The Impact of Digital Capability on Long Tail Tourism Marketing in

Marine Tourism Destination

Diaz Pranita

, Ernie Tisnawati Sule

and Umi Kaltum

Vocational Education Program, Universitas Indonesia, Kampus UI Depok, Depok, Indonesia

Faculty of Economics and Business, Universitas Padjadjaran, Bandung, Indonesia

Keywords: Digital Capability, Niche Tourism, Long Tail Tourism Marketing, Long Tail Economy, Marine Tourism

Destination

Abstract: The objective of this study is to identify how digital capability affects the performance of long-tail tourism

marketing in marine tourism destination in Indonesia. Internet and digital technology have led changes in

tourism products to be more specific and fragmented or known as long tails. More significant demands for

niche products have made popular products' demands or short heads, tend to decrease. When combined

together, long tails can become more significant than brief leaders. Questionnaires from 134 yachting tourists

visiting 20 marine destinations, participating in Wonderful Sail to Indonesia yacht rally were collected. It is

analytical research using Structural Equation Modeling (SEM). The results show that there is a significant

effect of the digital capability to the long tail of tourism marketing, especially on the aspects of tagging

capability, manage big data, and develop the internet of things. In addition, the development of specialization,

differentiated and personalized tourism destinations are the critical factors to ensure the success of long-tail

tourism marketing. Based on the result, it is essential for tourism destination to gain digital capability in order

to be successful in benefitting from the application of long tails tourism, especially in the marine tourism

industry.

1 INTRODUCTION

The world today is facing digital economy challenges

(Freitas et al., 2016), the digitized information, and

ICT infrastructure based economy (Zimmerman,

2000). In the tourism industry, the development of

ICT has influenced tourism for more than 40 years

(Buhalis & Soo, 2011), and did a disruptive tourism

business (Karimi & Walter, 2015). Digital technology

makes companies need to redefine traditional

business strategy into the modular process, well

distributed, cross-functional and global which enable

works done beyond the limitation of time, distance

and function (Freitas et al., 2016). Digital technology

transforms social relationships both customers and

businesses with social media and social networks

(Kohli and Grover 2008).

According to Dickinson et al. (2014), digital

technology, particularly mobile and smartphone

technology in the tourism sector has led tourist

destinations connected with tourists through

information provision, location-based data and social

information sharing. Digital technology becomes

robust tools for tourists when travelling. Smartphone

becomes a tourism partner, and tourism becomes

fertile land for digital business and mobile computing

(Cheverst, Davies, Mitchell, Friday, & Efstratiou,

2000).

The rapid development of ICT and massive

growth of internet users, causing tourism travel

planning to be the main reason for internet use in the

tourism sector, since tourists use the internet to search

for information, making reservations for tourism

products such as aeroplane tickets, buses, trains,

hotels, attraction tickets and so on, to a medium to

share the travel experience (Buhalis & Soo, 2011).

Therefore, business organizations and industries in

the tourism sector, must carry out digital

transformation and have new capabilities, the

capability of utilizing digital technology, which is

hereinafter referred to as digital capability to be able

to survive and win the global competition.

Lew (2008) stated that since the 1980s, special

interest tourism with personal experiences had

become a phenomenon in the travel and tourism

industry. The interest and growth of this market

326

Pranita, D., Tisnawati Sule, E. and Kaltum, U.

The Impact of Digital Capability on Long Tail Tourism Marketing in Marine Tourism Destination.

DOI: 10.5220/0010675900002967

In Proceedings of the 4th International Conference of Vocational Higher Education (ICVHE 2019) - Empowering Human Capital Towards Sustainable 4.0 Industry, pages 326-331

ISBN: 978-989-758-530-2; ISSN: 2184-9870

segment continue to grow, so that niche tourism is

referred by Auliana Poon as new tourism in the 1980s

and 1990s. According to Longhi & Rocchia (2015),

the development of ICTs and the internet caused a

second explosion in the growth of niche tourism or

niche destinations because it opened the market niche

that was initially not economical which increased

overall demand, known as the birth of the long tail

tourism economy. The internet causes tourists to

explore niche products where they can better explore

niches, tend to find things they like and can consume

a large portion of niche products.

Long-tails were first introduced by Anderson

(2004) because the phenomenon of distribution on

tourism demand and economic approaches is

different from the old path where profitability does

not only depend on economies of scale and

undifferentiated mass-market exploitation (Lew,

2008). Financial coverage, systems gains, market

fragmentation, individualized and customized

vacations are increasingly crucial for tourism

profitability and competitiveness (Longhi & Rocchia,

2015). Miranda (2012) concluded that the economic

model of long tails with the term 'maxi-min' is that the

maximum tourists in the minimal destination and

accommodation, which are benefits the minimum

actors. The distribution results of this model refer to

the Pareto distribution law, which is 80% or more of

a phenomenon that benefits 20% of actors, for city

size, income, and tourism. From a distribution

perspective, the world is very rarely seen in normal

but fractal or endless distributions. This means that

the shipping is formed by many mini-tails, each of

which has its own world. In the context of tourism

distribution law, overall tourism demand is created on

all curves formed by each type of special interest

tourism. This applies to all tourism products such as

accommodation, attractions and so on (Day et al.,

2011; Longhi & Rocchia, 2015). The internet

significantly affects the distribution of activities,

causing the tail of the distribution curve to be longer

and thicker, and further reduce the head area or short

head. Therefore Day et al. (2011), underlining the

legal strength of the demand curve can be seen as a

superposition of all demand curves formed by each

destination or accommodation, from the tails within

each tail, which then has implications for the higher

chance of a niche product. The long tail concept is

defined by Lew (2008) as an internet-based marketing

approach for small and medium-sized businesses or

new destinations to compete in the global market.

Therefore Day et al. (2011), underlining the legal

strength of the demand curve can be seen as a

superposition of all demand curves formed by each

destination or accommodation, from the tails within

each tail, which then has implications for the higher

chance of a niche product. The long tail concept is

defined by Lew (2008) as an internet-based marketing

approach for small and medium-sized businesses or

new destinations to compete in the global market.

Therefore, the internet causes a fundamental

change in the tourism business, where every product

has its own market, and even the most remote

destinations can access global markets. On the other

hand, the development of ICTs also causes tourists to

further define products individually and consider the

products consumed to reflect their identity.

This situation is an opportunity for particular interest

tourism destinations to grow and reach markets

massively. What is interesting is that tourists are

currently incorporated in communities with specific

interests, and the business concept is no longer just

B2B or B2C but becomes C2C.

As the largest archipelagic country in the world

with abundant maritime wealth, this condition is an

opportunity for every smallest niche market,

especially those included in marine tourism, which

began to receive attention and the government's

commitment to its development to immediately enter

and compete with international markets, especially

for small islands and outermost to be able to enter the

global market. On the other hand, the internet and

digital technology can also integrate scattered tourist

destinations so that stakeholders can collaborate to

develop tourism products and dispersed markets that

are accessible. However, to be able to successfully

develop a long tail marketing destination and tourism

businesses in destinations must-have digital

capabilities. Therefore, based on the above

phenomena, this research is intended to see how much

digital capacity contributes to long-tail tourism

marketing. In order for research to form essential

aspects of long tails tourism, the unit of analysis is a

seaside destination that is passed by yacht tourists

while the observation unit is yacht travellers who

travel to marine destinations in Indonesia.

2 LITERATURE REVIEW

2.1 Digital Capability

Digital capability according to Freitas et al. (2016) is

the ability to provide information to tourists instantly

at the time needed and utilize ICTs and specific

technologies such as social media, web-based and

mobile technologies, search location and tourist data,

and big data analytical skills. Digital capability is

The Impact of Digital Capability on Long Tail Tourism Marketing in Marine Tourism Destination

327

needed to achieve four objectives, namely

overcoming market competition, increasing the

efficiency of internal communication, structuring

business ecosystems, and reducing information

complexity and uncertainty (Freitas et al., 2016).

The dimensions of digital capabilities used in this

study refer to the capability indicators proposed by

Dickinson et al. (2014) and Freitas et al., 2016), the

capacity to manage big data, the capacity to do social

networking, context awareness capability or

proximity sensor capability, internet development

capability of things, and the ability to build a tourist

experience ecosystem.

Capability to manage big data is the ability to

provide digital information when needed (Dickinson

et al., 2014; Freitas et al., 2016). Capability to do

social networking is the ability to share information

with friends or communities that are chosen in

specific applications (Dickinson et al., 2014).

Context-awareness capability is the ability to inform

the proximity of tourists to an object (Dickinson et al.,

2014). Capacity to build the internet of things is the

ability to integrate and configure internal and external

information (Freitas et al., 2016) and the ability to

remind consumers in the future/tagging capability

(Dickinson et al., 2014), while the capacity of

building a multi-channel ecosystem is the ability to

creating digital platforms by finding, exploring and

applying knowledge about resources, opportunities

and exploiting opportunities to improve the efficiency

of internal communication and structuring business

ecosystems (Freitas et al., 2016). Ecosystem

capability can reduce the complexity and uncertainty

of information and provide data and news in the right

format.

2.2 Long Tail Tourism Marketing

In more than three decades, tourism experts have

discussed tourism in the context of globalization, and

technological change called the new tourism, which

is characterized by the birth of niche market tourism

(Lew 2008). Juliana Poon has mentioned the trend

since 1998.

The long tail concept refers to the behaviour of the

economic sector that provides products in relatively

low volumes but is able to generate profits by giving

aggregate product variations. The current

phenomenon, the total aggregate amount of long-tail

products is often higher than the short head or

products with large volumes. Usually in short head

products contribute to 80% of sales while 80% of

long-tail products only affect 20% of total sales.

In a tourism perspective, short head is the main

tourist-producing destinations which are usually

popular and attract many visitors while the long tail is

a destination of particular interest (particular interest

tourism destination). The concept of The Long Tail

became famous as a way of explaining the structure

and success of internet-based activities and

representing new approaches to marketing and sales

that before the internet was born nonexistent

(Anderson, 2004; Brynjolfsson, Smith, & Hu, 2003).

The internet provides inexpensive media for

individuals and businesses to reach potential

audiences and consumers who are not bound by

traditional geographic time and location. The internet

eliminates traditional factors such as relative distance

with raw materials or consumers. This is increasingly

felt by specialized services and small market niche

products that are in the Long Tail economy.

The indicator of long-tail tourism marketing

according to Lew (2008) is the level of

differentiation, specialization, personalization of

tourist destinations; tourist community, healthy

interactions with tourists, and the use of digital

marketing.

Differentiation is a differentiating aspect between

a product or tourism destination compared to other

products and destinations. Specialization is the

specific competence of goals and outcomes towards

the unique needs of tourists. Personalization is the

flexibility of a tourism product or destination serving

tourists individually. Digital marketing is the use of

digital technology for tourism promotion and

marketing activities. Marketing through Social Media

is a promotional activity and communication with

tourists by using social media. Interaction is building

strong relationships with tourists.

2.3 Hypotheses

This section must be in one column.

Implicitly, the research of Sayre et al. (2012) from

the Boston Consulting Group, stated the importance

of digital capabilities owned by companies to achieve

effective digital marketing. Alharbi (2015) says that

marketing capabilities can form a marketing strategy,

while Banerjee and Soberman (2013) state that

product development capabilities affect marketing

strategies. Therefore, the research paradigm is

illustrated in Figure 1 below.

The research propositions are:

: Digital Capability affects Long Tail Tourism

Marketing

: Digital capability does not affect Long Tail

Tourism Marketing

ICVHE 2019 - The International Conference of Vocational Higher Education (ICVHE) “Empowering Human Capital Towards Sustainable

4.0 Industry”

328

Figure 1: Research Paradigm

3 METHODOLOGY

Primary data was obtained by distributing

information to yacht tourists who were sailing in

Indonesian waters where these tourists enjoy most of

the individual interest marine tourism products such

as snorkelling, diving, yachting, ecotourism, culture

and so on. Questionnaires were measured using an

ordinal scale of 5 for excellent ratings and 1 for bad

grades.

This research is a quantitative research that uses

Structural Equation Modeling (SEM) to generalize

data and continue the principal component analysis

features and multiple regression (Hanlein & Kaplan,

2004). This method is useful for predicting how the

influence of the dependent variable on the

independent variable. Data was collected by

distributing questionnaires to yacht tourists when

they leaned or anchored in Indonesian waters. A total

of 134 questionnaires were collected representing 67

yachts participating in the Wonderful Sail to

Indonesia. The research was conducted at one time.

Respondents were asked for their opinions on six

digital capability indicators and six indicators of long-

tail tourism marketing with a value of 1 for very poor

assessment and 5. The statistical test used in this

study was a t-test with an error rate of 0.05 to test how

much influence capability digital against long-tail

marketing.

4 DISCUSSION

4.1 Model Suitability Testing

The results of data analysis show that the suitability

of the overall model is adequate as it indicates the

model fit. Chi-Square (145.36) where (P = 0.00), is in

the range of right fit. The goodness of fit index (GFI)

and normed fit index (NFI) is always between 0 and

1 indicating perfect fit even though values above 0.9

indicate good fit (Bentler and Bonett 1990).

The model has GFI of (0.85) and NFI (0.88),

AGFI (00.77) shows marginal fit. RMSEA (0.11)

with a 90% degree of confidence for RMSEA (0.092;

0.14), P-Value for Close Fit testing, namely RMSEA

<0.05 (0.00). The non-normed fit index (NNFI) and

the comparative fit index (CFI) are two additional

measurements between 0 and 1, where values

approaching or greater than 0.90 shows reasonable

model fit (Sim et al. 2006). The NNFI and CFI for the

models are 0.90 and 0.92, indicating a good fit.

Overall GFI, AGFI, NFI, NNFI and CFI results

indicate that the model is fit.

Table 1: Goodness of Fit

The

goodness of

Fit Index

Model

Fit

Criteria

Data

Analysis

Result

Remarks

Chi-Square

Chi-Square χ2 < χ2

table

28,96 Good

P-Value P ≥ 0.05 0,06665 Good

Absolute Fit Measures

GFI ≥ 0.90 0,94 Good

Normed Chi-

Square

< 2 or <

1,524 Good

Incremental Fit Indices

NFI ≥ 0.90 0,88 Marginal

NNFI ≥ 0.90 0,92 Good

CFI ≥ 0.90 0,95 Good

IFI ≥ 0.90 0,95 Good

RFI ≥ 0.90 0,82 Marginal

Parsons Fit Indices

AGFI ≥ 0.90 0,88 Marginal

Source: Data Analysis Result

4.2 Intra-class Correlation in Variables

The results of data processing show that the highest

factor in forming digital capabilities is the tagging

capability (ability to remind products and services in

the future) which reaches 82%, the ability to manage

big data (78%), the ability to develop internet of

things (78%), the ability to manage social networks

digitally (0.72), develop context awareness or

proximity sensors with objects (0.70) and the ability

to build digital ecosystems (66%) as listed in Table 2.

This means that the capabilities that need to be

possessed by the destination and tourism industry in

the digital era are the ability to inform products and

services in the future (tagging capability), manage big

data, develop IoT and manage digital social networks

or tourist communities.

Digital

Capability

Long Tail

Marketing

The Impact of Digital Capability on Long Tail Tourism Marketing in Marine Tourism Destination

329

The ability to develop context-awareness and

build a digital ecosystem is the next priority. The

most important factor that forms the long tail tourism

marketing variable is product personalization (86%)

which indicates the need for a large variety of

products according to individual consumer desires,

product differentiation (82%) and destination and

industry specialities (69%) to serve market niches

(individual interest tourists). Surprisingly, the

development of social media marketing, digital

marketing and intense interaction with tourists only

correlated 45%, 22% and 29% respectively. This

means the essential thing in long-tail tourism

marketing is the uniqueness of its products.

Table 2: Intra-Class Correlation in Variable.

Variable/

Dimension

Items Intra-class

elation

Digital

Capability

Ability to manage Big

Data

0,78

Ability to manage digital

social network

0.72

Ability to develop

context awareness

Ability to build the

Internet of Things (IoT)

Tagging Capability

Capability to develop a

digital ecosystem

0.70

0,78

0,82

0,66

Long Tail

Tourism

Marketing

Specialization 0.69

Differentiation 0.82

Personalization 0.86

Digital Marketing 0.42

Digital Social Network

Customer Engagement

0.45

0,29

Source: Data Analysis Result

4.3 Hypothesis Testing

Hypothesis test results show that there is a significant

effect of digital capabilities on long-tail tourism

marketing (test F = 2.48). Research shows that the

influence of digital skills on long-tail tourism

marketing is 25%. This means that digital skills,

especially tagging capabilities, managing big data,

developing IoT and awareness context contribute

25% to the success of long-tail tourism marketing,

and by 75% are other factors not examined in the

research.

This situation indicates that in order for a long tail

tourism marketing approach to be effectively applied

to niche tourism destinations or marine tourism

destinations, tourism destinations need to have digital

capabilities, especially the ability to tagging, manage

big data, develop IoT and context awareness. Tagging

capabilities, leading big data, and context awareness

will be more easily achieved if the destination has a

digital ecosystem that is able to integrate resources -

resources, businesses and scattered maritime business

actors. The digital ecosystem platform developed

must also be able to accommodate digital social

networking to incorporate scattered consumers or

tourists. On the other hand, the digital ecosystem

platform that was developed needs to adopt the

concept of long-tail tourism marketing, namely

differentiation, personal service, specialization to

capture specific market segments and encourage

digital marketing activities.

The birth of long-tail tourism indicates a massive

opportunity for particular interest destinations so they

can immediately enter the international market

without having to build large-scale infrastructure but

instead develop facilities and support that are specific

to the needs of tourists because the digital ecosystem

platform will provide very high for tourists to produce

shared experiences that will continue to grow because

tourists are increasingly critical and do not want to be

dictated by marketers.

5 CONCLUSION

The findings of this study show that destinations and

the tourism industry today need to develop digital

capabilities, especially the ability to tagging, manage

big data, develop IoT, and digital social networking

or develop digital communities to build long tail

tourism marketing, the marketing strategies to reach

market niches. The unique development of product

niches namely personalization/ differentiation and

specialized individuals is the first step to being able

to develop effective new long-tail marketing followed

by marketing through social media and close relations

with tourists needing to be done next.

It is highly expected that this research can be

carried out with more samples and other types of

special interest tourism to be able to better explain the

phenomenon of long-tail tourism.

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