Meeting DMO challenges

Responsible for developing and promoting tourism in their respective regions, destination management organizations (DMOs) are the backbone of the travel industry. Challenges await them as they consider new funding formulas, adopt new technologies, deal with heightened competition, and adapt to changing consumer needs.

Recognizing the importance of DMOs

Working in an industry composed primarily of small and medium-size businesses, DMOs are – first and foremost – « umbrella » organizations, working in a very heterogeneous environment. First-generation DMOs were simply public organizations funded entirely by government, and although this type of structure continues to predominate, many new forms have emerged at the national, regional and even municipal levels. 

In Canada, the Canadian Tourism Commission is an example of a public/private partnership, just like the national DMOs in the United Kingdom, France, Denmark and Australia. In countries like Germany, Italy, Greece and Portugal, the national DMOs are entirely publicly funded, while some destinations have taken the opposite tack, seeing government intervention as unnecessary and relying instead on natural market forces. This is the model that prevails in the US, the Netherlands and Japan. (In the case of Japan, the national tourism bureau was simply privatized.)

Moreover, a growing number of tourist destinations are establishing public/private partnerships to set up destination management systems. BonjourQuébec.com, an alliance of Tourisme Québec and Bell Canada, is one such example. The WTO and the United Nations Conference on Trade and Development (UNCTAD) both encourage this approach.

Need to adapt

In the constantly evolving world of tourism, DMOs must keep up with the times and adapt. According to Arthur Oberascher, CEO of the Austrian National Tourism Office, the major problem for DMOs is their traditional focus on supply, catering as they do to the interests of their member businesses. In fact, they must better understand demand so they can adapt to consumer needs. DMOs must take on the role of knowledge brokers, acting as information clearinghouses for consumers and suppliers alike. Ultimately, DMO managers, just like hotel managers, should have access to daily activity reports: inventories, customer and spending profiles, financial analyses, etc. As a matter of course, DMOs should be linked 24/7 in a communication network with destination suppliers. Although we are obviously not there yet, this gives us an idea of the direction we should be taking.

Furthermore, increased consumer use of the internet to research tourism destinations and purchase travel products is one of the major changes to the DMOs’ operational environment. DMOs have to consider this new consumer attitude and adapt to the digital information age. According to the WTO, while the majority of national organizations have e-commerce strategies, at least half of regional and local outfits do not.

Case study: East of England Tourist Board

In their desire to acquire market intelligence, DMOs, like those in Austria and the East of England, have begun to redefine their areas of activity. Assuming the role of intermediary, these organizations are acting as knowledge brokers by using information about consumers to help the businesses who provide travel products and services.

For example, the East of England Tourist Board uses Tiscover, a destination management system, to encourage tourism organizations to offer packages on their website. Called UNITE, the platform enables suppliers to easily create packages using a content management system. The tourist board offers ongoing training and support to users as they familiarize themselves with the technical requirements. In fact, the challenge is more cultural than technical, because most small and medium-size businesses are not very familiar with this form of marketing.

Founded in 1991, Tiscover acts as a destination portal for Austria, Germany, Switzerland, Italy and the United Kingdom.

Tourism New South Wales: using e-business application

Many DMOs wonder how to best communicate and transmit their product information to various international markets at a low cost. This was the challenge facing Tourism New South Wales (TNSW), a regional tourist board in Australia.

The tourist guide for Sydney and the New South Wales region is the single most important tool available to consumers planning a trip. Since it would be prohibitively expensive to send this 150+ page document to potential visitors from the Americas and Europe, TNSW instead turned to the private sector, partnering with OnlineDM and Sampson Carroll to publish an international, interactive version of the tourist guide.

This interactive brochure uses mobileBrochure technology, a platform developed by Mobular Technologies.

The format offers a number of attractive features:The documents created are much smaller than traditional PDF files. This means they can be emailed without clogging the bandwidth of either sender or recipient. For example, the email for an interactive 200-page catalogue would generally be smaller than 20 k.

• The interface is very user-friendly, incorporating pull-down menus, regional content, a search engine, etc.
• The format is embedded in an email and does not require any plug-ins, attachments or reader software.
• Unlike hyperlinks, these documents are not HTML messages that redirect the consumer to a Website.
• User interaction with Mobular documents can be thoroughly monitored; in other words, usage data are saved in real time and may be accessed by the sender through a dedicated password-secured site. With this feature, DMOs can find out how many people have consulted the document, what search terms are used most often, which regions attract the most interest, the most popular pages, and so on.

A number of DMOs – those in Wisconsin, Maine and San Luis Obispo County in California – have made this technology part of their marketing strategy. With vacations increasingly planned at the last minute and traditional travel guides only consulted once travellers are on-site, e-brochures are a logical solution.

Sources:

– Delgado, Joaquin A. and Maggie Bowen. « DestinationFinder: A Travel – Focused Search Engine, Portal and Recommender System for the DMO Marketplace, » talk given at ENTER 2004.
– Gretzel, Ulrike and Daniel R. Fesenmaier. « Information Technology Use and Organisational Approaches: A Comparison of Destination Marketing Organizations in the United States and Canada, » National Laboratory for Tourism and eCommerce, 2002.
– Mintel Group. « Destination Marketing, » Travel & Tourism Analyst, No. 5, April 2005.
– Travel Research International. « Roles and Responsibilities in Tourism Support and Promotion in the Yorkshire and Humber Region, » prepared for Yorkshire Forward, December 2003.