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Digital transformation, fuelled by advanced technologies such as the Internet, artificial intelligence, and cloud computing, has led to significant changes across different entities and has garnered considerable attention, particularly regarding its impact on performance. Numerous studies highlight the reduction in production costs driven by digital transformation and confirm its role in promoting economic growth. However, gaps remain in our understanding of digital transformation and its relationship with performance, especially in light of the so-called “digitalisation paradox” and “Baumol’s cost disease.” This project focuses on the relationship and mechanisms between digital transformation and tourism performance, especially destination competitiveness.