ECLAC Examines the Digital Transformation Process of Tourism-related MSMEs in SICA Countries

A new publication by the subregional headquarters in Mexico includes a cross-cutting gender analysis and addresses the innovation capacity of rural companies in this sector.

The Micro, Small and Medium-sized Enterprises (MSMEs) dedicated to tourism in the member countries of the Central American Integration System (SICA) recognize the importance of digital tools for attracting tourists, attaining visibility and selling, and they show great willingness to engage with them. However, they still only make basic use of these technologies for communicating and promoting their business, missing opportunities to improve their competitiveness, productivity and sustainability, according to a new document published by the Economic Commission for Latin America and the Caribbean (ECLAC).

The publication entitled Tourism in Central America and the Dominican Republic in the Face of Digital Technologies: Challenges and Opportunities for MSMEs, produced by officials from ECLAC’s subregional headquarters in Mexico, reveals that the main gaps hindering progress on the digital transformation revolve around three issues: (i) use; (ii) access; and (iii) time.

1. Companies are connected to the Internet, but they only use tools like social media and messaging platforms in a basic way. The limited digital capacities lead to a lack of familiarity with new technologies, difficulty for outsourcing and supervising digital services, and basic use of business management tools.
2. There are different types of access barriers, mainly the quality of the broadband in relation to its cost in remote areas, as well as the cost of digital equipment and services such as digital marketing or data analytics. In addition, there are very limited capacities for sustaining ongoing investment in digital products and services.
3. The companies analyzed tend to be family businesses or microenterprises where many diverse tasks are distributed among only a few people, so there is little time available to innovate. Many of these conditions are exacerbated in rural areas, where the majority of the region’s tourist attractions are located.

Women, both in their capacity as workers and business owners, face additional challenges in the digital transformation process, the document indicates. Although tourism facilitates their economic empowerment, women occupy operational and administrative positions normally excluded from digital training programs; they face more financing restrictions; and they have less time available to innovate due to the greater burden they shoulder in terms of unpaid care work.

Innovation, facilitated by digital tools, has the potential to provide solutions to the most persistent challenges that MSMEs face: business management, access to financing, and professionalization and continual training, ECLAC’s publication underscores.

Finally, the text recalls the importance of managing communities that draw tourism through articulation in the territory, and the need to have institutional capacities so that public policies can adequately meet the diverse needs of each region.