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Business Models for Creative Tourism
Greg Richards
Academy for Leisure and Events
Breda University of Applied Sciences
The Netherlands
Abstract: Creative tourism has grown and diversified in recent years, but
little attention has been paid to changing business models. We use the Business
Model Canvas to compare creative tourism business models linked to the
evolution of creative tourism from basic arts and crafts learning experiences to
the incorporation of creative experiences in global platforms such as Airbnb and
TripAdvisor. We identify a shift in focus from individual learning to destination
platforms, the integration of the creative economy and tourism to models based
on placemaking. These developments also imply the integration of a growing
range of stakeholders into the creative tourism ecosystem and more focus on
collective, place-based creativity rather than individual creative skill
development. These different business models are also linked to different types
of value creation, with intrinsic value for the consumers and instrumental value
for the producer increasingly being joined by institutional and integrative value
creation processes.
Keywords: Creative Tourism, Business Models, Business Model Canvas,
Tourism Experiences, Placemaking, Value Creation.
Introduction
Creative tourism has emerged as an important niche in the tourism market in
recent years, with a growing number of destinations and internet platforms
offering creative experiences to visitors. This growth is arguably a result of
consumers seeking more active and fulfilling ways of engaging with the cultural
of destinations, as well as destinations looking for more distinctive offerings.
This growth has also been linked to the general growth of the ‘experience
economy’.
Creative tourism was first identified as a distinctive form of tourism in 2000,
when it was defined by Richards and Raymond (2000: 18) as:
Tourism which offers visitors the opportunity to develop their
creative potential through active participation in courses and
learning experiences which are characteristic of the holiday
destination where they are undertaken.
The most important aspects of this original definition relate to the need to
involve tourists in some form of creative activity, and the fact that these
activities should also be linked to the culture of the destination in some way. In
the 20 years following the initial conceptualisation of creative tourism, however,
the concept has grown and changed considerably. We can identify an evolution
Business Models for Creative Tourism | Greg Richards
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of creative tourism over a number of different phases (Duxbury and Richards,
2019).
Firstly, under ‘creative tourism 1.0’ we saw the development of small-scale
creative experiences and learning activities, provided mainly by creative
entrepreneurs as a supplement to other creative production. Typically, these
would be provided through small-scale workshops and courses, giving tourists
hands-on experience of local creativity (Richards & Wilson, 2006). The
subsequent emergence of creative tourism 2.0 introduced a more consumption-
related perspective, with creative activities used to attract tourists to a
destination, and the emergence of destination-based networks, such as Creative
Tourism Barcelona (Couret, 2012) and Creative Tourism Austria (Paschinger,
2016). Creative Tourism 3.0 saw a broadening integration of tourism and the
creative economy, leading to the development of a wider range of creative
experiences, as well as more passive forms of creative consumption by tourists.
In particular, this phase saw a strengthening of the links between the creative
industries and tourism (OECD, 2014). The most recent Creative Tourism 4.0
iteration saw a shift towards ‘relational tourism’ (Richards, 2014) based on the
co-creation of experiences facilitated through peer-to-peer networks. Examples
of this include the growing availability of creative tourism experiences on
Airbnb and TripAdvisor (Carvalho, da Costa & Ferreira, 2018).
Some studies have emerged that have tried to chart the growth and
development of creative tourism models, although their coverage tends to be
partial (e.g. Remoaldo, Matos, Gôja, Alves & Duxbury, 2020). Richards (2017)
also identified several different models of creative tourism development
worldwide. Duxbury, Carvalho, Vinagre de Castro, Bakas and Silva (2018)
provide a useful overview of the different models of creative tourism emerging
from the CREATOUR project in Portugal. This shows that most projects are
small scale and rely on attracting individual visitors to courses or events, or to
stay in a specific location where they can undertake creative activities (Table 1).
The main forms of income are therefore individual participant fees, although
larger projects can also attract public sector funding and sponsorship.
Duxbury, Carvalho, Vinagre de Castro, Bakas and Silva (2018), also
underline the importance of Artisan-mediators in a number of projects. These
‘switchers’ are often people from outside the local area who provide important
links to knowledge and resources from elsewhere. By linking the location to
other places, they extend the range of the local social and knowledge network,
allowing resources to be gathered on a larger scale, for example by attracting
tourists and external grants and sponsorship. Bakas, Duxbury, Remoaldo and
Matos (2019) also argue that events and festivals organised within creative
tourism programmes facilitate the interaction between different groups of people
who don’t usually mix, such as artists, local residents, children and elderly
people. Creative tourism activities embedded in small-scale art festivals also
create social value by increasing the host community’s pride in place and
reinforcing the bonding and bridging social capital of the location. The features
Journal of Hospitality & Tourism, Vol. 19, No. 1, 2021
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of these projects emphasise the importance of factors such as social capital and
networks in generating value for creative tourism producers.
Table 1: Models of creative tourism development in the CREATOUR Project
(adapted after Duxbury, Carvalho, Vinagre de Castro, Bakas & Silva, 2018)
Model
Project
Focus
Stand-alone offers
Vagar Walking
Tours
Creative routes in Evora,
Alentejo.
Repeated offers; series
of creative activities
Nova Tradição
(New Tradition)
Workshops relating to
sustainable dying and cloth-
making in Alentejo.
Localized networks
Loulé Criativo
Network related to traditional
techniques and crafts in the
Algarve.
Small-scale festivals
Artistic
Residencies
Amares
Contemporary art and traditional
heritage based around a festival
in the North of Portugal.
Creative
accommodation
Mondego Art
Valley
Artist residencies and festival in
Central Portugal.
Although there have been some studies describing the growth of creative
tourism and the development of different creative tourism forms, there has been
relatively little comparative analysis of the architecture of creative tourism
businesses or the ways in which they generate value. The aim of this exploratory
paper is therefore to analyse the business models related to different types of
creative tourism. Particular attention is paid to the value creation processes
related to these models and the opportunities that these offers for creative
tourism development.
Business Models and Value Creation
Ovens (2015) reviews the concept of business models and shows that ideas
about how businesses organise themselves to create value have changed over
time. In the past, the focus of business model analysis used to be on ‘how
businesses generate money’, but more recently the focus has shifted to a broader
concept of value creation, describing the assumptions about not only key
resources and activities of the business, but also value propositions, customer
relationships and customer segments. The most widely used tool for describing
these broader business model concepts is the business model canvas developed
by Osterwalder and Pigneur (2010), which “describes the rationale of how an
organization creates, delivers, and captures value”. Chesbrough (2007) outlined
the functions of the business model as:
• Stating the value proposition and the value created for customers
• Identifying market segments – who the offering is for
• Defining the value chain needed to create and distribute products
Business Models for Creative Tourism | Greg Richards
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• Presenting mechanisms of revenue generation, presenting the cost
structure and profit potential
A business model deals with the architecture needed to create value, which is
different from organisational strategy, which relates to overall business planning.
The focal point of strategy lies with the overall positioning of the organisation,
whereas the business model is concerned with creating customer value. Strategy
outlines how the organization can function better than competitors, and business
models describe how all the important pieces of the business synergize
(Magretta, 2002) in value creation. As Osterwalder and Pigneur (2010) argue,
analysing the elements of the business model for different organisations allows
you to identify the different strategies adopted by those organisations. In the
context of creative tourism, therefore, we should be able to relate different
business to different strategies of developing creative tourism, which according
to the evolutionary view taken by Duxbury and Richards (2019), should also
relate to the different phases of creative tourism development.
The standardised Business Model Canvas (BMC) developed by Osterwalder
and Pigneur (2010) provides us with a means of analysing and comparing value
creation processes across different organisations. The BMC consists of nine
elements that describe the whole process of value creation, but the key
component is the value proposition: the benefits that people can expect from
your products and services. To develop the value proposition, we need to think
about the nature of value, and the people we are trying to reach. What value are
we trying to create? for whom, and how do we create it?
Figure 1: The Business Model Canvas
Source: http://www.innovationclub.it/approfondimenti/business-model-canvas/ (Creative Commons
Licence).
One of the limitations of the BMC is its foundation in Goods-Dominant
Logic. It was originally based in economic models of physical goods moving to
customers in different geographical locations. In the service economy, or more
recently the experience economy, however, it is often the customer who moves
to the location of experience production. This is clearly the case in tourism.
Journal of Hospitality & Tourism, Vol. 19, No. 1, 2021
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Ojasalo and Ojasalo (2018) argue that Service-Dominant Logic has a more
advanced view of customer relationships, as it is based on co-creation between
businesses and customers (Schlager & Maas, 2012). However, even the basic
notion of co-creation, which is usually seen from a producer perspective, often
provides an incomplete view of what the service means to the customer (or,
arguably, to the producer). The solution to this problem is to shift to a customer-
centred view of value creation, in which the service is embedded in the context,
activities, practices and experiences of the customer. Ojasalo and Ojasalo (2018)
therefore argue the challenge is “how to highlight the customer’s active role and
add the notion of the customer as a value creator and the company supporting
that value creation” (p. 82). They present a new version of the BMC, the Service
Logic Business Model Canvas, in which the view of the customer as well as the
producer is presented. Most importantly, they emphasise that the value
proposition “goes beyond the actual business that the business model is
describing, and here the customer’s life is analysed in depth. Before moving to
the value proposition and other blocks of a business model, it is very important
to get a deep insight and holistic understanding of the customer’s world” (p. 83).
However, the Service Logic Business Model Canvas also has its limitations
in the context of creative tourism. Most notably, it continues to view the
production of value through services purely as an economic transaction.
However, many of the activities surrounding creative tourism also generate other
forms of value beyond the economic. To encapsulate a broader view of value
creation we turn to Holden’s (2006) concept of cultural value, which considers
the value of culture as a form of public value. Holden argues that “value is
located in the encounter or interaction between individuals (who will have all
sorts of preexisting attitudes, beliefs and levels of knowledge) on the one hand,
and an object or experience on the other” (2006, p. 15). Creative tourism fits
such a model of value very closely: participants usually travel to encounter a
specific cultural object and/or have a specific creative experience. Holden (2006)
identifies three types of value generated by culture:
• Intrinsic value, or the capacity of culture to affect people.
• Instrumental value, or the ancillary effects of culture, where culture is
used to achieve a social or economic purpose.
• Institutional value, or the processes, techniques and practices that
organisations adopt in working to create value for the public.
We can usefully apply all three types of value to creative tourism, as it
involves the personal benefits of the creative activity for participants, such as
learning (intrinsic value), the economic and social value derived by the indirect
stakeholders in the destination (instrumental value), and the value derived by
makers and public institutions from the expansion of creative opportunities and
know-how (institutional value).
Public value has recently been applied to the events sector by Richards
(2021a), who highlights the different roles played by events as value creation
configurations that can deliver different forms of value to a wide range of
Business Models for Creative Tourism | Greg Richards
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stakeholders. One important step in Richards’ analysis of event value creation is
the division between the function of events as platforms and their role in
networks. Events can act as platforms that showcase the value provided by an
event (or a creative tourism experience), and events can act as hubs and nodes in
networks that help to maintain network functions. In this sense, an event can be a
tool to promote flows (of money, information, resources) in networks, and it can
act to draw attention to particular locations, places or times through its platform
function. We see similar network and platform functions of value creation
operating in the field of creative tourism, with the development of local, national
and international creative tourism networks, and the growing propensity of
platforms such as Airbnb and TripAdvisor to curate and highlight creative
tourism content. The value created by the network and platform functions in the
creative tourism arena go far beyond the economic to include network value
(Richards and Colombo, 2017), social value and of course intrinsic, instrumental
and institutional value.
We can link these different types of value to specific value propositions and
show how these are incorporated into the different phases of creative tourism
development described by Duxbury and Richards (2019). The following analysis
extends the basic Business Model Canvas by considering the type of value
generated by each configuration of creative tourism. Because we are dealing
with destinations, or places, we are also dealing with much more complex
relationships than customer-producer links. We are dealing with the whole range
of stakeholder relationships that make a place, and which make places attractive
to visitors. This type of ‘integrative value’ (Crowther & Donlan, 2011) places
even more emphasis on the relational aspects of the places that tourists visit. This
is also important because it reflects the relational turn in tourism (Richards,
2021c) and the need of many tourists to integrate themselves into local places to
give themselves a feeling of belonging and authenticity (Russo & Richards,
2016).
The evolution of creative tourism business models
In early Creative Tourism 1.0 experiences, the emphasis was often on
individual creative producers developing workshops for tourists. The basic type
of value being developed for the tourist is intrinsic (learning, skills
development), and for the creative producer the basic value generated is
economic, through course fees. One of the important elements of value creation
was the idea that increased involvement of the tourist would increase their
awareness of the value of the creative experience, and therefore their willingness
to pay. In these early Creative Tourism 1.0 experiences, such as Creative
Tourism New Zealand (Raymond, 2007), individual crafts producers would
share their skills and knowledge with visitors, which helped to increase their
understanding of the context of craft production (Richards, 2021b). One
important outcome was the sharing of creative skills between producers and
consumers, because the consumers were themselves often engaged in creative
Journal of Hospitality & Tourism, Vol. 19, No. 1, 2021
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activities. This also generated a more equal relationship between ‘host’ and
‘guest’ than is normally the case in tourism encounters.
Creative tourism 1.0 experiences usually generate intrinsic value for the
participants, who acquire creative skills and come to appreciate the skills of
producers more. For the producers, as well as the intrinsic benefit of gaining
respect for their creativity, there is an increase in instrumental value through
sales of experiences and products related to these.
Figure 2: Creative workshops as business model in Creative Tourism 1.0
Adapted from "Strategyzer | Business Model Canvas (n.d.). Used under a Creative Commons
Attributions 1.0 (https://creativecommons.org/licenses/by/1.0/)
In Creative Tourism 2.0, the growing scale of creative tourism enabled local
networks to emerge that would collaborate to provide more complex creative
offers, such as concerts, festivals or workshop programmes. In addition to the
instrumental value being generated by tourist spending, there were also benefits
in terms of increased local collaboration, building the potential for institutional
value creation. This saw the development of dedicated creative tourism
platforms, such as Creative Tourism Barcelona, Creative Tourism Loulé and
CREATOUR. The aim of these platforms is usually to generate income for
members, and to increase the flow of visitors through collaborative marketing of
creative experiences. The emphasis of value creation shifts towards the
instrumental value developed by creating economies of scale in branding and
marketing.
Creative tourism 3.0 provides new opportunities through the integration of
tourism and the creative economy. By opening up different creative sectors to
tourism, such as the film industry, architecture or design, the potential to tap new
tourism markets is increased. At the same time, the tourism sector can benefit
from the re-valorization of tourism experiences offered by adding creative
content (OECD, 2014). In many cases these developments have been stimulated
Business Models for Creative Tourism | Greg Richards
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by top-down programmes led by government, based on the synergies to be
gained from integrating the creative economy and tourism.
Figure 3: Creative tourism platforms as business model in Creative Tourism 2.0
This has often involved the creation of specific programmes and
organisations designed to support the growth of this new model of creative
tourism, such as the Creative Economy Action Plan in South Korea (UNCTAD,
2017), which aimed to support the development of a ‘creative economic
ecosystem’, including forms of creative tourism (Richards, 2017a). The Korean
Tourist Office estimated that creative content-related (Hallyu) tourist spend was
USD 1.1 billion and that Hallyu-related tourism was linked to over half the
inbound tourist arrivals in 2019. The Korean Culture and Information Service
has developed 32 Korean Cultural Centres in 28 countries to promote Hallyu and
creative experiences (Roll, 2020). In Thailand, government efforts to grow the
creative economy included the development of creative tourism programmes by
the Designated Areas for Sustainable Tourism Administration (DASTA). This
included the development of creative tourism experiences in 20 villages
nationwide, designed to showcase different aspects of Thai culture and creativity
(Richards, 2020). The institutional value created by the development of
customised organisations to stimulate the links between the creative economy
and tourism also helped to develop instrumental value in the form of increased
business turnover and creative exports.
Creative Tourism 4.0 also provides new opportunities through global
networking. The placement of creative experiences on global platforms such as
Airbnb or TripAdvisor exposes them to a global audience, significantly
increasing the potential for new business. In contrast to the tourism concentration
effects found for Airbnb accommodation (e.g. Arias Sans & Domínguez, 2016),
Capineri and Romano (2021) found that Airbnb Experiences seem to counter the
spatial concentration of accommodation listings in the city centre of Florence.
Journal of Hospitality & Tourism, Vol. 19, No. 1, 2021
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They attribute this to the different nature of the resources utilized in the
Experiences, which emphasise experiential content and which also allow
entrepreneurs in non-central locations to offer experiences such as food tasting
and cooking classes.
Figure 4: Integration of tourism and the creative economy in Creative Tourism 3.0
Figure 5: Placemaking as an integrative approach to creative tourism
The expanded networking and peer-to-peer interaction supported by Creative
Tourism 4.0 enables a wider range of stakeholders to become involved in
creative tourism, opening up the ecosystem to actors outside the tourism or
creative sectors. The essential asset that these forms of creative tourism have in
common is the place they are located in. The central value proposition of the
business model becomes ‘the place to be’. This also stimulates a more holistic
Business Models for Creative Tourism | Greg Richards
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approach to ‘placemaking’ through creative tourism (Richards and Duif, 2019).
Creativity becomes a means of giving meaning to resources that can
subsequently enable creative activities by residents and visitors. In essence the
focus of value creation moves to the development of ‘integrative value’
(Crowther & Donlan, 2011), with creativity becoming an integral element of the
experience of place rather than a separate sector of activity. This is a more
complex value creation system, which involves a growing flow of information
about creative experiences and events in the destination. This has stimulated
more ‘curatorial’ approaches to the selection of creative experiences for
consumers overwhelmed with a wealth of creative choice (Richards, 2021c).
At the same time, however, the growth of creative tourism stakeholders can
increase the potential for competition, not only between experiences in the same
destination, but across different global destinations as well. A cursory
examination of Airbnb experiences in different cities shows that many of the
creative experiences offered by local hosts are fairly similar, including art walks,
bike tours, cooking classes and gastronomic experiences. One effect of the
‘airbnbization’ of creative tourism (as with other forms of tourism) is a levelling
up of prices, with pricing being adjusted to what the international tourist market
will bear, rather than local cost levels. Increased competition in Creative
Tourism 4.0 also focuses attention on the need for positioning – why should
visitors come to undertake creative activities in your destination, rather than a
similar place elsewhere? As Richards and Raymond (2000) originally suggested,
this means destinations should pay more attention to the characteristic, original
elements of creativity they are able to offer.
The development of Creative Tourism 4.0 business models has also been
given a boost by the Covid-19 pandemic. Unable to offer face-to-face
experiences, many creative tourism suppliers have been offering experiences
online. Richards and Duxbury (2021: 53) note that during the COVID-19
pandemic, vacation with an Artist developed online workshops and classes
delivered by artists, and they expect to continue this after the pandemic. New
target groups have also been addressed by creative tourism programmes during
the pandemic, including domestic tourists and people who want to be ‘tourists in
their own city’ (Richards, 2017). Digital nomads have also become more
important targets for destinations worldwide, particularly as they often want to
undertake creative experiences as a break from their normal digital work
environment. Norum and Poulsen (2021) also note that in the early days of the
Covid-19 pandemic, Airbnb pivoted their experiences to online offerings for
those unable to travel.
After the pandemic there will also be more opportunities for hybrid creative
tourism experiences, which offer a mix of online and offline elements. Online
contact with visitors before arrival can help to orient them to local culture and
creativity, or to develop some mastery of basic skills before getting hands-on
experience of more complex creative activities. Digital experiences can also be
offered after the physical experience as a means of staying in touch with visitors,
Journal of Hospitality & Tourism, Vol. 19, No. 1, 2021
11
helping to ensure continued interest in creative activities and increasing the
potential for repeat visits. As Duxbury and Richards (2019) note, there is a
growing societal Zeitgeist in which ‘analogue arts’ (hands-on creation) and other
forms of personal participation in creative activity and aesthetic self-expression
are viewed as an integral dimension of personal self-development and well-
being, which suggests there may be future potential for hybrid creative
experiences as well. As Norum and Poulsen (2021) suggest, these may become
part of digital placemaking strategies, which are based on the affective labour of
locals to ignite the interest of (potential) visitors and help embed them in place.
Discussion and conclusions
Creative tourism has undergone considerable development over the past
twenty years. From a casual observation by Richards and Raymond (2000) of the
potential of creative workshops and learning experiences, the concept has
evolved in many different directions, enfolding an increasingly eclectic range of
stakeholders. Whereas the early Creative Tourism 1.0 model was based on a
fairly simple exchange of knowledge for economic gain by creative producers,
Creative Tourism 4.0 presents a much more complex system of placemaking and
integrative value creation, supported by technology platforms and peer-to-peer
interaction.
The development of creative tourism has also produced a succession of new
business models. A comparison of the models related to the phases of creative
tourism identified by Duxbury and Richards (2019) indicates significant changes
in terms of all elements of the Business Model Canvas. The relatively limited
range of partners and activities evident in Creative Tourism 1.0 models has
gradually expanded to include actors from different sectors, who have also
introduced new value propositions that have expanded from personal learning
encounters between producers and consumers to networks offering increased
creative opportunities and links between different economic sectors and place
actors. The growing range of stakeholders has also supported different forms of
value creation, introducing increased opportunities to develop institutional and
integrative value on top of the basic intrinsic value usually desired by the
consumer and the instrumental (primarily economic) value desired by many
creative producers.
These new value creation opportunities have led to an increasingly complex
creative tourism ecosystem, which offers growing synergies between economic
sectors. In the early phases of creative tourism development, many creative
tourism organisations were lifestyle businesses (Tan, Kung & Luh, 2013),
lacking a carefully designed business model or value creation strategy. With the
entry of a wider range of actors into the creative tourism system, including
networks, (local) governments and technology platforms, there is more attention
to the design of business models and the creation of growth strategies. The
incorporation of more actors into creative tourism also means that business
models are likely to shift away from ‘lifestyle entrepreneurship’ to ‘placestyle
Business Models for Creative Tourism | Greg Richards
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entrepreneurship’ in which the relationships and meaning forged by place are
important to the production of value in creative tourism experiences, as well as
place being an important attraction for the consumer. What traditional
‘producers’ of creative experiences should realise is that the consumer is
becoming increasingly involved in the co-creation and curation of their own
experiences. For creative tourism development, this means focussing
increasingly on the meaning of creativity for the consumer, instead of just
assuming that creativity emanates from the destination.
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Acknowledgement- Elements of this paper were developed for a
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About the Author
Greg Richards is Professor of Placemaking and Events at Breda University
of Applied Sciences and Professor of Leisure Studies at Tilburg University in the
Netherlands. His main research interests are in the fields of cultural and creative
tourism. Email-Richards.g@buas.nl
