We are currently living in an era of change induced by a new technological cycle that promises to redefine our culture, our society and our economy. Artificial Intelligence (AI), Machine Learning (ML), Big Data (BD), blockchain, robotics, the Internet of Things (IoT), the metaverse and the rest of cutting-edge technologies are leading a new innovative wave that is plunging us fully into the so-called IV Industrial Revolution.
Given this panorama of change, it is obvious that the entire Spanish economy and its productive fabric will be totally affected. Precisely, in this thesis we want to focus our attention on how one of the most representative sectors of our economy, tourism, is facing this wave of innovation. As was already the case with the emergence of the technological leap of Information and Communications Technology (ICTs), this new innovative impulse promises to transform the sector, although with some notable differences: this new wave will bring changes that are increasingly rapid, continuous and intense over time, posing a major challenge, perhaps as never seen before, for the tourism industry.
The tourism sector is one of the most consolidated and important economic sectors in the world. During the last decades, it has established itself as one of the fastest growing and largest sectors worldwide, setting a record figure of 1.5 billion international tourists in 2019, surpassing those of 2018 by almost 5% (WTO, 2020). This translates into a contribution of more than 10% to the Gross Domestic Product (GDP) worldwide, more than 7% of total international trade and nearly 30% of world exports of services, keeping pace globally with the value of oil or automobile exports, thus making tourism one of the top five activities in world trade (WTTC, 2019).
Justifying the economic importance also for the Spanish case, international tourist arrivals in 2019 exceeded 83.5 million travelers, accounting for more than 11% of the total international market and a growth in travelers of almost 1% compared to 2018 figures. Thus, tourism is established as a fundamental pillar of the Spanish economy, due to its contribution to GDP, employment or economic growth, well above the rest of the OECD countries (Figure 1.1), and due to the compensating role of the external imbalance that the Spanish economy suffers structurally (Pedreño-Muñoz and Ramón-Rodríguez, 2009). These characteristics give it an undeniable resistance to the latest economic crises, although it is true that the COVID-19 pandemic has overexerted it, has forced it to transform itself once again and has made evident the excessive dependence of our economy on tourism, due to its multiplier effect on the rest of the economy, because of the transversal nature of the consumption of tourist demand.
In this globalizing context and the integration of new digital technologies in practically any area of society, it is unthinkable that the evolution of the sector should be linked to the digital economy, being one of its basic pillars of development (Hojeghan and Esfangareh, 2011). This digital revolution is taking place in an environment where the number of tourists worldwide is growing steadily, with the rate of growth of tourism demand exceeding the rate of growth of the economy, due to the emergence of emerging countries, the greater ability of young generations to travel and the lower costs of air travel, and represents a significant opportunity for digital innovation in the sector.
As we will discuss below, the sector in question is characterized by a low capacity to generate innovation, although at the same time it is extremely sensitive to the adaptation of its structure to new technologies. This fact implies a constant need for renewal within the sector in order to adapt its competitive capacity through the new innovations already mentioned. In fact, as we will see in this thesis, there are many examples in the literature on the adaptation of the sector to BD and AI, clean energy, mobile technology, augmented reality, IoT, virtual assistants or blockchain, among others.
But all these advances have as their starting point a common element: data. These are the key element to raise the productivity of companies and make the most of these technologies, so having the ability to collect, exchange, process and analyze data is indispensable in any industry. The introduction of data and algorithms oriented to price management, demand capture, user segmentation and optimization of value chain processes, among other applications, as a fundamental part of the structure of any industry has a fundamental impact on the study of industrial economics. Researchers, public administrations, companies and all the actors involved must adapt to this new reality, implement policies that promote the digitization of the productive fabric and address new lines of research to understand the new participants, thus achieving a greater understanding of this data-driven tourism.
Precisely here lies one of the main strengths of tourism compared to other sectors: it has a huge amount of varied, dispersed and representative information, as it is produced by the 'digital footprint' of the tourist on each trip. The challenge for companies in the sector, from large hotel companies to SMEs, is to make the most of this data. Otherwise, they will be swept away by new technology companies, whose main source of business is innovation, and not the tourism sector. In fact, the new technological reality of the industry has created a competitive environment in which technology-based disruptors, who know how to create new markets by satisfying untapped needs, coexist with traditional players who generally do not have the capacity to innovate.
Under these premises, this doctoral thesis aims to review the economic principles of tourism from an innovative perspective, analyze the potential impact of the application of AI in the tourism industry at all levels and the need for the use of machine learning algorithms in research in the sector. To this end, first of all, the conceptual framework on which it is framed is constructed. Chapter II of the thesis is devoted to a review of the evolution of the concept of innovation and its importance in economic theory. For this purpose, theoretical references that have studied the role of technology and innovation in economic growth, such as Schumpeter, Solow, Romer or Lucas, are studied. The aim is to understand the impact that the disruptive changes we are experiencing in the economy are having, in order to subsequently apply them to the transformation of the structure of the tourism industry.
It is precisely in Chapter III where an applied analysis of innovation and the impact of new technologies on the tourism sector is carried out. It will study the state of innovation in the tourism sector, making important clarifications on the sector's capacity to adapt or develop innovations. In addition, it will explain the digital principles that are transforming the tourism industry and the new research cycle derived from the emergence of BD and which is led by techniques based on ML algorithms, thus justifying the choice of the tourism sector as a case study.
Chapter IV provides a complete review of the transforming process that the structure of the tourism industry is undergoing due to the technological paradigm shift. Thus, it studies how these innovative processes are developing a new tourism demand based on data, how the tourism value chain is being reinvented, how tourism prices are set in a market with almost perfect information, what challenges are posed for the labor and training market in the sector, and what role they play in the emergence of new technology-based competitors in the sector.
In Chapters V and VI, Airbnb is chosen as an applied case study, as it is representative of all the challenges faced by the sector in terms of technology, political regulation, market intervention, reinterpretation of the tourism value chain, emergence of economic or pandemic shocks that researchers must face. The applied analysis of Airbnb aims to contribute to the research of the sector in this empirical context dominated by BD and by the increasingly imperative need to apply machine learning-based algorithms to understand the different challenges posed by Airbnb in the sector, highlighting among them the processing and simplification of huge databases.
Chapter V has as a case study Madrid, the capital of Spain and the fourth destination by number of Airbnb ads in Europe. For this applied case, we study whether the COVID-19 pandemic had a significant impact on the structure of Airbnb supply and demand. For this purpose, the study starts from a logit model of hedonic panel data, different alternative methods of variable selection and likelihood tests are applied to confirm the existence of the structural change affecting the decision making when renting an apartment from the Platform. This work aims to contribute to the research of the sector, and specifically of Airbnb, based on BD.
Chapter VI focuses the study on the Valencian Community, one of the main sun and beach tourist destinations, to carry out an analysis on the pricing of tourist accommodation on the platform. This case study aims to analyze whether the application of ML algorithms allows companies to optimize prices in a more efficient way than traditional models. To this end, the performance of a traditional hedonic pricing model is compared to an estimation model based on neural networks to demonstrate the best fit in the predictive capacity of machine learning-based techniques when setting prices.
Thus, the doctoral thesis constitutes a valuable and novel contribution to the new research cycle in the sector. It proposes an exhaustive review of all the implications and applications of new technologies in tourism and the advantages of using machine learning based analysis techniques for researchers in their study.