1. Introduction

The global tourism industry is undergoing a profound transformation, driven by rapid advancements in digital technologies and evolving consumer behaviors. The imperative for tourism and travel service providers to embrace digital transformation (DT) has become increasingly evident, particularly in the aftermath of global crises such as the COVID-19 pandemic, which highlighted the need for adaptability and innovative solutions. This shift necessitates that organizations not only adopt new technologies but also cultivate the internal capabilities to understand, assimilate, and effectively utilize these technologies to reshape their operations and service delivery. A crucial aspect of this organizational capability lies in the employee absorptive capacity (ACAP), which refers to the ability of individuals within an organization to recognize the value of new external knowledge, assimilate it, and apply it to create value. This literature review focuses on examining the relationship between employee ACAP and DT within the Egyptian tourism sector, primarily drawing on the insights and findings presented in the provided source: "The Impact of Employees’ Absorptive Capacity on Digital Transformation of Tourism and Travel Services: Evidence from the Egyptian Travel Agencies" by Mahmoud Ahmed Aboushouk. The objective of this review is to summarize, synthesize, and evaluate the existing research on this specific topic as presented in the source, highlighting the main themes, points of agreement and debate with broader literature mentioned within, research gaps identified, the methodologies employed, and critical insights into the alignment and divergence of this body of work.

1. Main Themes Across the Source

The research presented in the source underscores several key themes concerning the interplay between employee ACAP and DT in the Egyptian tourism context:

• The Imperative of Digital Transformation in Tourism: The study acknowledges the significant changes imposed on organizational culture and structures by the digital transformation of businesses. It emphasizes that existing and future employees are being called upon to develop their digital skills by absorbing digital technologies and new forms of automation within their specialized areas. The World Tourism Organization (UNWTO) is cited, indicating that while the future of tourism post-COVID-19 remains somewhat uncertain, the sector's capacity to adapt and provide innovative solutions to new challenges will be crucial for recovery and reigniting economies. Innovation is highlighted as a top priority on the tourism agenda at all levels of government, serving as a critical tool for managing tourist activity. Despite this global recognition, the source points out that Egyptian travel agencies have been slow to adapt to digital transformation, as evidenced by a previous study. This lag in adoption provides the central motivation for the current research to assess the potential impact of employees' absorption capacity on DT within this specific national context. The source further elaborates on the scope of DT in tourism and travel, encompassing IT systems and the influence of social, mobile, analytics, cloud, and Internet of Things (SMACIT) technologies. Big data and cloud computing advancements are facilitating the personalization of travel packages, while digital technologies offer visitors various functions and help overcome constraints such as pandemic risks. Ultimately, DT is shaping how tourism businesses engage and communicate with their customers.
• The Significance of Employee Absorptive Capacity for Digital Transformation: The research posits that enhancing employees' absorptive capacity is essential for the digital transformation of travel services. It draws on established literature that recognizes ACAP as a crucial concept in contemporary organizational research, applicable across diverse aspects and situations. The source references the foundational work of Cohen and Levinthal (1990) and Zahra and George (2002) as theoretical pioneers of ACAP. Cohen and Levinthal defined it as a firm's ability to recognize the value of new information, assimilate it, and apply it to achieve financial goals. Zahra and George (2002) offered a more comprehensive definition, characterizing ACAP as a dynamic capability comprising organizational routines and strategic processes that enable firms to acquire, assimilate, transform, and exploit knowledge to create value. The study emphasizes that for Egyptian travel agencies to effectively undergo digital transformation, their employees must possess and develop this capacity to absorb and utilize new digital knowledge and technologies. It is also noted that prior to this study, ACAP had been a notably overlooked area within tourism research.
• The Dimensions of Absorptive Capacity and Their Impact on Digital Transformation: The study adopts Zahra and George's (2002) framework, which delineates ACAP into four dimensions: knowledge acquisition, assimilation, transformation, and exploitation. Acquisition involves identifying and obtaining critical external knowledge. Assimilation is the process of analyzing, interpreting, and understanding this new knowledge. Transformation entails developing and refining processes to combine existing knowledge with newly acquired and assimilated knowledge. Exploitation refers to the application of this newly obtained and transformed knowledge into the organization's operations to create value. The central finding of the research is that employees’ absorptive capacity, particularly the exploitation dimension, has a positive and significant effect on the digital transformation of Egyptian travel agencies. This suggests that the ability of employees to apply newly learned digital knowledge is crucial for driving DT within these agencies. Interestingly, the study also found a weak negative effect of knowledge acquisition and a negative effect of knowledge assimilation on digital transformation in this context. Furthermore, knowledge transformation was found to have an insignificant impact on DT. These unexpected findings suggest a complex relationship between the different dimensions of ACAP and DT in the specific setting of Egyptian travel agencies.
• Challenges and Opportunities in Digital Transformation for Travel Agencies: The source highlights that tourism professionals face challenges in understanding technological trends to reinvent and digitally transform their services, particularly focusing on data analysis and integrated technologies. It also notes that organizations may recognize the necessity of DT but fail to act on this insight. For Egyptian travel agencies, adapting to DT is presented as a significant hurdle. The study emphasizes that the first step towards becoming digital is establishing a fundamental strategy and culture for digitization, which involves changing business practices in terms of internal procedures, efficiency, customer interactions, and opportunities. Organizational change, encompassing individuals, procedures, tactics, structures, and competitive dynamics, is at the heart of digital business transformation, presenting both challenges and opportunities. The source provides examples of how tourism and travel services can be digitally transformed at various stages, such as creating interactive websites, utilizing QR codes, offering value-added services, facilitating online reservations, and incorporating future technologies like virtual and augmented reality, the Internet of Things, and semantic social networks. The importance of continuous training programs for employees to learn how to exploit newly acquired knowledge for commercial benefits is also emphasized.

III. Points of Agreement, Debate, and Gaps in the Research

The research presented in the source engages with existing literature on absorptive capacity and innovation, revealing points of agreement, debate, and significant gaps, particularly within the context of tourism and the Egyptian sector:

• Agreement: The study aligns with the general recognition in the broader literature that innovation and adaptation are crucial for firms to remain competitive in dynamic environments, a notion echoed in the context of post-COVID-19 tourism recovery. There is also a general agreement that absorptive capacity plays a role in enabling organizational innovation. The finding that the exploitation dimension of ACAP is positively linked to desirable organizational outcomes resonates with some prior research that has highlighted the importance of applying acquired knowledge to achieve business value. The source cites Cruz-Ros et al. (2018), who also found that the exploitation dimension had the greatest impact on business innovation in travel agencies (though in Colombia).
• Debate and Mixed Findings: The most notable point of divergence and potential debate lies in the negative impact of knowledge acquisition and assimilation on digital transformation in the Egyptian travel agency context. This finding contradicts the more intuitive understanding of ACAP, where these initial stages are typically seen as prerequisites for subsequent transformation and exploitation. While the source mentions that Cruz-Ros et al. (2018) also did not find a significant positive influence of acquisition and assimilation on innovation in Colombian travel agencies, the negative relationship found in the Egyptian context warrants further scrutiny. This suggests that simply acquiring and understanding new digital knowledge might not translate directly into successful DT in this specific environment, potentially due to other mediating or moderating factors not explored in this study. Furthermore, the insignificant impact of knowledge transformation partially aligns with Ali et al. (2016), who found it had no effect on process innovation in a different industry, but it still requires further investigation within the Egyptian tourism sector to understand why the ability to combine new and existing knowledge does not significantly contribute to DT.
• Gaps in the Research: The study explicitly addresses a significant research gap by being the first to investigate the impact of travel agency employees’ absorptive capacity on the digital transformation of tourism and travel services within the Egyptian context. The author notes that absorptive capacity has been largely ignored or inapplicable in tourism-related research prior to recent years. Based on the findings, the researcher calls for future research to delve into the enabling factors and barriers of ACAP within Egyptian travel agencies, as well as the reasons behind the negative impact of the potential ACAP dimensions (acquisition and assimilation) on DT. Further research could also explore the insignificant role of knowledge transformation in this context. This highlights a need for a more nuanced understanding of the specific conditions and organizational characteristics within Egyptian tourism that might influence the relationship between different facets of employee ACAP and the successful implementation of digital transformation strategies.

1. Relevant Methodologies Used

The study employed a rigorous quantitative methodology to investigate the hypothesized relationships:

• Research Design and Approach: The research utilized a deductive approach to test the formulated hypotheses regarding the impact of the four dimensions of employee ACAP on the digital transformation of Egyptian travel agencies. It adopted a quantitative method to analyze the relationships between these variables.
• Sampling Technique and Sample: A simple random sampling technique was used to select a representative sample from the population of Class A Egyptian travel agencies, which are recorded by the Egyptian Travel Agents Association (ETAA). The study identified 1008 Class A travel agencies as the sampling frame and successfully collected data from 278 agencies, representing a calculated sample size based on statistical requirements. A response rate of 75% resulted in 209 usable questionnaires.
• Data Collection Instrument: A semi-structured questionnaire was the primary instrument for data collection. The questionnaire was designed to measure the five key constructs of the study: knowledge acquisition, knowledge assimilation, knowledge transformation, knowledge exploitation (all comprising employee ACAP), and digital transformation. The items used to measure these constructs were adapted from previous studies published in peer-reviewed journals, ensuring some level of content validity. Specifically, the ACAP dimensions were measured using scales based on the work of Zahra and George (2002) and Flatten et al. (2011), while digital transformation was measured using items adapted from Sethna et al. (2017) and Dredge et al. (2019). All items were measured using five-point Likert scales, ranging from strongly disagree to strongly agree.
• Data Analysis Technique: Structural Equation Modelling (SEM) was the primary statistical technique used for quantitative data analysis. SEM was chosen due to its ability to measure complex causal relationships among multiple constructs simultaneously. The analysis was conducted using Amos software version 26. The study also assessed the reliability and validity of the measurement model. Composite reliability and Cronbach’s alpha were used to assess internal consistency, with values exceeding 0.70 for all constructs indicating good reliability. Average Variance Extracted (AVE) values were greater than 0.50, demonstrating convergent validity. Additionally, the Jarque-Bera goodness-of-fit test was implemented to ensure that the sample data approximated a normal distribution. The assessment of the structural model involved examining the weighted regression coefficients to determine the direction and significance of the relationships between employee ACAP dimensions and digital transformation. Model fit indices such as Chi-square, degrees of freedom, P-value, Comparative Fit Index (CFI), Root Mean Square Error of Approximation (RMSEA), and Parsimony Normed Fit Index (PNFI) were used to evaluate the overall fit of the proposed model.

1. Development in the Field Over Time (If Applicable)

The source suggests a developmental trajectory in the conceptualization and application of absorptive capacity:

• The concept of absorptive capacity has evolved into a significant area of inquiry in organizational research over the past few decades. The source notes that seminal works by Cohen and Levinthal (1990) and Zahra and George (2002) are considered theoretical cornerstones in this field, providing foundational definitions and frameworks. Subsequent research has refined and extended the concept, as indicated by citations to various scholars.
• However, the application of ACAP within the tourism sector has been a relatively recent phenomenon, with the source explicitly stating that it was a "notably overlooked area of research within tourist studies". Prior to the studies cited in the source (mostly from the last decade), research on innovation and organizational capabilities in tourism may not have explicitly employed the lens of absorptive capacity.
• The increasing prominence of digital technologies and the growing recognition of the need for digital transformation in the tourism industry, particularly accelerated by global events, have likely spurred greater interest in understanding the factors that facilitate or hinder this transformation. Employee absorptive capacity, as a critical internal capability for leveraging new knowledge, has thus gained relevance in this context.
• The research presented in the source contributes to this emerging body of literature that specifically examines the role of absorptive capacity in the tourism industry, focusing on its impact on contemporary challenges like digital transformation within a specific national context (Egypt). This indicates a development in the field towards applying well-established organizational theories to understand the unique dynamics of the tourism sector in the face of technological change.

1. Critical Insights on Alignment and Divergence

The findings of the study on Egyptian travel agencies offer critical insights into the applicability and nuances of the absorptive capacity framework in a specific industry and national context:

• The study reinforces the multidimensional nature of absorptive capacity, as proposed by Zahra and George (2002), by examining the distinct impacts of acquisition, assimilation, transformation, and exploitation on digital transformation. This aligns with the theoretical underpinnings of the ACAP construct.
• The positive and significant effect of knowledge exploitation on digital transformation underscores the practical importance of not just learning about new digital technologies but also effectively applying that knowledge to implement changes and innovations within the travel agencies. This finding is consistent with the general notion that the ultimate value of absorptive capacity is realized through the application of acquired knowledge.
• However, the unexpected negative impact of knowledge acquisition and assimilation raises critical questions about the contextual factors at play within the Egyptian tourism sector. This divergence from the more commonly assumed positive relationship suggests that other factors, such as organizational structures, access to resources, or the specific nature of the digital technologies being introduced, might mediate or moderate the influence of these potential absorptive capacities on actual digital transformation outcomes. It could also indicate that simply acquiring and understanding broad digital knowledge without a clear strategic focus on exploitation might lead to inefficiencies or misallocation of resources.
• The insignificant role of knowledge transformation in driving digital transformation in this context also warrants further investigation. It might suggest that the ability to combine new digital knowledge with existing expertise is not a critical bottleneck or driver of change in Egyptian travel agencies, possibly because the nature of digital transformation in this sector might be more about direct application (exploitation) rather than complex integration of different knowledge bases.
• By focusing on the Egyptian tourism sector, the research addresses a significant contextual gap and highlights that the relationships between absorptive capacity and organizational outcomes like digital transformation might not be universally applicable across all industries or national contexts. The specific characteristics of the Egyptian tourism industry, its infrastructure, the digital literacy of its workforce, and the nature of its competitive landscape might all play a role in shaping these relationships.
• The study’s findings carry important practical implications, suggesting that for Egyptian travel agencies aiming for digital transformation, efforts should be particularly focused on enhancing their employees' capacity to exploit digital knowledge through training, resources, and organizational support, while also understanding and addressing the factors that might be leading to the negative impact of acquisition and assimilation in this specific context.

VII. Conclusion

This literature review, based on the provided source, highlights the critical role of employee absorptive capacity in the digital transformation of the Egyptian tourism sector. The study makes a significant contribution by providing a validated model that examines this relationship within a previously under-researched context. The key finding that knowledge exploitation has a positive and significant impact on digital transformation, while knowledge acquisition and assimilation exhibit a negative influence, offers a nuanced understanding of how ACAP operates in this specific industry and national setting. The insignificant impact of knowledge transformation further adds to the complexity of this relationship. The research identifies important gaps in the existing literature, particularly concerning the enabling factors and barriers of ACAP and DT in Egyptian travel agencies, as well as the underlying reasons for the unexpected negative effects observed. The methodology employed, utilizing a quantitative approach with SEM analysis on data collected from a representative sample of Egyptian travel agencies, provides a robust foundation for these findings. The study's insights suggest that for Egyptian travel agencies to successfully navigate digital transformation, a strategic focus on fostering employees' ability to apply and utilize new digital knowledge is paramount. Future research should delve deeper into the contextual factors that shape the interplay between different dimensions of employee ACAP and digital transformation outcomes in this and potentially other tourism contexts. The practical implications for managers underscore the need to prioritize the development of knowledge exploitation capabilities within their workforce to effectively leverage the opportunities presented by the digital age.

FAQ: Employees' Absorptive Capacity and Digital Transformation in Tourism

1. What is "absorptive capacity" in the context of this study, and why is it considered important for businesses, particularly travel agencies?

Absorptive capacity (AC) refers to a company's ability to recognize the value of new external information, assimilate it, and apply it to create value. This study focuses on employees' absorptive capacity within Egyptian travel agencies. It is crucial because in a rapidly evolving digital landscape, travel agencies need to adapt to new technologies and automation to remain competitive and meet changing consumer behaviors. Employees with a strong absorptive capacity can better understand and utilize new digital tools, driving the agency's digital transformation and potentially leading to innovation in services and processes.

2. How does this study define "digital transformation" within the tourism and travel services sector?

Digital transformation in this context goes beyond simply having an online presence. It encompasses the integration of IT systems and the impact of social, mobile, analytics, cloud, and Internet of Things (SMACIT) technologies. It involves changes in business practices, not only in internal efficiency but also in customer interactions and opportunities. This includes leveraging technologies for smart digital document flows, e-accounting, mobile payments, cloud storage, personalized service offerings through big data, and utilizing platforms like online travel agencies and social media for customer engagement and service delivery.

3. What were the main findings of this study regarding the impact of employees' absorptive capacity on the digital transformation of Egyptian travel agencies?

The study found that employees' absorptive capacity, specifically the "exploitation dimension" (the ability to apply newly acquired and converted knowledge to operations), has a positive and significant effect on the digital transformation of Egyptian travel agencies. Surprisingly, the study also found that the "potential dimensions" of absorptive capacity – knowledge acquisition (identifying and obtaining external knowledge) and assimilation (refining and incorporating external knowledge) – had a negative impact on digital transformation in this specific context. Knowledge transformation (merging existing expertise with new knowledge) showed an insignificant effect.

4. Why might knowledge acquisition and assimilation have a negative effect on digital transformation in the studied context?

The negative impact of knowledge acquisition and assimilation, while seemingly counterintuitive, could be attributed to several factors specific to the Egyptian travel agency context. It's possible that a strong focus on acquiring and understanding new digital knowledge without the immediate capacity or resources to effectively implement and utilize it could lead to delays, confusion, or a feeling of being overwhelmed, thus hindering actual digital transformation. It might also suggest that the acquired knowledge isn't always directly applicable or easily integrated into their existing operations. Further research is needed to fully understand these negative correlations.

5. What does the positive impact of the "exploitation dimension" of absorptive capacity suggest for travel agencies looking to digitally transform?

The positive impact of the exploitation dimension highlights the importance of being able to effectively implement and utilize newly acquired digital knowledge. Travel agencies should focus on developing their employees' ability to apply new technologies and insights to their daily operations, service delivery, and customer interactions. This could involve providing practical training, creating clear processes for technology adoption, and fostering a culture that encourages the application of new digital skills to improve services and efficiency.

6. Based on the findings, what are some practical implications for managers and owners of travel agencies in enhancing their digital transformation?

Travel agencies should prioritize strengthening their employees' ability to exploit new digital knowledge by:

• Providing continuous and effective training programs focused on the practical application of new technologies.
• Establishing R&D departments or dedicated teams to explore and implement relevant digital innovations.
• Fostering collaboration among employees and with external entities like academic institutions to facilitate knowledge sharing and application.
• Encouraging an open organizational culture that supports the adoption and experimentation with new digital tools and processes.
• Developing systematic methods for collecting and applying insights from both internal knowledge and external sources.
• Considering an open innovation approach that focuses on the rapid exploitation of new knowledge to gain a competitive edge.

7. How does this study contribute to the existing research on absorptive capacity and innovation in the tourism industry?

This study contributes by specifically examining the impact of each dimension of employees' absorptive capacity on the digital transformation of travel agencies, a specific form of technological innovation within the tourism sector. It fills a gap in previous research that has often overlooked the role of absorptive capacity in the digital evolution of tourism, particularly within the context of Egyptian travel agencies. The findings, especially the negative impact of potential absorptive capacity dimensions, offer a nuanced perspective that can guide future research and practical strategies in the industry.

8. What are some potential areas for future research based on the findings of this study?

Future research could delve deeper into:

• Identifying the specific enabling factors that strengthen the different dimensions of absorptive capacity within travel agencies.
• Exploring the underlying reasons for the negative impact of knowledge acquisition and assimilation on digital transformation in this context.
• Investigating the specific barriers hindering digital transformation within Egyptian travel agencies.
• Examining the role of organizational culture and leadership in fostering employees' absorptive capacity and driving successful digital transformation.
• Conducting similar studies in different geographical contexts or with other types of tourism businesses to see if these findings are generalizable.

(Aboushouk, 2022)

References

Aboushouk, M. A. (2022). The Impact of Employees’ Absorptive Capacity on Digital Transformation of Tourism and Travel Services: Evidence from the Egyptian Travel Agencies. In Eurasian Studies in Business and Economics (Vol. 23, pp. 167–184). Springer Science and Business Media B.V. https://doi.org/10.1007/978-3-031-14395-3_9