business model in tourism

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Tourism Review

ISSN : 1660-5373

Article publication date: 20 November 2017

Business models and the business model concept have become a fixture of scholarly and managerial attention. With a focus on how actors create, capture and disseminate value, business model research holds the promise to inform the tourism sector’s search for ways to innovate and change outdated business practices. Yet, the concept has inspired little research tackling the contingencies of the tourism context. The purpose of this paper is to address this gap in this review and research agenda on business models in tourism.

Design/methodology/approach

In this paper, the authors review and synthesize contributions from publications in EBSCO, Emerald Insight, ProQuest and Science Direct databases, that make explicit use of the business model concept in tourism (anytime up to September 2016). We conceptualize the identified articles as a coherent body of knowledge on business models in tourism with the objective of identifying common themes that characterize existing contributions.

From the review of 28 qualified articles, the authors identify four emergent themes: sector-specific configurations, the role of different value types, design themes for consistency and regulatory contingencies. These themes inform three domains in which the authors present avenues for tourism-specific studies on business models, as well as their management and innovation that the authors position in relation to the general business model literature.

Originality/value

This review details how researchers across disciplines conceptualize the business model. Together with the identified directions for further research, this literature review thus establishes a common conceptual basis and stock of knowledge for the study of business models in tourism research.

• Value creation
• Business model
• Research agenda
• Value capture

Reinhold, S. , Zach, F.J. and Krizaj, D. (2017), "Business models in tourism: a review and research agenda", Tourism Review , Vol. 72 No. 4, pp. 462-482. https://doi.org/10.1108/TR-05-2017-0094

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A Unified Business Model Canvas for Digital Intermediaries in Tourism Industry

• First Online: 15 July 2021

Cite this chapter

• Vasilios Zoumpoulidis 5 ,
• Stavros Valsamidis 5 ,
• Stefanos Nikolaidis 5 &
• Lambros Tsourgiannis 5  

Part of the book series: Contributions to Economics ((CE))

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The development of new technologies and in particular the emergence of the Internet and globalization have affected the tourism industry. Tourism industry is constantly confronting global changes and traditional tourist companies are facing a new economy that includes competition from machines and global outsourcing. Internet has become one of the most important communication tools for travellers and tourism companies. It has influenced tourism industry in a variety of ways and resulted in fundamental changes in industry structures and behaviour. Tourism intermediaries adopted new business models based on these changes and provide customers different types of products and services with cut and sliced solutions to meet their needs. These business models get value for all stakeholders in tourism activity. They reduce costs, break away from old patterns of fee arrangements, and increase efficiency. Business Model Canvas (BMC) is a tool that enables companies to articulate their business model. It represents the individual dimensions of the business model and their properties. This study examines the business models of four digital intermediaries such as Airbnb, TripAdvisor, Expedia and Booking.com through Business Model Canvas and proposes a new unified model consisting of the best features of the aforementioned four models. This novel business model presents how stakeholders such as the companies, the customers and the advertisers contribute to the achievement of a network-effect business.

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Zoumpoulidis, V., Valsamidis, S., Nikolaidis, S., Tsourgiannis, L. (2021). A Unified Business Model Canvas for Digital Intermediaries in Tourism Industry. In: Karanovic, G., Polychronidou, P., Karasavvoglou, A., Maskarin Ribaric, H. (eds) Tourism Management and Sustainable Development. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-74632-2_6

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Travel and Hospitality How to Build the Right Business Model for Smart Tourism

Finding efficiencies across the destination to drive down costs while helping to boost visitor spending is a winning strategy for the long-term

As more destinations seek to create smart tourism experiences , they’ll have to be both environmentally and economically sustainable – one can’t exist without the other to truly be considered smart.

More governments like Saudi Arabia and the UAE are turning to tourism to help diversify their economies as they consider how to balance sustainability with the economic viability of new destinations in development. The goal is to attract high net worth, luxury-focused travelers who increasingly value smart tourism – where automation and sustainable and luxury products combine to offer a human-centric experience – and are willing to spend more to have these types of getaways.

About 44 percent of respondents to a recent Altiant survey of Asia, Europe and North America luxury travelers said they’re willing to spend 10 percent more on travel to visit destinations that are supporting sustainability. In a Virtuoso survey, 82 percent of respondents said the COVID-19 pandemic has made them want to travel more responsibly and 70 percent said sustainability enhances the vacation experience.

But the caveat to this growing desire to have both low-impact and exclusive vacations is that visitation has to be managed and strategically planned. Even with destinations powered by renewable energy and water conservation technology, millions of guests per year would likely negate many sustainability efforts and be harmful to the environment. Barcelona, Venice and Phuket are a few of the most prominent examples of what can happen when visitation is left unchecked and quality of life for local people and animals declines.

That’s why the solution to long-term growth is to use data and technology to 1) get a smaller number of guests to spend more and 2) identify operational efficiencies so that every aspect of experience adds value for each guest. To achieve this, destinations need to create a growth cycle by making these four considerations:

• Smart destinations need to be self-sustaining -- governments can’t subsidize them forever.
• Using data, it’s possible to manage costs while also taking a human-centric approach that can significantly increase returns.
• Ground-up builds have the advantage to build new digital infrastructure – if they’re bold enough.
• The experience can eventually be scaled to other regions and other age groups and segments.

Without a solid business model for smart destination investments to enable sustainability while continuing to grow revenues, governments and sovereign funds risk subsidizing these efforts for an extended period of time which could lead to project failure. Destinations that will be successful will use data that comes from and is processed through technologies such as 5G, AI, edge devices, cloud and a high number of sensors in places like airports, hotels and shops. Ground-up builds such as Saudi Arabia’s Red Sea project designed with these technologies in mind while anticipating future innovations will be even further ahead of competition.

First Step: Capitalize on Operational Efficiencies

Data has to be accessible and utilized by every staff member if guests’ end-to-end experiences will truly be sustainable and personalized, while simultaneously helping drive down costs. Traditionally siloed departments should instead work together using the same core data hub that prevents duplication of work and enables the entire guest experience to seamlessly connect. Doing so can accurately predict work volume requiring human intervention and optimize labor costs. This approach can also be a selling point to guests for why they should visit: staff have more time and capabilities to provide an automated bespoke experience, or one that uses data and AI to ensure a guest’s stay is completely unique, luxuriously personalized and memorable.

Destinations should also identify areas where they can remove humans from processes that don’t add value to the overall experience. This includes using technology to automate labor intensive activities such as sensors that replace manual maintenance checks. And innovations such as smart thermostats in each guest room could save energy while smart roofs could generate solar power and also collect rain water that could be reused in hotels.

Next: Maximize Guest Spending

Simply trying to upsell guests add-ons or upgrades isn’t always the best plan to boost revenues. Instead, destinations must use data to anticipate and fulfill guests’ needs before they even know they have them. How can you reach them before they need something so that when they’re ready to buy, they already know the best option for them?

Data from sensors throughout the destination, guest devices and digital transactions all help indicate consumer behavior and intent and allow destinations to offer the right products and services at the right place and the right time. Albeit, while ground-up builds have advantages by building these sensors into infrastructure from the beginning, older destinations are also stepping up to the challenge.

Dublin, for example, recently hired its first Smart Tourism Manager who’s tasked with using digital technologies and data to create a more sustainable, accessible and equitable destination. One of the position’s priorities is using the city’s open data sets, which include data like pedestrian traffic and noise levels in different neighborhoods, and aggregated, real-time consumer credit card spending data to help local businesses better understand consumer behavior and prevent things like congestion that inhibit sustainability. Although the goal of Dublin’s work isn’t to offer automated bespoke experiences to luxury travelers – at least not yet – it’s an example of how making data accessible could allow destination decision-making and design to be more aligned to luxury customers’ expectations.

Shopping is another area where accessible data is an imperative. The process needs to be centralized and connected to guests’ accounts to keep them within the destinations’ all-in-one information hub. Guests’ time is precious and they don’t want to spend hours shopping and picking up their orders, and by creating an ecommerce engine within the guest hub the destination would know activity schedules and bookings and determine the best time and place to deliver an order. Heathrow Airport, for example, offers a service that lets travelers buy products from terminal shops online and pick-up and pay before their flights. Smart destinations could offer a similar service to show guests that they understand shopping has to be convenient and on their terms.

Scaling the Experience to New Audiences

Ultimately, each destination needs to assess the return on investment for building automation technologies into their infrastructure based on their unique circumstances. But it’s clear that planning ahead, modeling scenarios and understanding the assumptions and limitations of these technologies is a must for any destination serious about attracting this expanding luxury segment. 

To make long-term growth possible, new segments must also be brought in once the experience is tested on luxury travelers who can afford automated bespoke hospitality. Think of Formula 1, which was originally an exclusive European event that eventually expanded internationally and now attracts a much broader audience. Altiant’s data also show people under 40 (millennials and Gen Z) are more likely than older travelers to be willing to spend more than 10 percent extra on travel to ensure it’s sustainable (44 percent versus 35 percent, respectively). American Express card data for millennials and Gen Z card holders also show that spending for these groups in 2021 is 125 percent higher than 2019 levels. Having a business model that’s based on a data-driven, human-centric approach will help show digitally native younger travelers that a destination is worth their time and money.

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How Smart Tourism Experiences Are Served by Technology

With bespoke customer experiences baked into existing and emerging infrastructure, the next phase of luxury tourism is here.

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Business models for creative tourism

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• Business Model Business & Economics 100%
• Tourism Business & Economics 88%
• Individual Learning Business & Economics 32%
• Intrinsic Value Business & Economics 32%
• Ecosystem Business & Economics 27%
• Value Creation Business & Economics 23%
• Creativity Business & Economics 21%
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T1 - Business models for creative tourism

AU - Richards, Greg

N2 - Creative tourism has grown and diversified in recent years, butlittle attention has been paid to changing business models. We use the BusinessModel Canvas to compare creative tourism business models linked to theevolution of creative tourism from basic arts and crafts learning experiences tothe incorporation of creative experiences in global platforms such as Airbnb andTripAdvisor. We identify a shift in focus from individual learning to destinationplatforms, the integration of the creative economy and tourism to models basedon placemaking. These developments also imply the integration of a growingrange of stakeholders into the creative tourism ecosystem and more focus oncollective, place-based creativity rather than individual creative skilldevelopment. These different business models are also linked to different typesof value creation, with intrinsic value for the consumers and instrumental valuefor the producer increasingly being joined by institutional and integrative valuecreation processes.

AB - Creative tourism has grown and diversified in recent years, butlittle attention has been paid to changing business models. We use the BusinessModel Canvas to compare creative tourism business models linked to theevolution of creative tourism from basic arts and crafts learning experiences tothe incorporation of creative experiences in global platforms such as Airbnb andTripAdvisor. We identify a shift in focus from individual learning to destinationplatforms, the integration of the creative economy and tourism to models basedon placemaking. These developments also imply the integration of a growingrange of stakeholders into the creative tourism ecosystem and more focus oncollective, place-based creativity rather than individual creative skilldevelopment. These different business models are also linked to different typesof value creation, with intrinsic value for the consumers and instrumental valuefor the producer increasingly being joined by institutional and integrative valuecreation processes.

M3 - Article

SN - 0972-7787

JO - Journal of Hospitality & Tourism

JF - Journal of Hospitality & Tourism

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Business models in tourism: a review and research agenda

2017, Tourism Review

Purpose Business models and the business model concept have become a fixture of scholarly and managerial attention. With a focus on how actors create, capture and disseminate value, business model research holds the promise to inform the tourism sector’s search for ways to innovate and change outdated business practices. Yet, the concept has inspired little research tackling the contingencies of the tourism context. The purpose of this paper is to address this gap in this review and research agenda on business models in tourism. Design/methodology/approach In this paper, the authors review and synthesize contributions from publications in EBSCO, Emerald Insight, ProQuest and Science Direct databases, that make explicit use of the business model concept in tourism (anytime up to September 2016). We conceptualize the identified articles as a coherent body of knowledge on business models in tourism with the objective of identifying common themes that characterize existing contributions...

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This study examines the business models of four emblematic Digital Disruptive Intermediaries (DDIs), Airbnb, TripAdvisor, Expedia and Booking.com. The sources are constituted mainly by surveys, articles and expert opinions which are the main argumentation sources. The best practices for ideal business models in tourism industry through the analysis of the DDIs are the findings of the study. The main functions of the DDIs are Cataloguing, Reordering or filtering, Ranking and Recommending, Bundling, Sharing, Intent Casting, Channelling Actors, Pricing and Matching Actors. The originality of the paper derives from the SWOT analysis of the business models of the four well known DDIs. There is no previous analysis which evaluates the business models and discloses the main functions they perform.

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This article presents considerations on business models, overtourism, and sustainable development on an example of the most important Polish tourist destination, which is Krakow. The purpose of the article is to identify the values generated and captured by tourist enterprises in the context of the occurrence of a specific level of overtourism. The authors have attempted to identify the values of sustainable tourism declared by entrepreneurs, referring to the companies providing services as well as tourists and the local community. The research, conducted on a sample of 518 respondents including 371 residents and 147 entrepreneurs, not only allowed us to determine the attitudes of Krakow inhabitants toward the phenomenon of overtourism related to the Doxey model of irritation, but also to assess the impact of having/using a business model based on the acceptance of principles in sustainable tourism development. A comparison of the results obtained between enterprises declaring having and not having a business model indicates a great similarity in terms of declared value propositions.

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/ article, an evolving brics and the shifting world order.

By  Daniel Azevedo ,  Saurabh Bakliwal ,  Cinthia Chen ,  Marc Gilbert ,  Iacob Koch-Weser ,  Nikolaus Lang , and  Michael McAdoo

Key Takeaways

As attention focuses on wars in Eastern Europe and the Middle East and mounting tensions between the world’s great powers, a structural shift in the global order has been quietly underway. Large developing nations are exerting greater influence in world economic affairs and are beginning to build alternatives to Western-led institutions.

At this movement’s core is a formal intergovernmental grouping known as the BRICS+. The grouping includes five longstanding members—Brazil, Russia, India, China, South Africa—as well as five that joined in January 2024 or have been invited: Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE. Together, these ten nations account for around 40% of both crude oil production and exports. They also account for one-quarter of global GDP, two-fifths of global trade in goods, and nearly half of the world’s population. Adding another dozen nations that have applied for membership, including dynamic emerging markets such as Thailand, Vietnam, and Bangladesh, would raise the group’s share to one-third of global GDP.

A larger BRICS challenges the dominance of existing global institutions, such as the World Bank and the International Monetary Fund, that are strongly influenced by the West. It also further weakens the relevance of the G-20, a grouping founded in 1999 to seek economic policy alignment among the largest industrialized and developing economies. Indeed, the G20 is fraying at both ends: its seven most economically advanced members are strengthening their ties through the G7, while its six large developing economies are asserting their own voices within BRICS+. (Exhibit 1.)

BRICS+ creates a forum that, at minimum, gives emerging markets the opportunity to align on global topics and new opportunities to promote mutual economic development and growth. And it’s evolving steadily. As it begins building political and financial institutions and a payment mechanism for executing transactions, there are important potential implications for the future of energy trade, international finance, global supply chains, monetary policy, and technological research. As a result, global companies will need to factor these new geopolitical and economic realities into their investment strategies. They should also strengthen their capacity to capture the opportunities and to mitigate risk that they engender.

How BRICS+ Has Evolved

Leaders of the original BRICS nations held their first summit in 2009 to discuss reforming international financial institutions, which they believed did not adequately address the interests of the Global South. Aside from the United Nations and G20, which included all five BRICS, there was no major forum where emerging markets could discuss their own economic and geopolitical agendas. Development assistance and funding for infrastructure through financial institutions established largely by Western powers after World War II often came with challenging strings attached.

There has been skepticism from the beginning over whether BRICs would evolve into a functioning bloc. But over the years, these nations have been drawing nearer to each other economically. Trade in goods among BRICS economies has considerably outpaced trade between the BRICS and G7 nations, leading to greater intra-BRICS trade intensity. (Exhibit 2). Decades of rapid growth have also given many of these economies far more weight in the global economy, both as producers and consumers. (Exhibit 3.) Because many of these nations are engaged with both advanced economies and China, which is perceived as an economic and trade superpower, they can create another coalition less dependent on the West.

Recent crises have added momentum to BRICS expansion. Several big developing nations that are aligned with neither NATO nor Russia resisted pressure to adhere to Western-imposed sanctions on Moscow in response to the invasion of Ukraine. Others have complained that G7 nations’ initiatives to combat climate change and the COVID-19 pandemic did not take their needs into account. BRICS+ institutions have been slowly evolving through regular meetings, joint initiatives, and formal bodies.

Yet grounds for skepticism over BRICS+’s capacity to become an effective institution remain. This grouping includes countries that are very diverse in terms of political systems, institutional frameworks, economic models, and cultural backgrounds. It even includes geopolitical rivals; for example, relations between Saudi Arabia and Iran, as well as between China and India, remain strained. A so-called “China shock” of low-cost exports of everything from steel and chemicals to machinery could also raise trade tensions within the group. The expansion, moreover, is heavily tilted toward the Middle East, so further regional balance may be required as the group grows.

Five Ways BRICS+ Can Shift the World Order

BRICS+ could make a significant global impact in the following five areas.

Energy. BRICS+ brings together both some of the world’s biggest energy producers and buyers. With the addition of Iran, Saudi Arabia, and the UAE, BRICS+ member states account for around 32% of world output of natural gas and 43% of crude oil. If Kazakhstan, Kuwait, and Bahrain are admitted, those shares will rise further. BRICS+ nations also account for 38% of global petroleum imports, led by China and India. If all new applicants are admitted, that would rise to 55%. (Exhibit 4.) During times of volatility in energy markets, having many of the biggest energy buyers and sellers within the same group could give rise to a parallel energy trading system. That would allow for transactions among BRICS+ economies outside the Western-led financial system and potential future sanction programs, and it would perhaps give them the ability to influence oil prices.

Trade networks. Trade has been a major driver of the economic development of BRICS+.   The share of global trade in goods transacted among the group’s current members more than doubled, to 40%, from 2002 through 2022. This trend becomes clearer when looking at the increasing dependence of specific BRICS+ economies on trade with fellow BRICS+ members. China’s growing role as a supplier of industrial and consumer goods, as well as an importer of commodities, has been a key force for integration. China has become a major market for Brazilian soybeans and iron ore, for example, and a major exporter of advanced goods such as electric vehicles, solar panels, and heavy machinery. Western sanctions relating to the war in Ukraine, moreover, have led to the diversion of Russian exports to BRICS+ markets, notably China and India.

Although a handful of BRICS+ members have free trade agreements (FTAs) with each other through blocs such as the Gulf Cooperation Council and Pan-Arab Free Trade Area, there is currently no FTA covering the entire ten-nation group. India withdrew mid-negotiation from Asia’s Regional Comprehensive Economic Partnership, which includes China. BRICS+ could, however, serve as a forum for widening intra-BRICS+ market access in various ways. It already convenes a Digital Economy Working Group, for example, and has established a framework for promoting cooperation in professional and business services trade.

Infrastructure and development financing. The greatest progress so far in BRICS+ institution building has been in project and development finance. The New Development Bank (NDB), capitalized at $100 billion, largely complements China’s Belt & Road initiative. Egypt, India, Russia, Saudi Arabia, and UAE are also shareholders in the China-led Asian Infrastructure & Investment Bank (AIIB) and have received loans from it. By 2023, the NBD and AIIB combined had committed more than $71 billion in credit across a range of sectors, including infrastructure, public health, and clean energy. (Exhibit 5.) Such projects generate significant revenue for BRICS+ companies. The addition of Saudi Arabia and other cash-rich economies, moreover, could expand and diversify the financial resources of BRICS+.

Monetary policy . BRICS+ countries are keen to develop greater independence from the Western-led international monetary system. Approximately 90% of global foreign exchange transactions are conducted in dollars and flow primarily through US and European banks. Western financial sanctions on Russia underscored the powerful systemic influence the US still holds through Bretton Woods institutions and its central role in the global financial system. Because BRICS+ includes leading commodity exporters and importers, however, the group can become a conduit for foreign exchange transactions in currencies other than US dollars. The NDB, for instance, has issued about one-fifth of its loans in Chinese yuan. Russia, China, and other BRICS+ members also aim to promote digital currencies. The group has launched the beta version of a payment app—BRICSpay—that enables transactions in several non-dollar currencies. That could help nations ease reliance on the US and make them less vulnerable to sanctions and foreign exchange volatility during financial crises. From a governance perspective, BRICS+ has established the Payment Task Force, the Think Tank Network for Finance, and the Contingent Reserve Arrangement, establishing a pool of reserves that can be used in place of IMF funds to help nations address financial crises.

Technological cooperation. Space is an overlooked dimension of BRICS+ collaboration. There is a BRICS+ Space Cooperation Joint Committee, supported by longstanding partnerships between Russia and China and China and Brazil. BRICS+ has also established a Partnership on New Industrial Revolution and a Center for Industrial Competencies. These initiatives aim to spur cooperation and innovation in leading-edge technologies in areas such as intelligent manufacturing, artificial intelligence, digitization, and clean energy. The efforts could help more emerging markets get in on the ground of new technologies, improve their capacity to create intellectual property, and adopt alternative technical standards.

The Implications for Companies

An expanded BRICS presents risks as well as opportunities for business. Companies should anticipate that BRICS+ will develop more formal institutions and agreements in the years ahead and begin planning for such scenarios. Companies should consider action in five areas.

• Develop a BRICS-for-BRICS go-to-market strategy. BRICS+ markets are likely to experience significant growth over the next decade. While the group lacks formal trade and investment agreements, it already has substantial, growing intra-BRICS trade. BRICS+ markets could become valuable gateways for companies seeking to expand to other emerging markets. The success of China-made EVs in BRICS+ markets is a good example of how companies can customize offerings to reach consumers across the member countries.
• Leverage the infrastructure boom. BRICS+ is likely to see significant infrastructure investment, which will improve the business environment and connectivity. Transportation, digital communications, energy, and other projects will generate demand for global companies and provide opportunities for investors. The NDB, for example, is funding 15 transportation infrastructure projects across the Indian subcontinent.
• Adapt “China + 1.” Many companies are pursuing supply chain strategies that seek to strike a difficult balance. They want to keep leveraging China’s many competitive advantages in manufacturing. But they also need to mitigate risks, react to shifts in relative costs, and gain access to government incentives for reshoring or near shoring. In a more multipolar world, companies could consider building supply chains that can leverage the BRICS+ economies. That could make them more resilient to geopolitical and trade shocks.
• Refine risk and compliance. Economic sanctions, such as those stemming from the war in Ukraine, and US-China technological competition are heightening legal, operational, and reputational risks for companies. A recent BCG survey of 250 risk and compliance officers found that geopolitical risk is now a top-five concern, up 15 spots from a prior survey. Most sanctions have emanated from Western countries. In the future, BRICS countries could coordinate a mutual “non-sanctioning” posture while also seeking to avoid the Western-led financial system. Multinational companies should account for this scenario when managing their import and export global supply chains, exchange rates, third-party screening, and risk and compliance needs. While companies will need to comply with Western sanctions, they can do so in ways that don’t hamper potential BRICS-for-BRICs value chains.
• Build geopolitical muscle. During the period of relative peace that followed the end of the Cold War, business leaders had limited need to assert themselves in global political and security issues. These days, geopolitics is increasingly uncertain and volatile. Executives need to prepare for a wide range of scenarios that could impact their operations, supply chains, consumers, and brands. They need to factor geopolitics into their capital-allocation decisions and strategic planning. Leaders should also build geopolitical sensing capabilities across their business units, functions, and regional managements to balance business efficiency with risk mitigation.

Recent years of new geopolitical tensions, economic ambition and instability, trade wars, and a pandemic have clearly brought lasting, structural change and challenges to the business landscape we once knew. The growth of the BRICS+ shows that, after decades of strong economic development, emerging markets are now ready for a larger role in the world order, one that better reflects their interests. Companies that adapt to this movement will be more likely to thrive in an evolving era of multipolar competition.

Managing Director & Partner

Managing Director & Senior Partner

Associate Director, Global Trade & Investment

Managing Director & Senior Partner; Global Vice Chair, Global Advantage Practice

Partner & Director, Global Trade & Investment

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