The tourism industry is one of the biggest industries and its markets are highly saturated, with constantly falling profit margins on the one hand, and fast changing needs and customer demands on the other (Lohmann, 2004; Witt, Brooke, & Buckley, 2013). It seems that the growth of the industry has reached its environmental, social and economic limits, where boundaries can no longer be expanded. Products and services in tourism are becoming more and more similar and exchangeable. The tourism industry is predominantly organized in a traditional way. The main part of tourism companies are small and medium-sized (family) enterprises (Buhalis, 1998). Tradition,
authenticity and adhering to time-tested principles are on the one hand, appreciated by most guests, while the risk of missing a timely adaption to far-ranging technological and societal transformations can be observed on the other. New approaches are needed to guarantee the survival of companies. The development of ICTs (Information and
Communication Technologies), especially the Internet with its revolutionary impact on the value creation of companies, has resulted in an enormous increase on literature about how economy and business have to be managed in view of a global paradigm shift (Reichwald & Piller, 2009). Many of these publications focus on management, marketing and innovation in general, or on particular branches, such as IT or product management, while the tourism industry so far has been addressed insufficiently. Open Innovation, Crowdsourcing and Co-Creation have become the most researched and discussed innovation topics since their introduction by Prahalad and Ramaswamy (2000), Chesbrough (2003) and Howe (2006a). The fundamental considerations of integrating customers into corporate processes have attracted a lot of attention among academics and practitioners (Tapscott & Williams, 2010; Zhao & Zhu, 2014). The traditional conception of innovation management is based upon a goods-dominant logic, that focuses on the developing, producing and selling of products (Vargo & Lusch, 2004). With the rise of the software industry in the 1980s, theories and models were first applied to intangible products and subsequently to the service sector—giving rise to the service-dominant logic.
In the scientific literature, it is widely recognised that service innovations
(especially in tourism) have been handled with kid gloves. One of the first researchers who examined the use of Open Innovation , Crowdsourcing and Co-Creation within the hospitality industry was Menzel (2011). Later, the studies of Doctor, Schnyder, and Stumm (2011), Hjalager and Nordin (2011) and Faullant, Krajger, and Zanker (2012) focusing on User-driven-Innovation and on identification of innovative users in tourism were published. Schemann (2012) concentrated on the relevance of these concepts in the cruise industry. In the tourism industry , the opening of corporate boundaries to accommodate external input is not limited to innovation process es but also comprises of other important functions, such as marketing, communication and the execution of services. The literature focusing on Co-Creation in tourism mainly discusses the
generation of personalized customer experiences in services (Morgan, Lugosi, &
Ritchie, 2010; Scott, Laws, & Boksberger, 2010; Binkhorst & Den Dekker, 2009).
According to Rifkin (2014), Open Innovation , Crowdsourcing and Co-Creation are only part of a much larger social change and the beginning of a completely new
economy. A fundamental principle of our economic system is to achieve maximum productivity and to reduce marginal costs. Marginal costs are the costs of producing an additional unit of a good or service, after fixed costs have been absorbed. To produce the first cinematic travel report, several thousands or millions of dollars have to be spent on infrastructure, personnel, equipment etc. The costs of copying and duplicating the movie are comparatively marginal. The goal of a company will always be to lower the production costs as much as possible, to generate higher profits or to grant price reductions in order to remain competitive. The recent developments in the field of ICTs can be seen as drivers of economies of scale and scope, resulting in a progressive reduction of marginal costs. The Internet allows a myriad of small players to unite within decentralized peer-to-peer networks, the so-called “Collaborative Commons”.
These Collaborative Commons with their ability to reduce marginal costs, have already transformed the information goods industry, as consumers began to produce and share music, videos and knowledge for free. Toffler (1990) describes these people as
“prosumers”, being producer and consumer at the same time. The desire of consumers to play an active role in the creation of products and services in cooperation with companies has increased over the past years (Neuhofer, Buhalis, & Ladkin, 2013). In order to stay competitive, tourism companies have to handle these empowered
customers strategically and apply the new technologies fruitfully (Neuhofer, Buhalis, &
Ladkin, 2014). Outsourcing business tasks to customers is a double-edged sword. It can be very enhancing on the one hand for users to produce and share content among
themselves, in other words, to derive user-generated-content, peer-to-peer-production, and share economy. At the same time, these constitute potent challenges to the whole industry. On social media platforms like Facebook , Tripadvisor and Youtube , a steadily rising number of documented touristic experiences, ratings and
recommendations, are continually published in an independent fashion by customers, without control from the affected destinations and service providers. The information seeking and decision making behaviour of modern customers is strongly influenced by these publications (Xiang & Gretzel, 2010). The provision of services such as renting out private rooms or offering car service to visitors, can easily be offered online and therefore, disrupts traditional processes in the tourism industry . The main
transformations and challenges for the tourism industry triggered by new technologies can be summarized as follows:
Opening of operational boundaries (principle view):
The (online) provision and consumption of corporate or individual offers is mostly non-excludable and non-rivalrous as well as independent of time and
space. Keywords: Public good/Any time, any place Opening of economic boundaries (cost view):
Digital goods produced by companies or individuals are duplicated and distributed at near zero marginal costs, providing more and more offers (almost) for free, Keywords: Share economy /Free economy
Opening of institutional boundaries (ability view):
Companies on the one hand are able to integrate external sources into their value creation , individuals on the other can easily form affiliations with each other, substituting traditional business models. Keywords: Customer integration/
Peer-to-peer production.
Opening of behavioural boundaries ( motivation view):
Companies and individuals are willing to build partnerships for exchanging and sharing resources. Keywords: Co-Creation / Prosumer
The transforming processes are continuously expanding, thus affecting tourism and all other industries. The omnipresent modifications and paradigm shifts can therefore be seen as a “Third Industrial Revolution ” (Rifkin, 2014).