Tag: tourism strategy

Marketing 3.0Tourism marketing

Visitor Experiences are Still Job #1. Only More so!

This article is written by Bill Baker, Chief Strategist at Total Destination Marketing, author, speaker, and blogger at “Small City Branding around the world”.

Product, service and experience delivery are frequently missing from many destination branding strategies, however, in the future their inclusion will be essential to ensure that the place and its DMO remain relevant and competitive. They are also the foundation for establishing and expanding the local economy. This need hasn’t changed with the influence of digitalization, except that there are more channels available to connect with the customer and enhance their experiences.

Wherever visitors are in contact with the destination, the encounters must, to the greatest extent possible, be aligned with its brand promise. DMOs must orchestrate this through their collaboration with government, non-profit and business partners. There can be no gaps between expectations and the reality of the place. Delivering outstanding experiences is more important than ever. A bad experience will spread like wildfire and negatively impact your brand. Without DMO leadership, who will monitor the experiences and expectations?

So much commentary regarding social and digital media speaks of customer-focus and relevance, however they seem to be speaking primarily in terms of communication and not in regard to delivering the core experiences that the place stands for. These same principles should be applied to product development and experience delivery. Given the transparency and depth of information available to consumers, the investment in quality experiences to stimulate positive word of mouth and increased media exposure has never been more acute.  The days of boosterism, over-promising and under-delivering have long gone for places that want to establish sustainable brands.

This article has been re-posted with permission from http://citybranding.typepad.com/city-branding/page/2/

StrategyStrategy planning & execution

The World Bank builds country ownership in the National Tourism Strategy of Georgia

Tourism strategic planning is a comprehensive process for determining what a business or destination should become and the steps needed to achieve that goal. Many times when consultants are hired to create a strategic plan, the plan is at risk of remaining on the shelf and never being fully implemented. Why? Because those most affected by the tourism development plan may not have been fully integrated into the development of the strategy, and may not agree with the ideas. This is an ongoing issue the tourism industry faces, and a difficult one in which to find a solution.

The World Bank and the Georgia National Tourism Administration (GNTA) recognized this problem in the past. As part of the solution, they decided to develop a tourism strategy for the Caucasus nation. The consultants were asked not to lead the development of the strategy, but rather facilitate and guide the GNTA through the strategy development process to ensure it was collaborative and comprehensive as possible.

Between the years 2009 and 2013, Georgia’s international tourism arrivals grew over 300%. This was largely in part to its envious location at the crossroads of Europe, Asia and the Middle East, as well as increasing amounts of exposure in international press as a unique, exciting destination. Georgia is the birth place of wine, has an exquisite culinary tradition, a rich early Christian history, and an abundance of natural assets – including 7 national parks. These attributes – if developed practically – demonstrate a significant strength to the country’s tourism sector within the high-value European marketplace, while improving the industry’s ability to contribute economically.

To keep pace with the increasing demand for tourism in Georgia, additional financing for private and public investments will be necessary. “The joint World Bank and IFC collaboration [in Georgia] focuses on fostering entrepreneurship and access to finance, improving the investment climate, and developing Georgia’s tourism strategy that will determine how to improve the sector’s performance, align implementation priorities and enable job growth.” said Henry Kerali, World Bank Regional Director for the South Caucasus.

Georgia’s tourism development approach has generally been focused on regional advancements rather than a cohesive national-level plan. However, to maximize tourism’s national impact, a national strategy is required that takes into consideration large scale infrastructure and marketing activities that cannot be achieved by the regions alone.

 “The tourism sector currently provides nearly 20 percent of export earnings. The national tourism development strategy is, therefore, an instrument to take full advantage of Georgia’s potential and position it globally as a rich, diversified and high quality destination.” Ahmed Eiweida, Program Leader for Sustainable Development Programs in the South Caucasus.

Where is the Georgia National Tourism Administration now?

With the support of the World Bank, the GNTA produced a 2025 strategic plan that articulates the country’s current position, its vision for the future, and the key activities required in order to get there.
To build buy-in for the strategy, the GNTA led regional workshops, communicated with inter-government committees, issued press events and integrated action plans from other tourism-related sectors. The final document describes how the GNTA and its partners will deliver creative marketing to attract to higher income markets and statistical projections on how the GNTA will achieve a minimum of 5% growth rate over the next 10 years.

Where does Georgia National Tourism want to be in 2025?

The GNTA envisions the country as a premier, year-round, high quality tourism destination – a destination centered on its unique cultural and natural heritage, its world-class customer service, and timeless tradition of hospitality. The GNTA will be at the forefront of tourism competitiveness, through strategic investments in infrastructure, education, marketing, and the development of unique Georgian visitor experiences that appeal to high-value markets around the globe.

How does the GNTA lead the tourism industry to reach it’s vision?

Extensive stakeholder consultation resulted in the identification of 50 priority actions that have been grouped around the following 8 strategic objectives.

1.Respect, enhance, and protect Georgia’s natural and cultural heritage
2. Create unique and authentic visitor experiences centered on those natural and cultural assets
3. Enhance competitiveness, through delivery of world-class visitor services
4. Attract higher spending markets, through increased and more effective marketing and promotion
5. Expand and enhance Georgia’s ability to collect and analyze tourism data and measure industry performance
6. Enhance the business environment, to facilitate increased foreign and domestic investment
7. Expand public and private sector investment in the tourism sector
8. Build partnerships between government, industry, non-governmental organizations, and communities that will be needed to achieve all of the above

What will the challenges be?

Even though the GNTA has completed their strategic plan and found positive monetary incentive to start implementation; the national and regional tourism stakeholders must work as a team to have success. And most importantly, the 2025 strategic plan will only be effective if the GNTA continues to be committed and take ownership of this visionary strategic plan.

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

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

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 & 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?

StrategyStrategy planning & execution

Clustering benefits for profitability and growth

The concentration of many attractions and related services within an area, specialized in a certain type of activities is likely to attract other operators dealing with this type of activity, as this is where their potential clients go and so as to profit from the existing tourism flows and necessary services available in that area. This saves them many marketing costs, and also results in a much lower risk investment. Therefore, consolidated and competitive clusters are more likely to attract investors.

Further, as it happens in all industries’ clusters, business’ concentration reduces trading costs, thus enhancing profitability. As in all types of clusters, there are also common infrastructures and key resources, which shared among many operators, reduces its cost per operator, through creating economies of scale.

Moreover, concentration helps to boost cooperation, and by joining efforts, partners not only accelerate innovation and develop economies of scale by sharing strategic resources, but also cooperate in lobbying to gain negotiation power against common suppliers and clients, as well as to counter or neutralize other competitive forces that shape the long term industry’s profitability. The Whitepaper “The 5 Competitive forces and business strategy” depicts how these 5 forces shape the long term profitability in the tourism industry.

In many cases, companies in a specialized cluster have a better access to skilled employees and specialized suppliers, also located within the cluster influence area. Institutions or Universities can be used mutually and capital expenditures in regional marketing, infrastructure or education programs can be employed and shared together (Müller and Lanz 1998). Finally, cluster based tourism attractions’ concentration is also beneficial to profitability as long as it contributes to extending the average tourist length of stay.

Beyond profitability, consolidated clusters are also likely to foster more new business creation. First, a concentrated clients’ base lowers the risks for new suppliers to settle in, and as a result of the cluster based boosted innovation, also more spin-offs and start-ups are likely to be created. Further, financial institutions have a good knowledge about the industry, and so they are more likely to provide financial support to new ventures.

Do you think of other clustering benefits for profitability and growth?

StrategyStrategy planning & execution

Clustering benefits for competitiveness

The cluster structuring and development in a destination offers four main types of benefits: enhancing competitiveness, boosting profitability and growth, ensuring sustainability and increasing marketing effectiveness.

As the Competitiveness Planning 3.0 Whitepaper explains in detail, destination competitiveness is based on the relation between value offered to the visitors and efforts demanded, considering experiences, feelings, service quality, and positive impacts of tourism development in the destination as the sources of value; and discomforts, risks, price and negative impacts of the tourism development in the destination as the sources of efforts demanded, or factors diminishing value.

Among all these key factors that determine the destination’s competitiveness, the tourist experience is probably the most important. In this regard, having a higher concentration of experiences –related to the same motivational profile- available within a short distance (not needing to change accommodation in many cases, nor consuming much time in transfers) clearly optimizes the whole destination experience. Cluster development also entails an increasing variety of experiences available, beyond the experience efficiency due to the reduced distances within the cluster.

A good cluster planning should consider a strategy to prevent congestion issues by spreading the tourism flows right from the conception of the cluster layout. This may be achieved by creating many itineraries throughout the cluster to diversify the visitor’s flows –avoiding “backbone itineraries” which tend to concentrate the flows-, and preventing bottlenecks.

Furthermore, by creating themed itineraries and charming transportation systems which may eventually become iconic experiences themselves, not only are the tourist flows spread out but also the experience is enhanced. Charming transportation systems may be traditional transportation means –gondolas, tramways, etc.- made tourist friendly in terms of comfort, or just innovative transport means which are a new experience for the visitors.

Business concentration makes it also more feasible to invest in key resources, which eventually influence positively the cluster’s competitiveness. This may be the case of educational facilities, R&D centers, and cross-destination infrastructures related to accessibility, environmental management & protection, etc.

Do you think of other clustering benefits for the destination competitiveness?

StrategyStrategy planning & execution

Cluster based competitive advantages

In line with the origins of cluster development, the combination and cooperation of many resources and operators may result in many types of competitive advantages:

Resource uniqueness: many clusters feature a unique collection of natural or cultural resources. Cases of cultural resources could be the Egyptian Pyramid cluster along the Nile River, or the Maya Pyramid cluster in Yucatan Peninsula. Examples of unique clusters based on natural heritage could be Iceland with its unique combination of volcanos, glaciers and northern lights, or the Tanzanian cluster with Mount Kilimanjaro and the Masai mara safaris.

Experience innovation: some clusters have, beyond competitive natural or cultural resources, a special deed for innovating experiences. Such is the case of Queenstown in New Zealand’s Southern Island, the most innovative destination for adventure tourism activities, where bungee jumping was invented, among many other crazy experiences. Developing unique experiences without unique resources requires building a culture of innovation.

Operators’ cooperation: the good coordination and cooperation among the cluster operators may also be the source of competitive advantage. The case of the Trois Vallées ski area, the largest ski-lift connected ski area in Europe illustrates this type of advantage. This dominion has no unique resources like other areas in the Alps –namely Zermatt-, but the connection between the three valleys offers the best mobility efficiency for skiers who want to enjoy the whole ski dominion, allowing them to enjoy all the ski areas spending the least possible time.

Differentiated product experience: clusters featuring one main product may develop their competitive advantage by creating a unique signature experience, adding an extra value that other cluster rivals do not offer. This is the case, for instance, of the Austrian Tirol for ski holidays, offering a unique “après-ski experience” consisting with traditional Tirolean pubs with local atmosphere and also a world class network of Wellness & Spa facilities. The Ski Resorts’ accommodation facilities are all in old villages, which also give character to the experience.

Dimension: some clusters base their competitiveness in offering the largest amount of facilities or resources for a specific kind of tourism activity. Such is the case of the Golf Cluster in Costa del Sol as a Winter Golf destination in Europe. On the other side of the world, the Australian Great Barrier Reef is the largest coral reef on earth, a paradise for divers. Another example could be Macau, featuring the largest offer of Casinos in Asia.

Variety: many tourists are not only motivated for one type of activity but prefer to enjoy many different experiences during their holidays. Clusters offering a large number of different attractions appeal to an increasing number of tourists. Such is the case of the Costa Brava, offering not only attractive beaches, but also first class gastronomy, unique cultural heritage sites, a Golf cluster, a protected area for diving, Casinos, facilities for skydiving, Wellness, etc.

Price: for certain products, price is sometimes a decisive factor to gain competitiveness, especially in the case of the most standardized ones. As it happens with clusters in other industries, the competition of many operators may result in a price advantage for the tourist, though this is not usually the main reason. This could be the case of Tunisian coast cluster competing with European beach destinations, the Red Sea cluster for diving, etc.

Do you think of other cluster based competitive advantages?

Strategy

The origins of tourism clusters

As Porter says, “the function of a cluster is to create a forum for a growth oriented dialogue between key regional stakeholders”. However, as explained by The Cluster Competitiveness Group, “Clusters typically do not develop as a group of firms which join to pursue a common purpose or goal. Clusters exist, they have their own development and dynamic which can be influenced by private and public activities, but it is very difficult to purposefully construct them”. In the tourism industry, however, the dynamics are sometimes different than in other industries, due to its several particularities.

In this regard, the most typical origins of tourism cluster development are:

Local demand: a spatial concentration of competing businesses facilitates the customers purchasing decision making, allowing them to compare easily between several suppliers. In the case of tourism this happens very often for the shopping clusters. Local demand may also apply to different cases where the cluster is mainly developed by one operator, such as the Theme Parks in the outskirts of large metropolitan areas.

Related industries or related clusters: either for taking advantage of the customer flows or for leveraging specific resources, some industries develop in the same location where others are already developed due to the potential synergies between them, which eventually become a key competitive advantage. Such is the case of the Wellness cluster in the Tirol area (Austria), taking advantage of the ski tourists in the most competitive ski cluster in Europe. Other cases are the development of Golf clusters in Sun & beach destinations with little or no local demand for Golf, such as Spain and Portugal; or the development of Theme Parks in mature destinations.

Exploitation of new special interest demand: regardless of the geographical origin of the demand, the reasons for traveling have been increasing also due to new market segments related to interest in specific cultural or natural resources, for instance. The practice of sports related to natural resources such as mountains or underwater natural heritage has boosted the development of tourism in many places where there were neither related industries nor substantial local demand for these activities. The same applies to cultural tourism related to archeological sites and other types of cultural heritage.

When defining the limits of a cluster, we may consider two different criteria:

  • Cluster boundaries are defined by the linkages and complementarities across industries and institutions which are important in market competition.
  • Cluster boundaries are determined by the physical characteristics of the territory, regardless of its exploitation for tourism development.

The first corresponds to generic business cluster boundary definition, whereas the second is more closely related to tourism clusters. However, as explained in upcoming sections of this Whitepaper, some tourism clusters may correspond rather to the first boundary definition.

Do you think of other criteria to define the limits of a tourism cluster?