Strategy for fostering innovation

in sustainable tourism for

the Adriatic-Ionian region

FOST INNO

2018





Strategy for fostering innovation

in sustainable tourism for

the Adriatic-Ionian region

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

Strategy for fostering innovation in sustainable tourism for the Adriatic-Ionian region

Authors (ABC): Saša Cerovac, Vedrana Čikeš, Lorena Dadić, Ivana Ivančić, Helga Maškarin

Ribarić, Tjaša Peršič, Andrej Raspor, Vanja Vitezić, Daniela Soldić Frleta, Jana Suklan,

Zvonimira Šverko Grdić,

Edit: Andrej Raspor

Proofreading: Terry T. Jackson

Book break: Tjaša Peršič

Collection: Scientific monographs

Cover photo: FOST INNO

Other photo: FOST INNO, pexels.com

Printed and bound by: Electronic edition

Available on : http://www.andrejraspor.com/perfectus_zalozba

Edition: 1st edition

Place and year of issue: Dolga Poljana, 2018

Published by: Perfectus, Svetovanje in izobraževanje, dr. Andrej Raspor s.p.

Price: €0.00

This work had financial support from the programme INTERREG ADRION, project FOST

INNO.

Programme: INTERREG V–B Adrion 2014. –2020.

Project: 381 FOST INNO - Fostering tourism innovation system in the Adriatic-Ionian

Region

All rights reserved. No part of this publication may be reproduced, stored in a retrieval

system, or transmitted, in any form or by any means, electronic, mechanical, photocopying,

recording, without reference to the source.

Kataložni zapis o publikaciji (CIP) pripravili v Narodni in univerzitetni knjižnici v Ljubljani

COBISS.SI-ID=297260288

ISBN 978-961-94549-0-9 (pdf)

ii

FOST INNO





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N

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

INDEX OF CONTENTS





Introduction ______________________________________________________________________________________ 4


1


Tourism in the Adriatic-Ionian region: Situation analysis ___________________________ 6

1.1

Socio-economic indicators ______________________________________________________________6

1.2

Tourism indicators ____________________________________________________________________ 13

1.3

Innovation indicators__________________________________________________________________ 21

1.4

Sustainability indicators ______________________________________________________________ 27

1.5

Comparative analysis of the national legislation regarding innovation and

innovation incentive policies _________________________________________________________________ 31

2

Trends in tourism _________________________________________________________________________ 48

3

Results of the empirical surveys on tourism and innovations in the Adriatic-

Ionian region_____________________________________________________________________________________ 58

3.1

Online questionnaires and telephone survey________________________________________ 58

3.2

Interviews with key stakeholders ____________________________________________________ 75

3.3

Workshops _____________________________________________________________________________ 79

4

Tourism and innovations in the Adriatic–Ionian region ____________________________ 84

4.1

SWOT analysis of the Adriatic-Ionian tourism and innovations ___________________ 85

4.2

PEST analysis of the Adriatic-Ionian tourism and innovations ____________________ 90

4.3

Adriatic-Ionian tourism development principles and strategic goals _____________ 93

5

Model development – incentives for innovation in tourism ________________________ 99

5.1

Common regional issues and problems related to tourism and innovations _____ 99

5.2

FOST INNO tourism innovation centre – the cornerstone of a regional tourism

innovation system ____________________________________________________________________________101

6

Examples of good practice______________________________________________________________ 115

Conclusion______________________________________________________________________________________ 130

References______________________________________________________________________________________ 131

1

FOST INNO

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

INDEX OF FIGURE

Figure 1: Adriatic-Ionian region___________________________________________________________________6

Figure 2: GDP in Purchasing Power Standard per capita by NUTS 2 region (% of the EU

average, 2004 _____________________________________________________________________________________ 11

Figure 3: Defining the economic contribution of travel & tourism ___________________________ 13

Figure 4: Monthly distribution of nights spent in tourist accommodation establishments,

2016 _______________________________________________________________________________________________ 21

Figure 5: Framework of the Global Innovation Index 2017 ___________________________________ 23

Figure 6: Simple synthetic relative measure of sustainability pressures ____________________ 29

Figure 7: Order of countries by measures of sustainability pressures _______________________ 30

Figure 8: Organisational structures of tourism management in Albania_____________________ 32

Figure 9: Organisational structures of tourism management in Bosnia and Herzegovina _ 34

Figure 10: Organisational structures of tourism management in Croatia ___________________ 35

Figure 11: Organisational structures of tourism management in Greece ____________________ 37

Figure 12: Organisational structures of tourism management in Italy_______________________ 38

Figure 13: Organisational structures of tourism management in Montenegro ______________ 40

Figure 14: Organisational structures of tourism management in Serbia_____________________ 41

Figure 15: Organisational structures of tourism management in Slovenia __________________ 42

Figure 16: Fastest-growing experience categories in 2017 (ranked by year-over-year

growth in total bookings count) _________________________________________________________________ 51

Figure 17: Number of enterprises, EU-28, 2015 (%) __________________________________________ 59

Figure 18: Companies profiles according to…__________________________________________________ 60

Figure 19: Strategy is…___________________________________________________________________________ 62

Figure 20: Human resources_____________________________________________________________________ 63

Figure 21: Quality control is… ___________________________________________________________________ 64

Figure 22: Sustainable tourism…________________________________________________________________ 66

Figure 23: Domestic component of services and goods provided by the tourist sector ____ 67

Figure 24: Innovation ____________________________________________________________________________ 68

Figure 25: Which department of your company is responsible for dealing with innovations?

_____________________________________________________________________________________________________ 69

Figure 26: Innovation mindset __________________________________________________________________ 70

Figure 27: How many innovations or useful suggestions did you have in the last three

years? ______________________________________________________________________________________________ 71

Figure 28: What are the most commonly accepted forms of rewarding innovations in your

company?__________________________________________________________________________________________ 72

Figure 29: Regarding innovations introduced by your company in the last three years,

please specify which were introduced?_________________________________________________________ 72

Figure 30: What can improve your company’s innovation performance? ___________________ 74

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Strategy for fostering innovation in sustainable tourism for the

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Figure 31: SWOT and PEST analyses development process __________________________________ 85

Figure 32: Adriatic-Ionian tourism development principles and strategic goals____________ 93

Figure 33: Strategic goals in the function of fostering innovations in sustainable tourism in

the Adriatic-Ionian region _______________________________________________________________________ 95

Figure 34: Model development process_________________________________________________________ 96

Figure 35: FOST INNO conceptual model______________________________________________________102

INDEX OF TABLE

Table 1: Region and population, 2017 ____________________________________________________________7

Table 2: Population under 15 and over 65 years of age (in % or p.p.) _________________________9

Table 3: Unemployment, total (% of total labour force) (national estimate) ________________ 10

Table 4: Selected socio-economic indicators ___________________________________________________ 12

Table 5: Contributions of tourism to economic activity in the Adriatic-Ionian region (All

data are in percentages) _________________________________________________________________________ 14

Table 6: Economic growth and the role of tourism in the Adriatic-Ionian region___________ 16

Table 7: Growth of capital investment associated with Travel & Tourism in the Adriatic-

Ionian region (in percentages) __________________________________________________________________ 17

Table 8: Capacity of tourist accommodation establishments by NACE group, 2016 ________ 18

Table 9: Foreign component of tourist demand (in percentages if not indicated otherwise)

_____________________________________________________________________________________________________ 19

Table 10: Foreign vs domestic contribution of tourism to GDP (in percentages) ___________ 20

Table 11: Global innovation index_______________________________________________________________ 24

Table 12: Global innovation index rank_________________________________________________________ 24

Table 13. World development indicators: Percentage share of the Adriatic-Ionian region

(unless indicated otherwise) ____________________________________________________________________ 25

Table 14: Innovation and technology ___________________________________________________________ 26

Table 15: Tourist perception of a country according to the Travel and Tourism

Competitiveness Report for 2017 _______________________________________________________________ 27

Table 16: Legislation in the field of tourism ____________________________________________________ 31

Table 17: Overview of school programmes_____________________________________________________ 44

Table 18: Profit tax and Tax incentive for R&D investments__________________________________ 46

Table 19: SWOT analysis of the Adriatic–Ionian tourism and innovations __________________ 86

Table 20: PEST analysis __________________________________________________________________________ 91

3

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Introduction

The strategy for fostering innovations in sustainable tourism for the Adriatic-Ionian region

represents a framework for a value-creating network for innovations and tourism

development across the region. This document is based on and follows the tourism

strategies of the Adriatic-Ionian countries and UNTWO’s sustainable tourism principles. Its

main mission is in contributing to the development of innovation culture, increasing the

implementation of innovation in tourism, and enhancing international communication and

cooperation among the stakeholders in this region. Given that increased innovation activity

is identified as a solution to common regional issues related to sustainable tourism and that

they contribute to the competitiveness of businesses and destinations, the focus of this

strategy lies on developing an attractive and supportive environment that can enable any

business to prosper and develop through innovations.

This document covers analyses of the situation of tourism and innovations in the Adriatic-

Ionian region as well as an analysis of tourism trends. For the purpose of detecting the

main issues that different tourism stakeholders in the region are facing, several empirical

research studies have been conducted. As a result, SWOT and PEST analyses of tourism and

innovations are created along with tourism development principles and strategic goals in

the function of fostering innovations in tourism in the region. The studies’ results showed

the low implementation of innovations in tourism, mainly due to the lack of knowledge

about innovations and their role in sustainable tourism development, poor cooperation on

all levels, as well as the lack of effective innovation incentives. The strategy recognises the

need for stakeholders to obtain knowledge about the value that can be gained from being a

part of the right network (i.e. new relationships and connections, partnerships, business

ideas and new clients/customers). In that context, the most important part of the strategy

relates to the model development – a conceptual framework that includes all stakeholders

that need to act together and integrate if the value network is to be put in place. The

proposed model (network) should help its members to improve mutual business

communication and success and enable the transfer of value and knowledge.

Stakeholders across the Adriatic-Ionian region had a central role in the strategy

development process and were actively involved in its creation. Their suggestions,

comments, and recommendations greatly contributed to the development of this

document.

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region





CHAPTER 1


5


FOST INNO



Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

1 Tourism in the Adriatic-Ionian region: Situation analysis

This chapter introduces some important indicators dealing with sustainable tourism and

innovation in the Adriatic-Ionian region, needed for the situation analysis. These are

indicators that describe regional socio-economic conditions, as well as those depicting

tourism development with special focus on innovation in tourism, such as general tourism

indicators, sustainable tourism indicators, and innovation indicators.

Indicators are gathered from several data sources and cross-checked for consistency and

international comparability.

1.1 Socio-economic indicators

The Adriatic-Ionian region (Figure 1) is a place of considerable differences.

Figure 1: Adriatic-Ionian region

Source: (The Istrian Region, n. d.)

At the same time, it is home to some highly competitive sub-regions, which are global

leaders in research and development and have excellent research facilities and systems of

6

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

product quality certification. Its rich, natural and cultural heritage makes the Adriatic-

Ionian region one of the most attractive tourist destinations in the world. Situated at the

crossroads of Western and Central Europe, it has a strategic location and enormous

potential for growth in the transport sector (Adrion Programme, n. d.).

The Adriatic-Ionian region (countries – Table 1) covers 678,450 km2 and accommodates

roughly 92 million inhabitants, with the average density of population of 136 people per sq.

km of land. For comparison, the population density at the EU level equals 118 inhabitants

per sq. km, which indicates that the Adriatic–Ionian Region is densely-populated, but

clearly it is only Italy that stands out by these parameters. In contrast, other countries in

this group have lower population density, and within-group differences are not marginal.

Italy is the most densely populated country in the region, while Montenegro is the other

extreme. Interestingly, variations in the share of the urban population are somewhat

smaller across the region, but still suggest that country-specifics have to be taken into

account (The World Bank, 2018b).

Table 1: Region and population, 2017

Land area

Population

Population

Urban

Country

(km²)

(million)

density

population

Albania

27,400

2.9

107

65.1%

Bosnia and Herzegovina

51,000

3.5

69

43.6%

Croatia

55,960

4.2

75

60.1%

Greece

128,900

11.2

87

78.3%

Italy

294,140

59.4

202

71.5%

Montenegro

13,450

0.1

5

63.6%

Serbia

87,460

8.8

101

59.2%

Slovenia

20,140

2.1

103

49.8%

TOTAL

678,450

92

136

69.3%

EU28

4,353,384

512

118

75.0%

Source: (Eurostat, 2018;The World Bank, 2018a; Worldometers, 2018)

Population structure and ageing

The EU’s population is likely to shrink in the coming decades because of a prolonged period

of relatively low natality rates while keeping in mind migration trends (Table 2). The falling

share of children and young people in the total population could result in labour market

shortages in specific countries/regions and in particular occupations. By contrast, life

expectancy (for both men and women) in the EU continues to rise while the baby-boom

generation is in the process of moving into retirement. As such, the number and the share

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

of elderly people in the total population continue to increase. This will probably drive

demand for a range of specific services (for example within social and healthcare). These

two demographic changes of the EU will affect the structure of its population and could

lead to a number of challenges, for example (Eurostat, 2017):

 how to encourage sustainable economic growth during a period when the number and

proportion of working-age people will decline; a lower number of working-age people

could lead to a reduction in revenue-raising powers, for example, from income tax and

social security contributions;

 how to safeguard social welfare models, such as pensions and health care, if there is a

growing number of (very) old people who are making increasing demands on these

systems.

A few numbers can easily demonstrate this fact. The ageing of the European population has

contributed to the reversal of declining tendencies in the dependency ratio (ratio of the

sum of elderly and youth populations to total population) that lasted for decades. Eurostat

provides worrying projections that show this increase is likely to continue in the far future.

In this respect, the EU is similar to other developed economies. Although the youth-

dependency ratio is declining and currently stabilising the total dependency ratio, it is a

mere measurement illusion, since dynamically it contributes to lower labour participation

rates, thus boosting elderly and total dependency ratios altogether. However, while some of

the more developed European countries and regions will be able to dampen these effects to

some extent and probably not for long, by attracting some of the working-age population

from the rest of Europe, it is simultaneously generating mentioned pressures in the

Southeast, contributing to demographic differences within the Adriatic-Ionian region as

well.

These trends have a number of implications for government and private spending on

pensions, health care, and education, and more generally for economic growth and welfare.

In addition, the comparability of elderly population data is affected by differences, both

across and within countries, depending on the geography of rural and urban communities.

Elderly people tend to be concentrated in a few areas within each country, which means

that a small number of regions will have to face a number of specific social and economic

challenges due to population ageing. Table 2 summarises this.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Table 2: Population under 15 and over 65 years of age (in % or p.p.)

Ageing Index

(ratio of

Country

Young (<15)

Elderly (65+)

elderly to

Difference in

young

Ageing Index

people)

(2016-2000)

2000

2016

2000

2016

2000

2016

Albania

30.3

17.7

7.1

12.8

23.4

72.4

49.0

Bosnia and

Herzegovina

20.7

14.2

11.0

16.1

52.9

113.4

60.5

Croatia

17.3

14.7

15.6

19.3

89.9

131.3

41.5

Greece

15.5

14.4

16.4

20.2

106.0

140.7

34.7

Italy

14.3

13.6

18.2

22.7

126.7

166.9

40.2

Montenegro

21.5

18.3

11.6

14.3

54.0

78.3

24.3

Serbia

20.5

16.6

13.5

16.8

66.1

101.5

35.4

Slovenia

15.8

14.8

14.1

18.5

89.2

124.9

35.7

AVERAGE

19.5

15.5

13.4

17.6

68.9 113.3

44.4

EU - 28

17.1

15.4

15.7

19.5

91.6 126.1

34.5

Source: (The World Bank, 2018a; OECD, 2018)

The ageing index is currently the highest in Italy, and the lowest in Albania and

Montenegro. The greatest increases in population difference between 2000 and 2016 can

be observed in Bosnia and Herzegovina and Albania. The average share of inhabitants

below 15 years of age in EU in 2016 were 15.4%. Montenegro, Albania and Serbia are the

countries with the above average youth population. In contrast, focusing on the elderly

population, we see that the EU average is 19.5% with Italy and Greece high above it.

Unemployment

According to Eurostat, unemployment levels and rates1 move in a cyclical manner, owing to

business cycle dynamics. However, other factors, such as labour market policies and

demographic changes, may also influence the short and long-term development of

unemployment. In industrialised economies, educational qualifications are often viewed as

good insurance against unemployment, as unemployment rates tend to be higher for

persons with lower levels of educational attainment (in comparison to persons with

tertiary education). The unemployment rate is an important indicator of both social and

economic dimensions. Rising unemployment results in a loss of income for individuals,

increased pressure with respect to government spending on social benefits, and a

1 The definition of unemployment provided by the International Labour Organisation (ILO, 2018) utilizes

three criteria: 1) being without work, 2) actively seeking work, and 3) being available for work.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

reduction in tax revenue. From an economic perspective, unemployment may be viewed as

unused labour capacity (Eurostat, 2018a).

The overall unemployment rate in the EU (Table 3) fell from 10.2% in 2014 to 9.4% in

2015, and further down to 8.5% in 2016. However, the 2008 financial crisis continues to

echo, especially in less-developed regions. Compared with the EU, the unemployment rate

in the Adriatic-Ionian region is very high, more than 20% in Bosnia and Herzegovina and

Greece. From 2000 to 2017, the unemployment rate dropped somewhat in Croatia and

Montenegro, but all other countries in the region have experienced increases in

unemployment rates, Greece being the extreme case. In general, unemployment remains at

elevated levels.

Table 3: Unemployment, total (% of total labour force) (national estimate)

Year

Index

2017/2000

Country

2000

2005

2010

2015

2016

2017

Albania

14.1

13.8

14.2

17.1

15.2

15.0

106.4

Bosnia and Herzegovina

22.0

21.7

27.2

26.3

26.0

25.8

117.3

Croatia

15.9

12.6

11.6

16.3

13.1

11.5

72.3

Italy

10.8

7.7

8.4

11.9

11.7

11.6

107.4

Montenegro

19.1

19.5

19.7

17.5

17.7

17.7

92.7

Slovenia

6.9

6.5

7.2

9.0

8.0

7.5

108.7

Greece

11.2

10.0

12.7

24.9

23.5

23.1

206.3

Serbia

12.6

20.8

19.2

17.7

15.3

14.4

114.3

AVERAGE

14.1

14.1

15.0

17.6

16.3

15.8

112.1

EU28

8.9

9.0

9.6

9.4

8.5

9.6

107.9

Source: (ILO, 2018; Authors’ own calculations)

Income and other development indicators

Relatively significant differences in development levels and purchasing power within the

EU and the Adriatic-Ionian region remain. The Adriatic-Ionian region has a GDP per capita

far below the EU average (Figure 2). Nevertheless, care must be taken in detecting the

structure of regional disparities: the Adriatic-Ionian region does fall behind developed

western European countries but also suffers from intra-regional as well as from intra-

country disparities. On the one hand, it defines regional demand for European structural

funds, and on the other, it reveals dissimilarities in requirements from each country’s

perspective.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Figure 2: GDP in Purchasing Power Standard per capita by NUTS 2 region (% of the EU average, 2004

and 2014)

Source: (European Parliamentary Research Service, 2016)

To allow for a more coherent picture of the socio-economic conditions in the Adriatic-

Ionian region to emerge, it is useful to combine raw economic data with relevant statistics

on social and cultural development. As illustrated in Table 4 and indicated in the discussion

above, regional disparities are not diminishing, and related features of the quality of life are

dispersed, consequently, with Slovenia and Italy obviously in the lead. Clearly, Internet

access or the years of schooling are not that much different across the region, but also

cannot be so easily associated with the record of social deviations. In contrast, the same

figures suggest that GDP per capita and its changes might be so associated (Table 4).

11

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Table 4: Selected socio-economic indicators

GDP per

Absolute

Education

Terror

Adjusted

Intentional

Individuals

index

index

Country

capita in PPS

change in GDP

homicides

using the

for 2016

p.c. index

net savings

(per 100,000

Internet (% of

average

average

(EU28=100)

(2016-2006)

(% of GNI)*

people)**

population)***

2010 –

2012 –

2015****

2016*****

Albania

29

7

8.93

3.93

44

0.71

0.72

Bosnia and

Herzegovina

32

6

1.47

40

0.67

1.38

Croatia

60

2

8.03

1.27

54

0.78

0.09

Italy

97

-11

4.37

0.93

50

0.8

2.6

Montenegro

45

11

2.91

48

0.79

0.3

Slovenia

83

-3

7.89

0.84

62

0.88

0

Greece

68

-28

-6.18

1.26

48

0.82

4.56

Serbia

37

5

-3.69

1.52

48

0.75

0.73

Euro area

106

-4

8.8

1.03

67

EU - 28

100 …

8.26

1.03

67

Source: (Eurostat, 2018b; The World Bank, 2018a; United Nations, 2018; ITU, 2018; Institute for Economics &

Peace, 2018; Authors’ own calculations)

*Adjusted net savings are equal to net national savings plus education expenditure and minus energy depletion, mineral depletion, net forest depletion, and carbon dioxide and particulate emission damage.

**Intentional homicides are estimates of unlawful homicides purposely inflicted as a result of domestic disputes, interpersonal violence, violent conflicts over land resources, intergang violence over turf or control, and predatory violence and kil ing by armed groups.

Intentional homicide does not include al intentional kil ing; the difference is usual y in the organisation of the kil ing. Individuals or smal groups usual y commit homicide, whereas kil ing in armed conflict is usual y committed by fairly cohesive groups of up to several hundred members and is thus usual y excluded.

***Internet users are individuals who have used the Internet (from any location) in the previous three months. The Internet can be used via a computer, mobile phone, personal digital assistant, games machine, digital TV etc.

**** Calculated from ‘Expected years of schooling’ EYS (Number of years a child of school entrance age can expect to spend in a given level of education) and ‘Mean years of schooling’ MYS (Average number of completed years of education of a population [25 years and older]). ‘Expected years of schooling’ is indexed by dividing by 18 and ‘Mean years of schooling’ is indexed by dividing by 15. Education index is obtained by averaging these two indices. The maximum for ‘Mean years of schooling’, 15, is the projected maximum of this indicator for 2025. The maximum for ‘Expected years of schooling’, 18, is equivalent to achieving a master's degree in most countries.

*****Global Terrorism Index (GTI) is a comprehensive study analysing the impact of terrorism for 163 countries and which covers 99.7

per cent of the world’s population. The GTI, therefore, defines terrorism as ‘the threatened or actual use of il egal force and violence by a non-state actor to attain a political, economic, religious, or social goal through fear, coercion, or intimidation’.

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1.2 Tourism indicators

Tourism indicators covered in this part of the analysis include direct and total

contributions of travel and tourism to GDP and employment, capital investments

associated with travel and tourism, the capacity of tourist accommodation establishments,

foreign and domestic demand, as well as the monthly distribution of overnights in

countries across the Adriatic-Ionian region.

Contributions of Travel and Tourism to GDP and employment

Since tourism is not a separate economic activity in terms of transactions or business that

is observed as a specific statistical unit or category, but rather a specific economic impact of

various activities, it is necessary to filter it out from the available statistics. Much like the

crystallisation process in chemistry, it demonstrates different layers of the mentioned

impact, i.e. it reveals the complex structures of the set of tourism indicators. Figure 3 shows

how these contributions can be quantified and indicate the significance that travel and

tourism have in most countries around the world.

Figure 3: Defining the economic contribution of travel & tourism

Source: (WTTC, 2018)

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

As well as its direct economic impact, the industry has substantial indirect and induced

impacts.

The direct contribution of travel and tourism to GDP (Table 5) is defined as the share of

GDP generated by industries that deal directly with tourists, including hotels, travel agents,

airlines and other passenger transport services, as well as the activities of restaurant and

leisure industries that deal directly with tourists.

Table 5: Contributions of tourism to economic activity in the Adriatic-Ionian region (All data are in

percentages)

Direct

Total

Direct

Total

Direct

Total

Direct

Total

Indicator

contributi

contributi

contributi

contributi

contributi

contributi

contributi

contributi

on to GDP

on to GDP

on to

on to

on to

on to

Empl.

Empl.

on to GDP

on to GDP

Empl.

Empl.

Albania

Montenegro

Average 2012-

17 period

8.2

25.0

7.4

22.9

10.5

21.3

8.2

18.1

Diff. 2017-

2012 (p.p.)

0.3

1.2

0.6

2.0

1.0

4.6

0.0

3.4

2018 e

8.5

26.3

7.8

24.3

11.7

25.1

7.7

20.0

Bosnia and Herzegovina

Serbia

Average 2012-

17 period

2.4

8.7

2.9

10.0

2.1

6.1

1.8

4.8

Diff. 2017-

2012 (p.p.)

0.4

1.6

0.6

2.1

0.4

1.1

0.0

0.1

2018 e

2.7

9.9

3.3

11.4

2.3

6.7

1.8

4.7

Croatia

Slovenia

Average 2012-

17 period

9.9

23.0

9.4

22.0

3.3

12.2

3.8

12.6

Diff. 2017-

2012 (p.p.)

2.1

4.3

1.5

3.2

-0.1

-0.4

-0.1

-0.5

2018 e

11.0

25.1

10.1

23.4

3.4

12.3

3.9

12.7

Italy

Greece

Average 2012-

17 period

5.1

12.2

6.0

13.9

7.3

18.2

11.3

22.8

Diff. 2017-

2012 (p.p.)

1.0

1.9

1.1

2.1

2.0

4.0

2.5

4.9

2018 e

5.5

13.1

6.5

14.8

8.3

20.2

12.4

25.4

Source: (WTTC, 2018; Authors’ own calculations)

To assess its wider impacts or the total contribution and its dynamics, the indirect

contribution has to be quantified. It is the gross addition to the estimated direct

contribution to GDP in the form of investment, collective government expenditure, and

supply-chain consumption, and encompasses the second round (induced) expenditure of

14

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

agents who have tourism-dependent incomes. Analogous to the measurement of

contributions to GDP, the same effect tourism has on employment can be estimated,

bearing in mind, of course, that in both cases the perspective is a static one, i.e. no dynamic

economic or broader social effects of a causal or historical nature are accounted for or

implied.

This enables the basic features of tourist activity in the Adriatic-Ionian region to be

uncovered, and several distinct patterns are immediately revealed, as shown in Table 5.

Firstly, tourism directly accounts roughly for less than 1/10 of GDP, with the highest share

observed in Croatia, Montenegro, and Albania, as expected. It is similar to the direct

contribution of tourism to employment, although here the dispersion is smaller due to

somewhat higher employment shares in Italy and Greece. Secondly, indirect (and induced)

effects of tourism are much stronger, so total effects across these countries on average are

multiplied by a factor of 2.7. Thirdly, these patterns have been quite stable recently, with

marginal annual increments. This is expected for 2018 as well, even in Slovenia, which is

the only country in the group that experienced negligible falls in these shares from 2012 to

2017.

Insight into these patterns is possible with minor additional effort in comparing them with

the economic performance of countries within the group (Table 6). It is hard to overlook

the fact that growth in tourist activity and employment surpasses overall GDP and labour

dynamics in these countries. In this post-crisis period, it reacted to the recovery sooner

than other sectors of their economies, probably because of the relatively stronger reliance

on tourist demand from northwestern Europe. This is especially relevant for countries that

experienced somewhat stronger deterioration during the crisis, such as Greece, Italy or

Croatia.

Apart from countries whose average GDP in 2012-2017 shrank, total tourism expenditure

accounted for almost the entire real growth in Albania, Croatia, and Montenegro. The rest

of the countries had considerably smaller contributions of total tourism expenditure to

their economic growth, and tourism has contributed to the employment dynamics much

more modestly in all of them. Inflation has been moderate across the region, with Greece

even experiencing deflation, and prices in the tourism sector generally followed the same

pattern, not causing any competitive pressures. Montenegro and Serbia stand out

regarding these tendencies, but not in absolute terms, i.e. the annual frequency shows no

extremes.

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Strategy for fostering innovation in sustainable tourism for the

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Table 6: Economic growth and the role of tourism in the Adriatic-Ionian region

Cumulative performance in 2012-17 period

Change

Change

Growth

Growth

Contr.

Contr.

in

in

Growth

Growth

Growth

Contr.of

Contr.of

Country

Growth

of DC

of TC

of DC

of TC

DC to

TC to

of GDP

of DC

of TC

implicit

implicit

of

to GDP

to GDP

to

to

to

to

Empl.

Empl.

GDP

GDP

GDP

TC

Empl.

deflator

deflator

Empl.

Empl.

Growth

Growth

Albania

9.8

26.9

27.9

2.1

6.7

5.1

6.2

30.2

47.4

47.9

3.3

10.3

Bosnia and

Herzegovina

8.8

22.1

22.2

0.5

1.9

4.5

4.0

10.6

17.7

17.8

3.3

1.6

Croatia

5.4

24.7

20.7

2.4

4.8

3.1

3.4

-6.2

6.2

3.5

0.6

0.8

Italy

-1.0

24.5

21.0

1.2

2.5

5.8

5.6

1.9

27.3

23.0

1.6

3.0

Montenegro

8.9

30.4

43.0

3.1

8.7

10.6

13.1

14.9

14.2

39.4

1.0

6.7

Serbia

5.3

29.7

26.7

0.6

1.6

4.8

21.2

-1.6

4.5

4.9

0.1

0.2

Slovenia

9.6

6.6

3.8

0.2

0.4

6.7

6.1

-0.1

-2.1

-6.0

-0.1

-0.8

Greece

-8.9

21.7

12.1

1.5

2.2

-6.0

-5.7

-6.4

20.3

15.0

2.3

3.6

Max-Min

18.7

23.8

39.2

2.8

8.3

16.6

26.9

36.6

49.5

53.9

3.4

11.1

Source: (WTTC, 2018; Eurostat, 2018b; Authors’ own calculations)

Note: 1) Growth in percentage, contribution to growth in percentage points; 2) missing data: BA, ME and AL

for 2017; 3) Total (direct) contribution termed TC (DC).

Capital investment

A distinct component of previously analysed contributions is capital investment, which

provides an indication of future trends, since capital adjustment is a reaction of businesses

to estimated longer-term demand conditions and profitability. In the travel and tourism

industry, capital investment includes capital expenditure by all industries directly involved

in tourism and transport activities. This constitutes investment spending by other

industries on specific tourism assets, such as new visitor accommodation and passenger

transport equipment, as well as restaurants and leisure facilities for specific tourism use.

Currently, Italy and Slovenia absorb the largest amounts of capital expenditures at the

regional level and account for more than 80% of total investment in the region. Greece

follows with 4.5%, and the others lag behind. However, in terms of new capacity

adjustments as indicated by the growth rates of this component, the dynamics are quite

robust in Montenegro, Albania, and Bosnia and Herzegovina. Although capital investment

suffered in all countries during the last economic crisis, Greece again shows a relatively

slower recovery (Table 7).

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Strategy for fostering innovation in sustainable tourism for the

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Table 7: Growth of capital investment associated with Travel & Tourism in the Adriatic-Ionian region

(in percentages)

Share of

regional

2018

Average

capital

Country

2012

2013

2014

2015

2016

2017

e

2012-17

expenditure

Albania

2.5

15.3

0.7

7.3

4.6

15.8

5.5

7.4

1.2

Bosnia-

Herzegovina

-5.1

-8.5

22.6

-0.7

22.6

7.2

6.3

6.3

0.9

Croatia

-6.2

0.2

-2.5

9.3

6.3

3.0

2.6

1.8

6.3

Italy

10.6

-20.7

-11.9

17.4

7.6

3.1

4.2

1.5

63.1

Montenegro

4.1

14.7

7.1

18.9

23.0

16.4

6.3

12.9

1.6

Serbia

4.0

1.5

2.0

4.5

3.9

5.7

5.3

3.8

1.6

Slovenia

0.6

-0.7

-4.2

-3.1

-5.6

7.6

7.7

0.3

20.7

Greece

-24.5

-8.6

-4.6

7.4

3.9

1.8

3.6

-3.0

4.5

Total

0.0

-15.3

-8.5

13.1

6.5

3.5

4.3

0.5

100.0

Source: (WTTC, 2018; Authors’ own calculations)

Capacity of tourist accommodation establishments

Tourist accommodation establishments include all establishments providing, as a paid

service, accommodation for tourists, regardless of whether the provision of tourist

accommodation is the main or secondary activity (Table 8). These establishments are

defined, according to the NACE classification, as units providing short-term or short-stay

accommodation services as a paid service:

 hotels and similar accommodation (NACE Group 55.1) — this includes accommodation

provided by hotels, resort hotels, suite/apartment hotels, motels;

 holiday and other short-stay accommodation (NACE Group 55.2) — this includes

holiday homes, visitor flats and bungalows, cottages, and cabins without housekeeping

services, youth hostels and mountain refuges;

 camping grounds, recreational vehicle parks and trailer parks (NACE Group 55.3),

otherwise referred to as campsites — this includes the provision of accommodation in

campgrounds, trailer parks, recreational camps and fishing and hunting camps for

short-stay visitors.

The number of bed places in a tourist accommodation establishment is determined by the

number of persons who can stay overnight in the beds in the establishment.

The Adriatic-Ionian region holds a significant position in the European context with more

than two thirds of establishments with roughly one third of bed places located in countries

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

of this region. Italy, Greece, and Croatia have the most extensive infrastructure. As previous

information on capital expenditure demonstrates, these proportions can be expected to be

roughly stable, although somewhat faster expansion of capacities could be seen in the

southeast part of the region.

Table 8: Capacity of tourist accommodation establishments by NACE group, 2016

Camping grounds,

Hotels and similar accommodation

Holiday and other short-

stay accommodation

recreational vehicle parks

Total

and trailer parks

Establishments

Bedrooms

Bed places

Establishments

Bed places

Establishments

Bed places

Establishments

Bed places

EU-28(1)

202,519

6,687,905

13,849,276

378,736

7,528,108

28,951

9,982,936

610,206

38,048,225

Albania (2)

Bosnia and

Herzegovina(3)

Croatia

1,011

79,962

16,738

81,569

569,436

653

250,456

83,233

916,592

Italy

33,163

1,090,926

2,247,930

142,916

1,519,436

2,364

1,174,821

178,443

6,033,113

Montenegro(4)

351

16,248

34,645

152

111,996

21

2,707

524

165,596

Slovenia

692

22,451

45,716

2,485

42,554

83

24,887

3,260

135,608

Greece

9,986

41,283

797,827

24,369

359,842

309

83,577

34,664

1,282,529

Serbia(5)

676

25,634

54,075

291

45,314

20

3,031

987

128,054

Adriatic-

Ionian region

45,879

1,276,504

3,196,931

251,782

2,648,578

3,450

1,539,479

301,111

8,661,492

in percent of

EU28

23

19

23

66

35

12

15

49

23

Source: (Eurostat, 2018b; The Agency for Statistics Bosnia and Herzegovina, 2018; The Institute of Statistics

Republic of Albania, 2018)

(1) 2012 data.

(2) Low reliability for holiday and other short-stay accommodation (and totals)

(3) 2014 data.

Foreign demand features

A brief overview of the tourist overnights, arrivals and visitor exports (spending within the

country by international tourists for both business and leisure trips, including spending on

transport, but excluding international spending on education – Table 9) might provide

deeper insight into the foreign component of tourist demand. For all practical purposes, it

is the component that drives the activities that are the first to reflect market shocks across

the region (shared sensitivity of receipts or joint-dependency of the region); it is also the

source of massive inflows of tourists in the Adriatic-Ionian region, with the potential to

inject considerable sums of foreign currency, especially in non-euro countries.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Table 9: Foreign component of tourist demand (in percentages if not indicated otherwise)

Overnights

Arrivals

Visitor exports

Country

Diff.

Diff.

Diff.

2010

2015

2016

2016-

2010

2015

2016

2016-

2010

2015

2016

2016-

2010

2010

2010

Albania

2.96

3.91

4.00

1.35

53.04

49.90

52.13

-0.91

Bosnia and

Herzegovina

0.28

0.40

0.44

0.15

0.49

0.70

0.76

1.55

12.94

12.39

12.75

-0.19

Croatia

12.24

18.39

19.29

7.04

12.32

13.09

13.56

1.10

36.61

37.82

39.04

2.42

Italy

60.85

53.92

53.37

-7.48

59.00

52.37

51.44

0.87

7.22

7.29

7.38

0.17

Montenegro

2.57

2.89

2.82

0.25

1.47

1.61

1.63

1.11

49.91

52.37

53.27

3.36

Slovenia

1.72

1.83

1.94

0.22

2.53

2.79

2.98

1.18

8.75

7.51

7.41

-1.33

Greece

21.80

21.91

21.42

-0.38

20.30

24.36

24.36

1.20

20.97

27.81

28.19

7.22

Serbia

0.53

0.67

0.73

0.20

0.92

1.17

1.26

1.36

7.24

7.55

7.53

0.29

Number

total (1000)

271,505

357,210

373.678

1.38

73,940

96,875

101.802

1.38

Total

(Visitor

exports -

100

100

100

100

100

100

24.58

25.33

25.96

1.38

average)

Source: (WTTC, 2018; National Statistical Offices2, Authors’ own calculations)

Here, Italy is once again at one extreme, having particularly large shares of overnights and

arrivals in the region, while the other extreme is represented by Slovenia and Serbia.

Montenegro is quite specific in this regard because while overnights and arrivals of foreign

tourists account for small portions of the regional totals, they significantly influence their

national export performance. In general, there is a case for arguing that these patterns have

also been relatively stable in the recent period, although changes in the share of foreign

tourist overnights in Italy and Croatia deserve some attention.

Domestic demand at a glance

For most of the countries in the Adriatic-Ionian region, domestic demand is relatively less

important in terms of contributing to their GDP figures, with the exception of Italy (only

23.2%), which has two distinct characteristics that can explain this: geography (it has by

far the longest coastline, on the Ligurian, Tyrrhenian, Ionian, and Adriatic Seas) and

demographics (it has the largest population as the majority of the regional population lives

in Italy). In this respect, Italy resembles the EU aggregate in which one third of GDP is

generated by foreign tourists. However, Croatia and Montenegro do exhibit extremely high

ratios of foreign-to-domestic contributions of tourism to GDP in comparison to the rest

(Table 10).

2 The Institute of Statistics Republic of Albania, 2018; The Agency for Statistics Bosnia and Herzegovina, 2018;

Croatian Bureau of Statistics, 2018; Hellenic Statistical Authority, 2018; National Institute of Statistics Italy,

2018; Statistical Office of the Republic of Montenegro, 2018; Statistical Office of the Republic of Serbia, 2018;

Statistical Office of the Republic of Slovenia, 2018.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Table 10: Foreign vs domestic contribution of tourism to GDP (in percentages)

Country

Foreign

Domestic

Albania

75.4

24.6

Bosnia and Herzegovina

62.5

37.5

Croatia

84.7

15.3

Italy

23.2

76.8

Montenegro

83.4

16.6

Slovenia

66.2

33.8

Greece

64.5

35.5

Serbia

67.8

32.2

Average

66.0

34.0

EU28

32.9

67.1

Source: (WTTC, 2018)

Seasonality

All tourism enterprises and regions are impacted by seasonality whether severely or

mildly. This type of regular intra-year fluctuations is seen in tourists and visitor numbers,

as well as in direct and indirect expenditures generated by them. Therefore, some

destinations at certain times have more tourists and visitors than they are able to

accommodate, while at other times, there are too few tourists and visitors to the region.

Causes of seasonality can be natural, institutional, and other.

For destinations, seasonality leads to many negative economic effects in terms of the

difficult identification of the optimal level of investment as regards the size of tourism

structures (a problem of the long-run); the higher level of volatility (and risk) in economic

performance (which is higher the shorter the length of the peak season); as well as the

overload in terms of social and environmental carrying capacity of the destination (Figini &

Vici, 2012). However, destinations can put different marketing policies into effect to reduce

seasonality, such as market diversification, price verification (e.g., reducing prices of goods

and services at the destination as well as tour prices), offering out-off-season attractions or

non-conventional tourist services and facilities and others.

Destinations where tourism is highly seasonal suffer from underused infrastructure. Thus,

natural and cultural resources can be exposed to risks of negative impacts during the high

season, while the economic viability of small tourism businesses and the stability of the

local labour market can be threatened during the low tourism season (Oliver & Jenkins,

2005).

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Figure 4: Monthly distribution of nights spent in tourist accommodation establishments, 2016

40,00

35,00

EU28

AL

BA

30,00

HR

IT

ME

25,00

SI

EL

RS

20,00

15,00

10,00

5,00

0,00

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Distribution per month (%)

Source: (Eurostat, 2018b; The Institute of Statistics Republic of Albania, 2018; Authors’ own calculation)

Clearly, the attractive Mediterranean coast is one of the most important factors behind this

seasonality due to summer vacations, and it affects the economies of Croatia (Figure 4),

Montenegro, and Greece the most. Although this fact may help address the issue of

seasonality and related sustainability pressures at the national level in these countries, it is

an issue of considerable magnitude and does pose a challenge. In contrast, massive inflows

of tourist do affect specific sub-regions and cities in all the countries of the Adriatic-Ionian

region, even where national perspectives may differ.

1.3 Innovation indicators

Innovations form part of the Europe 2020 strategy due to their role in creating job

opportunities, increasing the competitiveness of enterprises in global markets, improving

the quality of life and contributing to more sustainable economic growth. Indeed, EU

policies often focus on encouraging and stimulating innovation. According to Eurostat,

almost half of the enterprises in the EU reported some form of innovation activity (49.1%)

during the 2012–2014 period. Compared with the 2010–2012 period, the share of

innovative enterprises remained relatively stable (rising by 0.2 percentage points). To

assess the innovation-specific conditions and innovation performance in the Adriatic-

Ionian region, several indicators/sources are consulted: Global Innovation Index, World

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Development Indicators, World Bank Group Enterprise Surveys and Bloom Consulting Country

Brand Ranking.

Global Innovation Index

The Global Innovation Index (GII) is an annual ranking of countries by their capacity for

and success in innovation. It is published by Cornell University, INSEAD, and the World

Intellectual Property Organization in partnership with other organisations and institutions

and is based on both subjective and objective data derived from several sources, including

the International Telecommunication Union, the World Bank, and the World Economic

Forum. GII aims to capture the multi-dimensional facets of innovation and to provide the

tools that can assist in tailoring policies to promote long-term output growth, improved

productivity, and job growth. GII helps to create an environment in which innovation

factors are continually evaluated.

Four measures are calculated (Figure 5): the overall GII, the Input and Output Sub-Indices,

and the Innovation Efficiency Ratio (Dutta, Lanvin, & Wunsch-Vincent, 2017):

 The overall GII score is the simple average of the Input and Output Sub-Index scores.

 The Innovation Input Sub-Index is comprised of five input pillars that capture elements

of the national economy that enable innovative activities: (1) Institutions, (2) Human

capital and research, (3) Infrastructure, (4) Market sophistication, and (5) Business

sophistication.

 The Innovation Output Sub-Index provides information about outputs that are the

results of innovative activities within the economy. There are two output pillars: (6)

Knowledge and technology outputs, and (7) Creative outputs.

 The Innovation Efficiency Ratio is the ratio of the Output Sub-Index score over the Input

Sub-Index score. It shows how much innovation output a given country is obtaining for

its inputs.

The GII is computed by taking a simple average of the scores in two sub-indices, the

Innovation Input Index and Innovation Output Index, which are composed of five and two

pillars, respectively. Each of these pillars describes an attribute of innovation and

comprises up to five indicators, and their score is calculated by the weighted average

method.

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Strategy for fostering innovation in sustainable tourism for the

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Figure 5: Framework of the Global Innovation Index 2017

Source: (Dutta et al., 2017)

A group of 127 countries was analysed and compared in 2017. Switzerland came at the top

of the list (index of 67.7), on the bottom was Yemen (15.6). Within the Adriatic-Ionian

region, the eurozone countries have experienced an increase in the GII, with Italy

outperforming all the others. At the same time, the largest contraction of the GII was

observed in Bosnia and Herzegovina, and Serbia (Table 11).

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Strategy for fostering innovation in sustainable tourism for the

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Table 11: Global innovation index

Year / (%)

Index

Country

2012

2013

2014

2015

2016

2017 2017-2012

Albania

30.4

30.9

30.5

30.7

28.4

28.9

95.1

Bosnia and Herzegovina

34.2

36.2

32.4

32.3

29.6

30.2

88.3

Croatia

40.7

41.9

40.7

41.7

38.3

39.8

97.8

Italy

44.5

47.8

45.7

46.4

47.2

57.0

128.1

Montenegro

40.1

41.0

37.0

41.2

37.4

38.1

95.0

Slovenia

49.9

47.2

47.2

48.5

46.0

54.8

109.8

Greece

35.3

37.7

38.9

40.3

39.8

38.8

109.9

Serbia

40.0

37.9

35.9

36.5

33.8

35.3

88.3

Source: (Dutta et al., 2017)

However, even with positive developments in the eurozone countries, Slovenia scaled

down the global GII ranking (note that lower rank indicates better performance), joining

the others from the same region (Table 12).

Table 12: Global innovation index rank

Rank

Year (rank)

difference

Country

2012

2013

2014

2015

2016

2017

2017 – 2012

Albania

90

93

94

87

92

93

-3

Bosnia and Herzegovina

72

58

81

79

87

86

-14

Croatia

42

43

42

40

45

44

-2

Italy

36

28

31

31

29

29

7

Montenegro

45

40

59

41

46

50

-5

Slovenia

26

29

28

28

32

30

-4

Greece

66

45

50

45

37

38

28

Serbia

46

63

67

63

68

58

-12

Source: (Dutta et al., 2017)

Although some indication of cross-country differences and specifics at the regional and

global levels can be inferred from these indicators, in general care should be taken when

interpreting the results because of well-known difficulties in attempts to unambiguously

relate them to the other economic and social categories and developments. Even in the

narrow field of interest of tourism activity and for quite a small group of countries, this is

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Strategy for fostering innovation in sustainable tourism for the

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easily demonstrable (for example, Greece provides here enough evidence for that in the

light of previous data analysis).

World Development Indicators

World Development Indicators (Table 13) offer an opportunity to assess briefly business

conditions from an innovation perspective and can provide some critical information on

the intraregional developments demonstrated above. Country-specific indicators of

innovative business behaviour, such as trademark and patent applications or charges for

the use of intellectual properties to some extent reflect the saying: ‘quantity gives quality’.

They are closely related to the size of the country’s population (not necessarily to its

economic size), level of development, trade openness, or growth trend. These factors have

greater influence on the country’s own efforts to generate technological progress as

measured by R&D expenditure.

Table 13. World development indicators: Percentage share of the Adriatic-Ionian region (unless

indicated otherwise)

Charges for

Charges for

Research

Patent

Patent

the use of

the use of

High-

and

Country

Trademark

applications

applications,

applications,

intellectual

intellectual

technology

development

residents

nonresidents

property,

property,

exports

expenditure

receipts

payments

(% of GDP)

Albania

4.8

0.2

0.4

0.1

0.4

0.03

0.2

Bosnia and

Herzegovina

4.3

0.6

0.6

0.4

0.1

0.3

0.2

Croatia

5.5

1.8

1.2

1.4

4.8

3.3

0.9

Italy

60.8

89.3

91.1

92.7

82.7

86.4

1.3

Montenegro

4.4

0.1

NA

0.02

0.1

0.0

0.4

Slovenia

1.6

NA

1.0

2.1

4.0

5.4

2.2

Greece

9.7

6.1

3.7

2.1

4.4

3.7

1.0

Serbia

8.9

1.9

2.0

1.2

3.5

1.0

0.9

Total

100

100

100

100

100

100

0,8

Source: (The World Bank, 2018a)

Note: Trademark and patent applications: 2016; Research and Development expenditure: 2015 (Albania:

2008); Rest of data: 2017

The Enterprise Surveys conducted by the World Bank provide an alternative view on

innovation practices (Table 14): the firm-level intensity of the process. Specifically, this

survey helps to estimate the share of firms involved in the innovation process.

Unfortunately, the surveys are done mostly in World Bank client countries, and high-

income countries are usually not covered, which is why the data for the largest economies

in the Adriatic-Ionian region (Italy and Greece) are missing. However, these results can still

indicate the extent to which regional firms invest in product and service or process

innovation.

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Strategy for fostering innovation in sustainable tourism for the

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It is not surprising to find a positive correlation between the shares of the firms that

introduce product/service innovations and process innovations (where Bosnia and

Herzegovina, Croatia and Serbia demonstrate the highest intensity). Interestingly, it would

seem that the majority of these firms open their market to new products and processes.

Survey results also suggest that the share of firms that direct their expenditure to R&D is

universally smaller than the share of firms introducing innovations. This could mean that

technology diffusion is taking place across the region and broader but, to some extent, it

might suggest that they have low levels of technologically advanced content. This is

probably the reason that relatively less-developed countries in the region have higher

innovation-to-R&D-spending firm-intensity ratios.

Table 14: Innovation and technology

Percent of firms

Percent of firms

whose new

Percent of firms

Percent of firms

Country

that introduced

that introduced

a new

product/service

a process

that spend on

product/service

is also new to

R&D

the main market innovation

Albania

8.4

56.8

2.9

0.9

Bosnia and Herzegovina

43.9

76.8

34.4

10.6

Croatia

39.7

72.4

29.6

22.3

Italy

Montenegro

14.3

22.7

11.7

9.5

Slovenia

34.0

40.6

9.0

14.8

Greece

Serbia

39.5

56.6

21.5

15.1

Source: (The World Bank, 2018a)

Note: The latest data available: 2013

Country Brand Strategy Ranking and Digital Country Index

The last source (Table 15) (i.e. a set of indicators) to check remains the one that measures

international perception and reputation (World Economic Forum, 2017). A Country Brand

Strategy Rating is a form of evaluating the accuracy of the strategy of national tourism

organisations (NTO) by a formula that compares the most popular brandname for a specific

country to the brandnames most heavily promoted by that country’s NTO. Digital demand

for cultural and entertainment tourism is measured through the total number of online

searches.

According to this indicator, the most successful brand strategy is implemented in Slovenia,

and it is also highly rated on global terms. Greece and Italy follow, and the rest are

markedly lagging behind. However, digital demand expressed in cultural and

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Strategy for fostering innovation in sustainable tourism for the

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entertainment tourism tells a different story. Slovenia seems less attractive through the

lenses of Internet searches for this segment of demand than Italy and Greece do, but also in

comparison to Bosnia and Herzegovina and Croatia. Still, it is difficult to assess in what way

and magnitude this reflects traditional perceptions of European countries, current political

situations, brand strategies and/or innovation processes in the tourist sector.

Table 15: Tourist perception of a country according to the Travel and Tourism Competitiveness

Report for 2017

Country brand strategy rating

Cultural and entertainment

tourism digital demand

Country/Indicator

Rank

Score

Score

Rank

Score

Score

(1/135)

(1-100

(0-100

best)

trend

(1/135)

best)

trend

Albania

106

63.2

+

122

1

+

Bosnia and

Herzegovina

91

71.7

0

77

7

0

Croatia

105

63.8

+

36

18

+

Italy

75

73.8

-

7

71

-

Montenegro

99

66.2

+

112

2

+

Slovenia

25

82.8

-

98

4

+

Greece

67

74.9

+

29

23

+

Serbia

127

50.3

-

117

2

+

Source: (World Economic Forum, 2017)

Note: For detailed definitions, sources, and periods, consult the interactive Country/Economy Profiles and

Rankings at http://wef.ch/ttcr

1.4 Sustainability indicators

Sustainability principles are the environmental, economic and socio-cultural aspects of

tourism development, and a suitable balance must be established between these three

dimensions to guarantee its long-term sustainability (UNWTO, 2018).

Sustainable tourism development requires the informed participation of all relevant

stakeholders, as well as strong political leadership to ensure broad participation and

consensus building. Achieving sustainable tourism is a continuous process, and it requires

constant monitoring of impacts, introducing the necessary preventive and/or corrective

measures whenever necessary. Sustainable tourism should also maintain a high level of

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Strategy for fostering innovation in sustainable tourism for the

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tourist satisfaction and ensure a meaningful experience to the tourists, raising their

awareness about sustainability issues and promoting sustainable tourism practices among

them (UNWTO, 2004).

Since the concept of sustainability does not allow for a direct measure of this balance, one

can and usually does rely on numerous ‘sustainability indicators’. However, from the

perspective of sustainable practices, they mean something only in relation to each other,

and still can provide merely a sense of the nature and, to some extent, possibly a degree of

the potential problem. Here, mostly ecological and socio-cultural consequences of tourist

activity were given attention. UNWTO and the World Bank provide a large set of interesting

indicators to measure certain dimensions of this concept, but one is forced to derive

conclusions with no straightforward way of comparing and interpreting them. Bearing that

in mind, it can be useful to attempt to synthesise a relative measure of sustainability

pressures across the Adriatic-Ionian region. One way to do so it is described next.

From a typical list of sustainability indicators (17 indicators from the World Economic

Forum and World Bank) for each country in the group, one can standardise them by

dividing the country-measure by the maximum value for the group and then clustering

them (simple averaging) into six distinct categories: Vulnerability, Direct pressure,

Potential amplifiers, Protective capacity, Water management, and Electricity management.

Observing vulnerability in relation to the existing pressure and resistance factors may give

some indication of the sustainability risks of these countries.

The measure presented here (Figure 6) is crude and relative and is used to differentiate

among countries that are heterogeneous in many aspects. One way to examine it is to

confront the composite measure of direct sustainability pressure that can be amplified

depending on many factors, which include the vulnerability (P=DPxA) with the capacities

of a country to generate resistance (R) and thus ameliorate potential (negative) impact

stemming from tourism and tourism-related activities.

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Strategy for fostering innovation in sustainable tourism for the

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Figure 6: Simple synthetic relative measure of sustainability pressures

1

Number of World Heritage cultural sites

(number of sites)

Vulnerability

2

Oral and intangible cultural heritage

Vulnerability

(number of expressions)

(V)

3 Terrestrial and marine protected areas (% of

total territorial area)

4

Foreign tourist overnights

Direct

v

pressure

5

Foreign tourist arrivals

(DP)

Pressure

6

CO2 emissions (metric tons per capita)

Potential

(P=DPxA)

7

Natural disasters 2011-2016

amplifiers

8 Particulate matter (2.5) concentration µ/m3

(A)

Sustainability

(S=VxP/R)

9

Airport density airports/mil ion pop.

10 Stringency of environmental regulations (in

percent)

Protective

capacity

11 Enforcement of environmental regulations

(PC)

12 Sustainability of travel and tourism industry

development (in percent)

Resistance

13

Wastewater treatment (in percent)

Water

(R=1/3x[PC+

14 People using safely managed drinking water

management

WM+EM])

services (% of population)

(WM)

15

People using safely managed sanitation

services (% of population)

16

Access to electricity (% of population)

Electricity

Renewable energy consumption (% of total

management

17

final energy consumption)

(EM)

Source: (Authors’ own calculation)

It is clear and intuitively understandable that this relative measure connects the size of a

country’s tourist activities (e.g. market share or contributions of tourism to GDP) and

pressure of the tourism, but a quite different view of the problem may emerge from the

perspective . It depends not only on their management effectiveness and the development

of infrastructure, but also on the attributes of the inherited or collected natural and cultural

possessions, which may simultaneously pose ‘a target’ difficult to protect. It seems that

Italy demonstrates the highest within-group sensitivity in this regards, while Croatia,

Greece, and Slovenia fall into medium-risk countries from the sustainability perspective.

Montenegro currently holds the most favourable position (Figure 7).

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Figure 7: Order of countries by measures of sustainability pressures

R

P

V

2,5

2

1,5

nents)po

1

S (com

0,5

0

Italy

Croatia

Greece

Slovenia

Serbia

Bosnia and

Albania

Montenegro

Herzegovina

Source: (The World Bank, 2018a; World Economic Forum, 2017; Authors’ own calculations)

Note: (a) Missing value for the tourist overnights for Albania is approximated by tourist arrivals;

(b) For a definition of the components, see Figure 6.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

1.5 Comparative analysis of the national legislation regarding

innovation and innovation incentive policies

The legislative framework is an important factor for the development and strategic growth

of tourism in the country. It shapes the rules and regulatory practices that affect, directly or

indirectly, the sustainable development and management of tourism, protection, and

conservation of natural and cultural resources, and the facilitation of the involvement of

private sector and local communities in tourism development activities. Apart from that,

legislation is supposed to define the roles and responsibilities of various government

agencies, at central and local levels, in tourism development. To ensure the rights of

international/local tourists, the rights and obligations of participating businesses, inbound-

outbound tour operators and all other concerned players in the tourism field,

straightforward legislation and policy are needed.

Legislation in the field of tourism

Apart from just focusing on innovations in tourism, which is apparently underrated and

mostly non-existent in partner countries, a wider range is taken into consideration. In the

next table, there is a summary of the review of laws and regulations dealing with

innovation within three areas: Tourism, Innovation, and the Labour Market (Table 16).

Table 16: Legislation in the field of tourism

Indicator

Country

Tourism

Innovation

Labour Market

Law

Process of

Law

Process of

Law

Process of

rewarding

rewarding

rewarding

Innovation

innovation

innovation

Albania

√

X

√

√

√

√

Bosnia and

√

X

X

X

√

X

Herzegovina

Croatia

√

X

√

√

√

√

Italy

√

X

√

√

√

X

Montenegro

√

X

√

X

√

X

Slovenia

√

X

√

√

√

X

Source: (Authors’ findings)

In general, as seen in Table 16, countries included in this analysis have adopted laws in the

areas under study. However, regulations or processes dealing with rewarding innovations

or stimulation of the innovative potential within the specific area are limited. As expected,

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

there are processes of rewarding innovations, defined by the acts on innovation and

inventions from an employment relationship. However, such processes are mostly lacking

in two other areas: Tourism and Labour Market. Procedures for rewarding innovation from

an Employment Relationship are regulated only in Albania and Croatia.

Organisational structures of tourism management systems in the countries of the

Adriatic Ionian Region

In this section, the organisational structure of the tourism in the Adriatic-Ionian countries

is reviewed. The organisational structure focuses on the public sector, the private sector,

and civil society at three levels: national, regional, and local.

Bosnia and Herzegovina and Italy regulate at the level of regions, while other countries

have national tourist organisations and specialised tourism offices. The organisation

schemes of the countries vary. Generally, a network at the local level is widely distributed.

In particular, there are tourist information centres. They vary from independent ministries

of tourism as it the case in Croatia to the combination of the ministry with a wider field as

in the Ministry of Economic Development and Technology in Slovenia.

Albania

The Ministry of Tourism (Figure 8) is the competent authority for policy-making and

programming in the tourism sector of Albania. The ministry supervises the National

Tourism Agency, which is responsible for implementing marketing programmes and

monitoring their development. This level coordinates the activities of regional-level

agencies: the regional committee for tourism at the prefecture level and four regional

agencies that have begun working at the regional marketing level, and regional project

planning and implementation.

Tourism information offices at the local level are responsible for dealing with complaints

made by visitors against tourism enterprises and provide information concerning

requirements for visiting Albania. One additional member of the third-level component of

the scheme is a private national association of tourism.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Figure 8: Organisational structures of tourism management in Albania

Source: (Authors’ findings)

Note: ATA – Albanian Tourism Association; UTOA – Albanian Union of Tour Operators; UOTSH – Albanian Union of

Tourism Operators

33

FOST INNO





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34

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IN O

N

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

The responsible authority in FBiH for tourism is the Federal Ministry of Environment and

Tourism. FBiH consists of 10 cantons that represent the regional level. Each canton has its

own authority responsible for tourism (e.g. in Zenica–Doboj Canton, it is the Ministry of

Economy). The authority responsible for tourism at the level of ‘entity’ in RS is the Ministry

of Traffic and Tourism, and in BD it is the Department of Economic Development, Sports

and Culture (without regional division in these two entities).

Croatia

The national body responsible for tourism in Croatia is the Ministry of Tourism, which is in

charge of drafting strategies, policies, and measures at the national level, and for drawing

up proposals for legislation to regulate the tourism and hospitality industry, determining

the role and activities of the Croatian National Tourism Board, and tourism tax issues

(Figure 10).

There are four directorates within the ministry: International Co-operation, Development

and Competitiveness of Tourism, the Tourist Board System and Destination Management,

and Legal Affairs. Tourism promotion is the responsibility of the Croatian National Tourism

Board (CNTB). The Minister of Tourism is, ex officio, its president, while the executive

director manages the CNTB’s daily operations and activities.

At the regional level, most county administrative offices have a department responsible for

tourism and handle the classification of, and issuing of permits for, private accommodation

operators. The management bodies involved within the Croatian National Tourist Board

are the Croatian Parliament, the Tourist Board, the Auditing Committee, and the President.

The duties of the President of the Croatian Tourist Board are undertaken by the Minister

for Tourism.

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Strategy for fostering innovation in sustainable tourism for the

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Figure 10: Organisational structures of tourism management in Croatia

Source: (Vlada Republike Hrvatske, 2013)

Note: CCC – Croatian Chamber of Commerce; CCTC – Croatian Chamber of Trades and Craft; RCTC – Regional

Chambers of Trades and Craft; TB – Tourism Board; DMO – Destination Management Organisation

Greece

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

In Greece, the Ministry of Tourism formulates the country’s tourism policy, introduces

legislative reforms, undertakes tourism planning and coordinates activities with other

ministries (Figure 11).

Figure 11: Organisational structures of tourism management in Greece

Source: (Authors’ findings)

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

A number of directorates are responsible for the various functions of the ministry. Within

this structure, the National Strategic Reference Framework Executive (NSRF) reports

directly to the Secretary-General for Tourism Policy and Development and contributes to

the formulation of proposals, which lead to specific tourism projects. The Greek National

Tourism Organisation (GNTO) is a public entity under the supervision of the ministry. Its

mission is to organise, develop, and promote Greek tourism, within the country and

worldwide, utilising its 16 overseas offices. The Hellenic Chamber of Hotels is the state’s

institutional consultant and the authority responsible for the official classification of hotels,

rooms, and apartments for rent. The Ministry of Tourism has 14 Regional Tourism Offices,

located in each region, which are responsible for licensing and inspecting tourism

businesses, conducting quality control, monitoring official classification and imposing

administrative sanctions on tourism businesses. At the local level, regions and

municipalities design and implement programmes and activities for tourism development

and promotion. These activities are not financed by the central government; local

authorities make use of their own resources or European programme funds.

Italy

At the national level, the management of tourism is carried out by the Italian Parliament

through the Production Activity, Trade and Tourism Committee (Figure 12).

The new government has recently (July 2018) modified the governmental organisation

moving the competence on tourism from cultural heritage goods ministry to the MIPAAFT

(Ministry of Agriculture, Forestry and Tourism). At the national level, the ENIT - Agenzia

Nazionale del Turismo (www.enit.it/en/) has to be mentioned as well. It is a state agency

(National Tourism Organisation) for promoting the national tourist image and supporting

the commercialisation of Italian tourism products in the world. In recent years, it has been

subjected to various reforms, and it currently still does not cover the pivotal role that suits

it.

To perform the functions of programming, promotion, and financing, regions also use, in

addition to their direct administration (Tourism Department), bodies falling into the so-

called ‘regional indirect administration’ (public limited companies, and regional agencies).

Municipalities are the primary entities of the territorial tourist policies with

responsibilities for carrying out communication strategy through Tourist Information

Offices (IAT) Relations with the Public Office, and a specific service (S.O.S.) dedicated to the

management of local tourism.

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39

3

FO

F S

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S

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

significant challenge in terms of the implementation of a coherent and efficient national

tourism strategy.

Montenegro

The Ministry of Sustainable Development and Tourism coordinates its activities with the

National Tourism Organisation of Montenegro, which is responsible for planning and

implementing tourism strategies, proposing and carrying out promotional activities at

home and abroad, and improving the quality of tourism offerings (Figure 13).

Figure 13: Organisational structures of tourism management in Montenegro

Source: (Authors’ findings)

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

However, at the national level, this coordination takes place in a trilateral form that

involves the Ministry of Sustainable Development and Tourism, as well as the

parliamentary committee responsible for tourism, and economic operators’ interest groups

(Chamber of Economy and Association Board of Tourism and Hospitality). The

coordination structure focuses on tourist organisations at the local level, which exist in 19

municipalities and are very active in all aspects of tourism development and operations in

their districts, aided by the functions of local secretariats.

Serbia

The Ministry of Trade, Tourism and Telecommunications in Serbia functions through the

Sector for Tourism, and the Sector for Tourist Inspection (Figure 14).

Figure 14: Organisational structures of tourism management in Serbia

Source: (Authors’ findings)

The Sector for Tourism is headed by the state secretary and performs numerous duties of

state administration in accordance with the Law on Ministries, which is related to drafting

legislation and implementing the Law on Tourism, proposing and implementing incentive

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

measures for tourism development, etc. The National Tourist Organisation serves as a

connecting point between national strategy development and the law-making

administrative level and 116 local tourist organisations, owned and operated by local and

regional governments and supported by the tourism industry.

Slovenia

The Ministry of Economic Development and Technology (MEDT) is the main governmental

body responsible for producing and implementing national tourism policy as part of overall

economic policy in Slovenia (Figure 15).

Figure 15: Organisational structures of tourism management in Slovenia

Source: (Authors’ findings)

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Given the cross-cutting nature of tourism, it is regulated by a number of national laws

requiring permanent cross-sectoral coordination. Legislation requires the adoption and

implementation of a tourism strategy for a five-year period. Strategic planning for

Slovenian tourism policy reflects a partnership between the public and private sectors, and

NGOs. The MEDT co-operates and consults primarily with the Chamber of Tourism and

Hospitality, the Chamber of Craft and Small Business, and the Tourism Association of

Slovenia, engaging in the strategic planning of tourism policy. The promotion of Slovenia as

a tourism destination and the corresponding marketing activities are the responsibility of

the Slovenian Tourist Board (STB), a public agency that operates six offices in Europe and

works with other promotional offices worldwide.

The STB is also responsible for the infrastructure of tourist information, coordinating

products, stakeholder networking, and undertaking research and development. Tourism

development at the regional level is undertaken by twelve Regional Development Agencies,

which are responsible to Regional Councils comprised of the mayors of local communities.

Regional tourism development is governed by national legislation and the national

development objectives of Slovenian tourism, which include some specific regional

development objectives. The MEDT has sought to establish Regional Destination

Organisations (RDOs) with the aim of achieving better integration of local tourism

destinations. RDOs now operate specific development and marketing programmes and

destination brands in each of the twelve statistical regions. At the local level, each mayor

and community council is responsible for tourism development according to national

legislation and national strategic objectives.

Overview of Tourism Study Programmes

Tourism education at universities tends to focus on enabling students for future careers in

the industry. The final goals of the education should be twofold, first, by providing

employable young professionals and, second, by providing students with foundations for

decision-making strategies, as well as for professional preparation (Inui, Wheeler, &

Lankford, 2006). The strategic aim of the providers of education in tourism should focus on

bringing tourism education closer in line with national tourism policies (Amoah & Baum,

1997). From an industry perspective, tourism employment in the coming decades must

have a very different profile than it does today. Students entering the uncertain world of

the future and, in particular, the vulnerable tourism sector need different skills, aptitudes,

and knowledge to succeed. To meet the challenges of the next few decades, tourism

educational systems, however, are in need of radical change. Furthermore, skills and

knowledge sets must be redefined, and structures and assumptions need to be questioned;

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Strategy for fostering innovation in sustainable tourism for the

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thus, the ‘old ways of doing things’ must be transcended. The challenges facing the tourism

industry and tourism educators call for a new paradigm of tourism education. Universities

are major enterprises and, historically, have been significant sources of innovative thinking

and change, while tourism is a hallmark activity of the postmodern world. As such, they are

an essential factor in world-making and people-making. ‘The intersection of tourism and

universities is, therefore, a powerful nexus of potential influence’ (Sheldon & Fesenmaier,

2013). Furthermore, significant focus in tourism education should be placed on

entrepreneurship, since tourism is one of the economic sectors in which the diversification

of tourism products and services is needed to cope with increased demand for new types of

tourism needs (Table 17). Entrepreneurship, as such, is considered a central force of

economic development. Its aim is to generate growth and serves as a vehicle for innovation

and change (Lordkipanidze, Brezet, & Backman, 2005).

Table 17: Overview of school programmes

Country

Secondary

Bachelor / Master programmes

Innovation in tourism

education

study courses

Albania

Two professional

Faculty of Economy at Tirana University (

There are no particular

secondary schools

www.feut.edu.al)

curriculums offered in

(in Shkodra and

University of Durres (www.uamd.edu.al),

Albania in the topic of

Lezha) specialise in

University of Korca (www.unkorce.edu.al),

innovation, although there

Tourism, and

University of Gjirokastra ( www.uogj.edu.al)

are courses that have

Restaurant and Hotel

included this topic as part

Management that

of the syl abus.

offer a curriculum of

three years in these

topics.

Bosnia and

Of 311 secondary

Faculty for Business studies in Banja Luka,

There are no particular

Herzegovina schools, 5 specialise

Col ege of Tourism and Management in Konjic,

curriculums offered in BiH

in catering and

Faculty of Economics in Sarajevo,

related to innovation,

tourism (pure

Faculty of Science/Geography - Dept. for Tourism

although there are courses

tourism).

and Environmental Protection in Sarajevo,

that have included it as

Faculty of Economics in East Sarajevo,

part of the syl abus.

Faculty for Management and Business Economy in

Travnik

(6 BA, 3 MA studies)

Croatia

Of 442 secondary

Juraj Dobrila University of Pula, Faculty of

There are no particular

schools, 18 specialise Economics and Tourism ‘Dr. Mijo Mirković’,

curriculums offered in

in catering and

University of Dubrovnik, The Department of

Croatia related to

tourism.

Economics and Business Economics, study Tourism,

innovation, although there

University of Rijeka, Faculty of Tourism and

are courses that have

Hospitality Management, University of Split, Faculty

included it as part of the

of Economics, Department for Tourism and

syl abus.

Economy, University of Zadar, Department of

Tourism and Communication Studies, University of

Zagreb, Faculty of Economics and Business,

Department of Tourism, Polytechnic of Međimurje

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in Čakovec, Management of tourism and sports,

Polytechnic of Karlovac, Study of Hospitality,

Polytechnic of Šibenik, Study of Tourism

Management, Libertas International University,

Study programme Tourism and Hotel Management,

VERN Polytechnic, Study programme Tourism and

Hotel Management

Italy

Of 3690 secondary

Università degli Studi di Milano - Bicocca

Few educational

schools, 292

Università degli Studi di Roma ‘La Sapienza’

institutions are concerned

specialise in catering

Università degli Studi di Perugia

with the tourism economy

and tourism (pure

Università degli Studi di Bergamo

and innovation.

tourism).

Università degli Studi di Bolognia/Rimmini

Università degli Studi di Palermo

Università degli Studi Suor Orsola Benincasa Napoli

University of Molise

Montenegro Of 50 secondary

Faculty of Tourism and Hospitality (FTH),

Programmes do not have

schools, 2 specialise

Faculty for Mediterranean Business Studies Tivat;

innovation curricula, so

in catering and

University Mediterranean Podgorica;

they are not directly

tourism.

Faculty for Business in Tourism Budva,

implemented

HEC Faculty for International Management in

Tourism and Hotel Industry Budva,

Faculty of Management Herceg Novi,

Slovenia

Of 182 secondary

Faculty of Tourism, Brežice

Faculty of Tourism,

schools, 6 specialise

Faculty of Tourism Studies - Turistica, Univerza na

Brežice

in catering and

Primorskem

Faculty of Tourism Studies

tourism.

Faculty of Commercial and Business Sciences

- Turistica

Ljubljana – Tourism I

Visoka šola za trajnostni

FKPV, Celje

turizem ERUDIO

Doba fakulteta, Maribor

Fakulteta za Management, Univerza na Primorskem

Source: (Authors’ findings)

Profit tax and tax incentives for R&D investments

Some countries have profit tax and tax incentives for R&D investments for research and

development (Table 18). The tax on corporate profit is the highest in Greece and Italy and

the lowest in Bosnia and Herzegovina.

Tax incentives for R&D are the highest in Slovenia and Serbia, while some countries do not

have them at all. In the case of Slovenia, 100% means that profit generated from R&D

within company activities is completely free from further taxation.

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Table 18: Profit tax and Tax incentive for R&D investments

Profit tax (%)

Tax incentive for R&D (%)

Albania

6/20 [1]

-

Bosnia and Herzegovina

10

-

Croatia

12/18 [2]

-

Italy

24

50

Montenegro

21

-

Slovenia

19

100

Greece

29

30

Serbia

15

20-80

Source: (Authors’ findings)

Notes:

[1] Depending on the type of business: 6% - tourism businesses, 20% - other

[2] Depending on whether revenue exceeds HRK 3,000,000.00

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Strategy for fostering innovation in sustainable tourism for the

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CHAPTER 2


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Strategy for fostering innovation in sustainable tourism for the

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2 Trends in tourism

To create an adequate tourism development strategy, in addition to the current tourism

situation analysis, it is necessary to analyse existing tourism, which ultimately defines the

development model of the destination or, in this case, the whole Adriatic-Ionian region. By

understanding the coming years’ trends in tourism, destinations, tourism businesses, and

professionals can make strategic decisions in order to achieve better competitive positions

on the tourism market. Therefore, it is more than necessary to follow the trends on the

tourism market both regarding tourism demand and the offered facilities and services

Trend analysis helps destinations to critically analyse their own position on the tourism

market. Additionally, by being aware of market changes that are taking place, destinations

can adapt to these changes as quickly as possible and, in that way, cope better with

competition (Čavlek, Bartoluci, Prebežac, & Kesar, 2011).

Tourism continues to grow strongly and remains a key driver of economic development.

Travellers around the world have regained confidence and have gone on more

international trips than ever, despite terrorist attacks in several destinations (Buck &

Ruetz, 2018). According to a recent World Tourism Organization (UNWTO) Travel

Barometer, international tourist arrivals (overnight visitors) worldwide increased by 7% in

2017. UNWTO reported the following 2017 results by region (UNWTO, 2018):

 Europe recorded great results for such a large and rather mature region, with 8% more

international arrivals than in 2016. Growth was driven by strong results in Southern

and Mediterranean Europe (+13%). Western Europe (+7%), Northern Europe, and

Central and Eastern Europe (both +5%) also recorded robust growth.

 Africa consolidated its 2016 rebound with an 8% increase. North Africa recorded a

strong recovery with arrivals growing by 13%, while in Sub-Saharan Africa arrivals

increased by 5%.

 Asia and the Pacific recorded 6% growth. Arrivals in South Asia grew 10%, in South-

East Asia 8% and in Oceania 7%, while arrivals to North-East Asia increased by 3%.

 The Middle East recorded 5% growth.

 The Americas recorded 3%. South America (+7%) led growth, followed by Central

America and the Caribbean (both +4%). In North America (+2%), robust results in

Mexico and Canada contrasted with a decrease in the United States.

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Strategy for fostering innovation in sustainable tourism for the

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It is expected that international tourist arrivals will continue to grow worldwide, and it is

crucial that the Adriatic-Ionian region follow this trend. To do so, all destinations have to

take into account and adjust their offered facilities and services according to the new

tourism trends.

According to the World Travel Monitor®3 at the global level in 2017 (Buck & Ruetz, 2018):

 holidays remain the number one reason for going on a trip abroad,

 within the holiday segment, city trips are again the main growth driver with a rise of

16%, while sun & beach holidays grew by 9%. In contrast, tour holidays dropped by

2%,

 trips to visit friends and relatives (VFR trips) showed an even stronger increase of

around 8%,

 business trips overall more or less stagnated. MICE trips, making up for around 60% of

all business trips, are showing positive growth.

Tourism product and service providers are now aware that it is necessary to continuously

pay attention to trends since tourism is changing globally. ‘Business as usual’ will not help a

destination succeed, since what was successful in one period probably will not work as well

in the next one. Therefore, providers need to be up-to-date regarding tourism trends.

Additional analysis of tourism flows in recent years resulted with a wide range of trends,

including responsible tourism, overtourism, the experience economy, safety issues, new

technology, and others.

RESPONSIBLE TOURISM

In the following years, responsible tourism will take centre stage. The UNWTO declared

2017 to be the International Year of Sustainable Tourism for Development, again

underlining the necessity of supporting more responsible and committed tourism. Hence,

in addition to sustainable tourism term, other terms are emerging, such as ‘conscious

travel’ and ‘responsible tourism’. Sustainable, conscious, and responsible travel focuses on

a traveller’s carbon footprint, as well as the local economy and community. Sustainability is

not just protecting the environment; it is also about local communities; therefore, more and

more tourists are interested in spending money in ways that benefit the local economy and

community. According to Association of British Travel Agents (ABTA) research, almost

70% of people now believe that companies in tourism should ensure their holidays help

the local people and economy (Association of British Travel Agents, 2018). However, it is

3 The World Travel Monitor® is an annual survey monitoring the outbound travel volume and travel

behaviour in all main markets worldwide, covering more than 90% of the world’s outbound travel demand.

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Strategy for fostering innovation in sustainable tourism for the

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becoming increasingly obvious that ‘business as usual’ seems impossible to reconcile with

sustainability and that changes are necessary in the attitudes and behaviour of major

stakeholders in tourism (Dwyer, 2018).

OVERTOURISM

The year 2017 was a turning point for some destinations, since local residents in some

cities were protesting the negative impacts of too many tourists in their neighbourhoods.

In light of the growing overtourism problem in major cities, tourists will increasingly

search for alternative destinations that are less crowded and less expensive; therefore,

rather than being a part of the tourist crowd in Barcelona, for example, cities with

impressive cultural offerings, such as Seville and Valencia, will be next on the list (Fanelli,

2018). At the same time, tourism industry stakeholders are looking to less-travelled

destinations in Europe to redistribute the demand (Shabada, 2018). Moreover, in addition

to cities, overtourism has become an issue for other kinds of trips, including winter sport

holidays and cruises. According to the World Travel Monitor®, it was found that in 2017,

nearly one international trip in ten was affected by overcrowding, indicating the necessity

for the international travel and tourism industry to find solutions to better manage visitor

numbers without restricting growth (Buck & Ruetz, 2018). The solution for the

overtourism problem is not simple, but it starts with long-term planning with all

stakeholders involved. According to a special World Travel Monitor® representative survey

of 29,000 international travellers in 24 countries in Europe, Asia, and the Americas

conducted in September 2017, around 25% of all international tourists had the feeling that

their destination had been ‘overcrowded’ ( ibid. ).

THE EXPERIENCE ECONOMY

‘Experience’ is usually seen as access to other people’s cultures, ways of life, food and

environments; however, this is possible only when the local community approves of this

and benefits fairly from tourism (Responsible travel, n. d.). Nowadays, the tourism industry

is at a turning point, owing to the dynamics characterising the industry in recent years.

Digitalisation and globalisation have pushed the giants on the web towards an oligopolistic

market structure, controlling the whole market: Internet providers govern the market and

are no longer just intermediaries but even also tour operators. Simultaneously, there is an

increasing search in demand not just for travelling but rather to live experiences, to ‘live

the visited places’, with their typical attraction factors (including food, local productions,

and traditions). Tourists are no longer satisfied with a single tourist offer or exclusive

quality accommodation, they are looking for experiences, while quality accommodation

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Strategy for fostering innovation in sustainable tourism for the

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and services are implied. Today, tourists are tending to replace things with experiences.

They are searching for those experiences that are unique and authentic. Therefore, it can be

said that contemporary tourists are more into rejuvenation, adventure, fulfilment, learning

new skills, seeking an adventure of a lifetime, life-changing experience, and ‘being more of

who you are’ than just passively visiting places, sightseeing, and lying in the sun. It is

expected that tourists will be interested in travel experiences that will allow them to

achieve a goal or accomplish something they have never done before, like completing a

marathon for the first time or climbing a mountain (Fanelli, 2018).

TripAdvisor booking data (Figure 16) also revealed that travellers are expanding their

horizons and bringing growth to new, non-traditional, and experiential categories.

Although tourists are becoming increasingly interested in new experiences, they remain

loyal to the world’s most iconic sites, i.e. the Vatican Museums, St. Peters, and Sistine

Chapel, Ancient Rome, the Chicago River Architecture Cruise, the Sagrada Familia, Eiffel

Tower and the Empire State Building (TripAdvisor, 2018). Therefore, the main and iconic

attractions in the Adriatic-Ionian region should be presented in a more innovative way, by

promoting them as unique and authentic experiences. Tour and activity operators who

prioritise the quality of the delivered experience and destinations that centre their

marketing efforts around experiences unique to the destination will be the ones that thrive

in the years to come (Kow, 2017).

Figure 16: Fastest-growing experience categories in 2017 (ranked by year-over-year growth in total

bookings count)

In light of the previously

presented

experience

trends, the Adriatic-Ionian

region

must

make

experiences the core its

tourism products and

marketing.

Source: (TripAdvisor, 2018)

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Strategy for fostering innovation in sustainable tourism for the

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TRAVEL RISK – SAFETY ISSUES

Provision of a safe and secure environment for visitors represents an essential basis for

providing quality in tourism. In recent decades, safety and security issues have gained

much greater importance in tourism. Nevertheless, despite natural disasters and terror

attacks around the world, as mentioned before, international travel continuously is rising.

The World Travel Monitor® results for the first eight months of 2017 showed that there is a

relatively high perceived risk of terror attacks when travelling; however, this is mainly

resulting in a change to destinations that are perceived as safe rather than giving up

travelling altogether (Buck & Ruetz, 2018):

 41% of international travellers say the recent instability and terror warnings will

impact their travel planning for 2018,

 33% plan to shift to a ‘safer’ destination,

 8% might not travel abroad at all,

 nearly 60% say they will not change their travel behaviour due to possible terror

threats.

It is necessary to underline that a feeling of safety and security are among the most

important factors involved in choosing a destination.

NEW TECHNOLOGY

A key role in changing tourism trends is and will be played by technology. Investing in new

technology is a major priority for tourism products and service providers. Hence, in an

effort to make guests’ stay simpler, it is expected that, for example, many hotels will be

focused on further improving Wi-Fi services with higher speeds and will be investing in

artificial intelligence, automated check-in and check-out and mobile applications that cater

to guests’ needs inside and outside of the hotel (Fanelli, 2018). Augmented reality could

help hotels to ‘tell their story’ by providing additional information about the location and

surroundings; this could range from sightseeing and excursions to more unusual and

memorable experiences (Buck & Ruetz, 2018). The expansion of Internet access as well as

the proliferation of smartphones and other mobile devices is facilitating ‘real-time’ travel –

whether it is canvassing online bulletin boards for restaurant or beach recommendations,

getting directions to a museum or stadium from a GPS-enabled app, or booking a last-

minute hotel room or flight (Visa, 2016).

In addition, autonomous technology that ranges from conversational ‘digital personal

assistants’, such as chatbots, or interactive devices through to physical robots is

particularly applicable in tourism (Olearczyk, 2018). The application of robots in tourism,

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Strategy for fostering innovation in sustainable tourism for the

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for example, could range from machines making room delivery in hotels to ‘luggage robots’

containing personal possessions and rolling along behind travellers, to fully autonomous

aerial transportation ( ibid. ).

According to Booking.com, artificial intelligence and digital technology are reshaping the

way travellers research, book, and experience travel (Booking, 2017):

 29% of global travellers suggest that they are comfortable letting a computer plan an

upcoming trip based on data from their previous travel history,

 50% of global travellers do not mind if they deal with a real person or computer, so long

as their questions are answered,

 64% of travellers say they would like to ‘try before they buy’ with a virtual reality

preview,

 50% of travellers find that personalised suggestions for destinations and things to do

encourage them to book a trip.

The fourth industrial revolution – the so-called Industry 4.0 (I4.0) – has been recognised to

cause a paradigm shift within tourism. It aims at revolutionising tourist experience

creation, as well as tourism business and destination management practices through the

introduction of new technologies and high-inter-connectivity. It takes advantage of smart

technology in creating, managing, and delivering intelligent tourist services/experiences

and is characterised by intensive information sharing and value co-creation.

To date, research has been mainly focused on the role of Industry 4.0 as the driver of

technological innovations (Grissemann, Pikkemaat, & Weger, 2013). Less attention has

been paid to its role in fostering and supporting institutional innovation (i.e. new business

models), by implementing strategies, models and schemes concretely different from the

past. Institutional innovation occurs when new problems arise, and there is no ‘focal’

institution readily available to respond (Hargrave & Van de Ven, 2006). In the tourism

literature, institutional innovation has been defined as a new, embracing organisational

structure or legal framework that efficiently redirects or enhances the business in certain

fields of tourism (Hjalager, 2010). It emphasises the necessity of an integrated approach to

innovation that considers both technological and non-technological aspects. Indeed, this

draws attention to the importance of recognising and understanding the different domains

of innovation. A review of the broader management literature reveals a growing

recognition of the importance of looking to the past as a source of innovation, as this may

allow for the discovery of values, practices, and competencies connected to traditions that

can contribute, in new ways, to developing and sustaining unique or distinct

products/services. (Savino, Petruzzelli, Messeni, & Albino, 2017) In this sense, mixing

tradition and new technologies may be a winning formula for successful innovation.

Accordingly, some new products/services can be the result of the process of recombining

53

FOST INNO

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

local and cultural traditions as well as the traditions of some long-standing firms and the

adoption of cutting-edge technologies.

Other trends in tourism include:

- Millennials. As the youngest generation with disposable income, Millennials (ages 20

to 35) are considered to be leaders in travel and tourism. When planning travel, they

are used to having their options conveniently available to them, and they want to be

able to research and book their trips and tours online. It is important to point out that

by 2025, Millennials will comprise three quarters of the global workforce, which will

bring them into a new era of spending power (Fuggle, Kow, Burkhard, & Silva, 2018).

- Solo, single-parent family, and multigenerational travel. Solo, especially solo female

travel is a major trend in recent years. Additionally, the travel industry is quickly

adjusting its offering towards single-parent families. For example, according to a recent

Stats Canada survey, single-parent families now make up 19.2% of Canadian

households with children, and the United Kingdom’s Office for National Statistics states

that there are around two million single-parent families in the UK (Shabada, 2018).

- In addition, in the coming years, it is expected that the interest in multigenerational

travel will increase. Family members of all ages, including parents, children and

grandparents, will be travelling to reconnect and create new memories together

(Fanelli, 2018). For Generation X (those born between 1965 and 1980), multi-

generational travel is the norm. Moreover, given longer life expectancies, more people

will be able to travel for more years, i.e. Visa projects that the number of trips made by

travellers aged 65 and up will double from 2015 to 2025, to 180 million (Visa, 20164).

This indicates that destinations will have to provide options, whether it be

accommodation or activities, for tourists of all ages.

- Booking trends. More bookings are happening on mobile devices, hence the ability to

measure how mobile influences the customer journey is critical. According to

Booking.com, one in two traveller journeys start on mobile devices. In addition, 69% of

US travellers are more loyal to a travel company that personalises their experiences

online and offline (Loo, 2017).

- Online reviews. Online reviews have the most impact on bookings; therefore, tourism

companies need to consciously manage their reputation online. As many as 9 out of 10

4 Taken from: WTTC, 2017

54

FOST INNO

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

travellers think that reading online reviews is important and 95% of travellers trust

reviews on third party sites (Fuggle et al., 2018).

- Sharing economy. The phenomenon of peer-to-peer (P2P) sharing of access to under-

utilised goods and services prioritises utilisation and accessibility over ownership,

either for free or for a fee (Schor & Fitzmaurice, 2015). Internet services based on user-

generated content such as YouTube and Facebook encourage individuals to share in

various ways; this concept has emerged in the tourism as well and continue to grow at a

phenomenal rate. The rise of profit-based online platforms for P2P sharing, such as

Airbnb, Uber, and others, has changed the way people travel and is of great significance

to the traditional tourism industry (Heo, 2016).

- Mobile photography. The vastly improved cameras on mobile phones have given

tourists the chance to capture images of a coveted vacation spot and post it immediately

to social media, generating nearly instant interest (Lyerly & Lyerly, 2018). Tour

operators and activity providers can benefit from this trend, as it is the perfect social

media marketing tool since it helps to develop user-generated content (Napier

Burkhard, 2016).

- Work and travel. Because reliable Wi-Fi is accessible almost all around the world and

online communication tools are advancing, it will be easier than ever to live and work in

different destinations for longer periods of time. Hence, extending a business trip by a

few days will not be satisfying for new tourists; instead, it is expected that they will be

interested more in working full-time or even part-time as a digital nomad for a month

or more (Fanelli, 2018).

- Authentic culinary tourism. The future of culinary tourism tends to move away from

expensive dining to more authentic food experiences. It is expected that visiting local

markets and dining with locals in their homes will be major interests for tourists.

Moreover, even entire vacations will be planned around food, with destinations being

chosen based on their culinary offerings. These experiences are closely tied to the

culture of the location, and they can be one of the best ways to get to know the

destination and its culture and tradition. Operators that provide a food experience can

benefit by ensuring that it connects products with people and the traditions of a

destination (Napier Burkhard, 2016).

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

- Wellness tourism. People focus increasingly on their own wellbeing and prefer healthy

life choices, as well as paying attention to environmental issues and sustainability.

Related to that, wellness tourism is a growing trend in tourism and has countless

opportunities in future markets and product development. The concept of wellness

tourism can be understood as a combination of wellness, health tourism, and wellbeing

products and services (Voigt & Pforrs, 2014). The development of health and wellness

tourism can also influence the quality of life of the local population due to the emerging

markets of wellness tourism. This also helps constitute development poles on local and

regional scales. The strategic potential in these health and wellness centres depends on

the variety of activities that the destination has to offer, which might then result in

increased destination attractiveness and customer loyalty (Peris-Ortiz & Álvarez-

García, 2015).

Understanding the presented trends is essential for tourism destination management, since

destinations need to increasingly adapt to a situation in which tourists are making real-

time adjustments to their plans. In that context, this analysis allows destinations in the

Adriatic-Ionian region a better understanding of future tourists, and the knowledge about

the trends should represent a basis for its future tourism innovative solutions. By taking

into account the above, it is necessary for the whole region to keep up with these trends by

creating an appropriate development strategy. Additionally, even though only global

tourism trends are analysed in this document (due to the fact that it refers to the whole

Adriatic-Ionian region), it has to be underlined that it is also critical to identify the trends

happening at the local level when developing action plans for fostering innovations in

sustainable tourism.

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FOST INNO



Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region





CHAPTER 3


57


FOST INNO

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

3 Results of the empirical surveys on tourism and innovations

in the Adriatic-Ionian region

In addition to the situation analysis and the analysis of tourism trends, several different

research activities have been conducted to obtain a more detailed overview of tourism and

innovations in the Adriatic-Ionian region. Online and telephone surveys were conducted

with employers in tourism from different parts of the Adriatic-Ionian region. Furthermore,

in-depth interviews with different stakeholders were also conducted with the aim of

detecting the main issues related to sustainable tourism, education in tourism, and

innovative capacity in Adriatic-Ionian tourism. Finally, all the empirical surveys’ results, as

well as the results of the situation analysis and trends analysis, have been presented and

discussed in workshops organised with key tourism stakeholders in Albania, Bosnia and

Herzegovina, Croatia, Italy, Montenegro, and Slovenia. The results of those activities are

summarised and presented in the following subchapters.

3.1 Online questionnaires and telephone survey

To obtain better insight into the innovation culture in the enterprises operating directly or

indirectly in tourism, a questionnaire was developed aiming to gather relevant information

from employers in tourism in the Adriatic-Ionian region. In total, 839 questionnaires (77 in

Albania, 105 in Bosnia and Herzegovina, 120 in Croatia, 130 in Italy, 68 in Montenegro, and

339 in Slovenia) were gathered and analysed.

The aforementioned aim of the survey points to a specific need to generalise results

conveying the nature of the innovation process and not the attributes of sectors or

populations. This notion drives the sampling needs and diverts research attention from

‘statistical units’ towards concrete business experiences of observational units, which

allows ‘transferability’ or ‘analytical generalizability’.5 The social significance of these

‘extracted experiences’ lies in the possibility of improving the understanding of innovative

practices and their applicability and relevance for designing regional innovation policies

within tourism.

5 For more detail, see Gobbo, 2004

58

FOST INNO





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IN O

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

portrays its structural characteristics) were located in four Member States: Italy, France,

Spain, and Germany.

The Adriatic–Ionian region is a location for one fifth of these businesses, with the highest

number in Italy (361,453) in 2015, followed by Greece (155,506), Croatia (23,800), Albania

(18,586),6 Slovenia (12,362), Bosnia and Herzegovina (4,133),7 and Serbia (3,123).8 These

facts, already assessed to some extent in the situation analysis, give an overview of the

significance of tourism activities across the region and provide a sense of the ‘landscape’ of

the survey respondents. Data gathered for the Adriatic-Ionian region capture the structure

of companies according to the NACE classification of activities, the ownership structure,

and the size of the company, as shown in Figure 18 (a-c). The respondents are typically

from micro and small private companies operating in the category of hotels and

restaurants.

Figure 18: Companies profiles according to…

18.a … economic activity

18.b … ownership

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6 Institute of Statistic of Republic of Albania, www.instat.gov.al

7 Agency for Statistics of Bosnia and Herzegovina, www.bhas.ba

8 Statistical Office of the Republic of Serbia, www.stat.gov.rs

60

FOST INNO

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

18.c … size (and economic activity)

100%

Classification:

80%

Transport – NACE H

Hotels and restaurants – NACE I

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Source: (FOST INNO Survey)

Notes: (1) w – (country) weighted; a – (country) average (normalised); (2) NA – not available

Strategy

Ideally, one would expect that companies active within tourism would be fully aware of the

latest practices and innovations in tourism as well as in compliance with the proposed

national tourism strategy. Since the majority responded that they do not rely on these

external strategies, but at the same time do give considerable attention to internally

developed ones, this indicates a discrepancy that reflects either business misconceptions of

national and regional policies or one that originates in ill-prepared strategic frameworks,

or both. In these conditions, a more compact institutional network (like the envisaged

Adriatic-Ionian Tourism Innovation Centre) might help alleviate the problem in addition to

its central goal (innovation generating and sharing). It would also seem (Figure 19) that

these firms take the sustainability issues seriously into account, although to some extent

less so than in hotels and restaurants. This probably mirrors regulatory compliance with

safety standards within this sub-sector that is not necessarily seen as a part of the

sustainable development or, in contrast, is given the status of primary importance, which is

something that differentiates them from other sub-sectors.

61

FOST INNO





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To

T ta

t l

a (a)

a

re

r sta

t u

a ra

r n

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ser

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re

r cr

c e

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a iton

Sou

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r e

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e (F

( O

F S

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S

T IN

I N

N O

N

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S r

u v

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e )

Note

N s

ote :

s w – (c

( ou

c n

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n ry

r )

y )we

w i

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gh ed;

e

d; a – (c

( ou

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tr )

y )av

a er

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( or

n ma

or l

ma is

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e )

d

Hum

Hu a

m n

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res u

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u es

rc

Pe

P op

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a e

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cle r

a ly

r a cen

ce t

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tou

t r

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s an

a d

n hosp

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i d

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y s ef

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ope

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a s

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s i

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a d

n ,

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con e

s q

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q e

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t ,

ly de

d p

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p n

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n s

d on itis

t wor

w k

or f

k or

f ce

or fo

f r

the

t

de

d li

e v

li e

v r

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r of se

s r

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r i

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i an

a d

n pr

p od

r u

od ct

u st

s a

t n

a d

n a

d r

a d

r s

d to

t mee

me t

e ex

e i

x s

i t

s itn

i g

n an

a d

n an

a t

n itci

i p

ci a

p t

a e

t d

e de

d ma

e n

ma d

n

fr

f om

r

itis

t vi

v s

i i

s tior

t

mar

ma k

r e

k t

e p

t la

p ce

la

(Ba

( u

Ba m,

u

Amoa

A

h,

moa

& Sp

S i

p v

i a

v ck

a ,

ck 19

1 9

9 7

9 )

7 .) The

T r

he e

r f

e or

f e

or ,

e iti comes

come

some

s

w

ome ha

w t

ha as

a a su

s r

u p

r r

p i

r s

i e to

t lea

le r

a n

r fr

f om

r

emp

e

lo

mp ye

y r

e s

r tha

t t

ha the

t r

he e

r is

i no

n st

s r

t on

r g

on pr

p e

r f

e e

f r

e e

r n

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n for

f

compu

comp ls

u or

ls y

or tra

r i

a n

i i

n n

i g

n or the

t pr

p e

r ci

e s

ci e

s sy

s s

y t

s e

t ma

e t

ma its

i a

s t

a iton

i

of jobs

ob .s In

I ad

a d

d i

d tiiton

i ,

on the

t y

he se

s e

e no

n lack

la of

tou

t r

ou i

r s

i m

s ex

e p

x e

p r

e t

r s

t cur

cu r

r e

r n

e t

n ly

t an

a d

n ,

d ge

g n

e e

n r

e a

r lly

a ,

lly the

t r

he e

r is

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n st

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t on

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p or

p t

or for

f the

t be

b li

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t t

ha ke

k y

e

62

6

FO

F S

O T

S

T INN

IN O

N

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

positions are reserved for people that have attended a formal study programme in the field

of tourism. This would suggest that tourism, as a relatively low value-added branch, helps

derive demand primarily for lower-skilled workers and that they are perceived by

employers as sufficiently able to handle tasks that ensure innovative applications and ideas

of sustainable tourism. A different view was expressed by a few interviewed stakeholders

regarding the perceived need for more highly qualified professionals to be employed in

tourism (Figure 20), basically expressing the attitude rooted in the human capital theory

(in short, a more qualified workforce should supposedly produce more innovations). Which

of these views indicates a misunderstanding of the concrete role of a skilled workforce, and

to what extent and in what manner, remains unclear.

Figure 20: Human resources

100%

Likert scale

80%

7

1 – strongly disagree

6

60%

2 - disagree

5

3 – somewhat disagree

4

4 - neither agree nor

40%

3

disagree

2

5 - somewhat agree

20%

6 - agree

1

7 - strongly agree

0%

a

b

c

d

e

f

g

h

Source: (FOST INNO Survey)

a - The company is facing a lack of tourism experts.

b - In our company, the key positions are reserved for people that have attended a formal study programme in the field of tourism business.

c - Our employees have little knowledge about how to apply innovative procedures in their everyday practice.

d - The idea of sustainable tourism is something that our employees embrace and perform accordingly.

e - When we apply innovations at the working place, al employees receive sufficient training.

f - We have defined a set of competencies required/needed for typical jobs in the company.

g - First-line employees receive compulsory training at least once per year (min. 4 hours).

h - Managers are required to receive compulsory training at least twice per year (min. 4 hours).

63

FOST INNO





Str

St at

r eg

at y

eg

y for

f

or fos

f t

os er

t i

er n

i g

n

g in

i n

n ov

n a

ov t

a iton

i

on in

i

n su

s s

u t

s ai

t n

ai abl

n e

abl t

e o

t u

o r

u i

r s

i m

s

m for

f

or th

t e

h

20

2 1

0 8

1

Ad

A r

d i

r at

i i

at c

i -I-on

I i

on an

i

an reg

r i

eg on

i

Qu

Q a

u l

a iltiy

t co

c n

o t

n ro

t l

ro

The

T imp

i

or

mp t

or a

t n

a ce

n of qu

q a

u li

a t

li y

t cont

con r

t ol

r in

i the

t tou

t r

ou i

r s

i t

s in

i d

n u

d s

u t

s r

t y

r has

ha ri

r s

i e

s n

e to

t an

a ex

e t

x r

t a

r or

a d

or i

d n

i a

n r

a y

r lev

le e

v l

e

be

b ca

e u

ca s

u e

s of the

t

chan

cha g

n e

g in

i pr

p e

r f

e e

f r

e e

r n

e ce

n s

ce of tou

t r

ou i

r s

i t

s s

t 's be

b ha

e v

ha i

v ou

i r

ou an

a d

n the

t

gr

g o

r wt

w h

t of

compe

comp t

e ittiitv

i e

v n

e e

n s

e s

s of ne

n w

e tou

t r

ou i

r s

i t

s de

d s

e t

s itn

i a

n t

a iton

i s

on (C

( a

C mi

a s

mi ón

s ,

ón 19

1 9

9 6

9 )

6 .) The

T

sur

u v

r e

v y

e focu

f

s

ocu e

s s

e on the

t

wor

w k

or st

s a

t n

a d

n a

d r

a d

r s

d an

a d

n pr

p oce

r

d

oce u

d r

u e

r s

e ,s de

d a

e li

a n

li g

n wi

w tih

t compla

comp i

la n

i t

n s

t ,s su

s g

u g

g e

g s

e t

s iton

i s

on tha

t t

ha gu

g e

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s s

t hav

ha e

v ,

e an

a d

n

the

t

ex

e cha

x

n

cha g

n e

g of good

g

bu

b s

u i

s n

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s pr

p a

r ct

a i

ct ce

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ce be

b t

e w

t e

w e

e n

e compa

comp n

a i

n e

i s

e .s Colle

C

ct

olle e

ct d

e an

a s

n w

s e

w r

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tha

t t

ha compa

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w tihi

t n

hi the

t

Ad

A r

d i

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i t

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c I-on

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i

hig

hi hly

g

va

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a e

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t cont

con r

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r

more

mor tha

t n

ha

90

9 %

0 of the

t m

he collect

colle gu

g e

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s iton

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on for

f imp

i

rov

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n w

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an

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a wi

w tih

t gu

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s compla

mp i

la n

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t pr

p omp

r

t

omp ly

t (F

( i

F g

i u

g r

u e

r 21

2 )

1 .) All

A othe

ot r

he as

a p

s e

p ct

e s

ct of bu

b s

u i

s n

i e

n s

e s

s cond

con u

d c

u t

tha

t t

ha en

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n u

s r

u e

r qu

q a

u li

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li y

t cont

con r

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a o

ls se

s e

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e imp

i

or

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t n

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t the

t m.

he

How

H e

ow v

e e

v r

e ,r the

t r

he e

r is

i an

a ex

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x r

t e

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me y

l

in

i s

n t

s r

t u

r ct

u i

ct v

i e

v de

d t

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a li of in

i t

n er

e e

r s

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s to

t thi

t s

hi in

i q

n u

q i

u r

i y

r .

y The

T

lowe

low s

e t

s car

ca e

r is

i gi

g v

i e

v n

e to

t the

t

ex

e cha

x

n

cha g

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good

g

bu

b s

u i

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i e

n s

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p a

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a i

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e amon

a

g

mon fifr

i ms

r ,

ms whi

w c

hi h pr

p ob

r a

ob b

a ly

b de

d mon

e

s

mon t

s r

t a

r te

t s

e the

t

ef

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f ct

e of the

t

compe

comp t

e ittiitv

i e

v en

e v

n i

v r

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r me

on n

me t

n in

i whi

w ch

hi the

t y

he ope

op r

e a

r t

a e

t an

a d

n could

cou in

i hi

n b

hi i

b ti pot

p e

ot n

e t

n ita

i l

a act

a i

ct v

i i

v tiite

i s

e ai

a me

i d

me

at

a sha

s r

ha i

r n

i g

n in

i n

n ov

n a

ov t

a iton

i an

a d

n in

i n

n ov

n a

ov t

a itv

i e

v id

i e

d a

e s

a wi

w tihi

t n

hi the

t re

r g

e i

g on

i .

on

Figu

F

r

igu e

r 21:

21 Qu

Q a

u l

a it

l y

it co

c nt

o r

nt o

r l

o is…

is

21

2 .

1 a … hi

h g

i h

g ly

h va

v lu

a e

lu d

e an

a d

n …

d

64

6

FO

F S

O T

S

T INN

IN O

N

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

21.b … also across sub-sectors

100.0%

80.0%

a

60.0%

b

c

d

40.0%

e

f

g

20.0%

0.0%

Transport

Hotels and

Tourist

NA

Sport and

Total

restaurants

services

recreation

Source: (FOST INNO Survey)

a - The company has set work standards.

b - We have implemented work procedures in our company.

c - We systematical y col ect guests’ opinions.

d - Managers are obliged to deal with guest complaints promptly.

e - The company col ects guest suggestions for improving existing or introducing new services.

f - We regularly inform our employees about the suggestions that we receive from guests.

g - Our company is exchanging good business practices with other companies.

Sustainability

Tourism can have a negative effect on environments and communities if it is not carefully

managed. Sustainable tourism aims to balance the requirements of tourists with the needs

of local communities and to protect the environment. Respondents across the region

demonstrate that they employ low-cost applications and practices that can additionally

help their business image and ensure customer satisfaction in the longer run (Figure 22).

These include waste sorting, water consumption and energy reductions, or adapting

services to the special needs of their guests. In contrast, high-cost and likely technically

more advanced practices, equipment, and tools are less represented. This could have been

expected, both due to cost-competitiveness concerns and, in the case of water treatment, to

potentially challenging attitudes of customers.

65

FOST INNO





Str

St at

r eg

at y

eg

y for

f

or fos

f t

os er

t i

er n

i g

n

g in

i n

n ov

n a

ov t

a iton

i

on in

i

n su

s s

u t

s ai

t n

ai abl

n e

abl t

e o

t u

o r

u i

r s

i m

s

m for

f

or th

t e

h

20

2 1

0 8

1

Ad

A r

d i

r at

i i

at c

i -I-on

I i

on an

i

an reg

r i

eg on

i

Figu

F

r

igu e

r 22:

22 Su

S st

u a

st in

a abl

a e

bl to

t u

o rism

r

…

ism

22

2 .a

2 … en

e ta

n il

ta s

il high

h -

igh c

- os

c t

os an

a d

n low

l -

ow c

- os

c t

os ac

a tiv

c itie

tiv

s

itie …

22

2 .b

2 … re

r c

e o

c gni

gn s

i ed

e al

a mos

l

t

mos un

u ifor

n

ml

ifor y

ml

100

0 .0%

0

80.

0 0%

a

60.

0 0%

b

c

d

40.

0 0%

e

f

g

20.

0 0%

0.0

. %

Tr

T an

a sp

s ort

Ho

H te

t ls

l a

nd

To

T uri

r st

NA

Sport

r

t a

nd

n

To

T ta

t l

a

re

r sta

t u

a ra

r n

a ts

t

ser

e vi

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c s

re

r cr

c e

r at

a i

t o

i n

Sou

S r

ou c

r e

c :

e (F

( O

F S

O T

S IN

I N

N O

N Su

S r

u v

r ey

e )

y

a - Ou

O r

u co

c m

o p

m a

p n

a y

n ha

h s

a ad

a a

d p

a t

p e

t d

e ou

o r

u se

s r

e v

r i

v ce

c s

e to

t th

t e

h sp

s e

p c

e i

c a

i l

a ne

n e

e d

e s

d of

o ou

o r

u gue

gu s

e t

s s

t wi

w tih

t di

d sa

s b

a i

b liitites

e or

o wi

w tih

t limi

m tie

t d

e mo

m b

o i

b liitiy

t .

y

b - Ou

O r

u co

c m

o p

m a

p n

a y

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a pr

p e

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p r

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p l

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c wa

w t

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m t

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( u

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a wa

w t

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a i

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e g. du

d a

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s w

/ a

w t

a e

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ur

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t .c).)

c - We

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c c

y l

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y

d - In

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a y

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y we

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e - In

I ou

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c m

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p n

a y

n ,

y we

w us

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r fr

f o

r m

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n w

e a

w b

a l

b e so

s u

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u c

r e

c s

e (e

( .eg. so

s l

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a pa

p n

a e

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b o

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s ,s wi

w n

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e c

t .c).)

f - In

I ou

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c m

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m a

p n

a y

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y we

w ad

a o

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e gy

r sy

s s

y t

s e

t m

e s

m ,s et

e c

t .c).)

66

6

FO

F S

O T

S

T INN

IN O

N

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

Another dimension of sustainable approaches to tourism development can be associated

with creating inclusive local markets, which implies less transport pollution, the alleviated

impact of foreign demand on local markets, etc. In general, non-local producers provide the

majority of goods and services, which reflects a natural adaptation of supply to tourist

demand that is predominantly of foreign origin. This happens to be the case even in Italy,

where domestic demand is relatively larger, but that still does not necessarily mean that is

confined to the borders of the local markets (Figure 23). One can detect from the responses

somewhat less pressure on local markets for services at least in the largest tourist markets

in the sample (Italy, Croatia, and Montenegro), which probably reflects, to some extent,

their so-called non-tradability features.

Figure 23: Domestic component of services and goods provided by the tourist sector

23.a Services

100.0%

100.0%

80.0%

80.0%

60.0%

Not applicable

60.0%

Not applicable

>50%

>50%

25-50%

25-50%

40.0%

10-25%

40.0%

10-25%

<10%

<10%

20.0%

20.0%

0.0%

Transport Hotels and

Tourist

NA

Sport and

Total

0.0%

restaurants services

recreation

HR

ITA

ME

BA

AL

SI

Total

23.b Goods, food and drinks

100.0%

100.0%

80.0%

80.0%

60.0%

Not applicable

60.0%

Not applicable

>50%

>50%

25-50%

25-50%

40.0%

10-25%

40.0%

10-25%

<10%

<10%

20.0%

20.0%

0.0% Transport Hotels and Tourist

NA

Sport and

Total

0.0%

restaurants services

recreation

HR

ITA

ME

BA

AL

SI

Total

Source: (FOST INNO Survey)

67

FOST INNO

Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

Innovation potential

Innovative attempts gain new strategic value when viewed from a perspective that values

experience as an important new attribute. Such a perspective has significant consequences

for the growth of destination strategies, policies, and the integration of the information-

society dimension (Stamboulisa & Skayannis, 2003). Though firms in tourism do consider

innovations important for their development, the survey responses also convey that they

are not too keen on attaching any formal dimension to it, e.g. a rulebook or some other kind

of written regulatory standards. Seemingly contradictory answers were provided to

questions about their willingness to share good practices with other companies if one

compares them to the lack of exchange of these practices reported within the quality

control section (Figure 24). One explanation could be that they associate possible collective

agreements, external criteria and incentives with prospective frameworks for rewarding

these sharing practices that could potentially compensate for the previously disused loss of

competitiveness, perhaps more through public reputation and increased advertisement,

than through monetary rewards.

Figure 24: Innovation

100.0%

Likert scale

80.0%

1 – strongly disagree

2 - disagree

7

3 – somewhat disagree

60.0%

6

4 - neither agree nor

5

disagree

5 - somewhat agree

4

6 - agree

40.0%

3

7 - strongly agree

2

1

20.0%

0.0%

a

b

c

d

e

f

g

Source: (FOST INNO Survey)

a - Innovations are important for the development of our company.

b - In our company, we have adopted a special rulebook (act, organisational regulation) on innovations.

c - The rulebook is a living document that our company intends to improve.

d - To stimulate innovation, we organise seminars to promote it.

e - The col ective agreement in the tourism business should more precisely specify the criteria for rewarding innovations.

f - The Section for Tourism at the Chamber of Commerce should help in the elaboration of criteria for rewarding innovations.

g - We are ready to share our own good practices with other companies in the industry

68

FOST INNO





Str

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F

r

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69

6

FO

F S

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T INN

IN O

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Str

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20

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0 8

1

Ad

A r

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What

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a

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t for

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a in

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a iton

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min

mi d

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i the

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to

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men

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or (F

( i

F g

i u

g r

u e

r 26

2 .

6 a).) Si

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iti wa

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w most of the

t m

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( i

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s .)

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F

r

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r 26:

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26

2 .a

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26

2 .b

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In

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(F

( i

F g

i u

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2 )

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f e

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t o

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a an

a n

n u

n a

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b s

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cor of in

i n

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a an

a n

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f r

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in

i v

n e

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i a

g t

a iton

i wou

w ld

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b ne

n e

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f an

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li b

a le

b conclu

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70

7

FO

F S

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T INN

IN O

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Str

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

29.b … except in sport and recreation

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Regarding innovations introduced by your company in the last three years, please specify which were introduced (multiple answers are possible):

a - Goods innovations (new or significantly improved)

b - Service innovations (new or significantly improved)

c - Process innovations

d - Marketing innovations

e - Organisational innovations

The last category of questions in the survey was designed to help retrieve information on

employers’ perception about the effectiveness of various stimuli packages that are or can

be used or engineered for improving the innovative performance of the firms (Figure 30).

Respondents perceive formal strategic planning and documentation as less important in

this sense, and more emphasis is given to the creativity and new ideas, the rewarding

system for new ideas, as well as better coordination and communication between

departments.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Figure 30: What can improve your company’s innovation performance?

Likert scale

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In your opinion, what can improve your company’s innovation performance?

a - Including innovation strategy in the business strategy

b - Better regulation of innovation policy within the company

c - National innovation policy and incentives

d - Development of the international innovation strategy

e - More creativity and new ideas

f - Additional education of employees

g - Rewarding system for new ideas

h - Effectiveness of innovation marketing

i - Better coordination and communication between departments

j - Fostering of a risk-taking (smart) culture.

k - Other

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Strategy for fostering innovation in sustainable tourism for the

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3.2 Interviews with key stakeholders

The main purpose of the in-depth interviews was to obtain a general overview of the

situation related to the strategic orientation towards the sustainable tourism and

innovations as well as to obtain an overview of the possible mechanism for the promotion

of innovations in tourism from different points of view. In that context, different types of

structured interviews, for three groups of stakeholders, were created and conducted

during May and June 2018. Overall, 38 interviews were conducted. The first group of

interviews was conducted with national tourism state representatives (i.e.

ministry/department of tourism; national or regional tourism organisations). The second

one was conducted with the representatives of national and regional business support

organisations (Tourism Trade Union, Chamber of Commerce, Chamber of Crafts, etc.). The

last set of interviews was conducted with the representatives of higher education and

research in the field of tourism.

The analysis of interviews conducted with nine national tourism state representatives

in Albania, Bosnia and Herzegovina, Croatia, Italy, Montenegro, and Slovenia showed that

national tourism organisations promote sustainable tourism and innovations in different

ways, depending on their countries’ tourism development level. Interviewees indicate that

their national tourism strategies are based on sustainable tourism development principles.

Accordingly, the majority of the respondents are also emphasising that their organisations

are carrying out (directly or indirectly) different activities to ensure the sustainable

development of tourism. Since innovations play an important role in tourism development

and because innovative solutions are contributing to stronger competitiveness on the

tourism market, in addition to increasing awareness of the importance of innovation,

interviewees indicated that their organisations will continue to promote them through

different mechanisms. The majority of those mechanisms relate to different public tenders

for financing or co-financing sustainable and innovative tourism programmes, products,

services and offerings, as well as to rewarding innovative products and projects.

To ensure tourism competitiveness and sustainability, national tourism organisations are

cooperating with numerous international tourism organisations, i.e. the UNWTO (World

Tourism Organization), the ETC (European Travel Commission), the OECD (Organisation

for Economic Co-operation and Development), the INSTO (International Network of

Tourism Observatories), and others. Additionally, the vast majority of the interviewees

point out that their organisations take part in international co-operations through a variety

of projects relating to innovations and sustainable tourism. In that context, some of the

interviewees are particularly indicating the participation in EU projects, such as:

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

 ADRION 5 SENSES (Adriatic-Ionian Programme INTERREG V-B Transnational 2014-

2020),

 DIOD - Development of ICT for outdoor destination (IPA Cross-Border Programme

Croatia-Montenegro),

 EDEN - European Destination of Excellence (European Commission project),

 HERICOAST - Management of heritage in coastal landscapes (Interreg Europe project),

 INHERIT - INter-sectoral Health Environment Research for InnovaTions (Horizon

2020),

 INNOTOURCLUST - Innovative cluster of SMEs in cross-border tourism (Interreg IPA

CBC Italy-Albania-Montenegro),

 PANORAMED and MedCycleTour - Mediterranean Cycle Route for Sustainable Coastal

Tourism (Interreg Mediterranean platform) and others.

Respondents are convinced that their national tourism organisations will continue to

promote sustainable tourism development and innovations by following the guidelines

defined in their national tourism strategies and by implementing measures and activities

provided in the action plans.

The second group of structured interviews was conducted with 14 national and regional

representatives of business support organisations. Interviewees were representatives

of the Regional Development Agency, Sustainable Urban Planning Organisation, Prefecture

of Shkodra District, Municipality Tourism Development Sector (Albania), Citizens’ Forum

and Tourist Association (Bosnia and Herzegovina), Chambers of Commerce (Albania,

Croatia, Italy and Montenegro), Tourism Trade Union (Italy and Slovenia), and a Chamber

of Crafts, Natural Park, Destination Management Company (Italy). The majority of

interviewees agreed that the process of innovation in tourism is held back by the lack of

collaboration and coordinated strategy between the different levels of governance. It has

been repeatedly emphasised that it is necessary to strengthen the coordination in tourism

horizontally and not just vertically (top-down). Respondents also indicate the importance

of developing a strong and well-defined network to foster tourism and particularly the

innovations in tourism. Additionally, some of the interviewees indicate that the obstacles to

the innovation process in tourism lie in the lack of knowledge, the fragmented nature of

tourism, and in insufficient incentives for innovations at all levels. The key mechanisms for

general improvement and growth of innovations are seen in better collaboration and

efficient, coordinated actions of the public and private sectors in tourism. It was also

underlined that the tourism development strategies should set out clearer objectives and

measures to increase interest in finding innovative solutions.

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Strategy for fostering innovation in sustainable tourism for the

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Considering the brain drain in tourism, the majority of the interviewees agreed that people

of different professions (e)migrate abroad for better jobs and better wages, and tourism is

not an exception. Better salaries, better working conditions, better workplace treatment,

greater involvement in decision-making processes, and advancement opportunities are

seen as common patterns of departure. As long as the labour markets of highly developed

EU countries express the need for workers from other countries, and as long as they offer

far better conditions than their domestic counterparts, it is difficult to expect changes in

the current negative trends in this phenomenon. In addition, some of the interviewees

indicated that tourism is witnessing a shortage of highly qualified personnel and that this

aspect can have serious consequences because it can reduce the innovativeness of tourism

and competitiveness. Therefore, interviewees concluded that it is necessary to involve

qualified and educated people in the key positions in tourism.

As far as the potential of regional cooperation aiming to attract tourists from distant

and/or new markets is concerned, all interviewees agreed that cooperation could bring

great benefits, but some outlined that in this regard state support is also needed. Regional

cooperation can help in terms of higher general regional competitiveness (because regional

cooperation is seen as an important factor in achieving a certain degree of visibility

throughout the entire tourism market), and especially with regard to innovations, tourism

product diversification, and seasonality. As sustainable development implies, through

regional cooperation, common issues and interests should be defined, all in order to avoid

conflicts that obstruct the sustainable development of tourism in the Adriatic-Ionian

region.

Finally, the summarised analysis results of the interviews with higher education and

research representatives are drawn from the 15 interviewees (university professors and

researchers with a professional interest in tourism). In terms of inhibitions of the

innovations process in tourism, they suggested the following reasons:

 lack of financial and human resources;

 lack of business cooperation with other institutions;

 employees in tourism are neither trained nor encouraged to be innovative;

 tourism employs (formally and informally) a large share of the labour force without

formal education in the field of tourism;

 tourism incorporates a large number of micro and small companies without significant

resources and funds for innovation;

 given the specific (fragmented and complex) nature of tourism, it is very difficult to

statistically monitor the innovations in tourism apart from other innovations (e.g.

innovations in the transport or IT sectors, whose products are also significant for

tourism).

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

 high investment and maintenance costs in tourism, coupled with the high seasonality of

tourism, make the decision to invest significant resources in innovation development

rather difficult.

One of the interviewees stated that, in general, there is a lack of an established culture of

innovation in tourism. One way to tackle this issue is seen in continuous education related

to the importance of innovations (starting from primary schools and all the way to life-long

learning programmes). It was also emphasised that the number of innovations could not be

increased overnight but through a systemic and long-term approach. According to the

interviewees, the main mechanisms and measures that could increase the number of

innovations in tourism include the employment of a labour force with a formal education in

tourism, raising the salaries and improving working conditions in tourism, as well as

encouraging innovations. This should consequently contribute to higher employee loyalty

and increase the companies’ innovative potential. In the context of a culture/innovative

environment, it is necessary to ensure the appropriate reward system for innovators (by

introducing the systematic support/stimulation measures for innovations, such as tax

exemptions, better access to favourable capital/financial sources, by public support for

innovative entrepreneurs and their products, etc.).

The main reasons for brain drain, according to the higher education and research

representatives, can be found in the fact that the tourism professions that are still being

perceived as insufficiently attractive (because of the seasonality, low wages, poor working

conditions, poor possibilities for promotion and advancement). In contrast, some of the

interviewees see the existing brain-drain as a positive situation in the long run, since some

of these people will return with new knowledge and initiatives.

This group of interviewees also agreed that regional cooperation is quite necessary for

attracting tourists from both distant and new markets. Tourists from distant markets tend

to visit a larger number of countries during one trip, not just a single country/destination

and, therefore, integral Adriatic-Ionian products/offerings should be a natural response to

such demand.

The interviewees welcomed the possibility of introducing new study subjects in the field of

innovation into their existing curriculum. This should result in a higher awareness of the

importance of innovation in tourism. In this respect, the introduction of courses that would

focus on different kinds of innovations and the benefits that innovations could bring, as

well as on obstacles that may occur, when they decide to introduce innovation in tourism

would be of great value. Consequently, the chances for the implementation of innovation in

tourism will be significantly increased. Apart from standard teaching methods, case studies

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

are identified as very practical and useful for the stimulation of innovative capacity and

atmosphere among students as well as for the transfer of innovations to practice.

The vast majority of the respondents confirmed the extreme value of the feedback from the

field (state-of-art), reached through the collaboration with practitioners in tourism, local

stakeholders, and all businesses that are directly or indirectly connected to tourism.

3.3 Workshops

Additional valuable inputs on tourism and innovations from Adriatic-Ionian stakeholders

were gained through two rounds of interactive workshops. Overall, twelve workshops

were organised in Albania, Bosnia and Herzegovina, Croatia, Italy, Montenegro. and

Slovenia between April and July 2018.

The first round of workshops was mainly focused on obtaining feedback from the

stakeholders on the situation in their countries related to sustainable tourism, innovations,

their (positive and negative) cooperation experiences on the local, regional, national, and

international levels. Their opinions related to the new markets and tourism trends were

also gathered.

During the second round of workshops, strategy proposals and the results of the previous

analyses were presented to the Adriatic-Ionian stakeholders, aimed at obtaining their

approval and constructive suggestions for the improvements of the future document. All

their inputs were later incorporated into the objectives of this strategy and into the model

for fostering innovations in tourism in the Adriatic-Ionian region.

Stakeholders who were actively taking part in these workshops were representatives of

local, regional and national public authorities, sectoral agencies, interest groups including

NGOs, higher education and research institutions, enterprises, SMEs and business support

organisations. Given the wide range of stakeholders (coming from different Adriatic-Ionian

countries), their recommendations, opinions and suggestions were of great value for the

further development of this document.

The first round of the workshops gathered a total of 235 participants. The analysis of

their opinion indicates that, as far as countries and regional potentials are concerned, the

Adriatic-Ionian region covers all types of experiences that contemporary tourists seek:

cultural, historical and artistic heritage, unique traditions, rich gastronomy, and diverse

and preserved nature. However, the stakeholders agree that apart from the evident

enormous tourism assets, some parts of the region still have tourist potential that remains

unused. In that context, it was concluded that, in order to stay sustainable, it is necessary to

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Strategy for fostering innovation in sustainable tourism for the

2018

Adriatic-Ionian region

follow the tourism trends and accordingly develop various types of special interest tourism

that will be compatible with different parts of the region and their potentials.

Some of the workshops’ participants pointed out that the lack of financial resources and the

interference of political and personal, as well as, public and private interests represent

issues that need to be overcome. These also influence the cooperation and integration at all

levels. In this sense, as stakeholders agree, cooperation enhancement is necessary and

essential since it can make tourism in the Adriatic-Ionian region more competitive and

consequently, can bring benefits and new development opportunities to all stakeholders.

Participants agreed that stakeholders at all levels are responsible for taking the initiative

for cooperation. The key benefits of such cooperation could be joint promotion, financial

and organisational benefits, more efficient approaches to distant and new markets, further

product and market diversification, exchange of knowledge and good innovative practices,

etc. To overcome the mentioned issues and to enhance the implementation of the

innovative and creative ideas and solutions in tourism, it was concluded that cooperation

must be improved in all countries and at all levels, including at the international one.

The potential of the Adriatic-Ionian region as a tourist destination is very high, and in that

context, the participants of the workshops agreed that it would be essential to focus the

efforts towards new and more distant markets, taking into account current tourism trends.

In addition, some of the participants emphasised the issues related to the collection of

quality data, vague methodology, and overall poor accessibility of data related to tourism. It

is agreed that certain indicators are easily monitored while others are difficult to measure

and that monitoring sustainable tourism development cannot be one-dimensional (e.g.

number of arrivals and overnight stays). It is also necessary to pay attention to the

destination’s life cycle stage, the type of tourism developed, and to the local community

needs. Therefore, additional efforts should be made in a way that, along with tourist

satisfaction, the attitudes of local residents are also monitored on a regular basis. The

results of those surveys should serve as a basis for decisions on future tourism

development. All the workshop participants agreed that tourism needs to be developed

following sustainable principles, but it was found that the majority of the tourism

stakeholders, apart from economic viability, are mostly focused on the environmental and

much less on the socio-cultural aspects of tourism. In this context, some of the participants

highlighted the issue related to overtourism, as well as to the trend that leads to the

depopulation of historic centres. Not only are they abandoned by people who choose to live

in the suburbs, but also by the small local businesses due to the high cost of living and

doing business in such areas. It was underlined that, in order to ensure sustainable tourism

development, it is of great importance to respect the local population and take their

opinions, wishes, and interests into account when defining the destination tourism goals.

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Strategy for fostering innovation in sustainable tourism for the

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Adriatic-Ionian region

Furthermore, workshop participants agreed that the great importance of innovation in

achieving long-term tourism development is undeniable. At the same time, they agreed that

there is a lack of innovation solutions in tourism. Stakeholders pointed out that it is

necessary to combine traditions, historical, and cultural heritage with new technologies

and innovations. Key benefits (goals) of implementing innovations in tourism are seen in

new and/or improved products, better image, new markets, fostered local cultural identity,

better environmental protection, and many others. The countries within the Adriatic-

Ionian region must cooperate, develop, and share the best practices to reach these goals.

Another interesting observation relates to the term ‘inertness to innovations’ manifested in

a lack of interest and action towards innovative processes inherent particularly to the

public sector but to others as well. In addition to the previously mentioned, the

combination of high business risk, disloyal competition, the fact that services can be easily

copied and very difficult to be patent, legal obstacles, regulations and tax policy, make the

tourism business quite risky and hard to plan, organise, and control.

Finally, participants agreed that due to the lack of quality monitoring in tourism, the same

problems with data collection naturally occur in a specific segment, such as innovations. In

that context, it was emphasised that creating an efficient and effective monitoring system

(including methodology, indicators, people, equipment and others) would be quite an

innovation itself.

In the second round, additional six workshops were organised, gathering 206

participants. As mentioned earlier, this time a strategy proposal was presented along with

the results of the previous analysis relating to the characteristics of tourism in the Adriatic-

Ionian region, tourism trends, SWOT and PEST analysis of tourism and innovations in the

region. Particular attention was given to the results of the survey conducted with the

employers in tourism, where the differences and deviations, both positive and negative,

among the Adriatic-Ionian countries were emphasised. The purpose of this approach was

to obtain stakeholders’ opinions on the strategy proposal since, in the end, they are the

ones who will (or not) implement the strategy. In general, the stakeholders expressed

positive attitudes toward the strategy proposal. They particularly welcome the kind of

approach in which all levels of stakeholders can contribute to the creation of a strategy that

has a major potential for implementation in all Adriatic-Ionian countries, since a bottom-up

approach is needed to enhance its later implementation. Stakeholders are, however,

concerned whether the strategy would find its way to the decision-making actors and they

are concerned about how it will be implemented in practice. In this sense, it was essential

to involve as many stakeholders as possible in order to obtain their points of view on how

to overcome these concerns. In this case, the cooperation enhancement at all levels

emerged as a good starting point.

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All suggestions given at the workshops were fully taken into account when defining the

principles and objectives of this strategy as well as when developing the model for

fostering innovation in the region.

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CHAPTER 4


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4 Tourism and innovations in the Adriatic–Ionian region

Following the results obtained via the situation analysis regarding tourism in the Adriatic-

Ionian region and the results of the empirical research, it can be concluded that the entire

area has many potentials to be explored and used in the future development of tourism.

Due to its rich natural and cultural heritage, the Adriatic-Ionian region is considered a very

attractive tourism destination. It has been confirmed that tourism development in this

region must be carefully planned and managed in order to be sustainable in the long run.

The region consists of different countries and sub-regions, each unique, which must be

taken into account when planning tourism development. Every country in the region

recognises tourism as an essential activity for their economy and society as a whole. In that

context, the countries have developed (or have in the process of development) their

strategic documents related to the future tourism development. All those strategic

documents include a SWOT analysis of each country based on their specific characteristics.

Given the fact that the Strategy for fostering innovations in sustainable tourism for the

Adriatic-Ionian region covers the whole region, it was found necessary to generate

strengths, weakness, threats, and opportunities that are common to all countries of the

Adriatic-Ionian region. Therefore, the SWOT and PEST analyses summarise the results of

the situation analysis of tourism in the whole region as well as the empirical research

results, including the online survey, the interviews conducted, and the workshop reports,

which all include the opinions of the tourism stakeholders in the Adriatic-Ionian region.

Based on the SWOT (Table 19) and PEST analysis (Table 20) of the tourism and

innovations in the Adriatic-Ionian region, the main principles of the future region tourism

development are recognised, and, upon them, the objectives of this strategy are defined

(Figure 31).

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85

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Strategy for fostering innovation in sustainable tourism for the

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Table 19: SWOT analysis of the Adriatic–Ionian tourism and innovations

Strengths

Weaknesses

 Strategic geographical location

 High seasonality

 Proximity of tourist markets

 Uneven distribution of tourism

 Preserved nature

demand

 Rich and diverse cultural and

 Slow adoption of new technologies

historical heritage

 Lack of quality of workforce

 Gastronomy

 Management

 Diverse climate

 Education

 Tradition in tourism

 High unemployment rate

 Hospitability of the local population

 Ageing population

 Multiculturalism

 Cooperation between stakeholders

 Existence

of

strategic tourism

 Low level of knowledge about

documents

innovations

 Growing tourism revenue

 Lack of innovations and incentives for

 The existence of good practices –

innovations

innovation

implementation

in

 Lack of creativity stimulation

tourism

 Legal and legislative frameworks

 Participation in the EU projects that

 Innovation measurement (lack of

focus on innovations

indicators)

Opportunities

Threats

 Growing tourism demand

 Growing competition

 New technologies

 Overtourism

 Experience economy, special interest

 Environmental degradation

tourism

 Climate change

 New markets

 Insufficient financial resources

 Transport development

 Socio-political stability

 Strengthening regional, national and

 Migration Management

local cooperation

 Terrorism

 Cross Selling – Adriatic Ionian

 Natural disasters

Tourism Integration

 EU funds

Source: (Authors’ findings)

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The Adriatic-Ionian region’s strategic geographical location induce enormous potential for

tourism development. Tourism in this area has a long tradition, and countries are

recognising the importance of tourism for their economic development. This is confirmed

by the fact that all countries have developed strategic tourism documents, which took into

consideration sustainable principles. Therefore, the main strengths of this area are seen in

the adequate planning of sustainable tourism development as well as in the strategic

location of the region and the proximity of major tourism markets.

Preserved nature in this region is also one of the strengths that represent a high-value

resource in tourism development. At the same time, it implies high responsibility in its

preservation for the future generations. Additionally, the Adriatic-Ionian region has a

diverse and rich cultural and historical heritage that, along with diverse and specific

gastronomy, makes this area authentic and unique. Those strengths have to be recognised

and preserved in terms of their usage in tourism. On the one hand, natural, cultural and

historical sites are marketed as a highly compelling site to visit, but on the other,

conservationists are afraid of the adverse effects brought by excessive tourism activities to

those sites (Hassan, Jailani, & Rahim, 2014). Therefore, it is necessary to ensure that the

revenue generated from those visits is being reinvested in the same resources. Preserved

nature and cultural and historical heritage have reported increases in tourism demand in

recent decades. Hence, the diversity of those resources in the future need to be valorised in

tourism development of the Adriatic-Ionian region in a responsible and innovative way.

Additionally, the Adriatic-Ionian region is perceived as a home of very hospitable people,

where the multicultural environment implies mutual understanding between people.

Multiculturalism enables seeing the world through different aspects that enhance openness

and creativity. The literature also identifies increased research and innovation as a key

benefit of cultural diversity (Qian, Acs, & Stough, 2013). In general terms, a diversified

workforce is likely to have different skills and mindsets, which in turn are positively

correlated with business, technological, and cultural innovation (SGS Economics and

Planning, 2016). However, unfortunately, a lack of innovations and incentives for

innovative solutions is identified as one of the weaknesses of the Adriatic-Ionian tourism.

In this context, it is of great importance to find a solution that will result in fostering the

implementation of innovations in tourism. Given that countries in the Adriatic-Ionian

region record increased tourism revenue, there is a potential that part of the revenue be

directed in fostering innovation. Regarding innovation in tourism, in addition to taking part

in different EU projects that focus on innovations, the region does have many good

examples of implementing and/or fostering innovations in tourism that should be

promoted so that other tourism stakeholders can learn about the ideas that could be

implemented in their own practices. However, there are no systematic innovation

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incentives or monitoring, especially with regard to tourism. In addition, the results of the

conducted empirical research indicate that there is a low level of knowledge about

innovations and consequently a lack of innovations and their incentives.

The majority of tourism destinations in this region, as seen from the situation analysis, are

facing an issue of high seasonality, since the majority of their tourism flows are

concentrated in the summer season. Therefore, an active approach is required that would

result in the enrichment and innovation of the tourism offering, particularly in the off-

season periods. This could result in higher value for money and could lead to seasonality

smoothing. The other weakness of the whole region lies in the geographically uneven

tourism development, since some parts of the region are facing massive inflows of tourists

while others remain with a low number of arrivals and overnight stays. One of the issues if

tourism of this region also lies in the slow adoption of new technologies and in the low

quality of the workforce. Due to the relatively unfavourable working conditions and low

wages in tourism, there is a high fluctuation of the labour force. Moreover, tourism employs

(formally and informally) a large share of the labour force without formal education in the

field of tourism, and this also represents an issue when the aim is to provide high quality

tourism products. By solving the educational issues of the employees in tourism, raising

salaries, improving working conditions in tourism as well as by stimulating creativity,

employees’ loyalty will increase, and they will contribute to innovative capacity and

performance. Additionally, compared with the EU, the unemployment rate in the Adriatic-

Ionian region is very high. However, the falling share of children and young people and the

rising share of elderly people in the total population could result in labour market

shortages. This also could be seen as an opportunity given the fact that tourism is a labour-

intensive activity and can provide employment to people of different age and education

levels.

Another issue, which was also raised from the previous analyses of tourism in the Adriatic-

Ionian region, is poor cooperation among stakeholders in tourism at all levels (national,

regional, and local). This issue needs prompt attention since the cooperation and

involvement of all interested stakeholders in the decision process in tourism is essential if

tourism is to be developed in a sustainable way.

The opportunities for further tourism development in this area are enormous. As UNWTO

predicts, international arrivals will continue to grow worldwide in the years to come. This

trend is positive, but also challenging, as destinations need to stay true to their identity and

maintain their uniqueness (Bosnić, Tubić, & Stanišić, 2014). Hence, tourism destinations in

the Adriatic-Ionian region need to be prepared and take advantage of this positive trend.

To do so, it is evident that destination management needs to follow current tourism trends

and provide more innovative, diverse, and sustainable tourism products. This implies the

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enhancement of knowledge transfers (between stakeholders at all levels) on sustainable

tourism principles as well as on the importance of innovations in tourism development. In

addition, given that the measurement of innovation in tourism, as in the knowledge-

intensive services, is very complex, there is a lack of adequate innovation indicators. As

soon as this is recognised, more incentives for innovations will be introduced in all

countries in the region. In this context, tourism has to be recognised as a connection or a

link of many industries and sectors that are directly and indirectly involved in tourism

(hotel industry, intermediaries, catering, trade, transport, agriculture, construction,

manufacturing, IT, and many others). Hence, the innovation in all of these industries and

sectors can be directed and applied in tourism.

In addition, when planning the development of tourism products, trends in the tourism

market need to be followed. For instance, new technologies need to be applied much faster

than they are applied now, in order to make guests’ stays simpler, and to provide them with

the services that they are expecting (i.e. Wi-Fi services with higher speeds, automated

check-in and check-out, mobile applications that provide guests additional information

inside and outside the hotel, etc.). Additional opportunity for this region lies in providing

authentic and unique experiences, not just products. This could be easily done since the

whole region is diverse and, therefore, can offer different kinds of experiences (i.e. cultural,

rural, sport, adventure, eco, gastronomic, and other experiences). By doing so and, given

that more and more tourists are seeking for different (and very often nature-based)

experiences, certain destinations in this region can focus on developing special interest

tourism in order to avoid dependence on the sun and sea products.

Many destinations in the region are dealing with inefficient tourism management; thus,

there is need to upgrade the existing tourism management systems for destinations to be

more flexible in adjusting their products according to the rapidly changing tourism trends.

To achieve high-quality and effective management of a destination, it is necessary to form a

strongly structured and institutionalised destination management that has adequate

human and financial resources and that functions independently and responsibly with the

support of public institutions, the private sector, and the local population (Cetinski, 2009).

Having said that, it is necessary to enhance and foster the cooperation between

stakeholders in tourism. Given globalisation and the high competitiveness of the tourism

market, there is a need for greater flexibility than ever before from tourism companies, as

well as rapid access to different resources (Freel & Harrisom, 2006). In tourism, given that

micro and small companies dominate, this may be achieved above all by cooperation with a

range of stakeholders at the local and/or regional levels, so the most popular motivation

for cooperation is seen in the lack of information, knowledge, human, financial, or

organisational resources (Borodako, 2011). Some of those resources could also be gained

through EU funds, which also requires cooperation between different partners.

Cooperation between countries in the Adriatic-Ionian region has to be strengthened and

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upgraded through cross-selling, joint promotion, and the exchange of good practices

related to innovations in tourism. All these opportunities represent the basis on which

innovative solutions should be developed.

Evident growing competition on the tourism market represents a threat for the future

development of tourism in the Adriatic-Ionian region. For that reason, it is of great

importance to plan future tourism development on a sustainable basis, which includes

active stakeholders’ cooperation, innovative, and authentic tourism products, as well as the

preservation of socio-cultural and environmental resources. By providing innovative

tourism experiences in a preserved environment, greater competitive advantage can be

created. Recently, the new issue of overtourism has emerged in certain destinations, and

the Adriatic-Ionian region is no exception. This should be taken very seriously, since this

problem is not simple and requires responsible long-term planning with all stakeholders

involved.

Among the threats, in addition to the previously mentioned ones, possible insufficient

financial resources, the lack of venture capital and socio-political stability are also

identified. In addition, a high priority on maintaining stable governance and establishing

control over migration has emerged. Moreover, terrorism remains a real threat to tourism

destinations worldwide; therefore, personal safety and security are imperative for further

tourism development.

4.2 PEST analysis of the Adriatic-Ionian tourism and innovations

The PEST analysis focuses on the environment in which the tourism of Adriatic-Ionian

tourism is developing (Table 20). Apart from the political, economic, sociological, and

technological environment analysis, particular emphasis has been placed on the

innovations and the quality of tourism offering.

Political environment: The development of tourism products will be influenced by the

range of circumstances in the political environment: current and future market regulations

in the Adriatic-Ionian countries; their government policies; eventual conflicts that can

influence the political stability in the region. All of these can influence the level of financing,

subsidies, and initiatives related to tourism and innovations; legal environment, such as

new commercial (business) laws as well as tighter control in terms of compliance with legal

regulations (consumer protection, labour legislation, etc.); quality control; intellectual

property protection, environment protection and the application of environmentally

responsible ‘green’ concepts. Additionally, in terms of fiscal policy, in order to provide

incentives for tourism and innovation development, it would be a positive impact if the

conditions for an additional reduction of the fiscal pressures on tourism and innovations

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(preferential tax status, value-added tax, tax on profit, income tax, and other) are

established throughout the region. The ongoing process of EU integration should positively

influence the business climate as well as accelerate the collaboration between countries in

the region.

Table 20: PEST analysis

Political environment

Economic

Socio-cultural

Technological

environment

environment

environment

- Future market

- Growth of the

- Increased share of

- High-speed

regulations

European economy

elderly people

development of

- Government policies

- Steady tourism

- High-income

information and

- Political stability

growth

tourist with free

communication

- Subsidies and

- Potential

time to travel

- ICT innovations

incentives for

incensement of

- Increase in

implemented in

innovations

foreign tourist

individual travel

tourism

- Intellectual property

expenditures

- Higher general

- Transport

protection

- Investments in

welfare

infrastructure

- New laws (tourism,

innovative solutions

- ‘New tourists’

- Improved and

innovations)

- Research and

seeking experiences

innovative

- Labour legislation

development

and personal

computer

- Quality control

- Grey economy

development

reservation and

- ‘Green’ concepts

- Common European

- Unemployment

management

- Process of EU

currency (€)

- Education

systems

integration

- EU funds

- Overtourism

Source: (Authors’ findings)

Economic environment: Economic developments can be seen in the context of the growth

of the European economy (at its fastest rate in 10 years in 2017 and, for the first time since

2007, all Member States saw their economies expand (European Commission, 2018)). This

will have implications for the Adriatic-Ionian macroeconomic environment. Previous

analysis showed that tourism in the whole region rises in terms of tourists’ arrivals and

overnights stays as well as in terms of their expenditures. Changes that stimulate the

development of tourism are certainly the economic power of the outbound countries (that

affect the two basic driving factors of tourism demand: the amount of income and the

amount of free/leisure time). In developed economies, despite occasional fluctuations, the

trend of growth of these two factors is noticeable. Forecasts for economic movement in the

next decade point to the increasing economic potential of the so-called BRIC (Brazil, Russia,

India and China) and MIST (Mexico, Indonesia, South Korea, Turkey) countries, including

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their affinities for tourist travel. Given the potential of increased tourist expenditure,

positive economic impacts of tourism are expected: investments in innovative solutions as

well as higher investment in research and development. One of the issues that many

countries in the region encounter is the grey economy to which a complex bureaucracy,

slow judicial system and an over-leveraged public sector add to the problem. Because of

these difficulties, there is a lack of Foreign Direct Investment (FDI) in tourism; however,

great potential is seen in the EU funds that support sustainable tourism development and

innovations.

Social environment: Social aspects, in terms of tourism, record the most significant

changes in the composition of the tourism demand (the increase in the share of elderly

people travelling) and in the increase of individual travel as well as of experiences-based

and active vacations. Changes in the ageing population structure, with an increased share

of people over the age of 60 or 65 in the total population of developed countries, create a

significant market segment that consists of high-income tourists with plenty of free time

available for travel. In addition, due to economic growth, higher levels of education and

general welfare, the social and cultural value system is changing resulting in ‘new’ tourist

behaviour and expectations. All of these factors (economic development, growing level of

education and a general increase in prosperity) contribute to the transition towards post-

materialistic social values of the experience economy. New trends show that tourists will

increasingly seek those tourism products that, in addition to other qualities, include

experience and personal development. Additionally, the tourism development should be in

synergy with the cultural environment since the cultural heritage of the region (or a

destination) should be considered an essential element of the tourism offering. To develop

high-quality products and achieve a positive climate in terms of enhancing innovations and

their application in tourism, education should encourage changes (i.e. inclusion of new

study programmes with the focus on innovation and tourism, lifelong learning

programmes, etc.). Finally, local communities must be actively involved in the planning and

managing tourism development in their destinations.

Technology: Information and communication technologies are developing at high speed

and have a significant impact on tourism and businesses. The Internet, as one of the most

significant technological phenomena, provides tourism stakeholders with a whole new

competitive potential, of which the most significant is the ability to provide current

information, all over the world, in real time. Therefore, it is a powerful communication

medium that effectively connects tourism supply and demand. In the domain of traffic

changes and their relations with tourism, there is an increased demand for better transport

infrastructure. This requires the construction of state-of-the-art road transport, and the

more efficient organisation of rail, air and ship traffic, and the development of new

generations of aircraft, super-trains, mega cruisers as well as the use of alternative energy

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Str

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Strategy for fostering innovation in sustainable tourism for the

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Tourism across the Adriatic-Ionian region – it was found necessary to include all parts of

the region in tourism activities according to their potentials, resources and traditions (i.e.

stimulating rural, ecotourism or heritage tourism development). In that way, tourism can

assist in the development of remote areas, improve their infrastructure, stimulate local

production and contribute to household incomes and standard of living,

Tourism throughout the year – given the seasonality issues, some actions need to be

taken to assist the tourism development in the off-season as well. This could be done by

stimulating the development of internationally competitive special interest tourism that

does not depend on the sun and sea (i.e. rural tourism, culture, art and heritage tourism,

health, adventure and sport tourism, ecotourism, gastronomy tourism, MICE, city breaks,

etc.).

Authenticity, creativity, and quality – for Adriatic-Ionian tourism to be competitive, it has

to develop its tourism experiences based on its unique natural and socio-cultural

authenticity. Moreover, being sustainable and competitive in the long run requires

creativity and innovations in the development of products, destination positioning, and

marketing. Additionally, the focus has to be on the high-quality tourism products, which

requires continuous improvement of the quality level.

Innovations – future tourism development of the Adriatic-Ionian region should be based

on innovative solutions that need to be supported for the region’s tourism to be more

competitive and sustainable.

Following reflection on all the previous information, it is possible to reflect on the future,

desirable scenario of the Adriatic-Ionian region's tourism development. Given the fact that

all countries in the region have developed their strategic tourism plans, the main focus of

this strategy is innovations and sustainable tourism development. Innovations, in general,

create job opportunities, increase competitiveness, improve the quality of life and

contribute to more sustainable economic growth. Hence, within the paradigm of

sustainable tourism development, introducing innovations that will better take into

account the preservation of the natural, cultural, and social environments should be

fostered. Having in mind the previously mentioned, the strategic goals in the function of

fostering innovations in sustainable tourism in the Adriatic-Ionian region are summarised

in the following figure 33.

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Figure 33: Strategic goals in the function of fostering innovations in sustainable tourism in the

Adriatic-Ionian region

Source: (Authors’ findings)

Research and development (R&D) as a driver of change needs to be recognised and

encouraged in the private and public sectors, not concentrated only within R&D-intensive

sectors (high-tech, science-based, knowledge-intensive sectors) but also in sectors that are

less R&D intensive. Incentives for innovations are essential in order to foster innovation

solutions in all industries and sectors and, therefore, in tourism as well. An innovative

tourist company is the one that stands up to competition and successfully adapts to

changing market conditions for a longer period. Therefore, legal and legislative frameworks

require simplification, i.e. changes that would create a stimulating environment for

entrepreneurs and innovators. A large number of statutes and regulations relevant to the

tourism indicate an over-burdening legal formality and inefficient legal framework. The

legislative framework should provide innovation incentives for all sectors, providing a

system that will enhance the research and development as well as the building of human

potential. Successful entrepreneurship is characterised as constantly innovating to

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maintain and increase competitiveness, in order to open additional niche markets and

achieve greater profits. All of this requires systems of formal and life-long education

adjustment to the needs of the tourism and the system of tourist organisations. Therefore,

education in the function of human resources development in tourism needs to be

structured. Furthermore, to foster innovations in sustainable tourism in the Adriatic-Ionian

area, it is necessary to establish networking structures and to increase knowledge transfer

between business, users, academia, and institutional stakeholders in the region. In addition

to the education and knowledge transfer related to sustainable tourism and innovations,

special attention should also be placed on developing marketing skills since tourism

entrepreneurs and destination managers very frequently lack specific skills. To improve

the knowledge about tourists and, as such, to be able to adapt the product and the rest of

the marketing mix variables to their need is a must for tourism enterprises as well as

destinations as a whole (Figure 34).

Figure 34: Model development process

Source: (Authors’ findings)

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To provide valuable contributions in exchanges of cooperation opportunities and best

practices, this networking structure has to become a knowledge base and information hub

for different actors, including SMEs, universities and research centres, relevant tourism

authorities, regional authorities, and others.

According to the results derived from the situation analysis’ and conducted surveys, it can

be concluded that, at this moment, in the Adriatic-Ionian region there is a lack of innovative

solutions for tourism. Following the current trends in tourism, it is more than necessary for

all countries in this region to change their perspectives regarding incentives for innovation

in tourism. Therefore, the main focus of this strategy is seen in how innovations will

contribute to the tourism development of the Adriatic-Ionian region. The strategy model

follows the tourism strategies of the countries in the region as well as the UNTWO’s

sustainable tourism principles.

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CHAPTER 5


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5 Model development – incentives for innovation in tourism

Tourism is a complex and diverse system consisting of different sectors with myriad

activities. The high differentiation of stakeholders makes their mutual recognition and

connectivity more difficult, which in turn lowers their possible synergy effects.

Additionally, as a system whose ‘parts’ mainly belong to the service sector, tourism is

characterised by low levels of innovativeness (see Chapter 3). These two facts indicate the

need to use networks and networking as a way of increasing the innovation capacities and

capabilities, the number of innovative solutions, and the effects of innovation on tourism

and its sustainability.

Many researchers argue that enterprises can advance their innovation by interacting with

different stakeholders (primarily including suppliers, customers, competitors, and research

organisations). Networks are used for providing necessary resources, information, advice,

support, encouragement and access to new opportunities, and they represent a good basis

for creating a culture of innovation and development of open innovation models.

5.1 Common regional issues and problems related to tourism and

innovations

Based on the results of the thorough analysis in the previous chapters, an array of issues

(problems) emerge as inherent for the whole AI region. These issues should be considered

from two aspects: the sustainability of tourism and the innovations for sustainable tourism.

The identified issues are grouped around seven themes.

1st Group: state level, public administration

 there is no analysis of the innovation capacity of the public and private sectors

 the legal framework for innovations practically does not exist, especially for tourism

 innovation incentives are insufficient, they lack systematic approaches and goals, and

users of public resources are not clearly identified

 the system of public administration (local, regional, national level) is slow and overly

bureaucratic

 the effects of deployed incentives are not measurable, i.e. are not subject to

measurement; there is a potential interest among public bodies for measuring the

effectiveness of their resources that have been allocated for the purpose of stimulating

innovations

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 insufficient tax reliefs and incentives for innovations

2nd Group: wider understanding

 lack of understanding of the real meaning of the term and the concept of innovation

 connecting the concept of innovation as a rule only with technological innovation and

patents

3rd Group: issues inherent to tourism and its complexity/diversity

 tourism is a multifaceted system incorporating a wide variety of stakeholders; this

makes communication and networking more difficult

 insufficient cooperation between SMEs and large enterprises

 insufficient cooperation between HEIs, support organisations, public administration,

enterprises, NPOs

 lack of promotion of strategic alliances by public administration

4th Group: HR and education

 unfavourable (poor) educational structure in tourism, lack of highly educated

employees

 lack of education for innovation and Innovation Management

 lack of LLL programmes (e.g. for private accommodation renters/owners)

 migration of the domestic population towards developed countries offering better

working conditions and higher salaries

 insufficient use of digital technologies

5th Group: issues within enterprises

 lack of employee innovation reward systems within enterprises

 general absence of systematic approach to innovation management; who is ‘in charge’

of innovations, who (or what organisational unit) should be dealing with innovations

6th Group: AI tourism, regional issues

 the AI region is not sufficiently recognised as an integrated destination by either the

Member States or by tourists

 seasonality of tourism, overtourism in some parts of the region/destination

 existing resources (natural, cultural, social, etc.) are not sufficiently valued

 economic migrations of the domestic population endanger autochthonous and

authentic tourism products

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 uneven (misbalanced) development, e.g. between rural and coastal areas of the region

 in reflections and management of sustainable development and tourism, there is too

much emphasis on the economic and ecological component of sustainability, while the

social component is neglected

7th Group: innovations and/for sustainability

 innovations should be in the function of the sustainability of development and tourism

 lack of innovation indicators reflecting the characteristics of tourism systems – the

necessity of such systems derives from the very nature of tourism as a system; there is

no metric that would enable monitoring, management and fostering of innovations

 there is no comprehensive and accessible knowledge base of existing good practices.

Based on the above defined and addressed issues, a model for fostering innovation is

proposed that addresses the identified problems and encourages the strong development

and deployment of innovation capacities within sustainable tourism in the Adriatic Ionian

region.

5.2 FOST INNO tourism innovation centre – the cornerstone of a

regional tourism innovation system

According to the situation analysis and analysis of the results obtained through empirical

research (online questionnaires, interviews, workshops), individual organisations are left

alone to deal with and develop innovations. There is no or little support provided by the

environment (local, regional, or national levels). The results also indicate that there are no

systematic innovation incentives and monitoring, especially when tourism is concerned.

The system in which the stakeholders in the Adriatic-Ionian region currently operate does

not function in the sense of promoting, encouraging, or rewarding innovation. In addition,

the results also indicate that co-operation among stakeholders is unsatisfactory at all

levels, including the regional level. This situation calls for a mediator to improve and

enhance communication and co-operation between stakeholders. This mediator is

recognised as one possible solution for the current non-innovative climate in the Adriatic-

Ionian region’s tourism.

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A framework to conceptualise the development of the FOST INNO model is proposed

(Figure 35).

Figure 35: FOST INNO conceptual model

Source: (Authors’ findings)

The proposed hypothetical conceptual framework includes all stakeholders that need to

work together in order to be part of the value network integration process in practice. The

main assumption of this model is that being a part of it will improve co-operation and

communication between networked organisations and enterprises. Organisations and

enterprises usually have their own information technology solutions and data interchange

but, with involving in the presented network, it should be possible to additionally improve

business in order to become more competitive. Above all, the success in changing defeatist

beliefs and general judgment in the direction of attitude that it is worthwhile to invest in a

proper network can surely affect the communication and the transfer of values between

future business partners.

The strategic purpose of model development is the initial building of a stronger and more

connected Adriatic-Ionian region, which will help entrepreneurs, creative individuals, and

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organisations to transform their ideas into reality. For the future inclusion of various

actors, the proposed supranational network should provide:

•

the benefits for the different types of stakeholders from their integration into coherent

value networks

•

organisation, creation, capturing or distribution of value, and ensuring its availability

for future users within countries

•

the transfer of tangible and intellectual property, expertise, learning and skills

between countries

•

assistance for al stakeholders to become fully integrated international business

partners.

For the effective adaptation to the changing environment, actors and their roles in the

future activities need more clarification. Furthermore, a more refined definition of co-

operation, support, and the preferences of organisations and enterprises who share the

same interest are presented. In the following subchapters, both the private and public

stakeholders are analysed. The proposed hypothetical model has one core organisation

(Adriatic-Ionian Tourism Innovation Centre), which has a central role in the network as a

mediator. A central role means that the core organisation tackles the creation and

development of the strategic network with a special effort on relationship maintenance.

The primary role of this innovation centre is to improve and enhance communication and

cooperation and, in this way, facilitate the innovations within the context of tourism

industries. The innovation centre is a new ‘player’ whose aim is to transfer knowledge

about the role of innovations in sustainable tourism development.

Adriatic-Ionian Tourism Innovation Centre

At the heart of the FOST INNO conceptual model is the Adriatic-Ionian Tourism Innovation

Centre (AITIC) established as a network of six contact points located in Albania, Bosnia and

Herzegovina, Croatia, Italy, Montenegro, and Slovenia. The aim of the future

multidisciplinary centre is to facilitate knowledge of the role of innovations and assist in

the co-designing of sustainable tourism development including researchers and

practitioners from the humanities, social sciences, natural sciences, and engineering. The

sharing of knowledge and learning from the experience of others with focused, objective-

seeking communication between individuals, groups, or organisations is a prerequisite for

the sustainable operating of the centre.

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The role of the centre is to promote close and long-term partnering. Furthermore, its role is

also seen in assistance in contacting partner stakeholders and arranging introductory

meetings. Moreover, in the model of networked organisations and enterprises, the centre’s

obligation is to aid in clarifying or reframing communications for better and quicker

adoption. In developed dissemination plans, multidisciplinary knowledge should be

transferred through publications about research results along with various events and

networking. Another role of the centre is the accurate identification of the latest innovation

trends together with collecting examples of good business practices of innovative

enterprises. It is crucial to perceive the barriers to innovation activity in the AI region and

promptly react towards policymakers.

In broad terms, future activities of the AITIC include:

 transfer and exchange of know-how about sustainable tourism development and

innovations

 fostering innovations in tourism

 promotion of innovations as a driver of sustainable tourism development

 inclusion of stakeholders in the activities of the centre

 educational activities

 creation of ICT solutions as a knowledge base in the form of web applications

Enterprises, including SMEs

Large enterprises can be highly important in stimulating SME growth. Large counterparts

can help SMEs enter business markets, and, on the other side, SMEs can be a cost-effective

approach for them in terms of the realisation of specific requirements. In line with this,

large enterprises have the resources for developing innovations while SMEs, often starting

businesses based on innovative ideas, have the required creativity and flexibility. Tackling

the idea of fostering and strengthening business relations between SMEs and larger

enterprises, first within the countries and then between the countries in the AI region, is a

major step for sustainable development. The overarching objective is to analyse how SMEs

can successfully interact with the larger counterparts on the market. One future objective

of the Adriatic-Ionian Tourism Innovation Centre is to examine how SMEs and large

enterprises can successfully share innovation projects and move beyond an initially

asymmetric relationship. However, before relationship management, there is an obvious

need to conduct research studies on the innovation activity of large and small enterprises,

especially the types of relationships that SMEs have with larger enterprises inside and

outside the supply chain.

Another question is linked to the effectiveness of SMEs’ strategies for engagement with the

larger counterparts, in particular, to what extent strategies shape the behaviour,

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experience, and performance of small enterprises. Conclusively, indicators of the extent to

which some sectors are effectively controlled by a small number of large enterprises and

deeper understanding of the innovative contractual and collaborative relationships

between small and large enterprises will benefit policymakers and business support

organisations in future policies and activities. Future activities of all model stakeholders

should strive for:

 increasing enterprises’ innovation capacity by developing, validating, and integrating new

ideas, products, and services

 rapidly scaling-up offers, first to the AI region and then global markets

 strengthening business relations between SMEs and larger enterprises

 making innovation processes more effective by partnering with other stakeholders (e.g.

innovative SMEs-suppliers)

Business support organisation

There are many organisations that support the ongoing growth of entrepreneurs and

businesses in different ways. Some are good, while others provide little to no value. Under

the term ‘Business support organisation’ primarily considered are Chambers of Commerce

and Chambers of Crafts, followed by various types of incubators, accelerators, hubs,

technology and science parks, development agencies, etc. It is imperative to move from the

traditional approaches, to analyse current work and to attempt to change perspectives and

definitely to present to entrepreneurs the value that can be gained from being a part of the

right association. The transformation of non-effective business models can lead to new

relationships and connections, partnerships, business ideas, and even new clients and

customers.

Business support organisations should work with a focus on helping local entrepreneurs

and businesses in the area to develop and grow through co-operation. For example,

Chambers of Commerce and Chambers of Crafts have to strengthen the community through

connections and assists the local business community by helping enterprises to improve

business and foster a business-friendly environment.

Beyond management and legal consultancy, training, and assistance in foreign trade,

business support organisations should consider:

 determining what information is needed for business valuation

 finding the lacking resources that affect business

 tracking the innovation outcomes

 knowledge sharing and collaboration between research units, institutions and enterprises

 setting-up and implementation of the standards and criteria for innovative individuals

and enterprises

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 transfer of organisational knowledge from one entity to another within/between

organisations

Education and research

Fundamental transition processes must take place in the systems of education and

innovation research. Local and regional top talents are attracted by successful and

innovative universities, research centres, and other academic institutions. Knowledge must

be transferred through publications of research results , and definitely through events and

networking. When students graduate and join the labour market, they bring with them new

knowledge. and they are effectively helping to rejuvenate and revitalise the industry. The

temporary placement of students/graduates/other individuals in enterprises or in civil

society or non-profit organisation can be a more direct way of exchanging knowledge.

Along with publicly funded projects, collaborative research, consultancies, and training

courses, bringing research results to market through the establishment of a new business,

e.g. university spin-off enterprises or graduate start-ups, is a form of commercial

exploitation of research results obtained at the universities. Using the intellectual capital

and infrastructure of the university in its activities, spin-off enterprises and graduate start-

ups can stimulate growth in overall AI region employment, turnover and investment,

particularly when the application of innovation represents a new market and value

network and possibly disrupts the current market or sector. Competitive strategies of

education and research should include:

 identifying the diversity of market needs and strengthening col aboration with

stakeholders

 recognising and understanding of the new global and regional contexts relevant to

research and innovation in education

 employment of highly trained experts who have the management and leadership skills to

deal with the changing environment

 designing study programmes that support and enhance sustainable employability

 building metrics for recognising and rewarding innovative quality learning and teaching

(for students and professors)

 developing and promoting open data, open source, and open innovation initiatives

 education for innovation management

Local/Regional/National public authorities

Local, regional, and national public authorities have to recognise and respond in strategic

and often in transformational ways to cyclical and structural changes that can potentially

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be harmful to the economic viability and sustainability of sectors, businesses, employees,

and communities. The recognition of the role of innovation, digitalisation and, most of all,

innovation culture is a prerequisite for sustainable development and sustainable tourism.

As never before, growing digital information networks have the potential to connect

various stakeholders, i.e. individuals, organisations, and nations.

The full scope of tourism encompasses the products and services of many industries, and

sometimes legislators and employees in public administration at the local and regional

levels lack an in-depth understanding of tourism needs. The challenge for all levels of

public authority is to bring together leading research and business to tackle the big tourism

issues of today. The positive impact of innovation in tourism presented by tourism

professionals should provide the necessary inputs for policymakers to set up new

measures, i.e. incentives, grants, and tax reliefs.

Local, regional and national development leaders need to recognise that ideas, talent,

capital, and a culture of openness are vital for the creation of start-ups and small business.

Moreover, authorities should give innovators a possibility of bypassing obstacles and

hierarchies that often hinder creativity. A collaborative spirit can help cities and regions to

form stronger communities. Authorities should also enhance key innovation infrastructure

through various opportunities, e.g. technology incubators, start-up accelerators and co-

working facilities, providing easy access to investment capital ( business angels and other

private and public investors). However, it is crucial for national, regional and local

authorities to bear in mind that they can also receive high returns by investing necessary

resources in creating a more conducive environment for existing businesses.

Balance and synergies between public and private stakeholders should be stimulated by:

 promotion of strategic alliances between education and research, private and public

partners, and the provision of smart services

 easy access to financial incentives

 the increase of business support which includes direct innovation grants and R&D credits

 optimisation of R&D tax reliefs

 the inclusion of non-economic innovation measures in the domain of social and

environmental innovation

 collection and analysis of feedback information on organisation or enterprise

performance and impact

 engagement of stakeholders in long-term partnerships

 future research agenda about linkages of all sizes of enterprises in innovation.

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Interest groups including NGOs

Interest groups and NGOs are vital stakeholders of a business ecosystem because they

mainly represent the claims of civil society and the public. With such a huge influence on

civil society, especially in democratic society, NGOs and interest groups need to enhance

assessment and monitoring functions, measure impact, and teach citizens how to improve

their innovation efforts and capability.

The main role of NGOs and interest groups is to influence and encourage public policy and

public officials to apply innovative methods (particularly social innovations) that allow

more open, collaborative, outcome-driven and adaptive approaches to innovation

management in tourism. Moreover, they should be active and equal partners for

knowledge-generating institutions in the whole AI region.

With constant challenges to balance interests, future strategies and activities should

include:

•

use of the proposed conceptual model for long-term, substantive involvement of civil

society in AI region policymaking processes

•

initiative for the development of interest groups and NGO networks

•

creation of a comprehensive database of innovative practices

•

defining standards for civil society participation in tourism innovations

•

analysis of the different cases of involvement of the public in the context of sustainable

tourism.

Adriatic-Ionian Tourism Innovation Centre strategic goals

The ultimate purpose of the model lies in its contribution to the development of an

innovation culture that should lead to the development if sustainable tourism in the

Adriatic-Ionian region. In this sense, the strategic goals of the AI Tourism Innovation Centre

are defined and organised around six key topics: Legislation, Cooperation, Support,

Transfer, Education, Research.

Specific strategic goals that will serve as a base for future activities are as follows:

 Development of an innovation taxonomy, as well as its popularisation and advocacy

 Lobbying (nationally) for the simplification and improvement of legislative acts dealing

with innovations

 Education of stakeholders about innovations, sustainable tourism, and the importance

of monitoring of innovations (innovation indicators)

 Lobbying nationally (promoting) for the necessity of introducing obligatory reporting

on innovations

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 Creating an Open Innovation Platform

 Promoting changes of the HEI curricula – introducing courses dealing with innovations

and, specifically, innovations in tourism

 Development and support of cooperation and networking between crucial

stakeholders, especially:

o

Enabling the transfer of knowledge and innovations from other sectors into

tourism

o

Cooperation between SMEs and large enterprises (win-win)

o

Cooperation between HEIs and enterprises

 Development of research activities related to innovations and tourism.

Development of innovation taxonomy, its popularisation and advocacy

The results of research conducted for the purpose of this strategy development, as well as

of many other studies, indicated a general misunderstanding and very different

comprehension of the term and concept of innovation. Misunderstanding of the content

and the scope of the concept is a major obstacle to the popularisation and implementation

of innovation in practice. For this reason, the development, popularisation, and advocacy of

a taxonomy of innovation have been imposed as the first and an inevitable strategic goal

that needs to be achieved in order to stimulate the development of innovative society and

innovative sustainable tourism, as well as the implementation of this strategy and its goals.

The realisation of this goal requires the engagement and contribution of the academic

community. Their task refers not only to further taxonomy development and adjustment to

economic needs and practices (particularly with regards tourism) but also to contribute to

the transfer of knowledge on innovations and on raising awareness among all stakeholders

that innovations are a prerequisite for any kind of development. This can be achieved

through different activities, i.e. publishing articles, public appearances, lectures, advocacy

with key stakeholders at all levels, and others.

Lobbying (nationally) for the simplification and improvement of legislative acts

dealing with innovations

Identified tourism stakeholders in the AI region, according to the results of the conducted

research and based on feedback gained on the workshops and local events, express

dissatisfaction with the existing situation regarding the legal and legislative frameworks.

Legislation does not cover key aspects of innovation, from labour law and rewards to

taxation and incentives for innovation. Incentive legislation represents a key and starting

point in the creation of an incentive environment for innovations of every kind. Therefore,

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specific efforts should be placed on lobbying at the national level to create a stimulating

environment for entrepreneurs and innovators. The legislative framework should provide

a transparent system that will foster creativity, innovation, incentives for innovations, as

well as cooperation among stakeholders in innovation processes.

Education of stakeholders about innovations, sustainable tourism, and the

importance of monitoring of innovations (innovations indicators)

Education is identified as one of the key prerequisites for achieving sustainability and the

main factor for enhancing and encouraging innovation development. The research results

confirmed that educational structures in tourism in the AI region are unfavourable, at the

moment and in addition to the lack of highly educated employees. Therefore, it is of great

importance to provide wide-ranging as well as custom-made (on demand) education

activities available to all stakeholders, since only well-educated individuals can ensure

long-term destination sustainability. Additionally, it is necessary to increase and intensify

knowledge transfer between businesses, users, academia, and institutional stakeholders in

the region. In that sense, through education processes, the implementation of innovations

would be enhanced, and a better understanding of the issues facing sustainable tourism

development would be ensured. The importance and the advantages of reporting and

monitoring of the innovations implemented in tourism should be promoted through

educational activities. Additionally, it is necessary to emphasise the need for the

development and application of specific and concrete innovation indicators. In that context,

indicators must tackle and reflect the core of a specific(s) (local, regional) innovation-

related issue(s). This means that it is possible that the indicators needed to manage

innovations in one region can differ from the those in another region. The goals are the

same, but the way to reach them (the indicators needed to follow the necessary activities)

do not have to be the same.

Following the previously mentioned, it can be concluded that there is an obvious need to

develop a clear and long-term methodology for collecting and monitoring innovation

activities in tourism. The advantages of such a methodology should be promoted to al

tourism stakeholders, since in that way they would be willing to exchange their data and

experiences regarding innovations. By collecting and monitoring the innovation activities

in tourism, the basis for a transparent innovation incentives system would be ensured. This

system should also ensure that innovations are implemented in accordance with

sustainable development principles and destination interests.

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Lobbying nationally (promoting) for the necessity of introducing obligatory

reporting on innovations

Considering the fact that there is a lack of innovation indicators that reflect the

characteristics of the tourism system and, therefore, a lack of a metric that enables

monitoring, management. and fostering innovations, it is necessary to introduce obligatory

reporting on innovations in tourism. For that purpose, it is vital to promote (among key

national players are ministries of tourism, national tourism board, chambers, etc.) the

necessity and the advantages of reporting about innovations. This could be done in line

with the existing Eurostat system - Community Innovation Survey (CIS). The CIS is a survey

of innovation activity in enterprises but, at this point, its microdata sets do not cover all

countries, and the provision of microdata is voluntary for tourism enterprises.

Hence, it would be a huge step forward if this kind of reporting would become obligatory

for all enterprises in tourism in all Adriatic-Ionian countries.

Creating an Open Innovation Platform

An integrated, multi-sectoral and participatory approach should be the core of the tourism

planning process, delivering innovative solutions from cultural, social and technological

aspects resulting in multiple cultural and socio-economic benefits. The idea is to develop an

Open Innovation Platform that will facilitate effective online discussions that may lead

stakeholders to discuss, reach consensus, and engage with user-generated ideas.

Additionally, in the process of fostering tourism innovations in the Adriatic-Ionian region, a

valuable step is also seen in the creation of a comprehensive and accessible knowledge

base of existing good practices related to the innovations in tourism, as a part of this

platform. In this sense, a significant role will be placed on the Adriatic-Ionian Tourism

Innovation Centre since it will enable collection and ensure the availability of basic

information about already tested and successful ideas. This pool of inspiring ideas is

expected to provide additional incentive for individuals and organisations who are in need

of innovation of any kind or who are already in the process of developing their innovation

ideas.

Promoting changes of HEI curricula – introducing courses dealing with innovations

and innovations in tourism

In addition to other activities, achieving the main goal of this strategy – fostering

innovations – also requires introducing new and improved university level courses dealing

with innovations. The aim of curricula changes in HEIs is not only to enhance the

awareness of the importance of innovation implementation in tourism, but also to create

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and build new students’ competencies concerning innovations and entrepreneurship. The

introduction of courses that would focus on innovations and on the benefits that they could

bring to companies in tourism, as well as on obstacles that may occur, would contribute to

the growth of innovation in tourism in the long run. This also requires the intensive

involvement of tourism practitioners in the educational process since they are a valuable

source of knowledge, and thus, a critical force for strengthening innovation in tourism.

Development and support of cooperation and networking between crucial

stakeholders

In order to achieve all the previous objectives and above all, to increase innovation

capacities and capabilities, it is essential to enhance cooperation between all tourism

stakeholders. They should be motivated to join the network proposed through the FOST

INNO conceptual model. Quality connections and synergies between stakeholders should

be enhanced to enable the transfer of knowledge and innovations. Working and

collaborating together, and exchanging knowledge, information, experiences, and good

practices will lead to a greater number of innovative solutions and consequently to

sustainable tourism development in the Adriatic-Ionian region.

Development of research activities related to innovations and tourism

Changes in the tourism market are constant and happening very fast. This indicates that it

is necessary to follow them on a regular basis to be able to promptly react, to be one step

ahead, and to remain competitive. To do so, different research activities related to tourism

trends and changes in the environment in which tourism in the Adriatic-Ionian region is

developing should be conducted. High-quality research would lead to a deeper insight into

the ongoing changes and the changes that might happen in the future. The results of such

research would provide an advantage to the stakeholders and ensure them better

opportunities while developing new and innovative solutions as a response to those

changes.

Concluding remarks

The focus of this study is on developing an attractive and supportive environment that

might enable any business to innovate. Changing the perspective and presenting

entrepreneurs the value that can be gained from being a part of the right

network/partnership can lead to new relationships and connections, partnerships,

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business ideas, and even new clients and customers. Even more, building trust between

stakeholders can help to forge an innovation culture.

There is an obvious need in the fact that better innovation data and analysis of that data is a

priority. All stakeholders in the FOST INNO conceptual model should work on this issue

and bring some novel data sources to the Adriatic-Ionian economies. From a policy

perspective, it is relatively easy to create a policy, but it is much harder to implement it in a

meaningful manner, in particular along with a various group of stakeholders. Clear

consensus about the definition of consistent indicators for the tourism industry along with

the development of innovation metrics and proper implementation, analysis, and

monitoring can support management, strategies and various decision- and policy-makers.

The creation of a FOST INNO model reflects part of this issue and poses questions about the

ways in which tourism innovation strategy can work. With refining the funding

implications and intended outputs and setting timescales for the innovation in tourism, a

huge step towards sustainability can be taken. Therewith, a proper set of guidelines,

regulations, directives, and development objectives can directly affect long-term tourism

growth and development. It should become a common practice to use an optimised

indicator system for designing and implementing innovation tourism models that focus on

the sustainability approach.

Through the development of a stronger innovation ecosystem, AI partners are directly:

 stimulating a more innovative, creative, and risk-taking culture

 promoting a more dynamic and competitive AI region

 facilitating the entry into the AI market of new, fast-growing players

 improving the quality and scope of the advisory services in the field of the innovation in

tourism

 finding the right metrics to track tourism innovations.

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EXAMPLES OF

GOOD PRACTICE

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6 Examples of good practice

There is a wide range of examples of innovative activities in both the public and private

sectors in the AI region, encompassing product and service innovation, process innovation,

marketing innovation, and organisational innovation. This section provides some examples

of good practice. There are examples of organisations that have improved the way they

support people and communities and operate in line with the principles of sustainable

tourism. Some are new initiatives, and some have been running for many years.

1. PUBLIC CALL FOR CO-FINANCING THE DEVELOPMENT AND PROMOTION OF INTEGRAL

PRODUCTS OF THE TOURIST ECONOMY

COUNTRY: Slovenia

LEVEL OF DEVELOPMENT: National level

NETWORK STAKEHOLDERS INVOLVED: National public authority; Enterprises including

SMEs

The Ministry of Economic Development and Technology published a public call for co-

financing the development and promotion of integral products of the tourist economy on 4

April 2017. The call is in line with the Strategy for the Sustainable Growth of Slovenian

tourism for 2017-2021. The value of the offered funds is €8,087,84.89. The beneficiaries

under this call are enterprises and private entrepreneurs from tourism (SMEs).

DESCRIPTION OF THE PRACTICE

The subject of the public call is co-financing the implementation of activities for the

development and promotion of new integral tourist products of the tourist economy. The

products have to be based on the principles of sustainable development and thereby

strengthen competitiveness and quality in all areas and at all levels of Slovenian tourism. In

the activities related to the placement of a tourist product on the market, the focus is on

digital content.

According to this call, integrated tourism means a combination of several products and

services designed to meet the tourist’s needs when visiting a tourist destination.

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A new integral tourist product is an integral tourist product, which the applicant has not

offered its clients, and is contributing to the greater quality and variety of tourist offering of

the destination. The integral tourist product that is the subject of the application must be

part of the applicant’s regular offering and is not just a one-time event.

Eligibility criteria:

- Sustainability of the business model of the applicant (credit rating of the applicant,

sustainability of the business model in the aspect of the market, incomes and costs of

business, sources for business (human resources, infrastructure, funds, partners,

information, knowledge, equipment, brand, etc.), identifying opportunities for further

development/growth)

- Quality of operation (leadership and organisation of operation performance, work style

of the project group, quality and compliance of the integral tourist product, innovation

of integral tourist product, alliance with cultural heritage, contribution to new

employment positions, use of digital tools)

- Reality of operation performance (reality of expected results of the operation, reality of

expected costs for operation and individual activity, proportion of applicant’s incomes

and value of operation).

- Opportunities for breakthrough on the foreign market (Connecting different actors to

achieve a critical mass for the breakthrough on the foreign market (partnership),

breakthrough on the foreign market).

- Regional criteria (problem areas, Triglav national Park).

- Contribution to social change (EU Environment sign, Contribution of operation to

achieving the objectives of Slovenia’s smart specialisation strategy, Connection to

creative sectors) (Ministrstvo za gospodarski razvoj in tehnologijo (MGRT), 2017).

2. PUBLIC CALL FOR IMPLEMENTATION OF SUPPORT SERVICES OF THE INNOVATIVE

ENVIRONMENT ENTITIES IN THE REPUBLIC OF SLOVENIA FROM 2018 TO 2019 ‘SIO

2018-2019’

COUNTRY: Slovenia

LEVEL OF DEVELOPMENT: National level

NETWORK ACTORS INVOLVED: National public authority; Business support organisation;

Enterprises including SMEs; Higher education and research

The Public Agency for Entrepreneurship, Internationalisation, Foreign Investments and

Technology published a public call for the implementation of support services of the

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innovative environment entities in the Republic of Slovenia from 2018 to 2019 ‘SIO 2018-

2019’.

DESCRIPTION OF THE PRACTICE

The public call aims at financing the implementation of the free services for target groups

within entities of an innovative environment. The entities will implement the activities and

contribute to balanced software support for start-ups, growth, and business development.

Consequently, the number of new businesses will rise, the survival rate of new businesses

will rise, and fast-growing businesses will more easily overcome obstacles. The public cal

is co-financed from European Regional Development Fund (ERDF). The funding is

€6,600,000.00.

Target groups are innovative potential businesses (innovative individuals, scholars,

students, pedagogical workers), new and already existing businesses with the potential for

fast-growth (start-ups), fast-growth businesses with the potential for global growth (scale-

up). The subject of the public call is financial support to the activities of innovative

environment entities that are supporting the target groups. The support is promotion-

motivation events, information and consulting, thematic workshops, mentorship, expert

help, etc.

Eligibility criteria:

- Rating of quality and feasibility of operation,

- Contribution to improving the business environment,

- Broad social impact,

- Partnership,

- Contribution to stimulating the regional development (SPIRITSLOVENIA, 2018).

3. SEJALEC

COUNTRY: Slovenia

LEVEL OF DEVELOPMENT: National level

NETWORK ACTORS INVOLVED: National public authority; Regional public authority; Local

public authority; Business support organisation; Higher education and research;

Enterprises including SMEs; Interest groups including NGOs

The Ministry of Economic Development and the Technology and Tourism and

Internationalisation Directorate are publishing the SEJALEC award for the recognition of

creative and innovative accomplishments for new products, processes, and marketing

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approaches in tourism. The accomplishments must contribute to the greater visibility of

Slovenian tourism offerings.

DESCRIPTION OF THE PRACTICE

The subject of the call for SEJALEC are innovations in tourism that contribute to the greater

visibility of the Slovenian tourist offering. For the call, innovation is defined as quality-

designed and successfully implemented new or improved innovation in the field of new

products, processes and/or marketing approaches that contain unusual elements, the

applicant's originality, systematic business thinking and the promotion of Slovenian

tourism.

Applicants must comply with the following conditions for applying:

1. Applicants can be enterprises, sole proprietors, organisations, institutions and

economic interest associations, key partners of the STO, local tourist organisations,

clusters, tourist societies and associations, other tourism-related societies, and their

associations, regional, and other development agencies.

2. The registered innovation was introduced into the regular business of the enterprise or

for the first time publicly offered on the market between 1 January 2016 and 31

December 2017.

3. The application is in accordance with the purpose of granting recognition.

4. The application is submitted in the prescribed content, form and deadlines.

Assessing starting points and criteria

The evaluation commission will base on the following four starting points:

- level of innovation in Slovenian touristic, geographic and cultural space,

- level of adaptation of innovation to Slovenian characteristics (especially if it is an

innovation transferred from abroad),

- level of performance (of the product, process and/or marketing),

- level of excellence in the realisation and overall implementation of the announced

innovation, based on the principles of sustainable development.

In addition, the expert commission will assess whether the innovation brings added value

to economic, social and economic levels, cultural values and the contribution to sustainable

development and whether the notified innovation was introduced into the regular

operation of the applicant in the prescribed period.

Sejalec 2018 receives free participation on the stock market SIW 2019 (scheduled for June

2019), exposure on the home page www.slovenia.info, exposure on the website

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www.slovenia.info (on the pages of innovative Slovenian tourism), free presentation in the

magazine Turizem, involvement in STO promotional activities, usage of the official logo

Sejalec 2018 in all communication activities (printed publications, websites,

advertisements, etc.) two years after the award.

FINALISTS Sejalec 2018 receive free presentation in the magazine Turizem, involvement in

STO promotional activities, usage of the official logo finalist Sejalec 2018 in all

communication activities (printed publications, websites, advertisements, etc.) two years

after the award.

All APPLICANTS on call receive free presentation on the website www.airth.global

(Slovenia.info, n.d.).

4. SNOVALEC

COUNTRY: Slovenia

LEVEL OF DEVELOPMENT: National level

NETWORK ACTORS INVOLVED: National public authority; Regional public authority; Local

public authority; Business support organisation; Higher education and research;

Enterprises including SMEs; Interest groups including NGOs

The Slovenian Tourist Organisation and the Ministry for Economic Development and

Technology (Tourism and Internationalisation Directorate) hold an annual competition,

SNOVALEC, for recognition of the promotion and realisation of new ideas/inventions in

tourism.

DESCRIPTION OF THE PRACTICE

The purpose of SNOVALEC is to promote creativity, inventiveness, and innovation at the

corporate level, the destination level, associations of tourism products and providers or in

the design and marketing of tourism products from Slovenia in domestic and foreign

markets. The SNOVALEC award supports the design and implementation of development

projects and the market introduction of tourism products that are in line with the basic and

strategic documents of the STO, Slovenia, and Europe.

The subject of the call for award SNOVALEC is inventions in tourism, which will (once

implemented and become innovations) contribute to greater recognition of the tourist offer

of Slovenia. For the purposes of the call, an invention is defined as a quality planned-and-

not-yet-realised innovation or improvement, which contains unusual elements of the

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applicant’s originality, systematic business thinking, and the promotion of Slovenian

tourism.

The foreseen funds are €15,000 gross, which the expert commission will distribute among

the three recipients who will realise their project in the year applying and thus significantly

enrich the Slovenian tourist area.

Applicants can be enterprises, sole proprietors, organisations, institutions and economic

interest associations, key partners of the WTO, local tourist organisations, clusters, tourist

associations and associations and the rest with tourism-related societies and their

associations and regional and other development agencies.

Last year, the award was given to four projects that realised their idea: active tourism for

the physically disabled, a culinary journey with a museum train, climbing holidays on the

Karst edge, and the legend of the dragon and tarragon (Slovenia.info, n.d.).

5. FINANCING OF TECHNOLOGICAL-DEVELOPMENT PROJECTS

COUNTRY: Slovenia

LEVEL OF DEVELOPMENT: National level

NETWORK ACTORS INVOLVED: National public authority; Enterprises including SMEs

SID Bank (Slovenska izvozna in razvojna banka, d. d., Ljubljana) is a promotional

development and export bank 100% owned by the Republic of Slovenia. SID Bank

promotes sustainable development and improving the competitiveness of the Slovene

economy.

DESCRIPTION OF THE PRACTICE

A programme for the financing of technological-development projects is offering loan

ranges between €100,000 and €15,000,000 with credit period from 6 to 12 years. The

programme funds up to 85% of the total costs of the R & D project, or up to 75% of the

eligible costs of the investment project.

Beneficiaries can be commercial enterprises of all sizes, established in the Republic of

Slovenia or other EU Member States.

Subject of financing:

RESEARCH-DEVELOPMENT PROJECTS

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- Acquiring new knowledge and skills, aimed at developing new or improved products,

processes or services.

- Prototyping, presentations, pilot projects, testing new or improved products, processes

or services.

- Research with the purpose of developing new or improved products, processes or

services.

INVESTMENT PROJECTS

Investments in tangible and intangible assets:

- Establishment of a new business unit.

- Increasing diversity of production.

- Substantial changes in the production process (SID Banka, n. d.).

6. COMPUTERISATION OF THE S.C. ‘SCHEDULED HOUSED’

COUNTRY: Italy

LEVEL OF DEVELOPMENT: National level

NETWORK ACTORS INVOLVED: National public authority; Enterprises including SMEs

Article 109 of the ‘Consolidated text of public security laws’ (TULPS) establishes that

managers of hotels and other kinds of accommodation, including those providing

accommodation in tents, caravans, as well as owners or managers of holiday homes,

apartments and landlords, including managers of non-conventional reception facilities,

with the exception of alpine shelters included in a special list established by the region or

the autonomous province, must report daily to the public security authority the arrival of

the people housed, by delivery of a copy of the card or communication, also by computer

means, according to established procedures by decree of the Interior Ministry.

DESCRIPTION OF THE PRACTICE

To standardise the discipline on this field, the Legislative Decree of January 7th, 2013 of the

Ministry of the Interior introduced the obligation to transmit the cards of the hosted by

Internet to the police headquarters, which, in this way, will collect and have access to

personal details of all the people hosted and the hosting structures directly by accessing

the website online. Data must be transmitted within 24 hours of the arrival of the

customers, and in the event that guests stay less than 24 hours, the cards must be sent

immediately. In case that the rules are not complied with, and a guest registration is

omitted, criminal penalties are applied with a corresponding complaint to the Public

Prosecutor's Office. In this case, there is the risk of arrest for up to three months, a

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monetary fine or the temporary revocation of the authorisation to carry out the business

activities.

The obligation is addressed to all the managers of accommodation activities, which will

have to provide accommodation services exclusively to persons with an identity document.

The communication obligation also applies to extra-hotel facilities and minors.

INNOVATION INTRODUCED

- Data are sent directly from the hosting structure, avoiding the burden of direct delivery

to the Police Headquarters.

- Data control by State Police personnel becomes faster and more effective in the

detection and/ r repression of crimes, in order to protect public order and safety.

- Data control becomes faster and more effective also in order to prevent and avoid

illegal rents by hosting structures and, in this way, to permit accommodation that has to

pay taxes to be more competitive than the others.

7. MODEL OF ‘DIFFUSED HOTEL’

COUNTRY: Italy

LEVEL OF DEVELOPMENT: This new model of hotel born at the regional level and then it

has been widespread also at national level.

NETWORK ACTORS INVOLVED: National public authority; Regional public authority; Local

public authority; Enterprises including SMEs

Business-friendly accommodation facilities housing tourists in a range of pre-existing

accommodation

DESCRIPTION OF THE PRACTICE

A definition of ‘diffused hotel’ can be identified in the Guidelines of Region Lombardy

(Resolution of the Regional Council n. IX / 1189 of 29th December 2010), according to

which the ‘diffused hotel’ is a typology of recent diffusion in Italy and Europe, born from

the idea of use for tourist purposes of the empty houses renovated with the funds of the

post-earthquake of Friuli (1976). The ‘diffused hotel’ hospitality model was developed by

Giancarlo Dall'Ara, a tourism marketing professor, and was formally recognised for the first

time in Sardinia with specific legislation that dates back to 1998. The progressive and

constant diffusion of the ‘diffuse hotel’ is mainly due to the attention of a part of tourist

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demand to the contents of sustainability and respect for the environment proposed by

some places of stay. It is in this context that the nature of this type of accommodation

should be placed. Therefore, the natural location of the ‘diffused hotel’, referring to a broad

and elastic model definable as ‘hotel country’, sees the privilege of the small historical

centres and the villages and nuclei of ancient formation or the rural or mountain

settlements, although not excluding the validity of solutions linked to single significant

presences in different urbanised contexts.

Today. there is a regulation regarding this in almost all Italian Regions. In Umbria the

Regional Law (12 July 2013, Article 17, paragraph 7) introduced ‘Criteria for the realisation

of the Diffused Hotels’, and it defines these structures as hotel accommodation facilities

located in the smaller historic centres, characterised by the centralisation in a single

building of the common services and the dislocation of the housing units in one or more

separate buildings. The units are equipped with furniture, equipment and homogeneous

services.

On 15th June 2006, at the first ‘National Meeting of Managers of the Diffused Hotel’ held in

Rimini, was born the National Association of Diffused Hotels.

INNOVATION INTRODUCED

 In this way, it is possible to recover and enhance old closed and unused buildings

and to avoid solving the problem of tourist accommodation with the construction of

new buildings.

 Respect for the cultural environment: the diffused hotel proposal moves directly

towards the recovery of the artistic and cultural heritage of the smaller centres,

pursued with tenacity by both community and national and local policies, and shows

to have the potential to increase income and employment of small towns, to

maintain or increase the population, without interfering with the culture, the

environment, the identity of the places.

 Originality-New features: a largely original accommodation solution means greater

visibility and offers many advantages in terms of positioning strategy in the tourism

market (ALBERGHI DIFFUSI, n. d.).

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8. U.M.B.R.E. NETWORK

COUNTRY: Italy

LEVEL OF DEVELOPMENT: Regional level

NETWORK ACTORS INVOLVED: Regional public authority; Local public authority;

Enterprises including SMEs

A tourism network led by a team of five young female entrepreneurs from Umbria with

different business backgrounds, who offer their know-how and tourist accommodation

facilities for business management courses connected to the Made in Italy approach.

DESCRIPTION OF THE PRACTICE

U.M.B.R.E. (United Marketing for Business and Regional Experience) is a business network

led by five young Umbrian women entrepreneurs, each from different industrial sectors but

with one thing in common: they all own a hotel in Umbria. Six structures, spread across all

of Umbria’s geographical areas, will host an experiential training inspired by the key ‘Made

in Italy’ themes: food and wine, management, innovation and fashion, enhancing the

region’s treasures through cultural tours and food tastings, in-depth analyses and

enterprise visits, workshops and lessons hosted by professional lecturers. The experience

comes with exclusive accommodation, where the surrounding environment, comfort and

pleasure blend in perfect harmony with the territory’s nature and history. At the end of the

experience, participants of the Umbre excellence week will receive a certificate of

participation from the University for Foreigners of Perugia and U.M.B.R.E.

INNOVATION INTRODUCED

- The objective of this innovative concept is to demonstrate that Umbria is not only an

excellent region of art, culture and gastronomy but also of entrepreneurial skills and

realities that are worth knowing and exploring.

- This experience permits going beyond traditional tourism and deepening knowledge

about expert artisanal and entrepreneurial skills that represent true excellence

recognised worldwide.

- The one-week experience allows tourists to learn about the Umbrian regions and

become acquainted with strategies and production methods through meetings and

workshops and, at the same time, to enjoy the landscape, as well as the artistic and

cultural beauties of the territory (U.M.B.R.E., n. d.).

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9. e Visitor

COUNTRY: Croatia

LEVEL OF DEVELOPMENT: National level

NETWORK ACTORS INVOLVED: National public authority; Regional public authority; Local

public authority; Enterprises including SMEs

The Croatian National Tourism Board created eVisitor as a unique online information

system that provides insight into tourist traffic and accommodation capacities (commercial

and non-commercial) in Croatia. The eVisitor system was put into operation in January

2016 and has won the third place and the award of the World Tourism Organisation

(UNWTO) for inventiveness in research and technology.

DESCRIPTION OF THE PRACTICE

The creation of the eVisitor system was based on the legal obligation and regulations for

the registration and check-out of guests staying within the territory of Croatia. The system

enables the automation and control of the collection of overnight tourist taxes, and it

generates statistical reports and marketing indicators in real time (i.e. length of stay,

location, gender, age, country of residence, type of facility, destination, etc.), which enables

the more efficient monitoring of tourist traffic and revenues, allowing better control over

the collection of accommodation fees, creating a synergistic effect of all Croatian tourism

stakeholders and contributes to ensuring their competitiveness. It applies to all commercial

and non-commercial tourist registration in the Republic of Croatia. It enables access via a

graphic interface for ‘small’ users (apartment rentals and holiday homes), and an

application interface for ‘large’ users (hotels and camps). The encrypted, anonymised, and

safe eVisitor system is user-friendly, free, and accessible on all platforms through a web

interface with access to the Internet.

INNOVATION INTRODUCED

- Centralised and highly automated system

- Data is accurate, up-to-date, and enables the analysis of existing and planned activities

- Data is segmented depending on the area of the institution’s responsibilities and access

rights

- Data is updated on a 24-hour basis

- Inclusion of all stakeholders in the process (accommodation providers, tourist boards,

Croatian National Tourist Board and relevant government bodies)

- Collection of feedback from users and global user support

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- Enables detailed statistics regarding tourist traffic and analytical information regarding

overnight tax collection

- A source for official government statistics office, which in turn is the source of data for

Eurostat - the statistical office of the European Union (eVISITOR, n. d.).

10. Istra Inspirit

COUNTRY: Croatia

LEVEL OF DEVELOPMENT: Regional level

NETWORK ACTORS INVOLVED: Regional public authority; Local public authority;

Enterprises including SMEs; Business support organisation; Interest groups including

NGOs; Higher education and research

Istra Inspirit is a multi-award-winning tourism project in Istria that enriches the cultural

and tourist offerings of the peninsula with the revival of historical events on authentic

locations, through staged Istrian legends and myths. The 100th session of the UNWTO

Executive Council was held in Rovinj in May 2015 for whose members Istra Inspirit had the

opportunity to present its experiences; after that, Istra Inspirit was listed in the hundred

best tourism stories in the world in the renowned publication issued by the World Tourism

Organization.

DESCRIPTION OF THE PRACTICE

The Administrative Department for Tourism of the Region of Istria has promoted the

development of the Istra Inspirit project since 2012 in cooperation with the Istrian

Tourism Development Agency, IRTA and Istria Tourist Board. Istra Inspirit is an example of

best practice of creative and innovative tourism and underlines the value of existing

unused resources of the cultural and historical heritage of the region and finds innovative

ways of involving different stakeholders in the tourism industry in order to create tourist

packages and new tourism products. It encompasses 7 clusters, 400 volunteers, and 50

artists. Quality, originality, innovation, and sustainability are the main characteristics that

make this project distinctive and its ‘know-how’ recognisable, the aim of which is to be

transferred to the stakeholders and create with them the story of the destination.

Furthermore, the goal is to achieve the active networking of all the interested publics in the

synergy of the creation of tourism destinations – family farm households, students, local

communities, actors, artists and musicians, craftsmen and local tourist boards.

INNOVATION INTRODUCED

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- Interest in selective forms of tourism - more than ‘sun and sea’

- Searching for the authentic experience of the destination - explorer and adventurer

- Involving locals - hosts as the best promoters of the destination

- Additional tourist offerings for the hotels, tourist agencies, private accommodation

owners

- Symbiosis of the academic, private, and public sectors

- Gourmet experience (ISTRAINSPIRIT, n. d.).

11. Juraj Dalmatinac Virtual Guide

COUNTRY: Croatia

LEVEL OF DEVELOPMENT: Local level

NETWORK ACTORS INVOLVED: Local public authority; Enterprises including SMEs

The project of the virtual guide entitled ‘Juraj Dalmatinac’ was presented in 2013 to Šibenik

citizens and tourists in front of the St. Jakov cathedral. It is the project carried out by the

Šibenik Tourist Board and the Department for Economy, Development and

Entrepreneurship of the town of Šibenik which made Šibenik the first in Europe to have a

‘virtual time machine’. The Ministry of Tourism awarded this innovative guide project with

80,000 kunas whilst the Tourist Board participated with a bit less than 20,000 kunas.

Moreover, this project called ‘3D AR Visual Portal’, from the DSP Studio & Momentum

Studio, was nominated for the UNWTO Ulysses Award for Innovation in Research and

Technology.

DESCRIPTION OF THE PRACTICE

By installing an AR application on a mobile phone or tablet, the user is given the option of

directing the display of the virtual 3D model of Jurja Dalmatinac by directing the mobile

phone camera or tablet camera to the AR location on the device display. The model is

referring to the user and publishes details of the history of the construction of the Šibenik

cathedral, the architect Juraj Dalmatinac himself, and UNESCO's inclusion of the cathedral

on the list of world cultural heritage

As part of the project, the three-dimensional figure of Juraj Dalmatinac, which tells tourists

stories about the cathedral, its history, construction and details, and through the actual

image of an object or location on a mobile phone, other multimedia contents such as

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educative films about the history of the Šibenik city core can be launched. For those who

have not yet experienced the project, they will see it through stylised tags on the ground

and with the help of the table of instructions on the wall not far from the monument to

Juraj Dalmatinac.

The 3D AR Visual Portal project relies on the latest augmented reality technology, which

was (at that time) the only application in tourism in the world. With the help of

smartphones, augmented reality allows viewers to have a three-dimensional view of

computer created real-image of an object or location. The application works in such a way

that the mobile device is directed to the foot of the statue Juraj Dalmatinac, which then

activates the device’s screen and begins with the story of the cathedral and its construction

and leads visitors throughout the location.

INNOVATION INTRODUCED

- Application of augmented reality in tourism

- Multimedia content

- Educative films about the history of the Šibenik city (MOMENTUM STUDIO, n. d.)

12. Zagreb Be There

COUNTRY: Croatia

LEVEL OF DEVELOPMENT: Local level

NETWORK ACTORS INVOLVED: Local public authority; Enterprises including SMEs

The Zagreb Tourist Board has launched a mobile application, Zagreb Be There, which

provides smartphone users with suggestions for various themed sightseeing tours of the

city. For the time being, the application offers five possible routes, each presenting Zagreb

in a somewhat different way.

DESCRIPTION OF THE PRACTICE

This project of the Zagreb Tourist Board is created in cooperation with the agencies

Bruketa & Žinić OM and Brlog, and the application for tourists enables sightseeing with

smartphones. Apart from the classic tourist locations, the speciality of this application is

specifically designed thematic routes on which tourists discover less-developed and

equally interesting places in the city. The mobile application for tourists ‘Zagreb Be There’,

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in the competition of 30 cities from 20 European countries, won the award for Best Digital

Project of Tourism Promotion in Europe at the first European Tourism Promotion Festival

Tourism & Strategy in Paris.

The app works on iPhone and Android mobile devices. It is based on a so-called

gamification principle that maps the rules and ways of interaction from a video game to the

real world. Tourists using ‘Zagreb Be There’ need to virtually log in at every location they

visit; when they finish the route they are given a reward, such as discounts on tickets, etc.

INNOVATION INTRODUCED

- Sightseeing with smartphones

- Specially designed themed sightseeing tours of the city

- Educative films about the history of Zagreb

- Gourmet promotion (BE THERE ZAGREB, n. d.)

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Conclusion

The strategy for fostering innovations in sustainable tourism for the Adriatic-Ionian region

focuses on developing an innovation culture that will contribute to the development and

competitiveness of sustainable tourism. According to the situation analysis and the results

obtained through empirical research, individual organisations in this region are left alone

to deal with and develop innovations. It was found that there is no or little support

provided by the environment (local, regional, national levels), and that there are no

systematic incentives and monitoring of innovation, especially when tourism is concerned.

In addition to this, the results also indicate that co-operation among stakeholders is

unsatisfactory at all levels. For this purpose, a conceptual framework (model) was

proposed that includes different stakeholders (enterprises, SMEs, business support

organisation, local, regional and national public authorities as well as interest groups

including NGOs) that have to act together and integrate if the value network is to be put in

place. In the model, the Adriatic-Ionian Tourism Innovation Centre is seen as a cornerstone

of the regional tourism innovation system. The document defined and organised its

strategic goals around six key topics: Legislation, Cooperation, Support, Transfer,

Education, and Research. The goals that will serve as a base for future activities are

identified as follows:

- Development of innovation taxonomy, its popularisation and advocacy

- Lobbying (nationally) for the simplification and improvement of legislative acts dealing

with innovations

- Education of stakeholders about innovations, sustainable tourism and about the

importance of monitoring of innovations

- Lobbying national y (promoting) for the necessity of introducing obligatory reporting on

innovations

- Creating an Open Innovation Platform

- Promoting changes of HEI curricula – introducing courses dealing with innovations and

innovations in tourism

- Development and support of cooperation and networking between crucial stakeholders

- Development of research activities related to innovations and tourism.

It is essential to emphasise that this is a ‘living’ and, as such, a flexible document. The

strategy is considered to be just a first step of the long-term process of developing

innovation culture and fostering innovations in tourism in the Adriatic-Ionian region with

the ultimate goal of the growth of prosperity and the enhancement of the quality of life in

the

reg

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