THE DIGITAL EU TOURISM NETWORK (DTN)

Digital innovation is key for competitiveness of tourism industry but the European tourism. SMEs are lagging behind in using the potential offered by modern technologies. The Commission has implemented several initiatives to support adaptation of tourism businesses to the ICT developments and boost digitalisation of tourism in general. The DTN will help facilitate a regular dialogue between the digital and the traditional tourism relevant stakeholders. This dialogue should offer to the European Commission and national/regional /local public and private actors input for the digital transformation of the tourism sector. The DTN will share its information and vision on the current state of play, regulatory/non-regulatory and business challenges and it will provide recommendations already challenged by the debate for possible policy responses.

EU consumer law meets the challenge to ensure fair competition and customer protection and should be seen as internal market-driven. For that reason, the European Commission is insuring that tourism remains one of the drivers of the European industry. Consumer law with an impact on digital tourism includes :

• Package Travel Directive
• Timeshare Directive
• Unfair Commercial Practices Directive
• Misleading and Comparative Advertising Directive
• Unfair Contract Terms Directive
• Consumer Rights Directive

The Fitness Check exercise of part of the consumer legislative framework, includes the Unfair Contract Terms Directive, the Unfair Commercial Practices Directive. The preparatory work for the REFIT started in 2015. Results could be available in 2016.

NEW CHALLENGES IN DIGITAL TOURISM

There are key areas of concern for tourism businesses when operating online, such as regulatory fragmentation, level playing field, new business models and market trends, Big Data opportunities, ownership, access and use of data generated on tourism flows, access to training / finance / technology etc.

Sharing Economy and New Business Model:  An unprecedented rise of sharing economy is observed. The sharing trend covers a huge set of goods and services, resulting in an estimated 13 billion Euros value globally. Those new business models trigger an easier use and adoption of new technology and put pressure on traditional service providers. Under pressure are also the existing levels of regulation. It is time to reflect on the market conditions for the new business models and to question about competition with traditional players, for which standard compliance appears like a disadvantage.

Regulatory Framework in the EU: The regulatory framework appears confusing, conflicting with a huge degree of fragmentation across Europe and it offers a set of laws – national, regional, city laws on housing, zoning, tourism and taxation, e-commerce- which are in some cases even contradictory. None of these have been designed for the digital age and the tourism sector is experiencing a critical period, in which it is hard for new business model to find an opportune place and for the traditional operators to maintain their market power, in a business environment which is rapidly changing due to the presence of new online platforms and service providers.

International Market: There are for example 200 million Chinese citizens that are travelling to Europe. This reveals an opportunity which requires global approach, including the consideration of a set of aspects: transports, visa, traditional and innovative related services, health-care issues. Immigration concerns should be tackled at policy level in a way that does not create a barrier for international tourism flows.

Digital Technology and Innovation: The use of mobile devices and online services is increasing. It involves all generations, especially young people. This innovation is driven by consumer demand for transparency, flexibility and the willingness to self-design their own travel experience. It is important to catch all positive opportunities given by the digital technology, for example, for improving the tourist's experience (profiling on passions not only on professional behaviours). Businesses have to be present online and take care of their reputation through reviews. Trust in users' reviews on the Internet should be conceived as an opportunity for the consumers but also for fair tourism actors. There is a need to build trust also among the tourism entrepreneurs and the Internet services providers: being online stands for more visibility for the business; however, this visibility can be limited and search results commercialised and it could result in a selective bottleneck. Due to the global dimension of tourism, another issue is about payments and virtual currencies which are not covered by current legislations. As an example of the relevance of this point: reaching the Chinese market means to reach a market where Chinese people don’t have bank accounts (replaced by vouchers /cheques).

There is a need to simplify and proportionate regulations in order to not create barriers for innovation, for non-professionals as well as for traditional actors. SMEs should be supported in innovation and regulations need to be analysed in function of the new types of actors. Some cities like Amsterdam or Paris lead the reflection on these issues.

REGULATORY FRAMEWORK

200 billion of interconnected devices are expected by 2020. This data push to think about the uptake of digital technologies by the tourism sector and the SMEs' inclusion in the global digital value chain.

Exiting Legal Framework for Market Entry Barriers: Cross-Border Enforcement and Anti-Trust Rules: There are no specific rules for tourism so general rules are applied, namely Article 101 TFEU on restrictive agreements and Article 102 on abuse of a dominant position. National investigations on MFN clause are ongoing. The Commission has a coordination role vis-à-vis NCAs. There is a risk of a non-homogenous outcome.

The Role of Regulators

The action of the regulator should be led by the question on which incentives can be offered to tourism players and by limiting regulation to cases of market failure resulting in distorted competition. The implementation of a Digital Single Market (DSM) can support the creation of new tourism products and the DSM principle should be used horizontally in all new EU legislation in order to ensure that the rules fit for the digital area. The EU needs a robust but simple consumer protection, effective, well-understood, taken up by businesses and well policed by regulator.

Challenges

Digital is not a goal per se but rather a competitiveness enabler which should be supported by a proper business strategy. Digitalisation in the tourism sector raises several challenges regarding regulations. Before taking any initiatives, it is crucial to have strong evidence about the Digital Tourism market, its trends and its actors. The EU need to set up priorities and identify the most important challenges before changing regulations. The sharing economy might generate new concerns and problematics about tax evasion and big data.

The Digital Tourism sector needs better regulation based on better evidence of its economic impact. It should also be able to embrace the level of flexibility needed to follow the customer expectations. The issue should be tackled with a general approach, bearing in mind that the Digital sector is only a piece of the whole Single Market. There is also a need for a better dissemination of European information by creating coherence with pre-existing tools (Youreurope.eu, Watify, etc.).

BUSINESS SUPPORT

The issue is not just about skills and adaptation of the education sector. Digitalisation of tourism is a new paradigm, transforming the way tourism business is conceived of and managed. Therefore, a revolution needs to happen in the way tourism entrepreneurs internalise the digital revolution and exploit the opportunities offered by the ICT in the entire life cycle of service delivery and business management.

Business support: There is a rise of innovation powered by open data, entrepreneurship, new technologies and empowered leadership. Innovation can take businesses out of isolation and can facilitate know-how transfer. Platforms of best practices and industry leaderships have to be promoted. The EU should enhance the new opportunities coming from this surge of innovative ideas and activities.

Skills: Skills offer and demand in Europe are still heterogeneous when it comes to Information and Communication Technologies (ICT). Indeed, the educational systems in Europe are offering a variety of performance regarding teaching ICT skills. Moreover, there are varied levels of competences and expertise needed across tourism value chain. In general, the tourism sector need for upskilling when accounting for ICT skills. The EU need to support e-learning activities which could solve issues related to economies of scale and the training provision during low season.

Recommendations

• Support stronger dialogue with industry and tourism stakeholders, because of industry-led counsel can a success factor for digital transformation;
• Fully integrate SMEs in this dialogue which deliver the tourism output;
• Networking is crucial to enhance business support and skills provisions. Exchanges of information through conferences and seminars, best practices dissemination, mentoring and coaching ideas, etc. are solutions to be implemented;
• Create E-mentors network;
• Involve universities as well as technology providers to boost entrepreneurship spirit (and thus, shape skills offer) and provide insight on skills demand, trade unions, NGOs, transport companies.

NEXT STEPS – SETTING UP THE DIGITAL TOURISM NETWORK AND ITS STEERING GROUP

The Steering Group of the DTN will be composed of 10 to 15 participants divided in working groups. The objective of the Digital Tourism Network is to analyse the trends and opportunities of digital tourism and to elaborate policy recommendations. The DTN Steering Group will work under the close coordination of the Commission, with the final aim of producing a report on these challenges/opportunities and on recommendation to address/exploit them. The report will focus, amongst others, on the following list of topics:

• Integration in Value Chains
• Big data
• Clouds
• Aadaptation
• Streamlining, Simplification of Regulatory Framework
• Trust
• Collaborative Economy
• Skills- language, digital, cultural, entrepreneurship
• Capacity building
• Exchange of Best Practices
• E-learning
• Payments

The report is planned to be discussed and agreed at a meeting of the Digital Tourism Network at the end of November 2015 and presented at the European Tourism Day (16 December 2015 in Brussels).

Key Players

• Günther H. Oettinger - European Commissioner for Digital Economy & Society
• Veronica Manfredi, Head of Unit Consumer and Marketing Law, DG JUST
• Gösta Petri - Deputy Head of Unit, Unit E2, Consumer and Marketing law, DG Justice and Consumers, European Commission
• Jordan Toujarov, Enforcement and European Consumer Centres Unit, DG JUST
• Kristyna Deiberova, Antitrust: Transport; Post and other services Unit, DG COMP
• Carlo Corazza - Head of Unit, Directorate General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
• Aoife McArdle, Airbnb
• Patrick Robinson - Head of Public Policy, Europe and Canada for Airbnb
• Daniel Makay, HOTREC
• Christoph Klenner,-ETTSA- European Technology and Travel Services Association (Amadeus, ebookers.com, EDreams, Expedia, GoVoyages, Hotels.com, Odigeo, Opodo ; Sabre Holdings, Travellink, Travelport, Trivago, Venere.com, Lastminute.com)
• Jean-Philippe Monod, Expedia
• Jason Hawthorne - Legal Director, Ebookers
• Tim Fairhurst- ETOA- European Tourism Association
• Nick Hall, Digital tourism think tank
• James Rampton, CSES- Centre for Strategy and Evaluation Services
• Ferran Donate, ACECCAT- Catalonia Cloud Computing Companies Association
• Jeremy Rollison, Senior Manager, Government Affairs, Microsoft Europe
• Erika Mann - Director, EU Affairs, Facebook
• Michael Kreft von Byern - Chair of  IAAPA Europe’s Government Relations Committee and Representative of the Board of Europa-Park
• ECTAA- European Travel Agents’ and Tour Operators’ Association
• Claudia Tapardel - MEP, Member of TRAN Committee and co-chair of the Parliament’s European Tourism Development Intergroup