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 Chanda Gulati
Assistant Professor, Presitge Institute of Management, Gwalior
Content Reviewer Prof. Monika Prakash Nodal Officer, IITTM Noida Paper 13: Destination Management
Module 35: Strategic Issues in Destination Management
TABLE OF CONTENTS 1. Learning Outcome
3. Key Components of Destination Management 4. Tourism Being Unique
5. VICE MODEL
6. Destination Value Chain
7. Destination Management Strategy 8. Summary
QUADRANT –I 1. Learning Outcome
After completing this module students will be able to:
i. Understand the concept of Destination Management.
ii. Various issues affecting destination management
iii. Know the critical factors and new initiatives that make destinations successful.
iv. Understand the solutions to current challenges ITEMS DESCRIPTION OF MODULE
Subject Name Tourism and Hospitality Management Paper Name Destination Management
Module Title Strategic Issues in Destination Management
Module Id Module no-35
Pre- Requisites Basic knowledge about Tourism
Objectives To study the strategic issues in Destination Management
Keywords Destination, Destination Management, Strategic Issues
STRATEGIC ISSUES IN DESTINATION MANAGEMENT
Tourism occurs when a traveler moves from his/her residence place to outside destinations. Tourism caters the needs of these travelers during their stay at outside destinations. The varied services offered to facilitate them generate economic impact.
Chadwick (1994) defined Tourism as “the activities of a person outside his or her usual environment for less than a specified period of time and whose main purpose of travel is other than the exercise of an activity remunerated from the place visited.”
Destination management is complex in nature. Anderson (1997) defined destination management as “the integrated process of managing the five key elements of destination offering, visitor mix, marketing communications, advocacy and destination partnership formations. The essential purpose is to increase visitation to a destination in a more comprehensive and balanced manner acknowledging both tourist demand and supply parameters.” It strives to coordinate all the destination elements for successfully catering the tourists with the best offered experience. The various destination elements are the attractions, amenities, accessibility, human resources, Image, DMO, marketing, and pricing. Destination management strategically tries to link all the separate entities for better destination management. The elements of the destinations are marketed first to attract the tourists and then promised services are delivered to meet the expectations.
These elements should be supported by suitable environment to develop tourism.
Figure 1: Destination Management
Source: http://www.e-unwto.org Georgios Drakopoulos (307-99-294)
3. Key Components of Destination Management
A) Core Elements
i) Product Development – The destination comprises of attractions and services that are offered to support the ease of tourists. The complete set of new attractions and services are managed by Destination Architect.
The destination product development should be strategically made to satisfy the customers, but the activity become more complex due to the multi-segment tourism industry. The strategy formulated should commensurate with the changes in tastes, life styles, expectation range, and attitudes of the visitors.
The primary and peripheral elements need a good plan and tested strategy. On one hand, the destinations require innovative products and on the other hand, the need is the innovative promotional tools to sensitize and attract the potential tourists. Thus, the strategic issue in destination product development is its innovativeness and promotions.
The formulation of strategy needs a microscopic study of its product life cycle to decide upon the destined position of the products and how much modifications it requires. The branding of destination is of utmost important and it requires the promotion of complete tour packages. The combination of core services like attractions, accommodations, accessibility and other amenities. Few of the established travel brands highlights the importance of branding of the products in tourism.
The launch of a product should be strategically focused, be it aircraft, hotels, tour package or, any other, the uncertainty associated is likely to be higher. The below table specifies different strategy adopted by the destination organization in launch of a product;
Figure 2: Source: Holloway, J.C. & Plant, R.V.; Marketing of Tourism
Least risky is the modification of the existing product in existing market by making the product attractive. Another is to add a new product in the existing market; it’s just the extension under the same brand. For example, if the labor cost is very high at a particular region, the self service is the option to raise the price structure.
Introducing New Product in Existing market
Product in New Market
Modifying Existing Product in Existing Market
Existing Product in New Market
But, launching a new product in the new market involves much risk. The social and environmental factors too are the major concern while developing a tourism product, as the tourism industry generates heavy pollutions. So, the product should be environmental friendly, recyclable and users’ computability. The test marketing that is the product feasibility should be checked properly before the full fledge launch.
The formulation of Tourism product mix is very sensitive, so need intense care. Firstly, the tourist sites are to be developed as a centre of attraction. The preservation of the aesthetic values and its development both should be taken care while developing any destination. The tourist sites should be captive to attract the potential tourists. All the context factors such as natural beauty, historical excellence, and artificial beauty are instrumental in developing the tourist destinations. In all the factors, the communication of the same plays a significant role. Any tourists’ destination may be developed by inducing more attractions to the place. The tourism core services are supported by the peripheral services such as shopping arcade, visa & currency exchange facilities, first aid services etc. and the right blend of both help in retaining the competitiveness of tourist destination. India has much potential for cultural heritages. For example, Kerala have the potential of the International Cruise destination.
ii) Marketing & Sales - The Destination Seller promotes and markets the destination brand and communicates it to the target market. Ministry of Tourism plays a catalytic role in promoting the destination. The limited promotional budget for tourism organization makes it mandatory for them to design better promotional strategies. Word of mouth is considered as the most influential promotional tool, but apart from that the organization need to use advertising, public relation, personal selling and sales promotion. The selection of promotional strategies should be tested against few parameters. It is important to select the target market and the types of customers for whom the strategies are to be formulated. The promotional activities should help in creating an image of the site as a desirable destination spot. The four ways to communicate the message to the public are:
a) Advertising through medium by AIDA principle (Example- Television, Newspaper etc.)
b) Personal selling to client
c) Sales promotion such as Window display or, exhibitions d) Public relation activities (Calling to review the destination)
iii) Community Relations – The third primary element stresses on the community relation advocating the awareness and profile of tourism locally in support of external marketing by Destination Advocates. The host of the place should support the development of tourism destination and should display a cordial welcome for the guest tourists. The behavior of the local people and the awareness about the attraction of the destination will help in developing the place to a desirable tourist destination.
B) Support Elements
i) Research and Planning- The Destination Planner look at the future marketing prospects and development of the existing and potential markets by preparing a full proof destination policy. The tourism services are amalgamated services of different industry.
There are three extended Ps of marketing in tourism industry which play vital role in the development of the destination.
a) Process: The process mix includes the flow of activities, Complexity of process and extent of customer’s involvement. The different attractions, accommodation facilities, accessibility, amenities and destination quality are tuned by using these process mixes.
Fig.3: Processing of Services
The tourist organizations for developing a tour package have to synchronize all the existing attractions ensuring its promotion. The standardized or, customized flow should be decided on the type of customers and their taste of preferences. The involvement of customers in the process of development of package will simplify the complete process mix.
b) Physical evidence and attractions: The tangibility adds a new impulse in changing the perception of the tourists. The physical evidence includes Designing, Signpost, Interiors, Equipment, Furnishing, Ventilation, Reports, Brochures, Parking, Music, Lighting and many more. The presentation of all physical evidence creates an aura generating a service ambience which helps in forming a positive opinion about the tourist place.
c) People: A quality team with appealing interpersonal skills helps in developing the tourist sites. The educational qualification, personality, punctuality and safety concern of service delivered, value orientation, Personal commitment, subjective knowledge and highest degree of communication skills have significant role in processing of services.
ii) Leadership, Partnerships and Team Building – As several industries contributes in the development of tourism destination, the proper strategy to build alliances for a long term growth and championing the marketing strategies to build and promote the brand is
Flow of activities Standardised or, Customised
Simple or, Complex Involvement of Customers
necessary. The cohesive actions taken by all destination partners play a major role in developing any destination.
4. Tourism Being Unique
The tourism being unique due to multi segment nature has implications including positives as well as few challenges.
-Tourism helps several small and medium businesses associated with it to go global.
Every tourist visiting the destination do lots of purchasing of goods and services thus tourism provides opportunity to many businesses to gain.
-Smaller enterprises may access the tourist markets without any barriers.
-Tourism industry generates employment across all levels i.e. from semi skilled to managerial level.
-A wider community is benefited due to development of tourism such as from entertainment services, events, visitor attractions and many others.
Making partnership: Several communities need to join hand and work closely for successful tourism. The tourism success relies on the collective vision of the tourism stakeholders’ alliances. The tourism experience is delivered by range of partners including private sector businesses, public sector businesses, and the community at large.
Ensuring leadership. The cohesiveness among the stakeholders is decided by the effective leadership of the Destination Management Organisation (DMO). The retention of all the partners by fulfilling their requirement through the competitive strategy is most challenging aspect in tourism.
Economic leakages. The income generated at the destination many times drained from the destination to the visitor’s home countries known as Economic leakages. In many of the cases of tour packages, visitors expenditures are transferred to hotels, airlines and other international companies having headquarters in visitor’s home countries.
Competitive advantage. The competitions among different destinations are fierce and increasing. The management of the tourism destination should adopt the right competitive strategy for achieving competitive advantage through a targeted tourism approach, projecting brand of distinction and delivering quality customer value.
Delivering quality. The fragmented tourism industry make the task of quality control much complex. Thus, the strategy should focus on the frameworks and standards of quality and its maintenance for the assurance of quality delivery by the service providers.
5. VICE MODEL
The sustainable tourism can be developed through proper management of destination’s environment. The sustainable tourism impacts destination’s environment, economy and community and enhances the resources. The maintenance of balance to protect and enhance resources while meeting the needs of present and future need of all stakeholders is the need of the hour. The VICE model presents the destination management as the interactions between Visitors, Industry, Community and the overall environment which facilitates the interaction among V, I and C. The environment is the one where the tourism products are to be developed.
Fig. 4: Source: The VICE-model in the sustainable tourism (Source: Csizmadia, L. 2008)
The model indicates the partnership among all the components and a need of joint plan to satisfy visitors, maintain prosperous industry, engage the host local communities and protect and enhance the environmental resources and culture. The model confirms the sustainable plan or, action taken.
Any strategy made should be evaluated on its affect on visitors, Implications on industries, affecting community, impact on destination’s environment. Thus, the VICE model considers all the involved stakeholders in deciding the destination management processes.
6. Destination Value Chain
The tourist experience is heavily dependent on the support activities at the destination that cannot be controlled by any single industry. A value chain of manufacturing and service industry is controlled generally by the industry; but for tourism industry the value chain moves along with the consumers’ journey. Here the addition of value is as and when visitor plan to, travel to, experiences and return from the destination.
Primary Activities of Value Chain
Primary activities include the tourism experience delivered to the customers in the form of the packaging, promotion and delivery of the same. It is much similar to the core elements of the destination management,
Product development: The key elements of destination offering are made up of two parts:
Firstly the main attractions in form of natural, cultural or, manmade products; and the second the other support attraction that is the experience with the destination such as accommodation, catering, and transportation that is not the prime motive of travellers.
Destination and product packaging. The intangible experience that destination share as per the theme and geographical location with the tourist in the form of convenience, attractiveness and ease of accessibility.
Promotion: A range of promotional tools should be used as discussed in the core element to promote the destination.
Distribution and sales: Well advanced channels should be used to take enquiries, mailing the destination information, display facilities, reservations and ticketing, insurance facilities etc.
In and outbound logistics: Destination choice is highly influenced by the ease and access to destination. The convenience factors such as availability of flights, visa provision, airport facilities, VAT reclaim, emigration, in flight services , the pricing and scheduling all should be supportive for long destinations.
Destination operations and services: It comprises the largest portion of the tourists experience. This include visitors’ visit, travel, accommodations and the other related experiences.
Aftercare: The services include the management of client information in the database, taking feedback, consumers’ attitude and profile. These all contribute to the establishment of loyal pool of consumers.
Foundation Activities of Value Chain
The activities that support the travellers’ experience indirectly. This includes the Infrastructure, Technology, Human resource and other industries. These support activities are being delivered by various public and private industries. The destination success is highly dependent on the coordination and the effective delivery of the activities to ensure this the leadership of DMO play an important role so that the destination should display the brand image in the right perspective.
Destination planning and infrastructure includes Image, environment, infrastructure, transport, telecommunication, water, electricity, recreation, security services as the most important elements to portray the destination in front of the visitors in the right sense.
Training and skills development. Service encounter in tourism development is most frequent activities, so the training for the skill development should be provided frequently to groom the employees.
Technology and systems development. Technology is the actual driving force in support of the value chain. To maintain the competitiveness of the tourism industry, all the participative industry contribute globally through the advanced information and communication systems. E-based services are the gift to the tourism industry for development of the same.
Related industries and buying local produce. Majority of the primary activities are underpinned by a range of related industries to cater the tourism at a destination. Example- Food and beverages, Real estate, fuel, contracted services, professional services etc. The factors to be assessed of the related industry is its quality, innovativeness, price competitiveness and technological efficiency in the delivery of the services and should be suggested to keep a uniform standard acceptable by the tourists to make it the most preferred destination.
7. Destination Management Strategy
The framework to manage the destination by devising proper strategy as per the steps followed ;
A) Situation assessment: The competitiveness of the destination explaining where we stand. These includes:
Macro-environmental appraisal explaining political, economic, social and technological opportunities and threats of the destination.
Market analysis and assessment stating the market share, trend, demographic considerations including customer profiles.
Audit and assessment of tourism resources and services.
Assessment of supportive infrastructure,
Benchmarking the present and future competitors Establishing synergy with different destinations.
Finally preparing the delivery gaps, opportunities and levers from the above step to gear up for the next strategy framework.
Market and competitive research and analysis
Strengths Weaknesses Opportunities
Development of destination Vision, goals and actions
B) A strategic framework: In this, the vision, objectives, goals is to be framed for the next leap. The right positioning strategy by placing the distinctiveness of the destination at the top. Then, a market strategy should be framed for proper market segments and their preferences. To match the target market, complete set of product portfolio should be prepared by keeping in view the critical success factors of the destination.
C) An integrated Implementation Plan: The project along with the budget indicators and monitoring mechanism should be implemented through a proper strategic framework.
The tourism programme includes infrastructure, Product development, packaging, investment promotion, human resource development, security services, and branding of the destination through the marketing mix (that mainly comprises of product, packaging, distribution and promotion)
D) Institutional and performance management: During this stage, the effectiveness of the strategy is evaluated. The benchmark created is to be used as the standard to evaluate the strategy. In all, the success of the strategy may be taken in the form of feedback from the tourists who actually experienced the services and the inputs or, the improvement of the destination along with support activities can be taken as suggestions.
The other indicators of the success of the destination are growth in economic benefits, seasonality and demand in the next season, national survey and campaign evaluations can be arranged to measure the effectiveness of the programme.
8. Summary: Tourism comprises of multi- segment industry. The conflicting partners have their own vision and mission that may differ. The competitive strategy play a significant role for maintain the associations of all including the growth of the destination as well as the growth of all the stakeholders contributing in that destination’s primary or, secondary activities. Before formulating the strategy, the destination should be assessed in regard to its potential by the preliminary testing. Once the potentials are known, benchmarking for further improvements of the sites should be made i.e. the forward competitive strategy including the vision, the growth targets, the key levers, the
right brand proposition, target markets, positioning and product market mix. An integrated programme with indicative budgets and critical success factors fixed should be implemented to assess the strategy and monitor its progress to check its effectiveness.
Holloway, J. C., & Plant, R. V. (1992). Marketing for Tourism: Pitman.
Chadwick, R. A. 1994. Concepts, definitions, and measures used in travel and tourism research. Pages 65-80 in J. R. B. Ritchie and C.R. Goeldner, ed. Travel, tourism, and hospitality research: a handbook for managers and researchers (2nd ed.). John Wiley &
Sons, New York.
World Tourism Organization (2004), Tourism Congestion Management at Natural and Cultural Site, UNWTO, Madrid.