Tag: smart destinations

Collaborative business modelsCollaborative cultureMarketing 3.0Strategy

For Smart Cities, to collaborate is the smartest thing to do

According to a United Nations report, 70% of the world’s population is expected to be living in cities by 2050. This is why overcoming many of today’s humankind challenges in areas such energy, water, food, climate change, health, etc.  will depend mainly on the success of the so called Smart Cities strategies. But as urgent we consider the implementation of smarter cities, making it really happen still remains a challenge several years after the concept was first coined.

As in many other cases, we think too collaboration should be a key factor implementing a truly transformative Smart City strategy. Considering the broad and diverse kind of stakeholders, expertise, knowledge, technologies, etc. needed for an average Smart City project, it is difficult to imagine any that does not require the commitment and dedication of a collective team.

The idea of a Smart City promises to improve municipal operations and the health and safety of citizens. New models of cooperation and engagement will make a tangible difference for this promise to move to a reality. These are just few of the many possible…

Organizational changes in local administrations

City managers are main actors on the potential gains of properly implementing Smart City initiatives. But many of the challenges they confront in order to achieve efficient outcomes of such initiatives still lie on the way city government is structured. As it happens in many other organizations, many departments and units in city councils are operated in isolation without any or little consideration of other departments. Add to that, an extra layer of red tape and special sensibility about the immutability of roles and positions that sadly are still typical of public government organizations.

But despite these cultural and organizational barriers, when projects need to address such variety of issues as, for instance, transportation systems, law enforcement, community services, water supply networks or waste management, some Smart City projects have become the driver for cultural changes and shifting attitudes that seemed impossible so far.

Sharing experiences and knowledge

“Lessons learned” are an important asset in competitive markets in which proprietary Know How can be easily turned into a competitive advantage. But it does not make much sense for cities to compete with other cities to be smarter, especially in the case of cities at the same continent and in projects funded by the same supranational organization.

Knowledge exchange and transfer is a crucial element of many of the projects funded by the European Union. The GrowSmarter project is one of the most important bets of the European Commission for the smart development of urban areas, and represents one of the only three projects that the Commission has financed under the umbrella of the “Lighthouse”. GrowSmarter brings together cities and industry to integrate and demonstrate ‘12 smart city solutions’ in energy, infrastructure and transport.

Key for the project is the concept of “Lighthouse Cities”, as the 12 smart solutions are being rolled out in designated sites in three cities: Stockholm, Cologne and Barcelona – including industrial areas, suburban and downtown districts, ensuring a sample base representative of many European cities. The idea is for these three “Lighthouses Cities” to show how ‘smart’ can work in practice documenting their journey with regular news updates. This way, the project specifically aims to provide other cities with valuable insights on how the smart solutions work in practice and the opportunities for replication, creating a butterfly effect.

GrowSmarter even considers the existence of five “follower cities” (Cork, Graz, Malta, Porto and Suceava) which role is to work closely with those “Lighthouses Cities” to learn from their experiences.  The three Lighthouse Cities will each host a number of study visits and European workshops, providing opportunities to see first-hand technological application of the smart solutions.

Sharing Standards

The performance of a city is intimately linked to its physical and communications infrastructures and the delivery of resources through these infrastructures. At present, the delivery of city services tend to operate in isolation from each other, in silos of activities, governance and information. But new digital infrastructures offer the potential of increased service integration that could ultimately result in services provision cost reduction, natural resource savings and efficiency gains for cities and their inhabitants.

Standards are required in order to accommodate such integration of data. But smart city implementations tend to focus on specific cities or services rather than multiple locations and services. This individual focus in the main cause of the lack of standards across the market. Many organizations and analyst, including the International Organization for Standardization (ISO), advocate the development and generalization of international standards for smart cities.

In UK, the Department for Business, Innovation and Skills commissioned the British Standards Institution to develop a standards strategy for Smart Cities in the county. The strategy identifies the role of standards in accelerating the implementation of Smart Cities. As part of this strategy the Cities Standards Institute is a joint initiative of the British Standards Institution and the Future Cities Catapult bringing together cities and key industry leaders and innovators to work together in identifying the challenges facing cities, providing solutions to common problems and defining the future of smart city standards.

By developing a coherent set of standards that addresses key market barriers, smart city products and services become easier to be widely accepted. Promoters of the consortium consider than an easier acceptance of these products and services ultimately accelerates the growth of the future cities market, first in the UK and then globally. The Cities Standards Institute is also leading a set of programs to help cities, companies and SMEs to implement standards-based solutions and strategies, and to ensure the uptake of smart city standards regionally and internationally.

This blog post is from www.co-society.com

Business trendsEnvironmental sustainabilityInnovationIntelligenceIntelligence methods

Smart destinations

What is a SMART destination? These may be defined in many ways. They are destinations that think and advance strategically, improving competitiveness and searching positioning through effectiveness. Becoming a SMART is no more than a strategy to enhance the destination value by leveraging both the cultural and natural heritage, developing innovative resources, improving the efficiency in the production processes and the distribution, which finally propels the sustainable development. This transformation generates positive effects in all sub-sectors such as energy, health services, security, culture, etc. thanks to the cross-destination impact of the tourism activity.

The key concepts that set SMART destinations apart from conventional ones are accessibility, innovation, technology and sustainability. Among these concepts, new technologies are the ones which are more likely to be perceived by the tourist, namely mobile applications, augmented reality and everything related to data smart management.

There are 4 key concepts upon which Smart destinations are developed:

-Technology/Big Data
-Innovation
-Sustainability: social, economic, cultural and environmental
-Accessibility

The development of the SMART concept in destinations consists mainly in working to attain a higher profitability in the daily exploitation of the resources. This is to be achieved by engaging both the local community and the tourists in order to enhance interaction between them. There are already some examples of Smart destinations, such as El Hierro island in the Canary Archipelago. Some of its main achievements are the energetic self-sufficiency and the pollution reduction, which have been achieved through actions such as:

  • Waste converted into energy
  • Environment camouflage of telecom and energy facilities and equipment (solar panels, antenna, etc.) within the landscape.
  • Reduction of the visual impact in the buildings and facilities construction, by using local volcanic stone instead of bricks.
  • It has gained awareness and branding by sharing and marketing its experiences in the social networks.

Other actions carried out in SMART destinations encompass:

  • Mobile Applications
  • Tourism Intelligence System, including data transportation and information Smart management, which altogether turn the destination into a SMART destination.
  • Smart office; a common working place where to unify processes which produces a work synergy and allows sense and common methodology guidelines in the transformation towards an intelligent city.
  • Beaches with free wifi

It is important to mention Singapore Smart City, which is on the way to become the first SMART nation worldwide. The country is working on its Master Plan for the next 10 years, which will be focused on the development of smart communities propelled by integration and innovation.

This blogpost is based on http://www.visionesdelturismo.es/smart-destinations/

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?

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 modelsMarketing 3.0StrategyTourism marketing

Destination Models 3.0: Revenue streams

In Tourism 3.0, revenue streams are a result of the customer engagement in the mission accomplishment. Depending on every business model, there could be several kinds of revenue streams:

  • Sales of merchandising products (through licensing designs to manufacturers)
  • Service sales (accommodation, activities, food & beverage) from integrated business units
  • License fees to local service providers in some cases
  • Brokerage fees for the booking platform service
  • Renting fees for renting premises and facilities to local service providers or partners
  • Service fees to partners for training or providing technical assistance
  • Asset sales (real estate investments)
  • Sponsorships
  • Service suppliers’ advertising in the online marketing platform (paid premium advertising space)

When providing services to the local service partners, there could be two main revenue models:

  • “Service based fee” model, in which the local partner pays to the platform for the training or technical assistance services used, at an advantageous fee, leveraging the negotiation power of the platform.
  • “Flat service fee” model, in which the local service partners have to pay a fix fee to the platform, allowing them to use a portfolio of services without extra charge.

In between these two opposite models, there may be many intermediate ones, in which there is a fix monthly service fee which gives right to service supplies up to a limit, from which services are payable. Further, such service fees may be subsidized by the platform -especially for the micro-entrepreneurs in the poorer layers of the community-, or to be also funded through the micro-loans. All these issues are to be discussed during the business model design phase with the local community leaders, as they are closely related to the local culture.

This section should include a diagram depicting the evolution of the revenue streams along the different stages of development, in contrast with the evolution of costs over these development stages. This diagram would visually depict whether some customer segments subsidize other segments, or some business units subsidize others, especially in the early development stages. The diagram should also include a break-even analysis to show when the platform is expected to generate profits.

Hereby it is important to remark that one of the main goals of the open innovation system –within its business model innovation section- is to create new revenue streams, increase the existing ones, and reduce costs, for this scheme may change over time, if the circumstances advise to do so.

Do you envision other sources of revenue?

Business model innovationEnvironmental sustainabilityStrategyStrategy planning & executionSustainability

Destination Models 3.0: Key activities & management (IV)

Monitoring the evolution of the destination’s activities through a system of key performance metrics which are to indicate the need for reorienting efforts or strategy in case the results do not meet the strategic goals. There should be many KPI sections:

  • Indicators tracking the outcomes of the open innovation system, like mission-driven initiatives, business model innovation discussions, as well as marketing ones like written stories, shared contents and other social media metrics.
  • Indicators tracking the expansion of the business model, like number of innovation system members (considering various member categories), partners by category, overall tourism arrivals, overall revenue, revenue per geographical market, revenue per market segment, average revenue per tourist, average length of stay, merchandising sales, occupancy rates, satisfaction rates, etc.
  • Indicators to characterize the evolution of tourist demand, identifying the behavior patterns for every market segment, like average expenditure, average length of stay, type of accommodation, activities carried out, type/size of group, trip organization, marketing channels, etc. These are also to gain a better understanding of tourists’ needs, concerns, motivations and aspirations.
  • Other indicators tracking the evolution of the business model such as the kinds of integration formulas to which most partners adhere (indicating the confidence inspired by the model), profitability of the business units, number of direct and indirect employments created, training courses attended and successfully completed by employees and partners’ employees, etc.
  • Indicators tracking the accomplishment of social and environmental goals, further explained in the section 2.12.

Further, it is necessary to explain the performance standards the model should comply with, the key metrics to monitor them, and the key competences needed to comply with such standards.

This section should explain in detail the operational system of all critical activities nurturing and sustaining the competitive advantages of the destination model, as well as the platform management system, stating the performance standards and the metrics to monitor the model’s evolution.

Do you miss any key activity to ensure its proper functioning? Would you add any other type of KPI?

Business model innovationCollaborative business modelsMarketing 3.0Storytelling training & case studiesStrategy planning & execution

Destination Models 3.0: Key activities & management (II)

Apart from the open innovation system, there would be many other key activities to highlight:

  • Destination’s strategic planning and monitoring the results of its implementation is one of the primary roles of the destination’s platform, from the definition of the mission and the design of the business model, to its deployment and continuous revamping so long as the environment requires so. This is the main role of the platform’s executives, with the support of the open innovation system and the information gathered through the monitoring system.
  • The destination marketing is one of the main reasons to justify the development of business models 3.0, leveraging the outcomes of the content marketing system to develop campaigns, destination merchandise, organize events and support special projects such as film broadcasting. Further, especially at the beginning, the platform should develop a marketing plan to start-up the content marketing system and leverage the marketing partners’ influence to attract the first flows of visitors.
  • The storytelling training is just as important as the aforementioned story creation section, as it is to train and coach stakeholders in developing their storytelling skills. Such training has to be carried out by a pool of certified storytelling facilitators who train not only all platform partners, but also tourists, becoming one of the life-changing experiences that set destinations 3.0 apart from others. Needless to say, it will be a key factor in nurturing the content marketing system.
  • The local service suppliers training may also be critical, so long as the destination model 3.0 intends to foster entrepreneurship in the poorer layers of the local communities. This training and coaching should be primarily focused on hospitality business management, customer service and foreign languages, without disregarding other needs to be identified through the service quality control.

Do you envision how this would work? What kind of obstacles or challenges do you foresee?

Business trendsCollaborative business modelsInnovationIntelligenceIntelligence methods

Destination Intelligence 3.0: Approaching tourism 3.0 from the regional level

Fostering the adoption of the practices and values proposed in the Vision of Tourism 3.0 entails transforming progressively the mindset of the tourism industry leaders towards a culture of collaboration and innovation.

Such efforts may well start in the top levels of the regional tourism boards, governments or industry associations. Either of these may take the lead in promoting the practices of Tourism 3.0 throughout the region down to the local levels, and a possible way to do so is by establishing a Destination Intelligence 3.0 system. This entails three main activities:

  • Capturing intelligence in the outbound markets
  • Monitoring the tourism activity in the destination
  • Leveraging the collective intelligence through an open innovation system

Destination intelligence 3.0 sets the stage for tourism destinations to develop their innovation strategy, providing a series of information flows and tools that facilitate and stimulate destination stakeholders to envision the need for innovation not only on the product development area but also on a more holistic approach encompassing all building blocks of the business model to continually improve the destination’s competitiveness. Further, it envisions how this practice is to become a key discipline in sustaining competitiveness and improving the destination’s marketing efficiency and effectiveness.

Apart from the consultancy reports, do you thing that intelligence reports elaborated by industry associations, governments and tourist boards are satisfactory to guide strategy, marketing and innovation planning in local destinations? If not, what is missing?

Business model innovationCollaborative business models

Destination Models 3.0: shaping the new generation of destination business models (II)

From the operational perspective, the platform has a group of core businesses and resources fully integrated –whose owners become platform shareholders or sell them to the platform-, and a group of businesses which may choose among several flexible integration formulas to become part of the platform, whose owners may keep control of their business and have the right to change their integration status upon complying with specified conditions.

Therefore, the small local suppliers (such as restaurants, accommodation, activity organizers) operate autonomously within the platform, taking advantage of the increased attractiveness of the destination due to the story-based marketing, the platform’s services and support in providing a higher-standard customer experience, and the aforementioned advantages of leveraging the collective intelligence. In exchange, they have to comply with the obligations established according to their chosen integration formula within the platform -see section 3 about integrating stakeholders-, which would mainly consist of complying with service quality standards and urban aesthetic guidelines, and contributing to the open innovation system.

In summary, the platform is in charge of several roles:

  • Ensuring that the tourism business is developed in harmony with the cultural and natural heritage.
  • Managing and controlling service quality of all integrated businesses.
  • Directing and managing the open innovation system and its outcomes.
  • Providing facilitation and support to integrating businesses, especially to new entrepreneurs.
  • Managing the incentive system to reward good service quality and contribution to innovation.
  • Managing the bookings of all service businesses through a booking center.
  • Managing the integration of all businesses within the platform.

As a result of the tourism 3.0 development approach, destinations integrate and engage all the local community in the tourism activity, maximizing their collective human potential to develop a vibrant and harmonious destination where visitors come to live authentic life-changing experiences which ultimately address some of the stakeholders’ concerns.

The following sections explain in further detail the structure and operation of destination models 3.0, and the detail of each of the building blocks that depict their rationale. In the upcoming blog posts the main challenges in developing business models 3.0 and their correspondent strategies will be explained.

Do you envision other roles that the platform could or should be in charge of?