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.

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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.

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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.