Smart Sustainable Tourism Village: Comparison
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Please note this is a comparison between Version 2 by Lindsay Dong and Version 1 by Diaz Pranita.

Tourism has become one of the biggest industries in the world. Many people carry out tourism activities for relaxation, fulfilling curiosity, gaining new experiences, and entertainment purposes (pleasure). Tourism village capability having a positive and significant effect on the smart sustainable tourism village; the smart sustainable tourism village having a positive and significant effect on tourism village management performance.

  • tourism village capability
  • business innovation
  • competitive advantage
  • smart sustainable tourism village

1. Introduction

Tourism is an externally sensitive industry so it is particularly vulnerable to exposure to various risks and to being affected by major crises that occur. Crises in the tourism sector have occurred before, such as the 11 September 2001 terrorist attacks in the United States, the atypical pneumonia epidemic in 2003, the tsunami in the Indian Ocean in 2005, the Zika virus epidemic prior to the Rio Olympics in Brazil in 2016, and, most recently, the crisis due to the COVID-19 pandemic. The implications of all of these crises caused severe damage to the tourism industry [1]. The COVID-19 pandemic resulted in a decrease in the global tourism sector’s Gross Domestic Product (GDP) by USD 2.7 trillion or 30% of the global GDP year on year [2]. 
The COVID-19 pandemic also emphasized a shift in the tourism paradigm from mass tourism (before the 1980s), to alternative tourism (1980–2000s), to quality interest tourism (2000–2020s), and now, in the era of new normal tourism, to customized tourism. In this case, customized tourism can be interpreted as a tourism orientation that is personalized, sanitized, and more concerned with security and health preferences. This special interest in tourism is characterized by a smaller scale but can be more evenly economically distributed and is more environmentally friendly when tourism villages are one of the mainstays. Tourism villages are an alternative tourist destination that continues to grow in Indonesia: in 2015, such villages only numbered 1459 but in 2021, there were 7275 tourist villages [4][3]. However, this development still creates a significant amount of work for the population because, of the existing tourist villages, only 0.03% have the status of an independent tourism village; less than 10% are of advanced tourism village status; and the remaining 90% still have the status of a tourism village. The status of pilot villages needs to be developed; in terms of management, they still require improvement so that they can compete with tourist villages that have an independent or advanced status. In general, a tourism village can be interpreted as an area that has the potential to be a unique tourist attraction, with a community of people who can create a combination of various activities and supporting facilities to attract tourists. The Ministry of Tourism and Creative Economy of the Republic of Indonesia classifies tourist villages into four levels: pilot tourism villages, developing tourism villages, advanced tourism villages, and independent tourism villages. The criteria for an advanced tourism village include that (a) there is local community awareness for tourism development; (b) it has been visited by many domestic and foreign tourists; (c) the tourist facilities are sufficient; and (d) the village tourism organizations are able to manage the tourism, both in utilizing village funds and in the context of improving the village economy; (b) the village is known by foreign tourists and has been recognized worldwide for implementing the concept of sustainability; and (c) the condition of the facilities and infrastructure follows international standards or, at least, ASEAN standards.

2. Smart Sustainable Tourism Village

2.1. Tourism Village Capability

Tourism activity in rural areas can make a significant contribution to the rural economy and, in the context of sustainable rural development, its contribution can be seen not only in financial terms but also in terms of employment, nature conservation, the adoption of new work practices, and the revitalization of passive and poor rural areas [15][4]. Winter and Kim (2021) proved that the capability approach can help investigate the impact of tourism development on poverty reduction and the welfare of the poor in a more holistic and nuanced way by considering the plural and relative nature of poverty and well-being [16][5]. Furthermore, Surmeier (2020) [17][6] also found that the capability of a manager can contribute to the sustainability of the tourism business in a destination. In her research, Pranita (2016) explained that community capacity in managing tourism includes awareness in pioneering the development of tourism potential, knowledge of the concept of a tourist village, the ability to serve tourists, the ability to process souvenirs, and the ability to manage tourist attractions [9][7]. An additional dimension, according to Surmeier (2020), is sensing capability—it is very important for tourism village managers to be sensitive and able to see the potential of what is happening [17][6].

2.2. Business Innovation

Innovation is considered an opportunity to change a business so that it can produce a different product or service [18,19][8][9]. According to Du Plessis (2007), innovation is a change in the output of a business caused by new knowledge and ideas, intended to improve business processes and structures to produce better products and services [20][10]. Business innovation is also associated with the application of something new [20,21,22,23][10][11][12][13] and changes in business models [21][11] that lead to better outcomes [19][9]. According to Bounckne et al. (2016), the dimensions of business innovation are new technologies, new advantages, new features, new markets, and new designs [24][14]. Similar dimensions were posited by Shahwan (2015), who used business models, technology, and products as indicators of business innovation [25][15].
Business innovation is increasingly considered a key success factor in tourism development and destination management. Innovation orientation in tourism destination organizations has a more positive impact on the performance of tourism destination management. This positive impact can be achieved through the se of resources for innovation processes, such as research and development funding, resulting in updated marketing strategies that can encourage performance improvement so that the development of tourist villages can be carried out sustainably [26][16]. Innovation is a strategy to increase organizational competitiveness [27][17]. Tourism villages that offer monotonous attractions without thinking about product innovation will eventually be abandoned. Hjalager (2010) emphasized the need for tourism workers to think about creating and maintaining innovations for the benefit of society and tourists [28][18]. If carried out effectively, business innovation, as a change in the form of new ideas, will later affect the sustainable management of tourist villages. The tourism village that will be studied will be assessed for its ability to change the organization, make new policies, carry out marketing business innovations (social media, websites, video marketing, direct email), carry out tourism village promotion techniques (discounts, giveaways, vouchers), perform service pricing techniques (penetration, psychological, variation), develop products (natural beauty, culture, artificial attractions), and cooperate with the Travel Bureau by introducing tour packages to potential tourists.

2.3. Competitive Advantage

In the tourism context, competitive advantage plays a crucial role for stakeholders in terms of increasing market share [29][19]. Competitive advantage is defined as the ability to increase expenditure on tourism, find ways to attract visitors, provide memorable and satisfying experiences with a profitable business approach, improve the welfare of local communities, and, of course, maintain the natural capital assets of destinations for the benefit of future generations. A destination’s competitive advantage is also translated as the destination’s ability to maintain or improve its position in the market [30][20]. Bris and Caballero (2015) explained that competitive advantage is how countries and companies manage the totality of their competencies to achieve prosperity or profit [31][21]. Experts suggest that there must be drivers of competitive advantage that destinations can use for benchmarking purposes. In thise study, the construction of competitive advantage is considered to be the attitude of an institution skewing toward looking for ways to remain competitive with others. Based on several previous studies, the dimensions that are usually used in the topic of competitive advantage are typically divided into macro dimensions and micro dimensions. In thise study, because the case study used is a tourist village acting as a tourist destination, the micro perspective of competitive advantage is used, with indicators including core resources, infrastructure, destination management, environmental consideration, and price [32,33][22][23]. A new dimension is also added, namely, information and communication technology (ICT) readiness, which has a strong correlation with the extent to which digitalization has been implemented in tourism villages to create smart tourism villages (smart tourism).

2.4. Smart Sustainable Tourism Village

Suta et al. (2020) stated that the development of sustainable tourism is very important to ensure that interactions and relationships between the environment, socio-culture, and the economy are sustainable; they highlighted the importance of paying attention to the welfare of local communities and their culture as well as the creation of long-term economic benefits for all stakeholders involved [34][24]. This strategy is unified into one sustainable business approach that refers to the ability of companies or business stakeholders to respond to their short-term financial needs without compromising their (or other people’s) ability to meet their future needs [35][25]. Another study was also conducted by Hamid et al. (2020), which explored the relationship between the implementation of sustainable tourism practices, focusing on the two main areas of sustainable business and destination management, and business performance; a positive relationship was found between them [36][26]. The implementation of a smart sustainable tourism village can be measured according to several elements that are almost the same, namely, facility design, employee development, marketing strategy, community development, and supply chain effort [37][27]. Based on some of the previous studies, the construct for measuring the implementation of sustainable tourism is how far the implementation of sustainable tourism has been carried out in tourist villages. Apart from being sustainable, tourist villages must also start to take advantage of further technology to become smart destinations. Smartness is important in order to take advantage of the integrated interconnectivity and interoperability of technology. Smartness aims to re-engineer processes and data to produce innovative services, products, and procedures that ensure the maximization of stakeholder value [37][27]. The literature shows elements related to smart sustainable tourism villages, including, among others, those outlined by the Global Sustainable Tourism Council (2013), that measure how sustainable tourism is carried out by collaborating several dimensions, including sustainable management practices, and maximizing social and economic benefits, cultural benefits, and environmental benefits [38][28]. The dimensions and indicators added and adjusted in the smart sustainable tourism village variable are indicators of waste management following circular economy principles, namely, regenerative and restorative [38][28].

2.5. Performance of Tourism Village Management

Concerning tourist villages, the sustainable business performance indicators that can be used include the economic, social, and environmental performance of the tourism business [39,40][29][30]. The adoption of a triple bottom line perspective requires organizations to broaden their focus from one criterion of economic performance to three dimensions of sustainability (economic, environmental, and social performance) [41][31]. The simultaneous consideration of economic, environmental, and social priorities can give companies a competitive advantage, enabling them to outperform competitors in winning target customers [42,43][32][33]. This shows that the importance of sustainability performance can be measured from an economic, social, and environmental perspective. The success of the performance of a tourist village should not be measured solely by quantity but also must consider the quality aspect. This means that the volume/quantity of tourist visits accompanied by income per year and employment absorption must also be balanced with the quality of the tourism activity itself. In this case, the village community involved in tourism work has fulfilled its income equivalent to the applicable minimum wage for work and has received social protection, such as from gender discrimination. Social sustainability can have three general orientations: towards changing behavior to achieve environmental goals; towards the preservation of socio-cultural patterns and practices; and towards reducing poverty and inequality [44][34]. Husgafvel et al. (2015) identified indicators of social sustainability from the perspectives of communities and companies [45][35]. Santos and Moreira (2022) measured social sustainability using employee wages and the average term for earnings (PMR) was used to measure social sustainability from the perspective of stakeholders (clients) [46][36]. Santos (2023) argued that workplace dignity is positively correlated with corporate social sustainability [47][37]. The improving reputation of the tourism sector as a workplace has significant implications for addressing the growing skills shortage. Proactive efforts to improve working conditions, provide fair opportunities for career advancement, and foster a culture of dignity in the workplace are essential [47][37].
 

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