This section presents an analysis of the interviews conducted with stakeholders in the tourism sector to identify key challenges in designing immersive experiences.

Based on the structured interviews with stakeholders, the following key challenges were identified:     

• Financial Constraints: Many respondents highlighted that a lack of financial resources is one of the most significant barriers to designing and implementing immersive experiences. Small and medium-sized enterprises (SMEs) often struggle to secure funding for investments in new technologies or creative initiatives that can enhance visitor experiences. This sentiment was reflected in several interviews, where respondents mentioned, "We have great ideas for immersive experiences, but the financial backing is insufficient."
• Technological Limitations: Another major challenge raised by stakeholders was the difficulty of integrating emerging technologies into tourism offerings. Access to advanced technology, such as virtual reality (VR), augmented reality (AR), or 3D visualisations, is often restricted due to high costs or lack of technical expertise. As one participant noted, "Our region has a lot of cultural heritage, but we don’t have the technological capacity to present it in an immersive way."
• Skills and Personnel Shortages: A recurring theme in the interviews was the shortage of skilled professionals who can design and implement immersive experiences. Respondents stated that finding employees with both technical skills and an understanding of tourism is difficult. "We need people who understand both tourism and technology, and that combination is hard to find," commented one interviewee.
• Cultural Sensitivity and Authenticity: Maintaining cultural authenticity while designing immersive experiences was identified as a challenge. Many stakeholders noted that there is a fine line between creating engaging experiences for tourists and ensuring that local traditions and cultural values are respected. "We want to offer tourists something new and exciting without compromising our cultural heritage," explained one respondent.
• Market Uncertainty: Several stakeholders expressed concerns about market volatility and economic uncertainty, particularly in the wake of global disruptions such as the COVID-19 pandemic. This unpredictability makes it difficult to invest in long-term immersive projects. "Investing in new technologies feels risky when we don’t know how the market will change in the next few years," said one participant.

“The lack of access to funding is the biggest hurdle for small businesses like ours. We simply can’t afford to invest in the kind of immersive technologies that bigger companies use.”

“We want to integrate VR into our museum, but the technical expertise isn’t available locally, and bringing in experts is beyond our budget.”

“Collaboration between stakeholders is essential, but it’s often lacking. We need a more unified approach.”

“How can we maintain the authenticity of our culture while still integrating modern technologies? It’s a delicate balance.”

The second part of the report delves into existing studies and interviews from other sources to identify broader trends and common challenges globally. The desk research complements the interview findings by presenting additional insights into the barriers faced by tourism professionals in various regions.

Research from global tourism reports and industry studies confirms that the challenges faced by Bulgarian and Norwegian stakeholders are common in other parts of the world. From technological barriers to financial constraints, SMEs in the tourism and hospitality sectors are encountering similar obstacles in designing and implementing immersive experiences.

1. Financial Constraints. The UNWTO 2021 Report on Innovation in Tourism notes that one of the key challenges for tourism SMEs is access to capital. The cost of developing immersive and interactive experiences—especially those that rely on technology such as AR, VR, and AI—can be prohibitive for smaller businesses. The issue is compounded by the general hesitance of investors to back high-risk projects in the tourism sector due to economic uncertainty and seasonal fluctuations.

2. Technological Limitations. According to a 2019 Deloitte report, digital transformation remains one of the biggest hurdles for tourism SMEs. The adoption of new technologies in tourism is growing rapidly, but many small businesses lack the infrastructure, training, or financial resources to implement and maintain these technologies effectively. Access to affordable technological solutions remains a challenge globally, especially in rural areas where internet infrastructure may be lacking.

3. Skills and Personnel Shortages. Research by the World Travel & Tourism Council (WTTC) indicates that staff shortages and skills gaps continue to affect the tourism industry worldwide. As digital technologies play a more prominent role in tourism, the need for staff with both technical expertise and industry-specific knowledge has become increasingly apparent. SMEs often struggle to attract and retain skilled workers who can manage both immersive technologies and customer service aspects.

4. Cultural Sensitivity and Authenticity. A study published in the Journal of Sustainable Tourism highlights the tension between innovation and authenticity in tourism. While immersive experiences often rely on the use of advanced technologies, there is concern that over-commercialisation could dilute cultural heritage, particularly in destinations that rely heavily on traditional practices and local history. Cultural sensitivity, therefore, remains a key consideration when developing new tourism products.

5. Market Uncertainty. The COVID-19 pandemic has dramatically impacted the global tourism industry, with many businesses facing severe market volatility. A 2020 report by Euromonitor International outlines how market instability has led to cautious spending in the tourism sector, with companies opting to delay or scale back investments in immersive technologies until they have a clearer picture of the market's recovery trajectory.

• Collaboration: A recurring theme in global research is the importance of multi-stakeholder collaboration. Partnerships between public authorities, private businesses, and local communities are crucial in the successful implementation of immersive experiences.
• Environmental Sustainability: Several studies highlight the need for immersive experiences to align with sustainable tourism practices. Technologies used in tourism should not only enhance visitor engagement but also contribute to the long-term conservation of natural and cultural heritage.

Based on the analysis of the interviews and desk research, the following key challenges and barriers have been identified:

1. Financial constraints

2. Technological limitations

3. Skills and personnel shortages

4. Organisational resistance to change

5. Cultural sensitivity and authenticity

6. Market uncertainty

7. Infrastructure and accessibility issues

8. Stakeholder collaboration

9. Environmental sustainability

10. Visitor engagement and personalisation

1.  Financial Constraints

How it manifests: Tourism SMEs often face significant financial challenges when trying to implement immersive experiences due to the high costs associated with acquiring and maintaining new technologies such as AR, VR, or interactive digital tools. Furthermore, many smaller businesses struggle to secure the necessary funding to invest in staff training, marketing, and infrastructure upgrades required for such initiatives.

Underlying causes:

• Limited access to financial resources or investment.
• High cost of implementing advanced technologies.
• Insufficient knowledge of available grants or subsidies.
• Difficulty in proving ROI to investors.

Impact: Businesses with tight budgets are often unable to implement immersive technologies, which can place them at a competitive disadvantage. Without immersive offerings, they may struggle to attract modern, experience-focused travellers, negatively impacting visitor numbers and satisfaction.

2. Technological Limitations

How it manifests: Many tourism SMEs lack the advanced technologies required to create immersive experiences. This includes challenges in acquiring or operating AR/VR systems, real-time data analytics tools, and digital content management systems. Furthermore, the rapid pace of technological innovation leaves some businesses behind, unable to keep up with changing trends.

Underlying causes:

• High costs associated with purchasing and maintaining new technology.
• Lack of expertise in implementing and managing immersive technology.
• Insufficient infrastructure, particularly in remote or rural areas (e.g., poor internet connectivity).

Impact: Technological limitations can diminish the quality of the immersive experience, resulting in less engaging or underwhelming offerings. This reduces the overall guest experience and can hurt a business’s reputation, leading to lost revenue and repeat customers.

3. Skills and Personnel Shortages

How it manifests: The tourism sector frequently struggles with finding and retaining skilled personnel who have both the technological know-how and the creative ability to design and manage immersive experiences. SMEs are particularly affected, as they may lack the budget to hire specialists or invest in comprehensive staff training.

Underlying causes:

• Shortage of workers with relevant skills in both tourism and digital technologies.
• Seasonal nature of tourism leading to high staff turnover.
• Lack of training programmes that cater to the integration of immersive experiences in tourism.

Impact: Without skilled personnel, businesses face difficulty implementing or managing immersive experiences, leading to either failed projects or lower-quality offerings. This directly affects customer satisfaction and engagement, resulting in poor guest experiences and diminished business performance.

4. Organisational Resistance to Change

How it manifests: Many tourism businesses, particularly those with traditional models, resist adopting new technologies or innovative approaches due to fears of risk or a lack of understanding of the benefits. This can create internal barriers to innovation, as decision-makers may be reluctant to invest in immersive experiences.

Underlying causes:

• Fear of the unknown or unfamiliarity with immersive technology.
• Concerns over the cost and complexity of implementing new systems.
• Organisational culture that is resistant to change or innovation.

Impact: Resistance to change can lead to stagnation in product offerings, with businesses failing to innovate or differentiate themselves from competitors. This can cause customer attrition, as modern travellers seek more engaging and personalised experiences elsewhere.

5. Cultural Sensitivity and Authenticity

How it manifests: Immersive tourism often involves blending technology with local cultural heritage. Striking the right balance between cultural preservation and commercialisation is challenging, as poorly designed experiences can lead to cultural dilution or appropriation, harming the community and its reputation.

Underlying causes:

• Lack of collaboration with local communities or cultural stakeholders.
• Insufficient research into the cultural significance of experiences.
• Over-commercialisation of cultural elements.

Impact: If an immersive experience is seen as inauthentic or exploitative, it can damage the destination’s cultural integrity and alienate both locals and visitors. This can lead to negative reviews, harm the destination’s reputation, and deter future tourists.

6. Market Uncertainty

How it manifests: Tourism is subject to fluctuating market conditions, including economic downturns, global crises (e.g., the COVID-19 pandemic), and shifting travel trends. These uncertainties make it difficult for businesses to invest in long-term immersive projects, which often require substantial upfront investments.

Underlying causes:

• Global economic instability or recessions.
• Unpredictable tourism trends.
• Travel restrictions and public health crises.

Impact: Market uncertainty can cause hesitation among businesses to invest in immersive experiences, which may be seen as high-risk, leading to missed opportunities for innovation and growth. Additionally, fluctuating demand can result in unstable revenue streams, limiting the resources available for investment.

7. Infrastructure and Accessibility Issues

How it manifests: The success of immersive experiences often depends on robust infrastructure, such as high-speed internet, reliable transport links, and modern amenities. In regions where infrastructure is lacking, particularly in rural or developing destinations, it can be difficult to offer high-quality immersive experiences.

Underlying causes:

• Poor internet connectivity, particularly in rural or remote areas.
• Inadequate transportation infrastructure.
• Limited access to modern amenities.

Impact: Without sufficient infrastructure, immersive experiences can be underwhelming or inaccessible to visitors, negatively impacting the overall guest experience. This may deter potential visitors from choosing the destination, reducing overall tourism numbers and revenue.

8. Stakeholder Collaboration

How it manifests: Collaboration between various tourism stakeholders—such as government agencies, local businesses, cultural institutions, and technology providers—is crucial for developing immersive experiences. However, poor coordination or lack of communication can lead to fragmented efforts and less effective outcomes.

Underlying causes:

• Competing interests between stakeholders.
• Lack of central coordination or leadership in tourism development.
• Insufficient communication and cooperation.

Impact: Failure to collaborate effectively can result in poorly executed or incomplete immersive experiences that don’t fully engage visitors or meet the expectations of all stakeholders. This can limit the scalability and success of tourism initiatives.

9. Environmental Sustainability

How it manifests: Many immersive experiences rely on technology that consumes large amounts of energy or creates additional waste. Tourism businesses must navigate how to integrate immersive technologies while ensuring that their operations remain sustainable and minimise environmental impact.

Underlying causes:

• High energy consumption from technologies such as VR, AR, and digital installations.
• Waste generated by tourism activities, including overuse of resources.
• Lack of integration of sustainable practices in immersive experience design

Impact: If environmental sustainability is not prioritised, immersive tourism projects risk contributing to environmental degradation, which can harm local ecosystems, damage the destination’s reputation, and discourage eco-conscious travellers. Unsustainable practices may also lead to regulatory issues or local community backlash, limiting long-term tourism development.

10. Visitor Engagement and Personalisation

How it manifests: Visitors increasingly expect personalised and interactive experiences that cater to their individual preferences. However, creating such tailored experiences requires significant investment in data collection, digital infrastructure, and customer insights. Many SMEs struggle to provide personalised services due to limited resources or technological capabilities.

Underlying causes:

• Insufficient data collection and analysis tools to personalise experiences.
• High costs associated with personalisation technology (e.g., AI and CRM systems).
• Lack of expertise in delivering tailored experiences.

Impact: Without engaging and personalised experiences, tourists may find offerings generic or unmemorable, reducing satisfaction and decreasing repeat visits. Personalisation is key to creating emotional connections with visitors, and without it, businesses may lose out on customer loyalty and recommendations.

1. Improving Financial Planning for Immersive Experience Investments

To address financial constraints, SMEs should consider a multi-pronged approach to funding immersive experiences:

• Public and Private Grants: Seek available government grants or public funding specifically aimed at tourism innovation, sustainability, or digital transformation. Platforms such as the European Union’s tourism initiatives often provide funding for projects that promote heritage conservation, digital innovation, and cultural tourism.
• Crowdfunding: SMEs can leverage platforms like Kickstarter or GoFundMe to involve their audiences in fundraising for new immersive projects. This also helps generate excitement and buy-in from future customers.
• Partnerships: Develop public-private partnerships with local governments, businesses, and cultural institutions to share the financial burden. These collaborations can reduce costs while spreading risk.

By planning strategically and utilising diversified funding sources, businesses can better manage the upfront costs of immersive projects.

2. Leveraging Emerging Technologies Despite Budget or Technical Limitations

For tourism SMEs with limited budgets, it is essential to start small and scale up:

• Start with Scalable Digital Tools: Rather than investing immediately in AR/VR, begin with low-cost digital tools like mobile apps, virtual tours, or digital storytelling platforms. These technologies offer immersive experiences without significant investment in hardware.
• Open-Source Technology: Explore open-source platforms that provide cost-effective solutions for virtual tours, customer management, and online experiences.
• Cloud-Based Services: Opt for cloud-based technology solutions, which often require lower initial investments compared to physical infrastructure. Cloud platforms offer flexibility and scalability based on a business’s needs.

By adopting a phased approach to technology investment, businesses can grow their capabilities over time without overextending their budgets.

3. Addressing Skills Gaps and Shortages Within Teams

Given the shortage of specialised talent, tourism businesses can take the following steps:

• Training and Upskilling: Encourage existing employees to participate in digital training programs, such as online courses in AR/VR or data analytics. Partner with educational institutions to create internship programs that bring in fresh talent and provide hands-on training.
• Collaborative Networks: Engage in industry networks and tourism associations to share resources and expertise. Collaborating with other tourism operators and technology companies can help fill knowledge gaps without hiring new full-time staff.
• Flexible Employment Models: Use freelancers or part-time specialists to manage specific aspects of immersive projects. Hiring experts on a project basis allows SMEs to access high-level skills without incurring long-term costs.

By investing in upskilling and leveraging flexible employment, businesses can overcome skills shortages and develop stronger in-house capabilities.

4. Managing Organisational Resistance to Adopting Innovative or Immersive Technologies

Organisational resistance can be mitigated by fostering a culture of innovation:

• Education and Communication: Regularly educate staff and stakeholders about the benefits of immersive technologies, demonstrating their potential to improve visitor satisfaction, increase revenue, and boost competitiveness.
• Involve Employees in the Process: Engage employees at every stage of the immersive project, encouraging them to provide feedback and contribute to innovation. This fosters ownership and reduces resistance to change.
• Pilot Projects: Start with smaller pilot projects to demonstrate the tangible benefits of immersive technologies. As employees witness the success of these initiatives, they are more likely to support future efforts.

By reducing fear and fostering buy-in, businesses can cultivate an environment that supports innovation and change.

5. Ensuring Cultural Sensitivity and Authenticity in Experience Design

To balance innovation with cultural authenticity, SMEs should:

• Collaborate With Local Communities: Ensure that local communities are involved in the design and delivery of immersive experiences. Regular consultations with community leaders, historians, and artisans can ensure that tourism projects reflect the authentic culture and values of the region.
• Co-Creation: Engage tourists in co-creation activities where they can learn traditional crafts, cooking, or folklore, preserving the region’s cultural identity while providing immersive experiences.
• Avoid Over-Commercialisation: Maintain the integrity of cultural experiences by avoiding overly commercialised or sensationalised depictions. Focus on educating tourists about the local history, traditions, and heritage in a respectful manner.

By involving communities and maintaining authenticity, immersive experiences can be designed in a way that respects and honours the local culture.

6. Navigating Market Volatility and Economic Uncertainty

To mitigate risks associated with market uncertainty, SMEs can:

• Diversify Target Markets: Reduce dependence on international tourism by developing products that cater to domestic or regional tourists. By promoting shorter, local travel experiences, businesses can maintain revenue streams even during periods of restricted international travel.
• Flexible Pricing Models: Offer dynamic pricing and packages that adapt to market conditions. For example, during low seasons or economic downturns, discounted virtual experiences or shorter tours can help retain visitor interest.
• Develop Contingency Plans: Prepare for market disruptions by having contingency plans in place, such as offering virtual or hybrid tourism options during travel bans or economic downturns.

By maintaining flexibility in offerings and pricing, businesses can better weather market volatility and maintain consistent revenue streams.

7. Overcoming Infrastructure and Accessibility Challenges in Tourism Offerings

Addressing infrastructure gaps is critical for delivering high-quality immersive experiences:

• Leverage Mobile Technology: For destinations with limited physical infrastructure, mobile apps, and virtual tours can help deliver immersive experiences remotely, reducing dependence on physical infrastructure.
• Collaborate on Infrastructure Development: Partner with local governments or technology providers to improve essential infrastructure such as internet connectivity, transportation, and signage in rural areas.
• Accessible Design: Ensure that immersive experiences are designed with accessibility in mind, accommodating visitors with disabilities through inclusive digital content and user-friendly interfaces.

By improving digital infrastructure and focusing on accessible design, tourism SMEs can overcome physical limitations and offer inclusive experiences to all visitors.

8. Fostering Stakeholder Collaboration to Enhance Immersive Experience Development

To foster effective collaboration, tourism SMEs should:

• Establish Cross-Sector Partnerships: Collaborate with a range of stakeholders, including government bodies, cultural institutions, and technology providers, to share resources and expertise. A cross-sector approach allows businesses to access a wider range of skills, funding, and promotional support.
• Create Collaborative Platforms: Establish tourism working groups or online forums where stakeholders can share ideas, plan joint projects, and align efforts to promote the destination as a whole.
• Regular Communication: Hold regular meetings with all relevant stakeholders to discuss progress, challenges, and opportunities. Open and transparent communication is key to ensuring alignment and collaboration.

Collaboration fosters innovation, enhances resource-sharing, and maximises the potential impact of immersive experiences.

9. Embedding Environmental Sustainability Into Immersive Experience Projects

To ensure that immersive tourism projects are environmentally sustainable, SMEs should:

• Implement Energy-Efficient Technologies: Select low-energy consumption technologies such as solar-powered installations, eco-friendly lighting, and energy-efficient servers for virtual experiences.
• Sustainable Visitor Engagement: Use immersive experiences to promote environmental education and sustainability practices among visitors. For example, virtual tours can highlight conservation efforts or encourage responsible tourism behaviour.
• Waste Reduction: Minimise physical waste by offering digital alternatives to brochures, maps, and guidebooks. Use digital platforms for ticketing, customer communication, and feedback.

By incorporating sustainability into the design and delivery of immersive experiences, tourism SMEs can reduce their environmental footprint while promoting eco-conscious travel.

10. Enhancing Visitor Engagement and Personalisation in a Scalable and Impactful Way

To improve personalisation and engagement, SMEs can:

• Leverage Data Analytics: Use data collected from visitor behaviour, preferences, and feedback to personalise tours, recommendations, and experiences. Implement customer relationship management (CRM) systems to streamline and personalise communication.
• Interactive Content: Develop immersive content such as virtual tours, augmented reality guides, and interactive displays that allow visitors to customise their journey based on their interests.
• Scalable Personalisation: Start with scalable efforts, such as offering personalised itineraries or targeted recommendations via email or mobile apps, and expand as more data becomes available.

By offering personalised, engaging experiences, businesses can create emotional connections with visitors, fostering loyalty and positive word-of-mouth.

The tourism and hospitality industry is evolving rapidly, and immersive experiences are becoming a cornerstone of modern travel. However, as the interviews and desk research demonstrate, designing and implementing these experiences comes with a range of challenges and barriers, from financial constraints to cultural sensitivity. By identifying the top 10 challenges and offering actionable recommendations, this report aims to empower tourism SMEs to overcome obstacles and successfully integrate immersive experiences into their offerings.

The future of immersive experience design lies in embracing collaboration, innovation, and sustainability. By investing in the right technologies, fostering partnerships, and ensuring that cultural and environmental integrity is preserved, tourism businesses can create engaging, memorable experiences that not only delight visitors but also contribute to the long-term success of the destination and its community.

As the global tourism landscape continues to shift, those businesses that are able to adapt, innovate, and remain agile in the face of change will thrive. With the right strategies in place, immersive experience design can become a powerful tool for creating sustainable growth, enhancing visitor engagement, and fostering cultural exchange. Through smart investments, targeted skill development, and a commitment to authentic, environmentally responsible experiences, tourism SMEs can lead the way in shaping the future of tourism.

1. World Economic Forum (2021). "The Future of Travel & Tourism: Innovating Amid Uncertainty."
2. UNWTO (2020). "Harnessing Technology for Sustainable Tourism."
3. European Commission (2022). "Tourism Innovation and Digitalisation: A European Perspective."
4. Global Sustainable Tourism Council (2022). "Balancing Cultural Integrity and Tourism Innovation.
5. "World Travel & Tourism Council (2021). "Tourism Investment and Market Trends Post-Pandemic."
6. National Geographic (2021). "Sustainable Tourism in a Digital Age."
7. TripAdvisor (2020). "The Rise of Immersive Travel Experiences: Insights and Opportunities."