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?

Co-creationCollaborative business modelsIntelligenceIntelligence methodsMarketing 3.0

Destination Marketing 3.0: Mobile Apps 3.0

As an essential tool for empowering tourists to contribute and participate in the collaborative marketing system, the Mobile Apps 3.0 would enable tourists to write reviews and rate immediately after the experience, vote and participate in content creation contests, make bookings and search for information about the destination.

The Mobile App 3.0 would not only be a supporting tool for the communication between the tourist and the destination, but also a tool to encourage tourists to become co-creators of the destination experience and to engage them in the mission accomplishment. Other functions of the Mobile App could be augmented reality features, geo-localization, video & photo uploading, map download, nearby deal pop-up service, etc.

This is to be developed for DMOs only, to take profit of the investment being supported by many stakeholders, and to offer the tourist a comprehensive service.

What kind of obstacles do you envision to make the Mobile Apps 3.0 an effective tool?

Business model innovationCollaborative business modelsCulture changeMarketing 3.0Strategy

Destination Models 3.0: Integrating partners (V)

Selling the vision to investors

In many cases the tourism development will require not only to integrate businesses, land and facilities’ owners, but also to invest in developing new infrastructure or renovating heritage and urban aesthetics, for it may be necessary to attract investors beyond the local players. In this regard, the local government should play a decisive role in supporting the development of the destination model, at least in the early stages and until the model is consolidated and profitable. Such support could consist on assuming many investments and integrating within the platform as a stable shareholder, or taking the role of platform’s guarantor to external shareholders and financial institutions.

As destination models 3.0 are mission driven models whose value is ultimately derived from the impact they make on the society and its environment, they require investors who share the same vision and so agree upon prioritizing the long-term profits over the short-term. Shareholders have to assume that the success of their investment will only come as a result of being faithful to the values and the mission, to obtain the engagement of all stakeholders.

Fortunately, there is already a growing concern among investors about sustainability, considering the long-term policies that guarantee the preservation of the environment and social cohesion as key sources of competitive advantage that manage to set destinations apart from their competitors.

Needless to say that many investors are not likely to share this vision or be willing to support the project over a long period of time, for which it would be convenient to create a two-tier shareholding structure whereby long-term shareholders would be given more power than the short-term oriented ones when deciding the corporate strategic direction, to help the long-term oriented votes clearly outweigh the short-term oriented ones.

However, investors want to assess the long-term benefits of sustainability –namely profitability and returnability- through metrics that quantify them financially. In his book “Marketing 3.0”, Philip Kotler suggests three metrics:

  • Improved cost productivity is mainly attained through the lower marketing costs of the experience and story generation & distribution system through the social networks, compared to conventional product development and marketing campaigns. Further, mission driven businesses obtain higher engagement from their employees and partners, which ultimately boost their productivity.
  • Higher revenue from new market opportunities, due to the higher market penetration that mission driven businesses tend to achieve, as they touch not only people’s minds and hearts, but also their human spirit. Further, the government is also more likely to support businesses that intend to address some of the local challenges and improve people’s lives.
  • Higher corporate brand value is the long-term result of sticking to the brand values, pursuing the mission and successfully generating compelling stories which are extensively distributed.

To foster long-term focused shareholding, the destination model should encourage somehow all stakeholders to become shareholders, especially those located in the destination’s community. As mentioned before, the government should also play a key role, at least in the early stages of development, as a key support benefiting the long-term welfare of the community.

Would you consider other strategies when selling the vision to investors?

Business model innovationCollaborative business modelsCollaborative cultureSustainabilityThird sector and social sustainability

Destination Models 3.0: Integrating partners (IV)

Selling the vision to community stakeholders

The challenge of integrating all the community of stakeholders requires its own marketing plan, usually known as internal marketing plan. This plan should encompass the target stakeholders to attract in every phase, the integration formulas, and the communication strategies and actions to achieve these goals. Since the beginning when presenting the first model prototypes to pre-test and design the integration formulas and when eventually marketing the destination model to engage the community stakeholders, it will be necessary to explain them the model vision in a compelling way that connects first with their emotions and human spirit, and ultimately opening their want for a deeper understanding of the destination model rationale.

Stories are the best way to help people imagine how the new model is likely to improve their current status quo, how it creates value and therefore improves the community’s life quality. Stories convey the new model ideas to the people’s minds describing them in a way that overcomes resistance, the most likely reaction to new model propositions challenging the status quo. By capturing people’s attention and curiosity, compelling stories are to pave the way for an in-depth presentation and further discussion about the new destination model, to eventually make the potential stakeholders understand the implications that the new model would have for them: costs, obligations, efforts, and benefits for the individuals and the destination as a whole.

To better convey the idea about how the new model would operate for the local stakeholders, it is convenient to use one main character similar to the audience profiles (service suppliers) to be the protagonist. Such character should have similar problems, needs, concerns, fears and aspirations as most local potential stakeholders, so to make them feel identified with him and connect with the story. Then, the story shows the character finding out how the new model addresses all these needs and concerns, so to help the audience visualize the answers to their questions and fully understand the operation of the model.

Furthermore, it is convenient to provide potential stakeholders with an interactive tool where to “play” with the model simulating how it would be to become an integrated partner within the new platform. So long as the model system is complex, such tool is crucial to help potential partners understand and envision their possible fit. This should be complemented with workshops where platform representatives would attend community stakeholders’ queries.

Such destination’s vision is not only necessary to convince the community members to integrate, but also a guiding force that constantly aligns everyone’s efforts on their contribution to expand the destination mode to the utmost of its potential and to accomplish the mission.

In this stage, when defining the model to be deployed throughout the destination, one of the key points is to decide upon harmonizing the urban aesthetics style to be deployed throughout the destination. This should be quite flexible and should be voted by locals.

Would you consider other strategies when selling the vision to the community stakeholders?

IntelligenceIntelligence methodsMarketing 3.0

Destination Intelligence 3.0: Tracking tourist satisfaction in social media

Finally, a third set of research goals are those related to customer ratings and reviews, usually obtained through social media tools or specific portals such as Tripadvisor. This is basically another channel to obtain a mix of quantitative (ratings) and qualitative (reviews) information to complement the other sources, taking into account that the customer feedback is voluntary and hence the data cannot be considered statistically representative. Many research goals may be envisioned in this section:

  • Detailed ratings on specific accommodation services, restaurants, activities, etc.
  • Detailed ratings on general issues about the destination such as feeling of locals’ hospitality, cleanliness, availability of good information, transport services, etc.
  • Reviews commenting about the tourists experience in accommodations, restaurants, activities, etc.
  • Reviews and discussions commenting about the tourists experience and impression on general issues that they consider especially relevant about the destination.

Furthermore, as mentioned in the previous section, social media may be a good source of candidates for the qualitative research. By analyzing the reviews, proactive and creative tourists may be identified, and they are also likely to enjoy the chance of giving their opinions and ideas about the destination needs and opportunities for improvement.

Mobile apps may also be designed to establish a direct relationship with the tourist, incentivizing these to give feedback (reviews and ratings) on many aspects of the destination. The potential of mobile apps for obtaining information from the tourists is especially interesting, thanks to the capacity to convey such feedback on-site right after the experience when it is still fresh in their minds.

Marketing 3.0 intends to engage tourists and other stakeholders in the social networks to obtain their collaboration in co-creating experiences, stories and marketing contents, but also to control the brand to keep its activities aligned with the mission and to become brand ambassadors. Creative tourists are expected to be keen on providing ideas and critical opinion on all issues related with the destination’s management and development. Therefore, destinations developing towards a tourism 3.0 model are likely to attract many of these creative tourists and have plenty of participation at no cost in the monitoring activities.

Up to what extend do you think that social media reviews and ratings should be considered as representative of the tourists’ satisfaction?

Co-creationCollaborative cultureInnovative cultureMarketing 3.0Open innovation

Destination Marketing 3.0: Co-creation workshops

Beyond the content creation contests to be carried out in the virtual collaborative platform, co-creation should be also facilitated and explained through educational workshops, especially for the enthusiast stakeholders. In co-creation workshops, attendants would learn how to cooperate in creating marketing designs for merchandising products, and tourism products based on life-changing experiences.

The marketing design co-creation workshops would be carried out by expert designers who would provide training on the design techniques to facilitate the development of artistic skills among the interested stakeholders. They would also be trained in team working to facilitate cooperation.

The product co-creation workshops would be organized by the Product Managers, who would explain the development process and key success factors for creating life-changing tourist experiences according to the mission of the destination, as explained in the Product development strategy section. This would be mandatory for local service suppliers, who should be mixed with other stakeholders to balance the co-creation process with a similar amount of inside developers and outside developers.

Co-creation workshops should be organized by DMO as a way of promoting product development throughout the destination, with the participation of local DMC. However, this idea could also be developed by DMCs themselves, even individually as long as they can gather enough contributors.

Do you envision other possible contributors or other possible outputs out of the co-creation workshops?

 

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?