The destination as a virtual company

Worldwide Market
Worldwide Market culture
nature

DMO-Management

transport-
companies hotels

Hundreds of
Service Providers

entertainment Worldwide Market

Worldwide Market

Slide 26
Source: Bieger, 2008
 culture
nature

DMO-Management

transport-

Complex & Comprehensive

companies hotels

Hundreds of

Tourism offer of a Destination

Service Providers

entertainment

Original offer Derived offer

Natural offer Tourist infrastructure

Landscape, flora, fauna accommodation, catering, travel advice,

climate, natural monuments Tourist transportation

Socio-cultural offer Leisure-infrastructure

Culture, tradition, customs, language, leisure: sports, culture, attractions,

mentality, hospitality, Hiking and biking trails, events
monuments (hist., cultural, techn.)

Special tourist offers

General infrastructure

spa and spa services

Politics, social, education, supply and disposal, fairs, meetings, exhibitions, congress
Slide 27
communication, transportation
What is sustainable development?

• The development that meets the needs of the present

without compromising the ability of future generations to
meet their own needs.
• Calls for concerted efforts towards building an inclusive,
sustainable and resilient future for people and planet.
• To be achieved, it is crucial to harmonise three core
elements: economic growth, social inclusion and
environmental protection. These elements are
interconnected, and all are crucial for the well-being of
individuals and societies.
• Eradicating poverty in all its forms and dimensions is an
indispensable requirement for sustainable development.
To this end, there must be promotion of sustainable,
inclusive and equitable economic growth, creating greater
opportunities for all, reducing inequalities, raising basic
standards of living, fostering equitable social development
and inclusion, and promoting integrated and sustainable
management of natural resources and ecosystems.
Slide 28
Source: UN.org
Modern destination management

Complex & Comprehensive

Tourism offer of a Destination

Original offer Derived offer

Natural offer Tourist infrastructure

Landscape, flora, fauna accommodation, catering, travel advice,

climate, natural monuments Tourist transportation

Socio-cultural offer Leisure-infrastructure

Culture, tradition, customs, language, mentality, leisure: sports, culture, attractions,

hospitality, Hiking and biking trails, events
monuments (hist., cultural, techn.)

Special tourist offers

General infrastructure

spa and spa services

Politics, social, education, supply and disposal, fairs, meetings, exhibitions, congress
communication, transportation

Slide 29
 3

Video: 1.3

Title: The tourism development and the impacts of Covid-19

Topics:
a. Getting an idea about the global tourism development and the actual
situation with Covid-19 impacts
b. Realising the two perspectives international and domestic tourism

Slide 30
 … before Covid-19!!!

Slide
Slide 31
International Tourist Arrivals by World Region

Slide 32 Source: https://www.hotelmize.com/blog/6-key-travel-industry-growth-statistics/

International Tourism by Purpose of Visit, 2019 (% share)

Slide 33
Purpose of trips (2018)

Year
2018
785

378
175
73

56%

27%
12%
5%
Slide 34
Slide
https://www.unwto.org/global-and-regional-tourism-performance
 COVID-19’s crushing impact on international tourism

Slide 35
International tourist arrivals, world and regions

In years 2020 & 2021,

international arrivals
dropped by -73% ,
resp. -72% compared
to 2019!

www.unwto.org/unwto-world-tourism-barometer-data
Slide 36
Slide 37 Source: UNWTO WORLD TOURISM BAROMETER JANUARY 2022
Slide 38
 https://www.unwto.org/global-and-regional-tourism-
performance

Global and regional

tourism performance

A compilation of data on outbound tourism

by country, including data on international
tourism expenditure and outbound trips.

Stay updated:
https://www.unwto.org/unwto-world-tourism-barometer-data
https://www.unwto.org/international-tourism-and-covid-19
https://www.unwto.org/unwto-tourism-recovery-tracker
Slide 39 https://www.unwto.org/covid-19-measures-to-support-travel-tourism
The Covid-19 crisis as a catalyst

The Covid-19 crisis and its immense and partly tragic effects are proof that tourism experts
and destinations cannot simply trust that tourism will always grow and guarantee
prosperity but must be developed and managed (pro-)actively and purposefully.
This requires not only "experience", but also specific knowledge and management skills.

In this context, your course participation is a very commendable and meaningful activity.
In order to consolidate and expand the management skills also about numerical analysis
knowledge, I would like to refer already now to the soon to follow first online research,
which will follow at the end of this unit.

With up-to-date knowledge and continuous training, it will hopefully be easier for us
tourism professionals to cope with difficulties and hard times more quickly and better in the
future.

Slide 40
But, tourism isn’t international tourism only!

Domestic tourism is tourism

involving residents of one country
traveling only within that country.
A domestic holiday is a vacation
spent in the same country.

https://www.tourismtattler.com/

Slide 41
The importance of domestic tourism

UNWTO Highlights Potential of Domestic Tourism to Help Drive Economic Recovery in Destinations
Worldwide
Madrid, Spain, 14 September 2020 - As restrictions on travel begin to ease globally, destinations around the world
are focusing on growing domestic tourism, with many offering incentives to encourage people to explore their own
countries. According to the World Tourism Organization (UNWTO), with domestic tourism set to return faster than
international travel, this represents an opportunity for both developed and developing countries to recover from the
social and economic impacts of the COVID-19 pandemic.

Recognizing the importance of domestic tourism, the United Nations specialized agency has released the third of its
Tourism and COVID-19 Briefing Notes, -Understanding Domestic Tourism and Seizing its Opportunities.- UNWTO
data shows that in 2018, around 9 billion domestic tourism trips were made worldwide – six times the number
of international tourist arrivals (1.4 billion in 2018). The publication identifies ways in which destinations around
the world are taking proactive steps to grow domestic tourism, from offering bonus holidays for workers to
providing vouchers and other incentives to people travelling in their own countries.

Slide 42
Domestic vs. international tourism

Tourist Arrivals
Domestic Travel International Share Domestic vs
Country
(Mio.) Arrivals (Mio.) International
International
Domestic Tourists
Tourists

USA 1429.3 59.0 24.2 96% 4%

China 1229.6 54.2 22.7 96% 4%

India 741.0 5.7 130.0 99% 1%

Brasil 310.6 5.3 58.6 98% 2%

Australia 66.4 5.8 11.4 92% 8%

Japan 292.8 8.6 34.0 97% 3%

France 208.2 77.5 2.7 73% 27%

UK 135.7 29.3 4.6 82% 18%

Italy 81.6 45.4 1.8 64% 36%

Austria 11.9 21.5 0.6 36% 64%

Switzerland 6.6 8.6 0.8 43% 57%

Slide 43 Adapted from Euromonitor, 2011, UNWTO,2011, BFS, 2011

 Arrivals are an important metric, but
not the only important one. The
expenditure of guests in a country is
also relevant, among other things.
Here, of course, the money spent by
foreign guests is of great importance
for the economy of a country.

To illustrate: in the Philippines, foreign

guests contributed only about 15% to
the total tourism turnover, while in
Croatia it is an enormous 85%!

Slide 44
 6

Video: 1.4

Title: The eco-system “destination”; its framework & environment

Topics:
a. The service chain
b. Service providers
c. The tourism system with the 4 key environments

Slide 45
 The destination as the competition unit

Worldwide Market
Worldwide Market culture
nature

DMO-Management

transport-
companies hotels

Hundreds of
Service Providers

entertainment Worldwide Market

Worldwide Market

Slide 46
Source: Bieger, 2008
 culture
nature

The tourism value chain –

DMO-Management

transport-
companies

the destination’s uncountable tourism providers

hotels

Hundreds of
Service Providers

entertainment
Tour operators

Transportation National Tourism Organization

Travel Agencies Destination Management Organisation Education

Gastronomy Cable Car Companies

Public Information
Points
Public Sector
Agriculture / Retailers
Farmers Marketing Agencies
Events
Entertainment
Hotels / Accommodation
sector Construction Industry Banks

Attractions
Technology companies
Slide 47
The destination’s tourism provider & the external interaction partners

Media State / authorities

Associations Supranational
organisations
Environmentalists,
Citizen’s groups
culture Parties
nature
Influencers /
Role models Cooperation-/
DMO-Management Network partners

Quality- transport-
companies Guests
organisations hotels

Hundreds of
Service Providers Intermediaries
NPO’s/
NGO’s entertainment

Banks & other financial

Cultural & service providers
Educational institutes
Employee-/ ext. touristy
Unions Entrepreneur- service provider
associations

Slide 48 Source: adapted from K.A. Wiesner

 Destination, potential guests & the 4 most relevant environments
= tourism system

economic natural
environment environment

culture
nature

demand markets, DMO-Management

transport-
potential tourists companies hotels
Hundreds of
Service Providers
entertainment

social political
environment environment

Slide 49 Source: adapted from Bieger, 2008

The four relevant environments with selected aspects

Economic Environment Social Environment Natural Environment Political Environment

Competitors Safety& Social health Seasonality & Climate Government policies
Demand Work/Career/Leisure attitudes Weather Political stability
Market size Education Geographical latitude Corruption
Supply / Suppliers Social culture Topography Foreign trade policies
Government spending Demographics Soil properties Tax policies
Inflation Attitudes & beliefs Water & Water pollution Labour law
(Un-)Employment Lifestyle, fashion, hypes Air & Air pollution Trade restrictions
GDP Social mobility Droughts, floods … Copyright and patent laws
Exchange rate Cross-cultural communication Animals (Wildlife) Funding & grants
Consumer confidence Historical issues Agriculture & farming Wars & conflicts
Interest rates Ethics & religion Recycling status Employment laws
Income Distribution of income/wealth Building density Bureaucracy issues
Price level Consumer behaviour Rivers, lakes, sea, woods Competition regulations

Slide 50
 9

Video: 1.5

Title: The destination’s stakeholder and their expectations

Topics:
a. Stakeholder complexity
b. Types of stakeholder
c. Cooperation & governance
d. Stakeholder management
e. Stakeholder map

Slide 51
 Stakeholders in destination management – an introduction
via the system and framework of destination management

The tourism value chain – The destination’s tourism provider & the
the destination’s uncountable tourism providers external interaction partners

Media
Tour operators State / authorities
Transportation National Tourism Organization Associations Supranational
organisations
Travel Agencies Destination Management Organisation Education
Environmentalists,
Citizen’s groups
culture Parties
nature

Influencers /
Role models Cooperation-/
DMO-Management Network partners

Gastronomy Cable Car Companies Quality- transport-

Guests
Public Information Points companies
hotels
organisations
Public Sector Hundreds of

Agriculture / Retailers Service Providers Intermediaries

Farmers MarketingAgencies NPO’s/
Events NGO’s entertainment

Entertainment
Hotels / Accommodation sector Banks & other financial
Construction Industry Banks service providers
Cultural &
Attractions Educational institutes
52, 3 May 2022 Technology companies
Employee-/ ext. touristy
Unions Entrepreneur- service provider
associations

Stakeholders can be internal or external.

Slide 52
Tourism and the Destination is a System of intensive Exchange and Interaction

Policy National Wars of

Currencies Media
Makers dept all kind

Instable
Tour Political Rural Different
political
Operator Institution exodus religions
systems

Many
others

Environmental Global
Education Transport CBT
problems Markets

Many
others

Growing Farmers /
Hospitalit
Tourist NGO_NPO middle Fisherme
y
class n

Slide 53
Stakeholder Theory: 2 Definitions

„Any group or individual who can affect, or is affected by, the achievement of a
corporation's purpose“
(Freeman, 1984, S. IV)

“The stakeholders in a corporation are the individuals and constituencies that contribute -
either voluntarily or involuntarily - to its wealth-creating capacity and activities, and that
are therefore its potential beneficiaries and/or risk bearers."
(Post et al., 2002, S. 19)

Slide 54
Complexity as a fundamental feature of the
stakeholder management in destinations

• Multitude of stakeholders and actors

• Stakeholders differ in objectives, skills, resources and commitment impact the functioning of a
destination
• Influence and expectations of stakeholders may vary in different situations and contexts!

Slide 55
Slide
Laws et al., 2011
Key principles in the management/coordination of stakeholders
(Freeman, 1984; Heitmann, 2010)

1. Identification of stakeholders and their contribution (stakeholder analyses)

• High or low power/influence? High or low interest?
2. Establishment of processes required to manage stakeholders (stakeholder
engagement)
• Regular engagement, communication & information, consultation & trust
3. Transactions among the organisation and its stakeholders need to be managed
(stakeholder management)
• Reduction of risk; reduction of negative impact; responsibility

Slide 56
Jamal & Getz, 1995; Sheehan & Ritchie, 2005
Two main stakeholder categories

Primary stakeholders Secondary stakeholders

• Their participation is vital for the • Are not directly connected to the
functioning of the system; creation of the product/service;

• are involved in the creation of the • are influenced by the actions of the
product/service; organization & therefore interested
in the action;
• (mostly) formal/official relationship
with the organisation; • influence the actions of the
organisation;
• dominant position of power;
• usually external
• key stakeholders, prominent actors;

• internal and external

Slide 57
Cooperation among stakeholders in a destination

„No Stakeholder is nowadays in the position to

oppose the upcoming strategic challenges on his
own.“ (Bruyn & Alonso, 2012, p. 222). • Stakeholders are obliged to work
together as they depend on each
„The very essence of rural tourism is local other to create the tourism product
cooperation and community involvement
through appropriate forms of networking.“ • Collective decision-making
among independent actors are
(Mitchell & Hall, 2005, p. 5) crucial for destination
development
Cooperation in community-based destinations ‘‘is
a process of joint decision making among • Formal or informal ways of
autonomous, key stakeholders of an inter- cooperation
organizational, community tourism domain’’
(Jamal & Getz, 1995, S.154)
Slide 58
Differences in stakeholder management between firms and destinations

Stakeholder coordination and management in the context of a

destination as the task of the DMO is much more complex than in a private business!

culture
Private Business Tourism Destination nature

DMO-Management

transport-
companies hotels

Hundreds of
Service Providers

entertainment

• Individual level -> moderate number of • Collective level -> Networks of stakeholders on local,
stakeholders regional and supraregional level
• Moderate amount of primary stakeholders • Complex number of heterogeneous primary & secondary
• Individual product creation stakeholders
• Lower potential of conflict • Collective product creation (touristic value chain)
• Lower dependence on other enterprises • High dependence of the enterprises in the destination
• Coordination and management of stakeholders • Higher potential of conflict
lays in your own hands

Slide 59
Forms of stakeholder involvement/engagement

Communication

Coordination

Cooperation
Cooperation & stakeholder
management – more to
come later in the module
Collaboration

Slide 60 Source: Morrison, 2013, p. 306

From stakeholders to governance: what does governance mean?

Corporate governance refers to the whole system of

rights, processes and controls established
internally and externally over the management of a
business entity with the objective of protecting the
interests of all stakeholders.
Centre for European Policy Studies, 1995

Governance involves collaboration, cooperation and

trust between government (at different levels) and
business stakeholders. It is the most effective way to
ensure accountability, transparency,
responsiveness, and a future orientation.
Damayanti et al., 2019

Slide 61
Destination governance

• In tourism destinations stakeholders do not necessarily engage in fully cooperative

behaviour; they may collaborate and compete at the same time (a phenomena termed
coopetition”)
• Destinations are a fragmented entity, requiring purposeful coordination to ensure
coherency of perception and delivery
• Destination success is attained through how destination stakeholders interconnect
• Tourism stakeholders are not static entities; managing stakeholders requires a
continual awareness and assessment

Destination governance:
“Synchronising the dynamic, competing forces, interests and resource
requirements of disparate stakeholder groups and structuring inter-
organisational relationships”.

Slide 62 Qúinlan et al. , 2013

“Stakeholder Analysis” & “Stakeholder Map” to synchronise the destination
towards good governance:
Stakeholder Analysis identifies the ways in which Stakeholder Mapping is the process of creating
stakeholders may influence the organization or their pictures to clarify the position of the stakeholders of the
attitude towards the organisation and its targets organisation/destination. It is useful to categorise the
various stakeholders by drawing further pictures of what
USAGE OF STAKEHOLDER ANALYSIS. APPLICATIONS
• Making a list of all stakeholders the stakeholder groups are, which interests they
• Analysing the interest of the various stakeholders represent, the amount of power they possess, whether
Analysing potential conflicts of interest with or between stakeholders
they represent inhibiting or supporting factors for the
•

• Basis for further Stakeholder Mapping

• Basis or major influencing factor for strategy formulation and decision- organization to realise its objectives, or methods in
making
• Evaluating existing strategies which they should be dealt with.
• Basis for stakeholder communication

STEPS IN STAKEHOLDER ANALYSIS. PROCESS There are different models to visualise these
1. Identify stakeholders
2. Understand stakeholder needs and interests. Classify them into meaningful
categorisations. Some examples are:
groups. • Power-Dynamism Matrix
3. Prioritize, balance, reconcile or synthesise the stakeholders
4. Integrate stakeholder needs into the strategies of the • Power-Interest Matrix
organisation/destination and into its actions • Power-Legitimacy-Urgency Model
RESULTS OF STAKEHOLDER ANALYSIS. BENEFITS
• Better insight can be obtained per stakeholder in:
o The relationship with the stakeholder
o Coalitions or organizations of which the stakeholder is a member
o The significance of the stakeholder to the organisation/destination
o The power of the stakeholder
o The priorities of the stakeholder
o Associated risk areas
• Better strategies and decisions
• Better acceptance of the strategy and decisions

Slide 63
 15

Video: 1.7

Title: The two forms of DMO – the marketing and the management organisation
Topics:
a. Explaining the difference between the 2 models
b. Presenting examples of both types

Slide 64
Destination management and marketing / DMO & DMO

Two highly interrelated concepts:

1) Destination Marketing Organisation: 2) Destination Management Organisation:

Marketing/Communication as key task Coordinated and integrated management of
(many National Tourism Organisations the destination with the relevant
like “Switzerland Tourism”) stakeholders (like the local attractions,
events, facilities, infrastructure, hospitality
resources and tourism providers/suppliers of
all kind)

Slide 65
1) Destination marketing:

• Marketing a tourist destination with a purpose to increase the number of tourists

(Ensuring a touristic place is visited by people) through marketing initiatives such as
advertisement, events, and activities.
• Destination marketing is the marketing activities carried out to promote the
destination in national and international areas, to create a positive image in the
target audience, to brand the destination and to gain an advantage over its
competitors.
• Destination marketing is a type of marketing that promotes a destination (town, city,
region and country) in order to attract visitors and / or increase the number of
visitors.

Slide 66
1) Destination marketing:

Expert statements:
Thulisile Galelekile, South Africa:
“Destination marketing is about engaging with key players in order to drive awareness of the destination, thereby driving
interest so that people visit the destination. It is about finding creative ways of communicating the destination’s value
proposition, therefore creating the reason for people to visit your destination.”

Gregory Pomerantsev, Latvia:

“Destination marketing (or marketing of a place) is a managerial process, a demand driven research, advertising and
communication activity with the focus on potential external consumers. It mainly focuses on attraction of visitors –
tourists, investors, university students or skilled labor force.”

Tom Buncle, Scotland:

“While destination branding is about who you are, destination marketing is about how you communicate who you are.”

Michael Gehrisch, USA:

“At the end of the day, destination marketing is all about turning tourism into a key driver of socio-economic progress in
communities through export revenues, the creation of jobs and enterprises, and infrastructure development.” “A
destination marketer is also an advocate for tourism, a cultural champion, and connects the visitor experience with the
quality of life of residents in the community.”

https://placebrandobserver.com
Slide 67
2) Destination management:

• … consists of the coordinated management of all the elements that make up a tourism destination.

• … takes a strategic approach to link-up these sometimes very separate elements for the better
management of the destination. Joined up management can help to avoid overlapping functions and
duplication of effort with regards to promotion, visitor services, training, business support and identify
any management gaps that are not being addressed.

• … calls for a coalition of many organisations and interests working towards a common goal, ultimately
being the assurance of the competitiveness and sustainability of the tourism destination. The DMO role
should be to lead and coordinate activities under a coherent strategy in pursuit of this common goal.

• ... though DMOs have typically undertaken marketing activities, their remit is becoming far broader, to
become a strategic leader in destination development. This is a vital ingredient for success in every
tourism destination.

Slide 68
2) Destination management:

UNWTO has identified three areas of key performance in destination management at DMO level:
1. Strategic Leadership
2. Effective Implementation
3. Efficient Governance. https://www.unwto.org

Additional statements:
“Destination management is the coordinated management of all elements that make up a destination,
including the attractions, amenities, access, marketing and pricing.” https://www.solimarinternational.com

“Destination management defines a process that involves coordinated actions aimed to control the
economic, socio-cultural and environmental dimensions of a specific tourism territory. It should be
carried out by local authorities and other tourism stakeholders in partnership, following principles of
good governance. It is central to the delivery of sustainable tourism as it allows a territorial approach
to the multi-sector, multi-stakeholder, multi-thematic matrix of challenges and opportunities facing
tourism development.” https://destinet.eu

Slide 69
Uniqueness of destination management and destination marketing

• The lack of authority to the single business

• Lack of direct control over the quality and quantity of services and products
§ DMOs do not own or operate those facilities, services, attractions, events or other
amenities which they represent and market
§ Yet, the quality and quantity of destination services and products greatly influence the
visitor satisfaction and the effectiveness of the DMO’s programmes

• Lack of pricing function

§ Due to lack of ownership, DMO’s usually do not get involved in pricing the offered
products and services
§ However, the price level within the destination also influences the DMO’s possibilities
(prices of meeting facilities à bidding for major event?)

Slide 70
Uniqueness of destination management and destination marketing

• Need to serve the requirements of many organisations

§ Many stakeholders to serve (governmental and industry members) who have different
priorities, objectives (they can also be competitors) and expectations.
§ DMO has to be objective and fair and should fulfil all the stakeholder’s wishes (with
limited financial budgets and human resources!)

• Need to build consensus among stakeholders

§ DMO needs to build consensus among stakeholders for its visions, goals strategies,
objectives, plans and programmes
§ Consensus refers to selling the DMO’s idea to others in the community

Slide 71
Uniqueness of destination management and destination marketing

• Need to be sensitive to the interest of residents

§ DMO also represents the local communities
§ DMO must not promote forms of tourism that undermine environmental, social or
cultural resources and values of the community (long term sustainability)

• Need to demonstrate broad economic benefits

§ DMOs are usually public or quasi-public organisations à not profit-oriented
§ Accountability: through effective use of funds and through the DMO’s impact in
generating additional visitor spending and employment in tourism and hospitality

• Difficulty in measuring performance

Slide 72