Information and communication technology (ICT) has led to significant changes as well as the development of new business trends in tourism over the past few years. ICT has changed tourism and every other sector globally and therefore become a determinant of the overall level of competitiveness among tourism firms and destinations. The role that information technology plays in the tourism sector in the face of technological advancement has evolved from the use of the internet for marketing, the use of mobile phones to the application of smart technology. Smart technology currently describes a new phenomenon in tourism known as smart tourism. According to Jasrotia, & Gangotia (2018), the concept of smart tourism is derived from the framework of smart cities which depict the environments in which technology is integrated into a city to improve the quality of life for its occupants and enhance service delivery within the city. The smart city is a relatively new development and management model in relation to urban social structures that encompass technology incorporation, industrial convergence as well as intelligent services.

China is one of the fastest-growing economies globally and the concept of smart tourism is well established in its territory. The steady and continuous growth of China’s economy following the implementation of a reform and open policy is one that has attracted the attention of many individuals across the globe (Li, Hu, Huang & Duan, 2017). The country has already ventured into a phase of fast urbanization and is predicted that in the next ten years urbanization will be at 68 percent. Therefore as the process of urbanization continues to intensify, the need to improve the quality of life, in urban locations has become an important matter. In this context, smart city refers to the development of urban space which generally contains the physical setting, virtual internet world, and the intelligent worlds made up of the internet of things (IoT) have become very crucial (Wang, Li & Li, 2013). The integration of smart city and information technology which are grounded on the urban information system has resulted in substantial innovative prospects for future strategy in terms of urban development in China.

Yalçınkaya, Atay & Korkmaz (2018) posits that, in today’s technology-driven business landscape and society, the smart city is an unavoidable trend in the development of Chinese cities. The strategy involves the process of integrating information technology as well as an intellectual economy to expansively enhance urban planning, management, and service delivery level across China. The strategy involves the feasible application of information technology, industrialization as well as urbanization. Dabeedooal, Dindoyal, Allam & Jones (2019), establishes that, essentially, the approach encompasses a transformation from technological development in the industry set to social intellectualization. From a business perspective, the most vital value that is linked with the rapid advancement of technology is the exponential growth of information which impacts every aspect of the business on a day to day basis allowing the sector to make a reliable prediction of consumers’ interests. A smart city is a concept that additionally focuses on the cultural and social life and might, therefore, lead to improved social interactions. Since tourism is significantly related to the concept of culture, therefore, a smart city is an ideology that is directly related to tourism. Smart technology is a buzzword that has suggestively been changing how individuals about the use of websites, mobile applications, and smartphones in making travel decisions including transportation, tour activities, and the availability of accommodation in their desired tourism tourisms (Zhu, Zhang & Li, 2014). Consequently, smart tourism entails a smart tourism experience representing technology-centered experiences that integrate personalization, real-team observation, and context-awareness.

Gretzel et al. (2016), asserts that Smart tourism is taking shape in China courtesy of innovation and technological advancement but it has not been adequately expounded in literature. There is therefore a need to explore and analyze the factors that continue to affect the development of smart cities and smart tourism in China. Thus the objective of this research is to explore and analyze the key factors that impact the development of smart cities and smart tourism in China. Beginning by exploring the nature of smart tourism and the opportunities and challenges that it creates, the paper examines forces that influence smart tourism development in China as labeled in literature and following a case study of the leading smart tourism destination across China. The analysis will mainly be narrowed to three main factors which are ICT, the innovation of the business landscape, and human capital (Guo, Liu & Chai, 2014). The analysis will provide insights about existing challenges and opportunities and propose feasible strategies to improve the travel and tourism industry in China through smart technology.

1.1 Background

For organizations to survive in the highly competitive tourism industry there is a need to be smart. According to Wang, Li, & Li (2013), smartness is a requirement for attaining and maintaining competitiveness based on the ability to offer clients personalized experiences. In this case, smartness shapes service delivery by ensuring that customers receive real-time services at their convenience. As the business world is characterized by rapid changes that created unforeseen challenges, smart technology is vital as it can generate feasible solutions to the existing issues. Normally, smart entails the application of the latest technology in creating a comfortable working environment that is dominated by productivity and high performance. Tourism organizations have realized that the sustainability of the industry lies in their ability to offer customer-centered services. Customer satisfaction is mainly achieved by combining affordability, accessibility, and convenience as the main values which lead to customer satisfaction.

Gretzel, Reino, Kopera & Koo (2015) highlights that, while the concept of smart city has been gaining popularity globally, in the last couple of years, due to technological advancement, there lacks definite definition to specifically explain the concept. The meaning of the concept varies depending on its application as it was initially coined to promote the improvement of service delivery in major cities. In general the term smart is related to fast operations using technological developments. The engagement of Information Technology (IT) in different aspects of city life has resulted in the evolution of smart cities (Boes, Buhalis & Inversini, 2015). Various challenges stemming from globalization and the growth of the population in China have been forcing major cities to establish smart solutions in the management of existing issues. Modern cities with the capability to deal with emerging challenges are regarded as a smart city.

Tourism represents a cultural, social, and economic phenomenon that involves the movement of people to places or countries outside their normal setting for different reasons. Tourism is one of the most information-intensive settings and this has resulted in the application of the smart concept to transform the general tourism landscape to align with customers' demand (Guo, Liu & Chai, 2014). The Smart City phenomenon encompasses a wide range of sectors, including the tourism sector. Introducing smartness into tourism destinations necessitates that the organizations and destinations to enable the exchange of information amongst stakeholders to improve the decision-making process. Ultimately, this helps the service providers in the tourism sector to offer improved services to their customers.

Gretzel, Werthner, Koo & Lamsfus (2015), establishes that, in regard to IoT technology, ICT and cloud computing, smart tourism is focused on the application of intelligent perception of different types of tourism information such as tourism economy, tourist resources, tourism operations, and tourism stakeholders among others in the realization and transfer of tourism information from the internet. Therefore, smart technology is becoming a vital aspect of China’s smart city approach while ICT is at the core of the smart tourism system. Currently, the country is following the theme of smart travel which was launched in 2014 to boost tourism in the country as one of its economic agendas (Jasrotia & Gangotia, 2018). China is focused on developing its economy from different levels by ensuring all sectors record a substantial growth and transformation and the use of ICT is making this dream possible.

Based on Zhu, Zhang & Li (2014), the peak of ICT as a result of the digital revolution has changed the tourism market by shifting it towards increased diversity. The competitiveness of the industry is dependent on its ability to achieve constant growth in terms of market share and profit maximization. ICT plays a crucial role in shaping the growth of smart tourism due to the wide use of smartphones and correlated technologies that are present in every field. The use of ICTs such as IoT enabled gadgets and sensors are constantly changing the way of life in the modern world as they significantly contribute to urban development including the utilization of resources, sustainable development, and economic growth. The speedy growth of urbanization is responsible for crowding due to dense population concentration, poor living conditions, and serious challenges within cities that are faced with progressively sophisticated smart systems. Cities gain better insight into feasible solutions to dealing with the issues of urbanization by being using smart technology while building smart cities (Su, Li & Fu, 2011). In other words, smart is a phenomenon that refers to economic, technological, and social developments that are augmented by ICT developments hence facilitating connectivity and information exchange from one party to the other which eases the decision making process. Forward-thinking or smart cities are constantly making significant investments in the development and design of the cities which are originally known as intelligent and digital cities. With the great innovation within the current information technologies, cities can develop more intelligent and connected designs. A smart city refers to high technology and an extensively connected city that utilizes advanced and novel technologies in creating sustainable capital, innovative businesses, and improved quality of life for residents and visitors.

Buhalis& Amaranggana (2013) suggest that smart tourism which is an outcome of smart city has been presented as one of the most pressing issues in China’s travel and tourism sector for the last decade. Most studies agree that smart tourism is an ICT incorporated urban tourism stand that combines tourism concepts and information techs like artificial intelligence (AI), IoT, and cloud computing to offer explicit information as well as effectual services to tourists in specific cities following the rapid development of advanced mobile technology. Smart tourism is beneficial to the Chinese travel and tourism industry in different ways. First, a section of urban tourism information can be sourced, integrated, and managed from a centralized approach hence providing convenience to tourists in acquiring the needed information as well as services (Boes, 2015). Also, it facilitates the application of monitoring strategies within scenic zones which can enhance real-time tracking of tourists, needed services, and analyze the services they demand. Smart tourism should be founded on offering information exchange which substantially improves response time in the handling of information.

From a tourism perspective, a smart city is a phenomenon that has enormous influence particularly in the travel experiences and decision making among tourists. Also, to the economic benefits of a smart city based on the ability to attract a significant number of tourists, the tourism industry normally affects the destination environment (Guo, Liu & Chai, 2014). Smart technology is beneficial as it improves the perception of city residents with regard to the tourism business as their city serves as a tourism destination. Major tourism destinations are often faced by major challenges resulting from population growth such as traffic and overcrowding. Tourists are highly attracted by tourism destinations with less crowding as the population density is crucial in determining their satisfaction rate. However, urbanization is China is an inevitable trend and with an increase in population smart city is focused mainly on improving the experiences of city residents and visitors by improving service provision. In the face of globalization, the tourism industry has the potential to grow significantly both in the short-run and long-turn (Liu & Liu, 2016). The growth, in this case means securing a significant market share hence enhancing the ability to maximize profitability. In other words, competitiveness in the industry relies on the ability of tourism destinations to attract more tourists while retaining existing ones. Stakeholders in the industry term smart tourism as an important channel for enhancing visitors’ and residents’ experiences simultaneously. Smart tourism cities in China are willing to increase their investment in resources in the bid to develop, implement and sustain the smart system that helps in solving tourism-related issues, protecting citizens as well as providing them with improved living conditions (Liu & Liu, 2016). Thus, smart cities act as innovative tourist destinations that facilitate sustainable development that allows tourists to enjoy unique interactions and experiences with their chosen destinations and ultimately improve the quality of life for residents.

However, with the embedment of technology in the cities’ setting, the concept of smart tourism depicts new challenges that affect sustainable development efforts. Existing research on smart cities has not focused on the factors that influence the development of smart cities and smart tourism destinations in China (Gretzel et al., 2016). Therefore, this study will be important in uncovering crucial components that facilitate or hinder the development of smart cities and smart tourism in China. Key insights with respect to the role of smart tourism cities in sustainable development have also been discussed.

Currently, the development and implementation of smart city and smart tourism are faced with major challenges such as coordination issues, lack of adequate technical support, lack of knowledge and skills, and minimal construction level (Wang, 2019). For a long time, the construction of smart construction is mainly dependent on effective management and to achieve this unified coordination as well as information sharing is needed. This, therefore, makes the overall development very challenging. Besides financial funding, technical support is highly required in the development and implementation of smart technologies in a timely and effective way (Wang, 2019). The information that exists with regard to the system is particularly minimal and this, therefore, implies that varied practices exist and this ends up creating more challenges. The lack of skilled and competent individuals to support the project further creates more challenges for development.

1.2 Problem Statement

Societies and economies in general have always been susceptible to changes. However, change has never been so strong and rapid as it has been witnessed in recent years particularly in the case of China which has been a source of a surprise based on its rapid developments. Currently, global forces that are shaping the world have continued to become more complex and very challenging by causing a disruptive transformation in every aspect of contemporary society. According to Sigalat-Signes et al., (2020), to be successful as an organization, in today’s fast-changing society, there is a need to generally understand the practices that are required to adapt to the forces and how they can be utilized as an advantage. Technological changes play a critical role in shaping the tourism industry and recent developments that involve the development of smart phenomenon have been acknowledged as a source of a paradigm shift within the current tourism industry.

The smartness phenomenon emerged as a multifaceted technological infrastructure embedded in urban areas as a smart city to fuel social, economic, environmental, and environmental growth. The application of ICT in tourism has resulted in improved processes as the industry continues to face social issues related to urbanization (Xu, Huang, Zhu & Zhang, 2018). The technology is important as it serves as the model through which future tourism operations are based. The Chinese government recognizes that to enhance its global positioning in terms of growth it must integrate economic, environmental, and social success. Smart cities and smart tourism destinations are in the view of smartness concepts classified as complex eco-systems with an extensive range of stakeholders that eventually work together in creating values for others and selves (Wang, Li, Zhen & Zhang, 2016). The public sector in China has begun to acknowledge the value of smart technologies in enhancing economic development and economic growth. 

It has been a decade since the government of China began to development of smart tourism as part of its economic development ambitions (Gretzel, 2018). Throughout the decade, several achievements in the travel and tourism with regard to the application of smart technology and smart city concepts have been achieved. Urbanization remains to be one of the crucial indicators of modernization in China and globally and is likely to continue in the future in the face of globalization, economic growth, and rapid technological advancement. While the concept of smart tourism has been embraced by stakeholders in the industry and projects implemented in several cities as pilot studies and real development, the current performance of the industry is still lagging of the set goals (Buonincontri & Micera, 2016). China is one of the most advanced nations in terms of ICT which is the main facilitator of smart tourism and smart tourism but several issues are responsible for adversely affecting the implementation of the smart tourism system.

The concept of smart tourism is relatively new and therefore not fully understood. While the phenomenon appears as simple, its practical application is rather challenging. In actual sense, the structure of a smart tourism system does not only involve the construction of an information technology scheme but the project needs to be implemented in alignment with the informatization and economics needs of the travel and tourism industry (Xiang, Tussyadiah & Buhalis, 2015). In China, smart tourism refers to a government focused system that is likely to differ when compared to that of different regions such as Europe. The government retains control of the project which affects the implementation and decision making process since tourism enterprises and stakeholders are rarely involved throughout the process of development and implementation. The situation mainly stems from several reasons such as funding and time. The smart tourism system requires immense investment and tourism enterprises are unable or unwilling to invest massively in supporting the cost of a project that is unlikely to generate short term benefits (Buhalis & Amaranggana, 2015). Smart tourism in China is considered as a public resource that mainly benefits tourists, which involves the integration of resources. Unarguably, the Chinese government has the most advantage in terms of mobilizing resources and it, therefore, plays a crucial role in the development of smart tourism systems.

With reference to Buonincontri & Micera (2016), the shortage of integrated standards greats challenges in managing smart tourism as well. The lack of standard measures in the evaluation of the development of smart tourism hinders the successful development and implementation of the system. There is also limited literature with regard to standards that needed in facilitating the successful implementation of the process. While most cities in China tend to rely on a variety of approaches as proposed by public tenders, accepted solutions differ based on existing situations that affect the evaluation of the entire tourism system. With reference to details, the presence of unified standards for data exchange can offer convenience in terms of communication which is critical in enhancing the system’s effectiveness (Gretzel, Ham & Koo, 2018). The lack of unified standards leads to the emergence of challenges in management.

Also, the government of China serves as the main investor and guider in the ongoing development and implementation of smart tourism. The government is currently involved in the development of several economic projects that are vital in enhancing its global economic position (Kaur & Kaur, 2016). The situation might result in major challenges as the government might not afford the huge funds that are necessary for supporting smart tourism leading to termination, delay, or interruptions of the entire projects which explain why some projects are still lagging in the set goals. The government of China takes a rather huge responsibility in controlling the development of smart tourism which might affect the effectiveness of the smart tourism business by making the initiative rather government-centered on marketization leading to low revenue generation (Wang, Li, Zhen & Zhang, 2016). Ultimately the outcome of this is indicative of the challenges faced in the development of the system. Therefore, investment attraction acts as a vital role in the development of smart tourism in general.

Smart business systems are the foundation of smart tourism. Alongside technology infrastructure, they help in determining the structure and system to be followed in achieving the desired results. Smart tourists rely on the use of personal technologies in exploiting existing resources that contribute to the development of data. Smart tourism, therefore, takes advantage of the values provided by smart technology in the development, managing, and offering intelligent touristic experiences that are characterized by intensive sharing of information (Gretzel, 2018). Gathering, processing, and sharing of tourism relevant information serve as the primary function in the smart tourism system. An additional issue of the technology is that there is a significant digital gap that is likely to affect the experiences of tourists. In China and across Asia it is worth noting that smartphones are rather affordable and easily accessible which is aimed at closing the existing digital gap among tourists. Today, traveling without the use of the smart networks is rare and while smart tourism help in creating convenience and ultimately improving the travel experience of tourists, the need to constantly rely on smart devices might also impact the experiences of the visitors negatively (Wang, Li, Zhen & Zhang, 2016). The smart tourism system has a rather complex infrastructure that necessitates the investment of knowledge.

Undeniably, the successful development of a smart tourism system within the national scope serves as a long-term and challenging task which mainly incorporates technological innovation and the collaboration between tourism enterprises and the government within operating phases. While China has achieved significant development with regard to smart tourism, the lack of standard measures and clear policies regarding the role of both the government and enterprises needs to be clear to solve the existing challenges.

1.3 Significance of the Study

The findings of the current research will mainly benefit the travel and tourism industry in China and across the globe, considering the vital role that it plays in socio-economic development. The tourism industry has developed rather extensively over the last couple of years, and it is considered as one of the leading economic growth indicators today. The increased demand for smart travel which is associated with convenience and comfort justifies the need to develop and sustain smart tourism in China. With the fast growth of urbanization which is taking shape in China, it is rather clear that tourism destinations must equip themselves with all the necessary resources to provide tourists and city dwellers with high-quality services while boosting socio-economic growth. Cities in China have been investing heavily in achieving smartness over the last couple of years and the development which has been significantly successful even though coupled with several challenges illustrates the long-run potential of smart cities and smart tourism (Buhalis & Amaranggana, 2015). Therefore, the study will provide an in-depth discussion of the factors that contribute to the development of smart cities and smart tourism destinations in China as part of urban development (Kaur & Kaur, 2016). Therefore, the tourism enterprises and destinations that adhere to the recommended practices will acquire the ability to deliver high-quality services to tourists and cities’ residents hence fostering better interactions between them.

The smart tourism project is headed and funded by the government based on its extensive need for resources and the fact that it does not generate short-term benefits. Therefore, the findings of the study will provide the Chinese government with a standard framework to follow in the development and implementation of the smart tourism system. It is worth noting that it has widely been cited in literature that the lack of collaboration between the government and major stakeholders in the industry has contributed to the delayed success of the projects given that most of them are yet to achieve the set goals close to a decade after the initiative began (Buhalis & Amaranggana, 2015). Additionally, the study will help inform tourism enterprises and investors on the role they play in urban and smart tourism development in general. The research will also help in establishing the existing gaps in innovation and ICT and therefore, inform the involved stakeholders on the appropriate measures to be taken in overcoming the hurdles in the short and long-term for sustainable development and economic growth. Tourism plays in facilitating development, and therefore, the findings of the research will benefit society in general, by providing useful insights into the importance of smart tourism in maximization of revenue. The findings will help in ensuring that sustainability in the travel and tourism sector in China is achieved through the development of smart cities and smart tourism destinations that aligns with the needs of its citizens and visitors as well.