Report on World Tourism Economy Trends (2018) Excerpt -13 IoT technology will change the service flow and discourse structure of tourism industry

1. Characteristics

IoT is an important part of new-generation information technologies and also an important stage of the “informatization” time.

(1) IoT is an all-new way to connect people, connect things and connect people and things

The English name of “物联网” is the Internet of things (IoT). As the name suggests, IoT is an Internet of things connected with one another. As defined by the International Telecommunications Union (ITU), IoT mainly solves the interconnection between things (Thing to Thing, T2T), human and things (Human to Thing, H2T), humans (Human to Human, H2H), and collects the required information of things or processes that require monitoring, connection and interaction in a real-time manner and through various information sensing devices. IoT is widely used in the network fusion through the technologies of communication perception, such as intelligent perception, identification technology and pervasive computing. Therefore, IoT is also called the third wave of the development of the world information industry after computers and the Internet. Innovation 2.0, with the core of user experience, is the soul of the Internet of Things.

(2) The Scale of IoT and the number of startups increased rapidly

According to the International Data Corporation (IDC), the global total investment in IoT market in 2016 was USD 736.9 billion, and by 2020, this figure will reach USD 1,289.9 billion, at a CAGR of 15.02%. In the next few years, the Internet of Things will expand rapidly around the world. In terms of market size, the market for Internet of Things in 2013 was USD 39.8 billion and the predictions for 2017 will double to reach USD 79.8 billion. In addition, the consulting firm Venture Scanner combed 1,428 IoT startups in October 2016 and tracked them in 20 categories. These companies maintain business presence in 46 countries and have raised the total of USD 25 billion (as of January 2017, the numbers have increased to 1,544 start-ups, 47 countries and USD 27 billion).

Figure 3.13 Global IoT Market Size (Number of Enterprises) and Growth Profile

Data Source: IC Insights, Ping An Securities

(3) IoT is the hottest venture capital area in 2017

In recent years, IoT has remained a hot area. According to the consulting firm Venture Scanner, as of the first quarter of 2017, IoT industry-related companies worldwide have exceeded 1,800 and covered 20 fields, including software development, smart home and smart vehicle. The financing amount has reached USD 32 billion. The statistical data below show the financing highlights in IoT area in 2011-2016. The financing was only USD 1.5 billion in the full year of 2011. By 2016, the financing amount in this field reached USD 6.25, up 76% over the same period of the previous year. In the first quarter of 2017, the financing amount hit USD 2.7 billion, surpassing the full-year financing amount in 2012. 2017 is expected to be the hottest year for the investment in IoT area.

(4) Three key technologies support IoT applications

There are three key technologies in IoT applications: First, sensor technology, which is also the key technology in computer applications. Since the appearance of computers, sensors are required to convert analog signals into digital signals before processing by computers. Second, RFID tag which is also a sensor technology. The RFID technology is a combination of radio frequency technology and embedded technology. For example, at the 2010 Shanghai World Expo, each ticket has a RFID chip, so that it had a sensing function. Third, embedded system technology, which is a complex technology integrating computer hardware and software, sensor technology, integrated circuit technology and electronic application technology. If IoT is simply compared to the human body, the sensor is equivalent to the human eye, nose, skin and other sensory organs, the network is the nervous system used to transmit information, and the embedded system is the human brain and performs classified processing after receiving the information.

2. Application to tourism industry

(1) IoT technology will fuse into daily life

In 2012, the market scale of China's IoT industry reached RMB365 billion, an increase of 38.6% over the previous year. From smart security to smart grid, from the popularity of QR code to the landing of "smart city", IoT is now widely flowering and quietly influencing people's life. Experts point out that with the improvement of technologies and related facilities, China’s IoT industry will embrace three trends, including localization of technology and standard, systematic operation and management, and industrial penetration to the grassroots, in the following years.

Table 3.3 Examples of IoT Applications in Daily Life in China

Data Source: Internet Weekly, 2017

(2) IoT offers a number of intelligent services to air passengers

Industrial applications of IoT are also gradually growing. For example, Royal Dutch Airlines has teamed up with Delft University of Technology to launch an improved version of the smart seat. These smart seats collect heart rate, fatigue value, moisture and body temperature data of passengers, and confer the airline company unique insights that allow airlines to focus on the needs of their passengers to enhance service. In addition, IoT can be used at airports to help track luggage storage and give tourists the necessary guidance at airport terminals to remind them of boarding gate changes or flight delays.

(3) IoT technology covers three main applications

IoT technology, as the key technology of smart tourism, mainly involves three applications, including self-service guide, electronic navigation and one-button shopping guide. Coupled with the application of Mobile Internet and secure online payment platform, IoT technology allows tourists to formulate or change tourism plans and schedules anytime, anywhere. The above three applications are implemented as follows:

• Self-service guide

When the tourist arrives at the scenic spot, he can perform data match through the electronic terminal equipment, radio frequency identification technology and the central database at the backstage to form a unified network control system. Then, the service can store the information such as scenic spots, facilities, cultural backgrounds and even symbolic plants by text, picture, video, VR and other storage methods, so that the tourist can browse the information through the QR code, WeChat shake, NFC touch. Self-service guide provides tourists with intelligent, comprehensive tour support, and represents the guide’s interpretation to certain extent.

• Electronic navigation

The location-based service (LBS) and Internet maps can be added to smart tourism, so that tourists will know their current location in real time, plan their paths, avoid missing and connect the staff of the scenic spot when in need to obtain timely rescue. Through data feedbacks from the system, managers can monitor the density of tourists in the scenic spot in real time, understand the ecological environment and ecological conditions of tourist services areas, and guide the tourist flow, so that tourists can select a comfortable tourism environment and improve the satisfaction in all aspects. For example, the Xi'an Branch of China Academy of Space Technology has designed a smart tourism system for Datang Paradise with the communication satellite technology. The system can display the real-time tourist data in the park, and analyze the national distribution of tourists to find out the reason, strengthen differential precise marketing, improvement and advertisement launch. The system also realizes the smart monitoring function and deploys an invisible warning line in the park with sensing equipment. In case of a fire or other emergencies, the system will automatically alarm. Moreover, the system also integrates Wi-Fi, access control, electric vehicle and other Beidou Satellite-based terminals.

• One-button shopping guide

The service can shorten the transaction flow and time and improve the transaction quality through online transaction and trace of tickets, gifts, services and other items online. The scenic spot can analyze and mine mass tourism data, identify personalities and preferences of tourists and develop popular tourism products. Moreover, it can design tourism products meeting personalized demands of tourists, design all-new marketing plans and realize the innovation of tourism products and marketing plans.

3. Influence on global tourism industry

(1) IoT technology will change the service flow and efficiency of tourism industry

IoT technology will change the service flow and efficiency of the tourism industry. IoT can increase the operating efficiency, reduce the human cost and improve the security management level of scenic spots through electronic ticket and monitoring equipment. Moreover, it will also create great convenience for tourists and make it possible for tourists to realize self-service tourism, smart tourism and tourist at their own will.

(2) IoT technology will reshape the global tourism mode

Second, IoT technology will change the discourse structure and power relations of the global tourism industry. During tourist activities, tourists enjoy the full right of speech, share their experiences during the tourism, comments on the scenic spot, adventure, tourism strategy and guide information in a real-time manner. The application of IoT to smart tourism allows tourists to realize more intelligent sharing and fully satisfy personalized tourist services demands. These changes will also deliver a far-reaching influence on the global tourism mode.