Tag: tourism planning

Environmental sustainabilityStrategyStrategy planning & executionSustainability

Johnny Cay Regional Park: Strategies for Conservation in the Caribbean

Johnny Cay, a small Colombian island in the Caribbean, faces significant conservation challenges. Although the park is a protected area, currently no license system or code of conduct exists for the tour operators who bring tourists to Johnny Cay from nearby San Andres. This lack of a tourism management plan has led to negative environmental consequences on the island, which in turn jeopardizes the long-term sustainability of businesses operating in Johnny Cay Regional Park.

A Sustainable Tourism Strategic Plan for the park has been recently developed. The plan supports conservation and business development in Johnny Cay Regional Park by identifying conservation threats, creating a plan to mitigate those threats, and implementing sustainable tourism best practices.

Principal conservation threats include environmental degradation, mainly pollution, both on the island and within the surrounding waters. The island is also losing its cultural identity and turning into a daytime party spot, leading to an abundance of alcohol consumption and diminishing authentic cultural interaction. Operations must become more conservation-focused if tourism businesses hope to use Johnny Cay Regional Park as part of their long-term business strategy.

The Sustainable Tourism Strategic Plan addresses conservation threats by employing five specific strategies over the course of three years:

  1. Creation of a Sustainable Tourism Department within Coralina (The Organization for the Sustainable Development of the San Andres, Providencia, and Santa Catalina Archipelago).

This department will ensure that businesses comply with specific operational standards while operating within the park. The department will also develop training programs, implement environmental education programs, and act as a link between Coralina and tourism associations on the island.

  1. Develop a Sustainable Tourism Certification Program within Johnny Cay Regional Park

This program will serve as a tool for setting operating standards and increasing sustainability awareness among local stakeholders. The program will provide best practices and codes of conduct for businesses and use the implementation of these practices as a filter to determine who can operate within the park. Businesses will be encouraged to gradually implement best practices and will receive recognition upon successful implementation. Businesses will also receive training related to different strategies for improving their product offerings. Ideally, this will serve as a pilot program for the region with possible extensions on the nearby islands of San Andres, Santa Catalina, and Providencia in the future.

  1. Provide a Business Support Program for tourism businesses operating within the park

A relatively low standard of technical business knowledge emerged through the project’s initial assessment process. This negatively impacted total revenues and product quality while poor marketing limited the ability for businesses to attract new clients. A business support program, run through Coralina, has been proposed to provide training in business planning, marketing, and monitoring and evaluation. A competition has also been proposed through which locals will develop their own business plans and compete for initial funding based on plan quality.

  1. Develop a Communication Strategy to increase cooperation between tourism businesses and Coralina

Improving communication among local residents, tourists, businesses, Coralina, travel agents, and national tourism entities will be vital to the success of the sustainable tourism strategic plan. This communication strategy hopes to strengthen conservation efforts by ensuring that residents and visitors understand that Johnny Cay is a nationally-recognized regional park. The goal is to invoke a sense of pride within locals and operators to foster a culture of conservation. Additionally, the communication strategy aims to facilitate a smoother communication process between businesses and other entities while keeping businesses up-to-date on the implementation of the overall sustainable tourism strategic plan.

  1. Develop a system for tourism businesses to pay a concession fee for operating within the park

The plan calls for this implementation to occur in year 3, after the above strategies have had time to take hold. Each business applying for a concession will have their tax calculated based on their financial projections. A maximum tariff will be established and businesses will have to comply with certain standards in order to apply. Very clear communication and successful implementation strategies 1-4 will be vital to establishing the concession system.

Johnny Cay faces serious conservation issues that threaten the long-term viability of its corresponding tourism economy. However, with the proper strategy and training, these negative consequences can be reversed.

This blog post is from www.solimarinternational.com/resources-page/blog/itemlist/tag/Destination%20Management

StrategyStrategy planning & execution

5 Common Mistakes in Business Planning

“The business of a business is business” goes the famous saying. Simply put, it means that a business needs to be practical (has a sound model, makes money) and realistic (whatever you set out to achieve, you should be able to achieve it) to operate successfully. However, growing a business that is both practical and realistic is much easier said than accomplished. Businesses are complicated and they contain a lot of moving parts. Here are 5 common mistakes you should be wary of so that your business remains practical and realistic during the planning stage:

  1. Not understanding the difference between planning and a plan

Tim Berry, the founder of Palo Alto Software stresses that the value is never in the original plan. Rather, it is in the implementation. He stresses that a plan can serve as the foundation providing a strategic direction but it is never valuable unless it is put into action. Planning is a continuous cycle, which takes a plan, puts it into action, compares the outcome with the projected results, and uses this new data to adjust the plan and set goals accordingly. It is the planning that creates value and allows a business to learn its strengths, weaknesses, opportunities, and threats as the time goes by – not the original plan. Therefore, a planning cycle should be put into place and the plan needs to be reviewed & appropriately changed on an annual basis to guide the business towards the desired end. This in turn, makes your business practical and realistic in response to the market.

  1. Ignoring market realities

The market is of a crucial importance to every company operating around the world. Susan Ward, co-owner of Cypress Technologies and an IT Consulting business, illustrates that a company can have an amazing product or a service that they would like to sell, but if the consumer is non-responsive to the product and does not want to purchase it, then the company will never be successful.

For example, if a company sells umbrellas in a place where it only rains 5 days a year, people would not purchase the umbrella. If the same company sells an umbrella in a market where it rains 200 out of 365 days a year, the demand is higher and umbrellas will likely sell. Even then, there are several other factors that need to be taken into consideration. Take a look at a business’ environments and corresponding factors in diagram below:

Adequate research into market dynamics needs to be conducted annually to understand the business climate, set realistic goals and assumptions, understand the competition, and price the products/services appropriately.

  1. Being everything to everyone

Bill Cosby has famously said, “I don’t know the secret to success; but the secret to failure is trying to please everybody.”

Pick a focus. Pick a problem to solve in the market. Solve it. It is crucial to pick a focus for your business and it is crucial to keep sight of it. It keeps things practical and realistic. Spreading yourself too thin trying to go in numerous different directions will most likely result in nothing working out too well. Ensure you have clear objectives when business planning and ensure that you tailor your plans to suit your business purpose. Whatever you pursue, make it your singular focus. Tim Berry defines strategy as “… focus. It’s as much what you aren’t doing as it is what you’re doing.” Therefore, be clear in what you do so that you can save time, money, and set goals that correspond with the purpose of the business. You don’t need to please everyone.

  1. Thinking that big picture is the key!

Tim Berry states that a “good business planning is nine parts implementation for every one-part strategy”. Therefore, while it is commendable to have a vision and a strategy, as they act as the guiding forces, a detailed action plan is very necessary to achieve the desired end. You should have a goal and underneath list all of the steps that need to be taken to accomplish that goal. More so, you should detail who is responsible, the dates and deadlines for the tasks, forecast the outcomes, design suitable key performance indicators to measure success, measure success against projections, and review the efforts to make decisions for the future of the company. The point is to put planning into action in such a way that there is accountability for each task and action, and you can measure each component. That will provide a much-detailed outlook onto what is working for the company and what areas require improvement. The big picture paints a pretty sight, but the details and implementation make that sight a reality.

  1. Treating it as a race or sprint

Being an entrepreneur is not a race. It’s a disciplined lifestyle, which demands time, persistence, and commitment. Therefore, to minimize risk, continuous business planning is essential and should become a natural rhythm rather than an activity you pursue irregularly. A plan should be carefully put into action. The actions then need to be measured. The new insight you gain should influence your plan. One also continuously needs to be wary of their market, consumer demands, their product/service offering, and pivot in response to the change to business’ environments.

A plan is not a final product, only a beginning. It’s the implementation, continuous planning, and the ability to adapt to the changes that will prove your efforts fruitful and help you retain an edge in the market.

In the end, business planning can indeed be a daunting task. As long as you ensure things are practical, realistic, and the plan is being implemented and reviewed regularly taking into account the change in business’ environments – your business should thrive.

This blog post is from: http://www.solimarinternational.com/resources-page/blog/item/164-5-common-mistakes-in-business-planning

StrategyStrategy planning & execution

Your Road Map to a Great Tourism Business Plan

Any great tourism business begins with a great “road map.” This road map serves as your business plan with actionable steps for moving forward with developing the enterprise. There are seven key components to your road map.

  1. Clear Concept- Before you can dive into the road map, the essential first step is to clearly articulate your enterprise concept. What is your enterprise? What do you do? What are you trying to achieve? What impact do you expect your enterprise to generate? Before you move further down the road map, be sure that you put some thought into these questions and can clearly define the concept of your tourism enterprise. Try to condense this concept into a simple one to two sentence pitch that clearly articulates your business concept.
  2. Market Analysis- Your market analysis includes the international, regional, and national tourism statistics and travel trends, the profiles of your target market segments, and a value chain/ industry analysis. Begin by getting an idea of the relevant tourism trends and statistics. What percentage of tourists coming to your destination region, country, or city are country nationals versus international visitors. When is the peak season that tourists come to visit? What are the typical demographics of visitors? Has the number of international tourists to your destination been increasing or decreasing? Addressing these questions will help you to better understand your market before moving forward.

From here, you can develop the profiles of your target market segments. Determine the nationality of your market, their wants and needs, their budget, etc. Think about whether your target traveler is seeking adventure and physical challenges, luxury and relaxation, or service and learning opportunities. Additionally, you will need to analyze the existing tourism industry in your destination. Especially if your enterprise will work with intermediaries; investigate the existence, success, and business models of tour operators, travel agents, and hotels; as they relative to your business concept to market or sell tourism products.

  1. Sales and Marketing Strategy- At this stage of your road map, it is important to determine strategic positioning in terms of the pricing, placement, and promotion strategies of your business. There are numerous factors, both short and long-term to consider for pricing including the value provided compared to that of competitors, the price the market is willing to pay, the revenue needed to enable the business to reach its financial goals, and profit maximization. Your placement, or distribution, may be conducted either through direct or indirect sales. Your promotion strategy will describe the sales and marketing techniques used to reach your target market and should include online and social media marketing.
  2. Competitive Analysis-Complete a summary of competing businesses and products, and determine your competitive advantage. Begin by defining your business competition- the people and businesses that offer similar products and services and seek the same markets. Research these competitors and assess their products or services on a number of factors, such as pricing, product quality, and customer service. Porter’s Five Forces Analysis is a useful tool to use for a through investigation of your competition. By assessing your business competition against your proposed enterprise, you will gain a better understanding of where your business stands and how best to leverage your strengths against your competition’s weaknesses. To determine your competitive advantage, simply outline the major advantages that your enterprise holds over the competition.
  3. Operations and Training Plan-Consider your business structure and the key personnel and training needs that will be required to support it, while also keeping in mind any legal considerations. Will your enterprise be a private company, a partnership, a limited liability corporation (LLC), a cooperative, a non-profit organization, or an association? There are pluses and minuses to each, and it is extremely important to think carefully to determine the best structure for your enterprise. Once the structure is determined, consider the number of employees needed and the roles and responsibilities of each. Consider the hierarchy of employees in your business and how profits will be shared.  Finally, the legal environment is key to consider; think about potential requirements like business registration, employee/membership agreements, permits, and insurance coverage.
  4. Community and Conservation Support- Consider sustainable tourism as a cornerstone to your business plan. Sustainable tourism has the potential to not only mitigate potentially harmful impacts of visitation to a site, but it can also support conservation of the resources upon which it depends. At Solimar, we employ a market-based approach that links jobs and revenue generated by sustainable tourism to support conservation of the resources upon which the tourism depends. To develop a sustainability plan, begin by assessing the conservation threats related to your tourism enterprise. Once these threats have been assessed, you can choose tourism conservation strategies that address those threats, such as an environmental education program or a trail monitoring and research program. Lastly, be sure to budget for the implementation of your sustainability plan, including salaries, equipment, materials, and trainings.
  5. Key Milestones and Workplan- Lastly, now that your business plan has been fully considered, you can create a timeline of the major activities related to the establishment of your enterprise and its tour products and services. Create a comprehensive list of the milestones to be completed for the successful establishment of your business and determine the order in which they shall be addressed. With each milestone completed, you are one step closer to being the proud founder of a great tourism business!

This blog post is from www.solimarinternational.com/resources-page/blog/item/163-your-road-map-to-a-great-tourism-business-plan

 

Business model innovationCollaborative business modelsInnovationMarketing 3.0Strategy

The innovation challenge in destinations

Research and innovation will have a fundamental role in the competitive improvement of destinations. Any policy for the destination development has to include a vision and an innovative orientation that brings some sort of competitive advantage.

In the Spanish economy, the tourism industry has proved to be one of the most dynamic sectors, which generates multiplying effects in the local economies in all sub-sectors directly and indirectly related to tourism. This multiplying effect together with the sector’s evolution worldwide has contributed decisively to increase competition, which in turn makes the industry develop strategies oriented towards the improvement of its competitiveness.

The new market after the changes in the offer and demand, requires tailored services and activities, with high quality standards, which makes attaining customer satisfaction more difficult than ever before. In this regard, tourism offer has to be organized according to the targeted market segments requirements in order to be successful. Unlike in past times, market penetration, promotion, price setting, product quality and quantity are variables defined by the demand and not by the offer, for it is necessary that the service and activity production in the tourism sector takes into consideration this new scenario, and so new destination models restructuring the links and relationships between stakeholders are being developed.

In any case, research and innovation will have a fundamental role in the destination’s competitiveness improvement. Any action for the successful development of the destination has to include a vision and an innovative orientation that can generate some kind of competitive advantage. The main challenges to foster competitiveness in destinations are the following:

Innovate in mechanisms and cooperation formulas and strategic partnerships. It is basic to develop mechanisms that work both from the public and the private scope, to boost new cooperation models between businesses and public-private partnership, as a way to gain profitability, dimension and commitment in the development of the tourist sector.

Innovate to improve the sector’s competitiveness. There should be techniques and strategies to improve the business and the destination’s competitiveness. This includes the development of Innovation Plans for the improvement of business models, management models, service processes and the destination’s business marketing.

Innovate for the introduction of new tourism products and consolidating the profitability of the current ones. It will be necessary to foster the creation of unique tourism products based on new business models, build upon the capacities and unique resources of the destination, with a high experiential value, using the ICT and being socially and environmentally friendly.

Leverage the resources and hidden heritage. It is crucial to develop new formulas for leveraging tourism resources that are complementary to the traditional ones, unknown or unexploited, so as to achieve the profitable consolidation so long as they create an outstanding experience and expand the revenue streams.

Innovate in destination’s promotion and communication formulas. There is nowadays a communicational saturation, which makes it necessary to face the future with promotion innovative mechanisms which allow optimization of the destination’s visibility.

Innovate in tourism product marketing. There will have to be developed new methods and tools to market tourism products, in order to favor the sector’s competitive improvement and control the dependence on external channels, in a way that guarantees some influence power. In this context, it is fundamental to develop strategies to improve the intelligence and the knowledge of the products and its results, and the client and its consuming habits.

Innovate in client relationship formulas. The strategy will have to develop new client management formulas. Starting up innovative mechanisms to do CRM is vitally important not only to retain clients, but also to achieve a more effective marketing.

This blogpost is from http://www.visionesdelturismo.es/innovacion-de-los-destinos-turisticos/

Environmental sustainabilityStrategySustainabilityThird sector and social sustainability

Key strategies to address Barcelona’s tourism challenges

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Environmental sustainabilityStrategySustainabilityThird sector and social sustainability

Typical challenges in mature destinations (II)

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

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

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

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

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

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

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

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

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

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

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

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

What other challenges are usual in mature destinations?

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 & execution

How do Theme Park clusters develop?

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

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

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

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

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

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

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

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

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

StrategyStrategy planning & executionTourism marketing

Clustering benefits for marketing

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

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

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

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

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

Do you think of other clustering benefits for marketing?

StrategySustainability

Clustering benefits for sustainability

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

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

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

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

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

Do you think of other clustering benefits for sustainability?