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TOURISM & TRAVEL SECTOR
UNDERSTANDING
DESTINATION DEVELOPMENT
COLBOURNE COLLEGE
PRESENTED BY SADEKE SMITH
Introduction
• Today’s international tourism market place can
be best described as a changing business
environment:
• Destinations are faced with increased
competition from
– ‘old’, established destinations that have been
re-branded with vastly improved product
features, as well as from
– new entrants to the market..
Introduction
• Furthermore, today’s ‘consumers’ (leisure and
business travellers) have wider access to
information about destinations and can be
more eclectic in their choices.
Introduction
• Tourism destinations must be able to develop
and use their competitive advantages and be
prepared to deal with sudden changes and
threats (e.g. September 11th 2001, Asian
tsunami etc.),
• as well as cease technological and other
opportunities to their strategic advantage
Introduction
• Threats in the external environment and
changes in the industry’s markets and
structures have challenged destination
marketing organizations to change in
fundamental ways.
Introduction
• The strategic responses to these
developments are essentially decisions to
proactively shape, adapt to, or passively
struggle through a crisis.
Introduction
• Envisioning the future of tourism and
examining possible ways of reaching various
future scenarios are essential exercises in this
process of deciding which strategic approach
to adopt to market destination effectively
What is a Destination?
A destination is the specific location to which a
traveller decides to go.
•Destinations can be defined variously and can include:
>Towns, Villages and Cities
>Historical Sites, Heritage Sites
>Self-Contained Resorts, Holiday Villages
>Amusement and Theme Parks
>Regions or Groups of Countries (e.g The Caribbean)
A TOURIST DESTINATION
• A premier Tourist Destination that provides
a high quality tourist experience is defined
by:
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Distinctive Core Attractions
Quality and Critical Mass
Satisfaction and Value
Accessibility
An Accommodations Base.
A destination must contain the
“critical mass” of elements to
meet consumer requirements
The Five ‘A’s of a Tourist Destination
Attraction – A unique product offering that will entice
the visitor to come.
Access – to both to the destination and the attraction,
whether by land, air, water or rail.
Amenities – such as water, food, electricity,
telecommunications, security and acess to healthcare
must be in place.
Accommodation- A place to stay during the visit that
offers convenience and comfort to suit her budget and
taste.
Activities- Shopping, Dining, Snorkeling, and
Gambling are but few of the activities that can be
made available to the visitor during his stay.
Components of Destination
Development
Destination audit
Partnership building
Vision
SWOT analysis
Resource analysis
Marketing Planning
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Critical Lessons
(C.R.O.P.S)
Consultation – The lead agency must consult with the stakeholders
to uncover the major issues affecting the industry, as well as to
discuss solutions and ideas for developing the destination
Research - No Plan makes sense without proper research. Research
must include but is not limited to Market Research – (Defining target
markets, scoping demand and devising the best strategy for meeting
the demand). Other kinds of research include Financial Risk
Assessment and Environmental Impact Assessment among others.
Organization - Information must be organized in a logical way that
addresses the overall vision for the destination. This is critical as
stakeholders have to be sold on the idea before they can accept it.
Presentation – The findings must be presented to the stakeholders,
it is simply the best way of reaching a consensus. The presentation
must emphasize the value being created for the stakeholders, both in
terms of financial benefits, assurances that social and cultural values
will be adhered to, and reassurance that the idea is sustainable and
does not pose a hazardous threat to the environment
Soliciting Feedback – Feedback is a key component in the
developmental process, it ensures that all angles are covered and
alternative ideas and solutions are discovered. It also ensures that the
influential majority commit their support to the venture.
Keys to Successful Destination
Development !!
Engaging local people in partnerships
Planning based on business principles that share the
burden
Identifying common long-term objectives with positive
impact in remote tourism locations
Focusing marketing opportunities
Destination Development
emphasizes sustainable
development based on
business principles
The Two Phases of Destination Development
Phase 1.
Consumer
Research
Analyse Destinations
Identify Hierarchy
Local Plans
Community
Local Plans
NT Tourism
Strategic Plan
Regional
Associations
Chamber of
Commerce
Govt Depts
Select Priorities
Other Strategies
NT Tourism
Strategic Plan
Destination Development
uses a Partnership approach
to guide incremental steps
toward a goal
Consumer Research
Local Industry
Phase 2
Analyse Resources
NT Tourism Strategic
Plan
Form Project Team
Govt Depts
Write Business Plan
Vision/Mission
Industry
Objectives
Resources
SWOT
Marketing
Capacity Audit
Govt Depts
Local Government
Community
Contractors
Project Proceeds
Identifying Key Stakeholders
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Local authorities
Accommodation providers
of many sorts and sizes
Attractions, events and
cultural organisations
National Park authorities
and AONBs
Restaurant, leisure and
retail operators
Transport providers
Intermediaries (for
example tour operators
and conference organisers)
Local tourism consortia
and partnerships
Business support and skills
agencies.
Craft vendors
Respecting the Stakeholder
Underlying Principles:
Cultural and environmental respect
Economic development
Social return
Community Values:
Lifestyle
Demography
Identity
Destination Systems
Destination Marketing Systems (DMS), or
parts of them, may be referred to elsewhere
as Destination Databases or Destination
Management Systems.
 On the demand side they cater for multiple
forms of access by potential visitors - directly
or through travel agents and tour operators, to
call-centres, visitor information centres and
the like and increasingly by distribution
through airline GDS, home shopping networks
(both on TV and computer) and the Internet.
 Potential visitors can be logged into a client
database and tracked through their purchase
life-cycle.
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Destination Systems
 There is clear value to the private sector in access to
targeted information about potential and actual visitors
to a destination.
 Some tourist boards face legislation which restricts their
ability to market this information to the private sector.
 Outsourcing of the destination marketing system may
be one method of circumventing this. Destinations have
been slow to follow the successful trends of affinity
marketing and the creation of frequent flyer/ visitor
programs in the private sector of the travel industry.
This is a clear opportunity for the private and public
sector to work together. By storing information about
enquiries and any bookings the tourist board is able to
measure its marketing effectiveness clearly-an option
not easily open to it without DMS.
Destination Systems
 On the supply side DMS provide a
comprehensive database of products and
services that the destination has to offer.
Destinations developing products and services
databases today need to be aware of the
many changes in distribution technology, and
the rapid introduction of multimedia, and
include the ability to store text, still and
moving images and sound in their database• . (Source: www.infocentre.com)
Destination Systems (contd)
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How can information systems be used to attract, service and
retain the growing numbers of higher spending, independent
travellers?
How can tourist boards leverage private sector initiatives
(GDS, hotel Computer Reservation Systems (CRS)) to create a
seamless marketing system that will give a sustainable
competitive advantage in attracting incremental bookings and
deliver more profit to tourism businesses?
Where should public sector activities end and the private
sector take over? Can entities be created where they can work
together?
How can marketing be improved the ability to identify the
need for, and help bring new products to market quickly and
efficiently, especially in destinations where there is diverse
accommodations base within the constraints of ever more
limited central marketing budgets?
Are there not other major barriers be considered before
investment information systems which would counteract their
effectiveness, example, organizational, cultural a political?
Features of Successful
Systems
Features of Failed
Systems
Comprehensive Database
Incomplete Database
High quality, accurate,
reliable information
Out of date, inaccurate data
Targeted at independent
travellers
Seen to compete with the
travel trade
Effective call centre
operation
Difficult to book
Run by marketing driven
organizations
Run by bureaucratic
organizations
Copyright 1999 Infocentre Travelling Systems
Ltd. All Rights Reserved
Framework for
Strategic
Destination
Management
"Any road will take you
there if you don't know
where you're going",
Determining the Vision
• What do you hope to achieve
– For the country
– Key stakeholders
– Communities affected by tourism
Key Stakeholders
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Local authorities
Accommodation providers of many sorts and sizes
Attractions, events and cultural organisations
National Park authorities and AONBs
Restaurant, leisure and retail operators
Transport providers
Intermediaries (for example tour operators and conference
organisers)
Local tourism consortia and partnerships
Business support and skills agencies.
Craft vendors
Identify key principles
• Core values guiding the process
• Design, Innovation, marketing approaches
needed to build on core values
• Linkages with other strategic industries
Elements of the Process
• Engage in a comprehensive destination
assessment
• Encourage community participation in process
• creating easy to follow action steps to win
local support
• Enable the generation of increased revenue
and opportunities for partners.
A proposed Framework
Customer perception
of destination
Brand image
Country image
Satisfaction
Brand value
- quality
- price
Brand identity
Positioning strategy
Marketing programs
Marketing strategic plan
Developing the identityDeveloping positioning statements
Creating brand meaning
Creating brand awareness
Model of Consumer Perception of Destinations
Quality
Destination Value
Destination
Satisfaction
Price
Intention
to
Return
Country
Image
Destination Image
Buhalis
• Buhalis (2000) highlights that whereas
destinations were historically defined
geographically such as an island or city, it is
argued that destinations can be a ‘perceptual
concept’ that can be different for different
tourists.
Buhalis
• Buhalis (2000) only considers the destination in its
geographical definition as this is simpler and allows for
the determination of accountability.
• This shows the difficulty of marketing destinations in
their most basic format because if the destination
cannot be defined or the definition changes from
organisation to organisation then the marketing
implications and subsequent difficulties both
geographically and politically are essentially endless.
• Buhalis does however raise a particular problem of
traditional branding and marketing strategy which
concentrates on increased visitor numbers and repeat
purchases stating,
Buhalis
• “This approach fails to recognise the unique
needs and limitations of each destination as
well as their particular geographical,
environmental and socio-cultural
characteristics.” Buhalis (2000 pg 98)
Understanding Service
Marketing
(Adapted from Philip Kotler Chapter 11, Marketing Management Millennium Edition, Prentice Hall 2001)
• A Service is any act or performance that one
party can offer to another that is essentially
intangible and does not result in ownership of
anything. Its production may or may not be
tied to a physical product.
• In addition to the four P’s of Marketing,
service marketing strategy covers three
additional P’s: People, Physical Evidence and
Process
• Five others-partnership, packaging,
positioning, programming, people
• Because services are generally high in
experience and credence qualities, there is
more risk in their purchase.
Characteristics of Services
• Intangibility – Unlike physical products, services
cannot be felt, heard ,smelled or tasted, rather it is an
experience. The person booking a room for the first time
does not know the service he/she will actually receive
until it is received. People will infer quality from the
people, place, equipment, communication material,
symbols and price that they see
• Inseparability – Services are typically produced and
consumed simultaneously. If a person renders the
service then the provider is part of the service. Because
the customer is present when the service is produced
,the client-provider interaction is a special feature of
service marketing
• Variability – Because services depend on
who provides them, and when and where they
are provided, services are highly variable
• Perishability – Services cannot be stored,
once a flight takes off, any unsold seats
cannot be held for future sales. However,
firms do not have to readily deal with this
issue if demand for the service is steady.
• Service marketing is founded upon the
fundamental Principles of Marketing and have
been developed in accordance with the
philosophy of customer orientation
• Marketing Theory and Practice developed initially
in connection with physical products such as
toothpaste and cars.
• More and More market offerings now contain a
service component targeted at customer’s needs
in a segment to create a distinctive differentiation
for competitive reasons.
• Successful Services Marketing calls not only for
external marketing , but also internal marketing to
motivate employees and interactive marketing to
emphasize both high-tech and high-touch
elements.
• The Service Organization must focus on these
primary marketing tasks:
• It must differentiate its offer, delivery and image
• It must manage service quality to meet or exceed
customer expectations
• It must manage worker productivity by getting its
employees to work more skillfully
• Use technology to save time and money
Three Kinds of Service
Marketing (Kotler 2002, Prentice Hall)
Service Marketing Strategy
The alternative to price competition in services marketing is to
develop a differentiated offer, delivery, or image.
Offer. The service offering can include innovative features.
The customer expects the primary service package; to this
secondary service features can be added. Marriott, for
example, offers hotel rooms (primary service package) with
connections for computers, fax machines, and e-mail
(secondary service features). Although most service
innovations are easily copied, the company that regularly
introduces new features will gain a succession of temporary
competitive advantages and earn a reputation for
innovation.
Delivery. A service company can hire and train
better people to deliver its service Delivery
thus enhances the firm’s differentiation.
Image. Service companies can also differentiate
their image through symbols and branding.
5 Categories of Service Mix
1. Pure tangible good: The offering is a tangible good such as
soap; no services accompany the product.
2. Tangible good with accompanying services: The offering
consists of a tangible good, maintenance, warranty
fulfillment, and other services along with its cars and trucks.
3. Hybrid: The offering consists of equal parts of goods and
services. For example, people patronize restaurants for both
food and service.
4. Major service with accompanying minor goods and
services: The offering consists of a major service along with
additional services or supporting goods. For example, airline
passengers are buying transportation service, but they get
food and drinks, as well.
5. Pure service: The offering consists primarily of a service;
examples include baby-sitting and psychotherapy.
Keys to Successful Service
Marketing
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Using the Strategic Concept
Top-Management Commitment
Setting High Standards
Monitoring Systems
Satisfying Customer Complaints
Satisfying Both Employees and
Customers
• Managing Productivity
Summary
• Services are intangible, inseparable, variable, and
perishable.
• Each characteristic poses challenges and requires
certain strategies.
• Marketers must find ways to give tangibility to
intangibles, to increase the productivity of service
providers, to increase and standardize the quality of the
service provided, and to match the supply of services
during peak and non peak periods with market demand.
• Service marketing strategy covers three additional Ps:
people, physical evidence, and process.
Types of Tourist
• 4 main types of tourists according to individual
choices of experience (Erik Cohen)
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the organized mass tourist
the individual mass tourist
the explorer
the drifter
Tourist Typologies
• The Explorer
Typically, the explorer’s purpose for visiting a
destination is for a specific attraction. For
example a tourist who visits Switzerland
specifically to climb Swiss Alps, a tourist who
goes to Peru to visit Machu Pichu or to China to
visit the Great Wall.
• The Drifter
Known as the skip from destination to
destination, this visitor usually makes
short stop overs.
• Mass Tourist
This is the category under which most
visitors to the Caribbean fall. These visitors
usually come for Sun, Sand, Sex, Sea and
the usual frills that come along with a
destination such as the Caribbean. They
usually occupy the all-inclusive hotels and
have access to various forms of
entertainment , in-house attractions and
duty-free shopping.
The organized mass tourists
• The organized mass tourists are the least
adventurous and spend most of their time in
their comfortable "environmental bubble"
throughout their trip.
• "Environmental bubble" means the tourist is
surrounded by his/her similar living
environment while he/she is abroad.
The organized mass tourist
• A guided tour in an air-conditioned bus
traveling through the countryside is a typical
example of the organised mass tourist.
• The itinerary is decided in advance, and all the
attractions and stopping points are well fixed
and guided. Tourists have almost no decisions
on their trip.
The Individual Mass Tourist
• This type of tourists is similar to the
organised mass tourist, except that the
tour is not entirely fixed.
• The tourist has a certain amount of
control over his/her time and itinerary,
and is not bound to a group.
The Individual Mass Tourist
• All the major arrangements are still made
through a tour agency.
• The tour does not bring them much further
afield than the organized mass tourists do.
• They are still confined by their "environmental
bubble".
How Target Markets Choose
• Consumers respond to a market offering
based on several factors. For customers to
part with their cash, Marketers have to be
aware of the influences which determine if
consumers choose their brand over another.
• In addition to the Four Ps: (Product, Place,
Price, Promotion), things such as the
consumer’s economic, technological, political
and cultural environment have to be taken into
consideration.
How Consumers Choose
• There are Several Factors which influence consumer
behaviour and ultimately their purchase decision.
These Factors can be :
• Cultural
• Social
• Personal
• Psychological
“The Black Box”
Consider that all these
environmental stimuli enter the
consumer’s mind or “Black Box”,
where they are interpreted and
transmitted as observable
purchasing habits, product and
brand choices, purchase time and
purchase amount.
What does the destination marketer
do?
• A successful marketer will obtain this information
through market research and from that determine what
service to offer and how to position the offering to the
target market.
• For example, research shows that the European Tourist
typically enjoys exploring the destination, mixing with
the locals and experiencing authentic local culture.
• A marketer for an all-inclusive property would have to
devise strategy to attract this customer by offering, say,
the option of a guided tour around the island, access to
various local events or perhaps access to rent-a car
facilities.
Factors Influencing Consumer Behaviour
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Cultural
>Culture
>Sub-Culture
>Social-Classes
Social
>Reference Group
>Family
> Role and Status
Personal
> Age and Life Cycle Stage
>Occupation
>Economic Situation
>Lifestyle
>Personality and Self Concept
Psychological
> Motivation ( Maslow & Herzberg)
> Perception
> Learning
> Beliefs and Attitudes
Buyer Decision Process
Purchase
Decision
Evaluation of
Alternatives
Information
Search
Problem
Recognition
PostPurchase
Behaviour
Reference
• Buhalis, Demetrius. (2000) Conceptual
Model of Tourism.
• Kotler, Phillip:(2002) Marketing
Management Millennium Edition,
Prentice Hall
• (http://www.infocentre.com).