Co-creationInnovationMarketing 3.0Tourism marketing

Co-creating experiences in cooperation with Airbnb

Airbnb is partnering with iconic brands all over the world to promote its services. The news is that they partner with all sorts of brands, regardless of their relationship with the tourism and hospitality business. For instance, in Australia they partnered with Ikea to allow a group of customers to sleep in its Sidney store. This has not been the only case of such partnerships. During last year, some Airbnb guests have been able to rest on a KLM plane or at the Galeries Lafayette in Paris. There’s a future chance to spend the night at the Holmenkollen ski jump skiing in Oslo (Norway).

More recently, Chicago Bulls and Airbnb partnered on a promotion to allow one fan and a guest to sleep in the United Center following a game. The Bulls redesigned the owner’s suite equipped with a bed, dining room table, and TV (although guests could chose a movie to be shown on the team’s giant video screen). The Bulls even hired a cook to make a very special breakfast in the morning.

For a hospitality brand as Airbnb with not a single room among owned assets, it’s being a very clever and successful promotion to show how they can offer what no hotel chain can offer: unique experiences in accommodations all around the world. A promotion hard to imagine if not thanks to a collaboration between two brands with a win/win outcome, a co-creation process concerning a global brand wanting to be known in every possible local market and another local brand interested in being exposed to the world.

So we were really glad when we knew Casa Batlló in Barcelona and Airbnb agreed to a similar partnership giving two guests the chance to spend the night in one of the most mythical and iconic landmarks in the city. First of all, because this modernist architect Gaudi masterpiece building is owned by a Co-Society fellow (consider this a disclaimer). But also, because in this case, besides the partnership between two companies, the initiative also included some other elements of co-creation and co-innovation.

The contest to win this unique experience was not a mere lottery. It was created to tie in with Mobile World Congress, which took place in Barcelona during those same days, and linked to the “Entrepreneur hosts Entrepreneur” program in which entrepreneurs who travel to Barcelona to attend the event could sleep in the homes of other local entrepreneurs. Casa Batlló wanted Gaudí to be one of these local entrepreneurs and invite home not any tourist but somebody who could show the same out of the box thinking that made the host unique. To qualify for the award, the applicants must “Write to host” and propose an original idea of how to leverage mobile technology in the building, built between 1904 and 1906.

See the original post at www.co-society.com/airbnb-casa-batllo-mi-casa-es-su-casa-gaudi-said/

What kind of partnerships do you envision for collaborative platforms like Airbnb?

Business model innovationCo-creationTourism trends

Innovating in a religious center to create life-changing experiences

Innovation is not a transforming element exclusive to the business world. Promoting innovation in another ambit such as spirituality is not only possible but it can also teach us many useful lessons which are actually applicable to any kind of organization. The changes carried out in Cova St. Ignasi house of spiritual exercises, a Christian Catholic center in the Barcelona Area, prove that innovation is applicable in absolutely all fields. Actually, innovating in the field of spirituality is itself a disruptive innovation.

It took around 7 years for a group of young Jesuits led by Xavier Melloni to introduce a series of new activities among the programs developed in Cova St. Ignasi. Those activities were open to the participation of all kinds of people regardless of their religious confession or practice. These programs offer the chance to experience the inner search introducing both oriental techniques and elements of body expression.

Among the new internalization techniques there are yoga and tai-chi. Self-knowledge practices incorporate also elements from the Sufi tradition and have a base of both spiritual and psychological dimension. To these spiritual experiences some components related to body expression like dance have been added.

As you may guess, the introduction of these activities among the usual programs in this house of spiritual exercises was much more than mere novelty in an institution dedicated for centuries to the prayer and spirituality from the Catholic practice and doctrine. Years after offering these new activities, the novelty has positively surprised both the local population and the institution.

Key takeaways

From the success of an innovation in a rather conservative environment there are many interesting lessons to take away:

WITHOUT RADICAL BREAKING OFF. The introduction of new programs has not led to the disappearance of the traditional activities. This circumstance helped the transition by diminishing the anxiety in front of novelty.

CONVINCED PEOPLE, THE MAIN CHANGE MOTOR. The main characteristic of the group of people who led this innovation was the strong conviction in the ideas they were proposing and wanted to put into practice. Nobody had the obligation of getting involved in an activity which they did not feel comfortable with or did not believe in.

MULTI-CONFESSIONAL TEAMWORK. To develop the Project they decided to mix both catholic and non-catholic members, cooperating at the same level since the first day.

CONFIDENCE IS KEY. The proposal of Xavier Melloni and the rest of the team responsible for the Project generated many kinds of negative reactions at the beginning. For instance, one of the main concerns was fear that people could think that they were abandoning or relaxing the principles of the organization. But any innovation process requires a certain audacity to overcome the fears that arise with any change. For Xavier, this audacity has been as crucial as the necessary confidence not to be questioning the project over and over again. With the confidence shown by Xavier and his team it was easier to assume their own responsibilities and be patient with the development of the project.

THE BEST OF EVERY PRACTICE. Successful innovations in any field are not absolutely original. They do not start from scratch, but rather from combining elements of the best practices in a new way. The spiritual exercises designed by Xavier Melloni claim to integrate the most positive elements from both oriental and western cultures, attracting people who are distant from the Catholic practice, probably due to the Church’s official message. Many people want to work on their spirituality but consider that Christianity is too inflexible and excessively moralized. On the other hand, seriously introducing elements from other religions requires going through an educational process encompassing language, mythology, etc. which may be quite long and demanding. Xavier’s proposal consists in offering the chance to rediscover spirituality through the local language.

INNOVATION AS AN ELEMENT WITHIN A VISION. Changes coming from a concept or a vision that goes beyond that particular change have more chances to be successful than those that are made as a result of a short term challenge. The new proposals from Cova St. Ignasi come from considering the various religions as different vehicles to achieve the same destiny, the philosophy which Xavier Melloni has been working on as an expert in inter-religious dialogue for many years.

POSITIVE CONTAMINATION. Innovation usually comes from the merge of ideas and practices from different fields which are barely ever in touch. Xavier Melloni thinks that it is crucial to distance yourself from the small and closed worlds in which we usually are. Why not create the glocal (global-local) also in the religious ambit?

This post has been inspired by an article in www.infonomia.com , the leading Spanish Forum on innovation.

What life-changing experience do you envision inspired by these case studies?

Environmental sustainabilityStrategySustainabilityThird sector and social sustainability

Key strategies to address Barcelona’s tourism challenges

Historic overview. Barcelona is a case study where many of the mentioned strategies have been used. Till 1992, when the Olympic Games were celebrated, the city was a second tier destination within the European circuits. Despite having held two International Exhibitions, it had lost most of its appeal as a destination. However, the city carried out an extensive renovation to be prepared for the Olympics, and this resulted in relaunching many depressed clusters by leveraging their potential, as well as creating some brand new clusters.

Till then Barcelona had lived with its back facing the sea, and many parts of the old town were depressed and abandoned to the lowest class social sectors, also suffering from safety issues. So the greatest renovation was both in the waterfront and the depressed areas of the Old town. Further, directly related with the Olympics, a new district was built to host the Olympic Villa, where there was also the Olympic Port; and in the Montjuic area there was rebuilt the old Olympic Stadium keeping the original facade, and many other sport facilities were created.

The city regained its waterfront as one of the most attractive areas, creating two clusters for entertainment and many kilometers of beaches with a maritime promenade between the two clusters. Further, the Old town was equipped with culture entertainment facilities and many open spaces were created to attract both locals and visitors. The renovation consisted also of fostering the refurbishment of the old buildings with subsidies and building new residential buildings. This renovation drew the interest of the locals as an attractive location for housing.

As a result, these once-depressed areas started attracting new businesses such as shops, cafes, restaurants and accommodation facilities. Within a few years, they cleaned their image to a shining one like the most attractive areas of the town. All in all, the city leveraged all its potential charm and attractiveness namely based upon resources that were abandoned and through the vision of the city planning developers. From then on, the city started marketing itself as a new venue for international events, thanks to the regained reputation for the good organization of the Olympic Games, and as a tourism destination for city breaks among others.

Further on, Barcelona kept on targeting new market segments, leveraging and marketing under exploited heritage and also developing new clusters. In that sense, it took the leading position as a Cruise destination in the Mediterranean, which used to be Genoa. A few years after, the city’s tourism board started promoting the architectural heritage from Antoni Gaudi, as an attraction unique to Barcelona. At the same time, a new cluster was being created, also in the waterfront, to hold the International Forum of Cultures –a new kind of International Exhibition-, where a new residential area was built, along with Congress & Convention facilities and an iconic building which was later on to the Museum of Natural Sciences.

Over the last years two more clusters have been developed. First, the extension of the International Exhibition facilities in L’Hospitalet –Barcelona’s neighbor town- to host large international exhibitions and congresses such as the Mobile World Congress; and second, the last cluster to be developed –in this case, extended- was that of Sagrada Família Temple –the city’s top attraction- with the opening of St. Pau Hospital as a cultural center boasting the largest modernist enclosure in the city, within a five minute walk from the Temple.

New challenges. Despite being one of the top European urban destinations in terms of tourism revenue, the tourism development has raised the residents’ protests on the tourists’ behavior, the proliferation of tourist apartments which overload certain areas with too many visitors, the effect of these tourist apartments on the real estate prices, and the dominance of tourists in many public spaces. Further, there has been a growth of low budget travelers, whose expenditure is barely profitable for the city. At the same time, the raise of the Airbnb model has spread the tourism use of the residential areas. All these issues have invited the residents and the City Council to a reflection on what is the adequate Tourism model.

While the debate is still in process, this is a very good case to exemplify how the aforementioned strategies may solve some of the challenges typical of mature destinations. First are explained the clusters diagnosis and the corresponding cluster based solutions for each one, and finally the cross-destination programs to tackle the aforementioned challenges. In this case, only four clusters concentrate the suggested renovation.

Montjuic Mountain: “The Garden of Barcelona”. This is where the main Olympic facilities where built, nowadays used for sporting and cultural events. Despite the Montjuic Castle and two art museums, the area is quite underexploited, and is clearly a second tier cluster, with no must see attractions. However there is a large space where attractive attractions could be developed to make most of the tourists spend at least half a day of their stay in this area:

  • Using the Montjuic Castle as a venue for cultural events, combined with a street food market area with small outdoor restaurants, open on high season weekends and summer weeks.
  • Creating a first-class “botanical themed garden” with plants and urban aesthetics representing different world areas (Mediterranean, Japan, etc.), colorful vegetation, etc.

Forum Port: “Innovative entertainment”.  This is one of the most underexploited areas of Barcelona, where the International Forum of Cultures was celebrated in 2004. At present there is one Convention center and the Natural Science Museum in the Forum’s iconic building. This could be a cluster characterized by imaginative entertainment experiences, combined with iconic buildings with futuristic architectural style. These could be:

  • Imax & 3D Cinema in a ball shaped building with mirroring facade in a central location within the Forum area, as one of the most iconic buildings.
  • Large Aquarium in iconic building boasting species from different world regions, and including restaurants inside or beside the tank and a hotel with room views to the tank and the sea.
  • Seaplane terminal in the Port, offering sightseeing flights all over Catalonia, and possibly to some seaside destinations within Catalonia or the Balearic Islands.
  • “Dancing Springs Show” in the central area of the Port, installing a stable platform underwater with programmable springs to perform a light & music & water show.
  • Celebrity chef restaurants along the waterfront terraces of the Port, with exclusive views to the “Dancing Springs Show” and other selected performances.

Old Harbor: “Mediterranean history & tradition”. This is one of the clusters with the highest potential, given its privileged location nearby the Old town, and the most touristy waterfront area. Although it is already a very exploited cluster, the mix of attractions is far from optimum, as it is offering only a standardized experience, without any character related to the destination identity, nor with distinct value proposition. The proposal is to create:

  • Mediterranean Village with stores, restaurants, hotels and night entertainment. It would reproduce the local fishermen villages’ style, providing a truly Mediterranean experience.
  • 3 caravel reproductions in real size representing the ones with which Columbus discovered America. One would be a boutique hotel, another one a restaurant and the other a museum.

Poblenou district: “The art district”. This is a district with many faces at present: the Olympic Villa near the waterfront, the old Poblenou town with its village’s charm, and the old industrial Poblenou, full of warehouses and old factories with an abandoned atmosphere. The idea is to transform all this semi-abandoned area into an art district, filling both the open and the indoor spaces with sculptures and various types of art pieces. This would entail creating a new cluster from scratch, although leveraging most of the existing infrastructure, but filling it with an innovative experience system.

The Art district concept is both an incubator for new artists and an art marketplace. It is a destination model 3.0 in its full extent: a platform where many service suppliers (artists) can participate under a series of stated rules to contribute in creating a memorable experience characterized by both harmony and variety. The artist portfolio would encompass many types of art: scenic arts, sculpture, painting, handcrafting with glass, ceramic, etc.

An approach on the strategic and operational functioning may be found in the Whitepaper “Envisioning destination models 3.0”, but the upcoming Whitepaper “Envisioning Art Villages 3.0” will explain in more detail how this has to work.

These cluster developments are to create a sum of tourism attractions that correspond to and strengthen the aforementioned cluster identity, such as that of a Theme Park, but with original and authentic experiences targeting all segments, that you would never find in any Theme Park.

Beyond these key cluster developments, it is necessary to encourage tourists to visit these new areas, which should not only be achieved through good marketing but also by creating a network of charming transport systems. In the case of Barcelona, it could be a network of Old tramways, like the ones that used to circulate in the city many decades ago. The network would be the minimum necessary to reach all of these clusters through the nicest streets and avenues of the city.

Furthermore, as stated in the theoretical introduction, these new clusters should host many of the new accommodation developments to contribute in spreading the tourism flows.

Further, the development of these clusters would solve some of the mentioned issues:

  • Increasing the tourism expenditure: through the creation of the new clusters both the average stay and the visit repetition would likely increase, and many of the clusters would be to attract high expenditure tourists, namely that of the Forum Port. Concentrating the development of new accommodation in top end hotels or boutique hotels would strongly contribute to attract such kinds of tourists.
  • Demand for new accommodation development: many of the new clusters –if not all- could contribute in hosting some of the new accommodation facilities, also offering innovative concepts like art boutique hotel in the art district, garden boutique hotel in Montjuic, Mediterranean village boutique hotel in the Old harbor, the aforementioned hotel in the Aquarium tank, and many others, namely near the Forum Port cluster.
  • Conviviality with residents in the night-time: some of these clusters –namely the Forum Port and the Old harbor- could concentrate the nightlife of the city from a certain time on, prohibiting the operation of discotheques and night clubs in residential areas, so as to deviate all the noisy tourists in the non-residential clusters during the night-time. To make that work, there should be good public transport availability until the closing of these clubs.

Other issues regarding the proliferation of tourist apartments, the need to share the benefits of tourism with the poorer layers of society, and the rise in Airbnb based offers and its effect on the increase of the real estate prices could be addressed through policies such as:

  • Limiting the offer of Airbnb rooms to 1 room per apartment, 1 apartment per owner and also depending on the offer of every district, being more constrained in the areas suffering from congestion issues and with more accommodation offer.
  • Creating a body to control the non-regulated accommodation offer, enforcing the previous regulations to prevent the issues that residents complain about.
  • Offering the current night clubs in the areas suffering from conviviality issues a priority treatment to settle in the new clusters where nightlife is to be relocated, before they have to close or reconvert their current business.
  • Implement a limited capacity system and advance online booking in the cultural facilities such as monuments or museums, to avoid congestion and queues, and to enforce visitors to plan their visits in advance.
  • Create a tourism tax to make the tourists and tourism business contribute to the public expenses related to tourism spaces and subsidized public services they take advantage of. This could also help, by diminishing the business profitability, to lower the upward pressure of the real estate prices.

Do you think of other strategies to address Barcelona’s tourism challenges?

Environmental sustainabilityStrategySustainabilityThird sector and social sustainability

Typical challenges in mature destinations (II)

Lack of infrastructure renovation. Old destinations usually suffer from some kind of obsolescence at some point, not only regarding the transport or accommodation infrastructures, but also others such the buildings facades, the urban aesthetics, etc. All together, these elements may eventually give an image of decadence. However, this need for renovation may be regarded as an opportunity to develop each cluster’s identity, leveraging their uniqueness and their heritage to make them shine to the utmost.

Beyond usual competitiveness programs regarding accommodation facilities upgrade or quality labels certification, in line with the Re-clustering strategy suggested before in this section, some programs regarding the facades refurbishment and the development of unique urban aesthetics style for each cluster, using typical designs or elements that represent their identity.

Furthermore, beyond urban aesthetics renovation, an excellent way to change the atmosphere from decadence to lively and vibrant is to introduce elements of animation such as artists performing in the public spaces (painters, musicians, etc.) and imaginative illumination at night, in accordance with the type of atmosphere that is to be created.

Lack of new tourism businesses. A very different problem occurs when there is lack of private initiative to start up new businesses related to tourism. This may mean that the destination has no demand growth, but also that it is not capable of attracting new market segments or inspiring new experiences based on the current resources.

This challenge may be solved through either new cluster development or cluster reconversion, opening a new area with new resources to be exploited for tourism, which necessarily needs new business to operate, may inspire new experiences and attract new market segments. Complementing this move, there are two other possible programs to foster entrepreneurship. First, using one of the key concepts of Tourism 3.0, the development of an open innovation system is likely to bring in new business ideas and identify unsatisfied demands.

The second possible program is to create a tourism business incubator, facilitating entrepreneurs to start-up their business with a co-working space and business training at a subsidized cost for a certain period of time. Business incubators are to diminish the risk of business failure throughout the first months of the new business life. It is therefore a platform to encourage creative entrepreneurs to develop their ideas into the market.

Tourism expenditure & seasonality stagnation. Expenditure depends on many factors, such as the targeted segments, the geographical markets, the infrastructure and experiences attractiveness. Generating higher expenditure requires namely developing segments that target the wealthiest tourists: Luxury, MICE, Golf, Gambling, Special Interest, etc. with the adequate infrastructure and offering a charming and harmonic atmosphere leveraging the character of the destination, to attract investors, operators and, of course, the tourists.

Demand seasonality is another issue. It depends also on market segments and geographical markets, as some types of holidays or tourism related activities take place during the mid and low season. Also not all countries have their holiday at the same time, so there are many opportunities in this regard for marketing in new countries.

In both cases the idea of developing new or reconverted clusters to attract new market segments is more than appropriate, as it is also convenient to upgrade accommodation facilities and enhance the charm of the clusters to attract new businesses such as hotels, branded stores, prestigious restaurants and other entertainment infrastructures.

Poor branding, lost reputation, low brand awareness, etc. Marketing is always part of the problem and part of the solution. The cluster related solutions to brand challenges may be either the creation of new clusters, cluster reconversion or re-clustering the destination by developing each cluster identity and character. In this regard, providing a sense of variety to the visitor is strengthening the brand with more value.

Based upon these new developments, reconversions and re-clustering, it is important to define an identity for each cluster, where the experiences and the atmosphere feelings are reflecting this identity and character. So long as the most powerful marketing comes from the visitors’ opinions and recommendations, their experiences on site are the key brand developers.

Then, beyond the destination cluster development, a very effective marketing is –especially when there is a new cluster development- to organize a noteworthy international event that puts the destination in the spotlight of the outbound markets’ media and thus puts the destination brand at the target visitors’ top of mind.

What other challenges are usual in mature destinations?

Environmental sustainabilityStrategySustainabilityThird sector and social sustainability

Typical challenges in mature destinations (I)

Conviviality between locals and tourists. The most tourist crowded areas are sometimes also residential, and so there are usually many issues related to difficult conviviality between the local residents and the visitors, such as nightlife noise, tourists’ inappropriate behavior, or just a certain invasion of the public spaces and facilities, which are designed for the residents’ use only.

This may be solved with the development of other clusters to spread the tourism flows, and more specifically by regulating nightlife schedules in a way that from a certain time on nightlife entertainment is only allowed in specific areas with no residents, fully dedicated to leisure and entertainment. Further these and other rules concerning the tourists’ behavior should be well communicated through the tourist establishments and agents, and also enforced by local policemen controlling the problematic areas.

Finally, it is essential to control the concentration of accommodation facilities in the most demanded areas, not only by limiting the licenses for hotels and hostels, but also by limiting the allowance of Airbnb offers to a minimum, like 1 room per apartment and 1 apartment by owner, avoiding the proliferation of tourist apartments in the residential buildings. In accordance with the new clusters’ development, the demand for accommodation should be directed to the new clusters, also to help them grow and create demand for their businesses.

Congestion issues in popular areas. Closely related to the previous point, congestion issues are not only affecting the resident’s life, but also the tourists’ experience. Solving the issue for the tourist entails spreading the tourist interest hot spots and constraining visitors’ flows according to carrying capacity and bottle necks’ capacity.

First, the cluster development strategy should create new attractions in clusters other than the most crowded, even changing the location of some attractions from the crowded areas to the new cluster, as long as it is possible. This may be the case of museums or other cultural entertainment facilities. This may be done either through new cluster development or through reconverting existing clusters. Also the new accommodation facilities should be concentrated in the new tourism clusters, both to give them life and discharge the most popular areas from some of the tourism flows.

This new cluster development or reconversion should be complemented with the creation of tourism itineraries encouraging visitors to discover the destination off the beaten track, and the creation of charming transportation systems to move visitors from one place to another, encouraging them somehow to visit the new tourism clusters.

Excessive dominance of tourism businesses in the residential areas. Some residential areas popular among tourists have seen an increase in the percentage of tourism related businesses over the commercial mix, up to an extent that they lack some of the services they used to have close to their homes and many traditional businesses have had to close.

Being more profitable, some tourism businesses take the premises traditionally dedicated to services or products for the residents, up to the point where they barely exist or are too scarce according to the residents demand. The tourism business profitability allows them to pay higher rents than many residents’ oriented businesses and therefore it’s hard for these ones to keep their location. Such kind of business cannibalism obviously goes against the residents’ interest and so it is likely to put those residents against the tourism development.

Many solutions may be implemented to tackle this issue. A special tax for the tourism businesses could be fixed, so as to diminish their profitability after taxes and eventually lower the premises rental prices. The revenues from these taxes should be invested in helping the affected businesses to reconvert or start-up in another location. Another solution, combined with this one, could be the creation of micro-clusters for tourism businesses, allowing them to settle down in certain areas, but preventing them to settle in other areas reserved for the residents’ oriented businesses.

What other challenges are usual in mature destinations?

StrategyStrategy planning & execution

How cluster development applies to mature destinations

Most of the aforementioned challenges faced by mature destinations may be solved, at least partly, through an adequate cluster development strategy. Furthermore, cluster development strategies may have many other benefits for the destination. The following strategies summarize most of the approaches to cluster based developments in destinations:

New cluster development. Many destinations use undeveloped areas without any relevant resource, to build new tourism infrastructures which all together are to create a new tourism cluster. This is usually related to Theme Parks, Congress & Convention facilities or other modern buildings hosting all kinds of entertainment experiences. This is the case of the “Arts and Sciences City” in Valencia, an outstanding collection of innovative architecture facilities designed by the architect Santiago Calatrava encompassing an Opera House, a Science Museum, an Imax Cinema, an Aquarium and a Venue for various types of events.

Reconverting or relaunching existing clusters. Some destinations have unexploited natural or cultural resources, which are not leveraged as tourism attractions namely due to lack of vision or imagination. These type of developments should always be a priority, so long as they enhance the identity and uniqueness of the destination. This is the case of Shanghai’s Xintiandi and Tianzifang, two areas within the downtown’s French district with old houses and unique atmospheres, which have been reconverted as charming shopping and entertainment clusters, with many types of stores and restaurants.

Re-clustering the destination. Some destinations are perceived rather as homogeneous, or they do not have a defined characterization throughout its areas. However, the reality is that in most cases there are some distinct features in the different areas that may be leveraged to build a cluster identity. In this case, the cluster development strategy consists of enhancing and marketing the differentiated character of each cluster, providing a sense of variety to the visitor. This is what some Ski resorts do, “Theme-Parking” themselves to some extent, with distinct urban aesthetics, music, etc. to build a different atmosphere in every zone.

Cluster enhancement. As it is explained in the Whitepaper “Competitiveness Planning 3.0”, clusters should be reference units when assessing the destination’s competitiveness, and also when planning competitiveness programs. So long as each cluster may be considered as a sub-destination, with its own strengths and weaknesses, every cluster should follow its own development in accordance with its intended identity, adding more value, reducing risks and discomforts and marketing itself according to its distinct value proposition. This is the very minimum that a mature destination should do to not pass from maturity to decadence.

Based on these standard strategies, cluster development may contribute to solve some of the aforementioned challenges that are usual in mature destinations, so long as they are combined with the appropriate competitiveness programs and marketing strategies and activities. All tourism development strategies are interrelated, and so they need to be coherently weaved to be successfully implemented.

Do you think of other cluster development based strategies?

StrategyStrategy planning & executionSustainability

Clustering strategy for mature destinations

Destinations operating since decades ago reach a stage of maturity sooner or later, in which they stop growing and lose the strength and vibrancy that made them grow. At this point, depending on the conditions of the environment and will of the local inhabitants, many destinations prefer to manage this situation without growing anymore, so long as they are not willing to receive more tourists or they don’t want to extend the destination’s urban area with accommodation facilities or second residences, and keep the destination as it is to preserve its original charm, and avoid the risk of spoiling it with tourism overflows.

Other destinations, however, due to the need or will for the tourism business growth, try to find other solutions to satisfy a higher demand trying not to spoil the charm that attracts the tourism flows. Further, these destinations face many challenges such as:

  • Congestion issues in the most popular areas
  • Difficult conviviality between locals and tourists
  • Excessive dominance of tourism related businesses in residential areas
  • Lack of infrastructure renovation, which may give an image of decadence
  • Tourism expenditure stagnation
  • Seasonality stagnation due to incapacity to overcome seasonal occupancy gaps
  • Poor branding, lost reputation, low brand awareness, lack of well-defined identity, etc.
  • Lack of new tourism businesses creation

These and many other issues may be resolved through adequate tourism development planning, in which a good cluster development strategy is to have a key role in overcoming them successfully.

Which other issues affect mature destinations?

StrategyStrategy planning & execution

How do Theme Park clusters develop?

The case of Theme Park clusters is probably the most different from all other types of tourism clusters, as they have little or no relationship with natural or cultural resources, and so their development is rather similar to other industries’ clusters. They have unique dynamics and therefore require a separated analysis. Both the key success factors and the development stages of Theme Park clusters are hereby explained and illustrated through a few well known case studies.

Beyond the traditional Amusement Parks, usually targeting the local markets, Theme Parks were created to become a destination themselves, offering a more or less unique value proposition, bringing the visitor to an imaginary world or to somewhere far away, either in terms of distance or time, like those reproducing ancient civilisations. The experience of immersion within another world is what set Theme Parks apart from Amusement Parks, even if they have many attractions in common. Then, however, the ability to recreate a different world to make it also entertaining for visitors is something that few operators have.

Walt Disney was in fact the first company to leverage the imaginary world of their film stories to develop Theme Parks. Then, other film producers such as Universal Studios followed their example by leveraging their own story worlds, also in many locations worldwide. Apart from them, there have been other Theme Parks based on toy brands such as Lego, comic series such as Asterix, Smurfs or Tintin, and car brands such as Ferrari.

When analyzing the internationally competitive clusters, there may be found many things in common, related to their cluster development key success factors and phases. In this regard, there are four key success factors for the development of Theme Park clusters, of which at least three should be well accomplished:

  • Internationally competitive destination with important tourism flows and accommodation capacity, usually a city.
  • Good accessibility to the main targeted markets
  • Location with good weather conditions all year round.
  • Internationally reputable Theme Park brand (at least one).

Beyond these key success factors, there are about four typical phases in the Theme Park cluster development process:

  1. The base for the cluster development is an attractive location and compliance of at least two of the aforementioned key success factors.
  2. Development of a Theme Park
  3. Good results stimulate expansion with new facilities. These may be themed hotels, Water amusement parks, new attractions, facilities to offer new products such as MICE or Golf.
  4. New smaller Theme Parks settle down in the area to take advantage of the increasing tourism flows in the cluster.

In the Whitepaper on Clustering Strategy you may find several case studies that illustrate this theoretical approach.

Do you think of other key success factors for Theme Park clusters development?

StrategyStrategy planning & executionTourism marketing

Clustering benefits for marketing

So long as every type of environment is more or less adequate for certain types of activities, the correct matching between the location and the activities developed is a key factor for competitiveness and also for effective marketing, as it helps to build a cluster’s consistent identity, enhancing the character of the experience and also helping the tourists to envision what kind of feelings they are likely to experience.

Closely related to competitiveness and productivity, business concentration may also accelerate innovation in product development and process efficiency. Having a pool of competitors in the same geographical area facilitates benchmarking and stimulates innovation, so long as proximity leads to constant comparison and competition.

Furthermore, attractions concentration in a cluster makes it possible to design more attractive packages in the travel market, as well as to attract more transport operators –namely flights and bus regular lines-, which eventually open new markets. Competitive clusters attract also internationally branded operators –like reputable hotel chains-, which eventually contribute to the reputation and attractiveness of the cluster.

Other marketing benefits may come from the cooperation in marketing activities by the cluster’s operators. This includes market intelligence collection and management through a local “Tourism Observatory”, but also from sharing efforts and information for the cluster’s marketing planning, and operational marketing activities.

Through cluster based collaboration, all these benefits can be enhanced, due to the multiplier effects of more productivity, innovation and business growth in a cluster influences many other industries within the region.

Do you think of other clustering benefits for marketing?

StrategySustainability

Clustering benefits for sustainability

Cluster based destinations may also have many benefits for sustainability. First, adequate cluster development planning makes it also easier to prevent the tourist flows from overflowing the carrying capacity of the environmentally fragile areas, or having negative impacts on the residents’ lives. The cluster based development plans assess the carrying capacity of all areas to avoid congestion and protect the environmentally fragile points. Then, as long as possible, the Plans should locate the attractions in a way that spreads out the visitors’ flows within the cluster, through controlled itineraries where the flow dimension is monitored and may be constrained. So long as the flows are predictable, it is also easier for the transport and other service operators to offer the adequate services that the tourists need.

Regarding environment sustainability, so long as this is not homogeneous throughout the destination territory, dividing it into clusters is necessary as a part of the process of identification of the critical issues to be managed to ensure sustainability, as these issues are to be different in each destination cluster. Therefore, clustering is a key strategy to manage the destination’s sustainability.

Furthermore, the concentration of activities in specific areas fosters a more efficient development of infrastructures for accessibility (roads, railways, airports, etc.), reducing the negative impacts in the environment to the minimum possible. This also makes the tourism development more cost-efficient for the government, and in some cases, this cost-efficiency affects directly or indirectly the local operators and the visitors.

Cluster based destinations are also more likely to be targeted for research purposes and are easy to study, so long as  they are clearly defined areas. This facilitates gaining knowledge about the key issues that affect the destination’s sustainability. Further, as a part of the cluster infrastructure, it is quite likely that the cluster attracts educational centers, and these attract researchers at the same time, so a virtuous circle is developed in this regard.

Finally, so long as the resources are taken care of, and the activity concentration reinforces competitiveness, this also enhances the economic viability of the tourism development over the long term, ensuring the economic sustainability of the destination.

Do you think of other clustering benefits for sustainability?