Visions and case studies about third sector issues
One of the greatest challenges facing destinations around the world is finding a way to bring together tourism stakeholders to work collaboratively to develop, manage, and market their tourism destination.
It’s widely understood by tourism professionals that Destination Management Organizations (DMOs) play a key and important role in connecting the tourism industry and serving as an advocate for tourism that grows local economies while mitigating tourism’s negative impacts to the environment, cultural heritage, and local residents. In most destinations the role of the DMO is focused on destination marketing since most tourism businesses recognize the advantages of working together to create demand for a destination. But anyone who has been to an overcrowded, too touristy, trash-ridden destination should understand why focusing on destination management is just as important as destination marketing.
As important as Destination Management Organizations may be, unfortunately most governments fail to provide financial support to help them. In most developed destinations a combination of a bed tax, industry membership fees, and/or government funding provides modest marketing budgets that in turn convenes and unites the tourism industry around a common vision for tourism development. But this is not always the case in developing destinations. It’s these types of undiscovered destinations that need DMOs more than anywhere since we all know that it’s unplanned, unregulated tourism development that destroys the places we love to visit.
But how do you finance such an organization when there are only a few small tourism businesses in a destination and reluctance from national tourism authorities to decentralize tourism development and marketing?
Ajloun is one of Jordan’s undiscovered gems that offer visitors wonderful experiences ranging from 12thcentury castles to hiking trails through green forests. But the best is that the majority of these services are provided by local communities that are welcoming visitors into their homes and at their dinner tables to experience the incredible Jordanian culture and hospitality. Ajloun was not realizing its tourism potential and a main reason for this was because no one was working together to promote and develop the tourism destination. A DMO was needed, but how to make this work and what is required to make this successful?
Below are my reflections based on experience in Jordan and countless other developing destinations on what is needed to establish and sustain a destination management organization.
While every destination is unique and different I have come to learn that the following three key ingredients are required to establish and sustain a destination management organization in the developing world.
- Willingness to work together –as easy as it sounds the first and probably the most important ingredient to creating a successful destination management organization is making sure the tourism stakeholders are willing and able to work together. Small tourism destinations are made up of people and people are complicated. Especially in small towns where religious or political beliefs can be as divisive as loyalty to your favorite English Premiere soccer club or who someone is currently dating.
In essence you are asking people who consider themselves competitors to agree to meet, work together, and invest time and resources for a shared good. The first thing I did when visiting Ajloun is interview as many people as I could to try and determine if there was a willingness to work together and understand the personal dynamics in the destination that I need to be aware of. Luckily in Ajloun there was an overwhelming desire to work together. Everyone I met with expressed an overwhelming desire to be part of something that could help elevate Ajloun’s tourism offer.
- Leadership and Passion – while a willingness to work together is critical, to establishing a Destination Management Organization, equally important is finding someone with the leadership skills and passion for making it happen. This is where most DMOs that are established with the support of international development organizations fail. It’s much easier for the external consultant to step in and be the leader and initiate the work of the organization. But who becomes the glue that keeps everyone together after the donor support ends and the tourism consultant leaves? Who calls the meetings and sets the agenda? Who sees the status quo and is passionate about making change? Without a clear leader or group of leaders that are willing to invest substantial amounts of time and headaches to make this happen, it will not work.
This was one of the challenges I recognized last week in Ajloun. While many people I met are willing to come to a meeting and benefit from a destination marketing initiative, it was not clear to me who would be willing to take the lead and sustain this DMO over time. But this is also why setting up a DMO takes time. Several more conversations and meetings need to take place before I can say one way or another if there exist a leader in Ajloun that will ensure the long term success of this initiative.
- A Sustainable Business Model – To be honest I have seen destinations that lack one or two of the above mentioned ingredients that are still able to sustain a Destination Management Organization simply because it had a business model that provided sustained sources of income or funding to operate. However even those destinations with the best leaders and a willingness to work together have not been able to sustain a DMO without a sustainable business model.
But how do you create a sustainable business model for a DMO? This is a question that tourism professionals around the globe are trying to solve. In the US we have the membership model and the bed tax that funds most DMOs or new Tourism Improvement Districts (TIDs). In Europe, funding from local governments that recognize tourism’s return on investment supports the operating budgets of most DMOs. But in the developing world or in the case of Ajloun where there is less then 10 tourism enterprises that collectively sell less then $20,000 in services a year, how do we establish a sustainable business model for the DMO? There is no way the businesses in Ajloun will pay a membership fee and even if they would the amount would not go far. Government support is out of the question and the lack of large companies outside the tourism sector means that finding a Corporate Social Responsibility (CSR) sponsor will be a challenge.
As I interviewed more and more people I realized that the lack of tour operators in the region combined with the inability of many of the community tourism enterprises to take Internet reservations or create packages meant that there was a business opportunity. This business opportunity is around the creation of what I like to call a Destination Management and Marketing Company (DMMC). A DMMC takes the same mission as a DMO and has a governance structure similar to a board of directors of a DMO but it uses a business model that provides services in exchange for compensation to sustain the organization’s operating costs. By no means is creating a DMMC an easy task but I believe that Ajloun is a perfect destination for this social enterprise approach. The next step, like any new business is developing a business plan to define the company’s products, services, target markets, operating plan, and financial models. It is only after this business plan is developed and local stakeholders agree to the concept can the business be established. I look forward to the opportunity to work with the wonderful people I met In Ajloun to see if the social enterprise business model can sustain and support the needs of the tourism industry.