Month: May 2016

Business model innovationCollaborative business modelsCollaborative cultureStrategyStrategy planning & execution

Destination Models 3.0: Integrating partners (III)

The design of the integration strategy requires making the local service suppliers envision the future of the destination through the development of this model, and listening to understand the different levels of risk attitude and enthusiasm that the project inspires, identifying their fears and concerns about the integration process. This should be done through the Partner Discovery process, encompassing three main steps:

  • Mobilizing community leaders. The first step is to create awareness about the need for a new destination model, presenting a consistent proposal as a starting point, and establishing a common language to discuss about the new model. Community leaders are the first to participate in the discussion, though in the following phases other community members should also be consulted.
  • Upon presentation of the first proposal, the second step consists on getting feedback and understanding of the locals’ concerns, problems, needs, fears, and aspirations that the model has to address. Hereby we may identify different partner profiles, with different concerns and aspirations, which set the direction to refine the integration formulas to accommodate all profiles.
  • Designing. Based upon the feedback and insights obtained from community leaders, the initial prototype(s) should be rethought to adapt to the previously unknown requirements. Both “design” and “understand” are parallel processes interacting constantly along many rounds to revamp and pre-test the model, its formulas and the valuation criteria to integrate businesses into the platform.

Regarding the development strategy for integrating partners should consider several development phases stating the milestones when priorities change. For instance, the second phase should not start until the platform is able to operate providing all services for a minimum flow of visitors. This may entail also a spatial development strategy in which the model scales up when a determined area is fully or almost fully integrated into the destination model.

Would you consider any other step or issue in the partner discovery process?

Business model innovationCollaborative business modelsCollaborative cultureStrategyStrategy planning & execution

Destination Models 3.0: Integrating partners (II)

When attempting to integrate the local service providers into the platform, we are likely to find different attitudes with regards to their confidence on the project and their will for keeping the control of their business. Further, this attitude may change over time, for it is necessary not only to offer many integration formulas attending different risk attitudes or want for autonomy and ownership, but also to offer a flexible system that allows them to shift from one to another integration status.

For instance, the range of integration formulas could go from the full integration exchanging the business ownership for platform shares, to the lowest possible integration status in which the business is associated to the platform only by having to comply with certain service quality standards to take advantage of the aforementioned benefits of the platform. In between these formulas, there could be intermediate formulas guaranteeing a minimum profitability, but also with a limited dividend, to accommodate those with a medium level of risk aversion. As showed in the following table, in many cases we should distinguish between the integration of businesses and properties.

Owner’s risk perception Properties (premises, facilities, land, etc.) Businesses
High risk Renting or selling to the platform Association in low integration status
Medium risk Integration with guaranteed profitability Integration with guaranteed profitability
Low risk Full integration at all risk Full integration at all risk

Detailed information about the implications of each option would be provided to partner candidates, to help them visualize the pros and cons of every option. In general, these could be the following:

  Advantages Disadvantages & Obligations
Low integration ·   Keep ownership of the business

·   Take advantage of platform’s marketing

·   Advantageous deals in key supplies

·   No influence on platform’s policies

·   Compliance with service standards

Mid integration ·   Guaranteed shares’ profitability

·   Right to vote on platform’s policies

·   Preferential marketing deal

·   Free or subsidized training & assistance

·   Limited shares’ profitability

·   Limited voting power

·   Loose business ownership & control

·   Fix salary + bonus, subject to penalties when failing to comply with rules

Full integration ·   Stake in platform’s profits to the fullest

·   Full right to vote on platform’s policies

·   Preferential marketing deal

·   Free or subsidized training & assistance

·   Loose business ownership & control

·   Fix salary + bonus, subject to penalties when failing to comply with rules

·   Risk of no profits in case of platform’s poor results

Hereby it is necessary to remark that partners associated to the platform –in low integration status- would be also encouraged to invest in the platform to take advantage of its profits and have the right to vote when deciding the platform’s policies.

Besides, there should be a specific integration and development strategy for the new entrepreneurs encouraged through the platform development policy, establishing many integration options and setting their path to regain full ownership of their business in case they eventually wish to do so. For instance, as it happens with new employees, many new partners –especially the micro-entrepreneurs in the poorer layers of the community- should follow a trial period during which they are trained, coached and closely monitored to assess their suitability as integrated service suppliers.

What challenges do you foresee when integrating partners through this “formulas strategy”?

IntelligenceIntelligence methods

Destination Intelligence 3.0: Capturing tourist insights

With regard to the new approach intending to establish a closer relationship with tourists, there could be many possible kinds of research goals:

  • Tourists’ needs, problems, and concerns in view of identifying insecurities and discomforts to be addressed through improvement or development of new services and facilities.
  • Tourists’ motivations and aspirations to sense the convenience of developing new products or even revamping the destination model towards a 3.0 model to satisfy the aim for mission driven tourism activities.
  • Tourists’ opinions to pre-test ideas on new products or marketing initiatives, to ensure their viability and adequate development.

In this point, research should be conducted on the issues that concern the creative society, to better orientate on defining missions that engage the human spirit of most stakeholders. The researched issues are to be chosen by the Destination Management Organization (DMO) with room for participation of local private stakeholders, as with the quantitative surveys. These research goals are to be attained through qualitative methods, such as in-depth interviews and focus groups to get a deeper insight on the researched issues. The access to the sample is here a bit more complicated than in other research projects. Hereby are envisioned some ways to identify the desired sample representatives, bearing in mind that these have to be selected according to specific criteria related to the research goals in every case:

  • In the quantitative surveys, through which the pollsters know their sociological and motivational profile
  • In social media discussions about the destination and topics related to the research goals
  • In the accommodation, in collaboration with the supplier
  • On-site when practicing activities related to the research goals

To successfully carry out this task it is necessary to clearly define the target profiles and get the cooperation of the local service suppliers such as accommodation and activity suppliers, which ultimately also benefit from such research. Once identified suitable candidates, these should be invited to participate in a meeting with an interviewer or a focus group, in exchange for a voucher for some of the destination’s services.

The outcomes of the qualitative research are to provide insights and ideas which serve as a basis for further research with quantitative methods.

Would you consider any other goal when researching for tourists insights?

Co-creationMarketing 3.0Open innovationTourism marketing

Destination Marketing 3.0: Content creation contests

Let people vote for stories, experiences and other ideas through the social networks or mobile apps. Reviews and ratings are the key brand performance indicators applying to both experiences and stories. Because community members risk their reputations when giving reviews, only brands with high integrity are likely to obtain good reviews and ratings. Destination executives’ role is to ensure the brand integrity rather than trying to stimulate reviews by sponsoring them, which could be regarded as manipulation.

To develop an “exigent” rating system, community members could only vote for one, two or three stories, and would be rewarded if their nominated stories were eventually awarded, to motivate them to read carefully and make thoughtful ratings.

Such contests could be based on existing platforms such as Instagram, Facebook, Youtube, etc. This way, the created content is more likely to become viral and foster the destination’s brand awareness and image throughout the social networks, as well as to draw new visitors to the destination website and getting to know the creative activists better. Contests are rather suitable for DMOs, considering the necessary budget and infrastructure, though school based contests could be far more affordable, also for medium sized DMCs.

Do you envision other tactics to encourage online contribution in the content creation process?

Collaborative business modelsCollaborative culture

Destination Models 3.0: Integrating partners (I)

When designing the value proposition and the business model architecture, the first step in the strategy formulation is to define the mission. This should be done by listening to all the local stakeholders to identify current and future challenges affecting the local community and the specific constituents of these challenges (disadvantaged persons, minorities, elderly people, etc.), mostly those in the base of the pyramid. Further, it is advisable to identify concerns related to the protection of the environment or the cultural heritage. The local communities are the first ones who have to be engaged with the mission, and so their opinion and will should play a decisive role on the mission definition.

The next stage entails searching for solutions that can be powered through the tourism activities, which involves finding ways to transform the tourists’ lives to satisfy social needs and motivations which may also be understood as another mission focused on the socio-cultural transformation. Participation of communities of creative people should be encouraged from this stage. This process starts in the strategy formulation phase, but continues permanently as the main goal of the open innovation system where all stakeholders are empowered to participate.

Then, another key step in the strategy formulation is to identify the key partners and key resources the destination needs to start the virtuous circle that leads to expand the model. They are the ones that make the destination and the business attractive enough to progressively attract and engage new partners and a growing network of customers, some of whom turn into brand ambassadors. The usual core stakeholders to engage in the first phase are to be:

  • Local government, providing infrastructure, long-term shareholding and institutional support
  • Investors, so long as there need to be carried out significant investments in tourism infrastructure
  • Owners & operators of existing key tourism infrastructures
  • Land owners of the areas where the new tourism infrastructures should be built
  • Operators for the new key tourism infrastructures
  • Community leaders, who should influence and engage the local community
  • Channel partners such as Tour-operators and Travel Agents with key market influence
  • Opinion leaders such as journalists and bloggers to spread the first stories to their followers

Furthermore, it is necessary to define the partners’ profile for all resources and activities that are to be outsourced, establishing the prioritization criteria for the selection process and negotiation key points.

Moreover, the development of the destination model needs to define a strategy which sets the priorities on the requirements partners should comply with in relation to the value brought and mission commitment. In this regard, we will probably not always find the necessary service suppliers sharing our mission and values –especially at the beginning-, and so we will need to understand their values and expectations in order to build win-win collaboration. Progressively, as the model scales up, the strategy prioritizes partners who share our mission and vision, eventually replacing those who do not.

Would you suggest different roles for the core stakeholders mentioned above?

Business model innovationCollaborative business modelsEnvironmental sustainability

Destination Models 3.0: Environmental benefits

When focusing on environmental protection and sustainability, in the case of nature-based tourism destinations, there are many roles that the destination model may take:

  • Collaboration with research programs (either by universities, corporations, government, etc.) or environmental protection programs (private foundations, NGOs, government, etc.) by lending some of the facilities, programming volunteering activities related with the field work, etc. In some cases, the open innovation system could serve also as crowdsourcing resource for innovative ideas. Alternatively, the destination could also serve as a pre-testing field for new eco-friendly products.
  • Creating awareness among stakeholders about the environmental issues and challenges of the destination, by educating them on the threats and the good practices that should guarantee the protection of the destination’s environment, in order to create a network of environmental ambassadors that spread these concerns and good practices.
  • Integrating environmental friendly facilities and practices within the main business activity, thus minimizing the impact on the environment. These facilities and practices could also be leveraged for educating and creating awareness about the environmental challenges, thus accomplishing the aforementioned role at the same time.

The indicators to track the environment related mission should be designed by environmental experts according to the established goals aligned with the mission.

Beyond the aforementioned main benefits, there may be other positive impacts such as those related to cultural protection and promotion, socio-cultural change and human development on both the local communities’ side and the visitors’ side. These benefits may be difficult to measure and are most likely to be assessed through the kinds of stories that are created and their popularity.

A series of Whitepapers are to be released featuring case studies to illustrate how the destination model 3.0 approach may be applied in various tourism destinations.

Would you consider other roles to be played by the destination board?

IntelligenceIntelligence methods

Destination Intelligence 3.0: Monitoring performance and demand characterization

The main objectives when tracking the tourism activity in local destinations are to monitor:

  • Evolution of the accommodation offer by type and location
  • Demand seasonality by type and location of the accommodation
  • Evaluate the satisfaction of local businesses with the tourism activity
  • Characterize types of demand, clustering them according to their geographical origin, length of stay, type of services used, seasonality, motivations, trip organization, type of group, activities and places visited, loyalty to the destination and expenditure.
  • Satisfaction, intention to recommend, and intention to repeat visit.

These are to be attained through quantitative research methods, resulting in a periodical series of statistical data to be delivered throughout the local and regional industry stakeholders’ network. Hereby it is important to note that these quantitative surveys may work as omnibus surveys, in which business owners may pay for introducing questions related to their business’ information needs.

These data is to be obtained through two different quantitative methods:

  • For data on occupancy rates, occupancy satisfaction, origin of demand and length of stay, telephone based survey to the accommodation owners has to be carried out, right after every period of two weeks. This should use a sample representing 20% of the total capacity, to obtain a 98.5% of reliability. The occupancy rate is a weighted average for the number of available beds calculated from the answers of each establishment in the sample.
  • For data on characteristics of demand, satisfaction and intention to recommend, an on-site survey has to be carried out either in the tourist areas or in the hotel lobbies. This is designed in many stages: firstly, areas are stratified to ensure that samples are taken from each area. Secondly, primary sample units (towns)  with significant tourist accommodation capacity are selected. Then, intermediate units (establishments) are sampled randomly from clusters. Finally, individual units (tourists) are selected in a systematic random way from within each establishment.

The results may be delivered through both web-based updates every two weeks and an Annual Report to be delivered to all regional stakeholders.

Would you consider any other research objective to be monitored?

Marketing 3.0Storytelling training & case studiesTourism marketing

Destination Marketing 3.0: Storytelling training

Storytelling training is the process through which stakeholders develop their storytelling skills to be fully empowered in telling stories about the destination. Creating compelling stories is an art for which special techniques need to be mastered, and special skills have to be developed.

For instance, to be compelling, the stories have to be real and driven by lesser known characters like any community member, so as to be regarded as a community symbol, a symbol of the collective power of consumers leveraged in networks in front of corporate giants. Furthermore, they should use metaphors such as balance, transformation, journey, container, connection, resource or control. Characters, plot and metaphors are the three components necessary to move people.

The destination’s communication platforms (website, Facebook page, etc.) should facilitate, encourage and reward tourists for sharing their experiences in the form of compelling stories. The Whitepaper “Marketing destinations through storytelling” is to explain all the details about this essential training process for successful storytelling.

Do you think that learning how to craft and tell a compelling story is an experience many people would like to live among the values driven individuals?

Business model innovationCollaborative business modelsSustainabilityThird sector and social sustainability

Destination Models 3.0: Social benefits

As already introduced in previous sections, the mission of destination models 3.0 is to address social and environmental challenges that concern the stakeholders. In this section we explain the positive impacts that the tourism development intends to make according to its mission. The two main types of missions are most likely to be poverty alleviation and environmental sustainability, for which we need to define the role of the destination model in addressing these challenges, the goals and the metrics to measure its success.

When focusing on poverty alleviation, this is intended to be attained through fostering entrepreneurship in the base of the pyramid (BOP), favoring local businesses as suppliers, investing in infrastructure, and providing training, coaching and micro-funding to the poorest layers of the community, empowering them to become active players within the destination model. Ultimately, their participation brings along more human capital in the creation of experiences and stories, as well as a surplus of authenticity and variety that will positively impact in the visitor’s experience and the image of the destination.

Moreover, the raise of the bottom of the pyramid in terms of disposable income is likely to create multiple opportunities for the local economy, with all the new services and products that they may afford to buy. There could be many indicators to track the evolution of poverty alleviation:

  • Newly created tourism businesses in the poorer layers of the community
  • Increased disposable income in the poorer layers of the community
  • Newly created “non-tourism” businesses serving the poorer layers of the community
  • Increased turnover of old businesses serving the poorer layers of the community
  • Increased number of households with access to information technology and computer literacy
  • Increased access to primary and secondary education in the poorer layers of the community

Would you consider other relevant indicators?

Business model innovationCollaborative business modelsEnvironmental sustainabilitySustainabilityThird sector and social sustainability

Destination Models 3.0: Social & environmental costs

Even if destination models 3.0 intend to address social and environmental concerns by reducing the negative impacts that the tourism activity usually creates, it may not be possible to eliminate them completely, for it is necessary to foresee and monitor these impacts to obtain a holistic assessment on the mission accomplishment.

Furthermore, this section should also explain to what extent the destination model manages to reduce these kinds of costs in comparison to most conventional models. So long as the mission is not only to create positive impacts, but also to reduce negative impacts, it is necessary to gauge the negative impacts that the model manages to save in the social and environmental spheres.

There should be established a set of goals in relation to this intended impact reduction. For this purpose, a series of performance metrics are to be designed, along with those for measuring the positive social and environmental impacts. Once a year, a social and environmental audit should be carried out to assess the impact reduction in relation to previous years.

Some indicators on environmental negative impacts could be:

  • Air pollution
  • Acoustic pollution
  • Forest land reduction
  • River or sea water cleanliness
  • Survival status of endangered species

Some indicators on economic, social or cultural negative impacts could be:

  • Employment seasonality
  • Employment insecurity
  • Satisfaction of residents in tourist areas on the cohabitation with tourists
  • Rise of the real estate prices due to the tourism activity
  • Termination or offshoring of non-tourism local businesses replaced by tourism businesses

Would you consider other relevant indicators in either category?