I’ve learned over the years that working with destinations can be a tricky and sometimes frustrating endeavour.
Like many publicly funded organizations, Destination Marketing Organizations (DMOs) are often tasked with impossible objectives, saddled with lengthy and cumbersome vendor tendering processes, and a mandate to serve everyone equally all the time.
The biggest underlying issue, in my opinion, is the reliance on tax revenue generated from hotel stays and the subsequent focus of DMOs on putting “heads in beds”.
I can hear the proverbial gasps now.
Don’t get me wrong, I know how important this tax revenue is to most DMOs and although a steady source of revenue is a good thing from a funding perspective, it inevitably results in DMOs focusing too much on their (generally speaking) sole source of revenues.
I’ve been involved with enough local tourism initiatives to know that, in many cases, the advisory boards and boards of directors of DMOs are made up of hotel representatives that eagerly focus the long term strategy towards their own marketing goals.
Why shouldn’t they? After all, they are the ones who have to collect the tax, right?
The small businesses, predominately tour and activity operators are often left feeling ignored and subordinate to the tax revenue generating hotels.
What most DMOs fail to see is that unduly focusing on hotel marketing is squandering the immense opportunity to influence travellers earlier in the buying life cycle.
Think about it, when are travellers choosing at which hotel they are going to stay?
Do they do it before they have decided where to go? I couldn’t find any statistics to show when in the buying life cycle travellers book their hotel stay, but I think it is safe to say that it is after they have already decided where they want to go.
In other words, there is no direct correlation between hotel marketing and the choice of destination. Since destinations are trying to influence travellers to come to them rather than a competing destination, marketing one’s hotels seems to have little impact on influencing the decision making process.
In the recent report onÂ in-destination tours and activities, PhoCusWright found that certain tours and activities had a profound affect on the decision making process. Snow sports such as skiing, sporting events such as championship games (or the Olympics), and artistic performances such as band tours, are major drivers.
In these cases, the traveller is choosing a destination based on what they intend to do at the destination first. How the traveller gets to the destination and where they stay are ancillary to the activity.
Realistically though, these locales make up a small number of destinations.
So, what can destinations do to make their tours and activities drivers rather than add-ons to a trip? The first, and most important step is to expose as much of the long tail product as possible.
As I mentioned in my earlier article (Why the activity segment is an iceberg of Titanic dimensions)Â the majority of tour and activity product lives below the surface and off the radar of most travellers until they are in destination.
The study showed that print is still an important channel for in-destination activities. In fact, 36% of active travellers used brochures and 39% used printed guide books as their shopping method for activities.
The most important shopping method, however, remains the web, with 80% of active travellers opting to search for activities on-line. For those activity providers savvy enough to have a website, this is good news but clearly, there is a large number of businesses that currently have no influence on the decision making process.
The first and most important step a DMO can take is to engage with their small business members. Some DMOs are starting to make concerted efforts to educate their stakeholders and to bring more of the long tail tour and activity product to the surface (ie. the web).
The Australia Tourism Data Warehouse (ATDW), is one excellent example of an initiative to bring all members of the tourism industry to a higher level.Â The ATDW Tourism E-Kit is a multi-part workbook that is freely available to all tourism businesses and provides a step by step guide to getting a tourism business on-line.
The E-Kit was commissioned by the ATDW and developed by Fabienne Wintle and her team at UntangleMyWeb.com, a tourism consulting company in Queensland.
I mention this specifically to point out that there are, in almost every destination, those in the community that have the expertise to help put these tools together. The E-Kit stands out as one of the best examples of educating and engaging small business and should be emulated by all DMOs.
The long term benefit to the tourism industry is the increase in content (text, photos, and videos) generated by these operators and their customers that can then be used for the purposes of marketing destinations at all levels; nationally, regionally, and locally.
ATDW has also developed a program called Tourism Exchange Australia (TXA) which is a distribution platform. Software vendors can connect to the TXA for the purposes of exposing their customers (activity operators) to larger distribution opportunities in the Australian market.
A structure like TXA in other countries could serve as an aggregation tool for increasing distribution of long tail products. Unlike the TXA model, however, which uses a proprietary data structure and a private partner, I believe a public and open model would have wider adoption.
Of course, I am biased given my preference for Open Travel XML messaging.
Nevertheless, as more and more tour and activity products begin to surface, the more revenue opportunities will inevitably become available to the DMO.
Yet, these contacts and the potential they represent go largely untapped. Once operators make their products available, DMOs can use their budgets for the purposes of providing creative marketing opportunities that generate a return for their stakeholders and travellers alike. If the services are meaningful, relevant, timely, and measurable, businesses will pay for them.
In the end, DMOs need to recognize that marketing a destination is about influencing the traveller earlier in the travel buying life cycle.
This means giving travellers reasons to travel to their destination and that means working with experience companies. This also means that DMOs need to generate more of their revenues from the tour and activity segment.
Until there is equal representation from all segments of the tourism landscape both from a governance and revenue standpoint, destinations will miss the opportunity on an important local economic driver and they will continue to leave a sizable pile of money on the table.
NB2: Photo Credit -Â Redwood Photography