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

2. 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

3. 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.

4. 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”

5. 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?

6. 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

7. 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?

8. 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?

9. 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

10. 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

11. 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

12. Video link Working with VisitEngland

13. 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

14. 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?

15. 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.

16. Activity 2.2 – Funding decision
What is your response?

17. 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

18. 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

19. Video link Working with VisitEngland
See Blackboard for ‘Working with Tourism Australia’ booklet

20. 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?