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THE DEVELOPMENT TEAM
Principal Investigator Prof. S. P. Bansal
Vice Chancellor, Indira Gandhi University, Rewari
Co-Principal Investigator Dr. Prashant K. Gautam
Director, UIHTM, Panjab University, Chandigarh
Paper Coordinator Prof. Nimit Chaudhary
Head of Department, Hotel, Hospitality & Heritage studies,
Jamia Millia Islamia
Content Writer Ruchi Singh Kumar
HOD, Dept of Tourism & Hotel Management, Bhupal Nobel’s
University Udaipur
Content Reviewer Prof. Monika Prakash
Nodal Officer, IITTM Noida
Paper 13: Destination Management Module 37: Critical Success Factors of Destination Management
Organizations
TABLE OF CONTENTS
1. Learning Outcome
2. Introduction
3. Destination – Meaning and Concept
3.1 Components of Destination
4. Destination Management
4.1 Destination Management Organisations (DMO)
4.2 Categorization
4.1 Destination Management Process
4.1.1 DMO’s / Stakeholders
4.3.2 Coordination
4.3.3 Process
5. Critical Success Factors of Destination Management Organisations
6. Summary
QUADRANT –I
1. Learning Outcome
After completing this module students will be able to:
i. Understand the concept of destination management.
ii. Various types of destination management organisations.
iii. Know the concept of DMO and their process.
ITEMS DESCRIPTION OF MODULE
Subject Name Tourism and Hospitality Management
Paper Name Destination Management
Module Title Critical Success Factors of Destination Management Organisations
Module Id Module no-37
Pre- Requisites Basic knowledge about Tourism & Destination Management
Objectives To study the meaning and concept of destination, its management,
DMO’s and success factors of DMO’s
Keywords Destination, Destination management, Organisations, Success
factors
iv. Understand the factors responsible for the success of DMO’s.
CRITICAL SUCCESS FACTORS OF DESTINATION MANAGEMENT
ORGANISATIONS
2. INTRODUCTION :
The chapter describes about what a destination means, its various components and
different organizations which coordinate and help each other in fulfilling the needs
and desires of a wanderlust or a tourist. Destination management organizations bear a
huge responsibility of not only marketing the destination and their services but deliver
the task of managing efficiently. There are certain factors which any organization
dealing with tourism services need to cater to if they wants to sustain as well as if
they want the destination to sustain.
Media 1 : Facebook ( UdaipurBlog
3. DESTINATION - MEANING AND CONCEPT
In simple words it means a physical space where a tourist spends at least a night but
if we look at broader context it not only includes the space or place but various
tangible and intangible products and services offered by different vendors and
managed cohesively by public and private stakeholders.
DEFINITIONS
A destination constitutes a place, an event or a mode of transport.
A place constitutes, a hotel, An apartment, a villa or a tourist attraction
An event constitutes a city tour, sightseeing tours, a conference
A mode of transport constitutes car rentals, airport transfers or city cruises
-WWDMC Glossary
des·ti·na·tion (dst-nshn)
1. The place to which one is going or directed.
2. The ultimate purpose for which something is created or intended.
3. Archaic An act of appointing or setting aside for a specific purpose.
-Free Dictionary
…is a geographical area (place, region, country) which is chosen by the guest (or a guest segment) as travel
destination. It contains all the facilities necessary for a stay, inclusive of accommodation, catering and
entertainment/activities. Therefore, it is the competitive unit of the «Incoming Tourism» which must be managed
as a strategic business unit.
-Prof. Thomas Bieger, 2005
…is an area which is separately identified and promoted to tourists as a place to visit and within which the
tourism product is co-ordinated by one or more identifiable authority/ies or organisation/s.
-European Commission, 2000
A local tourism destination is a physical space in which a tourist spends at least one overnight. It includes
tourism products such as support services and attractions and tourist resources within one day’s return travel
time. It has physical and administrative boundaries defining its management, and images and perceptions
defining its market competitiveness. Local destinations incorporate various stakeholders often including a host
community, and can nest and network to form larger destinations. Destinations could be on any scale, from a
whole country (e.g. Australia), a region (such as the Spanish ‘Costas’) or island (e.g. Bali), to a village, town or
city, or a self-contained centre (e.g. Center Park or Disneyland).
-UNWTO
There are several authors who have defined destination in their perspectives whereas
you can term it more or less like a product which is offered to a tourist and this is
quite evident in the words of Kotler (1989) who defined it in marketing point of view
as ‘products can be defined as anything – physical objects, services, persons, places,
organizations, and /or ideas – that can be offered to a market for attention,
acquisition, use or consumption that might satisfy a want or need.’
According to Middleton (1988), the total tourist product can be interpreted as a
bundle or package of tangible and intangible components, based on activity at a
destination.
3.1. COMPONENTS OF DESTINATION
When we talk about the basic elements of any tourist destination four A’s comes into
our mind which covers almost everything a place requires to become a destination.
They are:
1. Attractions
2. Accessibility
3. Amenities
4. Ancillary services
Destination
Attractions
Accessibility
Amenities
AncillaryServices
Figure 1 : Components of Destination
Attractions –
These are the major focus of any visitor or tourist and may be categorized as natural
(mountain, beaches, waterfall, ranges etc.) or man made (heritage monuments, theme
parks, museums, art galleries etc).
Accessibilities –
A destination only becomes a destination when it is approachable or accessible. Here
different modes of transportation that is, air, surface and water plays an important
role. A good communication system also becomes of paramount importance then.
Amenities –
These include important services like accommodation, food and beverage,
entertainment, guide services etc. which act as the superstructure built for the tourists.
Ancillary services –
These ancillary services are the basic infrastructure which is required for both host
community and for the guest like medical, banking, communication etc.
Cho (2000) has mentioned some basic elements of tourist destination like:
attractions
public and private amenities
accessibility
human resources
image and character
price
4. DESTINATION MANAGEMENT
Management when works for a tourist destination or other segments works on the
more or less same principles. For effective management – planning, organizing,
directing, coordinating and controlling are important and these functions are
inevitable for any organization. In terms of tourism being a service sector where
customer is the focal point there are three important management functions which any
tourism business requires as per Page (2007) to deal with the tourists are : marketing,
operational issues and human resource management.
Media 2 : http://ividmc.travel/dominican-republic.php
Media 3 : http://homeofservice.com/blogs/507/#.WQo88jclFdg
4.1 DESTINATION MANAGEMENT ORGANISATIONS (DMO)
Tourism activity taken or purchased by a tourist is an experience whereas tourism
activity delivered by a stakeholder is a business. To manage and to deliver the best
and memorable experience various organizations work together for a common goal.
These organizations are DMO’s and somewhere they are also popular as Destination
Management Company (DMC’s). They work together with a coherent strategy, they
lead and coordinate with each other maintaining high skills and developing
partnerships.
As per dmc.com/blog, A “Destination Management Company”, or DMC, or
otherwise known as a Destination Management Organisation or DMO, is a
commercial organisation operating a variety of different management services for
stakeholders within the local, national and/or international travel industry, who
together are committed to promoting a specific destination or destinations.
4.2 CATEGORIZATION
Figure 2 : Categorization of DMO’s, Adapted from:
https://www.tutorialspoint.com/tourism_management/tourism_management_destinati
on.htm
DMO’s are generally categorized into:
National Tourism Authorities (NTA’s) or National Tourism Organizations
(NTO’s) which operate on the national level,
Regional Tourism Organization (RTO’s) which operate on region specific or state
level,
Local Tourism Organizations (LTO’s), their area of operation whether
management or marketing limits for a smaller area that is, city or town.
In Indian context we can take example of NTO where India is promoted by Ministry
of Tourism on www.incredibleindia.org.
For RTO level you can take the example of Rajasthan state as
www.tourismrajasthan.gov.in.
For the local DMO Udaipur – the beautiful world famous destination is promoted
through www.udaipurtourism.com
For a layman it may appear simple but destination management is a very complex
process and when the experience has to be catered by different stakeholders as single
product needs lot of planning, in fact strategic planning, marketing and managing to
fulfill a collective goal and vision.
Destination management is the coordinated efforts and management of the
components of destination. Various patterns of alliances between different
stakeholders makes this happen. A strategic approach to manage and link up all
elements at destination is a must.
Management means governance and can be done by a single authority (maybe public
or private), partnership between public authorities, public and private partnership,
NGO’s etc.
4.3 DESTINATION MANAGEMENT PROCESS
4.3.1 DMO’s / Stakeholders
- National / government (Public)
- State/ provincial (Public)
- Local authorities (Public)
- Financial Institutions (Public & Private)
- Transportation (Public & Private)
- Accommodation (Public & Private)
- Attractions/events/cultural (Public & Private)
- Food and beverage operators (Public & Private)
- Tour operators and travel agents (Public & Private)
- Media
- Many more
4.3.2 Coordination
Cooperation and coordination among all is a paramount requisite for destination
management. For such actions some alliances and partnerships or managers are often
required for the mutual benefit and for the development of the destination.
4.3.3 Process
Proper planning to integrate all the key elements, cohesive strategy, use of skilled
man power and experience with rationale approach leads to the effective management
of a destination and guarantees the smooth delivery of desired product which will
further help in developing and strengthening the destination and the ties (linkages)
between DMO’s.
5. CRITICAL SUCCESS FACTORS OF DESTINATION MANAGEMENT
ORGANISATIONS
Success factors of a destination vary from place to place. But the following are
considered to be the general points to keep in mind when we talk of an ideal
destination.
There are various case studies which can be referred for the success factors but here
we can take the example of Tourism Victoria, Australia which forms a base of all the
multiple factors of success of any DMO. There are four goals which one should keep
in mind, they are: Marketing goal, Leadership Goal, Infrastructure goal and
Management goal.
Another important model by English Tourist Board and Tourism Management
Institute (2003), VICE model places an emphasis on principles of sustainable
management which every organization should keep in mind while promoting and
managing destinations. The model as illustrated in Figure 3 shows destination
management as the linkage or interaction between visitors who visit the destination,
the industry that caters them, the community that hosts, serves and welcomes them
and the environment where it takes place and gives the rich cultural experience to
them.
Figure 3 : VICE Model (modified by content writer)
ESSENTIAL SUCCESS FACTORS:
i. Unique Selling Point :
When we talk about a destination the first thing that strikes is the identity. You
would wonder how it stands out from the other places. This factor is detrimental
to whether or not the tourist will acknowledge spending their vacation there.
USP is your specialisation as how you are different from your competitors or
Environment and Culture
Visitor
Industry
Community
what other value additions you offer besides serving the same product. The pull
factor or the magnet which marks your quality and credibility in the market is
your USP.
ii. Access :
What makes a destination popular? Apart from the unique selling points, comes
the available, accessible and affordable transportation system. This might seem
to be a neglected factor but in reality it accounts the most. A comfortable, safe,
reliable journey is the main consideration while selecting a destination for the
tourist and for this he or she may opt for various available mode of
transportation like: air, surface ( rail, bus, taxi etc ), water. For international
travel even passport, visa regulation and other documentation too becomes a
part of access. In the selected destination, the local public transport or means of
communication must be given importance as well.
iii. Products And Other Attractions :
Quality products available at the destination are a major source of attraction for
the tourists. Suppose places famous for handicrafts, jewelry, etc. The targeted
market segments or tourist will get attracted by such products because of its
unavailability in other places. Other attraction can be towards the infrastructure
of the destination. This can be ancient as well as modern. Ancient includes
heritage sites and monuments, whereas modern includes market, museums, art
galleries etc.
iv. Services :
The standard and variety of accommodation provided to the tourists decide the
duration of their visit. If the existing accommodation facilities fail to match the
expected suitable standard the tenure of their visit will be short. Apart from this,
the various entertainment activities that engage and stimulate visitors are
essential. This also reflects the destination’s image and specialty. Local dance
forms, traditional song artists or adventure sports are some examples out of
many that come under the activities preferred by the targeted market segments.
v. Coordination And Leardership Of The Industrial Sector :
Industries reflect the market of the destination, and market is the source of
attraction for the tourists. This calls for coordination amongst the elements of
tourism and hospitality industry of the destination. The need to work
collectively and collaboratively through informal and formal networks, become
a necessity for the growth of the destination in best way possible to attract
maximum tourists. Coordination of various categories of DMO’s also adds up to
the progress of the initiative taken by any local tourism associations. For a
strategic planning, aiming towards the growth of the destination requires a
leader. This increases the importance of the community leaders who can directly
influence the private sector driven tourism organizations, to monitor the work
and focus on maximizing the visitors satisfaction through the services rendered.
vi. Marketing Management :
Tourists plan their visit many days before their arrival at the destination. Due to
this, it becomes important to establish a system that can deliver information of
the destination before the arrival of the tourists. Marketing tools are important in
the sense that they can be reliable sources for the tourists to decide whether or
not they will book a stay at that destination. Various mediums whether
electronic, print or mouth publicity are platforms where the destination can be
displayed in the best way possible. Marketing mix i. e the variables important
for any business to consider for operations are: Product, Price, Promotion and
Place. These ‘four Ps’ are incorporated into the marketing process to evaluate
the internal and external performance of the business in the market. For those
who wish to grow and expand there are various options available. Horner and
Swarbrooke (1996) refer to following:
Marketing consortia, where several groups or vendors work together in
developing a product
Strategic alliance, where different organisations agree to cooperate either
in marketing or technical operations
Acquisition, purchase of share or equity in other business
Joint venture, to create a new product, service or business
Franchising, licensing franchisees to operate and grow using the company
logo etc which enhances the market presence and brand image of the
principal operators
vii. Strategic Planning :
Strategic planning for marketing and developing destinations with consistent
efforts will make the destination sustainable. DMO’s holistic development of
the destination helps in boosting the revenue and business for the stakeholders
and creating new opportunities. Financial strategic planning is also important for
viable sustainability.
viii. Co-Operation :
To maximize the effectiveness of the stakeholders - the government at local,
state or national level can play an important role. Their contributions and
cooperation in marketing as well as development of infrastructure at the
destination can help in making it a tourist friendly place. It also helps the local
industries to have an impact in the competitive market. It is important to
establish a genuine partnership between the local industry operators, retailers
and the local government to contribute the resources. This helps in marketing
the place as well as visitor servicing.
ix. Innovation :
Tourism industry is very dynamic and to be in the race and to offer new services
and products all the DMO’s have to be innovative. Tourism business is
governed by the whims and fancies of tourists and the person who will fulfill
the desires and follow the trend will be the market leader. Page (2007),
innovation is often seen when a business wants to gain competitive advantage
and with the innovation can grow, survive and gains more profit. Schumpeter’s
study (1952) has highlighted five principle routes to innovation:
Introduction of a new product/improvement of the existing product (eg.
Boutique hotel)
Introduction of a new method of production (eg. Budget hotel)
Opening of a new market (eg. Eastern Europe after the fall of
communism)
New source of supply of raw materials or part-made product (eg. Use of
local foodstuffs or wine to develop a food/wine experience in a locality)
Creation of a new type of industrial organisation (eg. Low-cost airline)
x. Customer Relationship Management :
CRM, the very popular term is used for ongoing development and for repeated
business and is one of the biggest success factors of any destination. If the guest
is happy with the services and behaviour of the supplier he or she will definitely
turn up again to avail another experience at the same place so this creates brand
image of the product.
xi. SWOT Analysis :
For self analysis it is very important for any company or organization to
compare, analyze its own products and services with its competitors. This is
frequently taken as Strengths, Weaknesses, Opportunities and Threats in the
business arena.
xii. Crisis Management:
DMO’s to remain successful in their services and business need to understand
the various critical crises which may occur anytime and if one is pre prepared
to tackle all the possible hurdles whether man made or natural can lead the
market. They should evolve strategies and have crisis management specialists or
collaborate to meet out the challenges which can hamper the reputation and
growth of destination.
6. SUMMARY :
Destinations play an important role in drawing tourists and helps in the
development of the place or region but as every product to be viable needs careful
monitoring and upkeep so does destinations. For the management of destinations
there are various stakeholders in the form of Destination Management
Organisations who offer different services or attractions to the tourists either
collaboratively or independently adding to the facilities and products of the
destination. We have discussed about the concept, types, process and some
important success factors of destination management in the chapter and
discovered that the key to the success and sustainability of destination
development is an ongoing management. As per universal truth of life cycle the
destinations also has the life cycle: creation, growth, stagnation and decline but
here the human factor can intervene in making changes to the last two cycles of
stagnation and decline by continuous evaluation, research, and implementing
strategies to preserve and develop long lasting places to visit.