PART ONE OF A TWO-PART LOOK AT THE EVOLUTION OF DMOs
FROM MARKETING TO MANAGING
ANAHEIM, Calif. — The U.S. Travel Association’s annual IPW conference has always served as a platform for destination marketers to tout the fruits of their visitor-number successes.
And there was some of that last month, when IPW was held here in Southern California. Nobody would deny that Discover Puerto Rico deserved to take pride in recording record revenue just two years after being decimated by Hurricane Maria. And destinations like California made note of increased international tourist arrivals despite the United States’ loss of global market share.
But even Caroline Beteta, Visit California’s CEO, was measured in her boast.
"Our success cannot continue unabated if we don’t take into consideration that this industry needs to be sustainable."
“Our success cannot continue unabated if we don’t take into consideration that this industry is like any other commodity and needs to be sustainable,” Beteta said. “California’s travel and tourism industry continues to redefine ourselves, and today, that means expanding our mission to focus on stewardship. Destination marketing is becoming destination management.”
Such is the reality in 2019 for destination marketing organizations (DMOs) around the world that for years measured success in numbers of visitors and their spending, only to find that in some places they had become victims of their own success.
As worldwide tourism balloons — in 2018, more than 1.3 billion people traveled the globe — surging numbers of visitors to cities like Barcelona, Venice and Amsterdam wrought an unprecedented tourism backlash that brought thousands of protestors to the streets and sparked the birth of the phrase “tourism phobia” in Europe.
Overtourism and its consequential impact on the environment and on quality of life in cities, such as housing costs and overcrowding issues, have put pressure on tourism ministers and DMOs to rethink their roles. In fact, in some cases, they are almost completely changing what they do.
"Now we’d like to welcome a visitor who is of high quality, who not only spends in our destination but has respect for the residents, for the cities, for nature and who is enhancing the areas instead of becoming a burden to them."
The most public of these shifts happened this spring in the Netherlands, when the Netherlands Board of Tourism and Conventions (NBTC) said in May that it was no longer promoting visitation but would instead focus on managing the visitors it already was getting.
In an extensive report titled “Perspective 2030,” the NBTC said its goal is that “every Dutch person benefit from tourism by 2030,” noting that until now its mission had been to attract more visitors.
“We now know that more is not always better, definitely not everywhere,” the report stated.
Estimating that, at its current growth pace, the number of international visitors to the Netherlands, a country of 17 million residents, could surge from 18 million in 2017 to 42 million by 2030, the NBTC said that “pressure on the liveability of our cities and iconic locations will increase … while other parts of the Netherlands do not or insufficiently benefit from the opportunities and socioeconomic boost tourism can offer.”
The report continued: “If we want to manage the visitor flows and cash in on the opportunities that tourism offers, we have to act now. Instead of promoting the destination, it is time to start managing and developing it.”
Antonia Koedijk, the NBTC’s director for North America, said the new vision “really reflects consideration of focusing on areas we haven’t focused on in the past.”
One of the pillars of the plan is to distribute tourism around the country, which will be done not just by marketing those areas but by helping to develop product in those communities in concert with residents and suppliers and by improving transportation, all with sustainability top of mind.
In terms of marketing, the NBTC will target a more “high quality” visitor who is interested in culture, history and meeting locals.
“In the past, we wanted to see growth, and the more the numbers were increasing, the better we were doing,” Koedijk said. “Now we’d like to welcome a visitor who is of high quality, who not only spends in our destination but has respect for the residents, for the cities, for nature and who is enhancing the areas instead of becoming a burden to them.”
Quality vs. quantity
Shifting priority from quantity to quality is something other destinations are doing, as well.
At the World Travel & Tourism Council (WTTC) Global Summit in Seville, Spain, in March, Fred Dixon, CEO of NYC & Company, said, “We got caught up in the race for bigger numbers. We realized over time that the true metric for tourism is the economic and social impact on the community: job development, economic impact, neighborhood impact. If you don’t bring locals with you when you’re invigorating or building a destination, you’re missing an important part of the equation.”
"‘We realized over time that the true metric for tourism is the economic and social impact on the community."
This is a severe shift in strategy for organizations that have long justified their existence, especially when depending on the use of public funds, by showing visitor increases and the resulting contributions to the economy.
A report published in February by the University of Hawaii Economic Research Organization (Uhero), titled “Charting a New Course for Hawaii Tourism,” contends that such quantity-driven benchmarks “downplay the importance of real economic impact, visitor satisfaction and resident sentiment, which are measures better related to sustainability.”
The report continues: “Despite attempts to broaden the metrics of success, press releases, presentations and other communications have been focused on visitor arrivals and overall spending. Hawaii public and private tourism entities need to move away from the simplistic view that more economic benefit necessarily requires more visitors.”
In this new paradigm, however, a DMO’s success could be difficult to measure, and many DMO’s are not yet accepting the notion that fewer is better.
Koedijk said, “We’d like to maintain market share and focus on sustainable growth. It won’t be good to see numbers decreasing.”
What seems to be universally acknowledged among DMOs is that it has become crucial to involve stakeholders from the community, government and the industry in all decisions and planning.
The “Perspective 2030” report says that “on every level and in every area of the Netherlands, residents should be included as co-owners of local tourism policies, in addition to government bodies and businesses.
They must be integrated into related activities in order that shared interests are at the forefront of everyone’s mind.”
The report acknowledged that doing this might be difficult.
“Municipalities, provinces and other public-private partners must work together closely and disregard some of their own interests in favor of the public interest,” the report stated. “They must look beyond their own provincial or municipal borders.”
Koedijk said there already are examples of this happening: Amsterdam is highlighting other cities its tourists might want to visit, which “takes pressure off their own city” but also demonstrates a willingness to share the wealth.
Wave Hill, a public garden in the Bronx along the Hudson River, is a destination promoted by NYC & Company that is outside of midtown Manhattan.
Wave Hill, a public garden in the Bronx along the Hudson River, is a destination promoted by NYC & Company that is outside of midtown Manhattan.
New York is one destination that was ahead of the game in recognizing the importance of community buy-in for tourism success. Four years ago, NYC & Company launched Tourism Ready, a program that teaches small businesses throughout the city to work with the travel industry.
Originally conceived of as a way to train small retailers, restaurants and cultural groups throughout the city to work with the travel trade in order to “take advantage of the rising tourism tide,” Dixon said, spreading out visitation and relieving pressure on hot spots like midtown was almost a byproduct.
Dixon said the local community engagement has been the biggest benefit.
“We feel strongly that if you have a family member or someone whom you know or close to you who makes a living in tourism and hospitality, you’re more likely to look more positively at visitors and the visitor economy,” Dixon said.
The Uhero report takes the Hawaii Tourism Authority (HTA) to task for not achieving a balance of “industry, community, Hawaiian culture and other diverse representatives” on its board as it was tasked to do.
“The long-term solution for tourism sustainability will require buy-in and participation from a broad range of experts and stakeholders,” the report stated. “The reality has been that this diversity hasn’t always been represented on the HTA board, or the diversity was not adequately expressed.”
A shifting emphasis
Asking marketers to become managers is not necessarily an easy transition. Koedijk said that while there will be changes in the NBTC’s daily tasks, “it’s a gradual process.”
“It won’t happen overnight,” she said. “We will still be marketing but in a very different way. Our message will change.”
Training will be important, she said, and while the NBTC’s focus has shifted, it will still be marketing the Netherlands, though in a way that redistributes tourism.
“Canals can be found not only in Amsterdam but in Utrecht, Leiden and Delft,” Koedijk said, “and all of these three cities have a rich history, but not many people know about them.
Beyond that, she said, “the emphasis will absolutely be more on sustainability. As a team, we have to be very conscious of our activities and mindful of the new directive.”
Koedijk conceded that some employees might decide not to be part of this, but she said that, overall, people are excited.
“We know this is the right time, and we shouldn’t wait any longer,” she said.
Not all places where this is happening are locations under pressure from a crush of visitors.
Julie Saupe, CEO Of Alaska’s Visit Anchorage, said that the DMO’s shift to a destination-management model is a means of improving the Anchorage experience.
“Ideally, it makes a community more desirable to all: visitors and locals, companies in tourism but also those in any line of work,” she said.
At Visit Anchorage, this has involved a greater focus on addressing training opportunities to foster a well-trained workforce.
"If we succeed, travelers will encounter more well-informed locals as part of the visit, improving their experiences, and the community will get a broader, more resilient local workforce."
“If we succeed, travelers will encounter more well-informed locals as part of the visit, improving their experiences, and the community will get a broader, more resilient local workforce,” she said.
Visit California launched a statewide Tourism Sustainability Plan that will examine the future of the state’s tourism economy with a focus on ensuring that travel offers cultural, recreational and quality-of-life benefits to all Californians, protects the environment and natural resources and grows in a way that drives the state’s economy.
Newport Beach, Calif., took the bold step of creating what it calls a new DMO model: a marketing agency for the entire city. Newport Beach & Company was formerly Visit Newport Beach. Now, it’s an umbrella organization that includes Dine Newport Beach, Film Newport Beach and Newport Beach TV, among other divisions.
Gary Sherwin, CEO of Newport Beach & Company, said the DMO is now a “brand manager and community marketing agency for everything in Newport Beach.”
“Tourism is a big part of what we do,” he said, but the DMO even does branding for city entities such as the police department, which it is helping to rebrand its community image. This umbrella approach enables one group to market how the police interact with both visitors and citizens. “They are community diplomats,” Sherwin said.
Sherwin said the DMO copied its model from what Disney does in neighboring Anaheim.
“They have hotels and two theme parks and Downtown Disney, and they all function under an integrated Disney brand,” he said. “So when one aspect succeeds, the other aspects succeed. Cities don’t think about that. They are just a bunch of parts.”
Given that the next generation of DMOs will be led by people for whom sustainable travel, tourism phobia and overtourism are not new phrases, it could be that the M in DMO eventually becomes “management.”
At HTA’s Global Tourism Summit last year, students were tasked with dealing with overtourism on Oahu as part of its Innovation Days contest. Among the winners were students from the University of Hawaii who devised an app that uses real-time GPS to determine if, for example, too many people are waiting to hike Waikiki’s popular Diamond Head. If so, the app pushes them to a less busy area, perhaps Oahu’s Koko Crater Trail, where local businesses are partners and offer discounts and other incentives to lure tourists.
Jerry Agrusa, associate professor at the University of Hawaii’s School of Travel Industry Management, was a student mentor at the event.
“The tourists have a better experience because they’re not waiting 45 minutes just to start the hike,” he said. “And it helps distribute the tourists to areas that at that time need them.”
Agrusa said he always tells his students to “think like a manager.”
Sustainability, he said, is part of all projects, not just of ocean reefs and nature trails but of the quality of the tourist and the “long-term liability — economic, environmental and the social well-being of our residents.”
Above, Diamond Head looms over Waikiki Beach on Oahu. As part of the Hawaii Tourism Authority’s Global Tourism Summit last year, University of Hawaii students created an app that points users to the Koko Crater Trail, right, when waits for hiking Diamond Head are too long. Photo by Marisa Yamane, Hawaii Tourism Authority
Above, Diamond Head looms over Waikiki Beach on Oahu. As part of the Hawaii Tourism Authority’s Global Tourism Summit last year, University of Hawaii students created an app that points users to the Koko Crater Trail, right, when waits for hiking Diamond Head are too long. Photo by Marisa Yamane, Hawaii Tourism Authority
