Business model innovationCollaborative business modelsInnovationStrategySustainability

Destination Models 3.0: Comparative performance between different destination models

To better realize how destination models 3.0 outperform other models in creating value, reducing efforts and marketing efficiently, hereby are compared three destination models:

Cultural destinations: based on cultural or natural resources with several business owners operating independently. In some cases these cooperate in partnership with the government for marketing the destination.

Resort destinations: based usually on natural resources with one owner operating or controlling all business units providing service in the destination, being also responsible for the marketing. All business units are therefore integrated within the resort.

Destinations 3.0: based on either cultural or natural resources with business units belonging to many owners, and operators cooperating with different levels of integration on the management and marketing of the destination.

COMPETITIVENESS & MARKETING: KEY DIFFERENCES BETWEEN THE THREE DESTINATION MODELS

  CULTURAL DESTINATIONS RESORT DESTINATIONS DESTINATIONS 3.0
VALUE PROVIDED
Experiences Typically local cultural experiences

Based upon cultural & natural resources, and locals creativity

Standardized experiences

Based on standard products, natural and artificial resources

Life-changing, personalized and imaginative experiences

Based on stakeholders co-creation

Feelings Cultural character and authenticity with heritage protection and hospitality programs Lack of character and authenticity (replicated facility style)

 

Enhanced authenticity through urban aesthetic harmony and locals’ inclusiveness as experience suppliers
Service quality control Some service suppliers have Quality certifications

Ratings for restaurants and accommodations

Comprehensive service quality control

Ratings for accommodation service

Comprehensive and incentivized service quality control
EFFORTS REQUIRED
Discomforts Dependent upon every service supplier and local service standards Fully specified comfort standards, adapted to the needs of tourists Only discomforts associated to cultural environment
Insecurities & risks Dependent upon government regulations and control Full information and safety controls on critical issues Full information.

Safety dependent upon government regulations

MARKETING
Needs satisfied Functional and emotional Mostly functional, but also emotional Functional, emotional and spiritual
Target tourists All kinds of tourists Limited segments All kinds of tourists, but primarily tourists 3.0
Marketing guidelines Differentiation Differentiation or price Mission, vision & values
Tourist relationships Sales transactions and satisfaction monitoring Sales transactions and satisfaction monitoring Experience co-creation, storytelling through communities
Marketing channels TTOO, TTAA and direct sales TTOO, TTAA and direct sales Mission driven agents, communities
COMMUNITY IMPACT Economic prosperity concentrated in local business owners Economic prosperity concentrated in the resort owners Poverty alleviation, socio-cultural change, environment protection
MAIN CHALLENGES Harmonize experience system and quality standards Develop unique experiences to compete upon differentiation Integrate and associate stakeholders

Foster culture change

Would you consider other destination models to compare performance? And other relevant points to be compared?

InnovationIntelligenceIntelligence methodsMarketing 3.0Open innovation

Destination Intelligence 3.0: structure of the open innovation system

The open innovation platform is to be structured in many areas of innovation, according to the nature of the needed expertise. Hereby, six areas of innovation are envisioned:

  • Technological solutions (mainly IT related)
  • Environmental friendly solutions
  • Product development
  • Marketing designs and merchandise
  • Business model innovation (strategy challenges)
  • Stories in different formats, photos, videos, etc.

Every innovation area would have its own pool of contributors, who receive updates about the incoming challenges in which they are invited to participate. Such challenges may be classified into three categories:

  • Private challenges posted by private companies
  • Public challenges posted by governments, public institutions and DMOs
  • Public challenges for mission driven purposes, posted by non-profit organizations, related to cooperation programs or for mission driven destinations

The difference between private and public challenges is mainly the publicity of the challenge, which in the case of private challenges is more likely to be directed exclusively to a selected group of innovators without revealing the name of the innovation seeker and keeping maximum confidentiality. Conversely, public challenges are open to the whole platform, without need to keep confidentiality on the identity of the innovation seeker.

Furthermore, there could be an “Ideation bank” to collect solvers initiatives on identified problems or opportunities which have not yet been posed as a challenge, as they are not among the top priorities for seekers or there is no budget to award solutions at that moment. This ideation bank should give room to creative initiatives and work as a social media platform where solvers may pay for enhanced advertising of their ideas and participants may vote for their favorite ideas. The posted ideas should comply with a series of parameters, requiring detailed and structured explanation of the idea, to filter the mass participation. The “Ideation bank” would not only foster innovation, but also the promotion of new talents in the industry.

Do you think of other types of innovation challenges or areas?

InnovationInnovative cultureIntelligenceIntelligence methodsMarketing 3.0

Destination Intelligence 3.0: Leveraging collective intelligence through open innovation

Beyond the aforementioned most conventional approaches, what sets destination intelligence 3.0 apart is the development of an open innovation system accessible to all the tourism industry stakeholders at a regional level.

An open innovation system works like a platform where innovation seekers -operators, tourism boards, governments, consultants, etc.- look for new ideas on how to tackle with their challenges by connecting with innovation solvers -trade professionals, consultants, creative designers, and experts in various fields- through open challenges where the problem is precisely formulated to help solvers envision possible solutions and submit proposals, which are to be assessed and rewarded as long as they help in solving the problem.

Among the posed challenges, there should be some non-rewarded ones for mission-driven purposes -cooperation with destinations in developing countries, destinations recovering from natural disasters, mission-driven destinations, etc.- to showcase how contribution to the greater good is one of the most powerful motivators in innovation, drawing the attention of a larger pool of creative talent than in other challenges.

Such a strategy is not only to support such mission-driven challenges, but also to raise awareness throughout the industry about the potential of mission-driven tourism, as the open innovation system leverages more intelligence and creativity for this type of purpose than for any other, hence providing mission-driven destinations with a natural competitive advantage, and compensating at least some of their constraints.

How do you envision such kind of open innovation challenges?

Business model innovationStrategyStrategy planning & execution

Destination Models 3.0: Development strategies (IV)

Service planning

Once identified the portfolio of partners, infrastructures, facilities and service suppliers needed to start operating the platform, it is necessary to envision the necessary service capacity or carrying capacity for each of them throughout the subsequent development stages. This entails determining the needed capacity for every business and facility in each of the destination areas in a reference day, foreseeing the expansion of the model to the utmost of its potential.

There should not only be planned the service capacity of facilities, infrastructures and service businesses, but also for the entire portfolio of experience providers, to guarantee a balance in the variety of experiences offered throughout the destination, according to the demand.

The service planning serves as a layout for the expansion of the model, setting the direction on which services and facilities have to be developed in which location, ensuring a balanced and harmonious development in every stage of the model’s expansion. It depicts the type of businesses, facilities and infrastructures that have to be developed in each phase of the model expansion, specifying the service capacity of everyone. Such service capacity planning should be flexible for both facilities and service businesses, in different ways:

  • For facilities, some resources such as personnel should be flexible to adapt variable costs to the needed service capacity according to demand. Every facility should have an established maximum service capacity, but its associated costs would depend upon the needed capacity.
  • For service businesses, there would be an initial plan of the service portfolio, which could be changed as long as the experienced demand for every kind of service advises to do so.

Would you add any other consideration when planning the service capacity throughout the expansion phases of the model?

Co-creationCulture changeInnovationMarketing 3.0Strategy

Destination Models 3.0: Development strategies (III)

Transitioning to content based marketing

As it takes a certain time for the open innovation system to become a productive content marketing machine, it is necessary to use other marketing strategies along the early stages of the destination model development. These would mainly consist on the following:

  • Partnering with Special Interest tour-operators and travel agents connected to a network of values driven travellers, to become our first brand ambassadors.
  • Invite popular bloggers and journalists to write about the destination’s experiences and stories.
  • Advertising in target related media, co-branding with our channel partners.

In parallel with these marketing strategies, it is necessary to start spotting existing stories to be used for marketing purposes. As many stories are already in the minds of the locals or even written, there has to be carried out some research to identify them. Further, the storytelling  training is also expected to empower and motivate locals to tell their stories and create new ones.

So long as the storytelling facilitation and the content creation contests generate an increasing amount of marketable content, and this manage to create awareness about the destination’s brand and its life-changing experiences, the platform could start reducing the budget for the aforementioned marketing programs, eventually concentrating all the marketing efforts on the “content marketing system”.

Such transition requires accurate monitoring of the social media impact of the stories in contrast with the impact of the other marketing programs. Based upon the results of such tracking, the platform’s marketing executives should decide whether to accelerate or not the transition towards the storytelling system. For such purpose, the marketing plan should have a series of key performance marketing metrics to help the executives visualize the impact of every marketing program.

Therefore, the marketing plan has to be flexible, with marketing goals determining the turning points when to shift the budget allocation from conventional to storytelling marketing.

Would you consider any strategy to accelerate the transition to content based marketing?

IntelligenceIntelligence methods

Destination Intelligence 3.0: Implementation of the monitoring system

The monitoring activities should be carried out by establishing Tourism Observatories in local regions, which are in charge of collecting and processing the data to elaborate the research outcomes. Then, these local Observatories are to be coordinated by an Observatory at an upper regional level to elaborate aggregated statistics ensuring that the research methods and criteria are unified and thus the data is comparable.

Such observatories should operate in cooperation with the local tourist boards and industry associations, to facilitate access to data from the local businesses. Further, cooperation with educational institutions at a University level should also be encouraged, to give prestige to the Observatory and nurture it with know-how and young talents whenever necessary.

The Observatories are to become the reference research center for the tourism industry both at a local and regional level, elaborating not only the regular statistics about tourism industry performance, but also carrying out ad-hoc studies to satisfy special research needs from either public bodies or private operators.

Tourism Observatories may be funded by industry associations, tourism boards and also through the ad-hoc services they provide to private businesses and public bodies. Again, the monitoring system is an opportunity to foster cooperation between the private operators and the public bodies.

Do you know about Tourism Observatories activities? What do you think they could do more to support local industry associations and governments in planning the tourism sector strategy, marketing and innovation?

Collaborative business modelsCollaborative cultureInnovative cultureMarketing 3.0Strategy

Destination Marketing 3.0: Implementation

The implementation process of the new marketing system is to be progressive and flexible, depending on its performance compared to the destination’s traditional marketing. By keeping track of the new marketing key performance indicators, the executives are to decide to what extent the marketing budget should shift the priority towards the new marketing system and replace the traditional marketing tools.

This is expected to be a progressive shift that may take a few years, envisioning that the new marketing system is to cost much less than the traditional one, especially in the long term. As explained previously, the new marketing is about empowering, encouraging and facilitating stakeholders on co-creating stories, experiences and other contents to be marketed throughout the social networks, and this is not only a more effective marketing, but also a more cost effective one.

When implementing the new marketing strategies and tactics, there also has to be a new set of key performance indicators to monitor the success of the new marketing strategies. Upon tracking these metrics, we will decide whether to progressively shift budget allocation from conventional marketing to storytelling based marketing through social media.

There are many indicators that could orientate us on the new marketing performance:

  • Production of stories, experiences and other contents in the open innovation system.
  • Voting participation on stories, experiences and other ideas through the social media networks or mobile apps when opening a content creation contest.
  • Shares on the stories published on the Destination’s social media page.
  • Destination publicity out of the stories and content production in all types of media.
  • Key influencers’ opinions on the destination’s value proposition.
  • Sales of merchandising products created through the content marketing system.
  • Followers of the Destination’s social media sites.
  • Survey on visitors to know what attracted them to come to the destination.
  • Qualitative reviews and ratings applying to both experiences and stories. In the new Tourism 3.0 culture, community members risk their reputations when giving reviews, hence only brands with high integrity are likely to obtain good reviews and ratings.

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.

Destination executives’ role is to ensure the brand integrity rather than trying to stimulate reviews by sponsoring them, which could be regarded as manipulation.

Do you miss or envision any other relevant KPI to take into account?

Collaborative business modelsInnovationInnovative cultureOpen innovationStrategy

Destination Models 3.0: Development strategies (II)

Open Innovation system development

Being one of the key assets to invigorate creativity and sustain the destination model competitive advantage, it is necessary to design a set of strategies to engage stakeholders in contributing up to leveraging the most of the collective intelligence. The open innovation platform is to unlock the creativity of all stakeholders, starting by its employees, followed by its closer partners, and beyond.

One of the key factors to make the open innovation work is to constantly connect with external networks, which are more likely to bring in new ideas than creativity alone. Based on the same principle, encouraging the network members to travel, research and learn about other destinations should nurture the innovation ecosystem with inspiring ideas.

Most productive innovation networks are characterized by a decentralized structure with many leaders who have collaborative mindsets. Such decentralization not only unlocks initiative and creativity, but also fosters further interaction and collaboration among the network members.

When developing the open innovation system there are four critical steps to follow from the design phase, to the execution and management of the network:

Connecting and organizing people:

  • Find open minded people who are motivated for innovation
  • Combine people with different approaches to innovation (idea generators, experts, producers)
  • Make sure there are members with different profile in terms of skills, seniority, and field of expertise
  • Include subgroups devoted to specific tasks and goals

Setting goals and engaging members:

  • Define the role of the innovation network and groups in relation to the organization’s mission
  • Establish innovation goals and metrics to track progress
  • Plan how to establish trust among network members and engage them quickly

Supporting and facilitating:

  • Determine technology support required for network members
  • Define additional support if necessary
  • Define key information inputs

Managing and tracking:

  • Define incentive system to reward contributions
  • Determine accountabilities and timing to track and assess performance
  • Decide who takes new responsibilities and who leaves responsibilities

When composing innovation teams for specific purposes such as business model innovation, some rules should be applied. For instance, there should be a balance between four kinds of contributors:

  • Idea generators, who come up with out-of-the-box approaches and questions to start with
  • Researchers, who bring along an analytical perspective based upon market insights
  • Experts, who bring deep knowledge in their field of expertise
  • Producers, who coordinate the activities of the network and connect with people from outside

Furthermore, mixing people from different backgrounds -in terms of education, culture, and industry expertise- is likely to bring along different approaches when trying to solve complicated challenges.

To start operating the open innovation platform, there are many steps to be followed:

  • Guarantee internet access to all internal stakeholders (partners and employees)
  • Train them on how to use the tools
  • Set up content creation contests for experiences, stories and marketing materials; setting clear rules to make sure they are aligned with the values and the mission. Everybody should be empowered to start their own story or to collaborate with others’.
  • Storytelling facilitation: stakeholders would attend training workshops on how to write stories
  • Training on business model innovation methods and frameworks to establish a common language
  • Presenting a story and other marketing contents as successful cases to inspire participation

Would you consider any other step in the development of the open innovation system?

Business model innovationCollaborative business modelsThird sector and social sustainability

Destination Models 3.0: Development strategies (I)

Once designed the architecture of the model, it’s time to design the strategies to develop it to the utmost of its potential. The development strategies are likely to be quite different depending on the initial scenario, whether it is a resort, a decentralized destination or a group of resources to be exploited for the tourism business. Hereby are described the four key development strategies that are to determine the success of the destination model 3.0 in most of the cases.

Human resources development

One of the key factors that makes destination models 3.0 deliver a superior value proposition to other destinations is the better human development of its service suppliers, along with the service quality control and incentive system. The human resources development strategy intends to unlock and leverage all the human potential of destination stakeholders, by stimulating their creativity and empowering them to develop and bring in all their talents in benefit of the destination, giving them incentives and recognition for their contributions. There could be many kinds of training programs:

  • Empowering locals to become micro-entrepreneurs, coaching them on how to develop their idea.
  • Training employees and service suppliers on how to deliver a memorable customer experience.
  • Language training in the main languages of the target outbound markets.
  • “Storytelling training” for all local stakeholders on how to create and tell stories, developing their communication skills, and eventually giving them the chance of participating in rewarding contests and publishing their stories.
  • Training to develop artistic skills such as photography or graphic design, to be used in the creation of marketing contents.
  • Educating on business model innovation in order to both help entrepreneurs reinvent their own business and to participate in the open innovation system discussions about revamping the destination platform business model.

Some of these programs like the storytelling training and artistic skills development, should also be offered as life-changing experiences to the tourists, who eventually may generate ideas and contents for the destination.

Would you consider other skills development goals?

IntelligenceIntelligence methodsMarketing 3.0

Destination Intelligence 3.0: Monitoring programs’ performance

Beyond the aforementioned general performance indicators, it may be convenient to track performance of the evolution of specific competitiveness programs such as Quality certification for local businesses, hospitality campaigns, service quality competitions, etc.

Such tracking may be carried out through many methods:

  • Mystery tourist system, consisting of periodical service evaluation by outsourced professionals pretending to be casual tourists.
  • Survey on customer satisfaction in the accommodation facilities for the Quality certification assessment.
  • Survey on customer satisfaction and assessment in the departure halls of airports or train stations.
  • Tracking of congestion and “early sold out” services through systematic observation, to identify bottlenecks and unsatisfied demand for critical services.

Do you envision other specific programs to be monitored or researched upon? Do you think of other appropriate research methods?