=Paper=
{{Paper
|id=Vol-3026/paper9
|storemode=property
|title=The Relationship between Innovation and Value Creation by Artificial Intelligence: The Case of the Tourism Industry in the Covid-19 Pandemic
|pdfUrl=https://ceur-ws.org/Vol-3026/paper9.pdf
|volume=Vol-3026
|authors=Hung Q. Vuong,Tung M. Tran
}}
==The Relationship between Innovation and Value Creation by Artificial Intelligence: The Case of the Tourism Industry in the Covid-19 Pandemic==
https://ceur-ws.org/Vol-3026/paper9.pdf
The relationship between innovation and value creation
by artificial intelligence: The case of the tourism industry
in the Covid-19 pandemic
Hung Q. Vuong[0000-0003-1136-3088] and Tung M. Tran[0000-0002-4238-882X]
FPT University, FPT city, Danang
{Hungvq, Tungtm6}@fe.edu.vn
Abstract. Nowadays, even if the Covid-19 pandemic has not left a significant
impact, the market of the tourism industry has relentlessly become competitive.
At the same time, the interests of tourists have also continuously changed rapidly
in industry 4.0. Facing such unpredictable challenges, firms must constantly have
different innovations to bring new and other values to the tourism industry. With
the ability to create appropriate new values, Artificial Intelligence (AI) can force
firms to redesign products and services, and at the same time to restructure the
entire innovation method. However, AI may also appear as a preferred option
when the advantages of conventional innovation methods are challenging to re-
alize. This paper aims to explore how AI will help the innovation of tourism and
hospitality enterprises create new values that match new and safe experiences for
customers during the Covid-19 pandemic and beyond.
Keywords: Value creation, Artificial Intelligence, Innovation.
1 Introduction
Tourism is an important source of foreign currency revenue, accounting for a signifi-
cant proportion of Vietnam's GDP. There will be the participation of many stakeholders
in the tourism industry, such as hotels, restaurants, event organizers, amusement parks,
shopping malls, souvenir shops, small local leisure & service establishments for tour-
ists, airports, rental company cars, travel agencies, and tourist information centers, mu-
seums and art galleries, etc. This means that tourism has many other related industries,
including agriculture, food, beverage, real estate, construction, transportation, creative
sectors, and other services.
Copyright © by the paper’s authors. Use permitted under Creative Commons License Attribu-
tion 4.0 International (CC BY 4.0). In: N. D. Vo, O.-J. Lee, K.-H. N. Bui, H. G. Lim, H.-J.
Jeon, P.-M. Nguyen, B. Q. Tuyen, J.-T. Kim, J. J. Jung, T. A. Vo (eds.): Proceedings of the
2nd International Conference on Human-centered Artificial Intelligence (Computing4Human
2021), Da Nang, Viet Nam, 28-October-2021, published at http://ceur-ws.org
Corresponding author.
84 Vuong and Tran
Although, tourists are often the ones who actively participate in their own
experiences when choosing a types of tourism with a particular tourist destination. But,
tourists often feel anxious about the unknown when traveling to unfamiliar destinations
[4]. Thus, this process needs solutions to help them achieve correlation to get close to
cultural norms, bypass security checkpoints, or even use payment methods in
currencies. In addition, support methods are also considered, in times of disasters such
as natural disasters or terrorist attacks, because tourists are generally not prepared to
react [5;7].
Now that the COVID-19 pandemic has spread around the world, the fear factor af-
fecting human psychology will continue. As a result, service industries that depend on
direct human interaction have been greatly affected. Many experts believe that it will
take nearly 18-30 months to stimulate demand again of the restaurant, hotel, airlines,
etc. Domestic tourism may return slowly due to the willingness to spend of the tourists.
Even tourism for international visitors needs a more detailed plan and depends on the
immigration policy of each country. Thus, with tourist destinations, Vietnam is also
one of the tourist destinations that are affected, affecting Vietnam's GDP [14].
Because of health concerns and risks, tourists will also raise skepticism about the
safety of services in their minds. Therefore, the tourism industry will have to find
business innovations to be able to survive. Solving this problem requires a lot of digital
transformation of services in the tourism industry. Then, the entire tourism industry
ecosystem can create trust and safety in the minds of tourists. This strategy will make
the entire ecosystem of smart tourism sustainable and innovative [14]. This study aims
to understand innovation in the fourth industrial revolution with artificial intelligence.
And its contribution to innovation by creating value in line with constraints during and
after the Covid-19 pandemic.
2 Innovation in the fourth industry revolution
Nowadays, the concept of innovation is not only for specific products but also for
firms that provide services to customers, such as restaurant or hotel management in the
tourism industry [13]. According to the OSLO manual 2018, business innovation
change the firm's products (product innovation), Innovations change the firm's business
processes (business process innovation). Managers can combine different types of in-
novation (bundled innovations) according to appropriate objectives to create business
efficiency [9]. Therefore, firms choose the types of innovation according to the purpose
of development.
In addition, research on innovation across various industries has shown that being
user-centric to create products/services that delight customers are the right choice. Dif-
ferent methods of product innovation or business process innovation, or combine them
to bring customers the new value created by the enterprise's comprehensive innovation
process. Then, the perception of the value that customers feel satisfied with will guide
the company's innovation [8].
Several countries are prioritizing innovations with emerging technologies such as
Artificial Intelligence (AI), Internet of Things (IoT), and Blockchain, and these are
The relationship between innovation and value creation by artificial intelligence: The case of
the tourism industry in the Covid-19 pandemic 85
becoming areas of focus in both research and development of business [11]. Besides,
AI is still being advocated for growth, and it has a lot of potentials to apply to many
types of innovative business activities. AI has put technology at the heart of organiza-
tions, and AI is being embedded in every device and innovation program across differ-
ent industries. “The global artificial intelligence market size was valued at USD 62.35
billion in 2020 and is expected to expand at a compound annual growth rate (CAGR)
of 40.2% from 2021 to 2028.” [1].
In fact, technology can free workers from some unsafe tasks during the Covid-19
pandemic while also helping them improve services and assist in creating a sense of
security for tourists. We can see many new applications & devices being used in
practice in many parts of the world, such as online check-in kiosks, automatic control
gates with Biometric Card Readers/passports, fully automated hotels, or self-driving
cars are being announced by manufacturers to become ubiquitous on the streets in the
next few years. In Vietnam, many innovative applications or devices are being used;
even self-driving has the first version introduced by a Vietnamese company designed
and manufactured.
However, some studies show that AI technology is only being developed in a few
regions of the world. This creates an "AI divide," reinforcing inequalities in social,
economic, and cultural sectors. Meanwhile, the participants in the tourism industry are
globally connected because the number of international visitors brought to the locality
is creating a tourism ecosystem with a significant source of revenue. Many countries
support the development of AI in the field of smart tourism. Its direction for Vietnamese
businesses also needs innovative thinking (with new methods) to connect. It is also
something that needs to be done quickly.
Table 1. Information Communication Technology and Smart Tourism [12].
Technology Function Smart tourism scenario
Mobile De- Mobile Phone for Web, Multimedia, Smart Tourism App, Location base App, Target
vice/Wearable eMail, Apps Marketing Device
Cloud Cloud for Iaas, PaaS, SaaS, IoTaaS, Smart Tourism cloud infrastructure services for
AIaaS XaaS
Social Media Online Social engage platform Smart Tourism social media for smart destination
Big Data Collect online data for exchange and Big Data for Smart Tourism analytic, prediction
process
AR/VR Augmeted Reality/Virtual Reality AR/VR for smart destination promotion
Robotic Robotic for human interaction assis- Robotic for helpdesk, customer service in destina-
tance tion
IoT Internet of Thing Location based service for tourism, transportation
Block Chain Open distributed ledger technology Smart contract for tourism, food quality record
tracking
Artificial Intelligent AI/ML provide analytics algorithm Cognitive engagement, process autimation, in-
sights
3D Printer Transferring image onto a 3D surface Destination 3D landsacpe demonstration, Custom-
ize souvenir product
Cyber Security Internet, IoT security Provide all tourism big data security such as
GDPR compliance
5G/NBIoT, Wifi 5G next generation transmitting tech- Smart Tourism data transmitting backbone
nology
The growth of Information Communication Technology (ICT) such as artificial
intelligence, cloud computing, mobile devices, extensive data mining, and social media
86 Vuong and Tran
makes software and hardware related to computing, storage, and communication
become ubiquitous; it is a key component of innovations in the field of smart tourism
[12]. AI has an important task to jointly create the context of smart tourism, which is to
participate in awareness, process automation, and insights. The participation of AI in
the relationship of ICT & smart tourism can be seen in Table 1[12].
3 Value creation by Artificial Intelliegence
3.1 Value co-creation - Safe, hygienic service experience
The local culture and language differences will not be a barrier to tourism but an
attraction for exploration. So during travel, technology will help tourists with the
unknown with the local cultural environment, along with language exchange
applications that will reduce anxiety and fear. Furthermore, technology will allow
customers to receive the best services [3].
In the COVID-19 period and beyond, automation technology and immense AI capa-
bilities have enabled Human-Machine Interoperable Devices (HMIs) to deliver differ-
entiated experiences that help tourism establishments create sustainable value in the
tourism industry. HMIs influences the tourism industry by providing a service where
travelers have to serve themselves more with the help of HMIs to co-create a safe, hy-
gienic service experience. In addition, tourists use HMIs from the point of view of ac-
cepting technology and services to enhance the value of quality and reliable infor-
mation-sharing mechanisms [14].
3.2 Diverse User Experience
There has been a lot of research on tourism initiatives to enhance the richness of the
user experience for applications serving the tourism industry. In which, Virtual Reality
(VR) has a leading role among AI-related technologies. VR is most likely used as a
virtual imaging tool to create human travel experiences during and even after the pan-
demic [11]. In addition, mobile technology has contributed to enhancing the user expe-
rience with "Augmented Reality" (AR), which is used in many cases. VR & AR appli-
cations for the tourism industry will increase tourists' interest in tourist destinations or
help them make choices regarding future travel plans.
The tourism can apply AI in location-based interactive services and the customiza-
tion ability of Robotic and Chatbot to provide information about tourist attractions and
promoting tourist attractions by analyzing GPS and shopping data. In addition, provid-
ing instant language translation to assist tourists in obtaining tourist information or im-
age recognition can enhance the rich content information of a tourist destination. This
shows that AI creates new value to enhance the on-site experience of tourists through
the rich & elevant information development of inquiry personalization 12].
AI can enhance the travel experience by automatically marking photos with location
information and automatically creating photo books. In addition, travelers can upload
and share photos to group social networks to promote travel experiences with family
and friends. Therefore, AI has created value, as excursionists can share their travel
The relationship between innovation and value creation by artificial intelligence: The case of
the tourism industry in the Covid-19 pandemic 87
experiences to help other tourists get more information while making their decisions.
Besides, AI can also recall memories, enhance tourists' travel experiences, and help
them build their image and status on social networks [12]. Figure 1 is an illustrative
example.
Fig. 1. An example of a travel experience with photos & location maps.
3.3 Willingness to pay for personalization capabilities and requirements
From the customer's point of view, AI will facilitate and enable travelers to prepare for
their travel experiences more quickly. AI will also generate intelligent predictions and
make appropriate recommendations following individual requirements, but the trans-
action costs are more reasonable. As a result, the travel experiences are personalized to
be tailored entirely to the needs and preferences of tourists [3].
Moreover, firms using AI can better understand their customers' financial capabili-
ties and requirements from the point of view. From there, they can design products,
services, and experiences that are more tailored to the needs of their customers. At the
same time, thanks to the help of technology, firms will significantly reduce overall op-
erating costs. Thus, it will help firms provide services at a more reasonable price, trans-
late into profits, and transfer as part of the cost reduction to customers [3].
4 Innovation and Value creation by Artificial Intelligence
Vietnam has been taking health measures for people, such as vaccination and requiring
masks in public spaces. And as soon as hotels reopen, they must also implement
hygiene, health, and safety procedures to keep guests and staff safe. Technologies that
use AI by automating processes and services will serve as a potential platform for users
to increase the rate of information application in decision-making in real-time and in
current contexts. Smart tourism has been presented as a clear concept, not just relying
88 Vuong and Tran
on capturing massive data. But to be able to inform business innovation also needs to
store, process, combine, analyze and use “big data” intelligently [13].
Expectations for AI adoption to impact the services provided and supported business
processes are substantial in service industries. AI applications impact information
processing and operations management, research and development, finance and
accounting, supply chain management, strategy, sales, marketing, and customer
service. They also always expect AI to contribute to innovative business models with
efficient user-centric services [2]. Artificial Intelligence (AI) will help firms and
organizations transform innovation. To respond to rapid technological advances and
realign human resources, AI can force firms to restructure the entire innovation
approach [13].
In addition, innovation will provide new initiatives and innovative changes in
products and services in the tourism industry. However, these innovations must also
make it possible to promote tourism with something new. At the same time, intelligent
technologies also attract and engage tourists in creating tourism experiences as a co-
creating component of that experience value [13]. As the novelties of digitalization
became the norm, more automated service was provided, by Human-Machine
Interoperable Devices (HMIs), with personalized service delivery capabilities.
Humanization and regular updating will increase the participation of tourists as co-
creators of value in tourism services. At this time, the self-service activities of tourists
also become service providers; this is seen as a change in process innovation of
products/services [14].
Fig. 2. HMI devices and strategy implementation vantage points [14].
However, it is acceptable to use AI devices to provide functional services, and the
willingness of tourists to use AI devices to provide hospitality services is lower than
that of airline services [6]. But facing the risk of coexisting with Covid-19 has become
clearer than ever; what services can provide tourists as before will take a long time to
return to the way they were before. Therefore, it is imperative to create a new direction
with distinct innovations that create safety for visitors' health. The socio-economic
The relationship between innovation and value creation by artificial intelligence: The case of
the tourism industry in the Covid-19 pandemic 89
condition of Vietnam's dwindling tourism system can be renewed by following
strategies for the safety information, hygiene addition knowledge, security
management, value and cost involvement for HMI devices, as shown in Fig 2 [14].
From the above points of view, AI forces firms to restructure and innovate their
businesses towards creating value using AI and, most recently, HMI devices in the
tourism industry. At the same time, they consider the use of AI as a priority option
when turning AI into solutions and tourism initiatives to contribute to creating
innovations for the smart tourism sector. Their relationship has implications for
business innovation that will bring innovative tourism products, services, and processes
to customer-centric business functions that serve the people and worldwide after the
Covid-19 pandemic.
5 Conclusion
Although recovering the economy during the Covid-19 period and restoring the tourism
industry is a challenge. Innovative solutions for sectors of the tourism industry to attract
a new influx of tourists. Based on this research, we believe that adapting to new
conditions during and after the Covid-19 pandemic is necessary for innovation. In
which, AI can create new values that enhance a safe customer experience and is worth
the move for firms in the travel industry. Furthermore, there are reasons to believe that
the innovative approach with AI is radically different from the human-skill-intensive
innovation approach many firms have adopted in the past.
The development of the tourism industry will rapidly utilize new initiatives that are
also important for the future of this industry because the technology and intelligence of
AI will make business more accessible by shortening the time of work & human
resources. However, we also need to pay attention to human labor needs in the tourism
industry, a labor-intensive industry, by creating more favorable conditions for
employees to work in this industry. In addition, AI also has challenges as many other
researchers have pointed out that need to be considered, which are: Computing Power,
Trust Deficit, Limited Knowledge, Human-level, Data Privacy and Security, The Bias
Problem, Data Scarcity, etc.
In general, AI can appear as a preferred option. This is because it has a positive role
in situations where the advantages of conventional digital innovation methods are
difficult to realize value creation with a new experience for customers. Incorporating
AI into applications & innovation tools of firms seeking innovation is also a smart
choice in the tourism industry during the Covid-19 pandemic (if all obstacles of AI for
users & related sectors of the tourism industry are solved). Thus, it can be seen that the
application of AI will help tourists to use a lot of information in the context of tourism,
and at the same time, creating value by AI will help tourists get more personalized
value, bringing trust & usefulness in the time of Covid-19 pandemic and beyond.
90 Vuong and Tran
References
1. Artificial Intelligence Market Size Analysis Report, 2021-2028.
https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-ai-market, last
accessed 2020/6/25
2. Allam, S.: The Impact of Artificial Intelligence on Innovation-An Exploratory Analysis. In-
ternational Journal of Creative Research Thoughts 4(4), 810-814 (2016).
3. Bowen, J. & Morosan, C.: Beware hospitality industry: the robots are coming. Worldwide
Hosp Tour Themes 10(6), 726–733 (2018).
4. Buhalis, D., Harwood, T., Bogicevic, V., Viglia, G., Beldona, S., and Hofacker, C.: Tech-
nological disruptions in services: lessons from tourism and hospitality. Journal of Service
Management 30(4), 484-506 (2019).
5. Buonincontri, P., Morvillo, A., Okumus, F. and Van Niekerk, M.: Managing the Experience
CoCreation Process in Tourism Destinations: Empirical Findings from Naples. Tourism
Management 62, 264-277 (2017).
6. Chi, O.H., Gursoy, D., & Chi, C.G.: Tourists’ Attitudes toward the Use of Artificially Intel-
ligent (AI) Devices in Tourism Service Delivery: Moderating Role of Service Value Seek-
ing. Journal of Travel Research (2020).
7. Fuchs, G., Uriely, N., Reichel, A. and Maoz, D.: Vacationing in a Terror-Stricken Destina-
tion: Tourists’ Risk Perceptions and Rationalizations. Journal of Travel Research 52(2), 182-
191 (2013)
8. Hung, V. Q., Ghadiri, S. M., & Khalil, K. Innovation and customer value perception. LAP
LAMBERT Academic Publishing, Moldova (2021).
9. OECD/Eurostat: Oslo Manual 2018: Guidelines for Collecting, Reporting and Using Data
on Innovation, 4th Edition, The Measurement of Scientific, Technological and Innovation
Activities. OECD Publishing, Paris/Eurostat, Luxembour (2019).
10. Sarkady, D., Neuburger, L., & Egger , R.: Virtual Reality as a Travel Substitution Tool
during COVID-19. In Information and Communication Technologies in Tourism 2021;
Wörndl, W., Koo, C., Stienmetz, J.L., Eds.; Springer, Cham, Germany (2021).
11. Strohmann, T., Fischer, S., Siemon, D., Brachten, F., Lattemann, C., Robra-Bissantz, S., &
Stieglitz, S.: Virtual Moderation Asssistance: Creating Design Guidelines for Virtual
Assistants Supporting Creative Workshops. In: Proceedings of the Twenty-Second Pacific
Asia Conference on Information Systems (PACIS), pp.1-14. Japan (2018).
12. Tsaih, R-H. and Hsu, C. C.: Artificial intelligence in smart tourism: A conceptual
framework. In Proceedings of The 18th International Conference on Electronic Business,
pp. 124-133. ICEB, Guilin, China (2018).
13. Tüzünkan, D.: The Relationship between Innovation and Tourism: The Case of Smart Tour-
ism. International Journal of Applied Engineering Research 12 (23), 14861-14867 (2017).
14. Van, N. T. T., Vrana, V., Duy, N. T., Minh, D. X. H., Dzung, P. T., Mondal, S. R., & Das,
S.: The Role of Human–Machine Interactive Devices for Post-COVID-19 Innovative Sus-
tainable Tourism in Ho Chi Minh City, Vietnam. Sustainability 12(22), 9523 (2020).