Because tourism is a key industry in Spain, ESADE has once again presented their annual report in conjunction with EY, “The State of the Innovation in Tourism in Spain 2019” at AIIT, the international tourism symposium organised by ESADECREAPOLIS, a business forum for new developments and experiences in innovation.

This year’s report reveals that investment in innovation by tourism companies in Spain is down 9.7% on 2018 figures, mainly in accommodation (11% lower than in 2018), foodservice (-15%) and passenger transport (-10%).

The overall decrease of 9.7% is due mainly to the fact that 7% of the tourism companies that invested in innovation in 2018 no longer do so. Average investment in innovation remained virtually unchanged at €124,837.00, a smaller decrease (-1.7%).

One positive detail is that innovation by intermediary companies is up 6.3%, mainly due to more intermediary companies spending between 2% and 4% of their turnover on innovation. According to Professor Josep-Francesc Valls, chair of the ESADE department of marketing management and author of the report, “This reduction in innovation investment suggests either a slowdown after several boom years or that Spain’s hotel industry has taken their foot off the gas slightly”.

The report highlights a desire to invest in improving and developing products and services (34%). Whereas most investment in recent years targeted technology, it now focuses on product and service enhancement.

Over the last seven years, the ESADECREAPOLIS AIIT has studied the hotel, foodservice, transport, distribution, culture and leisure industries in a survey of 500 Spanish companies.

According to Xavier Trias, the partner at EY in charge of IT consultancy, “Spain’s tourism industry has the technology and financial resources necessary to deal successfully with the future changes that will impact the industry, although it must spend more on cybersecurity and must continue working towards a better multichannel experience for customers”.

Experience boom

The survey also mentions the growing desire of tourism businesses to develop and improve marketing and sales channels (14,5%). According to professor Valls “an experience boom is happening in the industry”. He also said that “there is remarkably little interest in innovations related to management processes and new business models, which have been relegated historically to the bottom of the ranking by interviewees”.

As regards the analysis by sector, Valls pointed out that “hotels are at the forefront of everything related to product enhancement, followed by companies providing tourist activities and restaurants.”

Lack of familiarity with the digital world

As regards the shift in business models imposed by the digital era, 27% of those interviewed felt that their business model would change radically in the next two to four years; 64% were in no rush or thought that they would not change much in the long run (39%); whilst 25% saw no need to change (25%). The survey revealed companies in the hotel and restaurant industries to be the most resistant to change, and intermediaries and those involved in tourism activities to be the least.

Thirty-one percent of survey participants said they had not only already defined their outlook and strategy but also the resources necessary to deal with the digital era. Another third of the companies interviewed (33%) had the outlook and strategy but not the resources, whilst 24% only had a vision of which way to go. The subsectors that had made the most progress in this area were hotels and accommodation.

However, not much knowledge of digital technology and the advantages of using them was observed on the basis of how they were applied to everyday business. In this respect, the tourism industry still showed little interest in A.I., robotics, virtual reality and big data, all of which were rated less than 3.6 out of 7.

The tourist industry will remain profitable in the next five years

The survey reveals that tourism is a profitable business and will remain so in the next five years. According to Valls, “The industry is confident even though most businesses expect a moderate increase in consumer demands, the demand for lower prices, and in wages and environmental costs”. Hotel and transport companies were those with the most negative opinion of these factors. The survey also revealed that businesses were not particularly worried about the upsurge in apps, the impact of low-cost tourism, limitations on numbers of hotel rooms or the introduction of robots.