Purpose This article assesses the impact of the internal and external Business Environment on the Digital Entrepreneurial Activity (DEA) in the European tourism industry. Design/methodology/approach A sample of 125 European tourism entrepreneurs in Germany and France was studied. Data were analyzed using quantitative methods. Findings The results indicate that a firm experiencing losses due to theft and vandalism has a positive relationship with the DEA, and there is Liquidity or Cash flow that contributes positively to DEA. The outcomes shows that there is a specific limit to the institution having liquidity or cash flow, the costs of inspection by tax officials, and the average management time with government regulations that affect digital entrepreneurs. The total cost of labor contributes significantly to the digital productivity of entrepreneurs in the tourism sector. Originality/value These findings have significant and practical implications for entrepreneurs and academics in the tourism industry, providing them with valuable insights for decision-making.