In today’s world, digital transformation is a common term, and in many cases rather necessary. It refers to integration of digital technology into all areas of business, which changes the whole business and the way a business operates and brings value to its customers. Digital transformation and technology innovations are something that many businesses undergo nowadays to increase, strengthen and secure their competitiveness on the market. With the technological changes, customer’s needs and preferences also change, which is a big challenge for a company. This thesis will provide an in-depth analysis of digital transformation in tourism industry. Tourism industry started adopting digital transformation very early. It experienced many changes led by digital disruptions, which changed every single aspect of the industry. This thesis will firstly provide a theoretical background of digital transformation as well as its key drivers and strategies. Later on, it will look more into digital transformation of tourism industry. The goal is to understand which are the industry specific key drivers of transformation, and what are the key trends that many firms implemented when it comes to transformation of this specific industry. Later on, the importance of digital business model will be explained with comprehensive analysis of all of its nine building blocks. Lastly, there will be provided a case study on Expedia, which is one of the biggest travel platforms in the world. Expedia is one of the best examples of successful digital transformation in this industry. The goal is, through analysis of their digital business model using canvas methodology, to point out how did they keep up with trends and what technological innovations did they provide to their customers in order to maximize their satisfaction and provide them with increased personalization. For even better understanding, Expedia will be compared with Booking, which is also an example of very successful digital transformation in the same industry. After the analysis is done, critical review will be provided and followed by the future trends and possibilities for this industry and lastly, a conclusion.