Tag: sustainable tourism

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?

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?

StrategyStrategy planning & executionSustainabilityTourism marketingTourism trends

A theoretical approach to cluster development

As introduced in the first point, tourism clusters are created to leverage the unique resources of a location or in some cases to gather artificial resources in the same location. In both cases, they improve the value of the location to end up making the location a key strategic factor.

To make a cluster competitive there are many key success factors that should be considered by the cluster members:

  • Transport infrastructure within, and to access the cluster from the target markets
  • Solidarity and cooperation spirit among players
  • Cooperation between the Government and the private players
  • Creating a welcoming atmosphere to attract international talent
  • Foresee space for attracting new businesses and expanding the cluster

A very specific key success factor is the existence of a governance structure to promote collaboration and joint projects, fostering innovation and promoting the cluster internationally. This governance body should be also responsible for:

  • Attracting new businesses
  • Performance monitoring
  • Intelligence research
  • Identifying needs for improvement and training
  • Representing the cluster players internationally
  • Organizing networking events and conferences
  • Coordinating players to design and implement the cluster development strategy

As mentioned before, there may be many types of players within a cluster, and so the types of cooperation between them may also be different. There are at least two types of cooperation:

  • Value chain cooperation: between players from different sections of the value chain, to gain efficiency or to add new value.
  • Coopetition: competitors sharing resources and costs that are not afordable for each one alone.

Research has shown that tourism development is a venue in which cooperation is often more important than competition (Inman et al. 1998). A cluster based development should try to build the value chain within each cluster in the region. A cluster strategy places all public and private stakeholders in the position of being producers and suppliers to one another, and seeks for constructive ways to define and carry out mutually beneficial action. The value chain is central to the tourism cluster concept, as it demonstrates how tourism can generate benefits to the economy beyond the tourism sector through linked industries (Gollub et al. 2002).

Do you think of other key success factors to make a cluster competitive?

StrategyStrategy planning & executionSustainabilityTourism trends

What is a cluster and why are they created?

One of the key strategies to develop in any Tourism Development Plan consists of structuring the territory in different areas according to the kinds of activities to be carried out in each one. The clustering strategy is essential for the tourism development regardless of the dimension of the territory: clusters exist within countries, regions and even towns.

A cluster may be defined as a concentration of interconnected businesses and institutions in a limited geographical area. In most cases, such businesses and institutions belong to the same sector; but, as we will see in some case studies, sometimes there are new business sectors that flourish in a cluster to take advantage of assets related to other sectors in the cluster.

It may also be defined as an area characterised by a set of distinctive tourism assets which all together create a unique value system capable of attracting tourists and competing with other destinations. Many industry players settle down in the same location to cooperate in the search for synergies that improve their competitiveness:

  • Need for specific infrastructures to be leveraged by many industry players
  • Need for collaboration between industry players to create economies of scale and scope
  • Cooperation in joint marketing

Clusters also arise because they help businesses increase their productivity by sharing many strategic resources, diminishing trading costs between suppliers and clients, and fostering innovation thanks to proximity of a sector’s stakeholders. In the case of tourism destinations, clusters are the result of a concentration of operators exploiting a cultural or natural resource, or a concentration of operators developing artificial and complementary attractions.

Clusters are areas that can be considered as being internally homogeneous with specific traits that differentiate them from others. The goal of the clustering strategy is to structure the location of all tourism activities in accordance with the types of experiences and feelings they offer or the characteristics of the physical environment, and also to define a clear identity for every cluster and communicate it clearly to the visitors.

As Michael Porter says “Clusters are not unique, they are extremely typical –and therein lies the paradox: the enduring competitive advantages in a global economy lie increasingly in local settings which distant rivals cannot compensate. In a cluster, interconnected companies, firms in related industries and associated institutions both compete and cooperate”.

The term cluster may apply to many different destination dimensions: at a national, regional or local level. We may use clusters to distinguish several geographical areas within a country, each of which is specialized in a different type of experience, but also within each of these clusters there may be –and usually there are- sub-clusters according to smaller geographical areas with specific characteristics that are different from the rest, so long as these characteristics are relevant to be leveraged for a distinct tourism experience. At the lower scale, we distinguish clusters within local destinations, so long as these comprehend different areas providing unique or clearly differentiated atmospheres, resources and experiences.

Do you think of other reasons to explain the creation of clusters?

Environmental sustainabilitySustainabilityThird sector and social sustainability

Monitoring sustainability issues

Beyond the indicators related to the Competitiveness programs and mission related goals –poverty alleviation & environment protection-, it is also recommendable to carry out a comprehensive assessment of sustainability issues through the elaboration of a set of Sustainable Tourism Indicators (STI).

First of all, tourism sustainable development has to be based upon three main principles:

  • Equitability: the generation of wealth out of the tourism activity should be fairly distributed among all the destination stakeholders.
  • Livability: the tourism activity should allow the destination’s inhabitants to cover their present and future needs, ensuring a long-lasting quality of life.
  • Viability: development has to respect the carrying capacities of the destination ecosystems without using non-renewable resources

The indicators have to play the role of analyzing all types of factors affecting the structure of the tourism industry, assessing the benefits and impacts of the tourism activity, identifying critical issues that need to be addressed, measuring the achievement of the Plan’s objectives and orientating in the need for strategy shift in line with the objectives achievement.

Based on the 20 main sustainability issues identified in the WTO’s “Indicators of sustainable development for tourism destinations: a Guidebook”, Tangenay, Rajaonson and Therrien developed a list of 20 STI as the main indicators to monitor the key sustainability issues within a destination. These are exposed in the following table.

Sustainability issue Indicator
Ecosystem Area of natural protected space
Water Water consumption (tourism sector)
Atmosphere Air pollution (tourism sector)
Energy Energy consumption (tourism sector)
Waste Volume of waste recycled or treated/total volume generated
Well-being Level of satisfaction of the local population
Resilience and risk Environmental vulnerability
Security and safety Ratio of tourists to local population at cultural events
Health Quality of bodies of water (lakes, rivers and sea)
Satisfaction Level of tourist satisfaction
Public participation Level of public participation in election
Culture Level of maintenance of heritage sites
Accessibility Frequency, capacity of services, or level of use by existing transport modes to the destination
Investments Percentage of new real estate developments intended for tourism
Ecotourism promotion Number and % of businesses that acquired an eco-responsible label
Economic vitality Percentage of income generated by tourism in the community
Employment % of new jobs in the tourism sector occupied by local residents
Marketing Percentage of return visits
Distinction Number of visits to heritage sites
Traffic Volume of tourists

Whenever data is not available, other indicators for the same issue should be found according to the available data related to this issue in the destination. Further, in relation to the previous section about monitoring the implementation of the Plan, the STI scorecard has to include indicators directly related to the destinations policy on sustainability.

In this regard, the KPIs related to environmental impacts should be designed by specialized consultants specifically for every destination –depending on the type of environment and issues to tackle-, whereas some of the KPIs to track the evolution of poverty alleviation could be:

  • Newly created tourism businesses in the poorer layers of the community
  • Increased disposable income in the poorer layers of the community
  • Newly created “non-tourism” businesses serving the poorer layers of the community
  • Increased turnover of old businesses serving the poorer layers of the community
  • Increased number of households with access to Internet and computer literacy
  • Increased access to primary & secondary education in the poorer layers of the community

Concerning the value for money, service quality could be measured in two ways other than the tourists’ satisfaction:

  • Mystery tourist system, consisting of periodical service evaluation by outsourced professionals pretending to be casual tourists.
  • Tracking of congestion and “early sold out” services through systematic observation, to identify bottlenecks and unsatisfied demand for critical services.

Would you consider other indicators?

StrategyStrategy planning & executionSustainability

Developing destination’s spiritual value

The programs or actions to neutralize or reduce the negative impacts of the tourism activity are nearly or exactly the same ones that eventually manage to create positive impacts. In most cases, it is just a matter of the initial state of the destination and the intensity and ambition of the program what makes the difference between neutralizing or reducing negative impacts, and creating positive ones. Such impacts may correspond to three different spheres of influence: social, economic and environmental impacts. The main factors that create spiritual value in a destination are the following:

  • Fostering entrepreneurship at the base of the pyramid and training the poorer layers of the local community to integrate in the labor market not only reduces poverty but also enhances social cohesion, and creates a spirit of social harmony as a result of the integration of these groups of people in the community. This is very likely to be perceived by the visitors and appreciated by their human spirit.
  • Encouraging community members to contribute through the open innovation system in creating stories, co-creating products and bringing in ideas to enhance competitiveness is also a powerful social impact generator. Leveraging people’s talents, rewarding and giving them recognition for their contribution makes them feel like valuable protagonists within the tourism industry system, and helps them grow personally, eventually shifting their attitude towards tourists, being more hospitable and helping them have a memorable experience.
  • Preserving the natural environment and fostering the growth of the local endemic species helps the destination boost its uniqueness and character. Creating green spaces both in the public and private areas with typically local trees, plants and flowers conveys a spirit of healthy environment. Furthermore, in the cases where there are typically local animal species, it is also good to make them be part of the destination experience. Both lush animal and vegetable life provide positive impacts to the visitors’ human spirit.
  • Enhancing the attractiveness of the destination also makes it a pleasant living place for its inhabitants. Improving cleanliness, heritage restoration, developing cultural entertainment –events, museums, etc.-, creating green spaces, clearing pollution, making the urban areas more human friendly, harmonizing urban aesthetics and enhancing other aspects of the landscape are appealing to all community stakeholders.
  • Boosting economic development and wealth creation is one of the main goals of tourism development. The tourism 3.0 approach intends to spread the generation of wealth among all types of stakeholders. A clear indicator of success is therefore the increase of disposable income throughout all layers of society. The extent to which the destination collaborative model expands is one of the main key success factors to make it happen.

The key idea behind the creation of spiritual value is the balanced development and shared growth, considering tourism businesses, employees and micro-entrepreneurs, local inhabitants not related to the tourism activity, non-tourism businesses, and the cultural and natural heritage. Tourism development should be a win-win activity for all elements that are part of the destination life to make it appealing to the visitors’ human spirit.

Do you think of other factors which contribute to create spiritual value?

Environmental sustainabilityStrategyStrategy planning & executionSustainability

Cross-destination competitiveness programs: strategy enforcement & sustainability

Regulation and bureaucracy system audit. As mentioned in the cross-destination competitiveness diagnosis, the adequacy of the regulation is essential to foster sustainable development. Regulations are to enforce the policies determined in the strategic development plan, and so whenever there is any strategic shift or new practices are to be implemented, the regulation has to adapt to these changes.

Carrying out a regulation audit is to detect gaps in the present regulations with regards to the intended policies. This may mean some needed changes in the regulations, adding new articles within the existing regulations, or in some cases elaborating new regulations. The audit should state what kinds of behaviors, undesired actions or practices are being permitted by the current regulation to justify a change, and what risks are assumed by the current gaps.

Furthermore, there should be auditing of the bureaucracy system concerning the starting up procedures for new businesses to detect inefficiencies and bottlenecks that cause unnecessary delays. An agile bureaucracy system is an important factor that enhances chances of entrepreneurs and investors choosing the destination to set up a new business.

Eco-label system. To help some operators set themselves apart in terms of sustainability management, the implementation of an eco-label system may also help to foster an eco-friendly culture among the destination operators. There should be different eco-labels depending on the environmental impact degree of the operator, describing precisely the obligations, practices and constraints to comply with for every label category. These would be different depending also on the type of operator.

To extend the implementation of this eco-label system, it would be convenient to design an incentive system consisting of both fiscal and marketing incentives. These last ones may consist of privileged position in both marketing materials and activities.

Eco-labels are especially convenient for destinations marketing ecotourism related products, and also when targeting geographical markets that are especially sensitive to environmental issues such as the Nordic Countries, Germany, Australia, Canada, etc. This is a must have program for destinations intending to approach the vision of Tourism 3.0, as it is an effective and visible way to reduce negative impacts in the environment, enhancing sustainability.

Which other programs would you consider to enforce sustainability policies and others?

Collaborative business modelsStrategyStrategy planning & executionSustainability

The destination model as a key factor for competitiveness and sustainability

The competitiveness of a tourism destination is not just a matter of tourism operators’ performance. Instead, the potential of a destination for competing in the travel market is determined from the top government policies regarding urban planning, public services, territory planning –protecting natural interest areas-, and tourism development planning, determining tourism related regulations, license policies, investments in facilities and infrastructures and also cross-destination marketing planning and execution.

So long as the tourism activity affects not only the tourism operators, but also the residents’ lives, other business sectors and the image of the territory, it is necessary to elaborate a thorough model attending to the needs and aspirations of all stakeholders. The complexity and challenge of tourism development planning is namely in the need for reaching a balance point, considering all the stakeholders’ interests.

A destination model is to provide answers to three main questions:

  • What can we do to develop tourism in the destination?
  • How can we do it?
  • What vision do we want to strive for?

Finding answers to these questions means choosing among different alternatives related to the tourism to be developed: the development pace, intensity, the limitations to the business growth, etc. Furthermore, a development model works like a guide and reference framework for the activities of both public and private agents, and to articulate cooperation between different public bodies and between public and private ones.

Other advantages and benefits of defining a destination development model are:

  • The territorial structure –cluster definition- of the tourism development is clearly defined.
  • The destination takes advantage of the market opportunities more effectively.
  • The destination’s resources and attractions are leveraged more adequately.
  • Government leaders and local operators have a reference framework to orient their strategy.
  • The need for infrastructures, facilities, financial, technological and human resources are clearly defined according to established goals.
  • Investors have a reference framework that provides them with valuable orientation.
  • Resources are assigned more rationally, effectively and profitably.
  • The tourism management has a reference framework to orient the decision making.
  • The reaction versus certain changes in the market is faster and more effective.

Once the model is defined, if this is brought into practice, there are even more benefits:

  • The destination creates and develops solid and sustainable competitive advantages.
  • The destination positioning and image is stronger.
  • The tourism businesses operating in the destination are more profitable and increase revenue
  • The service quality and tourists’ satisfaction increases.
  • The destination inhabitants perceive the positive impact of the tourism activity more clearly.
  • All stakeholders have more confidence in the future of the destination.

Do you think of other benefits of defining the destination development model?