TOURISM INNOVATION AND ITS ROLE IN BOOSTING THE COMPETITIVE ADVANTAGE OF EGYPTIAN TOURISM PRODUCT

 

Abeer Attia

Tourism Studies Department, Faculty of tourism and hotels, University of

Alexandria, Egypt

 

Dalal Abd El-Hady

Tourism Studies Department, Faculty of tourism and hotels, University of

Alexandria, Egypt

 

Rania Ragab

Tourism Studies Department, Faculty of tourism and hotels, University of

Alexandria, Egypt

 

 

ABSTRACT

The tourism industry is considered a critical industry worldwide since it contributes to employment, raises national income and enhances the growth of tourism competitiveness. Consequently, tourism is one of the most promising fields for the growth in the world economy. This is due to its one multifaceted social and economic benefits, which help in providing solutions to many global challenges. As a result, many destinations have focused on innovation as one of the renewable forms of competition that provides an innovative tourism product and meets the constant change in the tourists' needs. Hence, the current research aims at examining the role of innovation as a tool to support the competitive advantage of the Egyptian tourism product. The methodology of the research depends on adopting the qualitative method, using interviews that were conducted with some official tourism management responsibles in Egypt. The findings of this research show that innovation is a forceful tool through which the competitive advantage of the Egyptian tourism product can be enhanced. This will positively affect the competitive position of the country. Therefore, the creation of innovative tourism products and activities will help to promote tourism sector and increase its positive impacts.

Key Words: Tourism Innovation, Competitive Advantage, Tourism Product, Egypt.

 

1      INTRODUCTION

Innovation is one of the main factors that contribute to economic growth in many countries as it has an economic impact on the tourism sector through the renovation of production, sales and promotion activities, besides being an effective factor in adding value to the tourism product (Teodorescu et al., 2015). This highlights the need for those who are in charge of destinations to constantly rethink about new strategies and innovation in delivering tourism products, promoting and improving facilities and infrastructure, and enduring awareness of the need to risk in order to meet tourism competition and enhance tourist experience within destination (UNWTO, 2014). Supporting innovations through the development of new products, processes and marketing methods will protect the future of tourism countries and face the growth decline in the new millennium (Scheidegger, 2004). In this context, it was necessary to consider innovation as the ideal way to face future challenges and meet the needs of the tourism sector in all destinations (Ragab, 2018).

As many countries seek to differentiate and innovate their tourism product, Egypt continues to offer traditional tourism products, despite the variety of tourist attractions that can help in offering innovative tourist products and various tourist activities and making the best use of its untapped tourist potential. Thus, this research aims to examine the role of innovation in supporting the competitive advantage of the Egyptian tourism product through highlighting the importance of innovation and its role in developing the tourism product and enhancing its competitive advantage. The research also identifies the organization and management of innovation policy and the key drivers of its success. In order to achieve those objectives, the current study will provide proof for the following hypothesis:

 

-       Organizing and managing tourism innovation can support the competitive advantage of the Egyptian tourism destination and contribute to enhancing tourist experience.

 

2      LITERATURE REVIEW

2.1  Importance of innovation in the tourism sector

Many researchers believed that innovation will lead to the success of tourism businesses both at individual tourism institutions and destination leadership (Zehrer et al., 2016; Drašković, 2015). Nowadays, innovation is considered an important issue for tourism, it represents all the new ideas, concepts, methods and practices that serve the tourism industry (Marakova & Medved'ova, 2016). From the strategic point of view, the adoption of an innovative policy in tourism business supports its ability to respond to the needs and requirements of international tourists. Consequently, tourism innovation has been used as a defensive strategy to keep up with the developments and changes in the international community in general and the tourism industry in particular (GarcíaRosel et al., 2013). Therefore, it can be noted that innovation helps to develop the reputation of the tourism sector in many countries, promote the international tourism industry in general, and address the increasing demands of tourists for niche tourism products by increasing the quality of tourist experience, which will result in the development of tourism destination, as well as supporting local communities and creating more employment opportunities for them (Carlisle et al., 2013).

As a result, many tourism researchers agree that innovation is a significant source of competitive advantage and can improve tourism performance in the ever-changing current environment. According to (Molina et al.,2017), there are many literature reviews that have addressed innovation in tourism at the destination level, including (Stamboalis, 2003; Volo, 2005 and Hjalager, 2006(, and at the level of the hospitality industry, such as (Camisón, 2000; Orfila–Sintes, 2009 ), Also at the level of small and medium-sized tourism companies such as (Weiermair et al. 2005; Pikkemaat and Peters, 2006 and Hjalager, 2010(. Since 2010, these kinds of literature reviews have grown dramatically and so far, as tourism is a service sector that must be constantly innovated because it is the service that sells products and provides new sentiments to tourists. If the destination does not adopt tourism innovation, it will stop tourists' feelings toward it, and reduce the volume of tourism demand, which emphasizes the need for actors to focus on supporting innovation and competitiveness (Molina et al., 2017; Omerzel, 2016). The innovations must be seen directly by the tourist, so the product or service provided must be new and non-traditional from the customer's point of view, which is the essence of success for the tourist organizations and destinations (Nicolau & Santa-María, 2013).

In 2013, some researchers presented a specific definition of tourism innovation, which is "An opportunity to differentiate the tourism product by making it more competitive, increasing its socio-economic gains at grassroots level and counteracting foreign currency leakages from the destination"(Carlisle et al., 2013, p.59). In addition, according to UNWTO the tourism innovation is defined as "The introduction of a new or improved component which intends to bring tangible and intangible benefits to tourism stakeholders and the local community, improve the value of the tourism experience and the core competencies of the tourism sector and hence enhance tourism competitiveness and /or sustainability. Innovation in tourism may cover potential areas such as tourism destinations, tourism products, technology, processes, organizations and business models, skills, architecture, services, tools and/or practices for management, marketing, communication, operation, quality assurance and pricing"(UNWTO, 2016, p.14).  Based on the importance of innovation in tourism and the previous definitions, we can establish a comprehensive definition of tourism innovation. It can be defined as "a tool designed to provide differentiated tourism products or services to cope with the changing characteristics of tourism demand, use new distribution channels and develop different marketing strategies and methods or different promotional tools in order to attract a wide variety of tourism movement as well as improve the organizational structures of tourism enterprises and enhance the internal and external relations of the destination in general, and the tourism enterprise in particular in order to support the value provided to tourists, enrich the tourist experience and enhance the competitive advantage of the tourism product with a view to increasing the tourism activity and improving its economic, social and environmental impacts at the destination as a whole".

 

2.2 Types of Tourism Innovation

Despite the lack of studies on innovation in the field of tourism in the past, Hjalager has contributed since 1997 to introduce all types of innovations to support sustainable tourism, by linking it to environmental sustainability and how to deliver innovative natural tourism products under the heading "tourism product innovation", and from that time on, many researchers such as (Weiermair, 2004; Aldbert et al., 2011; Booynes, 2012; Dogan et al., 2013; Brouder, 2013; Iorgulescu and Ravar, 2013; Collazos et al., 2015; and Marakova, 2016 ) have linked different types of innovation to tourism such as innovations related to tourism products, tourism service production, marketing innovation, and administrative reorganization (Dogan et al., 2013), These types are highlighted as follows: 

 

2.2.1 Tourism Product Innovation

According to (Carlisle et al., 2013), it aims to provide new tourism products and services such as providing a unique hotel services or adding distinctive attractions in the destination.  Tourism innovation can also be slight adjustments to tourism products and services that have already been provided with respect to their characteristics and intended uses (Brouder, 2013; Macerinskiene et al., 2014). For example, creative tourism is an innovative tourism product characterized by modernity and authenticity. It is considered as a part of modern tourism that has emerged as a result of the great change in tourist demand and is linked to the development of urban niche tourism (Booyens & Rogerson, 2015).

Moreover, providing innovative tourism products or restructuring that already exist supports the ability to adapt to the ongoing changes in the needs of the tourism markets, ensure the continuity and profitability of tourism businesses, help to face increasing competition, enhance the concept of sustainable tourism and fulfill effective development(Changkia, 2010). So, innovations related to the tourism product depend on two main elements; (A) providing completely new tourism products and services: when operators of a destination realize that over time new products or services should be offered to tourists because the competitiveness of the destination as a whole as well as of the individual tourist institutions depend on the ability to stimulate the tourist experience by offering something distinctive, and naturally this will keep visitors as long as possible; (B) boosting key tourism products: by developing the original products in a balanced manner to maintain the authenticity of the tourist product or attraction and enhance its value on the one hand, and improve the tourist experiences on the other (Hjalager et al., 2008, p. 33, 36).

 

2.2.2 Process Innovation related to tourism

Process innovation is related to providing new ways to produce and deliver tourism services available or to improve the performance of existing operations. For example, provide innovative ways to identify new segments of tourists or improve the tourist guidance process that enhances the quality of the tourist experience (Menses &Teixeira, 2011; Carlisle et al., 2013). It is also worth noting that information and communication technologies(ICT) represent the backbone of process innovations(Nicolau & Santa-María, 2013).These innovations focus heavily on improving efficiency, productivity and profitability (Hjalager, 2010). Finally, process innovation aims to lessen production or delivery costs, expand the quality of the product provided, and add a unique tourism product or develop a product in a differentiated manner (Macerinskiene & mikaliuniene, 2014).

 

2.2.3 Marketing Innovation

Marketing innovation is related to the development of innovative ways of distributing and marketing tourism products and services that involve significant changes in the design, promotion and pricing of these products in order to better align with the customers' needs, penetrate into new tourism markets, and maximize the position of the tourism product in the current markets, which leads to an increase in sales both at the tourism enterprise and the destination as a whole (Camisón & Monfort-Mir, 2012; Nicolau & Santa-María, 2013). This type of innovation is related to detecting new market segments, redesigning promotional messages to meet the requirements of new markets, or introducing alternative marketing methods (Nicolau & Santa-María, 2013).

 

2.2.4 Managerial Innovation  

This type may be related to the adoption of an innovative organizational structure or a new cooperative framework that reflects the norm of cooperation generally within the destination (Marakova & Medved'ova, 2016). Managerial innovation also refers to new administrative methods and procedures that contribute to the arrangement of relationships within the workplace and support internal cooperation, the management of the human resources and the delegation of authority to the subordinates, and thus it affects the internal system of the tourism institution, which is represented in the members of the administrative organization and the relations between them (Osman, 2011). So, this type of innovation can be divided into; (A) internal managerial innovation: that is related to the renovation or improvement of the internal structure of the organization, which may be linked to changing procedures, activities and processes, or to providing new ways to organize the work of tourism organizations; (B) external managerial innovation: it is related to building new relationships with external parties, for example by supporting an alliance strategy or expanding the business operations of enterprises internationally (Menses & Teixeira, 2011).

 

2.3 Principles and objectives of tourism innovation

Supporting innovation is aimed not only at improving tourism services and products, but also at growing tourism activity and improving its effects at the overall destination level (Ragab, 2018). According to the National Geographic Society (NGS), there are a set of principles that should be taken into account when supporting tourism innovation in the destination, which are:-

a.     Manifesting the authenticity of tourism products.

b.     Integrating sustainable practices into tourism products and services provided.

c.     Enriching visitors' experience.

d.     Expanding community assets.

e.     Creating community incentives.(Booynes, 2012, p.116)

In light of the above and according to some researchers, we can set the main objectives of supporting tourism innovation in the destination (Weiermair, 2004; Mayer, 2009; and Pirnar, 2012) as follows:-

a.     Boost the value provided to tourists and thus achieve the high efficiency of the destination and ease of achieving its goals.

b.     Increase the engagement of the global tourism market.

c.     Meet the changing needs of tourists by increasing supply adaptability to changing demand.

d.     Stimulate sustainable tourism practices that have become the focus of attention by tourists, local authorities and communities by encouraging innovative ventures and ideas that support sustainable development.

e.     Diminish costs and raise operational efficiency.

f.      Grow profits through the growth of international tourism demand.

g.     Increase the number of nights at the destination by investing in innovative tourism ventures.

 

2.4 Organizing and managing the innovation policy in the destination

Innovation has become a major player in tourism policies, especially tourism development policy. The application of innovation policy in the tourism sector has become one of the most influential factors in the sustainable development process (Mie et al., 2011). Marakova & Medved'ova (2016) pointed that innovation policy will be more effective if it is systematically incorporated into the regulatory environment of the tourism sector because the good regulation will promote creative behavior, and the introduction of innovation policy may be an important means of better understanding of the role of the public sector in supporting tourism innovation. It is also necessary that the existence of an innovation policy in the tourism sector is the result of overlap in the national framework to support innovation (Marakova & Medved'ova, 2016). For example, the Norwegian Government, through National Tourism Strategy (2007) has emphasized that the state aims to make Norway a global ruler in innovation and change field, and clearly recognizes the importance of tourism in its public policy of innovation (Mie et al., 2011, p.5). In addition, the government has taken a number of strategies and measures to encourage innovation in the tourism industry by the national innovation authority (Innovation Norway) through the provision of public loans and grants because it recognizes the importance of innovation in the tourism sector and its role in enhancing competitiveness, improving profitability and supporting growth in the Norwegian destination (www.innovasjonnorge.no, 2017; Mie et al., 2011). The authority has also developed a tourism strategy for the period (2014-2020) emerging from Norway's main innovation strategy, which is based on the development of Norwegian tourism, the creation of value for tourists and an increase in the utility from tourism industry. The authority stresses the need to cooperate with public sector, international tourism organizations and research institutions to update their knowledge and provide solutions to tourists and the industry as a whole (Innovation Norway, 2014).

 

2.5 Tourism Innovation System (TIS)

Successful tourism innovation depends not only on the entrepreneur but also on the roles and effects of all actors in the tourism industry, which emphasizes the need for a Tourism Innovation System that supports innovation opportunities, strengthens relationships between all stakeholders and makes tourism interests at the forefront in order to create a stimulating environment for all tourism enterprises (Failte Ireland, 2009). The main function of the Tourism Innovation System is to pursue innovation in terms of the development, dissemination and implementation of innovative ideas, through the interactions among all those involved in the system (government bodies, service providers, competitors, educational institutions such as universities, etc.), however, the process of innovation in destination is not isolated but requires relationships and interconnections between different tourism institutions and other bodies (Flagestad et al., 2005; Hjalager et al., 2008).

 

2.6 The key drivers for the success of innovation in the destination

In order to support the success of tourism innovation, several drivers are required, which are a combination of external factors that contribute to the application of innovative thinking at the destination and provide the necessary resources to support the competitive edge of the tourism product (Dogan et al., 2013). These drivers are as follows:-

 

 

2.6.1 Create a national environment suitable for tourism innovation

In accordance with Mie et al. (2011), the level of innovation in the destination depends largely on the national environment conducive to innovation which is provided by the country. Therefore, public policy should focus on the need to create a suitable environment to encourage innovation through tourism institutions and the tourism system, as well as the importance of incorporating innovation in the country's tourism strategies (Booynes, 2012). In addition to enhancing the country's ability to provide various incentives, which may consist of providing subsidies and grants, launching public support programs to encourage innovation in tourism businesses, or providing incentive awards from the country to support tourism ventures and ideas that aimed at providing innovative tourism products and services (Zehrer et al., 2016). Furthermore, the state should focus on addressing all barriers that hinder the strength of practical linkage with international organizations and markets, attracting foreign investments, in addition to strengthening practices that create strong linkages between industry, educational service providers and researchers, and assisting the private sector in generating appropriate findings and value from supporting innovative activities (Hall, 2009).

 

2.6.2 Support initiatives to develop the creative skills of tourism human resources

 The human resource is an influential factor in the success of the tourism sector, and is a vital factor in tourism innovation, so human resources development and the support of their creative energies should be the concern of tourism operators, work to support their salaries, overcome all obstacles that affect their level of creativity and try to be far from practicing tourism in the traditional sense (Nordin, 2003).

 

2.6.3 Boosting entrepreneurship

Innovation is driven by entrepreneurs who seek hot businesses and try to achieve success in the tourism economy in a renewed way and drive tourism development (Weiermair et al., 2010; Brouder, 2013). Consequently, the availability of entrepreneurship in the tourism industry creates new tourism products, improves the existing products and thus helps to develop tourism (Ragab, 2018). Therefore, the culture of entrepreneurship and innovation should be instilled in various educational programs. Hence, vocational education and training system should be developed to increase the capacity of young people to innovate. It is important to grant tax reliefs to tourism institutions to enhance the entrepreneurship in their activities and provide financial support from financial institutions in the form of soft loans and low interest rate guaranteed by the state (El-Bagoury, 2017).

2.6.4 Tourists orientation

This can be through an external focus on collecting and analyzing information about targeted tourists, defining their needs carefully, assessing their behavior and identifying their future expectations to support the ability to predict the necessary changes involved in the development process, the success of innovation in tourism is driven by the customer firstly (Al-alak & Tarabieh, 2011; Osman, 2011; Volgger & Losonczi, 2016).

Figure 2.1: The key drivers for the success of innovation at the destination

 

3 RESEARCH METHODOLOGY

The research relies on analytical descriptive method, which aims to explain and describe the nature of tourism innovation, its different types, objectives, principles, how to manage and regulate innovation policy to support the competitive edge of destinations and the key drivers for successful implementation at destination level. The secondary data are gathered from various sources of publications such as books, articles, periodicals, reports, and websites related to this study. Moreover, the research is based on adapting the qualitative method. In this regard, the qualitative method uses a semi-structured interviews that were conducted with some official tourism management responsibles at the ministry of tourism in Egypt and one of the experts working in the tourism sector to identify their level of awareness of the importance of innovation and its role in enhancing the Egyptian tourist product and studying the possibility of developing and providing innovative tourism products and their role in enhancing the tourist experience for tourists within the Egyptian tourist destination. The sample includes:-

-       Head of Information, Planning, evaluation Sector at the Egyptian Tourism Promotion Board.

-       General Director of Tourism Research, Ministry of Tourism.

-       General Director, Ministry of Tourism (Alexandria Office).

-       Owner of the first online tourism company in Egypt, and the winner of the UNWTO Award to recognize innovation and sustainability, in 2017.

 

Findings and Discussion

According to the data collected from literature review and the findings of the field study, the researcher proved the hypothesis of this research. Based on the field study, it was revealed that innovation is a tool that contributes to support the competitive advantage of the tourism product, which will positively affect the competitive position of the Egyptian destination. Furthermore, the provision of innovative tourism products and activities contribute to the prosperity of tourism activity and the increase of the positive effects arising from it. The findings of the interviews are as follows:

-       Promoting and adopting innovation policy will enhance the competitive advantage of the Egyptian tourism product by working on the diversity and differentiation of the tourism product, or through innovative marketing and management. This will be reflected in increasing tourism movement and attracting new and higher market segments, thereby increasing tourism revenues which will help to improve the economic situation, and benefit the local community, as well as enhancing the tourist experience of tourists who are always looking for everything distinctive.

-       There are a number of obstacles facing Egypt, the most important of which are:-

§  All the governmental tourist organizations lack the creative vision and they aren't yet aware of the importance of tourism innovation.

§  Lack of organizational climate that encourages creativity.

§  Absence of tourism policies and strategies that encourage entrepreneurship and innovation in tourism projects.

§  Lack of financial, moral and administrative support.

-       There is a weakness in the linkages between tourism academic institutions, official tourism associations and various stakeholders in the country.

-       Taking customers′ opinions, studying their changing needs and learning about their new trends help in reaching creative ideas in order to diversify tourism product and enhance Egypt.

Further, the previous studies have demonstrated that innovation is a tool that can be used to create value and new knowledge, which will lead to gaining a competitive advantage. The reliance of different tourism enterprises and destinations on innovations allows them to survive in the market and enhance their competitiveness in the changing global market conditions. The adoption of the innovation policy in tourism creates the opportunities to provide differentiated tourism products or services. In conjunction with that innovation helps to cope with the changing characteristics of tourism demand, uses new distribution channels and develops different marketing strategies and methods or different promotional tools in order to attract a wide variety of tourism movement. Additionally, the innovation policy improves the organizational structures of tourism enterprises and enhances the internal and external relations of the destination in general, and the tourism enterprise in particular. Furthermore, it is necessary that the existence of an innovation policy in tourism is the result of overlap in the innovation national framework. The management of innovation policy at the destination is achieved through the existence of a tourism innovation system that supports innovation opportunities and strengthens relationships between all stakeholders in the destination. Moreover, it is so important to create a national environment suitable for tourism innovation, enhance different initiatives to develop the creative skills of tourism human resources, disseminate the culture of entrepreneurship, and give importance for the tourists' opinions and demands in order to support the success of tourism innovation.

 

Conclusion and Recommendations

Based on the theoretical study of innovation in tourism and the findings of the interviews conducted with some tourism officials in Egypt, it is clear that supporting tourism innovation greatly helps to increase the competitiveness of destinations by increasing productivity, improving quality of service or differentiating tourism products offered. Thus, innovation for most tourism economies is the only way to develop more competitive and high-quality tourism products that will support their competitiveness in the presence of new destinations that have grown significantly in recent times.

As a result, it is necessary to provide the convenient regulatory climate for innovation at the national level, provide encouraging and facilitating government procedures to motivate investors and entrepreneurs to offer all that is innovative, and integrate tourism innovation within tourism policies and strategies to ensure the diversity of tourism product, and to support its competitive advantage on the one hand, in order to satisfy tourists' satisfaction and enhance the tourist experience provided to them on the other hand. Consequently, this will be reflected positively in the competitive position of Egypt as a destination.

From the above conclusions, the research recommendations are as follows:

-       Tourism innovation should be prioritized in the general tourism policy of the destination and included in tourism strategies in order to support the competitive advantage of the Egyptian tourism product.

-       Setting up a tourism innovation system or a tourism research forum that includes all concerned parties such as (representatives from the Ministry of Tourism, tourism academic institutions, representatives from travel agencies, hotels, non-profit organizations, etc.), in order to discuss different ways to develop this sector in the country by focusing on superiority and innovation, and to identify and prioritize tourism research in order to understand the changing needs of tourists, and to generate a special value for them.

-       Award prizes for all innovative initiatives that support sustainability, responsibility and competitive advantage at the level of Egypt's tourist regions annually to encourage different tourism institutions and organizations to achieve excellence.

-       Giving attention to tourism training as an essential factor that must be put at the forefront of the country's tourism strategies in order to create a good climate for creativity and innovation, with the need to establish career development centers and support the creative energies of tourism professionals.

-       Promoting practices that create strong ties between official tourism associations, other governmental entities, providers of education, and researchers, so that the country can benefit from innovative ideas put forward by researchers at colleges and institutes of tourism and hotels, which can be done through; (a) forming an annual committee affiliated to the Ministry to receive initial feasibility studies of distinguished projects and to choose the best among them to be implemented by tourism entrepreneurs and the Ministry of tourism. Other governmental bodies shall be competent to provide technical advice and administrative support to the selected projects, as well as taking into account intellectual property rights; (b) a cooperation agreement could be concluded between the Ministry of Tourism and The Academy of Scientific Research & Technology (ASRT) to encourage technological and non-technological tourism innovations due to the importance of this sector in the Egyptian economy.

-       The Ministry of Tourism should organize orientation seminars in cooperation with the Ministry of Investment, the Ministry of Antiquities and local communities, and with the participation of investors to show all unexploited areas and attractions in Egypt's tourist regions in an attractive way and to clarify the possibility of investing in them, and the advantages that the country will offer to them, whether technical support or equipment for infrastructure. In addition, various incentives may be offered, such as subsidies, grants or public support programs to promote tourism innovation and entrepreneurship or promotional awards by the state to support tourism projects that aimed at supporting traditional tourism patterns or developing new tourism patterns.

 

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