Barriers to Digital Transformation among MSME in Tourism Industry: Cases Studies from Bali

Abstract

Bali is an internationally well-known tourism destination. The performance of Bali's micro, small, and medium-sized enterprises (MSMEs) in the tourism industry serves as a benchmark for the Indonesian tourism industry. Digital transformation can assist firms in adapting to new business models and recovering swiftly from epidemics. The reality, however, reveals that the digital transformation process of MSMEs in Bali is slow, particularly in the tourism sector, and must catch up. This study intends to analyze the barriers MSMEs experience during digital transformation and identify the specific digital technologies employed by MSMEs. Six Balibased MSMEs are interviewed through the qualitative methodology. According to the findings, the key impediments are (1) an individual's lack of digital skills, (2) organizational and cultural barriers, such as a traditional mindset missing digital awareness, and (3) environmental barriers, such as a lack of resources and digital infrastructures. Furthermore, the survey reveals that social networking is the most widely utilized digital technology by MSMEs in Bali. The internet portal offers SMEs supplementary marketing and advertising options. This research improves our understanding of the current situation of Indonesian tourism-related MSMEs and enriches the academic study of MSMEs. In addition, it provides a reference to entrepreneurs undergoing digital transformation.