2019). As a consequence, customer-oriented management is increasingly demanded to identify
possibilities of customer-based value co-creation (Schmidt et al., 2017). Due to the changes caused by
digitalization, businesses need to develop strategies to cope with this change, often referred to as digital
transformation strategy (Matt et al., 2015). The particular focus on “the transformation of products,
processes, and organizational aspects owing to new technologies” (Matt et al., 2015, pp. 339) has, indeed,
manifold implications for the development, advertisement and co-creation of services, products, and even
whole business models. There are four major transformational dimensions related to digital
transformation: the use of technologies, structural changes, financial aspects, and changes in value creation
(Matt et al., 2015). All four dimensions need to be considered when planning a digital transformation
strategy and management, respectively. Digital transformation has mostly been studied in finance,
marketing and innovation management, but also, to some extent, in manufacturing and tourism. Yet in
relevant fields, such as accounting, human resource management, and sustainable digital transformation of
organizations, research is scant (Hausberg et al., 2019).

As the notion of transformation states, digital transformation is about change,which can be characterized
by the rate of occurrence, how this change comes about, and by scale (By, 2005; By & Dale, 2008). It is
important to note that there are different kinds of changes, and that there are also different ways to
respond to those changes. Typically, larger businesses ‘pro-actively’ start adaptation projects to cope with
change, thereby defining new directions and business models. However, failure rates of about 70 % have
been reported for these change programs (Balogun & Hailey, 2004), thus, demonstrating how difficult
managing and adapting to change can be in practice. Change management is defined as “the process of
continually renewing an organization’s direction, structure, and capabilities to serve the ever-changing
needs of external and internal customers” (Moran & Brightman, 2001, pp. 111). Indeed, the critical part is
the claim for continuous renewal. As some argue that innovations come from business routines (Kesting &
Parm Ulhøi, 2010), having just a one-time project in digital transformation could explain why so many
digital transformation projects fail (Davenport & Westernman, 2018).

Various studies have been analyzing the enablers and barriers of successful change management (Gill,
2002). Especially for tourism small and medium sized enterprises (SMEs), academic literature considers the
management of change as crucial for corporate survival and success. More precisely, By and Dale (2008)
conducted interviews with managers of visitor attractions in the UK to explore the nature of organizational
change management within tourism SMEs. They identified eigh success factors that help tourism SMEs to
manage organizational change processes: adaptability and flexibility, commitment and support,
communication and co-operation, continuous learning and improvement, formal strategies, motivation and
reward, pragmatism, and, most importantly, the ‘right’ people (ibid, 2008).

Traditional information systems and management literature uses the term change to describe the multiple
effects of technological innovations. There are three major schools and related perspectives on technology
and organizational change (DeSanctis & Poole, 1994). The decision-making school is characterized by a
focus on technology engineering combined with a positivist science approach. By contrast, the institutional
school focuses on social structures by employing an interpretive approach to research, in particular non-
deterministic modelling techniques. Finally, the social technology school focuses on technology and social
structures by employing mixed-research techniques and models of behavior, thereby blending the
perspectives of the two previous schools. As an example, adaptive structuration theory systematically
examines the change process of organizations caused by advances of ICTs (DeSanctis & Poole, 1994). This
theoretical approach looks at the types and structures that emerge in organizations through human action
as people interact with new technologies.

Digital transformation in the tourism industry can be divided into five categories, ranging from disruption to
new roles for tourism organizations (see Table 1, adapted from Dredge et al., 2018). These five categories
reflect the specific nature of digital transformation in tourism. More concretely, visitor experience
management is changing with augmented reality (AR) and virtual reality (VR), while the borders of
destinations are becoming blurred. New virtual and platform-based actors specific to the various tourism
domains are emerging. The transformational role of technology is evident in changing the role of tourism
producers and consumers, business models, and required competencies. For example, small- and medium-
sized tourism enterprises (SMTEs) require skills, finances, infrastructure, mentoring support, and policy
support to cope with digitization (Dredge et al., 2018). By surveying 2,897 SMTEs in Europe, Dredge et al.
(2018) noticed that the levels of digitization among businesses vary significantly across Europe with Nordic
countries exhibiting higher levels of digitization than other countries. Among the top five major difficulties
in implementing digital technologies emerged training, costs and uncertain return on benefits, insufficient
knowledge, as well as a lack of suitable products and services within budget (ibid, 2018).

Table 1. Transformations in tourism resulting from digitalization (Dredge et al., 2018, pp.10)

Disruption New destination New business Changing New roles for tourism
configurations models, value roles of organizations
chains, and eco- consumers
systems & producers
Big data improves Digitalization allows New actors, such as Visitors have Destination marketing and
management greater customization of online platforms act as become pro- product development, the
visitor experiences, new information brokers sumers traditional roles of tourism
Disruption to incumbent
customized destinations and intermediaries (e.g. actively organizations, are
operators and pressure
emerge Expedia, TripAdvisor, producing transformed
to re-conceptualize
etc.) offer services and
traditional business Organizations find
traditionally offered by consuming
models themselves increasingly in
tourism organizations. their own
facilitation and capacity
Rise of the platform experiences.
Digital platforms (e.g. building roles with less
economy, on-demand
Airbnb, Uber) are Visitors take direct influence over
business
expanding beyond on different destination development,
New value creation accommodation roles, innovation, and marketing
opportunities products to curate, including
coordinate, and booking,
Emergence of global facilitate visitor (self)-guiding,
value chains experiences in a reviewing,
destination sharing and
marketing the
destination

One of the main questions in e-Tourism related management and leadership research is, how can tourism
organizations manage this change that comes from the new possibilities and threats of new ICTs? What
type of management is needed in tourism, especially when taking into account the unique context of the
tourism industry? There are major differences in digital transformation among SMTEs (Dredge et al., 2018),
not to mention larger corporations, such as hotel chains, airlines and tourism destinations. This means, that
the tourism context is highly differing and tourism organizations are, thus, hardly comparable. Additionally,
different organizations have varied goals and have found differing strategies to reach those goals. Finally,
the environment (eco-system) where businesses operate is highly volatile and is changing at an accelerating
pace (Petry, 2018; Xiang, 2018). Therefore, knowledge sharing and knowledge management are regarded
as critical factors for successful digital transformation management (Höpken et al., 2011; Höpken et al.,
2015; Keil et al., 2017).

3. Management and leadership in e-Tourism

3.1 Knowledge sharing and management in e-Tourism

There are two types of knowledge in organizations (Polanyi, 1966). Tacit knowledge is difficult to codify and
to communicate with others, therefore challenging to digitalize. Explicit knowledge, on the contrary, is easy
to transfer and to communicate as well as to digitalize. Most of the knowledge in the field of tourism is
considered tacit (Cooper, 2015). This implies that knowledge is connected to individuals working in
organizations which is difficult to codify and to transfer. On the one hand, the tacit knowledge base of an
organization can hardly be imitated by competitors, thus, creating strategic advantages. On the other hand,
however, it makes organizations vulnerable and dependent on single individuals (Cooper, 2015). Therefore,
personnel changes and turnover can have damaging impacts, especially for SMTEs. ICTs can help integrating
tacit knowledge with explicit knowledge in tourism destinations and, thus, provide important tools for
knowledge management (Varra et al., 2012).

Knowledge management takes place within the context of networks and communities of practice
(Schianetz et al., 2007). In the case of communities of practice, practitioners show different behaviors,
languages and networks than those institutions who generate (e.g. tourism) knowledge, for instance
universities (Cooper, 2015). According to Cooper (2018, pp. 515) “knowledge and learning comes from
people and their relationships with each other and their experiences”. Most importantly, the way how
people within organizations are able to share knowledge among each other is affecting the capability to
innovate (Srivastava & Joshi, 2018). ICTs can improve knowledge sharing in tourism organizations (Fuchs &
Baggio, 2017; Srivastava & Joshi, 2018). In their literature review, Shaw and Williams (2009) identified two
major vehicles that stimulate knowledge flows in tourism. Indirect conduits, such as observations, trade
press, seminars and human mobility, as well as direct conduits, such as foreign direct investments,
franchising, joint ventures, and management contracts. Different vehicles are suitable for different kinds of
information transfer tasks. For instance, organizations acquire new knowledge either through internal
generation or through an external acquisition (Marco-Lajara et al., 2018). In their hotel study involving 2003
Spanish hotels, Marco-Lajara et al. (2018) discovered that hotels prefer to acquire external knowledge
generated in their location over knowledge that is internally generated. Thus, the authors conclude that to
foster competitiveness, public institutions should foster knowledge sharing and knowledge transfer within
a location, such as a tourism destination.

People are central actors in knowledge and learning processes, respectively (Cooper, 2015). As Liu (2018)
discovered when studying 432 Taiwanese cultural and creative firms, knowledge transfer that facilitates
innovations in a firm depends significantly on organizational learning, which, in turn, is affected by the
organization’s social capital. Liu (2018) measured the level of absorptive capacity, which is the capacity how
firms utilize external knowledge. Absobtive capacity turned out as a significant factor in knowledge transfer
and learning. Thus, one of the main challenges in tourism firms is to develop “a culture that embraces
learning, sharing, changing and improving, all through the collective intelligence and knowledge of the
people who make up the sector” (Cooper, 2015, pp. 117). This can be achieved through knowledge transfer
and management (Shaw & Williams, 2009). In his recent literature review on knowledge management in
tourism, Cooper (2018) found that the particular context of the tourism sectors is slowing the adoption of
the knowledge management approach. By context, Cooper considers the particular small-sized enterprise
structure of the dominant type of businesses in tourism characterized by strong risk-aversion, a reluctance
to invest, lack of trust and collaboration, poor human resource practices, as well as a highly fragmented
tourism product and statistics that are predominantly measuring physical resources. Cooper (2018, pp. 508)
defines knowledge management in tourism following the definition of Davidson and Voss (2002) and states
that “knowledge management is about applying the knowledge assets available to a tourism organization
to create competitive advantage”.

In a similar vein of analysis, Hu et al., (2009) surveyed 621 employees of international hotels and discovered
that team culture plays a major role in maintaining and moderating the relationship between knowledge
sharing and service innovation performance. In turn, and most interestingly, knowledge sharing is driven by
altruism and the quality of team interactions as well as the reputation among peers (Hu et al., 2009). In a
similar study, and by surveying 615 employees of Taiwanese hotels, Yang (2010) identified the important
role of leadership and leaders in knowledge sharing as the latter are playing a crucial role as mentors,
facilitators and innovators. Keil et al. (2017) and Hardy et al., (2018) argue that new technology shows the
capacity to enhance knowledge transfer in tourism through innovative, usable and credible visualization of
tourism data. Moreover, Marques and Borba (2017) showed how digital technologies can help in
democratizing tourism practices and in involving different stakeholders in tourism development by utilizing
the ‘playable city concept’. More precisely, the authors analyzed a case study where the city of Recife
developed their own “Playtown” to include various stakeholders for urban development and creative
tourism. These examples demonstrate how technologies enable novel ways to connect people and to share
knowledge among stakeholders in the field of tourism. Digital technologies have, thus, become crucial to
knowledge management and transfer in tourism.
At the intersection of managing people and things lies human resource management (HRM). Tourism and
especially hospitality are characterized by seasonal fluctuations, a low-skilled labor market and part-time
staff (Yang et al., 2012; Baum et al., 2019). However, digital transformation requires high-skilled knowledge
workers (Dredge et al., 2018; Yigitcanlar et al., 2007). This implies that HRM practices in tourism need to
have various perspectives. The tourism and hospitality characteristics mentioned above lead to retention
problems in tourism (Liburd & Hjalager, 2010; Baum, 2007). In turn, the retention problem implies that it
can be particularly difficult for tourism organizations to manage knowledge and to innovate, as personnel
keeps changing and resources have to be used for recruiting and training instead for product development
(Yang et al., 2012). In fact, people are the most critical dimension for the successful delivery of tourism
services (Baum, 2007). HRM practices in organizations affect how employees contribute to the organization
(ibid, 2007). Thus, digital transformation has to be visible also in HRM practices in tourism as ICTs have
transformed the concept of work itself and redefine its boundaries, for example the use of ICTs in and
outside of the workplace, automation, but also regarding work flexibility and work-life balance issues.
Knowledge workers or the creative class have become important to organizations, but empirical studies in
tourism regarding this employee group are scant.

The skillset required by tourism and hospitality employees as well as by tourism entrepreneurs is changing
as technology and other macroeconomic factors change (Fuchs & Höpken, 2008; Fuchs & Höpken, 2011;
Jaafar et al., 2011). Tourism companies investing in training and education are better at innovating and
improving technological capabilities and, thus, place larger emphasis on the role of people in digital
transformation (Pechlaner & Fuchs, 2002; Orfila-Sintes et al., 2005; Scholochow et al., 2010; Fuchs et al.,
2010). In their literature review on human resources management research in tourism, Madera et al.,
(2017) used content analysis to categorize the results of 45 tourism studies connecting HRM practices to
business outcomes into six research themes: 1) human capital and firm performance; 2) high-performance
HRM practices and performance; 3) international/global issues and strategic HRM; 4) individual HRM
practices and performance; 5) qualitative reviews of the hospitality; and 6) tourism HRM literature and
country-specific strategic HRM. In the course of their meta-analysis, the authors confirm the vital role of
human capital by showing that organizational knowledge, skills and abilities of employees are strongly
related to firm performance, competitiveness and efficiency (Carmeli & Schaubroeck, 2005), and that
strategic HRM practices show the potential to develop human capital (Madera et al., 2017).

Research points us to investigate firms and destination communities in order to understand how
innovations and, in particular, digital transformation, are going to happen (Hjalager, 2010; Hjalager et al.,
2018; Trunfio & Campana, 2019). As highlighted above, the tourism sectors are characterized by a majority
of businesses being single-person or family-owned small businesses with limited investment capabilities
(Cooper, 2015). Moreover, they often show poor human resource practices in employee selection,
appraisal, reward, and development, which is critical in knowledge management (Baum et al., 2019).
Urbano and Yordanova (2008) studied 164 tourism SMEs in Spain and discovered that HRM practices are
better adopted in businesses that have a HRM department or personnel with a HRM background. Without
HRM practices, SMTEs are less likely to hire the right people or enable personal growth and development,
both required for successful digital transformation.

The tourism sector has also been criticized for low risk-taking, low investment levels, lack of collaboration
between stakeholders, and rapid turnover of employees and business failures (Weidenfeld et al., 2009).
While risk-taking and investing in digital transformation strategy can be highly beneficial to businesses
(Kane et al., 2015), the risk of failure in these projects is high (Davenport & Westernman, 2018). Studies
have found that in the case of 165 Indian ICT firms, the innovative capabilities of organizations can lead to
an organizational advantage and that innovation capability is affected by managers’ risk-taking behavior
(Varma et al., 2020). In a similar way, by analyzing 15 publicly traded airlines and their CEOs, Lee and Moon
(2016) found that longer-tenured and less-educated CEOs take less strategic risks. In the case of micro,
small- and medium-sized tourism enterprises, individual characteristics, such as the experiences and socio-
demographics of managing personnel have also been shown to affect decision-making, including risk-taking
(Lehohérel et al., 2004; Kearney et al., 2017). These studies emphasize the importance of strategic
management and leadership as a source of innovation, such as digital transformation. Organizations with
little risk-taking capabilities are less likely to be innovative and managers have the most critical role in
defining what kind of risks organizations should take.

Tourism products are characterized by immaterial offerings requiring strongly coordinated efforts at an
organizational, destination and supra-destinational level, respectively (Schmidt et al., 2017). Thus,
collaboration plays an important role in tourism management, planning (Jamal & Getz, 1995) and
innovations (Marasco et al., 2018). In their literature review of 79 resesrch articles, Marasco et al. (2018)
identified five groups of research papers connected to collaborative innovation in tourism using a
qualitative thematic analysis framework: 1) innovation policy, 2) cooperative behavior, 3) co-creation, 4)
knowledge transfer, and 5) collaborative networks. Most notably, partnerships provide tourism SMEs’
strategic opportunities to succeed in competitive global marketplaces (Gursoy et al., 2015). Technology,
and in particular social media-based technologies, offer most valuable tools for collaboration, thereby
enhancing the potential for knowledge sharing and collaboration (Nezakati et al., 2015). In addition, mobile
devices, such as tour guides and open linked-data have been successfully utilized to foster e-learning
among tourism stakeholders (Fermoso et al., 2015). Digital tools allow tourism entrepreneurs to create
virtual teams for collaboration that leads to sustainbable competitive advantages (Matlay & Westhead,
2007). Even e-Commerce technologies in tourism have been shown to develop towards the social and
collaborative production paradigm (Sigala, 2017). With smart tourism technologies, knowledge and
information are – at least in principle – accessible to all stakeholders, thereby increasing innovation
potentials and collaboration possibilities (Gretzel et al., 2015; Jovicic, 2019). In fact, an open and virtually
collaborative environment of innovation has been shown to be facilitated by smart tourism technologies
(Ivars-Baidal et al., 2019; Gretzel & de Mendonça, 2019).

More technically, the innovativeness of tourism destinations requires an effective and efficient transfer of
knowledge (Raisi et al., 2020). In the field of tourism, network analysis has been employed to analyze how
tourism stakeholders are interlinked as well as to assess the properties of complex tourism destination
systems (Dredge, 2006; Scott et al., 2008; Baggio 2008; Baggio et al., 2010; Baggio & Fuchs, 2018). Most
notably, network analysis approaches have been successfully used to analyze how websites have been
strategically interlinked by collaborating tourism stakeholders both within and between tourism destination
networks (Baggio 2020). More precisely, websites of tourism stakeholders enable hyperlink-based network
analyses to empirically investigate the structural properties of the virtual tourism networks and their
coupling with real-world components of the tourism destination system (Baggio & Del Chiappa; 2014; Éber
et al., 2018). Understanding the topological structure of tourism destination sytems is important to
destination management as the capacity to innovate largely depends on it (Baggio 2014; Fuchs & Baggio,
2017; Raisi et al., 2020). In a similar attempt, Byeong Lee (2015) employed network analysis to study how
the adoption of DMO technology is affected by the amount and structure of social capital. The authors
conclude that social capital is among the most crucial factors in the adoption process of technology, and
that relationships with people operating in the same DMO as well as in other DMOs are most strongly
driving the rate and success of technology adoption. This, in turn, largely affects the capabilities of digital
transformation.

3.2. Destination Management and ICTs

Destination management is a central topic in the tourism literature where also research around digital
transformation can be found. In fact, the role of destination marketing/management organizations (DMOs)
in tourism change management is critical. Tourism destinations and especially DMOs play a major role in
tourism development, where the tools, frameworks and technologies related to digitalization are heavily
employed and reseaerched (Fuchs et al., 2010; Dredge et al., 2018). Again, one of the major challenges
seems to be the large proportion of SMEs (Dredge et al., 2018). As the ICT resources of SMTEs are strongly
limited, collaboration is particularly needed in digital transformation because the tourism industry needs to
share assets and data as well as needs to establish and maintain collaborative partnerships and strategic
alliances that create opportunities to learn and grow qualitatively (Dredge et al., 2018). For this reason,
digital transformation requires novel approaches and research paradigms to both management and
leadership in tourism (Gretzel et al., 2020). Notably, compared to all previous eras, the structure,
technologies and exchange processes between tourism stakeholders differ significantly in the era of smart
tourism (Gretzel et al., 2015; Xiang, 2018).

One of the major technology developments in regard to destination management has been the
development of new destination management systems (DMS) and Destination Management Information
Systems (DMIS) (Höpken et al., 2011; Fuchs et al. 2014). Together with other systems, such as computer
reservation systems (CSR), property management systems (PMS), and online analytical systems (OLAP),
these systems are capable to provide valuable sources for knowledge creation within tourism destinations
(Höpken et al., 2014). In fact, ICTs show the capacity to most strongly facilitate the generation,
transformation, usage and sharing of knowledge in tourism destinations (Varra et al., 2012; Höpken et al.,
2015; Keil et al., 2017). Destination management systems (DMIS) are connected and conceptually
embedded in the framework of smart tourism destination (Gretzel et al., 2015; Ivars-Baidal et al., 2019;
Gretzel & de Mendonça, 2019). Indeed, smart tourism destinations are designed as knowledge-creation
and sharing platforms to facilitate cooperation between destination stakeholders and to foster open
innovation (Gajdošík, 2018). Information technologies provide tourism managers with a wide selection of
new tools to manage a destination and their individual businesses (Gajdošík, 2018). Big data and the
processing of multi-source data by means of machine learning-based methods as well as their
transformation into useful knowledge is considered as vital to the innovativeness of smart tourism
destinations (Höpken et al., 2014; Höpken et al., 2015; Gajdošík, 2018; Gretzel & de Mendonça, 2019).

Knowledge management in tourism through big data and machine-learning is particularly evident in
destination management and marketing (Höpken et al., 2013; Mariani et al., 2018). Business intelligence-
based systems enable destination managers and stakeholders to base their decisions on knowledge about
customers’ needs, perceptions, and behavior (Fuchs et al., 2014; Höpken et al., 2015). Big data approaches
enable destinations to have new measurable sustainability goals, such as identifying and targeting
customers with the smallest ecological footprint (Fuchs et al., 2013). Furthermore, a transition is being
witnessed from the use of big data and machine learning methods to understand what has happened in
predictive analytics providing information on what is going to happen (Kamel et al., 2008; Li et al., 2017;
Höpken et al., 2019; Höpken et al., 2020a; Höpken et al., 2020b). All of these technologial and
methodological enhancements have a profound impact on tourism management. More precsilely, new
business intelligence-based systems are constantly being developed and used to cause and cope with
digital transformation, respectively (Mariani et al., 2018; Pierdicca et al., 2019). For instance, Höpken et al.
(2011, 2015) and Fuchs et al. (2013; 2014) presented a BI-based knowledge extraction and decision support
system for tourism destinations. In their DMIS approach, data from various business processes are analyzed
simultaneously, aiming to identify relevant correlations and patterns across different business processes at
the level of individual tourism organizations, organization groups and the tourism destination as a whole.
The authors demonstrate the effectiveness of the DMIS approach for the Swedish mountain destination
Åre. Their studies demonstrate the adequacy of business intelligence (BI)-based systems in managing
tourism destinations through means of big data and machine learning-based methods. Even though the
work is restricted to customer-based business processes, such as online reviews and feedback, web search
and navigation as well as reservation and booking processes, the authors highlight the possibilities to
expand BI-based DMIS towards the integration of additional customer- and supplier-based business
processes, thereby enabling new possibilities for knowledge-generation at tourism destinations (Keil et al.,
2017).

To sum up, tourism destinations show manifold possibilities of generating knowledge from big data which is
(semi-)automatically extracted from multiple data sources. However, while the technological capabilities
are promising and powerful, the human factor often remains underemphasized, thus, hampering the
effective utilization of knowledge generated by a DMIS (Keil et al., 2017). While it is up to the destination
managers to utilize the knowledge they receive from a DMIS to support their decision-making, both
specialized skills in data management and machine learning-based analytics, but also trust among
destination stakeholders are necessary conditions for the successful application of a BI-based DMIS to
facilitate digital transformation and innovation processes in tourism destinations (Trunfio & Campana,
2019). So far, research on the utilization of DMIS in destination management is scant, especially with
respect to the formation of social capital and the way the management of digital change is affected.

3.2 Digital leadership in the era of smart tourism

Tourism is first and foremost a service industry. Service leadership is, thus, one of the major managerial
concepts examined in the tourism literature (Testa & Sipe, 2012). Service leadership competencies are
divided into three major categories: business savvy, people savvy, and self-savvy (ibid, 2012). Each of these
categories consist of particular leadership behavior considered beneficial to hospitality and tourism
operations facilitating customer co-creation and satisfaction. However, even in these idealized leadership
models, the impact of service leadership on digital transformation in tourism organizations is not broadly
and critically discussed in the literature.

Leadership is a key factor in digital transformation, especially when connected to creating a company
culture that enables a digital transformation strategy to become reality (Kane et al., 2015; Larjovuori et al.,
2018). In fact, humans are the center of modern hybrid organizations (Kandampully et al., 2016), making
leadership the core management attribute. However, digital fluency of leaders is needed to facilitate
successful digital transformation processes (Kane et al., 2015). Thus, to facilitate digital mobilization, new
roles, tasks, jobs and responsibilities are being defined in organizations. As humans are increasingly
cooperating with machines (Tuomi et al., 2020), companies now employ chief digital officers (CDO, Singh &
Hess, 2017) and chief data officers (Nie et al., 2019). When interviewing 35 CDOs from various fields,
Tumbas et al. (2018) discovered that CDOs have to carve their own space in established organizational
hierarchies to drive digital transformation. Instead of replacing Chief Information Officers traditionally
responsible for innovation with digital technologies, CDOs are focusing on the digital rather than on data
and information in general. Whereas IT management has traditionally focused on back-office functions,
CDOs focus on the customer side and the application perspective of business technology (Dumeresque,
2014). As in other fields, tourism organizations need to re-define the roles and responsibilities of
employees and executives to meet the needs of digital transformation. Virtually every organization needs
to find ways to secure skills and personnel that facilitate digital transformation and mobilization. In the field
of tourism, empirical studies that look at leadership skills and positions in digital transformation are sparse,
pointing out a research gap to better understand the relationship between digital transformation and
leadership in SMTEs, larger tourism businesses, and destinations alike. New roles and responsibilities for
leadership in these processes could provide valuable insights into the process of digital transformation in
tourism.

Some studies already analyzed how digital technologies are changing the concept of work in tourism
(Tuomi et al., 2020). In fact, tourism businesses build upon a plethora of skills needed to use digital
technologies. For instance, Van Dijk (2006) lists three major types of skills that improve technology access
in tourism: strategic digital skills, informational digital skills and instrumental digital skills. People need both
the capacity to work with hard- and software, the ability to search, select, and process information from
digital sources, as well as the skills to use digital technologies to reach their set goals and to keep and
improve their position in society. There are examples of how online learning can be used to improve ICT-
related skills in SMTEs (Braun & Hollick, 2006). ICT skill-formation through formal education and further
training is a critical success factor in tourism, especially in the management and leadership domain.
However, digital transformation needs digital skills and knowledge that current tourism curricula might not
necessarily meet. Therefore, e-Tourism curricula require constant re-evaluation, re-design, testing and
adaptation (Fuchs et al., 2007; Jing et al., 2012; Fuchs & Sigala, 2017; Femenia-Serra, 2018). Not only are
digital skills required from tourism managers and employees changing, but also the ways hospitality
management theories are taught are constantly transforming (Lugosi & Jameson, 2017; Femenia-Serra,
2018). This has an impact on both knowledge management and learning strategies in tourism organizations
and destinations (Höpken et al., 2011; Fuchs et al., 2014; Höpken et al., 2014).

Leadership is transforming into digital leadership. Digital leadership requires leaders to possess a dynamic
combination of mindset, attitudes, skills, and behaviors that make the strategic use of technology both
feasible and beneficial (Sheninger, 2019). In managerial terms, managing ‘disruptive’ businesses needs both
leadership and management skills, respectively (Sousa & Rocha, 2019). Thus, a digital leader is strongly
connected to transformative leadership defined as a leadership style that seeks to change and transform
people for the better in the digital age (Northouse, 2018). Thus, a digital leader is interested not only in
leading people to work most effectively for the organization, but for the benefits of the society as a whole
(Ahlquist, 2014). Digital transformation requires three types of tasks to be fulfilled by leaders (Heavin and
Power, 2018): 1) strategic tasks, such as rethinking and re-designing business processes, as well as
reinventing new e-business models; 2) tactical tasks, such as integrating business processes with IT
processes and, in parallel, the building of digital management capabilities; and, finally, 3) operational tasks,
such as identifying key skills for employees and exploring of new databases and data analytics. In addition,
the tools and applications to manage digital transformation and teams have changed. Concepts, such as
scrum, business model canvas, hackathon, Lego serious play, reverse mentoring, design thinking, and FedEx
days have become common approaches for supporting digital leadership (Petry, 2018).

As highlighted, leadership and management in tourism differ significantly from other industries because of
the particular contextual conditions of tourism (Cooper, 2018; Valente et al., 2015). Regrettably, tourism is
seen as a low skills sector (Baum, 2015). Nevertheless, the development of smart destinations and
intelligent tourism requires and constantly generates new high-level capabilities and skills. In fact, these
polarized skill requirements in tourism are condisered as a challenge (Baum, 2015; Femenia-Serra, 2018). It
is a dire question of how the tourism industry can attract talents through education and training that meet
the needs and digital skill requirements of smart tourism (Elliot & Joppe, 2009). By incorporating various
theoretical perspectives, Table 2 summarizes major skill components for digital leadership in the era of
smart tourism. While the list is not exhaustive, it becomes evident that it is hardly possible for a tourism
manager to be similarly proficient in all the listed skill requirments. Rather, today’s context of tourism
particularly demands digital skills to make effective use of global distribution systems (Femenia-Serra,
2018) and to fruitfully follow requirements of sustainability (i.e., following the ‘triple bottom line’ concept)
and ethical leadership (i.e. corporate social responsibility) (Gretzel et al., 2015; Fuchs, 2019; Mao et al.,
2020). However, there is a lack of research about the outcomes of digital leadership skills for tourism
organizations and its theoretical underpinnings explaining how these skills are affecting the process of
digital transformation.

Table 2. Skills for Digital Leadership

10 Competencies of a Skills to manage a Service leadership Change management

digital leader disruptive business (Sousa competencies (Testa & Sipe, (Gill, 2002)
(Ahlquist, 2014, pp. & Rocha, 2019, pp. 262) 2012, pp. 654)
59)
1. Awareness of Emerging Innovation skills
Technology Tools and − Innovation and creativity
Platforms − New business opportunities
− Project management
− Risk management
− Efficiency and efficacy
− Networking
2. Digital Content Leadership skills
Analysis, Sorting Accuracy − High-performance teams
and Quality from False or management
Misinterpreted − Talent management
Information − Motivation and satisfaction
− Communication
− Careers management
− Leadership of multi-cultural
employees
3. Online Self-Awareness Management skills
and Reflection of Digital − New models of work
Profile (Consciousness of organization
Self) − Emergent technologies
− Decision making tools
− Big data analysis
− Organizational change
− Strategic management
− Social and relational
knowledge
4. Establishing Personal
Virtual Boundaries
including Privacy, Time
Management, and Overall
Wellness (Congruence)
5. Cultivating
Professional, Strategic,
and Career-Oriented
Online Branding
(Commitment)
6. Building a Personal
Learning Network
(Collaboration)
Accountability: Takes ownership,
executes and follows through on
promises and responsibilities
Professionalism: Role models
behaviors and demeanor
consistent with company values
Inspiration: Engages and inspires
others to do their best work every
day
Self-development: Takes initiative
to continuously learn, adapt, and
improve oneself
Interpersonal communication:
Listens and communicates openly
and effectively in a variety of
settings
Time management: Balances
multiple tasks while focusing on
key priorities
Spirit of optimism: Displays an
energetic, passionate, and
optimistic approach in all
endeavors
Expressive service: Goes above and
beyond to create customer loyalty
and memories that last a lifetime
Team oriented: Fosters a climate of
shared vision and contributions
from all team members
Cultural alignment: Aligns team
goals and values to that of the
company culture.
Technical service: Uses systems,
processes, and standards to
provide consistently efficient
service.
Results oriented: Focuses on
achieving high expectations and
getting things done.
Change management: Adapts easily
and views change as a way of life
Coaching and training: Provides
actionable feedback that supports
continuous learning
Vision: Ability to attach a
sense of urgency and
importance to change.
The vision needs to be
shared, meaningful,
inspiring, and of ethical
value
Values and culture:
identifying and promoting
shared values, new
organizational cultures
supplanting bureaucratic
cultures
Strategy: developing,
getting commitment to,
and implementing rational
business strategies based
on possible future
scenarios for the
organization
Empowerment: giving
people the knowledge,
skills, opportunity,
freedom, self-confidence
and resources to manage
themselves and be
accountable
Motivation and inspiration:
getting people to want to
do what needs to be done.
Honest and competence
leadership creating
credibility for a leader
 7. Integration of Digital Systems thinking: Orients toward
Technologies in the big picture and a process
Leadership Presence focused approach.
(Common Purpose)
Strategic decision-making: Uses all
available resources to make sound
decisions appropriate to the
situation
8. Cyber Conflict Planning: Creates and translates a
Resolution and Mediation shared vision in strategic priorities
(Controversy with and actions
Society)
Continuous improvement: Strives
to improve the business and make
things run smoother
9. Digital Decision-Making Number wise: Incorporates data,
Strategies based on reports, and trends to draw
Positive, Authentic, and conclusions and inform decisions
Constructive Activity
(Citizenship) Networked: Fosters industry
relationships inside and outside the
company
10. Using Social Media for
Social Good (Citizenship)

4. Critical reflections for digital transformation research in tourism

During the first and second industrial revolution, ‘creative destruction’ (Schumpeter, 1942) took down non-
competitive businesses and replaced them with more innovative firms. The creative destruction
perspective was economically driven. In fact, economic competitiveness decided the value and survival of a
business. Recently however, there have been calls to pay more attention to negative effects of innovations
(Schubert, 2012) and the role of spillover effects of innovations (Komlos, 2016). Indeed, the destructive
component of creative destruction is considered to grow if innovations replace close substitutes (Komlos,
2016). This leads one to seriously question the direction where organizational transformations and
innovations are taking us.

In the 1990s, innovations were predominantly business-focused. For example, Brown (1994) defined three
reasons for companies to innovate: 1) to gain competitive advantage, 2) to protect market share from
competitors, and 3) to prevent innovations that would harm their business. Following this tradition, in
tourism the concepts of product or service innovation, process innovation, and marketing innovation are
used (Aldebert et al., 2011; Hjalager, 2010; Hjalager et al., 2018). Value schemes underlying these
mainstream innovation frameworks are predominantly utilitarian (e.g. Alrawadieh et al., 2020, Boes et al.,
2016) and hedonistic (Stamboulis & Skayannis, 2003; Tung & Law, 2017). Only recently, have there been
discussions regarding eudaimonia as an additional tourist experience and value dimension (Lengieza et al.,
2019). In fact, eudaimonia could open up new approaches also to digital transformation, management and
leadership research in tourism, as it permits human flourishing and fulfilment on the basis of non-
materialist and intrinsic motives (Lengieza et al., 2019). For example, a more meaningful and happier
lifestyle is an integral part of digital nomadism (Hannonen, 2020), a mobile lifestyle enabled by digital
technologies in which the way to work is unrestricted by time and space. In addition, from a business
perspective, digital transformation seems to have the capacity to facilitate goals, such as improving the
meaningfulness of work by offering eudaimonic and mindful travel experiences (Chen et al., 2017; Walsh et
al. 2019). Indeed, competitive markets do not seem to offer adequate reward systems to create long-
lasting moments of pleasure for customers and for the well-being of societies (Poole, 2009; Nandram,
2011; Purser & Milillo, 2015). As Davies (2015, pp. 301) accurately states: “Instead of individuals,
communities and nations being invited to mimic the entrepreneurial properties of markets, which are
decisive in splitting ‘winners’ from ‘losers’, they may increasingly be invited to mimic the therapeutic
properties of markets, which facilitate gradual organic growth of relationships and selves”.

An increasing rate of business and market failure has inflicted stress upon current management practices
and economic theory (Daneke & Sager, 2015). In fact, bad management practices come from bad theory
which can even destroy good management practices (Ghoshal, 2005). For instance, within a shareholder
value paradigm, the task of management has been reduced to one which uses hierarchy and authority to
prevent employees’ opportunistic behavior. Ghoshal (2005) criticizes influential economic theories
underlying current management theories, such as agency theory (Jensen & Meckling, 1976), transaction
cost theory (Williamson, 1975), and Porter’s (1980) ‘five forces’ framework by showing how they
systematically destroy good management practices. Following Hayek (1989), Goshal’s epistemological
critique illustrates that neoclassical economic theories underlying current management models have
adopted a rather outdated scientific approach that demands theorizing based on partial analysis, deductive
reasoning, as well as sharp and unrealistic assumptions neglecting any human intentionality (Ghoshal,
2005). Especially the latter assumption has led to the exclusion of any ethical aspects from management
and economic theories. Regrettably, one of the main reasons why management science continues to use
agency theory that has led to serious management failures, instead of stakeholder or stewardship theories,
is that it can be modelled according to mathematical principles, thus, following the ideal of modern
sciences (Gretzel et al., 2020).

In a similar way, reductionist narratives of technological change and progress are dominated by a
technological determinism (Munar & Gyimóthy, 2013). It is often assumed that ‘perfect’ technology
enables us to provide the ‘perfect’ tourist experience (Munar & Gyimóthy, 2013), which will then lead to a
competitive advantage. Technological development is broadly propagated, but how is it possible to exactly
know that it is a flourishing development that is happening instead of deterioration? New business models
seem to be the ultimative goal of digital transformation and are propagated as salvation promise for
managrs (Davenport & Westerman, 2018; Gartner, 2020). However, failure rates of digital transformation
and change projects seem to suggest that digital transformation is far from salvation (By, 2005; Martin,
2018). Also in tourism, digital transformation and innovations are often seen as means to maximize
revenues and protect the market share (Alrawadieh et al., 2020; Baregheh et al., 2009). However, both
social and ecological costs of innovations are rarely questioned (Scholochow, et al., 2010; Fuchs et al.,
2020). For example, Fereidouni and Kawa (2019) discuss the danger of digital colonialism in tourist
destinations. Digital colonialism is the result of three gaps in digital transformation: the technology,
productivity, and regulatory gap, respectively. A technology gap occurs when tourism destinations become
too dependent on dominant digital infrastructure and service providers, while a productivity gap refers to
reliance on platforms regarding digital content, language, and data analytics. Finally, a regulatory gap
covers, for example, major international electronic payment systems that direct destination income to
platform owners’ parent countries and are, therefore, challenging for destination tax authorities to track.

As highlighted, tourism industries are dominated by large shares of SMEs what has often been criticized as
major challenge for digital transformation (Dredge et al., 2018). Only few research transitions from
examining the weaknesses of the tourism industry towards identifying and enhancing those strengths that
come from the particular SME structure. Organizational agility, for example, has been regarded as a success
factor in change management (Kale et al., 2019). At least in this regard, SMEs are well suited for digital
transformation (Arbussa et al., 2017). Nevertheless, digital transformation is not the same kind of process
for SMEs as it is in large corporations. When depicting the characteristics of a digital leader, ethical
leadership skills come up (Zsolnai et al., 2012). These characteristics are more connected to the
surrounding society and the ecological environment than to pure business making. Thus, nowadays,
business skills are just one of the skill sets required and expected from managers (Testa & Dale, 2012).
Leaders need to be authentic, ethical and trustworthy (Qiu et al., 2019), not just great business people.
Tourism and most management literature regards skills as resources and something that must be
developed for an individual to be employable (Baum, 2015). However, learning has more humane sides,
such as personal development and skills can also be acquired that are not useful for work at this moment,
but which do not make them any less valuable (Sawchuk, 2006). Thus, recommendations, such as those
presented in Table 2, should be interpreted through this lens. Typical skills for digital transformation and
digital leadership are focused on employability and business success, but ethical and sustainable leadership
has value in itself and for society at large (Gretzel et al., 2020).
In fact, digital transformation also embraces a radical institutional change. Digital transformation “comes
from the combined effects of several digital innovations bringing about novel actors, structures, practices,
values, and beliefs that change, threaten, replace or complement existing rules of the game within
organizations, ecosystems, industries or fields” (Hinings et al. 2018, pp. 55). Legitimacy within an
institutional context is a cornerstone for digital transformation (Garud et al., 2013). However, institutions in
digital transformation in tourism are not discussed yet, even though their importance is acknowledged, for
example, in smart tourism research (Boes et al., 2016). An institutional perspective (Hinings et al., 2018),
however, could enrich current management and leadership theories in explaining why organizations
succeed or fail in digital transformation. Institutions comprise both the outcome and social process of the
formation of rules, norms, meanings, symbols, practices and similar aids to collaboration, and they also
form institutional arrangements which are, in turn, interdependent assemblages of institutions (Barile et
al., 2017). As mentioned, research on institutions in tourism (McLennan et al., 2014) and especially on their
effects in digital transformation are almost non-existent. One reason for this might be the difficulties in
quantifying the phenomenon (Ghoshal, 2005). There are also prevailing institutions, such as overcoming
treating markets and people according to neo-classic economic theory. Notably, a post-mechanist
economic theory could contribute to management and leadership theories in tourism by placing human
creativity at the forefront, especially in digital transformation research (Fuchs & Baggio, 2017; Fuchs et al.,
2020; Gretzel et al., 2020).

Change management is often connected to digital transformation as one of the key factors for success
(Loonam et al., 2018). However, research seldom takes a critical perspective on what change management
is or could be. For example, it seems to be connected to digital transformation projects or how
organizations and managers respond to changes happening in the surrounding society. There are external
and internal drivers for change (Oakland & Tanner, 2007). The main criticisms focuses on why change
management programs report such poor success rates (By, 2005). This is also an identified phenomenon in
digital transformation (Davenport & Westerman, 2018). Thus, even though change management has been
identified as critical in succeeding in digital transformation, it is still unclear why so many change projects
fail, or why transformation projects are (or are not) initiated. Literature on innovation suggests that
innovation is not a project but a routine (Kesting & Parm Ulhøi, 2010), and without building innovations as
a natural part of an organization, digital transformation projects are more likely to fail. So little about
human creativity is known, especially from the perspective of neuroscience (Dietrich, 2019) and moral
philosophy (Kampylis and Valtanen, 2010). The progress of failed and successful projects could be studied
from the societal perspectives to improve an understanding from the perspective of stakeholder theory
(Phillips, 2003) and ethical leadership (Minett et al., 2009; Fuchs 2019). Indeed, the needs of internal and
external customers (Moran & Brightman, 2001), including society, are not thoroughly understood.

Management theories in tourism are Western-centric in origin (Baum, 2015), characterized by a focus on
competitiveness, hedonist benefits, and profitability (Loy, 2014; Alrawadieh et al., 2020). Thus, cultural and
ethical factors need to be considered more strongly by all leadership and management theories (Zsolnai et
al., 2012), as well as in e-Tourism research (Gretzel et al., 2020). Regrettably, ethical leadership in relation
to digital technologies is rarely discussed or studied in tourism, even though there are many issues that
managers must make decisions on. For instance, developing ethical AIs, deciding on how ethical digital
practices are defined in the organization, and how ethics are communicated, all belongs to the domain of
ethical digital transformation (Floridi, 2019). Earlier research demonstrates interesting differences of
tourism managers’ leadership styles and ethical decision-making (Minett et al., 2009). In fact, ethical digital
decision-making will play a larger role in the future among tourism managers, providing novel perspectives
in digital transformation. So far, research on ethical leadership in tourism is scant (Fuchs, 2019), and
transformative research on ethical digital leadership in tourism is virtually non-existent. However, this is a
topic that tourism managers will be increasingly encountering, especially when it is connected to the joint
creation of private and social benefits.

Kampylis and Valtanen (2010) are highlighting that ethics is not something that emerges from or can be
decided at the market place. Rather, creativity and innovations are pre-determined by the conscious
intention of the creator(s), the effects on the creator(s), and the social consequences for others. The vast
majority of research on innovation in tourism is focusing on the effects innovation has on the innovators,
especially how innovations lead to a competitive advantage. However, innovations, such as digital
transformation have wider societal impacts that need to be studied (Fuchs et al., 2020). One example is
Airbnb, being a true sharing platform, originally had a strong socio-innovative focus and impact. However,
nowadays it has considerable negative impacts on destinations that have, to some extent, come with the
neo-liberal growth orientation (Komlos, 2016; Nieuwland & van Melik, 2018).

To conclude, ethical digital leadership needs to be studied in the course of a transformative e-Tourism
research (Gretzel et al., 2020). ICTs can significantly contribute to sustainable tourism development: events,
business, tourism destinations, intermediaries and other tourism stakeholders benefit greatly from ICTs
when developing more sustainable business models and innovations (Ali & Frew, 2014; Fuchs et al., 2013;
Slocum & Lee, 2014; Franco et al., 2020). Knowledge management has been regarded as critical for
competitiveness and growth, but less is known about social aspects of innovation, such as ethical
leadership and societal effects (Werthner et al., 2019). Notably, life-style entrepreneurs demonstrate non-
economic motivations for their business. Thus, the goal of innovation is not of maximizing profits or
growing as fast as possible (Ateljevic & Doorne, 2000; Fuchs et al., 2020). Regrettably, knowledge is usually
regarded reductionistically as a ‘resource’ (Cooper, 2015), thus, critical reflections on what ‘knowledge’ is
for organizations and humans, and what its expected outcomes are, is still unclear (Rousseau, 2013).
Rather, different academic disciplines developed different models of knowledge-based realities (i.e.
ontologies). For example, for the social sciences, knowledge is a subjectively driven cultural construct,
whereas for physical sciences, exact knowledge cannot exist, although it is possible to make highly accurate
statistical predictions (Rousseau, 2013). This implies, that in the social sciences, what is meant by
knowledge and how knowledge is acquired has to be carefully defined, and that the possibility for
knowledge to have particular intention-driven meanings has to be acknowledged (McNaughton, 2003;
Rosseau, 2013; Kovacs, 2017).

Thus, instead of a knowledge-based theory of the firm (Spender, 1996), a socio-cognitive theory of the firm
has recently been proposed (Reihlen & Ringberg, 2013). Traditionally, the knowledge-based theory of the
firm is based on four premises (Reihlen & Ringberg, 2013, pp. 707): (1) The firm is understood as a system
of knowledge; (2) explicit and implicit knowing is clearly dissociated; (3) firms are conceived as cognizing
entities (i.e., having a collective consciousness); and (4) intuition, shaped by shared cultural practices, is a
superior source of managerial knowledge. In contrast, a socio-cognitive theory of the firm posits that a
sustained competitive advantage of an organization is based on how well it can align knowledge internally
within the organitation and externally with its stakeholders. This is mainly achieved through individual
sense-making in the course of a complex language-based process of social resonance. Similar to the
traditional approach, tacit and explicit knowledge is created, however, in synergy of reflective and ethical
thinking in order to resolve uncertainties at the interface between the individual and the social sphere
(Reihlen & Ringberg, 2013). In fact, this theoretical approach could contribute to the comprehension of the
digital transformation process and provide novel insights in technology supported knowledge management
and transfer processes in tourism.

5. Research outlook
Change management and digital transformation in tourism provide interesting research venues. Most
notably, management research in tourism lacks conceptual clarity, definitorial precision and empirical
support (By & Dale, 2008). In their study on corporate social responsibility (CSR), Hejjas et al. (2019) state
that the individual organization is usually treated as a “black box”, implying that current research fails to
comprehend intra- and inter-organizational peculiarities. People in different organizations interpret
managerial terms and concepts differently, and the same holds true for digital transformation. More
contetely, Hejjas et al. (2019) criticize that stakeholder theory does not explicitely consider employee
involvement. Generally, stakeholder theory is concerned with those agents that make a major input in
decision-making processes (Phillips, 2003). While stakeholder theory in management literature is focused
on private organizations, the focus in tourism remains on the public sector (Mistilis et al., 2014).
Stakeholder theory has also been utilized in e-Tourism management research. For example, Kalbaska et al.
(2017) identified relevant stakeholders for tourism governance examining how technology enables
interaction between government and tourism stakeholders. In a similar vein, McCabe et al. (2012)
demonstrate how collaboration among tourism stakeholders is required to innovative technology-based
tourism services. In fact, stakeholder theory is recommended to analyze digital transformation processes in
tourism.

Moreover, Mao et al. (2020) utilize Conservation of Resources theory to study how during the COVID-19
crisis tourism companies contribute to employees’ psychological capital. CoR emphasizes that individuals
seek to obtain and preserve resources that they value and, thus, avoid losing (Mao et al., 2020; Hobfoll,
2001). Job resources are defined as “physical, psychological, social, or organizational aspects of the job that
not only potentially reduce the negative effects of job demands and help to achieve work goals but may also
stimulate personal growth, learning and development and the positive state of work engagement”
(Hakanen et al., 2008; pp.79, Demerouti et al., 2001). As the availability of these resources largely
influences job outcomes (Hakanen et al., 2008), they are at the core of managerial work and leadership.
Using data from both online surveys and semi-structured interviews the authors confirmed that corporate
social responsibility is beneficial for building psychological capital during times of crisis (Mao et al. (2020).
Thus, future e-tourism studies should show how measures deduced from Conservation of Resources theory
influence digital transformation beneficially.

Sustained competitive advantage of a firm is based on how well it can align knowledge internally and
externally with its stakeholders (Reihlen & Ringberg, 2013). Creativity results in large part from social
interaction and collaboration with other individuals and networks and is, thus, considered a community
effort (Fischer et al., 2005; Baggio, 2014; Fuchs et al., 2020). For example, Wong and Pang (2003) identified
four main barriers to creativity among managers in the Hong Kong hotel industry: 1) low commitment to
organization and system; 2) fear of change and criticism; 3) time and work pressure; and 4) rigid rules and
company policy. Even though creativity is difficult to enforce, there are circumstances that make creativity
in an organization more likely (Tsai et al., 2015; Horng et al., 2016; Fuchs & Baggio, 2017). From a tourism
perpsective, the main question is how ICTs nurture creativity and how that knowledge can be used for
managerial decision-making. Sigala and Chalkiti (2015) adopted a knowledge management approach to
investigate the relationship between social media use and employee creativity in the Greek tourism sector.
Even though the model explained only a small part of the variance of employee creativity, the results
demonstrate that the use of social media is beneficial for people’s creative processes as it supports
conversational and collaborative knowledge management processes. Besides the use of social media, ICTs
offer promising possibilities for collaboration and creative processes that should be further explored in the
future.

Technology itself is a neutral concept (Floridi, 2019). However, how technology will affect organizations and
actors depends on how it is used. For this reason, the concept of affordance from ecological psychology
literature has been applied to e-Tourism research (Cabiddu et al., 2014). Affordances represent
opportunities for action as perceived by an organism in its particular environment (Hutchby, 2001).
Affordances lie in the intersection between technology and actors using it. Therefore, this approach has
been found to be useful for studying transformational technologies (Yoo et al., 2012). For leadership in
digital transformation, the perspective of affordances creates promising possibilities as technologies show
unexpected affordances that enable innovations (Nambisan et al., 2017). For instance, in their study of U.S.
convention and visitor bureaus (CVBs), Yuan et al. (2006) interviewed CES to understand information
technology (IT) implementation and the dynamic interplay between increased organizational capacity and
affordances of IT use. Tim et al., (2017) used a case study to describe a social media-enabled grassroots
environmental movement in Malaysia to explore community-driven environmental sustainability. Three
affordances for social media were identified: information democratization, network-informed associating,
and emergent organizing. The authors actualize these affordances to actions and outcomes. This research
impressively shows that if people consider ethical values and goals, technologies are utilized in highly
creative and benevolent ways (Tim et al., 2017). Thus, the concept of affordance in conjunction with the
task-technology fit theory (Goodhue and Thompson, 1995) is recommended as theoretical base for future
research in the field of digital transformation in tourism.

There have been calls for more effective resource management through technology in tourism (Navío-
Marco et al. 2018). This research gap on leadership and management of digital transformation is
highlighted also by recent review studies in e-Tourism (Law et al., 2009; Navío-Marco et al. 2018; Yuan et
al., 2018; Hughes & Moscardo, 2019). In fact, digital transformation is changing leadership and
management in tourism (Varra et al., 2012), where the roles and responsibilities are being redefined
because of digitalization. Managing a destination that relies on business intelligence requires leadership
theories that differ from traditional destination marketing leadership, especially regarding learning (Höpken
et al., 2011; Höpken et al., 2014). Thus, understanding leadership and management from knowledge and
creativity perspectives is considerd a valuable research stream in e-Tourism for the future. ICTs enable
networked organizations that can timely react to changes and developments in the marketplace (Clarke &
Clegg, 2000). In practice, however, tourism businesses often fail to utilize ICTs efficiently (Scholochow et al.,
2010). Thus, novel management practices, such as digital leadership (Petry, 2018), will likely contribute to
the understanding why and how this happens. Digital leadership takes place in a volatile, uncertain,
complex and ambiguous (VUCA) environment where predictable analysis and planning is difficult and
mostly impossible (Petry, 2018). Rather, effective digital leadership requires the leader to change the
traditional leadership model, the working model, and the organizational structure. Lack of professional
leadership (Dredge et al., 2018), characteristics of the service industry (Srivastava & Joshi, 2018), a high
proportion of low-skill seasonal workers (Baum, 2015; Dredge et al., 2018), and the importance of networks
and collaboration at tourism destinations (Hristov & Zehrer, 2017) open interesting future research venues
in digital transformation and management. New skills are required, for example, as robots are becoming
co-workers also in the tourism and hospitality industry (Tung & Law, 2017). Tourism could lead the way to
the understanding of value-based digital leadership in the service industries (Gretzel et al., 2020). Tourism
industry differs from other industries especially regarding the importance of destination marketing and
management, high seasonality, low-skilled workforce, SMEs dominance, and industry-specific institutions
and customs (Baum, 2015; Dredge et al., 2018; Jiang et al., 2019). All these factors provide novel and
promising settings for future research on transformative digital leadership.

Studies on the adoption of technology in tourism organizations and the impact of leadership and
management on the ICT adoption process are still in their infancy. Theories, such as technology affordance
(Cabiddu et al., 2014) and the institutional perspective (Hinings et al., 2018) offer new possibilities to the
understanding of digital leadership in tourism. Additionally, established and empirically validated theories,
such as adaptive structuration theory (DeSanctis & Poole, 1994) and the task-technology fit theory
(Goodhue and Thompson, 1995) show the capacity to bring new insights to the field (Cai et al., 2019). More
precisely, adaptive structuration theory (AST) should investigate the types of structures that are provided
by advanced technologies and the social structures that emerge through human actions and as people
interact with these technologies (DeSanctis & Poole, 1994). Based on AST, it can be argued that digital
transformation is not mainly about technology, but about people, ethics, values and social structures.
Understanding social structures and meaning in digital transformation in tourism is a topic that, regrettably,
has not received much attention so far (Gretzel et al., 2020). In fact, tourism organizations should not be
perceived as black boxes (Hejjas et al., 2019), but rather as complex social systems where interaction
between internal and external stakeholders take place. Research on e-Tourism has not paid much attention
to leadership aspects of digital transformation. A more personal and human-oriented approach to e-
Tourism research is needed, based on ethics, societal impacts, sustainability, and human value dimensions
(Gretzel et al., 2020). The whole process from the introduction of new technology in tourism to technology
affordance needs to be better understood (Cabiddu et al., 2014). While technology acceptance models
have been used to study the use of technology (Cai et al., 2019), the role of management and leadership in
these processes has been marginalized or even neglected (Spencer et al., 2012). Finally, tourism and
hospitality management education needs to respond to technological changes (Fuchs et al., 2007; Elliot &
Joppe, 2009; Fuchs & Sigala 2017). What kind of skills and knowledge do students learn to improve their
ability for digital transformation? An adequate understanding of business and technology is complemented
with skills related to self-management and people management (Testa & Dale, 2012). With an increasing
focus on sustainability, managers also need to be “world-savvy” in order to take care of the well-being of
stakeholders and the ecological environmental (Zsolnai et al., 2012).

To conclude, digitalization requires new perspectives on management and leadership in e-Tourism. A

learning organization is agile and can develop humans’ capabilities to meet the needs of changing market
places and society at large. An innovative organization can even disrupt the marketplace. However, to be
innovative, knowledge management in organizations is needed to enable possibilities and offer free
cognitive spaces for creativity (Fuchs et al., 2020). Thus, research needs to combine the topics of learning,
technology, knowledge management, innovation, collaboration and networking, creativity, and change
management in order to meet the needs of future societies. Leadership and management in tourism
organizations are the keys to achieving this. This article has presented promising theories, such as
technology affordances (Cabiddu et al., 2014), stakeholder theory (Kalbaska et al., 2017; Hejjas et al. 2019),
conservation of resources theory (Mao et al., 2020), and adaptive structuration theory (DeSanctis & Poole,
1994; Goodhue & Thompson, 1995), that explain why organizations either succeed or fail in their digital
transformation route. In addition, theories on creativity, learning and innovation (Fischer et al, 2005;
Kampylis & Valtanen, 2010; Tsai et al, 2015; Fuchs & Baggio, 2017) could contribute to building a robust
understanding of the phenomenon.

Cross-references
Drivers of E-Tourism
E-Tourism Curriculum
E-Tourism: An Industry Perspective
Acceptance and Adoption of E-Tourism Technologies
Strategic Use of IT in Tourism
E-Business Models in Tourism

Knowledge Management in Tourism Organizations (DMOs, Hotels, etc.)

Service Management in the E-Tourism Era
E-Tools for Tourism Innovation Management – A Typology
Digital Ecosystems, Complexity and Tourism Networks
The Diffusion of Information and Communication Technologies (ICT) in the Tourism Sector
ICT for Sustainable Tourism Development

Business Intelligence in Tourism

Acknowledgements

The author would like to thank the editorial team and especially professor Matthias Fuchs for suggestions
and discussions that considerably helped to develop the chapter to its final form.

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