Tourism Marketing for small businesses Chapter 2 Destination Competitiveness and the Destination Marketing Organisation (DMO)

Chapter learning aims To enhance your understanding of: the role of the DMO in enhancing destination competitiveness opportunities for small tourism businesses to work with the DMO key challenges faced by DMOs

Key terms Destination competitiveness A competitive destination features an effective market position, an attractive environment, satisfactory visitor experiences, profitable tourism businesses, and supportive local residents.   Destination image Images held by travellers of a destination are as important as the tangible attractions and services. Whether the travellers’ perceptions are correct or not, they do influence travel planning decision making and therefore impact on the competitiveness of the destination. Destination marketing organisation (DMO) A destination marketing organisation (DMO) coordinates the impartial and collaborative promotion of a geo-political boundary, in a holistic manner that enhances economic and social benefits for the wider community.

Proposition underpinning this chapter The success of a tourism business is reliant to a large extent on the competitiveness of the destination Therefore importance of understanding DMOs for tourism managers Hence the destination marketing mantra: “Promote the destination first, and your business second”

What is a destination? An island A village Beach City Province (eg Outback Qld), state Country, continent, macro region (eg Caribbean) Usually based on political boundaries due to government funding of the DMO Of little relevance to the traveller?

Consumers spoilt by choice Almost unlimited number of destinations to choose from Eg in the USA alone there are over 20,000 cities The worlds top 10 most visited countries account for almost half of all international arrivals The other 95% of countries compete for the other 50% of travellers Including Australia, New Zealand, Canada, South America, most of Europe (eg Greek islands) etc

Destination competitiveness A competitive destination is one that features a balance between: profitable tourism businesses an effective market position an attractive environment positive visitor experiences supportive local residents Do these happen by chance?

Destination competitiveness impacted by: Destination life-cycle Disasters and crises Government travel advisories Emergence of new types of competition Power of travel trade intermediaries Destination image Case 2.1 – The rise and fall and resurgence of Rotorua’s destination image How can a decline in destination image impact on local tourism businesses?

Destination marketing organisations (DMO) A DMO is the result of a community recognising the need to become organised in the pursuit of destination competitiveness The role of the DMO is to impartially coordinate the promotion of the destination, in a holistic manner that enhances economic and social benefits fore the wider community The only element of the marketing mix a DMO has control over is promotion

Cooperating to compete Travellers are spoilt by an almost unlimited number of destinations offering similar features and benefits So the majority of places are substitutable in consumers’ minds Even the most successful destinations cannot take future potential visitation for granted A key focus of DMO activity is stimulating cooperative promotions with local businesses, to stretch the budget and create a bigger impact in the market

DMOs Trend towards public-private partnerships (PPPs) Government as funder and provider of infrastructure Industry expertise for decision making at board level Anyone with a vested interest in the tourism industry should: understand the arguments for/against public funding of DMOs

Video link Working with VisitEngland https://www.youtube.com/watch?v=WDAVGdBEd_Y

DMO history Lack of literature relating to the history of DMOs 1864 – first Regional Tourism Organisation (RTO) (Switzerland) 1888 – first Convention and Visitors Bureau (CVB) (USA) 1901 – first National Tourism Office (NTO) (New Zealand) 1903 – first State Tourism Office (STO) (Hawaii) 1948 – First Macro Marketing Organisation (MMO) (European Travel Commission) Most NTOs formed after World War II Most RTOs formed in the 1980s and 1990s

DMO challenges Over-reliance on government funding Destination branding complexity Politics of DMO decision making Measuring DMO performance Eg of all the visitors in your city today…how many as a result of RTO marketing?

Activity 2.1 – What’s the destination slogan Without using Google, draw an arrow between each of these destinations and the corresponding brand slogan you think has recently been used by that destination. Las Vegas 100% pure New Zealand There’s nowhere like….. New York I ….. Scotland What happens here, stays here Australia Dream big California A spirit of its own After checking your responses, discuss why you recognised the brand slogan(s) and not the others.

Activity 2.2 – Funding decision What is your response?

To recap The success of individual tourism businesses is reliant on their destination’s competitiveness Tourism businesses need to understand how DMOs operate, to take advantage of cooperative promotional opportunities and navigate the politics

Opportunities for small businesses to work with the DMO See Table 2.1 Industry briefings Newsletter Product database Digital library Visiting media program Social media program Educating travel agents Travel trade events and exhibitions Contra prizes Cooperative advertising Destination branding collateral URL link

Video link Working with VisitEngland https://www.youtube.com/watch?v=WDAVGdBEd_Y See Blackboard for ‘Working with Tourism Australia’ booklet

Discussion questions What is meant by the mantra: promote the destination first, and your business second?   Why is it important for local tourism businesses to understand key challenges faced by their DMO? Why are DMOs so reliant on government funding?