Mechanism for transforming the competitive potential of tourism industry subjects in the post-war period

Kovalska, Liubov; Ierko, Iryna; Barskyi, Yurii Article Mechanism for transforming the competitive potential of tourism industry subjects in the post-war period Economic Forum Provided in Cooperation with: Lutsk National Technical University Suggested Citation: Kovalska, Liubov; Ierko, Iryna; Barskyi, Yurii (2024) : Mechanism for transforming the competitive potential of tourism industry subjects in the post-war period, Economic Forum, ISSN 2415-8224, Lutsk National Technical University, Lutsk, Ukraine, Vol. 14, Iss. 2, pp. 8-16, https://doi.org/10.62763/cb/2.2024.08 This Version is available at: https://hdl.handle.net/10419/318685 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Mechanism for transforming the competitive potential of tourism industry subjects in the post-war period Liubov Kovalska* Doctor of Economic Sciences, Professor Lutsk National Technical University 43018, 75 Lvivska Str., Lutsk, Ukraine https://orcid.org/0000-0003-2924-9857 Iryna Ierko PhD in Geographical Sciences, Associate Professor Lesya Ukrainka Volyn National University 43025, 13 Voli Ave., Lutsk, Ukraine https://orcid.org/0000-0002-5395-7557 Yurii Barskyi Doctor of Economic Sciences, Professor Lesya Ukrainka Volyn National University 43025, 13 Voli Ave., Lutsk, Ukraine https://orcid.org/0000-0001-9937-9847 Suggested Citation: Kovalska,L., Ierko, I., & Barskyi, Yu. (2024). Mechanism for transforming the competitive potential of tourism industry subjects in the post-war period. Economic Forum, 14(2), 8-16. doi:10.62763/cb/2.2024.08. Copyright © The Author(s). This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0 (https://creativecommons.org/licenses/by/4.0/) *Corresponding author Abstract. The relevance of the research concerns the implementation of the mechanism for transforming the competitive potential of tourism industry entities in the post-war period to ensure market balance, stability, and competitiveness. Martial law conditions limit the capacities of the industry subjects to implement the concept of competitiveness transformation, which can lead to an imbalance in the tourism services market due to the lack of effective management. The purpose of the study was to develop a mechanism for transforming the competitive potential of tourism industry entities. The study employed both general scientific and special methods of research: methods of analysis and synthesis, method of generalisation, methods of analysis of facts, methods of systemfunctional approach, and method of systematisation. The essence of the transformation mechanism, presented in three blocks, is substantiated. The basis of the 1st block was a specification of the concept formation according to various scenarios, determination of goals, and institutionalisation. The purpose of the 2nd block was to determine the phases (turbulence, fluctuation, bifurcation, deformation, and transformation) of the transformation by the criteria (sustainability, safety, and competitiveness). The determinant feature of the 3rd block was the tools and means of implementing the transformation mechanism (support systems, development strategy, methods of implementation). The study highlighted a differentiated approach to the selection of transformation goals. The institutionalisation in this study was interpreted as a set of institutes and institutions, owing to which transformative processes can ensure the sustainability, safety, and competitiveness of the tourism industry. The legal, organisational, information, and marketing subsystems, which act as supporting subsystems, were analysed. The study focuses on such tools for the implementation of the transformation mechanism as marketing (ensuring tourists’ satisfaction with the quality of tourist services), fiscal policy (regulation of costs and income), and reproduction (creation of new competitive advantages, restoration of tourist potential). The study elucidated the role of methods of implementing the mechanism for transforming the competitive potential of tourism industry subjects (planning, forecasting, and pricing), different intensities of influence, features of their manifestation, and time/periods of external and internal factors influence. The proposed mechanism is of great practical importance. ECONOMIC FORUM Journal homepage: https://e-forum.com.ua/en Vol. 14, No. 2, 2024, 8-16 Article’s History: Received: 10.01.2024 Revised: 23.03.2024 Accepted: 26.04.2024 UDC 338.487:005.332.4«36» Doi: 10.62763/cb/2.2024.08 Kovalska et al. Economic Forum, 2024, Vol. 14, No. 2 9 accelerators, industrial parks, innovation clusters, technological platforms; and public-private partnership. The methods of indirect action include search for potential investors; ensuring the access of subjects of innovative activity to the information needed for the creation and implementation of innovations; involvement of technical assistance; promotion of innovative products on domestic and foreign markets; protection against unfair competition”. According to A.Pustovarov(2020), the creation of a fund for entrepreneurship support is an important economic tool for stimulating economic development. The scientists V.Y.Doroshet al.(2023) note that “it is advisable to study the mechanism of public-private partnership, taking into account innovative approaches to its management, in particular, those that use digital transformation tools”. In the structure of the mechanism, the authors highlight the principles, methods, and instruments of its implementation. The emphasis is laid on the principles of transparency, purposefulness, effectiveness, distribution of costs, and mutual benefit, on the methods of forecasting and planning, and usage of the economic, financial, political, and legal instruments of the mechanism implementation. The authors argue the importance of digital transformation in the field of public-private partnership, considering it as a tool for implementing the concept of competitive potential transformation in the tourism industry. B.Markov(2017) defines the mechanism of transformation as a multifaceted process that should be studied as a sequence of actions and phenomena characterising regularities, cause-andeffect relationships, driving forces, and factors regarding the object of research. Stability and safety in the post-war period are important aspects of studying TCPTIS. The team of authors N.V.Pavlikhaet al.(2022) point out that sustainable development in the tourist sphere is a process that protects social justice, ensures environmental sustainability, and facilitates economic efficiency. Social justice means stabilising the social and cultural environment of tourist and recreational destinations, improving working conditions, increasing and expanding employment opportunities, and heightening the availability of tourist and recreational services. Ensuring environmental sustainability requires implementing resource-saving technologies, and greening economic activity in tourism and recreational projects, thus reducing their harmful impacts. On the other hand, economic efficiency is achieved by increasing the efficiency of the use of tourist and recreational resources, innovative development of Introduction Successful development of the tourism industry, forming and increasing competitive advantages in the field of tourism, including their reproduction, and safe sustainable development of the competitive potential of the subjects of the tourism industry require well-balanced actions to achieve balance in the market of tourist services, taking into account the relevant phase of transformation. In the conditions of martial law, the subjects of the tourism industry face certain challenges in implementing the basic postulates of the concept of competitive potential transformation, and management in these conditions also lacks effectiveness. The war and post-war periods cause an imbalance in the tourist services market due to the lack of a balanced mechanism for transforming the competitive potential of tourism industry subjects (TCPTIS). Creating such a mechanism can ensure balance in the market of tourist resources, stability, safety, and competitiveness of the tourism industry entities in the post-war period, taking into account the phases of transformation of competitive potential (CP). The above determines the relevance of this study. Many recent studies focus on the analysis of existing approaches to the essence and structure of the transformation mechanisms. I.Usyk(2019) states that “under the conditions of globalisation challenges, the implementation of the mechanism of structural transformation of the Ukrainian economy development creates a basis for the balanced development of all spheres of life, based on the well-balanced use of resources to solve economic, social, and environmental problems”, and the development of the transformation mechanism includes a factor of balanced development of all spheres of activities at different levels of management. A.Pustovarov(2020), considering the structure of the mechanism of economic transformation, focuses on such management methods as “legal, organisational, economic, and psychological. Methods of legal regulation allow translating social relations into legal relations”. The author interprets organisational management methods as “the use of administrative and organisational means of influence on the digital transformation. These means include standards, permits, certificates, prohibitions, restrictions, regulations, rules, quotas, licenses, state programs, and projects”. Economic methods, according to the author, “can be of direct or indirect action. Methods of direct action include reduction of corporate income tax rates; concessional lending to business entities; provision of grants for the implementation of innovative projects; creation or development of business incubators, business The application of a differentiated approach to transformation processes will help to balance demand and supply in the market of tourist services Keywords: tourism; tourism industry; tourist activity; subjects of the tourism industry; transformational processes; strategy Mechanism for transforming the competitive potential... Economic Forum, 2024, Vol. 14, No. 2 10 the tourist and recreational sector, and improving the quality and competitiveness of tourist and recreational services, their certification, and labeling. In his turn, N.V.Barvinok (2021) argues that security and tourism are interrelated and complementary notions, as tourism, certainly requires security and safety. The most important matter in ensuring the safety of tourism in the world is responsible management based on the concept of sustainable development associated with a clear understanding of tendencies for change in the indefinite future. The transformation mechanism is largely influenced by the tourist attractiveness of destinations, which depends on an objective assessment, investment attraction, and outline of measures to ensure TCPTIS. According to T.S.Smovzhenko & O.I.Hrafska(2020), the effective development of the tourism and recreation sphere in Ukraine is connected, first of all, with the intensification of the modernisation processes in the tourism infrastructure of Ukraine. Due to its obsolescence and low quality, this infrastructure is one of the main causes of the slow growth of the tourism and recreation sector and requires significant investment. The quality of tourist services is an important component of the TCPTIS mechanism. L.A. Bondarenko (2021) suggests that quality depends on benevolence, politeness, delicacy, and compliance with corporate standards. The study aims to investigate and define the concept of TCPTIS, determine the phases of transformation using the selected criteria, and outline TCPTIS strategies. Materials and Methods Both general scientific and special methods were used in the research: methods of analysis and synthesis for researching the approach to the selection of the goals of the TCPTIS; the method of generalisation to review the existing approaches to the interpretation of essence and structure of the transformation mechanism, the methods of fact analysis to consider the scenarios of the TCPTIS phases, functional approach to determine the criteria (stability, safety, and competitiveness); method of systematisation to determine blocks of transforming the competitive potential (formation of the concept, determination of transformation phrases according to criteria, mechanism implementation). In addition, the use of the forecasting method helps to consider the mechanism of transformation in three directions and a pricing method substantiates establishing the optimal level of prices for tourist services, depending on the demand and need for them. The special research methods contributed to concluding that the mechanism of implementation of TCPTIS depends on security indicators (the number of people with average per capita total equivalent income per month below the subsistence minimum (at least 3 times), inflation rate (no more than 107), unemployment rate (no more than 10%), and the total coefficient of natural increase (at least 2.8 people). The study of these indicators is based on methodological recommendations for calculating the level of economic security of Ukraine defined in the order of the Ministry of Economic Development and Trade of Ukraine (Order of the Ministry of Economic Development and Trade of Ukraine No.1277,2013). The mechanism for implementing TCPTIS involves the relationship between the values of the CP indices of the subjects of the tourism industry and the balance/unbalance between producers and consumers of tourism services. The researchers employed materials from scientific articles and monographs by reputable scientists (Chugunovet al.,2018). The actual materials source of the study is a scientific article published by the team of authors I. Ierko et al.(2023), where the methodological concept of TCPTIS was analysed, phases of transformation were defined, and approaches and tools of TCPTIS were highlighted. Within the scope of the research topic, the article is its integral continuation. Results and Discussion A review of existing approaches to the definition of the content and structure of the transformation mechanism allows interpreting it as a set of conceptual approaches to TCPTIS, which is based on the differentiated choice of strategy, supporting subsystems, tools, and methods of implementation of such a mechanism following the determined criteria and phases of transformation. Three blocks are proposed to form the basis of the TCPTIS mechanism: block 1– formation of the TCPTIS concept; block 2 – determination of transformation phases by criteria; block 3– implementation of the TCPTIS mechanism (Fig.1). In the 1st block, the concept of TCPTIS is formed according to various scenarios of development (realistic, optimistic, pessimistic and inertial), the goals of TCPTIS are determined, and the institutionalisation of TCPTIS is formed. The basic principle of the concept of TCPTIS is the correlation between the level of CP of the tourism industry subject, which determines the corresponding phase of transformation (turbulence, fluctuation, bifurcation, deformation, transformation), and the level of balance between producers and consumers of tourist services (demand>supply, demand<supply, demand=supply). There is a certain connection between the phases of transformation and the scenarios of the CP development of the tourism industry subject. Under a realistic scenario, a phase of deformation will be observed, characterised by the recovery and development of the CP of the subjects of the tourism industry, increasing the tourist attractiveness of the territories. However, a realistic scenario is possible only in case of cessation of hostilities in Ukraine. According to the optimistic scenario, a phase of transformation will demonstrate a high level of CP of the subjects of the tourism industry, balanced demand and supply in the market of tourist services, that is, this is the most desirable state of development. However, the Kovalska et al. Economic Forum, 2024, Vol. 14, No. 2 11 actualisation of the optimistic scenario is possible only under conditions of cessation of hostilities. The pessimistic scenario involves the phases of fluctuation and bifurcation when the market of tourist services is unbalanced and the level of CP of the subjects of the tourism industry is low. Such a scenario will be observed in the conditions of war continuation, active military actions, and the lack of balanced steps on the part of the governing bodies to stabilise the development of the CP of the tourism industry. It is caused by the lack of regulation and the uncontrollability of the destructive factors characteristic of war conditions. The phases of turbulence, fluctuation, or bifurcation are characteristic of inertial scenarios. At the same time, a further deterioration of the situation caused by military actions is foreseeable and characterised by a decrease in the CP of the subjects of the tourism industry, a low level of GDP, and stagnation of entrepreneurial activity not only in the field of the tourism industry but also in other spheres of economy. A differentiated approach is relevant and worth using to determine the TCPTIS goals. The basis of a differentiated approach to TCPTIS is the criteria and phases (Table1). An individualised system of goals of TCPTIS is formed according to each criterion and phase. Block 1: Formation of the concept of TCPTIS Formation of the concept of transformation according to scenarios: realistic, optimistic, pessimistic, inertial Determination of goals of TCPTIS Institutionalisation of TCPTIS Block 2: Determination of transformation phases by criteria Stability Safety Competitiveness Turbulence Fluctuation Bifurcation Deformation Transformation Block 3: Implementation of the mechanism Strategy for development of CP of tourism industry subjects by phases and criteria Support subsystems: legal, organisational, informational, marketing Tools for implementing the mechanism: marketing, fiscal, reproductive Mechanism implementation methods: planning, forecasting, pricing Management subjec t – management object Factors of influence Figure 1. Mechanism of TCPTIS Source: developed by the authors Table 1. Differentiated approach to the selection of TCPTIS goals TCPTIS goals The criteria of transformation Stability Safety Competitiveness Phases of transformation Turbulence Stabilisation of the development of CP of tourism industry subjects, elimination of destructive factors affecting the growth of CP of tourism industry subjects, and increase in the level of consumers’ satisfaction with the tourism industry Increasing the effectiveness of the country’s migration policy, aimed at reducing the migration flow of the population, strengthening the control of the development of the CP of the tourism industry subjects Stabilisation of the efficiency indicators concerning the use of CP in the tourism industry sphere Fluctuation Stabilisation of the sustainable development of the tourism industry Guaranteeing the safety of the tourism industry development Eliminating deviations in the development of CP of the tourism industry Mechanism for transforming the competitive potential... Economic Forum, 2024, Vol. 14, No. 2 12 Forming the institutional infrastructure of the tourism industry subject is an important integral element of the mechanism under discussion. O. Kovalova (2017) states that “the processes of transformational renewal of the structural policy, improving its effectiveness and operability depend on the proper institutional foundation, the quality of management decisions, and resources involved in this process. Every country chooses its peculiar way and time frame in transition from one model to another. Traditions, customs, attitudes to work, and the methods of the structural policy implementation play a decisive role here”. Institutionalisation of TCPTIS involves establishing a set of institutes and institutions, via which the transformative processes could ensure the sustainability, safety, and competitiveness of the tourism industry development and, thus, promote, a balanced market of tourist services. Here, it is important to specify the state, regional, and local government bodies responsible for the development of CP in the tourism industry and determine the rules and norms of behavior in the market of tourist services. The 2nd block deals with the phases of TCPTIS which are determined by the criteria. According to the research, the main TCPTIS criteria include stability, safety, and competitiveness. Each of these criteria is relevant at various phases of transformation (turbulence, fluctuation, bifurcation, deformation, and transformation). The 3rd block of the mechanism focuses on the development of the strategy of TCPTIS, the formation of supporting subsystems, tools, and methods of implementing the proposed mechanism. When developing the TCPTIS strategy, it is worth using a differentiated approach, based on such criteria as the phase of transformation and the level of balance in the tourist services market. The results of theoretical and analytical studies provide grounds for distinguishing the following transformation phases: turbulence (T), fluctuation (F), bifurcation (B), deformation (D), and transformation (T). The tourist services market can be considered balanced when demand (D)=supply (S) and it is imbalanced when demand>supply, or demand<supply. Accordingly, there are 15 types of ratios (Table2). TCPTIS goals The criteria of transformation Stability Safety Competitiveness Phases of transformation Bifurcation Elimination of crisis manifestations in the development of the tourism industry, elimination of the crisis in the socio-ecological and economic development of the CP of the tourism industry subjects Overcoming threatening situations and crises in the development of the CP of the tourism industry subjects Support (preservation) of the development of those types of CP of the tourism industry that have not been destroyed Deformation Forming a new model of sustainable development of CP of tourism industry subjects Ensuring the safe development of CP of the tourism industry subjects Creating new competitive advantages and restoring CP in the tourism industry sphere Transformation Support for the balanced socio-ecological and economic development of the tourism industry subjects Maintaining a safe state in the development of the CP of the tourism industry subjects (safety of providing tourist services) Increasing the CP of tourism industry subjects Table 1, Continued Source: developed by the authors CP level Level of balance/imbalance demand<supply demand>supply demand=supply Turbulence (T)=(D<S) (T)=(D>S) (T)=(D=S) Fluctuation (F))=(D<S) (F)=(D>S) (F)=(D=S) Bifurcation (B)=(D<S) (B)=(D>S) (B)=(D=S) Deformation (Df)=(D<S) (Df)=(D>S) (Df)=(D=S) Transformation (Tr)=(D<S) (Tr)=(D>S) (Tr)=(D=S) Table 2. Correlation between values of CP indices of tourism industry subjects and level of balance/imbalance between producers and consumers of tourism services Source: developed by the authors Kovalska et al. Economic Forum, 2024, Vol. 14, No. 2 13 To ensure the effective development of the tourism industry subject’s CP, it is necessary to choose a strategy for each of these fifteen types of ratios. Legal, organisational, informational, and marketing subsystems act as supporting subsystems in the TCPTIS mechanism. The function of legal subsystem is to provide an appropriate legal framework for conducting business in the tourism industry and form legal regulatory bodies in the tourism industry, which can ensure the safety of tourists and the safety of business operations/activities of the tourism industry entities. V.Khudaverdiyeva(2022) claims that a legal system functions as a set of factors characterising the social, economic, legal, and other conditions ensuring the rights and interests of citizens, legal entities, and the state in the tourism sphere. N.A.Leonenko(2019) and T.P.Bezsmertniuk(2021) define the notion of ensuring the legal rights and interests of citizens as “increasing the guarantee and effectiveness of protecting the rights and legal interests of consumers of a tourist product and solving problems related to the satisfaction of travelers’ (tourists’) interests and the effectiveness of the tourism industry development, in general”. The organisational subsystem of the TCPTIS mechanism ensures the growth of the GDP and revenues from the tourism sector, the expansion of the tourism industry through scaling the types of tourist services, and the maximum satisfaction of consumer needs for quality tourism products. The study highlights such organisational aspects as the development of entrepreneurship in the field of the tourism industry by increasing the number of small and medium-sized business entities, the organisation of new types of tourism, the restoration of tourism business, the improvement of the territory attractiveness, the development of a network of organisational measures regarding the tourism business management. The information subsystem provides the digitisation of tourist services, contributes to the effective processing of information flows in the system of forming a tourist product, facilitates the formation of an information base about tourist services and the tourism industry subjects, and implies the creation of computer reservation systems (CRS). The marketing subsystem of the mechanism implementation aims at ensuring a balance between the supply of tourist services and the demand for them; searching for new methods of work and new types of tourist services; identifying and evaluating the current and potential demand for tourist services; searching for sales markets of tourist services. Marketing, fiscal, and reconstructive means are proposed as the tools to implement the TCPTIS mechanism. Marketing tools provide for meeting the needs of tourists for high-quality tourist services, supporting relations with consumers in the mediumand long-term perspectives, monitoring consumers’ demands for tourist products, informing them about new types of services. The marketing tools important for the implementation of the mechanism involve destination branding (formation of positive ideas, values, and attitudes of consumers to a tourist service or destination), event marketing (organisation and holding of special events and activities to familiarise consumers with the subject of the tourism industry and services provided), direct marketing (addressed mailing of information to consumers about types of tourist services), viral marketing (creating positive emotion in the consumer to promote the product). Fiscal instruments regulate the costs and revenues of the relevant sectors of the economy. As K.Shaposhnykovet al.(2021) note, “fiscal instruments, by their very nature, are used directly to accumulate financial resources for business agents aimed at generating state budget revenues”. The scientific papers by O. Liutyi (2017), I.Y.Chugunovet al.(2018), and A.Vatulov(2020) argue that in this context, “the key challenges include monitoring and assessing the impact of budget expenditures on the competitiveness of tourism entities; increasing the budgetary resources volume and structure justified for the performance of the tasks and functions empowered to authorities at all levels; expanding access to international capital markets; an increase in the budget deficit and public debt as a percentage of the gross domestic product. The goal is to keep them at an economically safe level. The fact, that a significant part of the financial resources of local self-government bodies is spent on the performance of the powers delegated to them, reduces their independence and the level of differentiation in regional development, thereby limiting to some extent the possibilities to strengthen the financial base”. The reconstructive tools provide for the reproduction of the CP of the tourism industry, the restoration of the tourist potential on the destroyed territories, the development of such types of tourism as green, medical, sports, educational, business, military; inspiring tourists’ interest in “iconic places” of the post-war period, and renovation of tourist infrastructure. The methods of planning, forecasting, and pricing are especially effective for the TCPTIS mechanism implementation. According to O. Kirilova (2009), “the forecasting and planning of tourist activity can be conducted in three directions: the study of demand, as a reflection of the public need for meaningful leisure time, which includes the study of markets by types, forms, classes of service and other requirements for the tourist products in various segments of the consumer market; study of the proposal as a reflection of the country’s real conditions for the development of the tourism industry; assessment of the effectiveness of the current tourist product offer, its completeness, and quality following the existing demand and its possible changes; optimisation of the ratio of supply and demand in the market of tourist services”. Factor models are most frequently used as a forecasting method. Their application provides a basis for determining the change in the level Mechanism for transforming the competitive potential... Economic Forum, 2024, Vol. 14, No. 2 14 of CP of the tourism industry subject depending on the influence of various factors of the external and internal environments. Pricing, as a method of implementing the proposed mechanism, deals with determining the optimal level of prices for tourist services, depending on the demand and supply of them. V.R.Kupchak & K.V.Pavlov(2018) single out such approaches to pricing of a tourist product as “the cost approach (to calculate the cost price and the marginal markup for the final service); a competitiveness-based approach (takes into account the price policy of competitors); a conjunctural approach (to find out the specific features of the change and the impact of the market situation)”. Every subject of the tourism industry forms its own price policy, the principal elements of which are the availability of prices, a system of discounts, and payment terms depending on the type of tourist service. The effectiveness of the pricing policy determines the profitability of the tourist business and its attractiveness to the tourist. In their research paper, R. Dudyak et al. (2018) state that “the price of tourism products can sometimes be considered as the basic factor that influences the choice of the service by consumers. This is characteristic of countries with a low purchasing power of the population and cheap tourist products or for countries in a state of economic crisis”. Therefore, the level of prices for tourist services should be correlated with the phases of TCPTIS. In the deformation and transformation phases, the subject of the tourism industry forms a price policy satisfying the needs of consumers with a high level of purchasing power. In this case, a tourist package offers Luxury tourism services or some unique ones. For the remaining phases of the transformation, it is necessary to ensure the average level of prices for tourist services. Another important issue that should be considered is the influence of external and internal factors on the TCPTIS mechanism. Such factors may have different intensities of influence, nature of manifestation, time/period of influence, and be unpredictable and uncontrollable. They are the factors that will determine the phase of the transformational process and the balance in the tourist services market. Therefore, in this case, the ability of the subjects of transformational process management to respond quickly and efficiently to any manifestations of positive and negative influences is significant, as well as their readiness to take preventive measures to eliminate their destructive impact on the development of the CP of the tourism industry subjects. Conclusions The study elucidates the features and structure of the TCPTIS mechanism in the post-war period. Determination of blocks and criteria, differentiated approaches, and institutionalisation of the transformation mechanism are interpreted as basic elements for its development. The analysis of modern approaches to the formation of the mechanism of TCPTIS contributes to the understanding of this process as a complex of conceptual approaches. It is based on the choice of strategy, means, and methods depending on the chosen path and phases of transformation. The study considers the transformation mechanism through the analysis of its three blocks: formation of the concept, definition of phases of transformation by criteria, and implementation of the mechanism. These approaches can contribute to increasing the effectiveness of management of the TCPTIS process in the post-war period. At the basis of the differentiated approach to defining the goals of TCPTIS are three criteria: sustainability, safety, and competitiveness, which are the most significant for the successful development of the tourism industry. Sustainability implies the ability of the economy to adapt to varying social, economic, and environmental conditions, ensuring long-term development. Safety means the assurance of the safety and protection of tourists, reducing the risks of negative events or accidents. Competitiveness needs constant improvement of the quality and attractiveness of tourist offers and the preparedness to compete in the market of tourist services. The study offers insights into the role of various subsystems and tools in the implementation of the mechanism, namely: the strategy of developing the competitive potential of tourism industry entities by phases and criteria; support subsystems (legal, organisational, informational, marketing); tools for implementing the mechanism (marketing, fiscal, reproductive); methods of the mechanism implementation (planning, forecasting, pricing). The transformation mechanism provides various subjects of the tourism industry with the opportunity to choose optimal development strategies depending on their internal resources, level of competitiveness, and specifics of their activity. Such a differentiated approach will allow the subjects of the tourism industry to ensure diversity and compliance of supply options with demand needs, which will contribute to the balanced development of the tourist services market and increase the overall level of competitiveness of the industry. Therefore, the proposed mechanism of transforming the competitive potential and a differentiated approach to TCPTIS can help to balance the demand and supply in the market of tourist services. The study findings are important in the practical sphere, for example, for the analysis of the tourism industry of Ukraine in modern conditions. Acknowledgements None. Conflict of Interest None. Kovalska et al. Economic Forum, 2024, Vol. 14, No. 2 15 References [1] Barvinok, N.V. (2021). Safety of tourists during travel as an important factor in tourism organisation. In Actual problems of life safety (pp. 86-90). Mykolayiv: MNAU. [2] Bezsmertniuk, T.P. (2021). Regulatory and legal support for the development of tourism in Ukraine. In VII International scientific and practical conference “Modern trends in development science and practice” (pp. 604-507). Varna: ISG. [3] Bondarenko, L.A. (2021). Tools for improving the quality of tourist services in the conditions of competition. 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