Articles

25 September 2024

Supporting SMEs in the Twin Transition of Tourism

Adventure tourism

Coastal, maritime and inland water tourism

Cultural tourism

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The tourism sector is undergoing a twin transition, driven by the need for digital transformation and sustainability. Changing consumer behavior, growing environmental concerns, and evolving market demands are pushing businesses to embrace both digitalization and sustainable practices to remain competitive. However, small and medium-sized enterprises (SMEs), which form the backbone of Europe’s tourism industry, face significant challenges in adapting to these shifts. Many SMEs lack the resources, infrastructure, and technical expertise necessary to keep up with the rapid pace of digital transformation and meet sustainability standards. Supporting these businesses is crucial, as their success is essential for the overall resilience and sustainability of the tourism sector. Without targeted support, SMEs risk falling behind, making it imperative for governments and institutions to provide the necessary tools and resources to help them thrive in this evolving landscape.

Authors

Editorial team

Topics Geographical descriptors

Albania

Armenia

Austria

Belgium

Bosnia and Herzegovina

Bulgaria

Croatia

Cyprus

Czechia

Denmark

Estonia

EU-27

Finland

France

Georgia

Germany

Greece

Hungary

Iceland

Ireland

Italy

Kosovo

Latvia

Liechtenstein

Lithuania

Luxembourg

Malta

Moldova

Montenegro

Netherlands

North Macedonia

Norway

Poland

Portugal

Romania

Serbia

Slovakia

Slovenia

Spain

Sweden

Switzerland

Türkiye

Ukraine

Organisation Type

Academic/Research and VET Institutions

Company with 250 or more employees

Consumer / tourist organisation

Cultural and Heritage Organisations

Destination Management & Marketing Organisations

EU institutions

Financial Institutions and Investors

Industry Associations and Chambers of Commerce

International Organisations

Local authorities

Media/Travel Journalist Organisations

National authorities

Networks and Federations / Confederations

NGOs / Non-profits

Regional authorities

SMEs (a company with less than 250 employees)

Trade Unions

• Specific types of tourism

• • Adventure tourism

  • Coastal, maritime and inland water tourism

  • Cultural tourism

  • Ecotourism

  • Education tourism

  • Festival tourism

  • Gastronomy tourism

  • Health and medical tourism

  • MICE tourism

  • Mountain tourism

  • Religious tourism

  • Rural tourism

  • Sports tourism

  • Urban/city tourism

  • Wellness tourism

• Transition Pathway Strategic Areas

• • Best practices, peer learning and networking

  • Changes in tourism demand and opportunities

  • Digitalisation of tourism SMEs and destinations

  • Green Transition of Tourism Companies and SMEs

• Business activities

• • Activities of amusement parks and theme parks

  • Activities of associations and other organisations supporting tourism

  • Air passenger transport

  • Camping grounds, recreational vehicle parks and trailer parks

  • Events catering and other food services

  • Festivals, cultural and entertainment activities

  • Gardens and nature reserves activities

  • Holiday Housing / Apartments and other short stay accommodation

  • Hotel and similar accommodation

  • Mobile beverage services

  • Mobile food services

  • Museums

  • Operation of historical sites

  • Other

  • Other accommodation

  • Other amusement and recreation activities

  • Other food and beverage services

  • Other holiday reservation services

  • Other tourism transportation activities

  • Rail Passenger transport

  • Recreational and sport activities

  • Restaurants, cafes and bars (Food and Beverage serving activities)

  • Road passenger transport

  • Tour operator activities

  • Travel agency activities

  • Water (sea, coastal and inland) passenger transport

Share { "service" : "share", "version" : "2.0", "networks" : ["twitter", "facebook", "linkedin"] } The Role of Digitalisation for SMEs in Tourism

Digitalization Offers immense benefits for tourism SMEs, enabling them to streamline operations, enhance guest experiences, and unlock new revenue streams. Digital tools, such as booking platforms, data analytics, and customer relationship management systems, allow SMEs to operate more efficiently by automating time-consuming tasks like reservations and payments. This efficiency not only reduces costs but also frees up resources to focus on boosting guest satisfaction. Additionally, digital marketing tools and online platforms provide small businesses with a global reach, allowing them to attract customers from around the world without the need for significant marketing budgets.

A great example of successful digital adoption can be found in Croatia, where tourism SMEs are increasingly utilizing artificial intelligence (AI) to enhance customer service. AI-powered chatbots and virtual assistants are transforming how businesses handle customer inquiries and bookings, providing quick, personalized responses 24/7. This not only improves customer experience but also reduces the workload on staff, allowing SMEs to manage operations more efficiently.

In Spain, rural hotels are taking advantage of online platforms like Airbnb and Booking.com to gain international visibility. These platforms enable small accommodations in remote areas to connect with travelers globally, eliminating the need for expensive advertising campaigns. By adopting these digital tools, rural hotels are not only expanding their customer base but also contributing to the development of local economies by attracting tourism to less-visited regions.

Overall, digitalization is crucial for the future growth and sustainability of SMEs operating in tourism, offering them the tools to stay competitive and responsive in a rapidly changing market.

Transition Toward Sustainability 

The transition toward sustainability presents both significant opportunities and challenges for SMEs operating in tourism. While adopting green technologies and sustainable practices is becoming increasingly essential, many SMEs struggle with the high initial costs involved. The investment required for renewable energy sources, waste reduction systems, or sustainable infrastructure can be a significant barrier for small businesses, which often operate on limited budgets. Additionally, SMEs may lack access to the essentialsustainability expertise, making it difficult to implement effective strategies. These businesses are often torn between the need for short-term profitability and the long-term benefits of sustainability. While greener practices often lead to reduced operational costs and a stronger market position over time, the upfront costs and changes required can be daunting for SMEs with limited resources.

Despite these challenges, there are several practical steps that tourism SMEs can take toward becoming more sustainable. One key area is improving energy efficiency and reducing waste. By adopting renewable energy sources, such as solar or wind power, and implementing waste reduction strategies like recycling or composting, SMEs can reduce their environmental footprint while also cutting down on energy bills and waste disposal costs. Embracing circular economy practices, where resources are reused and recycled within the business, can also help minimize waste and create more efficient processes.

Another important step is promoting sustainable mobility and eco-tourism packages. SMEs can develop sustainable transport options for guests, such as offering electric vehicle charging stations or promoting public transport routes to their locations. Additionally, by offering eco-friendly tourism experiences—such as guided nature tours, wildlife conservation activities, or stays in eco-certified accommodations—SMEs can attract environmentally conscious travelers while contributing to the preservation of natural resources and local cultures.

Fortunately, there are numerous support programs available to help SMEs navigate the transition to sustainability. The EU Green Deal, for instance, offers funding opportunities for businesses looking to improve their environmental performance. SMEs can apply for grants or loans to support investments in energy-efficient technologies, waste reduction systems, or sustainable infrastructure. Similarly, the Tourism Transition Pathway under the EU Industrial Strategy provides specific recommendations and financial support for tourism SMEs looking to adopt greener practices. These initiatives aim to make the transition more accessible, helping SMEs overcome financial and technical barriers to sustainability.

In summary, while the path to sustainability may be challenging, there are clear steps tourism SMEs can take to reduce their environmental impact and remain competitive. With the support of EU funding programs and the growing demand for sustainable travel, SMEs can play a key role in building a greener, more resilient tourism sector.

Best Practices for Supporting SMEs

Public-private partnerships in the European Union have been instrumental in helping SMEs transition to sustainable and digital tourism models. One notable example is the COSME Program, which supports small and medium-sized enterprises in becoming more competitive and sustainable. Through initiatives like the EU DigiTOUR Project, COSME helps SMEs adopt digital technologies, such as AI and IoT, and provides training to bridge the digital skills gap. This program also supports eco-certification initiatives, enabling tourism SMEs to attract environmentally conscious travelers while maintaining a competitive edge.

Additionally, other EU programs like the European Social Fund (ESF) and Erasmus for Young Entrepreneurs offer training and funding for SMEs. These programs focus on upskilling employees in digital technologies and sustainable practices, and they provide opportunities for business exchanges where SMEs can gain insights from more experienced peers. Such initiatives are critical in equipping small businesses with the tools to adapt to both the digital and green transitions​.

Several case studies illustrate the successful transition of SMEs to sustainability. In Italy, agritourism companies have effectively utilized EU funds to adopt green energy solutions like solar panels, significantly reducing their environmental footprint while promoting eco-tourism. These changes have improved both sustainability and competitiveness, allowing these rural businesses to thrive in the evolving tourism market. Similarly, SMEs on the Greek islands have benefited from EU-supported initiatives that promote sustainable tourism through digital platforms. By marketing off-peak tourism experiences and eco-friendly options, these businesses have been able to attract a more diverse and environmentally conscious clientele.

National initiatives also play a vital role in supporting SMEs. Countries like Spain and Portugal have developed tailored programs to help rural tourism operators adopt sustainable practices and provide digital tools to enhance global visibility. These combined efforts highlight how public-private partnerships and access to EU funding can drive the transformation of tourism SMEs, ensuring that they remain competitive while contributing to a more sustainable future for the sector.

Conclusion 

The twin transition of tourism—towards digitalization and sustainability—is essential for SMEs to stay competitive in a rapidly changing market. Digital transformation allows tourism SMEs to enhance efficiency, improve customer experiences, and unlocknew revenue streams. At the same time, adopting sustainable practices, such as renewable energy and eco-friendly services, is increasingly important as travelers prioritize environmentally conscious options. However, many SMEs lack the resources and expertise to undertake these transitions independently, making external support crucial to their success.

Collaborative efforts from public and private stakeholders are necessary to support SMEs through this transition. Programs like COSME and the European Social Fund (ESF) offer financial support and training, while partnerships between governments, local communities, and businesses provide the necessary infrastructure and tools are in place. Initiatives like these not only help SMEs stay afloat but also foster long-term resilience and sustainability in the tourism industry.

As Europe’s tourism sector continues to evolve, it is vital for stakeholders to maintain and expand financial, training, and infrastructural support. By working together, public and private sectors can ensure that SMEs remain the backbone of a sustainable, competitive tourism industry, equipped to meet the challenges of the future.

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Vanguelis Chatzipanayotis

MKG Consulting,

France

29 October 2024 16:58:48

As the leading destination, Europe should set new standards on the field of tourism sustainability. This will be possible only through tourism industry SME's and it requires significant investment and know-how. To support this "green" transition we should collectively make gain in productivity through digital transition.

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