Digital Sustainability: How does digital transformation in the tourism industry affect sustainable development? : A case study of the Innovation Voucher Project in Korea

Abstract: This paper examines how the adoption of a series of digital technologies in tourism companies affects economic, social, and environmental sustainability. This research conducted a quantitative survey on tourism companies in Korea to empirically explore the connection between digital transformation and its impact on sustainability. The survey questionnaire was generated under the six hypotheses, which categorized research questions in detail. As a result of the survey data analysis, the following three implications were derived. First, it was confirmed that the economic sustainability of a company increases as the size of digital transformation grows. This result connotes substantial meaning because the existence of economies of scale helps economic sustainability, but on the other hand, it can undermine social sustainability. Second, a marginalization of environmental sustainability issues in digital transformation was observed. Survey results statistically confirmed that the impact of digital transformation on environmental sustainability is smaller than on economic and social sustainability. Finally, digital transformation has the characteristics of a service. There are provider companies that create digital transformation services, and at the same time, there are beneficiary companies that receive and utilize digital services. The fact that the impact of the innovation voucher service expected by the provider company was accepted as a smaller impact on the beneficiary company means that digital transformation services should also be designed to be more customer-centric.  Economic, social, and environmental sustainability do not exist alone. Improving economic sustainability triggered by digital transformation has side effects that deepen social inequality, and business activities focused on economic and social sustainability make the mistake of minimizing environmental sustainability in corporate management decisions. Digital transformation is a service that creates value in the process of utilization. Our society should balance the value generated by digital transformation with economic, social, and environmental sustainability.