Destination Marketing (DMOs) Governance PDF

Destination Marketing Dr Steven Pike © 2016 Steven Pike Chapter 3 Governance of destination marketing organisations (DMOs)  Learning outcomes – to enhance understanding of: the shift towards public–private partnership (PPP) DMO governance structures...

Destination Marketing Dr Steven Pike © 2016 Steven Pike Chapter 3 Governance of destination marketing organisations (DMOs)  Learning outcomes – to enhance understanding of: the shift towards public–private partnership (PPP) DMO governance structures the politics of DMO decision making the multiple accountability of DMOs © 2016 Steven Pike Marketing multi-attributed destinations in dynamic and heterogenous markets  The supply-side perspective: Destinations commonly contain a myriad of small family- owned businesses … and a diverse and often eclectic range of tourism resources … over which the DMO has no control … but must somehow present to the market in a way that interests target consumers, and appeases tourism operators and intermediaries  DMO and stakeholder opinions on how to do this are not always congruent Politics of DMO decision making can inhibit marketing theory © 2016 Steven Pike Marketing multi-attributed destinations in dynamic and heterogenous markets  Demand-side perspective: Markets are not homogenous in terms of needs  Heterogenous and dynamic The greatest challenge facing DMOs is cutting through the noise of the market and getting noticed at travel decision time  How can a DMO produce succinct messages that i) encapsulate the essence of place, ii) differentiate the destination from the myriad of competitors offering the same features, at the time households are making holiday decisions, and iii) be meaningful to heterogeneous and dynamic markets? © 2016 Steven Pike Table 5.1 Diversity of potential destination attributes Nature-based attractions Forests, mountains, tundra, glaciers, deserts, flora and fauna wildlife sanctuaries, lakes, rivers, coastlines, islands, harbours, beaches, lagoons, swamps, waterfalls Built attractions Theme parks, bridge climbs, casinos, mazes Water-based activities Sightseeing cruises, whale watching, white water rafting, jetboating, boat hire, fishing guides, swimming with dolphins, sharks and crocodiles Adventure activities Bungy jumping, parachuting, trekking, skiing, off road driving Entertainment venues Theatres, cinemas, exhibitions, race tracks Sports venues Stadia, golf courses, mountain bike trails, swimming pools, skating rinks Cultural attractions Indigenous culture, performing arts, theatres, art galleries, museums, historic sites, castles, palaces, architecture © 2016 Steven Pike Table 5.1 (continued) Retail Shopping malls, boutiques, megastores, craft markets Accommodation Hotels, exclusive lodges, motels, resorts, backpacker hostels, bed and breakfast guest houses Nightlife Casinos, nightclubs, bars, pubs, dancehalls Gastronomy Restaurants, cafés, cooking schools, farmers markets, wineries, orchards Dark tourism Battlefields, torture chambers, scenes of natural and man-made disasters Spiritual sites Indigenous sites, cathedrals, churches, temples, mosques, pagan sites Community amenities Picnic areas, children’s playgrounds, golf courses Host population Ethnic quarters, customs, language © 2016 Steven Pike Climate DMO as impartial coordinator  DMO coordinates the network of destination stakeholders  Fosters a cooperate to compete approach  Impartial pooling of resources for greater market interest  Holistic approach to benefit the wider community © 2016 Steven Pike DMO as impartial coordinator  If left to the private sector to organise and fund destination promotion … Self-interests prevail Disparate individual efforts Results in market failure © 2016 Steven Pike DMOs  Trend towards public–private partnerships (PPPs) Government as funder and provider of infrastructure Industry expertise for decision making at board level  National tourism offices (NTO)  E.g. Tourism Australia  State tourism offices (STO)  E.g. Tourism Queensland  Regional tourism offices (RTO)  E.g. Brisbane Marketing  Local tourism associations (LTA) © 2016 Steven Pike DMO names  Agency (Latvian Tourism  Department (Dubai Department Development Agency) of Tourism and Commerce  Authority (The Gambia Tourism Marketing) Authority)  Destination (Destination  Board (British Virgin Islands Northland) Tourist Board)  Development (Northern Tasmania  Bureau (Hawaii Visitors Bureau) Development)  Centre (Le Centre Gabonais de  Directorate (Crete Tourism Promotion Touristique) Directorate)  Coalition (North Carolina Travel &  Institute (Nicaraguan Institute of Tourism Coalition) Tourism)  Commission (Nevada Commission  Ministry (Israel Ministry of on Tourism) Tourism)  Company (New York City and  Office (China National Tourism Company) Office)  Corporation (Virginia Tourism  Organisation (Cypress Tourism Corporation) Organization)  Council (Swedish Travel &  Region (Bundaberg Region Tourism Council) Limited) © 2016 Steven Pike PPPs  Historically DMOs have been government departments  PPP becoming the most common legal entity  Potential advantages: Blends industry expertise with government resources Generates larger budget Less bureaucratic and more entrepreneurial Increased accountability Reduced antagonism through representation © 2016 Steven Pike Table 5.2 DMO name changes Current name A previous name Visit Florida Florida Department of Commerce Visit Britain British Tourist Authority Tourism Australia Australian Tourist Commission Tourism New Zealand New Zealand Tourist and Publicity Department Tourism and Events Queensland Queensland Tourist and Travel Corporation © 2016 Steven Pike Governance  The process of decision making  Good governance can still lead to bad decision making  DMO governance under continual scrutiny from stakeholders  Little research published about the politics of DMO decision making © 2016 Steven Pike Table 5.3 Characteristics of good governance Accountability There is an obligation to report, explain and be answerable for the consequences of decisions made on behalf of stakeholders Transparency Stakeholders should be able to follow and understand the decision-making process, clearly seeing how and why a decision was made, and what information was considered Lawful Decisions follow the rule of law, being consistent with the relevant legislation governing the legal entity of the organisation © 2016 Steven Pike Table 5.3 (continued) Responsive Balancing competing interests in a timely and appropriate manner, for the benefit of the wider community Equitable and inclusive All stakeholders should feel their interests have been considered in the decision-making process, and should have the opportunity to participate in some way Effective and efficient Decisions should be made and implemented with the best use of available resources and time to ensure the best results for the community © 2016 Steven Pike Governance  Tendency towards large representative boards of directors  Should directors be appointed by government on the basis of expertise? Potential for bias?  Or should they be elected by members of the tourism industry, in the same way as democratic governments? Does this result in the best candidate being elected? © 2016 Steven Pike Table 5.4 Government expectations of Tourism New Zealand directors and operations Expectations of Tourism New Zealand Skills and experience of directors operations  integrity  a wide perspective on issues  frugality and due care in the use of taxpayer  good oral and written communication money  understanding of public sector governance and  advancing activities beneficial to the tourism accountability sector and wider community rather than to any  previous experience as a company director individual business  ability to work in a team and work collaboratively  focusing on medium- to long-term strategies  strategic skills rather than short-term gains  experience in developing and maintaining  showing openness and having good partnerships with other organizations and communication with the Minister, the Ministry of companies Tourism and other government agencies  experience with financial statements  partnering with the private sector to add value  understanding of and/or experience in the tourism rather than displace or duplicate private sector at a senior level businesses  understanding the importance of value creation, innovation and international best practise comparisons  experience of marketing issues © 2016 Steven Pike Governance  Typical CVB board responsible for the following (Lathrop, 2005): Defining the purpose of the bureau and establishing its governing principles Providing advice and consent with respect to overall policy Approving the annual operating budget and monitoring the bureau’s finances Approving the membership structure and fees Providing direction and oversight for the bureau’s operations Monitoring the performance of the CEO Representing the bureau’s interests among external audiences and serving as an advocate for tourism and destination management issues © 2016 Steven Pike Long-term funding security  Fund raising has been a perennial challenge for many DMOs  A general reliance on government support  John Marks, CEO of the San Francisco CVB, suggests the key to future funding lies in developing a more entrepreneurial spirit among staff. Marks (2004) sees the entrepreneurial spirit being critical to developing alliances with non- traditional partners as well as tourism businesses. The San Francisco CVB, for example, has partnered with a diverse range of companies such as Visa, See’s Candies, Colavita Olive Oil, Buick and the San Francisco Giants. © 2016 Steven Pike Multiple accountability  Many RTOs are reliant on funding from several local government authorities in their catchment area  Not all local government authorities contribute equally  RTO management face multiple lobbying and multiple accountability E.g. Outback Queensland (Australia) is accountable to 21 local authorities © 2016 Steven Pike Politics of DMO decision making  Always a danger of politicians, tourism entrepreneurs and DMO management becoming self-serving  Major funders want a voice at the board table E.g. Critics of bed taxes as DMO funding argue that the accommodation operators want more control over decisions © 2016 Steven Pike Politics of DMO decision making  Students need to understand the best laid plans can come unstuck because of the nature of tourism industry politics  Politics is 'the striving for power, and power is about who gets what, when and how in the political and administrative system and in the tourism sector' (Elliott, 1997, p. 10) © 2016 Steven Pike Politics of DMO decision making  Students need to understand that working through the minefield of tourism politics is a challenging reality  Everyone in the community is an expert on tourism, and will have differing opinions  Particularly challenging at RTO level in smaller communities, where DMO staff encounter stakeholders daily © 2016 Steven Pike DMO roles  Development and coordination of a cooperative tourism strategy  Providing advice to government and entrepreneurs  Lobbying for the interests of the tourism industry with government agencies  Conducting marketing research © 2016 Steven Pike DMO roles  Stimulating new product development  Undertaking promotional activities  Information provision  Promoting quality service standards  Stimulating new event developments  Fostering civic pride, along with awareness of, and support for, tourism among the host community  Disaster response preparedness © 2016 Steven Pike