Abstract
The tourism industry has innovated its business models and developed new ones through digital technology. This has led tourism organizations to take action for their digital transformation (DT). Within this transformation, there are challenges that organizations should face to develop their capabilities and take advantage of the benefits of technology. According to a World Economic Forum study, Ecuador is a country with weaknesses in its digital environment which impacts its tourism competitiveness, that is, gaps remain open for its DT compared to other countries in the Latin American region. The purpose of this study is to analyze the DT in the Ecuadorian tourism industry. For this, we use the theory of the organizing vision and the neo-institutional isomorphism to identify the meanings of DT in the industry and the challenges regarding this technological phenomenon. Interviews with industry leaders were carried out within a pandemic context. Our findings indicate that the main challenges include lack of government support, weakness in the technological infrastructure, and digital skills to be developed in the tourism workforce.
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Keywords
- Digital transformation
- Ecuador
- Isomorphic pressures
- Neo-institutional isomorphism
- Organizing vision
- Tourism
1 Background
Digital technology has strongly impacted the tourism industry since the 1990s. This impact has meant changes in the information and communication process to evolve the tourist experience and create value for stakeholders [1]. New business models in tourism have been guided by trends such as e-commerce, digital marketing, virtual and augmented reality, or new collaborative digital platforms [2]. These models demanded more and more skills and capacities from organizations to attend to the new requirements of tourists in a digital world [3]. Digital technology, which is increasingly changing through digital innovation, leads tourism in a revolutionized way. Thus, nowadays, tourism companies have the challenge to integrate the technological infrastructure, human talent, and qualities of their environment to reach their digital transformation (DT) [4].
Parallel to the technological change, the tourism industry has been facing challenges caused by the Covid-19. This unexpected situation caused the industry to leverage digital technology more strongly to survive and enhance its offer. Some tourism organizations have taken advantage of the potential of digital technology, promoting the destinations virtually and creating an expectation in tourists until the pandemic situation would be over [5]. This situation required greater adaptation, resilience, and new forms of management [6].
In this context, some Governments are becoming interested in the development of the digital environment of their country. Nonetheless, there are still some limitations that inhibit DT in the tourism industry. According to the World Economic Forum and World Tourism Organization [7, 8], several Latin American countries could present obstacles to adapt technologically their tourism industry to new situations because the region has presented low indexes of digital readiness [9]. For instance, Ecuador exhibits below-average rates of tourism competitiveness, especially in its technological infrastructure and digital skills, which could slow down its DT. Additionally, the Covid-19 crisis brought new challenges for the industry that would mean a driver to accelerate its transformation [10].
Beyond the current conjectural problems evidenced in the industry, tourism organizations face an intricate process. The DT is a complex phenomenon that encompasses various theoretical and practical approaches [11, 12]. Likewise, organizations tend to technological determinism [13]. This could impede the integration of human and technological factors needed for DT. So, despite the trajectory of digital technology in the tourism industry, organizations still face particular challenges of the digital age that lead them to generate common actions to respond to the tourism ecosystem [14].
The purpose of this study is twofold: (1) On the one hand, we will analyze, through the theoretical lenses of the organizing vision (OV), what is the perception of the DT in the leaders of the Ecuadorian tourism industry. The OV is a discursive construction, a common idea that legitimizes a technology or phenomenon [15], and its approach will allow us to know how the idea of DT is constructed in this context. (2) On the other hand, we aim to identify the challenges for the DT of the industry by following the neo-institutional isomorphism statements. This will make it possible to identify the challenges as forces that influence tourism organizations to gain legitimacy in society [16].
2 Theoretical Framework
2.1 The Organizing Vision
The OV is “a focal community idea for the application of information technologies in organizations” [17]. The interpretation, legitimation, and mobilization of an idea as good organizational practice, are the axis of OVs [15]. The OV allows evidence if a technological phenomenon is recognized by an organization and the meanings that emerge in a social group. These meanings can take place before, during, or after their implementation along with the organizational practices and changes that emerge in response to the phenomenon.
The OV is a constructivist notion. The social construction of technology proposes the interaction of social factors with technological ones as one, as a social-technological ensemble [18]. In this interaction, the OV is socially constructed by the discourses that emerge as buzzwords, terminologies that acquire various interpretations and meanings in the digital innovation environment [19]. In addition, decisions in organizations around technology are influenced by the VOs that legitimize practices through influences and perceptions of actors in a context [20].
Since DT is a technological phenomenon that has gained interest in today’s digital economy, the study of the OV will allow us to know the notion that the selected tourist social group has regarding it.
2.2 Neo-Institutional Isomorphic Pressures
The neo-institutional theory is a theory focused on social construction. It points out that decisions in organizations could be guided by forces other than rational or economic ones to obtain legitimacy. DiMaggio and Powell [16], argue how organizations coexist with external and internal forces that tend to be homogeneous in the practices and structures of companies to gain legitimacy. This would lead organizations to adopt similar decisions and become more and more similar to their competitors in the same domain of activity, what they call institutional isomorphism. These forces can be:
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Coercive pressures: related to formal and informal conditions that exert pressure from the political, legal, or regulatory aspects. Governments or other related institutions impose or enforce regulations forming a common legal environment. Likewise, they impose penalties or sanctions that force organizations to acquire practices that tend to standardize the industry. Actions related to economic or structural issues managed by the government can also be considered [16].
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Mimetic pressures: organizational behavior tends to imitate the practices of their peers to gain legitimacy with the stakeholders. That is, they tend to imitate other companies, meet customer requirements and please new trends in society, balancing their values and beliefs. These forces are also related to decisions regarding the use of new technologies [21].
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Normative pressures: these refer to issues related to professionalization in industries such as the knowledge acquired by employees, specialization, standardization, training, and professional networks, which establishes and normalizes conditions and methodologies in organizational practice [22].
The isomorphic pressures have been used in some research in the tourism context [23]. In this study, the isomorphic pressures that emerge as challenges of DT will be identified. We consider challenges as weaknesses or barriers that inhibit or affect the development of DT [24].
2.3 The Digital Transformation in Tourism
DT is a continuous and complex process where technological, organizational factors and relationships with the environment are managed to take advantage of digital technology. It is a process that aims at the benefit and interests of the organization and its stakeholders, within a changing digital context [12, 25]. As mentioned above, digital technology has made some processes (i.e. reservation, communication between actors, multimedia management, information analysis) more efficient through new virtual scenarios in tourism [1]. Thus, tourism organizations are managing different areas to face the current digital trends focused on tourist well-being and new organizational objectives [4].
The organizational adaptation to digital technology gives way to DT. In tourism, the DT pursues the construction of smart cities to connect multiple destinations, actors, and communities around the world through dynamic digital platforms, connected artifacts, artificial intelligence, and big data. For this, digital skills and change management are needed to handle new requirements, new tourists, and a huge flow of information. This integration of human and technological factors allows to support decision-making in the organizations and exploit digital technology to personalize the tourism offer [26,27,28]. Efforts of DT have been evidenced in some tourist organizations such as hotels [29, 30], museums [31], or other destinations [32, 33]. In these cases, the tourist requirements, the employees’ skills, and the process of digitalization have been managed. The DT in tourism has been also evidenced in sustainability projects [34, 35], and rural tourism [36].
Around the DT, some weaknesses have been identified in tourism organizations. The industry has evidenced the need to strengthen collaborative efforts to create new digital business models [37] and improve the technological infrastructure on a national scale [38]. Likewise, some factors that need to be reinforced are digital skills, digital and resilient leadership [39], and a digital strategy integrated into the new tourist demands [31].
At a global level, challenges have been identified in DT related to the budget issue [29], resistance to change, lack of vision in organizations and lack of collaboration between stakeholders [39], monopolization of tourism infrastructure [13], weak political intervention [40], disarticulation of public policy [41], digital gaps, Internet connectivity problems [42] and weak domestic and foreign database management [43]. Nonetheless, the challenges vary according to the context where the DT is developed. Every industry and its context could identify new challenges.
3 Methodology
Through a qualitative and interpretative methodological approach, we aim to understand the perceptions around the DT and its challenges in the Ecuadorian tourism industry. This industry encompasses the set of organizations that offer services throughout the tourist chain such as food and beverages, accommodation, tourist operation and intermediation, community tourism centers, entertainment, and tourist transport [44]. The research questions of the study are:
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(a)
What is the OV of the DT in the tourist industry of Ecuador?
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(b)
What are the isomorphic pressures that are presented as challenges for the DT of the Ecuadorian tourism industry?
Semi-structured interviews with a phenomenological design were carried out to understand the meanings from the perception of the participants [45]. Interviewees were contacted via email and their participation was voluntary via Zoom. Leaders of public and private associations and institutions immersed in the tourism industry were integrated such as representatives of the Ministry of Tourism, provincial tourism chambers, tourism departments of local municipalities that represent a joint vision of the tourism industry. Likewise, leaders who manage the professional career of tourism and leaders of tourism businesses related to accommodation and tourism operations were included. Fourteen interviews were conducted until a saturation point was reached [46]. At the request of some interviewees, their anonymity has been maintained in the study.
The interview was designed as an open conversation regarding practices of the industry in response to the digital age. Only at the end of each interview, the term of the DT was introduced, asking them if they believed that the industry is transforming digitally. This approach was followed to avoid ambiguous responses regarding DT, which is a relatively recent topic in the Ecuadorian tourism context and most leaders are not digital experts. To generate empathy toward the interviewees, the interview also addressed topics about the experience of leaders in the Covid-19 crisis. The digital age was explained to the interviewees as the new digital scenarios of mobile applications, social networks, digital marketing, big data, digital platforms, smart cities, and artificial intelligence, which are tendencies in tourism. Likewise, the conversation focused on identifying situations that could be representing difficulties for organizations in this digital age. The interviews were conducted from May to August 2021, with an average time of 50 minutes.
The interviews were recorded, transcribed, and coded through NVIVO 11. A structural coding was applied that allowed us to identify sentences and paragraphs as the unit of analysis. The phrases related to “how the industry responds to the digital age” and the leader’s opinion regarding DT of the industry were coded to analyze their perceptions. The phrases related to coercive, mimetic, and normative pressures were coded to analyze the challenges of DT. The coded verbatim allowed us to conduct a thematic analysis through the identified items and recognize the topics that represent each category [47]. The codes assigned to each interviewee are shown in Table 10.1. Every idea expressed by each interviewee was considered of equal importance for the analysis. The analysis of the codified ideas has allowed us to understand how the topic of DT is perceived in the industry and the challenges that this phenomenon entails. This is shown in the following sections.
4 Results
4.1 Organizing Vision of Digital Transformation in the Tourism Industry of Ecuador
The leaders’ perception gives us a representation of what DT is and how it is reached, who is the principal actor in DT of the industry, what the digital technologies in this process are, and what its scope in organizations is. Figure 10.1 indicates a mental map that summarizes the codified ideas. The original words expressed by the interviewees were used to build the OV of DT in the Ecuadorian tourism industry.
The leaders interviewed gave their perceptions of how the tourism industry is responding to the digital age and whether they believe it is digitally transforming. The speeches of the leaders repeatedly showed their approach to the digitalization of the industry, for example, “when we talk about digital transformation, that is, we mutate this physical world to carry out all its processes in the usual way to a digital way” [E5]. The leaders reinforce that the digital age is linked to the generation of data and how to manage it for decision-making: “this new technology is also associated with obtaining data that is tremendously important” [E6].
Digital technology is the tool to respond to this digital age. The application of various digital technologies is necessary for organizations. The most mentioned were the social networks and collaborative platforms: “There is a Facebook, an Instagram, so they are things that we have to integrate […] It is an investment to have a web page and always be with technology” [E13].
Likewise, responding to the digital age is to generate comparative advantages at a global level: “We have to provide comparative advantages, we have to be at a global level because they have to know us at a global level, this is through digitalization, digital marketing, payment processes digital and others” [E1]. Organizations need to transform themselves to have a digital presence: “if you are not on Facebook, on Instagram, on Google, selling your product, selling your service, you are nothing” [E9].
The industry might be updated to new digital trends because “the digital ecosystem is ready” [E7]. “Jetti is an application that many of the Esmeraldean businesses have applied precisely because the young people of the new age, the millennials, and the centennials, use it” [E13]. The transformation is built to develop trust in a more demanding tourist, “the digital economy is equal to trust, no one can forget that. Why? Because all these elements such as the blockchain, currencies like bitcoin, and all of this are built on the development of trust” […] “through technology, digitalization, providing solutions, benefits and making life easier for tourists” [E1]. In the same way, the transformation responds to a more informed tourist, “now every tourist in the world knows his destination through an application” [E14].
Organizations need to have more trained employees with digital knowledge, “within their groups of employees, companies must have people who have a different vision, totally ambiguous to reality. When I say ambiguous, they think differently, act differently, generate different things” [E7]. The digital age requires a more interrelated collaboration between industry players: “we must face these new challenges and the important training of the private company together with the academy” [E8].
Organizations are transformed to create a direct relationship with tourists, “now if we cannot show them an attraction directly and personally, we can from the technological side. It is no longer necessary to have a computer, a laptop, we already do it through a telephone” [E11], “the Ecuadorian tourist buys alternatively with various mechanisms, one of these is WhatsApp, transfers or payment links that he executes for a direct reservation” [E7]. The digital age makes organizations look for efficiency and improvements in their offer, “the technological part provides more information on products and tourist destinations, gives a greater comparison of the offer between products on the market, in addition, the reduction of time and costs with the purchase of certain elements” [E11].
The interviewed leaders argue that DT is a process of the digital ecosystem, part of the technological innovation of industry 4.0. A process that generates comparative advantages through digitalization and the adoption of technology, concerning digital media. Also, it allows adaptation to new technological realities, a change from the traditional to the digital, where the generation of data and the management of information are central actions that support decision-making in tourism organizations and provide benefits to new tourist.
4.2 Challenges for Digital Transformation in the Tourism Industry of Ecuador
Several verbatims were identified within each isomorphic pressure. The verbatim allowed a thematic analysis that highlights the main challenges of the industry for DT. This is shown in Fig. 10.2.
Leaders shared various insights, most of them focused on topics regarding normative and coercive pressures. The perceptions regarding the mimetic ones were the least mentioned by the leaders. For example, regarding coercive pressures, there were perceptions regarding Internet connectivity problems that some communities present, “the main barrier we have is that many communities do not have access to the Internet, they are really very far away” [E14]. There were also perceptions regarding poor data management at the national level. It was expressed that “the Ecuadorian State has been very selfish in that it does not understand tourism, it has been very selfish in handling this data that is not available to investors” [E6]. Another point identified was regarding the weaknesses in public policy for the ethical use of digital platforms: “it is one of the things that is affecting us. I invite you to see on Facebook, on Instagram, ghost operators…they don’t need to be regularized, they don’t pay taxes, they don’t pay employees, they don’t pay rent, they don’t pay fees to the municipality” [E12].
Regarding mimetic pressures, several leaders perceive a minimal benefit from technologies such as virtual fairs, since the relationship with the client is difficult: “This communication helps, but it is not effective. I have participated in virtual fairs where I have not been able to achieve anything productive” [E6]. Likewise, the Ecuadorian market still presents resistance due to the issue of security: “Ecuadorians have a certain fear of buying online, that the products do not reach us, that there is some fraud when we put our credit card on some web page” [E2].
Finally, regarding the normative pressures, a lack of vision on the part of the businessmen of the industry was pointed: “the problem really is to change the mentality in the subject of this transformation, in the innovation and digitalization of the tourist ecosystems” [E10]. Likewise, there is a need for digital preparation and development of digital skills: “we need that tourism entrepreneurs know about social media, data and big data management […] they can do SEO or SEM analysis, from the information that is based on the market” [E5].
5 Discussion
The DT is a process that is taking space in the organizations of the tourist industry of Ecuador. Based on the three axes of the OV [15], the interpretation of the DT is around a process of adaptation to the new realities and digital requirements that the industry face. The perceptions issued by the leaders and the activities related to the DT show that there is a legitimacy of the process as a necessary practice for tourism organizations. This need might be enhanced by the resilience that the tourism sector has had in the financial crisis caused by Covid-19. Regarding the mobilization, the challenges identified show that more actions are required so that the government, business forces, and the national tourism market are involved in support of the DT of tourism in Ecuador. However, there is a perception that actions must be coordinated in the short term.
According to what is highlighted in [39], the leaders participating in this study are aware that the transformation process requires the management of human talent and contemporary leadership. In addition, it requires a different vision, a change mentality, and digital knowledge to achieve the benefits of digital technology in tourism and promote collaboration between actors to develop alliances in the sector.
Some challenges identified in this study coincide with those identified in the literature. There are coercive challenges such as the need for an articulated public policy for DT and the allocation of financial resources [40, 41], the lack of infrastructure management for Internet connectivity [42], and weaknesses in national data management [43].
Normative challenges such as a lack of a budget in organizations [29], a weak vision at the business level [39], and the need for collaborative networks [37], were also evidenced. Finally, mimetic challenges stand out around the lack of evidence of the scope of digital technology for the benefit of companies based on its cost–benefit. This DT challenge has been identified at the level of various industries [48].
According to the results achieved in this study in a pandemic context, the Ecuadorian tourism industry presents the challenges reported by the Spanish tourism sector five years ago [49]. Mainly, normative challenges related to the lack of strategic vision and lack of human talent and knowledge of digital skills. Also, coercive challenges such as regulatory uncertainty and structural deficiencies with information and communication technologies; and, mimetic challenges such as the lack of knowledge of benefits and advantages of digitization in tourism entrepreneurs, and financing difficulties due to the cost of technologies.
5.1 Reflections
This study aimed to analyze the perceptions of leaders of the tourism industry regarding the DT and challenges of this technological phenomenon. For this, we based on constructivist theories such as organizing vision and neo-institutional isomorphism, respectively.
Based on the results, we can highlight that DT is recognized by leaders as a necessary response to the new requirements of the digital society and a process that forms comparative advantages. The main challenges point to the fact that the Ecuadorian tourism industry needs collaborative work between government institutions and companies. Likewise, the industry needs to manage the technological infrastructure to develop digital strategies and skills in the tourism sector.
This study has theoretical and practical implications. Regarding the theoretical, the constructivist approach in DT has been exposed. The organizing vision and isomorphic pressures highlight a technological phenomenon integrated into an organizational and contextual reality. Regarding practical implications, the challenges identified warn the actions that the tourism industry authorities should consider in an Ecuadorian context to respond adequately to digital requirements and face critical scenarios due to the pandemic.
This study was carried out in the context of the Covid-19 pandemic that keeps the tourism sector in a financial crisis. Representatives from all provinces of Ecuador or all tourist activities could not be covered. The topic of DT has been of interest to the leaders during the interviews, however, this interest could be attributed to the evident need to apply digital technology to develop new strategies and cover new requirements of the current context. Future studies are required to compare the perceptions and challenges around DT according to tourist activity.
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Toscano-Jara, J., Loza-Aguirre, E., Franco-Crespo, A. (2023). Challenges for the Digital Transformation of Ecuador’s Tourism Industry: Perceptions of Leaders in Times of Covid-19. In: Estrada, S. (eds) Digital and Sustainable Transformations in a Post-COVID World. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-16677-8_10
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