Japan’s Ministry of Economy, Trade and Industry (METI) definition of DX is “To enable companies to adapt to drastic changes in the business environment and to transform their products, services and business models based on the needs of visitor and society, as well as to transform the business itself, organization, process, corporate culture and to establish the competitive edge by using data and digital technology.“
To achieve this, the first step is to migrate all business-related data from analog to digital. IT introduction and digitalization is already underway, but Digital Transformation (DX) involves both digitalizing data and transforming business through the analysis of such data. However, many tourism-related businesses go no further than IT introduction and digitalization without progressing to DX.

The efforts of individual businesses in the travel and tourism industry are insufficient to grasp the diverse needs of tourists and attract them to a destination. It is important for a destination in its entirety to attract visitors by understanding their needs and offering relevant services. However, there are still few local communities which capture data about the demographics of visitors to a destination, and their behavior and level of spending when they do.

Individual businesses within the tourism sector which provide services for visitors are the true owners of data about visitor behavior and spending. In the first instance, we need to move forward with the digitalization of these businesses. However, tourism businesses relatively consist of many micro-, small- and medium-sized businesses and, as such, it is not easy for these individual businesses to use their own data for DX, due to limiting factors which include skills, knowledge, and resources.

As a consequence, to achieve broader DX in the tourism sector, it is better to focus on improving the environment for businesses to capture data about visitor behavior and spending through digitalization, rather than for each business to strive individually for DX. Subsequently, destinations can consolidate data coming from each business and visualize visitor behavior and spending at a local level. Finally, there will be a way to contribute insight for individual businesses. In doing so, a tourism destination (businesses) will be able to obtain an accurate picture of their visitors which is required for better business management and thus, can take a first step in destination management by attracting more visitors and sending them to individual businesses.

It is important for tourism business to understand how and what kind of data is available, by utilizing visualized insights and dashboards about local areas, even if it is difficult to fully leverage data. Instincts and analog criteria which were the earlier foundations of business management can be supported by data if it is correctly used and understood. In addition, it becomes easy to understand the significance of digitalization and data usage, which will pave the way to business transformation.

To make this prospect a reality, we need to start discussing which kinds of data can be shared in specific local communities. As an example, EY provides support services in Okinawa where four local entities have started a joint initiative for a “data-driven tourism promotion model,” which aims to revitalize tourism in the era of the “new normal”. These four entities are the Okinawa General Bureau, Okinawa Prefecture, Okinawa Convention & Visitors Bureau (OCVB), and the IT Innovation and Strategy Center Okinawa (ISCO).