Professional Documents
Culture Documents
and
Geoffrey I. CROUCH
School of Business
La Trobe University
Melbourne
Australia
CABI Publishing
CABI Publishing is a division of CAB International
©CAB International 2003. All rights reserved. No part of this publication may
be reproduced in any form or by any means, electronically, mechanically, by
photocopying, recording or otherwise, without the prior permission of the
copyright owners.
A catalogue record for this book is available from the British Library, London, UK.
Ritchie, J. R. Brent
The competitive destination : a sustainable tourism perspective / by
J.R. Brent Ritchie and G.I. Crouch
p. cm.
Includes bibliographical references (p. ).
ISBN 0-85199-664-7
1. Ecotourism. I. Crouch, G. I. (Geoffrey I.) II. Title.
G156.5.E26R57 2003
338.4′791--dc21
2003000800
Preface x
Acknowledgements xv
Foreword xvii
v
vi Contents
Index 267
Preface
Like many published works, this book is the product of a true labour of love. It is an attempt by
the authors to capture and convey the essence of what they believe is important to successful
tourism.
As the title of the book indicates, the focus of our efforts is the tourism destination itself.
While many other paradigms have been the basis of books on tourism, we believe that, from a
management perspective, the destination is the fundamental unit on which all the many complex
dimensions of tourism are based. Others have, quite appropriately, focused on various aspects of
tourism, such as the tourism experience and human behaviour in tourism (Pizam and Mansfeld,
1996). Increasingly, many are examining tourism from an environmental or a sustainable tourism
perspective (Swarbrooke, 1999). A great number have chosen to take a more ‘micro’ perspective
by focusing on the operation of the successful hospitality firm (Lefever, 1996). A great many have
also focused on marketing in tourism (Morrison, 1989). While all of these different views of tourism
are very valuable, we believe that a focus on the destination provides the integrated perspective that
a destination must have if we are to comprehend, pull together and manage all the many elements
that determine the success of a tourism destination.
We have prepared this integrated approach to destination management on the basis of three
main types of input. First, we have benefited enormously from the published works of our many
colleagues, who have examined the many facets of tourism in great depth. We trust that we have
adequately recognized these contributions, although this is never entirely possible. Second, the
book is based on our own research, which has spanned nearly a decade now. This research first
sought inputs from managers in various national tourism organizations around the world. More
importantly, it has benefited from the insights provided by senior managers from Convention and
Visitor Bureaux throughout North America and elsewhere, most of whom are members of the
International Association of Convention and Visitor Bureaus. We are especially grateful for their
contributions. Further, we have also been the beneficiaries of assistance and critiques from the
many graduate students with whom we have worked over the years.
Other than focusing on destination management, what kind of book is this, and for whom has
it been written? The book is primarily intended to provide destination managers with an overall
understanding of the complex nature of the task they face in their efforts to enhance destination
performance, and thus achieve destination success. Due to limitations of space, it cannot and does
not seek to provide detailed operational guidance on each of the many dimensions affecting
destination performance. Hopefully, however, it does provide a basic understanding of all the
many facets of destination management and how they need to be integrated if a destination is to
compete successfully on a sustainable basis. In seeking to do so, it strongly stresses the critical and
vital role of the destination management organization in providing leadership and coordination for
x
Preface xi
the many destination stakeholders that must contribute and work together if a destination is to
succeed.
Despite this primary focus on the destination manager, the book also seeks to serve a second
important audience. We define this audience as senior undergraduates and beginning graduate
students, whose goal is to understand tourism destination management in both practical and
academic terms. While the book (in order not to drive away practising managers) is not heavily
biased towards the needs of academics, we have tried to provide a basic understanding of the
theoretical foundations of tourism that we feel are essential to our target student population,
and that might also be of interest to practising managers who wish to have some insight into the
intellectual underpinnings of their daily work.
We are aware that, in attempting to provide this balance between theory and practice, we risk
alienating either or both of our intended audiences to some degree. At the same time, we hope they
will appreciate the value of the approach we have taken and that, as a consequence, the book may
serve peripherally to encourage and strengthen the development of greater understanding between
academics and practitioners.
In addition to addressing the academic–practitioner interface, we have also sought to provide a
balance across another increasingly important interface in tourism, namely that between those who
espouse competitiveness and those who stress sustainability in destination management. We truly
believe that both are essential to destination success. We realize that, in setting out to provide this
balance, we again risk pleasing neither group. Nevertheless, we are comfortable in walking this fine
line because we believe that economic competitiveness is an essential part of true sustainability.
At the same time, we also believe that destinations cannot spend their natural capital in order to
be economically profitable. To make this point, we place great emphasis on the need to revise the
traditional accounting measures of destination performance and success.
In specific terms, how have we attempted to achieve all of the above? To begin, Chapter 1
provides a very brief introduction that simply stresses that the very nature of competition and
sustainability has been, and still is, constantly evolving. We stress that destination managers must
understand this reality and must take it into account in their efforts to produce the successful
destination.
Chapter 2 was written to help all readers (both students and practitioners) to understand
the theoretical foundations of the evolving environment in which they work. Towards this end,
Part I reviews the general literature on competition with a specific view to relating it to the tourism
destination. Part II reviews the literature on sustainability, drawing heavily on the growing body of
literature from the past decade on sustainable tourism.
Chapter 3 is the key chapter in the book. It presents and describes our basic model of
destination management. Readers who have followed our work over the past decade will be aware
that the model itself reflects the evolving nature of destination management. As we have learned,
we have slowly revised and adapted the framework to accommodate the many suggestions of
managers, students, and the literature. Although this evolution will be ongoing, we felt it was time to
pause briefly and to do our best to present what we have learned in book format.
Chapter 4 examines the part of our framework that formally recognizes that many aspects of
destination management are beyond the control, and even the influence, of the destination. More
particularly, it examines those global forces that generally shape the kind of world we live in, and
that specifically have an enormous impact on the nature of tourism and tourism management.
In doing so, it constantly stresses that destination managers must use all the judgement they can
muster in meeting the challenges these forces present and in seeking to take advantage of the many
opportunities they also provide.
After having gained an understanding of the global forces affecting the tourism destination,
the reader is brought back in Chapter 5 to the level that will be more familiar on a daily basis: the
destination itself, and the various operating components and firms that many people think of as
‘the tourism industry’. More specifically, this chapter examines what, in more academic terms, we
refer to as the ‘tourism system’ with a view to providing a basic understanding of the way that
xii Preface
destination competitiveness is affected by the way the tourism system functions. In doing so, the
chapter recognizes that although it is possible to define or delineate a destination, it does not exist
as an entity in the same way that a company is an entity. For this reason, we believe it is important
that students and individual industry operators, who traditionally look through the eyes of the firm,
should review this chapter with a view to becoming comfortable with the concept of the destination
and how firms are perhaps its most essential component in providing visitor experiences – and
how it is critical that all firms work together to create a destination that provides truly memorable
destination experiences.
Chapter 6 is another pivotal chapter. It examines in detail the core resources and attractors
component of our model. In doing so, it provides insights into the fundamental reasons why people
visit a destination – that is to say, the factors that are the essence of destination appeal. And since
many of these resources and attractions are under the control of the destination, they represent
areas where stakeholders and managers can act effectively to enhance the attractiveness of a
destination.
Chapter 7 deals with other areas where destination managers can have a substantial degree
of control and influence. Although they are not the primary reasons for destination visitation,
supporting factors and resources are essential in ensuring that the value of core resources
and attractions is not lost, as well as in enhancing their effectiveness in building a competitive
destination. These supporting factors and resources are often perceived as less glamorous –
because they may be! – but effective management of them can often mean the difference between
a mediocre destination and one that is truly successful.
With Chapter 8 we move into what may be viewed as another supporting area, but which we
view as a major activity that determines whether much of the effort in destination management is
ill-directed, ineffective or largely wasted. The topic of tourism policy, planning and development
is regarded by many as the glamorous side of destination management – that is, high-level
pontification carried out by those who do not want to get their hands dirty. This said, even the most
ardent of front-line staff should appreciate that effective tourism policy can make their lives much
easier and greatly enhance their well-being. This chapter provides considerable detail on how
destination policy-makers, through effective policy, can provide guidance for tourism planning
and development that will create an environment for tourism that enhances the well-being of the
community and its residents, and that will contribute to its long-term sustainability. In addition,
well-formulated policy can facilitate the growth and profitability of the kind of sustainable tourism
that a destination and its stakeholders desire. It is hoped that this chapter will clearly demonstrate
how good policy enables a destination to achieve the success it desires, and to do so most
effectively.
Chapter 9 returns to what most tourism operators and managers view as the daily realities
of the tourism industry. Since there are often overlaps between what constitutes policy and
management, this chapter attempts to clarify this distinction throughout, and to identify and
explain the nature of the many management tasks that must be carried out effectively on a daily
basis if a destination is to attract visitors, and then deliver the kind of memorable experiences
it promises and that visitors are expecting.
In Chapter 10 we address an area that might have been dealt with much earlier in the book, but
we felt it would be more useful if the contents of the chapters discussed above were already in the
mind of the reader. What we have called ‘qualifying and amplifying determinants’ might also have
been called ‘conditioners’. In any case, they deal with factors that either moderate, modify, mitigate
and filter, or magnify, strengthen and augment the impact of all other determinants. The concern
here is that the competitiveness and/or sustainability of a destination may be significantly affected
by specific factors that limit or enhance its success in ways that are beyond the control of manage-
ment. In contrast to the global forces that affect all tourism destinations, the qualifying and amplify-
ing determinants pertain specifically to the destination in question. These conditioners may affect
competition and sustainability by subtle and incremental amounts; but, this said, their efforts can
also be fundamental, dramatic and dominant, to the point where they can overpower the strength
Preface xiii
of other categories of determinants of success and turn an otherwise strong or weak destination into
a respectively minor or major player.
Our concluding chapter (Chapter 11) is intended to assist managers in translating the concepts
and theory of our framework into practice. We also hope that it will provide students with a better
understanding of some of the challenges that managers face in their efforts to make a destination
work successfully. We entitle this chapter ‘The Destination Audit: Putting the Model to Work’.
There are three main uses we envisage for the model. The first is as a communication tool. In brief,
the model establishes a lexicon for understanding, studying, diagnosing, discussing and sharing
ideas and thoughts about a destination’s competitiveness and sustainability. The second, and
perhaps most fundamental, use of the model is as a framework for management. In our executive
development work, participants have told us that they find that the model provides a useful vehicle
for comprehending the magnitude and complexity of the challenges they face on a daily basis as
they seek to fulfil their responsibilities. More explicitly, they note that it is much too easy to overlook
potentially important factors when faced with the multitude of activities that threaten to overcome
them and divert their thinking from what is truly important in determining success.
The final use of our model that is addressed specifically by Chapter 11 is for a destination
audit. While the term ‘audit’ is used here in a broader sense than that used traditionally, it still
focuses on an official examination of the destination to make sure that everything is in order.
Where everything is not in order, the audit seeks to provide recommendations as to what action
is necessary, and potentially most effective, in order to move systematically towards greater
competitiveness and sustainability.
In concluding, we would like to leave readers with an idea of where we hope to go from here.
As we have stressed, the development of the model/framework has been a long-term process – and
one that we hope to continue. While our work to date has emphasized the need to gain a qualitative
understanding of the factors that contribute to destination success through enhanced competitive-
ness and ongoing sustainability, it is now entering a phase in which we are seeking to improve the
quantitative measurement of the relative importance of each of the various factors that determine
the success of a destination. To this end, we are conducting three research projects. The first of
these, using a decision-support system, seeks to measure the importance of the model’s elements
as perceived by destination managers. The second avenue of research is aimed at developing
an index of destination competitiveness/success. This index, which is modelled on the index of
industrial competitiveness for countries developed by the World Economic Forum (WEF/IMD,
2002), will provide tourism destination managers with a better quantitative insight into the reasons
for their success over time. And just as a consumer price index shows which products and services
are contributing the most to the overall cost of living, our destination index will identify and measure
the relative significance of those performance factors that contribute to a destination’s competitive-
ness and success. While ‘competitiveness’ and ‘success’ are clearly distinct concepts, they are
nevertheless significantly related.
The final major stage of our destination research programme will seek to model the manner
in which destinations change the way they behave and perform when major strategic factors or
management practices are changed. The major strategic factors may be either forces from the
global (macro)environment that are beyond the control of management (such as the ageing of
the population) or those that are implemented strategically by management (such as the creation
or hosting of a new mega-event). Substantial changes in management practices might involve
overhauling a human resource development approach or finding a new, more effective way to
manage visitors. Ultimately, we hope to be able to develop the capability for a model that will assist
any given destination and its management to better understand and interpret the likely changes
in the behaviour and performance of a destination that will result from any strategic change around
or within the destination. While we recognize that this is an ambitious long-term goal that will
provide only management guidance rather than definitive answers to specific decisions, we are
hopeful that in seeking to achieve it we will help improve destination competitiveness and
sustainability.
xiv Preface
Finally, we would emphasize that, just as our model has been developed with input from
different national tourism offices (which are members of the World Tourism Organization) and
large urban centres (or city-states) (members of the International Association of Convention and
Visitor Bureaus), our goal is to develop decision support systems, indices of destination success,
and destination strategy simulation models for both countries and city-states.
References
Lefever, M. (1996) Hospitality in Review: a Capstone Text Complete with Senior and Graduate-Level
Projects. Kendall/Hunt Publishing Company, Dubuque, Iowa.
Morrison, A.M. (1989) Hospitality and Travel Marketing. Delmar Publishers, New York.
Pizam, A. and Mansfeld, Y. (1996) Tourism, Crime, and International Security Issues. John Wiley,
New York.
Swarbrooke, J. (1999) Sustainable Tourism Management. CAB International, Wallingford, UK.
WEF/IMD (2002) The World Competitiveness Yearbook. World Economic Forum and the International
Institute for Management Development, Lausanne, Switzerland.
Acknowledgements
The widespread support we have received from both organizations and individuals throughout
the preparation of this work has been essential and most gratifying.
From the very beginning, the strong research culture within the Faculty of Management at the
University of Calgary (now the Haskayne School of Business) has been the foundation for our
efforts. Without the high-quality academic and administrative environment it provided, this project
would not have been possible. In this regard, we first thank Dean Michael Maher for his efforts to
raise the funds to support the professorship in tourism that allowed JRBR the freedom and the
resources to pursue the research on which this book is based. The subsequent efforts of Dean David
Saunders to protect and nourish this critical academic foundation, and in particular to enable JRBR
to collaborate actively with the World Tourism Organization (WTO), were invaluable and much
appreciated.
For GIC, whose work on this book spanned two eras, both the University of Calgary and La
Trobe University have provided important support. The support, environment, encouragement
and resources provided at the University of Calgary, together with an initial Social Sciences and
Humanities Research Council of Canada (SSHRC) grant, were particularly important in the earlier
phases of our collaborative efforts. Subsequently, the professorial funding provided to GIC at La
Trobe University has enabled us to continue our collaboration from opposite ends of the earth, with
regular face-to-face periods along the way.
We extend our most sincere thanks to the SSHRC, whose policy of supporting two successive,
related research projects on an evolving topic was especially valuable. This policy permitted us
to maintain the time-consuming relationships with members of the WTO and the International
Association of Convention and Visitor Bureaus (IACVB) that enabled the research team to gain the
confidence and trust of these two leading organizations in the field of tourism. This confidence and
trust was a critical factor in the success of our search for information, and allowed us to gain insights
that would not have been possible otherwise.
We also wish to extend our thanks to the members of both the WTO and the IACVB. In the
case of the WTO, we are particularly grateful to Dr Eduardo Fayos Sola. His moral support and his
personal insights into tourism policy (gained from many years as a senior member of the Tourism
Department of the Spanish Government) provided us with a unique competitive advantage over
other authors who may have an interest in the same topic. In a similar manner, the support of our
colleague Mr Donald Anderson, Director of the IACVB Executive Development Program, was also
invaluable. The access to senior executives from the leading city-state destinations throughout
North America that he facilitated provided us with yet another unique competitive advantage in our
efforts to understand how a destination can be made both competitive and successful.
xv
xvi Acknowledgements
We are also grateful to the many individual members of the WTO and the IACVB who shared
with us their experiences and inner thoughts regarding the many complex factors that influence and
determine destination competitiveness and sustainability. It is their experiences and thoughts that
are the essence of this book. We trust they will find its content to be a fair and accurate distillation
of their views, and one that will provide a valuable legacy for future generations of managers and
students in the field of destination management.
Speaking of students, we also thank our many graduate students, who have been exposed to
various earlier drafts of the thinking in this book and who have provided us with the benefit of initial
assessments and suggestions for changes to its contents. In this regard, we are particularly grateful
to Mr Stuart Levy, who carried out a personal, in-depth review of a near-final draft of the book. His
frank and insightful comments and suggestions have, we believe, provided the reader with a more
logical and more coherent expression of our ideas.
Finally, we owe an incalculable debt of thanks to Ms Deb Angus. Her dedication, competence,
innovativeness and rigorous attention to detail throughout the long and arduous process of
manuscript preparation has more than compensated for our inability to maintain a continuous
and consistent authoring schedule in the face of other demands on our time. Without her support,
the completion of the manuscript might well have been in doubt. We trust she appreciates the
esteem in which she is held by both of us.
As in all our endeavours, we are eternally grateful for the quiet, ever-strong support of our
spouses, Rosemary and Linda. Their everyday help makes everything possible – and worthwhile.
The publication of this book has come at a very timely moment in the strategic evolution of the
World Tourism Organization (WTO). An understanding of the determinants of the success of a
tourism destination has always been of great interest to the traditional country membership of the
WTO. However, the recent establishment of a special Task Force on Destination Management
within our organization is a direct reflection of the growing importance of this critical theoretical
paradigm in the improvement of management performance for our broader membership
worldwide.
I am pleased that our Task Force on Destinations is seeking to identify a platform for
destination management, one that will provide valid universal guidelines to assist managers in
meeting the complex and difficult challenges they face daily in their efforts to develop and manage
tourism destinations. To do this, they must develop destinations that have the capability to perform
effectively in an increasingly competitive international marketplace – and that will do so in ways that
are environmentally, socially and culturally sustainable.
In both its timing and its content, this work, by two internationally recognized tourism scholars,
offers great potential for our WTO Task Force as it seeks to fulfil its mandate. Indeed, through good
fortune it seems that the stars are aligning themselves as they should. I know that Drs Ritchie and
Crouch have been preparing this work for some time now, and it is most propitious that the results
of their efforts are being published to coincide with the WTO’s focus on destination management as
a key priority. We in the WTO are most appreciative of this good fortune and I personally wish to
thank the two authors and to endorse both the timing and the quality of their work. I am convinced
that the comprehensive and insightful framework on which this book is based represents a
‘breakthrough paradigm’ – the kind of breakthrough that comes only once in a lifetime – and will
provide a widely accepted new model of theory and practice in destination management for many
years to come.
Francesco Frangialli
Secretary General, World Tourism Organization
xvii
1
The Evolving Nature of Competition and Sustainability
The important thing is to try and shape the An examination of today’s competitive uni-
nature of competition to take control over verse reveals that changes in its components
your own destiny. have radically altered its structure. The implica-
(Michael Porter, 1997)
tions of this restructuring are that those who
In developing the framework for destination are responsible for destination management
competitiveness, we examine its very nature are operating according to a constantly evolv-
and how it has evolved from the early begin- ing set of rules that continually redefine the
nings of mass tourism in the mid-20th century exact nature of competition. Even though the
to the present day, at the start of the 21st cen- factors that determine the attractiveness of a
tury. The intention is to identify the different destination may remain relatively constant,
components of the ‘competitive universe’ and the changing nature of competition requires
to examine how these components define the ongoing reassessment of the ability of a
fundamental nature of the competitive envi- destination to compete.
ronment in which tourism as a sector must Competition among tourism destinations
function. is but one manifestation of the broader phe-
Our examination demonstrates that, just as nomenon of the new economic competition
each of the components of the competitive (Asch and Wolfe, 2001) and, indeed, the even
universe has changed over the five decades in broader phenomenon of human competition in
question, the nature of competition itself the social, technological, cultural and political
has evolved substantially. The very essence of spheres. Thus, to achieve a true understanding
competition as we enter the third millennium of destination competitiveness, it is useful to
is quite different from what it was when the examine briefly the context within which com-
first jet aeroplanes took off (Tyson, 1997). It petitive tourism occurs and how this context has
will be useful to understand these changes evolved to the present time. In effect, we are
and their impacts before we develop a model recognizing that competition among destina-
of destination competitiveness for today’s tions, although it may have distinctive charac-
world. teristics, reflects the nature of competition in all
areas of human activity. The manner in which well-being of destination residents and pre-
North American, European and Asian destina- serving the natural capital of the destination
tions assert their attractiveness and attempt to for future generations.
influence choice behaviour in tourists cannot be Given the multidimensional nature of
divorced from the approaches taken in other tourism destination strength (Fig. 1.1), it
industrial sectors. For example, even though is useful to briefly review how the com-
tourism may not yet be as important as other petitive nature of the world has evolved
economic sectors are to Korea, the aggressive along each of these dimensions and, more
manner in which this country competes in importantly, how this multidimensional evolu-
tourism is similar to its approach in the tion has affected the overall competitiveness of
automobile sector. In a different vein, the destinations.
competitive strategy of the tourism industry
of the USA depends heavily on the film and
entertainment industry. The ability to sell the Economic competitiveness
American culture worldwide provides the US
tourism sector with an enormous competitive Michael Porter (1996) has achieved recogni-
advantage. In the same way, the competitive tion as the guru of the economic competitive-
approach of the Indian tourism sector tends ness of nations. As will be seen in the next
to parallel that taken in other areas, such as chapter, we will not hesitate to adopt and/or
technology and brand franchising, where indig- adapt his approaches or those results of
enous ownership of facilities and investments his model of competitiveness that appear
is considered important. pertinent to tourism.
In the light of the foregoing, it behoves As Porter (1996, p. 166) has reported, the
those of us seeking to understand the present sources of economic competitiveness lie in four
nature of destination competitiveness in tour- broad attributes of a nation (or, in the present
ism to review the evolution of the forces affect- context, of a destination), known collectively as
ing competitiveness in general with a view to the ‘Porter diamond’:
gaining insights into how tourism has been and
will be affected. • Factor conditions: the nation’s position
in the factors of production, such as skilled
and cultural power. The populations and gross who are sympathetic to its cause. Conversely,
domestic products of many mega-cities around other destinations may be economic giants and
the world (e.g. London, New York, Paris, models of relative political stability, yet still
Tokyo, Mexico City, Beijing and Los Angeles) have a modest appeal in many markets as
now rival and outpace those of many nation- travel destinations. For example, Canada suf-
states. From a tourism perspective, certain of fers from this deficiency in the eyes of some.
these mega-cities have become major tourism In brief, one concludes that the sociocultural
destinations in themselves. Their ability to man- appeal of a destination may override all other
age and market their touristic dimensions in dimensions in determining its appeal. Were it
a very controlled and integrated manner has not for the fact that resident well-being, profit-
provided a competitive advantage that is not ability and environmental sustainability must
available to larger, more physically dispersed also be taken into consideration, the socio-
nation-state destinations. This touristic reality cultural strengths of a destination might be the
is reflected in the power and level of activity dominant determinant of competitiveness.
in major metropolitan Convention and Visitor
Bureaux, whose tourism-related efforts, expen-
ditures and effectiveness frequently surpass
those of nations. Indeed, it can be argued that Technological competitiveness
the city-state seriously rivals the country as the
primary focus of much strategic thinking when The technological strength of a destination has
a competitive destination approach is taken only recently entered into the equation deter-
to tourism planning and development. The mining destination competitiveness. And while
process of urbanization of the world’s popu- technology is only a minor factor in determin-
lation has been so powerful that, in addition ing the appeal of destinations (minor excep-
to the city-states referred to above, we are tions are destinations such as Silicon Valley
now witnessing the creation of a great number in California and Cape Canaveral in Florida,
of second-tier cities having populations of where the technology of space travel is a
1 million or more. While not quite city-states, growing tourism draw), it has become a major
they have developed strong personalities and factor in the promotion and distribution of the
considerable economic power. Consequently, travel experience for an increasing number of
they can often consider themselves to be true destinations. Perhaps the first most significant
tourism destinations. step in this process was the airlines’ Central
Reservation System (CRS). Destinations that
were not served by airlines were at a significant
competitive disadvantage, and the airlines that
Sociocultural competitiveness controlled the CRS tended to ensure that
they were given priority within the system.
When one examines successful tourism desti- Consequently, destinations that were served by
nations around the world, it is easy to conclude any of the airlines controlling the CRS had an
that economic and political strength is a additional competitive advantage. Public pres-
genuine asset. It may be easier, however, to sure and legislature have generally made airline
conclude that a destination’s social and cultural ownership and control of the CRS much less of
characteristics are more critical for creating a a factor. However, suspicions of preference
destination that people want to visit. Despite still lurk in the shadows.
the fact that certain destinations may be eco- The arrival of the Internet represents the
nomic dwarfs and approach a state of political latest impact of technology on destination com-
shambles, they are still places that people want petitiveness. In particular, the traditional use of
to visit, often in considerable numbers. Why? published material as a source of information to
Simply because they offer a visitation experi- promote destinations has declined substantially.
ence that cannot be found anywhere else. For However, published materials and destination
example, Israel, despite its major problems, call centres with toll-free telephone numbers
continues to attract a certain number of visitors still remain significant sources of consumer
6 Chapter 1
information in certain cases. Another major and judgement will be essential in answering
impact of the Internet is that it has enabled these questions.
smaller, less powerful destinations to have
access to a global market at a cost that is no
longer prohibitive. For the visitor, the Internet
now offers a power of search and choice that Environmental competitiveness
was previously not available.
Technology has also had an impact on the In the past, destinations have used traditional
ability of destinations, and firms within them, to economic accounting when calculating the
enhance the quality of the visitor experience. success of their economic performance, and
The growing technical sophistication of inter- thus their degree of competitiveness. In recent
pretive centres has enabled destinations to both years, however, environmental economists
inform and educate visitors about the destina- have increasingly insisted upon full cost
tion they are visiting, as visitors move around accounting when seeking to estimate the true
and within the destination. Lodging operators economic liabilities of a destination, as well as
increasingly use technology, such as customer its economic assets.
databases, to enhance the personalization of The issue at hand is whether deterioration
the firm–visitor interface and to simplify and of the natural environment due to tourism can
accelerate the administrative work associated heavily mask the relative competitiveness of
with visits. In a similar manner, car rental agen- one destination compared with another (Prugh
cies have largely automated sign-in/sign-out et al., 1995). For example, it has been argued
procedures. In the extreme, certain properties that in earlier days Costa Rica appeared to
have virtually eliminated the human interface derive substantial benefits from tourism in
by allowing clients to make reservations via traditional economic terms. However, if the
technology, and then to sign in and sign out ‘costs’ of the destruction of the country’s natural
without ever interacting with a human. This capital are taken into account, it may well
extreme goes counter to the efforts of many to be that this high-profile destination, which
retain a human touch in dealing with customers. appeared to be highly competitive, is in reality
However, achieving the proper balance in non-competitive.
high-tech/high-touch is a delicate matter. Increasingly, in the evaluation of competi-
Global positioning systems have become tiveness it will be necessary to acknowledge the
another means of assisting travellers. Such sys- full cost of tourism visitation in practical terms.
tems provide the traveller with detailed informa- This may well alter the way in which desti-
tion on routing to destinations, at increasing nations manage tourism. Destinations that cur-
levels of detail. One suspects that once the cost rently practise stewardship of resources should
of this technological support is reduced it will rise in the formal evaluation of their competi-
become standard, and travel and tourism enter- tiveness, while those that do not will fall.
prises are likely to be very attracted to the mar- To summarize, while relatively new on the
keting opportunities this technology presents. scene, the environmental dimension of destina-
The challenge facing destinations is to tion performance and competitiveness is slowly
know which types of technology are truly but surely growing in importance in both practi-
desired by visitors, and thus which ones provide cal and moral terms. In practical terms, visitors
a genuine competitive advantage rather than are increasingly turned off by destinations that
create annoyance or confusion – in some cases have undergone visual degradation through
adding undesirable or even unnecessary cost. general overdevelopment or poor resource
Regardless of the specific answers to this stewardship. Typical examples might include
question at a given point in time, it seems excessive or improper signage, poor waste
inevitable that technological forces will con- control practices and the destruction of wildlife
tinue to exert their influence. Destinations will habitats. In moral terms, many segments of the
need to determine the extent to which tech- market may simply disagree with certain forms
nology increases their competitiveness as of tourism development in certain kinds of
opposed to reducing their appeal. Research locations.
Evolving Nature of Competition and Sustainability 7
In response to this growing concern for the Demographics are redefining the
environmental integrity of tourism destinations, foundations of competitiveness
the phenomenon of ecotourism, while still small
in market share, is growing in both stature and In Chapter 4, we note that the changing
importance. Destinations with unique, relatively demographics of the world’s population are
pristine environments can now build competi- radically redefining what the great majority of
tiveness by positioning themselves as ‘environ- the population finds appealing. Since appeal –
mental’ destinations. While this has in some or destination attractiveness – is one of the
cases proven to drive visitors away rather than major components of competitiveness, those
to attract them, it remains a viable strategy for in tourism (as in all sectors of the economy)
certain destinations. must face the reality that a product that is
Despite the risks of specializing in eco- highly successful today may well decline dra-
tourism, it would appear that maintaining the matically in competitiveness, even though the
integrity of a destination’s environment will only physical product is still of high quality. As Foot
grow in importance in the coming years and and Stoffman (2001) argue convincingly, the
decades. It is not clear whether this can be done age structure of a country’s population is one
in a way that is economically viable in terms of of the most powerful tools for understanding
the measures used by most investors today. the past and forecasting the future. In their
‘two-thirds of everything’ model, they describe
how the collective ageing of a population
redefines market demand. They demonstrate
Some General Observations on how the extent of this effect on the real estate
the Competitive Environment market, on the investment market, in retailing,
is Evolving on leisure and recreation, and on transporta-
tion systems. Clearly, all of these factors, even
Evolution of the travel experience if they are not an integral part of tourism, have
demanded a strong influence on it.
In a related vein, Foot and Stoffman
The evolution in value systems noted in describe how shifting social values have
Chapter 4 has led directly to a major evolution restructured the composition of the family/
in the fundamental nature of the types of household. This change in structure changes
experiences demanded by the market. For behaviour, and this change in behaviour can
example, the focus of the travel experience has modify the types of experience sought by travel-
shifted away from the family, in which vacation lers and vacationers. If these change, the nature
travel tended to emphasize relaxation, with of the competitive destination also changes. In
an underlying goal of producing a memorable brief, competition in this new millennium may
experience to be shared among all family evolve into something that is quite different.
members. In addition to being shared, these
family experiences had as a primary goal the
development of bonds among family members.
In today’s market, the experiences demanded Crisis and renewal are being forced upon
have become more individual in nature. Also, destinations as a strategy for
there is greater emphasis on stimulation, social competitiveness
interaction and, more recently, learning. While
relaxation has not been completely set aside, Contrary to traditional organizational theory,
the nature of the relaxation experience has which emphasizes rationality and control
changed. of the management of change, the emerging
The result of these fundamental changes socioeconomic climate forces destinations to
arising from shifting values is that destination consider redefining competitiveness as the
managers are now competing for consumers ability to respond effectively to crisis situations.
who have a vastly different mindset and Since the early 1980s, the competitive
different demographic characteristics. position of many destinations has been
8 Chapter 1
threatened overnight by either a single act of In any event, a shift in the relative impor-
terrorism or a systematic series of acts. These tances of the different factors in the model of
acts have undermined the perceived safety and destination competitiveness is under way – and
security of the destination. This has never been the shift may be dramatic. The entire concept of
truer than in the case of the events of 11 destination competitiveness is redefined.
September 2001. The city of New York, a This chapter has sought to emphasize that
major global tourism destination, has been the nature of competitiveness and sustainability
obliged to deal with a crisis of previously is in constant evolution, and that as a conse-
unimaginable proportions. It now appears, quence destination managers must monitor the
however, that the management talent of world around them rigorously to ensure they are
New Yorkers, with the support of all of the anticipating tomorrow rather than reacting to
city’s residents, has enabled an even stronger yesterday. In order to do this most effectively,
tourism destination to emerge. it is essential for them to understand the basic
Lebanon, once a tourism icon of the theoretical foundations of the complex con-
Middle East, has seen its tourism industry largely cepts of competition and sustainability. In an
obliterated. In North America, growing levels of effort to help both practitioner and student
crime dramatically altered the competitiveness appreciate the essence of these theoretical
of the city of Miami in the 1990s. Indeed, the foundations, we turn in Chapter 2 to a review of
problem has become so widespread that Pizam the literature on competition (Part I) and on
and Mansfeld (1996) were able to assemble an sustainable tourism (Part II).
extensive collection of examples of the manner
in which terrorism and crime have forced many
previously competitive destinations to rethink References
the nature of their appeal. In each of the forego-
ing cases, and many others, the constant threat Asch, D. and Wolfe, B. (2001) New Economy – New
to the security of visitors, or potential visitors, Competition: the Rise of the Consumer?
has forced destinations to reassess and redefine St Martin’s Press/Palgrave, New York.
their inherent strengths from a competitiveness Foot, D.K. and Stoffman, D. (2001) Boom, Bust and
perspective. Echo: Profiting from the Demographic Shift
The effect of crime in changing the in the 21st Century. Stoddart Publishing,
definition of competitiveness is not due simply Toronto, Ontario, Canada.
Hurst, D.K. (1995) Crisis and Renewal: Meeting the
to the perceptions and concerns of the visitor.
Challenge of Organizational Change. Harvard
As crime becomes more prevalent within a Business School Press, Boston, Massachusetts.
destination, there is a risk that the most Pizam, A. and Mansfeld, Y. (1996) Tourism, Crime,
respectable of citizens of that destination and International Security Issues. John Wiley
change their own behaviour. They often & Sons, New York.
become less friendly as they retreat into a local Porter, M.E. (1996) On Competition. Harvard
bubble (Hurst, 1995). Business School Press, Boston, Massachusetts.
Because of this growing insecurity on the Porter, M.E. (1997) Creating tomorrow’s advantages.
part of both residents and visitors, destination In: Gibson, R. (ed.) Rethinking the Future.
managers need to consider the adoption of a Harvard Business School Press, Boston,
Massachusetts.
very different style of destination management
Prugh, T., Costanza, R., Cumberland, J.H., Daly, H.,
– one that almost approaches the status Goodland, R. and Norgaard, R.B. (1995) Natu-
of ongoing crisis management. A significant ral Capital and Human Economic Survival.
proportion of the resources available for the ISEE Press (International Society of Ecological
management of a destination must go into: Economics), Solomons, Maryland.
Tyson, K.W.M. (1997) Competition in the 21st
• minimizing the possibility of recurrence of
Century. St Lucie Press, Delray Beach, Florida.
criminal or terrorist activity; and UNDP (2002) Human Development Report. United
• developing the ability to react immediately Nations Development Programme, New York
and effectively should an outbreak or (available on their website: www.undp.org/
incident arise. hdr2002).
2
Conceptual and Theoretical Perspectives
Competitiveness without sustainability is Yet another grey area lies between sus-
illusory. tainable tourism and ethical tourism. This issue
is examined by Swarbrooke (1999) as he looks
This chapter consists of two complementary
to the future of sustainable tourism in a more
components that are intended to provide the
recent major work on the topic. A further,
reader with theoretical and managerial inter-
recent analysis of the relationship between
faces between the two main concepts under-
ethics in tourism and sustainability has been
lying this book: competitiveness and sustain-
provided by Ryan (2002). More specifically, he
ability. In Part I, we review the theoretical and
reviews the Global Code of Ethics for Tourism
conceptual foundations of competitiveness.
produced by the World Tourism Organization
Upon completing this part, the reader
(WTO) (WTO, 1999, 2000b) and how it will
should have a basic understanding of what a
affect the ‘equity, management, power sharing
destination is trying to achieve when it pro-
and sustainability issues of the New Tourism’.
claims a goal of enhancing its competitiveness.
Given the importance of the WTO ethics char-
In Part II, we provide a parallel review of the
ter and the long-term impact it will undoubtedly
concept of sustainability. Because the historical
have on the future of tourism – sustainable
roots of this concept are more recent and
tourism in particular – an edited version of the
much shallower than those of competitiveness,
charter’s main articles is included as Appendix
there is often no clear consensus regarding
2.1.
what sustainability truly means. Also, the
The WTO ethics charter now hangs in
distinction between sustainable tourism and
many tourism offices around the world, and
ecotourism is not always clear, as evidenced
will slowly but surely pervade the thinking of
by Cater and Lowman’s pioneering book
tourism policy-makers who seek to develop a
Ecotourism: a Sustainable Option (1994)
sustainable, ethical model of tourism within
and by examination of the chapter The
their destinations.
Sustainability of Ecotourism, by Burton, in
The growth in tourism has spurred signifi-
another substantial work by Stabler (1997).
cant changes in the way in which destinations
A rather different taxonomy is explored
are managed. Not so long ago, destinations
by Newsome et al. (2002), who include
(whether countries, states, cities or regions)
ecotourism as one of four types of natural
welcomed tourists but did little to intervene in
area tourism (adventure tourism, nature-based
the visitation process, being content to rely
tourism, wildlife tourism and ecotourism).
on the travel trade to attract and serve visitors.
Destinations no longer take such a passive Fe, are often cited as examples of places that
approach. Competition for a share of the have been able to significantly enhance their
tourism market has intensified as destinations competitive position.
have begun to adopt a marketing orientation. In response to these changes, many desti-
Places are now marketed like any other product nations are seeking solutions to the problem of
to attract industry, investment and residents, as how to become or remain competitive. In doing
well as tourism. Kotler et al. (1993) describe so, numerous questions often arise. For exam-
numerous examples of such ‘place marketing’ ple, how important are convention facilities?
and propose a strategic market planning Should the airport be expanded? Would the
process to attract investment, industry and construction of a landmark help to enhance the
tourism to cities, states and nations. The use image of the destination by providing it with
of art, architecture, posters, advertising and a recognizable icon? Would it be better to
images is the focus of a set of readings, edited by concentrate resources on the promotion of the
Gold and Ward (1994), on the use of publicity destination? Should a hotel room tax be intro-
and marketing to sell towns and regions. duced to fund increased destination marketing?
As a consequence, destinations have Should there be more municipal government
created a variety of responses, including setting revenues spent on developing or improving
up national tourist offices, state or regional visitor-friendly infrastructure/services? Are resi-
tourist corporations, Convention and Visitor dents sufficiently visitor-friendly? Would the
Bureaux, and economic development agencies. hosting of a special event like a cultural festival,
In addition, chambers of commerce, local World Expo or Olympic Games help? Would
authorities and industry associations are often efforts to reduce crime have much impact,
now active in the tourism sector. In other given the media hysteria over isolated events?
situations, interdepartmental committees have Many such questions are being asked
been established to integrate and coordinate the but the current state of knowledge provides
activities of basic community infrastructure and few answers. Anecdotal evidence alone is not
service organizations, such as those responsible sufficient and, indeed, may seem confusing. For
for transportation, public health and education, example, some destinations have constructed
in the interest of facilitating a thriving local landmarks or other improvements (e.g. the
tourism industry. Gateway Arch in St Louis, the Sydney Opera
Some destinations appear to be coping House, the Riverwalk in San Antonio and the
with this increased competition quite well, Rock and Roll Hall of Fame in Cleveland) that
whereas others are struggling. In many cases it have enhanced their image. For example,
is the world’s traditional destinations that have Rubel (1996) describes the City of Cleveland’s
awakened to the reality that their share of the ‘comeback’ strategy. Others have ended up
tourism market is declining. In certain cases, with expensive white elephants which have had
this reality has been cushioned by the fact that little impact in attracting tourism. For example,
tourism is still growing, albeit slower than much of Montreal’s Mirabel Airport, completed
the international average. This has been the in 1975, remains, in the eyes of many, a
situation, for example, in Western Europe and cavernous ghost town. Mirabel was opened in
Canada. In other cases, for example in Malay- 1975 at the cost of $450 million and a bitter
sia, Hungary and Turkey, there has been an expropriation battle. The airport never came
actual decline in the number of visitors and close to using its capacity and only covers a
tourism receipts in recent years (WTO, 2000a). fraction of the land taken. Under a transfer
At the city level, too, it is evident that some proposal involving the transfer of all passenger
destinations are doing better than others. For flights back to the more central Dorval Airport,
example, Atlantic City and Los Angeles appear Mirabel will become an all-cargo and charter
to have lost some of their gloss over the years, airport, an idea welcomed by business groups
although the declining image of Atlantic City and airlines (Travel Week, 2002). Forcing
has recovered to some extent in various ways international flights to use Mirabel, about
over the last few years. In contrast, some 60 kilometres north of Montreal, has been cited
smaller cities, such as San Antonio and Santa as a major reason for Montreal’s stagnation as
Conceptual and Theoretical Perspectives 11
an aviation hub when compared with Toronto confronts humans in all endeavours, particu-
(Calgary Herald, 1997, p. 15). larly in sport, employment and, of course,
This chapter begins to examine the business and international trade. Whereas
concept of competitiveness in terms of its appli- in the animal kingdom we appreciate the
cation to tourism destinations. As a concept in importance of the principle of the survival of
business, management and international trade, the fittest, it seems more appropriate to talk
competitiveness has received widespread inter- of the survival of the most competitive in the
est and attention. Its importance and implica- human world.
tions are the subject of some debate, so to begin Critics point to the self-destructive nature
with we will look at its theoretical underpinnings of competition and the single-minded focus and
and managerial consequences. We will try to reliance on economic growth. Environment-
show how we have arrived at our particular defi- alists, for example, would argue that as the
nition of competitiveness and why we believe it pursuit of economic competition has led us to
is meaningful and managerially useful when exceed the capacity of our environment, the
applied to tourist destinations. The terms phrase ‘survival of the most competitive’ is an
‘comparative advantage’ and ‘competitive oxymoron.
advantage’ will be contrasted and we will Nevertheless, today the notion of competi-
demonstrate that both forms of advantage are tiveness is powerful and pervasive, receiving
important in understanding the competitive- much of its expression in the business world
ness and performance of a tourist destination. through the writings of Professor Michael
To shed further light on the topic, we briefly Porter and many others (see, for example,
look at the competition among destinations Porter, 1980, 1985, 1990).
for different market segments. This will help to The origins of our understanding of
clarify the relationship between tourism market contemporary economic theory and the nature
segmentation, competitiveness, target market- of competition begin with Adam Smith who,
ing strategy and the overall performance of the in 1776, wrote An Inquiry into the Nature
destination. As a destination’s ultimate goal is to and Causes of the Wealth of Nations. Smith
increase the levels of prosperity of its residents emphasized the importance of being the
and other stakeholders, it is vital, too, that lowest-cost producer. He argued that the free
we consider how prosperity, through tourism market efficiently determined how a country’s
development, can be achieved and sustained resources ought to be used in meeting the needs
over the long term. This emphasis on competi- of consumers. However, it was David Ricardo
tiveness implies a deliberate, purposeful effort who, when in 1817 he wrote Principles of
to manage the destination. Management Political Economy, developed the theory of
involves establishing goals, making choices and comparative advantage to explain why a coun-
balancing trade-offs with an overall vision for try might import a good even when it is the low-
the destination in mind. So we conclude the first est-cost producer. The theory of comparative
part of this chapter with a few words on the advantage is based on differences across coun-
crafting of a destination vision. tries in their endowments of the factors of pro-
duction (i.e. labour, capital, land and natural
resources). Such differences encourage special-
ization, which in turn creates the need for trade.
Competitiveness: Theoretical and A place possessing trading advantages
Managerial Dimensions benefits in a number of ways. Industry is
attracted to these places, resulting in more
What is this thing called employment and higher wages. The increasing
competitiveness? concentration of industry results in both infra-
structural improvements and an increase in
Origins business-to-business alliances and relationships.
These changes bring about improvements in
Today, we live in a world of relentless, living conditions and industrial productivity.
unceasing competition. The need to compete If the place is a country, the demand for the
12 Chapter 2
country’s products boosts demand for, and Politicians are interested in the competitiveness
therefore the value of, its currency. This enables of the economy (national, regional or local),
the residents of the country to purchase a industry or trade associations confine their
greater quantity of imported products. In total, interests to their own industry, and business
competitiveness means jobs, wealth, improved owners and managers worry about the ability
living conditions, and an environment in which of their own firms to compete in specific
residents can prosper. Therefore, an under- markets.
standing of what competitiveness is and how it It is perhaps helpful to review the defini-
is achieved and maintained is of considerable tions of competitiveness employed by others
interest. An excellent reference source that before we try to decide which approach is most
examines a wide variety of perspectives and suited to an examination of the competitiveness
research traditions on competition can be found of tourist destinations. Scott and Lodge (1985)
in Hunt (2000). Hunt develops a new theory of viewed national competitiveness as ‘a country’s
competition which draws upon these traditions ability to create, produce, distribute, and/or
and which he calls the resource-advantage service products in international trade while
theory of competition. earning rising returns on its resources’ (p. 3).
They also noted that this ability is ‘more and
Definitions more a matter of strategies, and less and less
a product of natural endowments’. As viewed
Superficially, competitiveness appears to be by Newall (1992, p. 94), competitiveness ‘is
a simple concept about which there is little about producing more and better quality goods
disagreement. According to the Concise and services that are marketed successfully to
Oxford Dictionary, to compete is to strive for consumers at home and abroad. It leads to well
superiority in a quality. Some athletes compete paying jobs and to the generation of resources
on the basis of single qualities, such as speed required to provide an adequate infrastructure
and strength. These athletes, though, would be of public services and support for the dis-
quick to point out that determination, the will advantaged. In other words, competitiveness
to win, attitude, concentration, stamina, etc. speaks directly to the issue of whether a nation’s
are also very important competitive qualities. economy can provide a high and rising standard
Therefore, it is when we try to measure of living for our children and grandchildren.’
competitiveness that we begin to understand This definition views competitiveness as the key
the difficulty in defining it because competitive- to national prosperity.
ness is both a relative concept (superior relative ‘A competitive economy’, according to
to what?) and is usually multidimensional (what The Economist (1994, p. 17) ‘. . . is one that
are the salient qualities?). These attributes of exports goods and services profitably at world-
competitiveness were emphasized by Scott and market prices.’ The OECD (WTO, 2000a,
Lodge (1985, p. 6), who observed that the p. 47) defines competitiveness in a similar
‘Evaluation of national competitiveness poses fashion as ‘the degree to which a country can,
two basic questions: how and in what dimen- under free and fair market conditions, produce
sions do we measure the competitiveness of a goods and services which meet the test
national economy, and what standards do we of international markets, while simultaneously
use in determining adequacy? For example, maintaining and expanding the real incomes
most analyses of competitiveness focus on the of its people over the long term’. The World
trade balance as the key indicator of perfor- Competitiveness Yearbook’s definition has
mance. Is it, however, more important than varied somewhat over the years. For example, it
other factors like market share, real incomes, has defined competitiveness as ‘the ability of
profitability, and relative changes in productiv- entrepreneurs to design, produce and market
ity? We believe it is the performance pattern goods and services, the prices and non-price
measured in several dimensions that is the key, qualities of which form a more attractive
not performance in a single dimension.’ package of benefits than those of competitors’.
A further complication concerns the unit It has also defined world competitiveness as
of analysis and the perspective of the analyst. ‘the ability of a country or company to,
Conceptual and Theoretical Perspectives 13
proportionally, generate more wealth than its The problem of international competitiveness
competitors in world markets’ (WTO, 1994, has been defined in highly diverse ways.
p. 18). Competitiveness is viewed as combining These definitions (and the proposed solutions
to the problem) are partially inconsistent,
both assets and processes, where assets ‘are
and thoroughly confusing to most academics,
inherited (e.g. natural resources) or created (e.g.
politicians, policy-makers, and business
infrastructure)’ and processes ‘transform assets managers. There is good reason for this
into economic results (e.g. manufacturing)’. confusion. The collection of problems alluded
The World Competitiveness Yearbook (IMD, to as ‘competitiveness’ is genuinely complex.
2000, p. 48) examines competitiveness in Disagreements frequently occur not only at
terms of four fundamental forces that ‘are often the level of empirical effects and of policies,
the result of tradition, history or value systems but also in the very definition of the problem.
and are so deeply rooted in the “modus Well-intentioned and reasonable people
operandi” of a country that, in most cases, find themselves talking at cross purposes;
sometimes it almost seems they are addressing
they are not clearly stated or defined’. The
different subjects.
four dimensions used are attractiveness versus
(Spence and Hazard, 1988, p. xvii)
aggressiveness, proximity versus globality,
assets versus systems, and individual risk taking
versus social cohesiveness. Alternative views
These definitions attend to the symptoms,
results or outcomes of a competitive economy. In recent years, governments around the world
They help to identify a competitive economy have embarked on programmes designed to
but do little to shed light on the causes of rein in burgeoning national debts, reduce the
competitiveness. size of governments, and develop more com-
There seems to be no generally accepted petitive economies. Critics have questioned
definition of competitiveness. It is perhaps too whether this all-pervasive, single-minded
broad and complex a concept, defying attempts pursuit of competitiveness has gone too far in
to encapsulate it in universally applicable terms. the light of the significant social costs. Paul
As noted by Porter (1990, pp. 3–4), ‘some see Krugman (1994), for example, in an article
national competitiveness as a macro economic titled ‘Competitiveness: a dangerous obses-
phenomenon . . . Others argue that competi- sion’ argued that bad polices have resulted
tiveness is a function of cheap and abundant from thinking in terms of competitiveness
labour . . . Another view is that competitiveness because competition between nations is funda-
depends on possessing bountiful natural mentally different from competition between
resources . . . More recently, many have argued firms. Krugman calculates that ‘the growth rate
that competitiveness is most strongly influenced of living standards essentially equals the growth
by government policy . . . A final popular rate of domestic productivity – not productivity
explanation for national competitiveness is relative to competitors, but simply domestic
differences in management practices including productivity’ (p. 34).
labour–management relations.’ Baker (1987) In commenting on Krugman’s views, The
argues that competitiveness is something Economist (1994), although accepting many of
more and broader than mere trade statistics. Krugman’s central arguments, suggests that
‘Competitiveness – as much a cultural under- competitiveness is too useful a word to prohibit.
taking as an economic or political one – requires Relative productivity growth is important as
changing minds as much as changing policies’ it affects a country’s income and well-being.
(p. 5). However, in the service sector, of which
Relative productivity performance too, tourism is a part, productivity has proven to be
is often seen as the root of competitiveness a difficult concept to measure.
(Porter, 1990, p. 6), but Walters (1987, p. 66) In a later article, Krugman (1996) went
warns against placing excessive weight on on to point out that competitiveness at the
statistical measures of productivity. level of the enterprise is fundamentally different
Perhaps the situation is best summed up by from the way in which national economies
Spence and Hazard: compete. Companies operate as open systems
14 Chapter 2
whereas national economies are largely closed buyers, particularly key corporate accounts
systems. As a consequence, although an (e.g. the corporate travel department in large
individual corporation may be quite able to companies like General Motors).
double its market share in a short period, Porter (1990) conceived of the national
a national economy (i.e. all companies) could ‘diamond’ to explain the determinants of
not do so because the closed nature of the national advantage in particular industries or
system would ensure that for gains in one industry segments (Fig. 2.2). This perspective
area there will be losses in another. Krugman might be useful, for example, in understanding
(1996, p. 48) illustrates this point by noting the relative competitiveness of the US, Cana-
that, for companies that neither export nor dian and Australian tourism and hospitality
face import competition, one company can industries. Factor conditions (both inherited and
increase market share only at the expense of created factors of production) are the inputs
another. ‘For companies that do enter world to an industry and include human resources,
trade any increase in market share creating a physical resources, knowledge resources,
trade surplus requires a corresponding export capital resources and infrastructure. National
of capital.’ advantage in an industry is influenced by the
availability of these factors to that industry, but
strengths in other parts of the diamond may
overcome disadvantages in factors. Demand
A framework for understanding conditions, particularly domestic demand and
competition its internationalization to foreign markets,
establish the proving grounds for the industry. A
It is helpful to our understanding of the high level of domestic demand confers static
concept of competitiveness to organize efficiencies and encourages improvement and
the principal theoretical and managerial innovation. Most national tourism industries
dimensions within a coherent framework. depend upon domestic demand for the majority
As should be clear from the above, the con- of their business. Foreign demand thrives more
cept differs as a function of the level of analy- readily when domestic tourism is well estab-
sis. Table 2.1 summarizes these differences. lished. Related and supporting industries that
possess their own advantages can stimulate an
The structure industry. For example, the leisure and recre-
ation, retailing and entertainment industries
The structure of competition between compa- share activities that complement the tourism
nies within any industry may be viewed as industry. Supplier industries (such as con-
being driven by five forces (Fig. 2.1). Although struction, arts and crafts, and food services)
we readily recognize the competition that that are either unique or cost-efficient confer
occurs as a result of rivalry among existing advantages on the tourism industry. The fourth
firms (e.g. in a city, hotel A competes with point on Porter’s diamond concerns firm strat-
hotels B, C and D for the business traveller), egy, structure and rivalry. A climate of competi-
companies often overlook other important tion stimulates improvement and discourages
sources of competition. Substitute products or stagnation. For example, the deregulation of
services (e.g. video-conferencing), although the airline industry, inter-airline alliances and
often very different in form, compete to serve strong price competition continue to stimulate
the same underlying market need (i.e. the the demand for air travel.
need for business persons to communicate). To the competitive diamond, Porter added
Companies also compete against the threat two additional variables, chance events and
that newcomers might enter the industry. For government, which can influence any of the
example, a hotel with high market share, four major determinants. Chance events that
an efficient operation, competitive prices and suddenly alter the circumstances introduce
strong brand recognition deters new entrants. opportunities for some and threats for others.
Competition also occurs for sources of reliable, For example, a terrorist event may direct tour-
low-cost supplies (e.g. laundry service) and for ists from one destination to another. Political
Conceptual and Theoretical Perspectives 15
Level of competition
Element of
competition Companies National industries National economies
The tools Goods and services Political lobbyists International trade policies and
Corporate strategy Industry associations free trade agreements
Market research Strategic alliances Innovation and entrepreneurship
Competitor analysis Marketing authorities Education and training
Industrial policy Productivity improvement
Cartels Investment
Joint promotions Economic policy
National culture
Fig. 2.1. Forces driving competition between companies (from Porter, 1980).
16 Chapter 2
Fig. 2.2. Determinants of national advantage in particular industries (adapted from Porter, 1990).
Fig. 2.3. Factors of competitiveness between national economies (from WTO, 1995b).
industry in other nations. The tourism industries When entire national economies represent
in France and Spain broadly covet similar global the unit of analysis, countries compete for a
markets. At the same time, it is important share of the international trade in goods and
to recognize that the relationships between services. In the current mobile global economy,
national tourism industries may not always be companies, capital and, to some extent, labour
competitive. To some extent, for example, the are free to move to locations which possess
tourism industries in Australia and New Zealand comparative and competitive advantages.
are complementary in terms of attracting So the competitive territory includes jobs,
long-haul visitors to that region of the world. investment and trade.
On a more local level, tourism in the states of
Maryland and Delaware in the USA are also The stakes
quite complementary.
A different type of competitive territory is Whereas the territory represents the ground
also relevant at this level of analysis. National over which competition is fought, the stakes
industries also compete over national resources represent the prize that this territory brings.
against other industries in the same country. For companies, the most obvious prize is
Governments seek to allocate resources to profitability. Mere survival in the face of bank-
growth industries through national strategies ruptcy or a hostile takeover attempt is also a
(Scott, 1985a). Greater allocative efficiency of reward conferred on competitive companies. In
the deployment of national resources produces addition to financial stakes, market share bestows
additional national income and wealth (Arndt legitimacy, authority, power and respect upon
and Bouton, 1987). companies and their managers because they
Important resources include land, labour are recognized as market leaders. As motiva-
and capital, for example. Favoured industries tion, these social and political rewards may be
will find it easier to attract or gain access to as significant as those that are purely financial.
these resources. The tourism industry, for By comparison, competitive national
example, competes against logging and mining industries enjoy a level of international domi-
industries for land as these industries involve nance that is shared by all national firms in that
largely incompatible land uses. The tourism industry. Industrial strength, growth and pros-
industry must also provide an attractive return perity provide the critical mass and firm founda-
on investment if it is to capture a sufficient tion for individual companies to pursue global
share of investment capital, and suitable salaries markets. In the tourism industry it would be diffi-
if it is to attract an appropriate mix of labour cult for a single enterprise (e.g. hotel or attrac-
skills. tion) to do well in attracting international visitors
18 Chapter 2
if the destination or national tourism industry direct in their effect, whereas the effect of
were not already competitive. Competitive, national economic tools is more complex,
prosperous industries typically enjoy greater uncertain and gradual. Companies can be
levels of public respect and support from policy managed, but national economies can only
makers. As a result, favourable public policies be coaxed, cajoled or nudged in a desired
may lead to some continuity in industry success. direction. Some tools, such as economic
The stakes for a nation, economy-wide, policy, international trade policies and free-
are economic prosperity and the quality of the trade agreements can be modified or tweaked
life of its citizens. Nations cannot be competitive relatively easily. Others, such as national
in all industries as the factors of production are culture, innovation and entrepreneurship, and
not shared equally. Every nation must make education and training may take many years to
choices as to which industries provide the best change, if change is possible at all, and it is even
cornerstones for their economy on the basis longer before the effects on the competitiveness
of factor endowments in which each has a of a nation are felt.
comparative and competitive advantage. Such
choices should be based on advantages that are Managing the framework
sustainable over the long term, not only eco-
nomically but also politically, environmentally The levels of competition form a hierarchy in
and socially. which the nature of competitiveness is addres-
sed at different levels of aggregation. Since
The tools competitiveness at each level is interdepen-
dent, strategies for competitiveness, in order
The tools provide the means by which com- to be effective, ought to be congruent. Samli
petitiveness can be managed. Companies use and Jacobs (1995) argue that government
market research, competitor analysis and macrostrategies and corporate microstrategies
corporate strategy to establish a competitive must be congruent if a country is to develop its
position. Ultimately, a company’s goods and competitive advantage fully in the international
services embody its competitive capabilities. arena. Companies, national industries and
Although the competitiveness of an indus- national economies require a shared vision and
try depends, in part, on the competitiveness of effective lines of communication if their strate-
its individual firms, it is also driven by the collec- gies are to work in concert rather than at
tive actions of these firms towards the common cross-purposes. This is unlikely if the different
good of the industry. For example, strategic levels do not share the same basic model or
alliances, partnerships, joint ventures or pro- understanding of the factors that shape com-
motions, cartels, marketing authorities and petition. Consequently, one of the main moti-
industry associations represent organizational vations for writing this book was to propose
behaviours designed to advance the interests such a model for the tourism industry as a
and success of the industry. It may be argued basis for discussion, debate and research.
that, at times, what companies believe to be in
the best interest of the industry may, in fact,
sow the seeds of stagnation and decline in the
long run. Attempts to protect an industry have Competitiveness in the service sector
often stifled innovation and institutionalized
uncompetitive behaviours. Governments seek Our understanding of competitiveness is based
to influence the competitiveness of national largely on research in the goods-producing
industries through industrial policy, and indus- sector. Yet today, in industrialized economies,
tries endeavour to shape government policy by the service sector dominates. Although most
employing political lobbyists. of the service economy is driven by domestic
The tools for building and manipulating demand, the volume of internationally traded
competitive national economies tend to be services is increasing rapidly.
rather blunt compared with those available to It was long believed that there was little
individual companies. Company tools are more scope for international trade in services because
Conceptual and Theoretical Perspectives 19
success. For example, tourism depends heavily 1994) defines competitiveness as combining
on climate and geography, and education and assets and processes, where assets are either
health services depend on the training and skill inherited (e.g. natural resources) or created
of local personnel.’ We would expect, there- (e.g. infrastructure), and processes transform
fore, that the theory of comparative advantage, assets into economic results. However, the
which recognizes spatial variations in endow- World Economic Forum uses eight factors in
ments of the factors of production, would help measuring competitiveness (Fig. 2.3), omitting
to explain the competitiveness of tourist desti- recognition of the natural resource assets on
nations. But Porter has argued for a new theory the basis of the argument that competitiveness
of competitive advantage that goes beyond ought to focus only on value added and not on
the limited types of factor-based comparative comparative advantage (IMD, 1994, 1995).
advantage to incorporate spatial differences in The created factors of production (i.e. assets)
the ability to apply or to make effective use of that are included in the World Economic
these factors: Forum model include human resources (i.e.
A new theory must move beyond the compar-
people) and capital resources (i.e. finance and
ative advantage to the competitive advantage infrastructure).
of a nation. It must explain why a nation’s Porter (1990, pp. 74–75) groups the
firms gain competitive advantages in all its factors of production into five broad categories:
forms, not only the limited types of factor- human resources, physical resources, knowledge
based advantage contemplated in the theory of resources, capital resources and infrastructure.
comparative advantage. Most theories of trade In a tourism context it seems appropriate to add
look solely at cost, treating quality and differ- historical and cultural resources as an additional
entiated products in a footnote. A new theory category, and to expand the infrastructure
must reflect a rich conception of competition
category to include tourism superstructure.
that includes segmented markets, differenti-
ated products, technology differences, and
economies of scale. Quality, features, and new Human resources
product innovation are central in advanced
industries and segments. The quantity, quality and cost of human
(Porter, 1990, p. 20) resources available to the tourism industry will
shape a destination’s competitiveness. The
To understand the competitiveness of tour-
tourism industry employs a diverse range of
ist destinations, therefore, it is both appropriate
personnel from bartenders and petrol station
and essential to consider the basic elements of
attendants to hotel managers, airline pilots,
comparative advantage as well as the more
consultants and entrepreneurs. The availability,
advanced elements that constitute competitive
skills, costs, work ethics and standard working
advantage.
conditions of a destination’s tourism managers
and employees are critical in an industry that
emphasizes customer service.
Comparative advantage
Physical resources
The distinction between comparative advantage
and competitive advantage has not been made Physical resources play a fundamental role in
completely clear in the literature on competi- attracting tourism to a destination. The diver-
tiveness. The theory of comparative advantage sity, uniqueness, abundance, accessibility and
concerns differences in the endowment of the attractiveness of scenic, ecological, recreational
factors of production. And while some, such as and other natural physical features, such as
the World Economic Forum, have assumed mountains, lakes, deserts and canyons, often
that this covers only natural endowments, the represent a primary motivation for travel. A
more conventional view is that comparative destination’s climate, location relative to impor-
advantages concern both naturally occurring as tant markets and geographical size are also
well as created resources. The World Economic important natural endowments. These resources
Forum’s World Competitiveness Report (IMD, do not necessarily affect a destination’s
Conceptual and Theoretical Perspectives 21
comparative advantages linearly. For example, the subordinate facilities, equipment, systems
climates can be too hot as well as too cold, or and processes that provide a foundation for a
just unsuitable for certain activities (e.g. skiing). wide range of economic needs and, as a conse-
Destinations that enjoy a close proximity to quence, is often provided by government or
major tourist origins are normally at an advan- public corporations. Examples include roads,
tage, but distant, exotic lands may also be able water supply, sanitation, health systems, utility
to benefit from their remote, unspoilt image. services and public services such as fire
and police protection, libraries and airports.
Knowledge resources The tourism superstructure represents the
additional created assets which rest upon this
Although the tourism industry is not as infrastructure and which serve visitor-oriented
knowledge-intensive as, for example, the high- needs and desires. Examples include hotels,
technology, education and medical services restaurants, theme parks, resorts, golf courses
sectors, knowledge resources are nevertheless and many other facilities.
important. This is most easily illustrated by
comparing the ability, in terms of know-how, Historical and cultural resources
of Third World countries to host tourists
vis-à-vis the industrialized world. Third World These resources may be both tangible (e.g.
destinations often need to import knowledge archaeological artefacts, ruins, monuments,
related to hotel management, engineering, architecture and townscapes, battlefields, art
regional planning and marketing when devel- galleries and artwork and museums) and
oping the tourism sector. This is reflected in intangible (e.g. music, language, customs and
the fact that many of the United Nation’s traditions, life styles, values, friendliness and
WTO’s activities are aimed at assisting literature). The stock and condition of historical
developing countries, whereas a number of and cultural resources depends upon a nation’s
developed countries have chosen not to be appreciation of their value and its ability to
members of the WTO. care for their condition. Government depart-
ments, trusts, arts councils, grants bodies and
Capital resources the degree of public patronage are examples of
manifestations of support for cultural activities
The ability of a destination to develop its tour- and the cultural heritage of a destination.
ism superstructure and finance its operations
depends on the amount and cost of capital Size of economy
available. In turn, the availability of capital
depends not only on the overall volume and The size of the local economy can also impact
structure of wealth but also on the extent to a destination’s comparative advantage. A larger
which investors believe that the returns from local population and economy provides several
tourism development are commensurate with potential advantages. It creates the conditions
the risks. In this regard, the financial perfor- for greater local tourism demand. It also
mance of the tourism industry has been mixed. facilitates the acquisition of needed resources
Notwithstanding the existence of some very locally. Greater economies of scale lower the
large corporations, the predominance of small cost of these other resources. A larger economy
businesses in the tourism sector means that also produces increased competition, leading
development often depends on the extent of to a variety of suppliers, product qualities and
personal savings and investment as much as it service. Local entrepreneurial activity in tour-
does on capital markets. ism facilitates destination competitiveness in
numerous ways (Crouch and Ritchie, 1995).
Infrastructure and tourism superstructure
Resource augmentation and depletion
The stock of created assets, in combination
with the inherited natural assets, supports The resources that make up a destination’s
much economic activity. Infrastructure covers factor endowments change over time, altering
22 Chapter 2
the comparative advantage of a destination. added resources (and not the resources) creates
Naturally occurring resources can be divided a surplus that a country can then invest in
into two types: those that are renewable and its economic development’ (p. 14). For this
those that are not. For example, hunting and reason, the WCR model focuses on value added
fishing, provided the stock of wildlife is well and ignores inherited factors.
above a sustainable level, involves a renewable In tourism, however, these arguments
resource. On the other hand, a sensitive eco- concerning the relevance of natural resources
logical reserve cleared for agriculture or mining to competitiveness do not apply. A country’s
is lost for ever despite any reclamation efforts. natural resources are clearly an important
The stock of created resources, too, changes source of comparative advantage in tourism.
over time but, because these are created, they However, in contrast to the sale of resources
are typically more renewable than naturally such as oil or minerals, tourists do not return
occurring resources. Nevertheless, certain cre- home with any significant physical elements
ated resources, particularly those of historical from the ‘exporting’ country (other than
significance (such as an archaeological artefact) the odd artefact or photograph). Thus, these
or contemporary cultural significance (such as resources are not depleted, despite the fact
a famous work of art) may not be renewable. that people have paid for their use. In tourism,
This is an example where the distinction bet- the visitor purchases an opportunity to briefly
ween naturally occurring, or inherited, and cre- experience such resources as scenery, culture
ated or man-made resources becomes moot. and climate – but this experience does not
The wise stewardship of resources is necessarily create environmental degradation,
critical, therefore, to the long-term competitive- which would cause a corresponding minus on
ness of a tourism destination. Strategies are the national balance sheet. Indeed, the fact that
required for the education and training of certain visitors have experienced a particular
human resources, the protection and care of country may enhance its appeal, and therefore
natural physical resources, the expansion its ongoing value, to others.
and domestication of knowledge resources, the At the same time, it must be acknowledged
investment and growth of capital resources, the that tourism can produce externalities that
construction and maintenance of infrastructure ‘must be written off as a reduction in the domes-
and tourism superstructure, and the preser- tic value-added since it implies that the quality
vation and fostering of historical and cultural of the national resources has deteriorated.
resources. Countries should not be misled into seeking
The World Competitiveness Report short-term prosperity at long-term cost. Value
(WCR) (WEF/IMD, 1992) makes an important added in the long-term is what really constitutes
point concerning the role of non-renewable a basis for the prosperity of nations’ (IMD,
resources in a nation’s competitiveness. The 1995, p. 14). Examples of externalities in tour-
report argues that, under the traditional theory ism that may result in such write-offs include
of comparative advantage, ‘countries are better environmental pollution, the despoliation of
off if they trade the products or services that scenic areas, social fragmentation, the spread
give them the greatest advantage, or least dis- of disease, the encroachment into wildlife
advantage, relative to their possible trading habitats and the creation of tourist ghettos.
partners’ (p. 12). ‘A comparative advantage can Despite the possibility of the above exter-
be based on having an abundance of natural nalities, it is argued that the tourism phenome-
resources in a country, for example oil, whereas non represents a form of economic exchange
competitive advantage can only be based on that is fundamentally different from the sale of
an entrepreneur’s ability to add value to the physical resources. With this premise, it can be
available resources, by refining the crude oil, further argued that, in the context of tourism,
say. By merely selling its natural richness, inherited, naturally occurring resources are
a country does not become better off in the important. A possible counter-argument is
long term – a sale [caused by natural resource that the natural resources of tourism have no
degradation] must be written off as a minus on economic value in themselves (although many
the national balance sheet; selling the value would argue that value cannot be measured in
Conceptual and Theoretical Perspectives 23
economic terms alone). For example, a scenic been recognized for their ability to improve
valley has no economic value in itself if the only their competitiveness as destinations. In con-
creatures able to experience the scenery are the trast, Singapore and Russia stand at opposite
local fauna. Building a road into the valley, thus ends of the comparative/competitive advan-
providing access for tourists, does, however, tage continuum. Russia possesses enormous
provide value. But as value is created only by physical, historical and cultural (i.e. naturally
the building of the road and as the scenery is not occurring or inherited) resources, yet lacks the
sold (resulting in a corresponding depletion of human knowledge and capital resources as well
natural resources) it can be asserted that the as the infrastructure and tourism superstructure
concept of comparative advantage is relevant or (i.e. created resources) required to bring
operative in this example. In brief, because these assets to the market. By comparison,
value has been added, it may be said to Singapore’s natural, historical and cultural
represent a case of competitive rather than resources are inferior, but its endowments in
comparative advantage. the other factors of production surpass those
Despite this counter-argument, there of Russia. In addition, Singapore seems able
remains a fundamental difference in the sale to utilize its competitive resources more
of an experience related to the use of a resource effectively. Perhaps most notable is Singapore’s
as opposed to the sale of the resource itself. reputation for service in its hotels and airlines.
Indeed, even physical resources require Singapore is safe, clean and hospitable. Its
enhancement (or the adding of value) before enterprises are reliable, its prices are competi-
they can be sold. Oil or minerals in the ground tive in terms of value, and the country functions
need to be accessed and physically removed as a highly tuned nation.
from their original location before they Singapore and Russia have a very different
become useful commodities. This process is mix of factors (known as factor proportions),
the equivalent of providing access to a beach but this only partly explains their difference
or a scenic area. However, we argue that the in destination competitiveness. Competitive
nature of the exchange process is conceptually advantage – the other side of the coin – explains
and fundamentally different. the rest because it introduces the additional
effect of differences in the deployment of the
resources; that is, where and how a destination
chooses to mobilize its comparative advantages.
Competitive advantage Indeed, Porter (1990, p. 83) contends that
offsetting weaknesses is more likely to stimulate
Whereas comparative advantages involve the businesses to innovate than to capitalize on
resources available to a destination, competi- strengths, and he has noted that nations which
tive advantages relate to a destination’s ability are factor-disadvantaged are often stimulated to
to use these resources effectively over the long find innovative ways of overcoming their com-
term. A destination endowed with a wealth parative weakness by developing competitive
of resources may not be as competitive as a strengths.
destination that is lacking in resources but that
utilizes the little it has much more effectively. Modes of deployment
By this we mean that a destination which has
a tourism vision, shares this vision among all Different destinations have adopted a variety
stakeholders, understands its strengths as well of modes for deploying tourism resources. As
as its weaknesses, develops an appropriate noted above, in the past governments played a
marketing strategy and implements it success- much less active role in destination manage-
fully, may be more competitive than one which ment. Today, however, various areas and levels
has never asked what role tourism is to play in of government are involved in the promotion,
its economic and social development. regulation, presentation, planning, monitoring,
Earlier we mentioned San Antonio and maintenance, coordination, enhancement and
Cleveland as examples of cities that, although organization of tourism resources. The locus
weak in terms of comparative advantages, have of control by government varies from one
24 Chapter 2
destination to another. In some countries, the listing of resources. It is also important to under-
national government may play a dominant role, stand something about the capacity and
whereas in others, state or local governments capability of the resources, including the limita-
may be more important. For example, in 1996 tions and consequences of their use. The main-
the US Federal Government ceased operation tenance of resources is the second element.
of the US Travel and Tourism Administration The stock of resources must be maintained in an
in favour of state-controlled organizations and appropriate way to guard against undue deteri-
greater responsibility by industry. oration and to facilitate sustainability. For man-
The actions of various industry associations made resources in particular, actions that
affect the deployment of tourism resources. facilitate the growth and development of the
Paramount bodies, such as the Travel Industry stock of these resources are important. Finally,
Association of America, the Tourism Industry the efficiency and effectiveness of resource
Association of Canada and the Tourism Coun- deployment create competitive advantage.
cil, Australia, and sectoral associations, such as
air transport associations, hotel associations The role of domestic tourism
and restaurant associations, seek to promote
the interests of their membership, and their Globally, domestic tourism receipts amount
activities include providing a voice on matters to about five and a half times international
concerning the cost, accessibility, regulation tourism receipts. In most situations, therefore,
and deployment of tourism resources. it is domestic tourism that drives the nature and
Despite the central role of government and the structure of a nation’s tourism industry.
industry associations, the collective actions of There are, however, a certain number of cases
the many thousands of individual tourism and where this is not true (e.g. Bermuda). But gen-
related enterprises have the greatest impact on erally the supply of the tourism product
resource deployment. Governments may con- is driven by domestic or local demand that
strain the way in which resources are used, but, is typically more stable and reliable and less
within these constraints, firms decide precisely fickle than demand from distant markets.
where and how the resources will be deployed. Hence, solid domestic demand provides a
Special interest groups such as environ- healthy competitive environment and the
mental organizations, community associations, critical mass of demand necessary to support
consumer groups, recreational associations and a thriving tourism and hospitality sector.
others are often vigilant in expressing their Strong domestic demand therefore helps to
views on tourism development, particularly as provide a climate that also encourages inbound
it concerns perceptions of adverse ecological, tourism and discourages outbound tourism (the
social and cultural impacts. import substitution effect). There are obvious
Tourism resources are likely to be used limitations to this assertion, however, since
more effectively when the different modes of domestic travel may not provide a suitable sub-
deployment share a common view regarding a stitute for outbound international travel where
destination’s strategy for tourism development. specific or unique kinds of travel experiences
If this is to occur, stakeholders must agree on a are involved. None the less, although inbound
body of research and information which details tourism and outbound tourism are distinct
the state of these resources. Effective and inclu- phenomena, strong domestic demand for
sive communication between all stakeholders tourism impacts favourably on both of them by
helps to chart a destination’s course. We have a enhancing the attractiveness of the destination
few more words to say about this towards the to both residents and distant markets.
end of this chapter.
The mobilization or deployment of
resources for competitive advantage may be
considered to consist of five elements. First, an Destination competitiveness
audit or inventory of resources is required
before they can be deployed appropriately. This While destinations compete primarily for eco-
involves more than just the cataloguing and nomic reasons, with an emphasis on attracting
Conceptual and Theoretical Perspectives 25
tourist expenditures, other motives may also and individual-oriented’ (p. 9). ‘New tourists are
underlie the development of tourism. For fundamentally different from the old . . . They
example, international tourism provides an are more experienced, more “green”, more
opportunity to showcase a country as a place flexible, more independent, more quality
to live, to do business with, to invest in and to conscious and “harder to please” than ever
trade with. It may also be used for political before’ (pp. 9–10). She argues that:
reasons to bolster national pride. Increasingly, Competitive strategies are therefore criti-
by means of careful management, attempts are cally important for tourism destinations to sail a
being made through tourism to help preserve new tourism course. This is so because:
ecological resources and cultures. For exam-
ple, tourism can provide a powerful economic
• Comparative advantages are no longer
natural.
incentive to protect African wildlife in the fight
against poaching, or to encourage rural resi-
• Tourism is a volatile, sensitive and fiercely
competitive industry.
dents to pursue their traditional culture in an
effort to stem the flow of people in Third
• The industry is undergoing rapid and
radical transformation – the rules of the
World countries towards overpopulated cities.
game are changing for everyone.
Tourism also facilitates international under-
standing and promotes peace (D’Amore,
• What is at stake is not just tourism but the
survival of tourism-dependent economies.
1988), and may be used as a tool to further
the international political goals of a country
• The future development and viability of
tourism-dependent economies will depend
(Buckley et al., 1989). This multiplicity of
not only on tourism, but on the entire
goals adds to the difficulty of conceptualizing
service sector.
the destination competitiveness concept.
(Poon, 1993, p. 291)
An additional complication concerns the
issue of how resources are allocated across Poon further suggests four key principles
different industries and sectors of the economy. that destinations will need to follow if they are
Competitiveness in any sector, including tour- to be competitive: (i) put the environment first;
ism, can be improved by shifting resources (ii) make tourism a lead sector; (iii) strengthen
away from other sectors. One would hope that the distribution channels in the marketplace;
governments and the private sector would carry and (iv) build a dynamic private sector (p. 24).
out this resource allocation process with the While these suggestions have merit, one might
nation’s overall prosperity in mind. There is ask whether there are not other critical compet-
no guarantee that this will be the case. Some itiveness factors among the many comparative
sectors may be more effective than others and competitive advantage dimensions that
in lobbying for government support. The agri- we have only touched upon so far. These four
culture and petroleum sectors, for example, principles are too broad and general to be man-
have typically been much more persuasive than agerially useful. A deeper, richer understanding
tourism in influencing public policy. of destination competitiveness is required.
Despite these difficulties, it seems reason- The concepts of comparative and competi-
able to focus attention on long-term economic tive advantage provide a theoretically sound
prosperity as the yardstick by which desti- basis for the development of a model of destina-
nations are to be assessed competitively. A tion competitiveness. But no single general
long-term view will help to internalize the broad trade theory will provide the necessary insight
range of costs and benefits into the economic or cover the most appropriate determinants
picture. from among the many variables possible.
Poon (1993) calls for greater strategic Gray (1989) notes that ‘any general model
orientation by tourism destinations if they are to of international trade must encompass an extra-
adjust to the competitive realities of ‘new’ tour- ordinarily large number of causal variables . . . a
ism. Mass tourism (or ‘old’ tourism) involved single theory of international trade . . . cannot
standardized and rigidly packaged products hope to account satisfactorily for all of the kinds
produced ‘along assembly-line principles’ of international trade which is undertaken in
(p. 29). New tourism is ‘flexible, sustainable this world. What is needed, then, is a more
26 Chapter 2
flexible body of analysis that will allow studies of reason, the result is always in doubt until
specialist sub-categories’ (pp. 98–99). the game is over.
Richardson (1987) expresses a similar At any point in time, as we attempt to
view. No ‘single theory is likely to be able to analyse and assess the competitiveness of a
encompass all the characteristics which make destination we have to rely on the past and what
trade in services such a complex – and such an we think might occur in the future. But from a
exciting – domain’ (p. 80). managerial perspective it is future performance
And Haahti (1986) states that ‘The infor- that we are really interested in. So although the
mation that should guide the decision maker focus of this book is destination competitiveness
in dealing with the targeting of competitive rather than performance per se, a few words
[tourism] resources is lacking in this critical area’ on the link between competitiveness and
(p. 13). performance are appropriate.
A mere listing of comparative and compet-
itive factors, no matter how comprehensive it
may be, is not sufficient. It is also necessary
to understand the relationship and interplay Tourism markets
between factors of competitiveness. That is, a
systemic model of destination competitiveness In order to say that something is competitive, it
is required. For example, a destination may not is necessary to specify the purpose or goal
possess a dominant position of strength on any towards which the competitiveness is directed.
particular determinant yet still be highly com- The same decathlete may be very competitive
petitive because its system of factors is unique in some events (e.g. shot-put, discus and
and difficult to replicate. A nation’s ‘position hammer-throw, where upper body strength
vis-à-vis some determinants may not be unique. and bulk are important) but weak in others
However, national advantage arises when the (e.g. the 100-metre sprint, hurdles and high-
system is unique’ (Porter, 1990, p. 147). Porter jump, where speed and agility are critical).
called his system of national advantage the Similarly, a destination may possess advan-
‘diamond’. In commenting upon the competi- tages more closely aligned with the needs
tive future of the tourism sector, Poon (1993, of one market segment (e.g. the adventure-
p. 205) also noted the increasing system-like seeker) than another (e.g. the culture-seeker).
nature of the industry. Some destinations may have a very skewed
competitiveness profile, meaning that they
have major advantages in some attributes but
are severely disadvantaged in others. By com-
Linking Destination Competitiveness parison, other destinations may be more evenly
to Performance balanced, offering a broader range of compara-
tive and competitive advantages. The former
Competitiveness is no guarantee of perfor- group of destinations are likely to appeal to a
mance. How often can you recall an occasion narrower range of tourism market segments
on which a highly talented sports team, which (e.g. Hong Kong), whereas the latter group
on paper should have won the game (e.g. the USA) may have the luxury of targeting
decisively, failed to live up to expectations? If a wider selection of market segments.
an analysis of competitiveness determined the A destination may deliberately decide not
result, there would be no need to play the to compete for certain market segments, either
game. On a given day a team may fail to because it lacks the requisite comparative
perform for a variety of reasons. Perhaps the and competitive advantages or because it has
game plan failed to address the real strengths chosen to deploy them towards other, more
and weaknesses of the opposition. Perhaps attractive markets. In these circumstances,
the coach lost a key player through injury, or is it meaningful to talk of competitiveness
the execution of specific tactics fell short. Or with respect to that segment? For example,
maybe it was because the opposition simply Mercedes-Benz is generally regarded as highly
played above themselves. Whatever the competitive in the luxury car market. If,
Conceptual and Theoretical Perspectives 27
however, competitiveness was measured in will target larger segments of the meetings
terms of the company’s share of the total auto- and conventions market. Although the city
mobile market, it would not be considered to be may be able to host smaller conventions,
a significant competitor. What are the implica- larger conventions offer a more efficient
tions of this viewpoint in tourism? Monaco, for match of resources and markets.
example, does not target the camper segment • Future demand. How will market seg-
of the travel market. In fact the principality ments evolve in the future? Market seg-
discourages campers, fearing that their pres- ments take time to cultivate, therefore a
ence in the country may tarnish its image as a match should be sustainable. Destinations
destination for the rich and famous – and those should anticipate the degree of match
aspiring to be rich and famous. over the long term.
So, as a destination seeks to apply its
comparative and competitive advantages, it
will look for a match between its competitive
Target market strategy
strengths and weaknesses, and the opportuni-
ties and threats present in each of the segments
Finding a match between a destination’s com-
constituting the global tourism market. The
petitiveness profile and the characteristics of
criteria for establishing the degree of match
certain market segments is only part of the
between the destination and the market
challenge involved in choosing target markets
segment may be grouped according to the
and developing a strategy to pursue them. We
following four categories.
also have to consider the response of competi-
• Nature of demand. The needs, wants tors to these same market segments as well as
and characteristics of those who constitute the goals we have established for our tourism
the market segment must accord with the development strategy.
comparative and competitive advantage
profile of the destination. The fit does not The competition
have to be perfect in every respect, but at
least in several key elements the desti- Other destinations are engaged in the same
nation has to possess a superior ability process of targeting a set of tourism market
to deliver the type of tourism experience segments. These destinations may play the
sought by the segment. As noted in the role of either enemy or ally. Enemies are desti-
previous section, however, it is the sys- nations whose success occurs at our expense.
tem, not the simple sum, of competitive That is, the choice facing the tourist in the
elements that matters. respective segment is either to visit the enemy
• Time of demand. Neither destination or to visit us. Allies also covet the same market
competitiveness nor market demand is segment but, for various reasons, complement
static. The match between the two must be rather than diminish our efforts to attract these
synchronous. At different times of the year tourists. For example, two (or more) destina-
certain resources will be at their peak (e.g. tions may be allies because their geographical
autumn colours, summer festivals, wildlife proximity enables packaging of the destinations
activity, snow and anniversaries of histori- in the same trip, or their collective marketing
cal events). Demand will also follow its own efforts may expand the size of the segment to
set of pressures and constraints, such as the extent that both destinations experience
the timing of school vacations, quiet peri- more demand than they would if either of them
ods in industry, or winter ‘blues’. The tem- was the only competitor in town.
poral pattern of resources and demand So when choosing market segments to
must be harmonious before a match exists. target, the decision should take competitor
• Magnitude of demand. The capacity of the strategies into account. A small destination may
destination and the size of the market seg- target a segment also chosen by a large ally even
ment must also be compatible. A conven- though there is a slightly better match with
tion destination like Chicago, for example, another segment. Or it may choose to target an
28 Chapter 2
inferior match because its enemies, who have sports team goes into the game with a goal and
also chosen that segment, are easier to deal with strategy, but the final result – and therefore the
than the competitors, who would have to be team’s performance – rests on the execution
faced if it had pursued the segment more closely of its game plan relative to how well the
matched with its competitiveness profile. opposition executes its own game plan.
Goals need to consist of some short-term
The goals milestones, but the performance of the desti-
nation stemming from its comparative and
Target markets need not only match a competitive advantages must ultimately be
destination’s comparative and competitive assessed over the long term. It is easy for a
advantages. A match with a destination’s tour- destination to fall into the trap of pursuing
ism development goals is also important. Our short-term apparent gains without any idea
destination may be more competitive in a of where this will lead in the long term,
different segment of the market, but if success or whether there may be undesirable conse-
in that segment does little to help us achieve quences that will become apparent only after
our goals we may have gained only a boost to many years of pursuing a myopic strategy. Scott
our ego. For example, suppose we had set a (1985b, p. 15) made the point that ‘competi-
goal to expand the economic benefits of tour- tiveness means earning a rising standard of
ism beyond a coastal resort region to improve living, not borrowing it’. Although this was said
the standard of living of residents in the hinter- in connection with the relationship between
land. On the basis of our competitiveness debt and productivity improvement, one could
profile alone, we may be tempted to target also apply it to the notion of borrowing from
short-stay, big spenders who might never leave the future to benefit the present. He went on
the resort itself and whose spending never to suggest ‘the wisdom of reviewing multiple
filters into the surrounding areas, other than measures, using a long time horizon, and
perhaps through the fortunate few employed attempting to relate . . . performance to . . .
to work at the resort. goals and commitments’.
But when the decision is goal-driven, a How does a destination execute its game
better target market might be backpackers, who plan successfully? All the usual rules apply to
stay longer and stray beyond the coast. They start with. Words in a strategic document will
may not spend as much as the other segment not leap off the page and into action by them-
in total, but the import leakage might be selves, and this is where many strategic plans
lower because they consume local crafts, stall, gather dust and meet their fate. Strategies
food and locally owned accommodation. have to be made to happen by establishing
The competitiveness-profile–segment match structures for implementation, identifying time-
may not be quite as good, but what does this lines and assigning responsibilities. The market
matter if the destination’s tourism goals are and the competition need to be monitored
more likely to be achieved as a result. We finish continuously so that plans can be adjusted in
this part of the chapter with a few further real time. Performance indicators need to be
thoughts on charting a destination’s course. tracked and contingencies implemented when
required.
But a destination faces some additional
Destination performance challenges not normally confronted by a
firm trying to implement a strategy. These
Although a target market strategy should be challenges arise because a destination strives to
goal-driven, the final link between destination achieve multiple goals, involves many different
competitiveness and performance depends on stakeholders, often lacks a focal organization
the implementation of the strategy resulting in that is able to see events from a bird’s-eye
a set of actual (not just anticipated or hoped view, and faces a difficult task in gathering
for) achievements that can be compared with the disparate information required to assess its
the established goals. As noted earlier, the performance.
Conceptual and Theoretical Perspectives 29
reasons: (i) it will be conducted more efficiently to make decisions about its desired industrial
because similar questions will need to be asked profile, and it is really only at this point that
and answered in these broader contexts; and tourism’s role in assisting the place to achieve all
(ii) overall goals will not be achieved unless of its goals becomes evident. The somewhat
sectoral plans are in harmony. separate but integrated process of developing
Kotler et al. (1993) highlight the plight a strategy for tourism begins at this point with
facing many cities, regions, states and coun- the undertaking of an audit of the destination
tries. They ask the question: can places do a which draws on the place audit but which
better job of forecasting and planning their extends, develops and fleshes it out further
future? They contend that the four traditional in terms of its tourism-related elements. Our
approaches to place development – community final chapter outlines how this might be
development, urban design, urban planning accomplished.
and economic development – each possess Places have recognized the growing signifi-
flaws that limit their efficiency. In response, cance and attractiveness of the tourism industry
they suggest that the strategic market plan- in their development plans. It has become a
ning process, which has been used by business major economic sector representing approxim-
organizations for many years, provides several ately 11% of the world’s gross domestic product
advantages because: (i) places compete for and a similar percentage of world employment
resources like business; (ii) dynamic, global (WTTC, 1995, p. 22). Strategies to develop
forces affect their industries; (iii) places compete and market the place as a tourist destination can
for tourists, conventions, educated residents, often proceed symbiotically with other place
factories, corporate headquarters and start-up marketing goals. Place marketing entails devel-
firms; (iv) they must be excellent or superior oping an attractive image, whether the goal is to
in some special ways; (v) they must be market- attract tourists, residents, investors or business.
conscious and market-driven; (vi) the attributes Indeed, a place that offers an attractive lifestyle
they develop today will affect their market and a variety of recreational, cultural and leisure
position tomorrow; and (vii) if they choose the activities serves the needs of both residents and
wrong industries they are in the same position visitors. In general terms, the tourism industry is
as companies that choose the wrong products now firmly established as an economic sector
(Kotler et al., 1993, p. 76). that is as attractive to places, in their plans for
Kotler and colleagues provide a five-stage economic development, as any other industry.
strategic market planning process that begins Interestingly, Kotler et al. (1993, p. 227) con-
with the completion of the place audit. The clude that ‘Tourism and the business hospitality
purpose of the place audit is to understand market have emerged as viable place develop-
‘what the community is like and why’ (Kotler ment strategies on a footing equal to business
et al., 1993, p. 81). The audit provides a com- retention, business attraction, grow your own
prehensive and detailed set of information upon businesses, and export-development/reverse
which subsequent planning is based. It should investment. In a service-driven economy of
identify the important tangible and intangible aging population, these two businesses are
characteristics that define the place. That is, generally expected to grow at rates ahead of
its strengths, weaknesses, opportunities and the national economy.’
threats. It should also profile the philosophies of
its citizens, civic leaders, institutions, businesses
and other entities that together constitute the
values of the place. Places, like people, possess Allocating resources: tourism’s share
personalities, and these personalities influence
the way in which people wish to live. On several occasions in this chapter we have
On the basis of the place audit, a vision and touched upon the competition between indus-
set of goals must be crafted. This process will be tries for a share of the nation’s resources. In
examined in greater detail in Chapter 8, where particular, we have examined how the theory
we present the process of destination policy of comparative advantage provides us (to some
formulation. In part, this will require the place extent at least) with a rational basis for resource
32 Chapter 2
allocation decisions. But resources are not nec- enormous size of the industry (WTTC, 1995),
essarily allocated rationally. Various influences it remains highly fragmented in many destina-
and dynamics may play a role at least as signifi- tions and consists of many thousands of compa-
cant as the rational efficiency approach that nies, large and small. In fact, tourism is not an
underlies the comparative advantage concept. industry in the traditional sense of the word.
For example, industries that have been Industries are traditionally defined from a prod-
the traditional mainstay of an economy in the uct rather than a market perspective. And
past typically exert a significant influence on because tourism is made up of so many diverse
policy makers. These industries tend to benefit products, many people working in the tourism
from a lag in the effect of their importance to sector still tend to identify more closely with
an economy, such that biased allocation of their industry (e.g. lodging, transportation, food
resources may be perpetuated long after the services, entertainment and tour operations)
industry has begun to decline. Indeed, when than they do with the broader economic sector
society finally realizes that these industries are defined by and derived from tourism demand.
in decline, there is often an attempt, perhaps While recent efforts led by the WTO (WTO,
futile, to maintain or even increase resources to 2001a) to develop and implement Tourism
these sectors in an effort to turn around, delay Satellite Account systems designed to address
or soften the fall. this complexity are promising, it will take time
Further, these established, traditional before these systems are in widespread use. In
industries are often able to more effectively the meantime, few outside the industry, and
mobilize their constituencies in expressing a perhaps not even all in the industry, recognize
consistent, concerted voice towards policy the size, scope and significance of tourism. The
makers. They have, over the years, fine-tuned lag effect we identified above also serves to
their message. Over time, too, industries tend to delay the recognition of emerging industries.
become more like-minded within. Structures The World Travel and Tourism Council was
and systems evolve, a process that creates a formed several years ago with the express
degree of homogeneity in management styles purpose of addressing these challenges, and
and perspectives. As a result, these industries although governments, social institutions and
often exert an influence that exceeds their the public appear to be rapidly altering their
significance. perceptions of the industry, these problems still
The travel, tourism and hospitality sector exist to a large extent.
is, by comparison, often poorly organized. The tourism industry must continue to
Notwithstanding the fact that humans have organize, professionalize, communicate, edu-
been travelling since the origin of civilization, cate, and conduct and support research if it is to
the industrialization of tourism really only compete effectively for its share of a nation’s
began after the Second World War. Despite the resources.
Conceptual and Theoretical Perspectives 33
While Part I of this chapter has focused primar- of a destination, it is essential that destination
ily on the theoretical foundations of economic managers understand the concept and how it
competitiveness, we have continually stressed can be realized. It is with this concern clearly in
that destination competitiveness must be viewed mind that this chapter seeks to provide readers
from a long-term perspective. This has sub- with the fundamentals they will require in
stantial implications for the way in which a des- order to meet their managerial responsibilities
tination is planned, developed and managed. of stewardship – of caring for their destination
In the business field, where the concept of in a way that will preserve and enhance its
competitiveness has received much attention, it well-being for residents and its appeal for the
has become a tautology to talk of sustainable visitors of tomorrow.
competitiveness. That is, a firm may not be
regarded as competitive unless it is able to sus-
tain any advantages it possesses over the long
term. Those companies and shareholders who The Birth and Evolution of
take a much longer-term view of company Sustainable Tourism
performance look favourably on investment,
research and development, product innovation, Given the relative newness of tourism and
employee retention and career planning, etc. tourism management as a field of study, it
By comparison, companies that reward market should not be surprising that the concept of
share, growth and profit performance in the sustainable tourism represents an even newer
short term, discounting the promise of future area of study. This newness, combined with
profits, tend to encourage cost-cutting, down- rapid growth, led to the introduction less than
sizing and the milking of profits. The result is a decade ago of a new journal focusing on
that such a short-term view, while perhaps sustainable tourism as a field of study. In the
improving the bottom line for the present editors' pioneering introductory article in the
reporting period, may encourage actions Journal of Sustainable Tourism (Bramwell
that harm rather than foster long-term perfor- and Lane, 1993), they traced the origins of
mance. Particularly from a tourism perspective, sustainable tourism back to the publication in
the concept of competitiveness makes little 1973 of Ecological Principles for Economic
sense if it borrows from the future in this Development (Dasmann et al., 1973). They
way, because success and true prosperity are further noted that many of the ideas in this
necessarily built over the long term. work were developed at the International
A destination which, for short-term profit, Union for the Conservation of Nature and
permits the rape and pillage of the natural Natural Resources (IUCN) and referenced in
capital on which tourism depends is destined for the World Conservation Strategy published
long-term failure. It is simply a matter of time in 1980 (IUCN, 1980). The subsequent report
before the destination's natural capital will be of the World Commission on Environment
depleted. Some destinations may last longer and Development (WCED, 1987), frequently
than others, but in the end the destination's referred to as the Bruntland Report, is now
ability to appeal to an ever-demanding, ever- viewed by many as the next pivotal point in the
consuming market will decline to an uncompeti- recognition of sustainable development as a
tive level. It is not only natural capital that fundamental principle for managing global
must be sustained: all the elements of the core development. Henry and Jackson (1996)
attractors, the supporting factors and the infra- believe that the more general contribution of
structure must also be maintained and managed the holistic analysis arising from 'green' think-
in a sustainable manner if market and economic ing is also responsible, at least in part, for the
competitiveness is to be maintained. range of differing perspectives on sustainable
Because of the fundamental importance of tourism – specifically, those of Dobson (1990),
sustainability to the ongoing competitiveness Leland (1983), Naess (1990) and O'Riordon
34 Chapter 2
(1981). Henry and Jackson (1996) also point or, at a minimum, offer valuable insights into
out that 'the key tool of the environmental the causes and nature of most of the impacts of
manager is environmental impact assessment, tourism.
or project appraisal'. They also emphasize that Hunter (1997) offers yet another perspec-
project appraisal techniques are not limited to tive which merits consideration and understand-
environmental impact assessments, but also ing by destination managers and policy makers.
enable the evaluation of physical, cultural, He asserts that the current paradigm of sus-
economic, sociostructural and managerial/ tainable tourism development is based on the
employment impacts. This latter point is par- principles that this kind of development should:
ticularly significant in the context of tourism,
since it draws attention to the fact that sustain-
• meet the needs and wants of the local host
community in terms of improved living
able tourism involves ensuring sustainability
standards and quality of life;
with respect to all the above dimensions, not
only the environment. They further point out
• satisfy the demands of tourists and the
tourism industry and continue to attract
the need to assess the cumulative impacts of
them in order to meet the first aim; and
tourism across all projects on an ongoing basis,
• safeguard the environmental resource
and provide examples of the approaches of
base for tourism, encompassing natural,
Goodall (1994) and Green and Hunter (1992).
built and cultural components, in order to
From a destination management stand-
achieve both of the preceding aims.
point, it is important to appreciate that sustain-
able tourism does not attempt simply to control While Hunter acknowledges that these
development, but that it also seeks to encourage principles appear to be laudable, he asserts that
the development and promotion of appropriate they are overly tourism-centric and parochial,
forms of tourism – many of which can actually leading to the creation of tension between the
enhance the environmental, social and cultural general desire for sustainable development and
well-being of a destination in addition to a more specific search for sustainable tourism
increasing its economic prosperity. development. He further argues that people
A number of other authors have made working in tourism need to re-examine their
significant contributions to our efforts to under- views on the appropriate scope and scale of
stand tourism from a sustainability perspective. tourism, as well as their ability to isolate or con-
One of the earlier contributions was made by tain its impacts. Aside from providing a number
McKercher (1993), who identified what he of theoretical issues for debate, Hunter notes
terms 'some fundamental truths about tourism' that, from a practical perspective, the adoption
in relation to its social and environmental of a less parochial view of sustainable tourism
impacts. These truths are summarized in Table can help ensure that local development policies
2.2. McKercher argues that the recognition and and objectives for sustainable tourism will rest
understanding of them can play a key role in within broader sustainable development goals
developing future sustainable tourism policies at both the regional and the national level.
Table 2.2. Some fundamental truths about tourism (from McKercher, 1993).
• As an individual activity, tourism consumes resources, creates waste and has specific infrastructure
needs
• As a consumer of resources, it has the ability to overconsume resources
• Tourism, as a resource-dependent industry, must compete for scarce resources to ensure its survival
• Tourism is a private-sector-dominated industry, with investment decisions being based predominantly
on profit maximization
• Tourism is a multifaceted industry, and as such it is almost impossible to control
• Tourists are consumers, not anthropologists
• Tourism is entertainment
• Unlike other industrial activities, tourism generates income by importing clients rather than exporting
its product
Conceptual and Theoretical Perspectives 35
Sharpley (2000) also questions and exam- that the true nexus between maintainable
ines the true meaning of sustainable tourism and sustainable tourism is an understanding
and its relationship to its origins in the broader of what (destination) stakeholders perceive
field of sustainable development. He presents a sustainable tourism to be. They then proceed
general conceptual model of sustainable devel- to pursue their argument logically by asserting
opment and examines how sustainable tourism the need to formally measure the views of major
satisfies the principles and objectives of this stakeholder groups (host population, tourist,
model. While the details of his comparative guest, tourism organizations (operators/
analysis are too extensive for the present regulators) and the natural environment (Cater,
purpose, his basic model (Table 2.3) will be of 1995)) with a view to achieving balanced
interest to managers wishing to implement a tourism. In the realistic situation in which
sustainable tourism philosophy and supporting no one element (subjective well-being, environ-
programmes. mental health, cultural health or visitor satisfac-
Yet another common issue that arises tion) predominates, it will be necessary to make
in efforts to plan and implement sustainable trade-offs among the objectives of each of the
tourism programmes is a blurring of the dis- stakeholder groups. In short, Hardy and Beeton
tinction between sustainable tourism and what (2001) are asserting that stakeholder analysis
Hardy and Beeton (2001) refer to as 'maintain- is a logical method for identifying the multiple
able tourism'. This distinction is much more subjective opinions of those with a stake in
than semantic, particularly since they assert that tourism, and for planning it in a way that will
maintainable tourism exists when the status quo avoid any costs associated with poor planning
is being managed simply to deal with concerns and management. They further note the
related to short-term trends and impacts rather argument of Grimble and Wellard (1997) that a
than to address the underlying fundamentals significant advantage of stakeholder analysis
of sustainability. Hardy and Beeton argue is that it provides a way of improving
Table 2.3. A model of sustainable development: principles and objectives (from Sharpley, 2000,
referenced from Streeten, 1977; WCED,1987; Pearce et al., 1989; IUCN/UNEP/WWF, 1991).
Development • Improvement of the quality of life for all people: education, life expectancy,
objectives opportunities to fulfil potential
• Satisfaction of basic needs; concentration on the nature of what is provided
rather than income
• Self-reliance: political freedom and local decision making for local needs
• Endogenous development
• Tourism that meets the needs of present tourists and host regions while protecting and enhancing
opportunity for the future (World Tourism Organization, 1993)
• Sustainable tourism is tourism and associated infrastructure that: both now and in the future operate
within natural capacities for the regeneration and future productivity of natural resources; recognize
the contribution that people and communities, customs and lifestyles, make to the tourism experience;
accept that these people must have an equitable share in the economic benefits of local people and
communities in the host areas (Eber, 1992)
• Tourism that can sustain local economies without damaging the environment on which it depends
(Countryside Commission, 1995)
• It must be capable of adding to the array of economic opportunities open to people without adversely
affecting the structure of economic activity. Sustainable tourism ought not to interfere with existing
forms of social organization. Finally, sustainable tourism must respect the limits imposed by ecological
communities (Payne, 1993)
• Sustainable tourism in parks (and other areas) must primarily be defined in terms of sustainable
ecosystems (Woodley, 1993)
• Sustainable tourism is tourism which develops as quickly as possible, taking into account current
accommodation capacity, the local population and the environment;
Tourism that respects the environment and as a consequence does not aid its own disappearance.
This is especially important in saturated areas; and
Sustainable tourism is responsible tourism (quoted in Bramwell et al., 1996)
Conceptual and Theoretical Perspectives 37
Fig. 2.6. The key issues in the sustainable tourism debate (from Swarbrooke, 1999).
Table 2.5. Principles behind sustainable tourism management (from Bramwell et al., 1996).
• The approach sees policy, planning and management as appropriate and, indeed, essential responses
to the problems of natural and human resource misuse in tourism
• The approach is generally not anti-growth, but it emphasizes that there are limitations to growth and
that tourism must be managed within these limits
• Long-term rather than short-term thinking is necessary
• The concerns of sustainable tourism management are not just environmental, but are also economic,
social, cultural, political and managerial
• The approach emphasizes the importance of satisfying human needs and aspirations, which entails a
prominent concern for equity and fairness
• All stakeholders need to be consulted and empowered in tourism decision making, and they also need
to be informed about sustainable development issues
• While sustainable development should be a goal for all policies and actions, putting the ideas of
sustainable tourism into practice means recognizing that in reality there are often limits to what will
be achieved in the short and medium term
• An understanding of how market economies operate, of the cultures and management procedures of
private sector businesses and of public and voluntary sector organizations, and of the values and
attitudes of the public is necessary in order to turn good intentions into practical measures
• There are frequently conflicts of interest over the use of resources, which means that in practice
trade-offs and compromises may be necessary
• The balancing of costs and benefits in decisions on different courses of action must extend to
considering how much different individuals and groups will gain or lose
38 Chapter 2
Table 2.6. Policy implementation framework (from Fennel, 1999, as reproduced from Liu, 1994).
Inventories Survey and analyse the region’s ecology, history, culture, economy, resources,
land use and tenure; inventory and evaluate existing and potential ecotourist
attractions, activities, accommodation, facilities and transportation; construct or
consolidate development policies and plans, especially tourism material plans
Infrastructure Provide the appropriate infrastructure and facilities, avoiding a reliance on foreign
and facilities capital; establish means to assist the private sector in developing ecotourism
enterprises in line with ecological and cultural standards
Market Analyse present and future domestic and international ecotourism markets and
establish marketing goals; know and understand the market in achieving goals;
assist the private sector in its development of marketing strategies
Carrying Strive to understand the social and ecological limits of use of an area through
capacity appropriate management and research; establish social and ecological indicators
of use and impact; implement an appropriate pre-formed planning and
management framework
Economic Consider ways to enhance economic benefits; conduct present and future
economic analyses; ensure that profits are made, locals benefit and public
revenues are self-sustaining
Environment Consider ways to enhance the impact of ecotourism on the resource base; link
ecotourism with other resource conservation measures (e.g. parks and protected
areas)
Culture Evaluate the socio-cultural impact of ecotourism, prevent negative impacts and
reinforce positive outcomes; empower local people to become decision makers;
conduct an audit of social impacts
Data system and Establish an integrated ecotourism data system for continuous operation that
implementation provides research and marketing information; identify ecotourism implementation
techniques; and collaborate with private industry and educational institutions in
implementation
40 Chapter 2
Table 2.7. Categories for conservation manage- reference data. With the above countries
ment (adapted from Nelson, 1991). clearly in mind, the WTO study The US
Ecotourism Market (WTO, 2002) was based
Category I Scientific Reserve/Strict Nature
Reserve on the US Department of Commerce's Inter-
Category II National Park national Trade Administration In-Flight Survey
Category III Natural Monument/Natural and a survey of US ecotourism operators.
Landmark The study of US travellers to overseas
Category IV Nature Conservation Reserve/ countries and Mexico revealed that in 1996
Managed Nature Reserve/Wildlife (the first year the category of ecotourism was
Sanctuary added), 4.8% of US outbound air passengers
Category V Protected Landscape or Seascape reported that they participated in environ-
Category VI Resource Reserve (Interim
mental or ecological excursions. By 1999, the
percentage had dropped to 4.2% of the total,
Conservation Unit)
Category VII Natural Biotic Area/Anthropological
Reserve although preliminary data for 2000 indicate
Category VIII Multiple Use Management Area/ that the percentage has risen back to the 5%
Managed Resource Area range.
Category IX Biosphere Reserve An in-flight survey of inbound passengers
Category X World Heritage Site reveals essentially similar results to those of the
Category XI Wetlands of International outbound survey. In both 1999 and 2000, only
Importance 3% of the foreign visitors flying into the USA
participated in environmental or ecological
excursions.
The authors of the US study note,
The World Tourism Organization
however, that 'nature tourism', which primarily
and Ecotourism
involves visitors to national parks, is signifi-
cantly larger than ecotourism. Specifically,
As the moral leader of world tourism, the
some 20% of foreign travellers visited US parks.
World Tourism Organization (WTO) has
However, only 8% of outbound American air
recognized the need to support the principles
travellers visited national parks overseas.
of sustainable tourism and ecotourism. This
The WTO study of US ecotourism provides
leadership has been clearly demonstrated
an interesting practical typology of ecotourism
through its sponsorship of the 2002 World
products.
Summit on Ecotourism, held in Quebec City,
Canada. In addition, the WTO has spear- • By destination – that is, the countries that
headed an initial attempt to determine the size appear to be considered as ecotourism
and significance of the ecotourism market and destinations. Table 2.8 shows the destina-
has recently commissioned research to provide tion of US ecotourists in comparison with
global estimates of the ecotourism-generating all leisure tourists in 1999. Since the
capacity of seven countries: Germany, the sample of ecotourists responding to this
USA, the UK, Canada, Spain, France and question was relatively small, the percent-
Italy. A particularly laudable feature of this age of ecotourists must be considered
research was an attempt to coordinate the illustrative rather than definitive.
definition of ecotourism and the research • By level of service offered (high-end/
method used by each of the seven experts who luxury, mid-level, budget-oriented) – the
conducted the research for the generating survey of US ecotourism operators indi-
countries. Despite this attempt to achieve cated that a slight majority of operators
standardization, the WTO warns readers that targeted the mid-level market. However,
the concept of ecotourism was found to vary only about one-third of ecotourists appear
from one country to another. For this reason, to travel with operators. So an important
they further caution readers to consider question remains regarding the level of
the results as general trends relative to the service being sought by independent
ecotourism market rather than as absolute travellers.
Conceptual and Theoretical Perspectives 41
Table 2.8. Main destination of ecotourists and Again, the reader is cautioned that the
all leisure travellers. Data are percentages of foregoing data cannot be considered definitive.
respondents in each category (from WTO, 2002). At best, they are illustrative of US ecotourists.
Destination Ecotourists All tourists The WTO study The German Ecotourism
Market was based on the same definition of
Western Europe 16.7 36.7 ecotourism as that provided by the WTO Terms
Germany 2.0 4.6 of Reference:
France 1.9 4.4
United Kingdom 3.9 10.4 Ecotourism includes all nature-based forms of
Eastern Europe 0.5 1.7 tourism in which the main motivation of the
tourist is the observation and appreciation of
Caribbean 12.4 14.5 nature.
Bahamas 2.3 4.3 (WTO, 2001b, p. 4)
Jamaica 5.1 5.1
An especially interesting aspect of the
South America 12.4 6.5 German study was the impact of language on
Argentina 1.2 0.8 the interpretation of the definition of sustain-
Brazil 1.5 1.6 able tourism, an impact in which the difference
Chile 1.5 0.4
between the terms Naturtourismus and
Ökotourismus is particularly significant and
Ecuador 1.5 0.7
Peru 3.9 1.11
meaningful.
Central America 30.9 21.7 'Naturtourismus' refers to a market seg-
Belize 0.8 0.1 ment whose distinguishing feature is that it
Costa Rica 4.0 1.0 engages in nature-related activities in attractive
Other (includes Mexico) 25.8 19.4 natural settings, preferably in protected areas.
Africa 5.2 1.4 The spectrum ranges from science tourism
Kenya 1.8 0.2 to wildlife-watching and nature photography,
South Africa 7.7 0.4 to consumptive activities (fishing and hunting)
as well as sports and adventure tourism.
Middle East 2.7 3.0
'Ökotourismus' refers to forms of Natur-
Asia 9.6 3.0 tourismus that attempt to responsibly minimize
India 2.3 1.3 negative environmental impacts and socio-
Oceania 10.0 2.6
cultural changes, help to finance protected
Australia 5.4 1.6 areas and create sources of income for the local
New Zealand 3.9 0.8 population.
This German definition is clearly different
from the WTO definition. The latter would
seem to correspond to the German concept
of Naturtourismus, although Naturtourismus
• By the nature of the ecotourist's travel extends beyond nature and wildlife-watching
arrangements (free and independent and includes nearly all forms of tourism in
travellers and group travellers) – probably natural settings.
account for about two-thirds of the US The German understanding of Ökotouris-
outbound ecotourism market, so tour mus, on the other hand, tends to include those
operator surveys miss a substantial aspects of tourism commonly described as sus-
portion of the market. tainable tourism: minimizing negative effects
• By ecotourism demographics (age, on people and the natural environment while
income, education, gender) – ecotourists ensuring adequate economic profit.
are generally believed to be somewhat To put things in perspective, the difference
older and better educated and to between Naturtourismus and Ökotourismus
have higher incomes than the average can be summed up as follows: Naturtourismus
traveller, and appear to contain a slight refers to a specific tourist market segment and
preponderance of males. a specific class of package – a form of travel to
42 Chapter 2
natural areas in which experiencing nature is important to this type, a built-up landscape
the focal point. The environmental impact can does not put them off, and expectations of
be positive or negative, but is of little impor- environmental management by tour oper-
tance. Ökotourismus, on the other hand, ators are slight, as is the willingness to
claims to minimize or avoid negative effects on make personal contributions towards the
the environment (programmatic components) preservation of nature; most important is
and is, in the end, identifiable as such only by its likely to be an intact environment at the
effects. destination. This type is mostly very
As a result of this important distinction, of young, has a low level of education and
which the German tour operators interviewed income, is single and is still in education.
were aware (but not particularly pleased with), • Type 2: Those unwilling to pay for envi-
the results of the German study on Ökotouris- ronmental protection in the holiday area
mus must be interpreted with care. Some of the (29.0% of the German population). This
more interesting of these results are listed below. type shows a very slight willingness to pay
for environmental protection measures at
• For a good half of Germans, experiencing
the holiday location, but otherwise dem-
nature is an important factor for a satisfac-
onstrates a slightly agreeing response pat-
tory holiday trip. This value is, however,
tern and rather an indifferent attitude to
not identical with the interest potential
environmental aspects. This type is mostly
for ecotourism, but merely expresses a
female, over 60 years old, has a relatively
general attachment to nature among this
low level of education and income, is
clientele.
mostly in retirement and is childless.
• Around one-third of German holiday-
• Type 3: Socially responsible supporters
makers are amenable to ecotourism travel
of environmental aspects on holiday
and activities in the narrower sense.
(14.7% of the German population). Espe-
• For 8.0% of those questioned, wildlife
cially important to this type is not only
watching and enjoyment of nature in an
the preservation of nature, but above all
unspoiled landscape were the main rea-
respect for the way of life and traditions
son for choosing their travel destination.
of the locals. Opportunities for nature
For a further 6.4% this was the second
experiences, on the other hand, are con-
most important reason.
spicuously and clearly unimportant to this
It should be noted, however, that marked type. These people are mostly middle-
differences were found according to survey aged and have a high level of education
locations. The WTO also emphasizes that their and income.
attempts at quantification should on no account • Type 4: Nature-experience-oriented
be understood as a dependable calculation, supporters of environmental aspects on
but only as a rough approximation that must holiday (30.0% of the German popula-
necessarily be verified by more appropriate tion). This type corresponds more or less
representative surveys. to those interested in ecotourism pack-
A particularly insightful result emanating ages in the narrower sense, as wildlife-
from the study of the German ecotourism watching and nature experience opportu-
market was the fundamental knowledge that nities are particularly important for them.
was obtained about motivation related to They additionally have great respect for
the environmental aspects of travel. More the culture and traditions of the locals.
specifically, the study classified people into Unspoiled nature and environment have
four amenability types with respect to the a strong influence on their travelling satis-
environmental aspects of holiday travel. faction. More frequently than average,
they are middle-aged (30–59 years), have
• Type 1: Uncertain rejecters of environ-
a middle to high level of formal education,
mental aspects on holiday (26.3% of
have a middle to high net household
the German population). Opportunities
income, are employed and have small
for nature experience tend not to be
children (up to 14 years).
Conceptual and Theoretical Perspectives 43
It was concluded that these four amen- c) increasing awareness of the con-
ability types might provide a useful taxonomy servation of natural and cultural assets
for an international comparison of ecotourism among both local people and tourists.
clients. At the same time, it was stressed that
When the tourism operators responding to
the classification represents attitude and not
the survey on which the study was based were
behaviour types.
asked to assess the relative importance of differ-
The third set of ecotourism study results
ent elements of the definition of ecotourism,
that were available at the time of writing related
they responded as shown in Table 2.9.
to the British ecotourism market. Although all
It is useful to note that the Association of
of the WTO ecotourism market studies (as
British Travel Agents members were far more
noted above) were given the same terms of
sceptical of the concept in that 'Most of the
reference, the findings of the British study
agents present commented negatively on the
provided some particularly unique perspectives
word and mentioned that when they first saw
and detailed findings. Those we consider to be
it on the Agenda and heard it from the
most meaningful are outlined below.
researcher, they were not interested. They
As in the German study, the definition
commented that "eco" makes them think of
of ecotourism in the British report covers two
"eco-warriors" and the extreme end of the UK
distinct levels.
green movement' (WTO, 2001c, p. 20).
• The term 'nature-based tourism' is used to At the Association of Independent Tour
mean 'forms of tourism in which the main Operators (AITO) meeting, ecotourism was felt
motivation of the tourist is the observation to be a hangover from the past and to be a
and appreciation of nature'. meaningless brand name that clients would rec-
• 'Ecotourism' is used to mean forms ognize as having no meaning. Operators felt
of tourism that have the following that, were any AITO member to use the word
characteristics: 'ecotourism' as a marketing device in their litera-
• they are all nature-based and the ture, it would be more likely to work against
main motivation of the tourists is them than to attract clients on the basis of any
the observation and appreciation perceived ethical or environmental credentials.
of nature as well as the traditional
cultures prevailing in natural areas;
• they contain educational and inter- Table 2.9. Relative importance of different
pretation features; elements of the definition of ecotourism.
• they are generally, but not exclusively, Relative
organized by specialized tour opera- ranking of
tors for small groups, and service- importance
provider partners at the destinations
tend to be small, locally owned Index value 4
businesses; Education/interpretation 3
• they minimize negative impacts Specialized tour operators, small 2
upon the natural and sociocultural
groups, destination service providers
small and locally owned
environment; Provides alternative employment and 1
• they support the maintenance of income opportunities for local
natural areas which are used as communities
ecotourism attractions by: Minimizes negative impacts on the 1
a) generating economic benefits for natural and sociocultural environment
host communities, organizations and Generates economic benefits for host 1
authorities managing natural areas communities, organizations and natural
with conservation purposes; areas with conservation purposes
b) providing alternative employ- Increases awareness of conservation 1
ment and income opportunities for
of natural and cultural assets, among
both locals and tourists
local communities;
44 Chapter 2
The 'eco' prefix was considered by many as a page in every one of its new guidebooks.
participants to have didactic and self-righteous While it is not unique, it does provide a
connotations. It was felt that the word con- summary of what many consider ecotourism
fronts potential clients with responsibilities or to be all about.
demands and is somewhat preachy, especially
where clients are buying holidays – and
therefore a certain level of escapism. Managing Tourism from a
The foregoing insights into industry per- Sustainability Perspective
ceptions of the term are important in that they
demonstrate some of the realities that those Regardless of how one defines environmen-
responsible for destination management should tally respectful tourism, it must, like all tourism,
anticipate and, where necessary, address. be managed effectively. To this end, as our
Despite these attitudes of industry opera- model emphasizes, there is clearly a need for
tors in a survey of package holidays respon- destination managers to develop a framework
dents, 85% of the sample said it was important
for monitoring the impacts of tourism (Faulk-
to them that their holidays did not damage the
ner and Tidswell, 1997). It is perhaps not sur-
environment, 68% felt it important that their
prising that much of the interest in managing
holiday benefited the people of the destination
tourism from a sustainability perspective
visited, and 77% said that they wanted their
focuses on the ecological dimension of sustain-
holiday to include visits to experience local ability, given the level of concern expressed
culture and foods. In brief, there appears to be a globally about mankind's pressure on the
fairly substantial difference between industry Earth's environment. However, we contend
operators and vacationers in their attitudes to that there are four primary pillars of sustain-
what we call 'ecotourism'. The British operators able tourism and that appropriate policy and
saw ecotourism as a small market niche and management solutions must be found for each
only some 12% used the term 'ecotourism' in of them if true sustainability is to be achieved.
their marketing. At least from a UK perspective, These four primary pillars of sustainability are,
then, ecotourism has a long way to go before in our view, the ecological, economic, sociocul-
being fully accepted. tural and political/governance environments.
Because the WTO studies represent one of The ecological or natural environment is a
the most comprehensive and intensive exami- major attraction for many destinations. Often,
nations of ecotourism, we have attempted to the experience of a unique natural environ-
provide an indication of the nature of both ment represents the core of a destination's
their specific results and the richness of their tourism product – the African savannah, the
total findings. Despite this, given the limita- Canadian Rocky Mountains, the Australian
tions imposed by the focus of this book, we outback and coral reefs, the South American
have been able to include only a superficial rainforests, the Norwegian fjords, the canyon-
sample of the findings from three of the coun- lands of America. For many destinations, these
tries in the total study. We encourage readers natural phenomena represent the lifeblood of
who wish to understand the complexity of the their tourism industries, and any decline in
topic to review these studies in much greater their value will have an adverse effect on the
depth, since we believe they represent an destination.
empirical landmark in the field. We feel it Residents of these destinations have the
only appropriate to conclude this review by most at stake in protection and preservation of
presenting (Table 2.10) an excerpt from the their natural environments. But the tourism
British study that cited the 'Code for Travellers' industry also has an important role to play,
that the publisher of Rough Guides will print not just in terms of ensuring that any tourism
Conceptual and Theoretical Perspectives 45
the sun worshipper on the beaches of Rio de of local labour and the skills and knowl-
Janeiro? edge resources that are required, the
importation of outside labour should not
be excessive. Efforts to establish local
Economic sustainability training programmes will probably be
viewed favourably by residents. Tourism
development often draws into a region
As one element of a destination's economy,
low-skilled people seeking work. Local
tourism must help support a viable economic
residents may resent the influx of these
base. A healthy economy enables a country,
newcomers, not just because they take
region or city to pursue initiatives designed to
away jobs but, because they also place
enhance the quality of life of its residents.
extra strain on local services.
Maslow's 'hierarchy of needs'1 tells us that
unless physiological needs are satisfied (i.e.
• Job security. Tourism demand can be
highly seasonal. Any efforts to enhance
food, shelter, basic health-care, etc.) humans
job security will improve economic
are unlikely to concern themselves with
sustainability. For example, employers
higher-order needs. This partly explains why,
should explore opportunities to establish
in Third World countries, environmental
a multiskilled, flexible workforce so that
protection is low on the list of priorities. We
employees can be assigned different tasks
view a healthy economy as critical to a healthy
throughout the year, such as maintenance
ecology.
during the off-season. To the extent that
So any tourism strategy must be capable of
certain firms experience different patterns
meeting the economic needs and aspirations of
of demand, there may also be oppor-
residents over the long term. If it is to do so, the
tunities for employers to collaborate by
following considerations may be influential in
sharing employees.
determining economic sustainability.
• Wages, salaries and benefits. Tourism is
• Of benefit to many, not just a few. Costs often perceived to be a low-skilled, low-
and benefits should be reasonably evenly income sector. While many of the service
spread over the relevant population. jobs in tourism and hospitality may be
Creating an environment in which some described in this way, the reality is a little
individuals benefit handsomely from tour- different from the common perception.
ism development while the lives of many Indeed, recent research suggests that
deteriorate is untenable. For example, compensation per employee in travel and
certain forms of tourism development can tourism is similar to that in other sectors,
result in land speculation pushing up the and is often higher (for a regional and
prices for land and increasing rents (both national assessment of travel and tour-
domestic and commercial) and property ism's compensation levels, see the World
taxes. Competition for resources may Travel and Tourism Council's 1995
increase prices. Tourists are often Research Edition of Travel and Tourism:
prepared or able to pay higher prices a New Economic Perspective (WTTC,
for food and other goods. 1995)). Tourism supports many higher-
• Utilization of local labour. Residents are income jobs, such as hotel managers,
more supportive of tourism development skilled construction workers, architects,
and may be prepared to tolerate minor consultants, researchers, airline pilots,
adverse consequences if tourism is an senior government employees, entrepre-
important source of local employment. neurs and numerous others. Some low-
Returns to local labour filter through much skilled employees are able to make a very
of the local economy. Both direct employ- good living through tips. An economically
ment and the indirect employment arising sustainable tourism strategy will seek to
from demand derived from tourism are generate a broad range of employment
important. Depending on the availability opportunities.
Conceptual and Theoretical Perspectives 47
Table 2.11. An overall framework for monitoring destination impacts of tourism (from Faulkner and
Tidewell, 1997).
Factor 1: Economic and • The economic benefits of tourism to the region are overrated
regional development • Public funding of tourism promotion and facilities is a waste of the
benefits ratepayers’ money
• The use of public funds for tourism promotion and infrastructure
development is justified by the benefits this brings to the community
• Tourism benefits only a small proportion of the Gold Coast’s population
• Further tourism development will disadvantage the community and
should be discouraged
• In general, tourism development brings facilities to the region that
improve the quality of life of its residents
• Further tourism development is beneficial to the community and should
be encouraged
• Visitors to the Gold Coast enrich the culture of this area
• Overall, tourism reduces the quality of life of Gold Coast residents
• I like to see and/or meet visitors to the Gold Coast
Factor 2: Adverse • Increased tourism has caused traffic congestion and made it more
environmental effects difficult to find parking spaces in commercial areas
• Tourism has made the Gold Coast a noisier and more congested place
in which to live
• Tourists are the cause of longer queues and delays in the provision of
services in shops and restaurants
• Tourism has increased the cost of living on the Gold Coast
• Tourism has disrupted the peace and tranquillity of the Gold Coast
region
• Tourism has resulted in damage to the natural environment of the Gold
Coast area
• Tourism has resulted in increased litter in our streets and public places
Factor 3: Quality of life • Tourism has resulted in Gold Coast residents having a greater range of
and employment choice with regard to shopping facilities, restaurants, etc.
opportunities • Tourism has resulted in a greater range of outdoor and indoor
recreational facilities being available to Gold Coast residents
• Tourism creates employment opportunities for the Gold Coast region
• Tourism brings important economic benefits to the region
• Tourism has resulted in a better standard of services being provided by
shops, restaurants and other areas of commerce
• Tourism has made residents and local public authorities more conscious
of the need to maintain and improve the appearance of the area
Factor 4: Improved • The development of tourism facilities has generally improved the
community environment appearance of the area
• Tourism has increased the pride of local residents in their city
• Tourism has contributed to the conservation of our natural assets
• Tourism has made the Gold Coast a more interesting and exciting place
in which to live
Factor 5: Cultural • Servicing visitors from different cultures undermines our own culture
erosion • Visitors to the Gold Coast are an intrusion on our lifestyle
Factor 6: Crime • Tourism has contributed to increased levels of crime and social problems
in the Gold Coast region
Conceptual and Theoretical Perspectives 49
sustainable. Other public concerns often find a fundamental research involves the measuring
way of expressing themselves in either peace- of the environmental, social, cultural and eco-
ful, or sometimes violent, ways. The current nomic well-being of the destination on an ongo-
widespread reaction to the process of globaliza- ing basis. Faulkner and Tideswell (1997) have
tion is an example where acceptability at higher reported a framework for monitoring sustain-
levels of government does not necessarily meet able tourism from an overall destination per-
with similar acceptance by certain segments of spective (Table 2.11). Since the measurement
the population. of environmental impact has been a driving
force behind the growth of sustainable tourism,
the WTO (1995) has developed a special set
of indicators emphasizing the environmental
Achieving Sustainable Tourism impacts of tourism, as summarized by Dymond
(1997) and given in Table 2.12.
The four pillars of sustainability discussed
above act as an interdependent system. A
particular strategic direction is unlikely to be Creating and Managing a Sustainable
sustainable if it fails the test of sustainability Ecotourism Destination
on any one of the four pillars. Suppose, for
example, that the tourism strategy involves Destination managers who believe that
exploitation of the ecology at an unsustainable ecotourism is an attractive and competitive
level. The economic structure established to option for their destination must clearly under-
exploit the ecological environment in this stand that, as shown in Fig. 2.7, ecotourists
way cannot survive because the ecological are but one segment of the total market and
resources on which it is based will deteriorate that ecotourism is just another type of travel
over time. A decline in the economic system experience (Wood, 2002). Nevertheless, the
will, in turn, lead to adverse social and development and management of a competi-
cultural consequences. The resulting political tive destination does involve some specialized
pressures, too, are likely to lead to instability. approaches that go beyond basic sustainability
Over the last several years, the concept of (UNEP, 2001; UNEP and Wood, 2002). Local
sustainable development has begun to perme- participation is especially important, and
ate management practice in the travel and tour- requires some very basic principles in order to
ism industry. Some destinations have actually succeed (Table 2.13).
introduced codes of practice with the intent of
encouraging tourism developers to adopt 'envi-
ronmentally friendly' practices. One example is
provided by the Tourism Industry of Canada Conclusion
(TIAC, 1995). As another example, the Austra-
lian Government has developed a National Eco- Although much of the traditional concern for
tourism Strategy comprising an accreditation sustainability, as related to tourism, has
programme and environmental codes of prac- focused on environmentally sensitive areas
tice (Commonwealth Department of Tourism, such as national parks (Butler and Boyd,
1994). The World Travel and Tourism Council 2000), we argue that every destination must
created its Green Globe programme (WTTERC examine its ability to maintain all dimensions of
and Hawkins, 1995; WTTC, 1998) to foster sustainability (environmental, economic, social,
improvements in environmental practices and cultural and political) if it is to develop and
to support an environment research centre. A preserve true competitiveness. We feel that it is
substantial number of tourism researchers appropriate to conclude by repeating the state-
now conduct studies in sustainable tourism, and ment we made at the head of this chapter.
such research is essential for the successful Competitiveness without sustainability is
management of sustainable tourism. The most illusory.
50 Chapter 2
Table 2.12. Core indicators of sustainable tourism (from Dymond, 1997, sourced and adapted from
WTO, 1995).
Generic indicator
Core indicator Specific measures groupings
Social impact Ratio of tourists to locals (peak period and over time) Social
Planning process Existence of organized regional plan for tourist destination Planning
region (including tourism component)
Table 2.13. Basic steps to encourage community participation (from UNEP, 2001).
Understand the Communities should exercise control over their growth and development. They will in
community’s many cases need technical assistance to make appropriate decisions and should be
role given adequate information and training in advance. Allocate time, funds, and
experienced personnel to work with communities well in advance. Avoid allowing
communities to feel they are powerless to influence patterns of development.
Empower Participation is a process that is more than just making communities the beneficiaries
communities of an ecotourism project. Jobs are an important benefit, but they do not replace
empowerment. Communities must genuinely participate in the decision-making
process. This involves more than just consultation. Processes must be initiated to
ensure that communities can manage their own growth and resources wisely.
Urge local Project managers must identify local leaders, local organizations, key priorities of
project the community, and ideas, expectations, and concerns local people already have.
participation Information can be gathered for and by the community. The opinions gathered should
be disseminated and discussed with the community along with other relevant
information such as government market statistics or regional development plans.
Training opportunities must be formulated at this phase to help community members
gain planning skills, and also the entrepreneurial skills required to run small businesses.
Create Participation can be encouraged at two levels – for individuals and for local
stakeholders organizations. Investment in project development areas should be encouraged, either
in cash, labour, or in-kind resources. Developing lodging by local entrepreneurs, and
setting standards for local services by local organizations are two good examples.
Link benefits to The links between ecotourism benefits and conservation objectives need to be direct
conservation and significant. Income, employment, and other benefits must promote conservation.
Distribute Ensure that both the community and individuals benefit from projects.
benefits
Identify Identify opinion leaders and involve them in the planning and execution of projects.
community Identify leaders that represent different constituents to ensure that a cross-section of
leaders society is involved (including both men and women). Be sure the project has good
information on the local social structure. Strategize on the effects of the projects on
different social groups and never assume that all parts of society will cooperate or
agree. Be strategic and gain appropriate allies early.
Bring about Use existing organizations already working in the community to improve its social
change well-being through economic development. Development associations or local
cooperatives are good prospects. Groups involved in organizing recreation can also be
good allies. Community participation through institutions is more likely to bring about
effective and sustained change.
Understand Be aware that authority structures vary greatly in each region. Consensus is not always
site-specific possible, nor is the full participation of all sectors of society (women are often
conditions excluded).
Monitor and Establish indicators in advance to track tourism’s impacts – both positive and negative.
evaluate Goals such as employment and income levels are only one type of indicator. The
progress project should track negative impacts such as evidence of rapidly escalating prices for
local goods, inflation in land prices, antagonism towards visitors, frequency of arrests,
change in youth activities, and evidence of drugs, prostitution, and other illicit activities.
Ideally, the more the local community is fully involved in ecotourism development, the
less these problems should develop. Another important indicator of local involvement is
evidence of initiatives within the community to respond to the negative influences of
tourism.
(Brandon, 1993)
52 Chapter 2
Green, H. and Hunter, C. (1992) The environmental Krugman, P. (1996) A country is not a company.
impact assessment of tourism development. Harvard Business Review 74 (1), 40–51.
In: Johnson, P. and Thomas, B. (eds) Pers- Leland, S. (1983) Feminism and ecology: theoretical
pective on Tourism Policy. Mansell, London, connections. In: Caldecott, L. and Leland, S.
pp. 29–48. (eds) Reclaim the Earth. Women's Press,
Grimble, R. and Wellard, K. (1997) Stakeholder London.
methodologies in natural resource manage- Liu, J.C. (1994) Pacific Island Ecotourism: a
ment: a review of principles, contexts, experi- Public Policy and Planning Guide. Office of
ences and opportunities. Agricultural Systems Territorial and International Affairs, Honolulu,
55, 173–193. Hawaii.
Haahti, A.J. (1986) Finland's competitive position as McKercher, B. (1993) Some fundamental truths
a destination. Annals of Tourism Research 13, about tourism: understanding tourism's social
11–33. and environmental impacts. Journal of
Hardy, A.L. and Beeton, R.J.S. (2001) Sustain- Sustainable Tourism 1, 6–16.
able tourism or maintainable tourism: manag- Mohan, N.C. (1990) Service exports: better than you
ing resources for more than average think. Fortune 4 June, 287–288.
outcomes. Journal of Sustainable Tourism 9, Naess, A. (1990) Ecology, Community and
168–192. Lifestyle. Cambridge University Press,
Henry, I.P. and Jackson, G.A.M. (1996) Sustain- Cambridge.
ability of management processes and tourism Nelson, J.G. (1991) Sustainable development,
products and contexts. Journal of Sustainable conservation strategies, and heritage. In:
Tourism 4, 17–28. Mitchell, B. (ed.) Resource Management and
Hunt, S.D. (2000) A General Theory of Com- Development. Oxford University Press, Oxford,
petition. Sage Publications, Thousand Oaks, pp. 246–267.
California. Newall, J.E. (1992) The challenge of competitiveness.
Hunter, C. (1997) Sustainable tourism as an adaptive Business Quarterly 56 (4), 94–100.
paradigm. Annals of Tourism Research 24, Newsome, D., Moore, S.A. and Dowling, R.K. (2002)
850–867. Natural Area Tourism: Ecology, Impacts
IMD (1992) The World Competitiveness Report. and Management. Channel View Publications,
World Economic Forum and IMD International, Clevedon, UK.
Lausanne, Switzerland. O'Riordon, T. (1981) Environmentalism. Pion,
IMD (1994) The World Competitiveness Report. London.
World Economic Forum and IMD International, Palmer, J.D. (1985) Consumer service industry
Lausanne, Switzerland. exports: new attitudes and concepts needed for a
IMD (1995) The World Competitiveness Report. neglected sector. Columbia Journal of World
World Economic Forum and IMD International, Business 20 (Spring), 69–74.
Lausanne, Switzerland. Pearce, D., Markandya, A. and Barbier, E.B. (1989)
IMD (2000) The World Competitiveness Yearbook: Blueprint for a Green Economy. Earthscan
Executive Summary. International Institute Publications, London.
for Management Development, Lausanne, Poon, A. (1993) Tourism, Technology and
Switzerland. Competitive Strategy. CAB International,
IUCN (1980) World Conservation Strategy. Inter- Wallingford, UK.
national Union for the Conservation of Nature, Porter, ME. (1985) Competitive Advantage: Cre-
Geneva. ating and Sustaining Superior Performance.
IUCN/UNEP/WWF (1991) Caring for the Earth: a Free Press, New York.
Strategy for Sustainable Living. International Porter, M.E. (1990) The Competitive Advantage of
Union for the Conservation of Nature and Nations. Free Press, New York.
Natural Resources (IUCN), United Nations Porter, M.E. (1997) Creating tomorrow’s advantages.
Environment Program (UNEP), World Wide In: Gibson, R. (ed.) Rethinking the Future. Free
Fund for Nature (WWF) World Conservation Press, New York.
Union, Gland, Switzerland. Porter, M. (1980) Competitive Strategy:
Kotler, P., Haider, D.H. and Rein, I. (1993) Techniques for Analysing Industries and
Marketing Places: Attracting Investment, Competitors. Free Press, New York.
Industry, and Tourism to Cities, States, and Richardson, J.B. (1987) A sub-sectoral approach to
Nations. Free Press, New York. services' trade theory. In: Orio, G. (ed.) The
Krugman, P. (1994) Competitiveness: a dangerous Emerging Service Economy. Pergamon Press,
obsession. Foreign Affairs 73 (2), 28–42. Oxford, pp. 59–82.
54 Chapter 2
Riddle, D.I. (1986) Service-Led Growth: the Role of The Economist (1994) The economics of meaning.
the Service Sector in World Development. 30 April, pp. 17–18.
Praeger, New York. TIAC (1995) Greening the Canadian Tourism
Ritchie, J.R.B. (1999) Policy formulation at the Industry. Tourism Industry Association of
tourism/environment interface: insights and Canada, Ottawa, Canada.
recommendations from the Banff-Bow Valley Travel Week (Toronto, Canada) (2002) Mirabel will
study. Journal of Tourism Research 38, switch to an all-cargo facility within a year. 16
100–110. May, p. 8.
Rubel, C. (1996) No mistake about it, Cleveland on a UNEP (2001) Industry and Environment: Eco-
rebound. Marketing News (American Marketing tourism and Sustainability. United Nations
Association, Chicago) 1 January, pp. 1, 8. Environment Programme Division of Technol-
Ryan, C. (2002) Equity, management, power sharing ogy, Industry and Economics (UNEP DTIE),
and sustainability – issues of the 'new tourism'. Paris.
Tourism Management 23, 17–26. UNEP and Wood, M.E. (2002) Ecotourism:
Samli, A.C. and Jacobs, L. (1995) Achieving Principles, Practices and Policies for
congruence between macro and micro generic Sustainability. United Nations Environment
strategies: a framework to create international Programme, Paris.
competitive advantage. Journal of Macro- Walters, D.A. (1987) Competitiveness and trade
marketing 15, 23–32. policy: a view for the administration. In: Barfield,
Sapir, A. (1982) Trade in services: policy issues for the C.E. and Makin, J.H. (eds) Trade Policy and US
eighties. Columbia Journal of World Business Competitiveness. American Enterprise Institute
17 (Fall), 77–83. for Public Policy Research, Washington, DC,
Scott, B.R. (1985a) National strategies: key to pp. 65–69.
international competition. In: Scott, B.R. and WCED (1987) Our Common Future: the World
Lodge, G.C. (eds) US Competitiveness in the Commission on Environment and Develop-
World Economy. Harvard Business School ment (The Brundtland Report). Oxford
Press, Boston, Massachusetts, pp. 71–143. University Press, Oxford.
Scott, B.R. (1985b) US competitiveness: concepts, WEF/IMD (1992) The World Competitiveness
performance, and implications. In: Scott, B.R. Report. World Economic Forum and Interna-
and Lodge, G.C. (eds) US Competitiveness tional Institute for Management Development,
in the World Economy. Harvard Business Lausanne, Switzerland.
School Press, Boston, Massachusetts, Witt, S.F. (1980) An abstract mode-abstract (destina-
pp. 13–70. tion) node model of foreign holiday demand.
Scott, B.R. and Lodge, G.C. (eds) (1985) US Com- Applied Economics 12, 163–180.
petitiveness in the World Economy. Harvard Wood, M.E. (2002) Ecotourism: Principles, Prac-
Business School Press, Boston, Massachusetts. tices and Policies for Sustainability. United
Sharpley, R. (2000) Tourism and sustainable develop- Nations Environment Programme, Paris.
ment: exploring the theoretical divide. Journal WTO (1995) What Tourism Managers Need to
of Sustainable Tourism 8, 1–19. Know: a Practical Guide to the Development
Siniscalco, D. (1989) Defining and measuring output and Use of Indicators of Sustainable Tourism.
and productivity in the service sector. In: Consulting and Audit Canada, Ottawa, Ontario,
Giersch, H. (ed.) Services in World Economic Canada.
Growth. Institut für Weltwirtschaft an der WTO (1999) Approval of the Global Code of Ethics
Universität Kiel, Kiel, Germany, pp. 38–58. for Tourism (Resolution adopted by the General
Spence, A.M. and Hazard, H.A. (eds) (1988) Inter- Assembly at its Thirteenth Session, Santiago,
national Competitiveness. Ballinger Publishing Chile, 27 September–1 October 1999). World
Company, Cambridge, Massachusetts. Tourism Organization, Madrid, Spain.
Stabler, M.J. (1997) Tourism and Sustainability: WTO (2000a) Compendium of Tourism Statistics
Principles to Practice. CAB International, – 2000 edition (1994-1998). World Tourism
Wallingford, UK. Organization, Madrid, Spain.
Streeten, P. (1977) The basic features of a basic WTO (2000b) Global Code of Ethics for Tourism.
needs approach to development. International Web address: www.world-tourism.org/projects/
Development Review 3, 8–16. ethics/principles.html
Swarbrooke, J. (1999) Sustainable Tourism WTO (2001a) Tourism Satellite Account (TSA):
Management. CAB International, Wallingford, Implementation Project – the Tourism
UK. Satellite Account as an Ongoing Process:
Conceptual and Theoretical Perspectives 55
Past, Present and Future Developments. WTTC (1995) Travel and Tourism: a New Eco-
World Tourism Organization, Madrid, Spain. nomic Perspective. World Travel and Tourism
WTO (2001b) The German Ecotourism Market. Council. Elsevier Science, Oxford.
World Tourism Organization, Madrid, Spain. WTTC (1998) GREEN GLOBE Annual Review.
WTO (2001c) The British Ecotourism Market. World Travel and Tourism Council, Oxford.
World Tourism Organization, Madrid, Spain. WTTERC and Hawkins, R. (1995) The Green Globe
WTO (2002) The US Ecotourism Market – Special Programme: Developing a Greener Future for
Report. World Tourism Organization, Madrid, Travel and Tourism. World Travel and Tourism
Spain. Environment Research Centre, Oxford.
56 Chapter 2
Appendix 2.1. World Tourism Organization Global Codes of Ethics for Tourism (from WTO, 2000b).
[Article 1] Tourism’s contribution to mutual understanding and respect between peoples and societies
1. The understanding and promotion of the ethical values common to humanity, with an attitude of
tolerance and respect for the diversity of religious, philosophical and moral beliefs, are both the
foundation and the consequence of responsible tourism; stakeholders in tourism development and
tourists themselves should observe the social and cultural traditions and practices of all peoples,
including those of minorities and indigenous peoples and to recognize their worth;
2. Tourism activities should be conducted in harmony with the attributes and traditions of the host
regions and countries and in respect for their laws, practices and customs;
3. The host communities, on the one hand, and local professionals, on the other, should acquaint
themselves with and respect the tourists who visit them and find out about their lifestyles, tastes and
expectations; the education and training imparted to professionals contribute to a hospitable
welcome;
4. It is the task of the public authorities to provide protection for tourists and visitors and their
belongings; they must pay particular attention to the safety of foreign tourists owing to the particular
vulnerability they may have; they should facilitate the introduction of specific means of information,
prevention, security, insurance and assistance consistent with their needs; any attacks, assaults,
kidnappings or threats against tourists or workers in the tourism industry, as well as the willful
destruction of tourism facilities or of elements of cultural or natural heritage should be severely
condemned and punished in accordance with their respective national laws;
5. When traveling, tourists and visitors should not commit any criminal act or any act considered criminal
by the laws of the country visited and abstain from any conduct felt to be offensive or injurious by the
local populations, or likely to damage the local environment; they should refrain from all trafficking in
illicit drugs, arms, antiques, protected species and products and substances that are dangerous or
prohibited by national regulations;
6. Tourists and visitors have the responsibility to acquaint themselves, even before their departure, with
the characteristics of the countries they are preparing to visit; they must be aware of the health and
security risks inherent in any travel outside their usual environment and behave in such a way as to
minimize those risks;
3. The staggering in time and space of tourist and visitor flows, particularly those resulting from paid
leave and school holidays, and a more even distribution of holidays should be sought so as to reduce
the pressure of tourism activity on the environment and enhance its beneficial impact on the tourism
industry and the local economy;
4. Tourism infrastructure should be designed and tourism activities programmed in such a way as to
protect the natural heritage composed of ecosystems and biodiversity and to preserve endangered
species of wildlife; the stakeholders in tourism development, and especially professionals, should
agree to the imposition of limitations or constraints on their activities when these are exercised in
particularly sensitive areas: desert, polar or high mountain regions, coastal areas, tropical forests or
wetlands, propitious to the creation of nature reserves or protected areas;
5. Nature tourism and ecotourism are recognized as being particularly conducive to enriching and
enhancing the standing of tourism, provided they respect the natural heritage and local populations
and are in keeping with the carrying capacity of the sites;
[Article 4] Tourism, a user of the cultural heritage of mankind and contributor to its enhancement
1. Tourism resources belong to the common heritage of mankind; the communities in whose territories
they are situated have particular rights and obligations to them;
2. Tourism policies and activities should be conducted with respect for the artistic, archaeological and
cultural heritage, which they should protect and pass on to future generations; particular care should
be devoted to preserving and upgrading monuments, shrines and museums as well as archaeological
and historic sites which must be widely open to tourist visits; encouragement should be given to
public access to privately-owned cultural property and monuments, with respect for the rights of their
owners, as well as to religious buildings, without prejudice to normal needs of worship;
3. Financial resources derived from visits to cultural sites and monuments should, at least in part, be
used for the upkeep, safeguard, development and embellishment of this heritage;
4. Tourism activity should be planned in such a way as to allow traditional cultural products, crafts and
folklore to survive and flourish, rather than causing them to degenerate and become standardized;
2. Tourism professionals, insofar as it depends on them, should show concern, in cooperation with the
public authorities, for the security and safety, accident prevention, health protection and food safety
of those who seek their services; likewise, they should ensure the existence of suitable systems of
insurance and assistance; they should accept the reporting obligations prescribed by national
regulations and pay fair compensation in the event of failure to observe their contractual obligations;
3. Tourism professionals, so far as this depends on them, should contribute to the cultural and spiritual
fulfillment of tourists and allow them, during their travels, to practice their religions;
4. The public authorities of the generating States and the host countries, in cooperation with the
professionals concerned and their associations, should ensure that the necessary mechanisms are in
place for the repatriation of tourists in the event of the bankruptcy of the enterprise that organized
their travel;
5. Governments have the right – and the duty – especially in a crisis, to inform their nationals of the
difficult circumstances, or even the dangers they may encounter during their travels abroad; it is their
responsibility however to issue such information without prejudicing in an unjustified or exaggerated
manner the tourism industry of the host countries and the interests of their own operators; the
contents of travel advisories should therefore be discussed beforehand with the authorities of the
host countries and the professionals concerned; recommendations formulated should be strictly
proportionate to the gravity of the situations encountered and confined to the geographical areas
where the insecurity has arisen; such advisories should be qualified or cancelled as soon as a return
to normality permits;
6. The press, and particularly the specialized travel press and the other media, including modern means
of electronic communication, should issue honest and balanced information on events and situations
that could influence the flow of tourists; they should also provide accurate and reliable information to
the consumers of tourism services; the new communication and electronic commerce technologies
should also be developed and used for this purpose; as is the case for the media, they should not in
any way promote sex tourism;
4. Administrative procedures relating to border crossings whether they fall within the competence of
States or result from international agreements, such as visas or health and customs formalities,
should be adapted, so far as possible, so as to facilitate to the maximum freedom of travel and
widespread access to international tourism; agreements between groups of countries to harmonize
and simplify these procedures should be encouraged; specific taxes and levies penalizing the tourism
industry and undermining its competitiveness should be gradually phased out or corrected;
5. So far as the economic situation of the countries from which they come permits, travelers should have
access to allowances of convertible currencies needed for their travels;
[Article 10] Implementation of the principles of the Global Code of Ethics for Tourism
1. The public and private stakeholders in tourism development should cooperate in the implementation
of these principles and monitor their effective application;
2. The stakeholders in tourism development should recognize the role of international institutions,
among which the World Tourism Organization ranks first, and non-governmental organizations with
competence in the field of tourism promotion and development, the protection of human rights, the
environment or health, with due respect for the general principles of international law;
3. The same stakeholders should demonstrate their intention to refer any disputes concerning the
application or interpretation of the Global Code of Ethics for Tourism for conciliation to an impartial
third body known as the World Committee on Tourism Ethics.
3
A Model of Destination Competitiveness
While Chapter 2 laid the groundwork, in this ‘web of meaning’ (Neuman, 1994, p. 37) and
chapter we present the development of a tour- thereby help to clarify our understanding of
ism-specific conceptual model of destination (in this case) the factors which affect the com-
competitiveness. A knowledge of the nature of petitiveness of a tourist destination; it is a model
both comparative and competitive advantage in that it is a simplified description of a phenom-
is certainly useful, but if we are to be able to enon that is always more complex than a model
begin to find answers to the types of strategic suggests. A good model has parsimony. A
question facing destination managers today, parsimonious model is one that seeks to
our conceptual model needs to go beyond such balance the need to maximize explanation with
generic concepts to reveal, in greater depth, minimal complexity.
just what these concepts mean in the context A conceptual model can be used for a
of a tourist destination. That is, to be manage- variety of purposes. It can be used as a basis for
rially useful we need to examine further the research to further test the reliability and validity
categories that constitute resource endow- of the model, or parts of the model, in explain-
ments and resource deployments (described ing the actual phenomenon. It can also be used
briefly in Chapter 2) in order to understand by decision makers to guide the generation of
how these constructs are best operationalized ideas, the analysis of these ideas, recommenda-
to determine destination competitiveness. tions and implementation. In this regard, it is
What is a conceptual model and what does important to recognize that models are not
it do? A conceptual model is a device that perfect and therefore should not be used in a
provides a useful way of thinking about a com- cookbook fashion. It is always important to
plex issue. Most conceptual models depict the check that the basic assumptions and limitations
believed structure of interrelationships between of the model are not violated. Models should not
separate constructs or factors which help to be used to make a decision; they assist decision
explain a higher-order concept, and they do making but should not perform the role of the
this by the use of a graphical device such as a decision maker.
diagram, figure, flow chart or some other type The conceptual model of destination com-
of two- or three-dimensional tool. Concepts are petitiveness presented in this chapter is not a
the building blocks of theory and consist of two predictive or causal model. Rather, its primary
components: a symbol (usually a word or term) purpose at this stage of our research is to
and a definition. Neuman (1994, Chapter 3), explain. Neuman (1994, p. 43) distinguishes
provides a very clear explanation of the impor- between theoretical explanation and ordinary
tance and use of concepts and conceptual explanation. He notes that a theoretical expla-
models in theory-building. A conceptual model nation is ‘a logical argument that tells why
is a collection of concepts that together form a something occurs. It refers to a general rule or
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
60 (J.R. Brent Ritchie and Geoffrey I. Crouch)
Model of Destination Competitiveness 61
principle. These are a researcher’s theoretical our grounded-research approach (Glaser and
arguments or connections among concepts. Strauss, 1967) progressed as follows:
The second type of explanation, ordinary
1. Before 1992, separate research, consult-
explanation, makes something clear or
ing and industry service by the authors, par-
describes something in a way that illustrates
ticularly in the areas of the determinants of
it and makes it intelligible . . . The two types
international tourism demand and destination
of explanation can blend together.’
promotion (e.g. Crouch, 1992a,b, 1994, 1996;
We see our model fitting primarily the
Crouch et al., 1992) and tourism policy,
definition of an ordinary explanation at this
planning, destination image and mega-events
stage of our research. The model is relatively
(e.g. Ritchie and Smith, 1991; Echtner and
abstract in its present form in that it does not lay
Ritchie, 1993; Ritchie, 1993).
out specific empirical generalizations. It is best
2. The joint preparation of a keynote paper
described, in the words of Neuman’s typology
(Basic Report) for the 43rd Congress of
(Neuman, 1994, p. 51) as a ‘theory on a topic’,
the Association Internationale d’Experts
the topic in this case being destination com-
Scientifique du Tourism (AIEST), which had as
petitiveness. (Neuman’s typology, from least
its general title Competitiveness of Long-Haul
abstract to most abstract, includes the following
Tourist Destinations (Ritchie and Crouch,
four classes of theory: an empirical general-
1993).
ization, which is a specific hypothesis; a
3. A focus-group discussion on the topic of
middle-range theory, which is used principally
destination competitiveness with a class of par-
to guide empirical enquiry; a theory on a topic,
ticipants attending the University of Calgary’s
which uses a range of more abstract concepts
Executive Program in Destination Management
and relationships; and a theoretical frame-
(EPDM) in 1992. Participants in this pro-
work, which is often called a theoretical system
gramme work for Convention and Visitor
or paradigm.)
Bureaux (CVBs) across North America.
We begin by explaining how we developed
Graduates of the programme are certified
the model and where we obtained the informa-
as Destination Management Executives by the
tion that forms the basis of its structure. Then,
International Association of Convention and
in the remaining part of this chapter, we pro-
Visitor Bureaus.
vide a brief overview of the model and its parts
4. A series of telephone conference-call
in order to provide a wider perspective of the
interviews on destination competitiveness
model and its usefulness. In subsequent chap-
with a number of presidents and chief executive
ters we examine each of the main components
officers of some of the largest destination
of the model in greater detail.
management organizations in North America.
5. A special session at the 1993 AIEST Con-
gress using transportable computer hardware
The Origins of a Conceptual Model and data-entry keypads with Option Finder
software (Option Technologies, Fleet, UK), to
The model that follows arose out of the coales- gather opinions on the topic of destination
cence of several research activities and ideas. competitiveness from a group of attendees at
The evolution of the model progressed induc- the conference.
tively, beginning with some unrelated research, 6. Computer-facilitated focus groups using
experiences and ad hoc insights that accumu- the University of Calgary’s Group Decision
lated through other consulting, research, and Support System Laboratory to expand and
industry service and experience. In 1992 we formalize the collection of views and opinions
began to pool these experiences and related on the topic from further classes in the EPDM
them more systematically to the larger issue of programme.
destination competitiveness. Over a period of 7. Feedback, debate and introspection stem-
about 8 years, the concepts and propositions ming from papers on the topic of desti-
behind the model emerged from the ground nation competitiveness presented at several
up, maturing in its present form. In summary, conferences held between 1994 and 2001.1
62 Chapter 3
8. Use of the model in our own teaching with interviews, where the focus tended to be on the
undergraduate and postgraduate students and more acute competitiveness issues confronting
short-course industry participants. the destination in question, one or two issues
often took precedence over all others.
The qualitative research involving the
While the model incorporates several cate-
interviews described in (4) above represented a
gories of factors and sub-factors, it was clear
significant phase in the evolution of the model.
that the relative importance of each factor and
The following set of questions guided these
the interactions among the factors depend very
open-ended interviews.
much on the unique circumstances facing each
• In your view, what are the factors that destination in question. It was also clear that
determine the success or competitiveness each set of circumstances is dynamic, that is,
of a major tourism destination? Is it possi- changes over time in the global (macro)environ-
ble to prioritize these factors? How would ment and competitive (micro)environment
you do it? result in changing fortunes and challenges. For
• What criteria are you using to assess this reason, we believe that a general model
success or competitiveness? of destination competitiveness can play an
• Are success or competitiveness factors important role in guiding destination managers
different for the international and as they seek to diagnose their competitive
domestic markets? If so, how? problems and develop sustainable solutions.
• What do you consider are the greatest Figure 3.1 illustrates our conceptual model
competitive strengths of your destination? of destination competitiveness in its present
• Could you identify several destinations form. It is likely to undergo further refinement
that you consider to be highly competitive and adaptation as our research continues. The
in the domestic and/or the international level of interest in the model has encouraged us,
marketplace? Why are they particularly and the feedback we have received to date has
competitive? certainly helped us to improve our framework.
• What do you consider to be the main We hope that the model and ideas presented in
determinants of the ‘cost’ of a desti- this book will help us continue this process.
nation? How important is productivity
in determining the cost of destination
tourist services and, in turn, destination An Overview of the Model
competitiveness?
• How does someone responsible for the The global (macro)environment
success of a destination improve its com-
petitive position? In the short term? In the
The tourism system is an open system. That is,
long term?
it is subject to many influences and pressures
No one element of the work outlined above that arise outside the system itself. This is the
resulted in the development of the model, but global environment or macroenvironment. It
each contributed important insights to its for- consists of a vast array of phenomena which
mulation. In fact it was apparent that, in all the broadly affect all human activities and which
discussions and interviews that took place, the are therefore not specific to the travel and
opinions that were expressed tended to focus tourism industry in their effect. By comparison,
on a subset of competitiveness factors. The big the competitive environment or microenviron-
picture emerged only by synthesizing and inte- ment is part of the tourism system because it
grating perspectives across all of the inputs to concerns the actions and activities of entities
the process. A major reason for this may have in the tourism system that directly affect the
been that the topic of destination competitive- goals of each member of the system, whether
ness is so broad that there simply was not time they be individual companies or a collection of
during each element of the research to cover all organizations constituting a destination.
the important dimensions and perspectives. We The macroenvironment is global in its
also found that, particularly during individual scope. Events in one part of the world today can
Comparative Competitive
advantages advantages
(resource endowments) (resource deployment)
Destination competitiveness and sustainability
Destination management
Quality Human Finance
Information/ and Visitor Resource Crisis
Organization Marketing of service/ resource
research venture management stewardship management
experience development capital
and climate
Competitive (micro)environment
Model of Destination Competitiveness
Fig. 3.1. Conceptual model of destination competitiveness. Further details available at: www.business.latrobe.edu.au/staffhp/gichp/destcomp.htm
63
64 Chapter 3
have consequences for tourist destinations in infrastructural developments that have been the
entirely different regions. Among the many basis for establishing new tourism destinations
effects of global forces are changes in a destina- in these regions also. Economic recessions in
tion’s attractiveness to tourists, shifts in the the early 1980s and early 1990s and the Asian
pattern of wealth to create new emerging origin economic crisis in the late 1990s had measur-
markets, changes in the relative costs of travel able effects on global tourism. The economic
to different destinations, and the disruption of environment profoundly affects global tourism
relations between cultures and nations. These and changes the fortunes of destinations.
forces present a given destination with a num- Technology, too, has produced sweeping
ber of special concerns, problems or issues that changes, the most significant of which involves
it must either adapt to or overcome if it is to transportation technology. The speed, capac-
remain competitive. At the same time, these ity, fuel efficiency, safety and productivity of the
forces provide destinations with a whole new technology used by airlines today, both in their
spectrum of opportunities for innovation and aircraft and in their systems and processes,
market exploitation. have been behind the real decline in the cost of
These global forces can result in events that air travel per seat-mile. Long-haul destinations
are profound in their implications for tourism. have particularly benefited from these develop-
Yet often it seems that businesses and manag- ments. We emphasize that it is not just hard
ers find it difficult or impossible to notice the technology that matters here. Soft technologies
significance of these developments, either (i.e. changes in systems or processes, or the
because they often occur gradually over the way in which things are done) have resulted
long term and do not produce significant in changes of equal significance, often in
incremental changes on a day-to-day basis, or combination with hard technology. Information
because their effect is often indirect, so that the systems (e.g. for computer reservations and
root cause of a problem may be obscure. global distribution, and the Internet for elec-
The global (macro)environment is in a con- tronic commerce), financial systems (e.g. credit
stant state of change and evolution. Destination cards, automatic teller machines, electronic
managers need to monitor the environment funds transfer), accommodation systems
regularly if they are to understand the big (e.g. computer check-in/check-out, all-inclusive
picture and anticipate and pre-empt changes resorts, franchising) and food services (e.g.
that alter the tourism landscape. Marketers will branding and franchising, operations systems),
recognize this as the need to avoid marketing to name just a few of these soft technologies,
myopia. have revolutionized practices in tourism and
Macroenvironmental factors are often hospitality. Tourism is often inaccurately
categorized into six principal groups related to labelled a low-wage service industry, yet it is
the economy, technology, ecology, political clear that many highly skilled jobs are a part of
and legal developments, sociocultural issues the tourism scene today.
and the changing demographic environment. Turning now to the ecological environ-
We will discuss macroenvironmental trends and ment, it is easy to identify several issues that
their ramifications for tourist destinations in potentially have enormous consequences for
greater detail in the next chapter. For the mo- tourism and destinations. To the extent that
ment, however, we provide a brief introduction global warming is a reality, destinations every-
to the scope of these categories of factors. where, from coastal resorts to mountain skiing
Real improvements in wealth have enabled destinations, may experience significant clima-
millions of people worldwide to engage in travel tic shifts over the long term and, if some of the
and tourism in the modern era. For much of predictions are correct, these changes may be
the 20th century, North America and Western enough to virtually destroy tourism in some
Europe produced the greatest share of travel- locations. The depletion of the ozone layer in
lers. This was driven largely by wealth creation the atmosphere and better education about the
in these countries. More recently, economic health risks of exposure to the sun have radically
growth in Asia and the Pacific Rim has opened altered attitudes towards sun-worship. Air
new markets in these regions and fuelled pollution has accelerated the degradation of
Model of Destination Competitiveness 65
some of tourism’s most famous icons, such as tourism involving under-age males and females
the Taj Mahal and the Parthenon. In addition, in Thailand and the Philippines, through the
the green movement acts as a vigilant watchdog Helmes–Burton Law in the USA (which targets
over tourism’s potential adverse environmental corporations and individuals trading with Cuba)
impacts, ranging from overcrowding (e.g. to embargoes against rogue states such as
Yosemite National Park in the USA) to effects Serbia and North Korea. These are just a few of
on everything from wildlife, flora, reefs, rain- the many political and legal trends shaping tour-
forests and sensitive ecosystems. Conversely, ism and the competitiveness of destinations.
hopes are held out for tourism as a saviour of Some of the major sociocultural trends
the Earth’s ecological heritage through the plac- shaping tourism are: (i) the back-to-nature
ing of economic value on the preservation of movement, with its emphasis on experiential as
scenic regions, national parks, wildlife species, opposed to material rewards; (ii) the backlash
etc., so that they may compete with or guard against cultural imperialism; (iii) a heightened
against other means of exploitation and degra- sense that aboriginal cultures possess features
dation. Economic, in addition to philanthropic, of great value, in which aboriginals of the youn-
motives may be enough to tip the balance in ger generation are developing a greater sense
many cases, particularly in developing regions. of pride; (iv) greater reverence for the enriching
In the political and legal arena, the scope qualities which other cultures contribute to the
of implications of many events for tourism is global community; (v) the impact of global com-
similarly momentous. As noted by Naisbitt munication and its demonstration effect on resi-
(1994, p. 120), a ‘confluence of cosmic events dents in Third World countries who, as a result,
is fuelling growth in tourism’. Naisbitt provides a develop a new set of social and economic aspi-
catalogue of geopolitical events (these include a rations; and (vi) tourism’s potential for social dis-
reduction in the arms race and its effect on location. Here too, however, opportunities
resource allocation; an increase in international exist for destinations to use tourism in a way
communications, trade, investment and travel; that improves the quality of life of its residents
free trade agreements; a reduction in hostilities through the judicial development, marketing
between a number of traditional rivals; a reduc- and operation of its local tourism system. In
tion in the number of authoritarian regimes; a Global Paradox, Naisbitt notes that:
move to market economies; and the spread of The biggest industry is driven as no other by
democracy) and their consequences in support individuals’ decisions. The smallest players
of this statement. International travel and decide. This situation also reflects the paradox
tourism is leading the field in the growing of the more universal we become, the more
international trade in services and has played a tribal we act. The bigger and more competitive
central role in the General Agreement on Trade travel becomes, the more authentically
in Services (GATS) and now the World Trade distinctive to tourists we will make our cultures.
Organization. International air transport agree- (1994, p. 103)
ments are complex and largely bilateral, and the The final macroenvironmental category
process of reaching agreement shows signs of concerns demographics. Foot (1996) claims
becoming, albeit slowly, more market-oriented. that an understanding of demographic changes
Migration and the flow of refugees continue today holds the key to success in business.
apace, often fuelling agonized debates over the According to Foot (p. 2), ‘Demography, the
levels of immigration in many industrialized study of human populations, is the most power-
countries – debates that are often tainted with ful – and most under-utilized – tool we have to
accusations of racism. Even concerns over understand the past and to foretell the future . . .
the spread of disease (e.g. AIDS, Ebola, mad Demographics explain about two-thirds of
cow disease (bovine spongiform encephalo- everything.’ Whether or not one quite agrees
pathy) and foot-and-mouth disease), facilitated with this claim, it is certainly true that the
by international air travel and open borders, has demographic environment presents some very
rung alarm bells in political circles. Govern- significant opportunities and threats for tourism
ments have passed laws ranging from measures over the long term. Those that are most talked
designed to punish citizens who engage in sex
66 Chapter 3
and written about, and most readily recognized, publics or stakeholders. As components of the
concern the ageing profile of the population, tourism system, they shape the immediate
at least in developed, industrialized countries. environment within which a destination must
Tourism generally has been quick to realize the adapt in order to compete.
implications of this trend. But other changes Suppliers provide the basic elements that
should not be ignored. For example, the well- together form the overall visitor experience.
established trend towards two-income house- There are many resources or factors that are
holds has been evident for some time. This required by tourism and hospitality enterprises,
has affected tourism by increasing household as outlined in Chapter 2. As the tourism indus-
income but a consequence has been less time try is a service industry, a great deal of the prod-
for leisure activities. The result is vacations that uct is formed through the actions of individual
are more frequent but shorter. More recently, employees of the many service firms that form
there have been signs of a reverse trend. the tourism industry. Labour is therefore a
Increasingly, individuals and couples are key supply factor. Other supply factors include
questioning the benefits of their work ethic food and beverage producers, the oil and gas
and lifestyle. industry, local crafts and shopping goods, and
The increasing level of education in recent the manufacturers of equipment such as amuse-
years is a trend that also has important implica- ment park rides, camping equipment and forms
tions for tourism. University degrees, even post- of transportation (e.g. aircraft, automobiles, fer-
graduate degrees, are no longer the rare ries), together with many other goods and ser-
commodity they once were. Education has vices the demand for which is derived from the
stimulated the desire for travel to experience needs of travellers and tourists. The number,
other peoples, places and ways of life. policies and practices of these suppliers drive
We have only touched upon some of prices, service levels, visitor choice and product
the major global forces shaping the tourism innovation. Their competitive and cooperative
industry and the competition occurring actions fundamentally shape the competitive
between tourist destinations. We explore these (micro)environment.
trends in greater depth in Chapter 4. Suppliers are connected to tourists
through tourism marketing channels consist-
ing of intermediaries and facilitators. These
include tour packagers, who assemble tourism
The competitive (micro)environment products or experiences from among the vast
number of alternatives supplied; retail travel
As noted above, a destination’s competitive agents, who provide information, reservation
(micro)environment is made up of organiza- convenience and expertise to tourism markets;
tions, influences and forces that lie within the speciality channellers, such as incentive travel
destination’s immediate arena of tourism activ- firms, corporate travel offices, meeting and
ities and competition. These close-in elements convention planners, who provide specialized
of the environment tend to have a more direct forms of travel planning and organization;
and immediate impact than do elements of the and facilitators, who assist in the efficient and
global (macro)environment as a general rule, effective functioning of the tourism system by
although the opposite is often true. Never- improving the flow of information, money,
theless, the microenvironment, because of its knowledge, services and people. This last group
proximity and greater sense of immediacy, includes credit card and financial organizations,
often occupies the attention of managers advertising agencies, market research consul-
because of its implications for the destination’s tants, embassies and consulates, information
ability to serve visitors and remain competitive. technology suppliers, and investors. Without
Apart from the destination itself, the intermediaries and facilitators, the tourism
competitive (micro)environment includes other system would gridlock. New forms of marketing
entities that together form the so-called travel channels, such as the Internet, continue to
trade, in addition to the various tourism mar- influence the structure and functioning of the
kets, competing destinations and a destination’s tourism system.
Model of Destination Competitiveness 67
Customers – travellers and tourists – are, the minds of potential visitors is very much a
or at least should be, the focus and source of the task at the heart of destination competitiveness.
driving force in the competitive (micro)environ- A destination’s internal environment is
ment. Competition to serve customer needs also an element of the microenvironment or
and wants is what ultimately governs the actions competitive environment that affects its com-
of the travel trade. Customers are not just a petitiveness. To be competitive, a destination
homogeneous bunch of individual travellers. must function as a real entity. That is, it must
The desires and tastes of travellers today are have a sense of itself; it should have a purpose
more heterogeneous and sophisticated than and be managed in a way that promotes the
ever before. Thus, the variety of travel moti- pursuit of that purpose. This assumes either
vations and tourism market segments has that some system of governance is in place for a
exploded in recent years. While many tourists destination or that there exists a shared sense of
today still seek warm and sunny climates for rest purpose across the organizations, companies,
and relaxation, or experiences in traditional government departments, networks and indi-
destinations like Paris, London, Rome and viduals that together constitute the destination.
New York, we now also see travel to distant, Individual tourism organizations do not operate
exotic destinations, or for eccentric or esoteric in a vacuum. Hotels work with convention
purposes. Examples include participation centres, tour operators and attractions depend
by tourists in archaeological digs, bicycle rides on one another for their business, airlines and
literally around the world, and attendance at car rental companies coordinate services, desti-
international scientific conferences. nation marketing organizations feature individ-
Another element of the competitive ual operators in their promotions, economic
environment consists of the competitors them- development agencies and financial institutions
selves; that is, other destinations, organizations bring investors and tourism developers together,
or firms with which an entity competes because and so on. How all of these relationships and
they offer broadly similar products to essentially interactions combine over space and time
the same group of customers, at least in part. determines the course taken by a destination.
Traditionally, these competitors have been Whether this course is chaotic and uncertain or
regarded as adversaries. However, in these days planned and deliberate depends on the degree
of down-sizing, partnerships and virtual corpo- to which all these events are congruent.
rations, a new word, ‘coopetition’,2 is being The final element of a destination’s com-
added to the lexicon of the business world petitive (micro)environment is made up of the
to reflect the fact that other organizations or many publics with which a destination must
entities can present both cooperative as well as contend and which it must satisfy. These include
competitive challenges. Porter (1980, 1990) the media, government departments, the gen-
recognized the complementary and supportive eral public, local residents, financial institutions,
roles of other players. The terms he used to citizen action groups (e.g. environmental pres-
reflect this are ‘strategic groups’ and ‘industry sure groups, aboriginal communities, taxpayer
clusters’. associations, consumer groups) and organized
In tourism, these paradoxical, competitive labour. The distinction between a destination’s
and complementary relationships between internal environment and its publics is rather
tourist destinations have attracted the interest of blurred, as in this instance most publics are
some researchers. For example, neighbouring internal to the destination. This is not always the
destinations often compete for short-haul case, however. Take, for example, the interna-
markets but cooperate in attracting long-haul tional reaction to France over nuclear testing in
markets because they recognize the synergistic the Pacific Ocean, or the ostracizing of Arizona
effect of a cooperative marketing strategy. Nev- and the subsequent boycotts affecting the state
ertheless, destinations do compete with many because of its initial failure to declare a public
other destinations in the choice processes used holiday in honour of Martin Luther King, Jr.
by travellers and tourists. Developing a strong As publics can facilitate or impede a
image, differentiating that image from other destination’s ability to pursue and realize its
destinations, and positioning the destination in tourism development goals, it is vital that a
68 Chapter 3
destination should develop a good relationship Indeed, it can be argued with great justification
with key publics. This is why destinations have that little or no attempt should be made to alter
often instituted promotional campaigns within or, especially, to prostitute local culture and his-
their own precincts to sell the virtues of tourism tory for the purpose of tourism development.
development. Once this constraint is accepted, however,
Chapter 5 delves more deeply into the way a destination’s culture and history furnish
in which the competitive (micro)environment a basic and powerful attracting force for the
shapes the playing field for tourist destinations. prospective visitor. This force appears to be
growing in significance for many segments of
the travel market, particularly in today’s world
of homogenized tourism, where one destina-
Core resources and attractors tion often seems to resemble another. Thus, if a
destination can provide visitors with a unique
This component of the model describes the setting within which to experience lifestyles
primary elements of destination appeal. It is outside their day-to-day routine, it has a clear
these factors that are the key motivators for competitive advantage. If this lifestyle is com-
visitation to a destination. While other compo- plemented by historical environments that
nents are essential for success and profitability, contrast with those found in the home situation,
it is the core resources and attractors that are the destination has a clear competitive
the fundamental reasons why prospective advantage in efforts to create a memorable
visitors choose one destination over another. experience.
These factors fall into seven categories: The market ties component of destination
physiography and climate, culture and history, attractiveness is also outside the direct control
market ties, mix of activities, special events, of tourism destination managers. Nevertheless,
entertainment and the tourism superstructure. it is one that evolves over time and one that can
Because so much of the tourism experi- be influenced to varying degrees by those
ence is associated with the physical resources of responsible for managing a tourism destination.
a destination, the physiography and climate The term ‘market ties’ includes several
of a destination together constitute a factor that dimensions along which a destination estab-
can be so important that it dominates other lishes and builds linkages with the residents of
factors of competitiveness. As it includes the tourism-originating regions. Ethnic ties result-
overall nature of the landscape and the climate ing from immigration patterns that have
of the destination, it defines the nature of the evolved over time – often long periods of time –
environmental framework within which the provide the strongest and perhaps most
visitor exists and enjoys the destination. It also enduring linkages for building systematic and
defines much of the aesthetics and visual appeal predictable travel flows to a destination. The
of the destination – and because it is a factor ‘visiting friends and relatives’ segment of the
over which destination managers have little or travel market, while not necessarily the most
no control, much of the built tourism environ- profitable segment, provides a firm foundation
ment is constrained by its characteristics. Thus, for building tourism within a destination. Even
to a great extent, a destination’s physiography more importantly, it often leads to the establish-
and climate constitute the one parameter of ment of business ties that can generate both a
core attractiveness around which other factors steady flow of visitors and create other forms
must be creatively developed. of economic development. Other ties include
Similarly, the culture and history of a des- religion, sports, trade and culture.
tination can also be an enormously important The range or mix of activities within a
factor. Although this factor may be viewed as destination represents one of the most critical
somewhat more malleable than physiography aspects of destination appeal, and it is one over
and climate from a management perspective, which destination managers do have extensive
the culture and history of a destination are also influence and control. While the activities within
determined well outside the scope of tourism. a destination may be defined to a large extent
Model of Destination Competitiveness 69
by physiography and culture, there is never- ignore the interests and potential for involve-
theless considerable scope for creativity and ment of members of the local community.
initiative. Entertainment is another category of
The activities dimension of destination destination core resource or attractor. The
attractiveness appears to be growing in entertainment industry is a major supplier to
importance as the traveller increasingly seeks travel and tourism. Apart from gambling, the
experiences that go beyond the more passive Las Vegas experience is based on entertain-
visitation practices of the past. In The Experi- ment. Many visitors to New York or London
ence Economy: Work Is Theatre and Every include a live show in their travel itinerary.
Business a Stage, Pine and Gilmore (1999) Entertainment can even attract tourists inter-
argue that customer experience rather than cus- nationally. New Zealand is an important market
tomer service is a hallmark of new economic for theatre productions in Melbourne and
growth: ‘Experiences are a fourth economic Sydney that are too expensive to stage in the
offering [the others being commodity, good or smaller New Zealand market. The theatre, con-
service] as distinct from services as services are certs, comedy festivals, operas and circuses,
from goods’ (p. 2). The challenge facing the such as the Cirque du Soleil, are examples of
tourism destination manager is to develop those the contribution that the entertainment sector
activities that take advantage of the natural can make to a destination’s competitiveness.
physiography of the destination while remain- The final core dimension of destination
ing consistent with the local culture and its attractiveness, tourism superstructure, is
value. For example, a nature-based destination another factor over whose development
should take the opportunity to strengthen its destination managers can exert a consider-
appeal by developing activities that build on this able amount of control. In fact, it is the
strength; a historical/cultural destination should tourism superstructure, consisting primarily of
creatively identify and develop activities that accommodation facilities, food services, trans-
reinforce this foundation of its appeal. portation facilities and major attractions, that
The attractor defined as special events many people view as the tourism industry.
represents a distinctive extension to that of the There are elements of the tourism super-
activities mix. It is of particular managerial inter- structure that may be categorized by some as
est since it is a factor over which destination supporting factors of destination appeal in that
managers have a great degree of control. The visitors do not, for example, normally choose
term ‘special events’ refers to a wide range of a destination just to eat and sleep. They visit a
happenings that can create high levels of inter- destination largely because of the appeal of its
est and involvement on the part of both visitors attractions. Despite the possible legitimacy of
and residents. The spectrum of possible special the view that excludes accommodation and
events ranges from modest community festivals food services, it can also be argued with consid-
to large-scale international ‘mega-events’, such erable force that the quality of these factors can
as the Olympic Games, world expositions and represent in itself a significant percentage of the
global sporting championships. Special events overall appeal of a destination. For this reason,
throughout the spectrum have an important the present model defines them as components
role to play. Local festivals provide the opportu- of core attractiveness.
nity to involve residents in events of particular Chapter 6 expands on the influence of
relevance to their daily lives, and may also each of these dimensions of core resources and
draw visitors from nearby regions. Mega-events attractors.
(Ritchie, 1984) demand a much higher level
of commitment, but provide a much greater
opportunity to establish a destination’s tourism
credentials at the international level. While Supporting factors and resources
mega-events are generally more commercial
and professional in nature, the decision to host Whereas the core resources and attractors of a
a particular type of mega-event should not destination constitute the primary motivations
70 Chapter 3
for inbound tourism, the supporting factors Successful tourism development also
and resources, as the term implies, provide a depends on a range of other facilitating
foundation upon which a successful tourism resources and services, such as the availability
industry can be established. A destination with and quality of local human, knowledge and
an abundance of core resources and attractors capital resources, education and research
but a dearth of supporting factors and resources institutions, financial institutions and various
may find it very difficult to develop its tourism areas of the public service. The labour market,
industry, at least in the short term, until some in terms of the skills available, work ethics, wage
attention is paid to those things that are lack- rates, union demands and government regu-
ing. This may not be easy in a location or lations, is particularly important in a sector of
region which is poor, undeveloped or under- the economy where customer service is critical.
populated. The question then becomes that of The availability of capital resources will depend
how the destination can begin to use, albeit in on the extent of local wealth and savings for
a modest way, its abundant attractions to build investment, competition for capital from other
gradually a tourism industry which will create industries, government constraints on foreign
the wealth, taxes, employment and investment investment, and the return investors expect
necessary for the provision of the missing from investment in tourism development. The
supporting elements. lack of such resources may severely limit a
In a region that already enjoys a broad destination’s competitive potential.
economic base, this question may not arise. The vitality, sense of enterprise, entre-
Even so, the quality, range and volume of sup- preneurship and initiatives that play a part
porting factors and resources are still likely to be in developing new ventures in a destination
significant in shaping the realization of the contribute to its competitiveness in a number of
potential for tourism. Where the question does ways. These include competition, cooperation,
arise, however, particularly careful planning specialization, innovation, facilitation, invest-
and management are required to ensure a ment, growth, income distribution and equity,
proper balance between the growth of tourism risk-taking, productivity, gap-filling, product
and the development of infrastructure and other diversification, seasonality management and
facilitating resources. Without such a balance, disequilibria (Crouch and Ritchie, 1995). We
economic, social, ecological and perhaps even discuss these in some detail in Chapter 7.
political systems might be placed at risk. The tourism industry is replete with many
One of the most important supporting small to medium-sized enterprises. The extent
factors is the condition and extent of a destina- to which tourism development advances
tion’s general infrastructure. Some elements economic prosperity and the quality of life of
of infrastructure have a very direct influence residents depends significantly upon the actions
on destination competitiveness. For example, and success of these firms. Porter (1990,
transportation services and facilities are vital p. 125) notes that ‘invention and entre-
to travellers. Highways, railways, bus services, preneurship are at the heart of national
airports, ferries, etc. convey travellers to and advantage’. He argues that the role of
from desired points of interest. The quality of chance does not mean that industry success
the infrastructure of transportation is as impor- is unpredictable, because entrepreneurship is
tant as its mere existence. A destination is more not a random phenomenon.
competitive when transportation systems are The accessibility of the destination, too,
reliable, efficient, clean, safe, frequent and able is a supporting factor since it is governed by
to take travellers to the locations and attractions a wide variety of influences, many of which
of greatest interest. In fact, infrastructure depend on broad economic, social or political
elements important to all economic and social concerns. For example, the accessibility of a
activity, such as sanitation systems, communi- destination is affected, in more complex ways
cation systems, public facilities, legal systems than its mere physical location might suggest,
and a reliable supply of potable water, also by the regulation of the airline industry; entry
provide the basis for an effective and efficient visas and permits; route connections, airport
tourism industry. hubs and landing slots; airport capacities and
Model of Destination Competitiveness 71
curfews; and competition among carriers, etc. Destination policy, planning and
Within a destination, the accessibility of tourism development
resources is also a competitive issue. Although
the accessibility of resources such as beaches, A strategic or policy-driven framework for the
mountains, national parks, unusual land forma- planning and development of the destination
tions, scenic regions, and lakes and rivers will with particular economic, social and other
undoubtedly be influenced by the needs of the societal goals as the intended outcome can
tourism industry, other economic, social and provide a guiding hand to the direction, form
sometimes political needs often govern the and structure of tourism development. Such a
location of roads and railway lines, for example. framework can help to ensure that the tourism
A destination’s resources are hardly relevant to development that does occur promotes a
the issue of competitiveness unless they are competitive and sustainable destination while
accessible to potential tourists and tourism meeting the quality-of-life aspirations of those
operators alike. who reside in the destination.
The operating sectors of tourism are res- In order to formulate a strategic frame-
ponsible for delivering high-quality, memorable work, it is first necessary to decide or agree on
experiences. Care must be taken, however, to the framework’s subject: that is, precisely what
wrap these experiences in a warm spirit of hos- it is that the framework is meant to govern. This
pitality. Quite simply, it is not enough to deliver requires an explicit recognition and common
all the attributes of an experience in a cold and understanding among the stakeholders who are
detached manner. Each individual visitor must involved in the process concerning the system
feel that they are more than a source of cold definition of the tourism destination in ques-
cash revenue for the business or destination. tion. Before different parties can agree or come
Rather, visitors have a natural human desire for to a consensus on what needs to be done, they
warm acceptance as they seek to enjoy the must first agree on the entity for which the
range of experiences the destination has to strategy is to be developed.
offer. The challenge facing destinations is to In the process of developing a policy-
deliver their experiences in a way that enables driven framework for destination development,
the visitors to believe they are welcome – that various philosophical perspectives are likely to
they are truly guests. emerge among the stakeholders concerned.
A further factor that can support or hinder For example, some destination communities
destination competitiveness is the degree of may feel that major resort development is quite
political will. Many destination executives we compatible with the social and environmental
have spoken to have noted how their efforts nature of the destination and will provide the
to develop their destination have been either best opportunity for creating economic growth
assisted by an abundance of political will or and jobs for younger people. In different cir-
frustrated by the lack of it. The saying ‘where cumstances, another community might hold the
there’s a will there’s a way’ captures the impor- view that a different sort of approach to tourism
tant role of political support in facilitating development is called for. So a community’s
efforts by the tourism industry to create a philosophy on the best way to address eco-
competitive destination. Political will is not nomic, social, environmental and political goals
a function of the attitudes and opinions of through tourism development will shape the
politicians alone. All community leaders shape policy framework. This philosophy needs to fit
political attitudes to the contribution that the circumstances, but there also needs to be
tourism might make to economic and social some emergent view among stakeholders about
development and the resulting quality of life in the right philosophy, or at least about the
the destination. prevailing philosophy.
In Chapter 7, which focuses on the critical A vision is a statement or understanding
role of supporting factors and resources, we of what such a philosophy logically suggests
discuss in some depth the need to pay attention makes most sense for the destination. The same
to this area as a foundation of successful tourism general philosophy might suggest different
development. visions in different circumstances. Whereas a
72 Chapter 3
philosophy is a way of looking at a problem, a entails knowing how different market segments
vision is more a view of what one sees when currently perceive the destination against com-
adopting a particular philosophical perspective. peting destinations, which market segments
A tourism development policy, if grounded it makes most sense to covet, and therefore
in reality, ought to be based upon an audit of target, and how the destination might be effec-
the destination and its attributes, its strengths tively and feasibly repositioned with respect to
and weaknesses, problems and challenges, past these segments.
and current strategies, etc. Without some Destination policies for tourism develop-
fundamental data on the significant attractions ment should be formulated as an integrative
and resources, historical performance, current system of mechanisms designed to work in
visitors and other vital information, the formula- concert, such that overall competitiveness and
tion of a policy framework for developing the sustainability goals can be achieved. Develop-
destination remains an abstract exercise. An ment policies should address the full range
audit of the destination helps to communicate of important issues that govern destination
information and issues to all parties engaged competitiveness, including both demand- and
in policy formulation and is a key input to supply-oriented concerns. On the supply side,
any effort to create and maintain a competitive policies should address the development and
destination. We view the destination audit as maintenance of resources, such as the destina-
the linchpin in the whole process of managing tion’s physical features; the quality and supply
destination competitiveness. For this reason, of human capital; the availability and cost of
we end this book with a chapter that overviews financial capital and the investment attractive-
the destination audit process. ness of the tourism industry; the necessary data
Similarly, competitive/collaborative analy- and information required for sound business
sis is an evaluation of how the destination and investment decisions to grow the industry;
relates and compares to other destinations and and the programmes and activities required to
the international tourism system. Because put these resources into action for the creation
competitiveness is a relative concept, decisions of tourism products and experiences. To the
about the most appropriate policy or strategy extent that governments assist tourism develop-
for developing a destination must be made in ment and therefore expect a broader socio-
the context of what other destinations are doing economic benefit from this investment, demand
and how they are performing. A management policies seek to ensure that the right tourism
consultancy recently advertised its services in markets are pursued in the most effective
newspapers by showing two views of a sprinter manner with regard not just to the needs of
in an athletics event. In the first frame the the tourism industry but also to the wider
sprinter is shown in full flight, apparently in the community.
lead with a couple of other athletes close on her The final element of destination policy,
heels. In the next frame the view widens to show planning and development, concerns the need
a gap in front of the athlete, revealing other for and importance of the monitoring and eval-
sprinters clearly ahead of the pack. It is an uation of policies and their outcome. The effec-
effective illustration of how a narrow view can tiveness and impact of policies in a complex
hide a competitor’s true position. system can be neither forecast nor predicted
A similar issue involves the marketing with a high degree of confidence when they are
concept of positioning. An athletic sprint event first formulated. Also, the eventual outcome is
is a one-dimensional race from a starting point as much a function of how well the policies are
to a finishing line. But destination competitive- implemented as a function of the policies them-
ness is not one-dimensional, and positioning is selves. Hence, the task of policy formulation,
all about where, in cognitive rather than physi- planning and development must continue to
cal space, a destination is positioned vis-à-vis include research into how well such policies
its competitors. Positioning is all to do with are performing, whether improvements in
how unique a destination is perceived to be in implementation are needed or, indeed, whether
ways that tourism markets value or regard as circumstances have changed so as to render the
desirable or important. Destination positioning policies no longer relevant or effectual.
Model of Destination Competitiveness 73
The sub-elements of the model discussed emotions which each tourist permits their five
above are further explained and developed in senses to perceive and experience. The choice
Chapter 8, Destination Policy, Planning and of hotels, restaurants, attractions, tours, etc.
Development. is incidental to the choice of the destination.
Efforts to enhance the quality of service
provided to visitors have recently been comple-
mented by recognition of the need to take a
Destination management total quality-of-experience approach to visitor
satisfaction (Otto and Ritchie, 1995). This
The destination management component of approach emphasizes the need to examine the
the model focuses on those activities which total travel experience of visitors. Essentially,
implement the policy and planning framework providing individual high-quality service trans-
established in the previous section of this chap- actions is not enough. As far as possible,
ter, enhance the appeal of the core resources destination managers must attempt to ensure
and attractors, strengthen the quality and a seamless, hassle-free interface among all ele-
effectiveness of the supporting factors and ments of the total travel experience. In practical
resources, and adapt best to the constraints terms, this means paying close attention to such
or opportunities imposed or presented by aspects as the convenience of transfers between
the qualifying and amplifying determinants. modes of transport or travel packages and
These activities represent the greatest scope the responsibility of travel agents for each
for managing a destination’s competitiveness component of the travel packages they sell.
as they include programmes, structures, In brief, on-site and transaction-specific visitor
systems and processes that are highly service is not enough.
actionable and manageable by individuals and The information/research component
organizations and through collective action. of destination management pertains to the
Perhaps the most traditional of these development and effective use of information
activities is the function of marketing the desti- systems that provide managers with the infor-
nation. In practice, destination marketing has mation required for understanding visitor needs
tended to focus on the task of promoting and and for effective product development. This
selling the destination. That is, the concept of also involves the regular monitoring of visitor
marketing has been applied to the destination in satisfaction and the tracking of industry
very limited ways. As a result, there is much performance. This monitoring function must
scope for the application of a true marketing be complemented by special research projects
philosophy.3 Beyond promotion and selling, designed to provide specialized information for
marketing responsibilities and activities are particular decisions. Finally, each destination
manifold. For example, the competitiveness of management organization (DMO) also has the
the destination also depends on product devel- responsibility to disseminate key market and
opment, packaging and innovation to serve performance information to its members in a
the changing needs of travellers, appropriate timely way. Such information is essential in
pricing policies and practices, the development order to ensure destination productivity and
of effective marketing channels to facilitate the effectiveness.
connection between the destination and the The concept of the DMO, where the ‘M’
potential consumer, and the strategic selection emphasizes total management rather than
of target markets which might be attracted to simply marketing, is a somewhat recent con-
the destination, while providing the yield levels ceptualization of the organization function for
and creating the sorts of impacts which will destination management. Within this refocused
sustain the destination. philosophy, a broader view is taken of the desti-
The importance of the service experience nation’s organizational structure, which, in the
dimension of destination management has also opinion of Nadler and Tushman (1997),4 may
been recognized for some time. Tourists are be one of the last remaining sources of truly sus-
buying experiences, and experiences are made tainable competitive advantage. This broader
up of all of the interactions, behaviours and view sees management as responsible for the
74 Chapter 3
well-being of all aspects of the destination. It impacts. Calls for visitor management have
emphasizes the provision of a form of leader- come from a range of places, including national
ship in destination development that makes parks (such as Banff National Park in Canada)
extensive use of teamwork in all DMO-led initia- and cities (such as Venice). It is in the interests of
tives. Destination promotion is no longer the the local tourism industries to cooperate in
sole purpose of the DMO. While this modified order to develop an appropriate approach to
role presents many new challenges, it also visitor management. In the absence of such
provides a much broader range of opportunities cooperation, governments and other regulatory
for ensuring destination competitiveness. authorities may be forced to act if problems are
While financial institutions, financial left unattended. DMOs can play an important
markets and investors will normally fund most role in coordinating efforts to institute such
private-sector tourism development (see this industry-regulated arrangements.
chapter, Supporting factors and resources; An increasingly important challenge for
and Chapter 7), some public sector support destination managers involves crisis manage-
or programmes can assist the availability of ment. Destinations have always, from time to
finance and venture capital to tourism devel- time, had to deal with crises affecting visitors –
opers. For example, guided by public policy, not only the direct effects at the time of the cri-
governments or DMOs can institute pro- sis but also the consequences of a tarnished des-
grammes to provide investors with seed tination image. Anecdotally, in recent years it
funding, grants, loan guarantees, depreciation seems that crises have become more problem-
allowances, capital gains exclusions, taxation atic for destinations. The impact of the terror-
concessions and other such incentives in order ism of 11 September 2001 in New York and
to stimulate private investment for tourism Washington, DC, is an extreme example, in
development. Such programmes should clearly which some visitors to New York and all
be designed to promote the realization of a passengers on board the hijacked planes
destination vision that has been formulated lost their lives. Not only has the New York
previously. Convention and Visitor Bureau had to contend
Similarly, destination management can with the significant aftermath of that crisis ever
play a key role in human resource develop- since, but these events have also affected the
ment by further encouraging and stimulating entire US tourism industry. It is easy to think
education and training programmes designed of numerous other acts of terrorism that desti-
to meet the specific needs of the tourism and nations have had to contend with over the
hospitality industries. Although quality educa- years. But crises may arise from many different
tion systems are a fundamental element of causes, including disease (such as the foot-
the facilitating resources (see this chapter, and-mouth disease outbreak in the UK,
Supporting factors and resources), education Ebola in Africa and mad cow disease (bovine
programmes are required which specifically spongiform encephalopathy) in Europe), acci-
address the skills required by employers in dents (such as the canyoning tragedy in Switzer-
tourism and hospitality, just as other industries land), crime (which we discuss in some detail
and economic sectors have cooperated with in Chapter 10), natural disasters (such as the
educational institutions to develop graduates’ floods in Europe and fires in the western USA in
skills in other fields. Australia is an example 2002), political and social problems (such as the
where educational institutions have responded violence in Zimbabwe over land laws and the
to the needs of the industry at both secondary conduct of elections, and cultural and religious
and tertiary levels and in terms of both voca- violence in parts of Indonesia) and union strikes
tional and professional education and training. (such as those by airline staff and other key
As the travel and tourism industry con- groups of employees). When such crises occur,
tinues to grow rapidly, concerns have been destinations need to be able to respond in an
expressed in various destinations that are sub- effective way to deal with the immediate impact
ject to large numbers of visitors that policies and of the event as well as its longer-term conse-
systems are required for visitor management quences. Destinations which respond to such
in order to exert some influence over visitor eventualities more effectively or, better still, act
Model of Destination Competitiveness 75
to prevent or minimize them as far as this is influence of the other three groups of factors.
possible, enhance their competitive position. They may be so important as to represent a
Proactive crisis management or disaster plan- ceiling to tourism demand and potential, but
ning is therefore becoming an additional chal- are largely beyond the control or influence of
lenge and responsibility for forward-thinking the tourism sector alone.
destinations. For example, clearly a destination’s loca-
The final component of destination man- tion has much to do with its ability to attract
agement in our model of destination competi- visitors. A physically remote destination, one
tiveness is a new but increasingly significant that is far from the world’s major origin markets
one. Resource stewardship is a concept that for tourism, is clearly at a distinct disadvantage
stresses how important it is – indeed, that it is to begin with. A destination that is perhaps
obligatory – for destination managers to adopt equally attractive to potential travellers but
a caring attitude to the resources that make which neighbours the major markets is in a
up the destination. This involves the effective much stronger position to be able to convert
maintenance of these resources and the careful latent interest into actual visitation because it
nurturing of those that are particularly vulnera- has the advantages of familiarity and lower
ble to any damage that may be caused by travel cost (in terms of both monetary cost and
tourism. All in all, the stewardship philosophy the opportunity cost of travel time).
implies ensuring the effective yet sensitive Although the physical location of a destina-
deployment of all the resources within the tion does not change (unless we are willing to
destination. The model is then not one of wait a few million years for continental drift to
simple economic competitiveness, but one of have an effect), what can change over time,
long-term sustainable competitiveness, which within the span of a decade or two, are the rela-
acknowledges the stewardship of ecological, tive locations of important origin markets for
social and cultural resources. tourists. We have seen, for example, in the
As noted above, because elements Asian region the economies of several countries
that constitute destination management are improve markedly over a short space of time.
among the most actionable and manageable The wealth generated in these countries and
of those concerned in the quest to develop the overflow effect in other neighbouring
and maintain a destination’s competitiveness, countries have created a huge and growing
a substantial part of this book (Chapter 9) tourism market in this region. This has led to
discusses these activities in greater depth. a shift in the competitiveness of tourism desti-
nations as a result of this one factor – location –
alone.
A related but nevertheless different phe-
Qualifying and amplifying determinants nomenon is the interdependencies that exist
between destinations. We touched upon this
The potential competitiveness of a destination issue briefly in our discussion of the competitive
is conditioned or limited by a number of factors (micro)environment, where we noted the para-
which fall outside the scope of the preceding dox of competition and cooperation between
four groups of determinants (core resources destinations. The competitiveness of any desti-
and attractors; supporting factors and nation is affected by the competitiveness of
resources; destination policy, planning and other destinations. In part, as we pointed out in
development; and destination management). Chapter 2, this is because competitiveness is a
This group of factors, which we have called relative concept. But beyond this there are
qualifying and amplifying determinants, interdependencies that can significantly affect
might alternatively have been labelled situa- the fortunes of individual destinations. This can
tional conditioners because their effects on best be illustrated if we consider the situation of
the competitiveness of a tourist destination are stopover destinations for a moment. You can
to define its scale, limit or potential. These probably think of destinations that depend, at
qualifiers and amplifiers moderate or magnify least to some significant extent, on travellers
destination competitiveness by filtering the who break their journey to or from more distant
76 Chapter 3
destinations. Should the attractiveness of those visitors. The consideration set includes desti-
distant destinations change, either positively or nations that potential visitors consider when
negatively, the stopover destination is sure to making a choice between alternatives. Destina-
experience some consequent effect. Another tions that are not considered may be explicitly
example concerns the impacts of terrorist rejected (the ‘inept set’) or implicitly ignored
events, wars and crime in a neighbouring (the ‘inert set’) (Woodside and Lysonski, 1989).
region. There are many examples of how More broadly, however, destination awareness
events such as these have dramatically affected and image is the lens through which tourists
the destination choices of travellers. perceive all characteristics of a destination and
This leads us to the specific issue of safety therefore effectively all of the other elements of
and security. Nothing can influence the choices our model.
of travellers more powerfully and patently as We have also included cost/value as a
concerns over safety and security. Of course qualifying and amplifying determinant. At first it
there will always be the intrepid tourist who dis- may seem strange that we have classified cost in
regards travel advisories, warnings or adverse this way when the cost of a destination can be
media coverage of events in dangerous destina- associated with the specific range of goods and
tions. Indeed, some travellers might even seek services consumed by visitors to the destination
out dangerous or risky experiences for the and the efficiency with which these products
excitement and challenge they offer. Most are produced. However, because the cost of
people tolerate a certain degree of uncertainty a destination to a foreign visitor is driven by such
and risk, but their tolerance levels are normally a broad range of local, domestic and global
relatively low. The need for safety, along with forces, and because cost in itself is so fundamen-
the physiological needs of food and shelter, tal to the question of competitiveness, it makes
are primary motivational forces behind human more sense to treat cost as a qualifying and
behaviour. If potential visitors are gravely con- amplifying determinant than to incorporate it in
cerned about crime, the quality of drinking any of the other four categories of destination
water, the risk of natural disasters, the standards competitiveness factors.
of medical services, etc., other competitive The monetary cost of a destination is gov-
strengths may amount to very little in the erned by three factors: (i) the cost of transporta-
minds of these people. Tourism authorities may tion to and from the destination; (ii) the currency
launch recovery programmes in response to exchange rate (in the case of international
these problems, and these may help. But prob- travel); and (iii) the local cost of tourism goods
lems such as these often dwarf the tourism and services. Many aspects of the global (macro)
industry’s ability to overcome them. environment (e.g. international trade balances,
The awareness and image of a destination relative interest rates, relative inflation, taxes)
can also qualify or amplify its competitiveness. and the competitive (micro)environment (e.g.
The image of a destination can take time to competition, productivity, cost of supplies,
change after the reality at a destination has labour rates and agreements) will affect costs.
changed and no longer accords with its previous Consequently, cost is largely governed by
negative or positive image. A negative image economic structures within the destination and
will qualify improvements at a destination and its comparative international position.
a positive image will cushion the effect of Finally, a destination’s carrying capacity
problems such as crime and high living costs. can clearly restrict the further growth or
Low awareness will also ensure that destination competitiveness of the destination if demand is
image changes slowly, but the degree of aware- close to or in excess of its sustainable limit. It can
ness also affects the likelihood that a potential also result in deterioration of conditions at the
tourist will even consider visiting a destination. destination or a decline in its apparent attrac-
As there are very many destinations today tiveness. Venice, for example, is clearly an
competing for a space in the minds of intending extremely popular destination that is under
tourists, it is important that tourists are suffi- stress in terms of its carrying capacity. It
ciently aware of a destination if it is to be at least remains very popular but struggles to cope with
a part of the ‘consideration set’ of would-be visitors at certain times of the year. Indeed, the
Model of Destination Competitiveness 77
system of restricted access to Venice effectively source of truly sustainable competitive advantage lies
imposes a ceiling on visitor numbers during in what we've come to describe as "organizational
these peak periods. capabilities": – the unique ways in which each organi-
zation structures its work and motivates its people
We discuss the role of qualifying and
to achieve clearly articulated strategic objectives.
amplifying determinants in greater detail in
These capabilities combine an organization's core
Chapter 10. competencies . . . with the ability to sustain and
adapt those competencies in the fulfillment of long-
term objectives despite changing competition, altered
strategies, and the loss of key employees' (Nadler and
Notes Tushman, 1997, p. 5).
1
These include the 1994 Administrative Sciences
Association of Canada Conference in Halifax (Crouch
and Ritchie, 1994); an invited presentation in 1994 at References
the Victoria University of Technology, Australia; the
1994 Quality Management in Urban Tourism confer- Crouch, G.I. (1992a) Effect of income and price
ence at the University of Victoria, Canada (Kirker and on international tourism demand. Annals of
Crouch, 1994); an invited presentation in 1995 at Tourism Research 19, 643–664.
San Diego State University (Ritchie and Crouch, Crouch, G.I. (1992b) Marketing International
1995); the 1995 World Business Congress in Istanbul Tourism: a Meta-Analytical Study of
(Crouch and Ritchie, 1995); an invited presentation Demand. PhD dissertation, Monash University,
in 1996 at La Trobe University, Australia; the 1996 Australia.
Annual Council on Hotel, Restaurant and Institutional Crouch, G.I. (1994) Demand elasticities for short-
Education Conference (Crouch and Ritchie, 1996); haul v. long-haul tourism. Journal of Travel
the 1999 Conference of the Council for Australian Research 33, 2–7.
University Tourism and Hospitality Education Crouch, G.I. (1996) Demand elasticities in interna-
(CAUTHE) (Crouch and Ritchie, 1999); the Second tional marketing: a meta-analytical application
Symposium on the Consumer Psychology of to tourism. Journal of Business Research 36,
Tourism, Hospitality and Leisure (Ritchie et al., 117–136.
2001); the 31st Annual Travel and Tourism Research Crouch, G.I. and Ritchie, J.R.B. (1994) Destination
Association Conference (Ritchie and Crouch, 2000); competitiveness: exploring foundations for a
and the World Tourism Organization's 2001 Annual long-term research program. In: Proceedings
General Meeting (Ritchie and Crouch, 2001). of the Administrative Sciences Association
2
'Competitive firms in the tourism business have of Canada 1994 Annual Conference, 25–28
recognized that they must "cooperate" and share June, Halifax, Nova Scotia, pp. 79–88.
in the responsibility for quality tourism growth. This Crouch, G.I. and Ritchie, J.R.B. (1995) Destination
collaboration of "competitors" in the tourism business competitiveness and the role of the tourism
for a better future in tourism is another expression of enterprise. Proceedings of the Fourth Annual
what "coopetition" is all about' (Edgell and Haenisch, World Business Congress, 13–16 July,
1995, p. 2). Istanbul, Turkey, pp. 43–48.
3
The marketing philosophy 'holds that the key to Crouch, G.I., Schultz, L. and Valerio, P. (1992)
achieving organizational goals consists in determining Marketing international tourism to Australia –
the needs and wants of target markets and delivering a regression analysis. Tourism Management
the desired satisfactions more effectively and 13, 196–208.
efficiently than competitors' (Kotler, 1988, p. 17). Echtner, C.M. and Ritchie, J.R.B. (1993) The
Promotion and selling represent only a small, albeit measurement of destination image: an empirical
important, subset of the range of tasks that constitute assessment. Journal of Travel Research 31,
marketing. Indeed, the more effective an organization 3–13.
is in marketing, the less effort it needs to make to pro- Edgell, D.L. Sr and Haenisch, R.T. (1995) Competi-
mote and sell its product (in this case, the destination), tion: Global Tourism Beyond the Millennium.
because the product will largely promote and sell itself International Policy Publishing, Kansas City,
if marketing has succeeded in its aim, so that the Missouri.
product satisfies customers' needs and wants better Foot, D.K. (1996) Boom, Bust and Echo: How to
than competitors' products. Profit from the Coming Demographic Shift.
4
'In this volatile environment where instability is Macfarlane Walter and Ross, Toronto, Ontario,
the norm, we're convinced that the last remaining Canada.
78 Chapter 3
Glaser, B.G. and Strauss, A.L. (1967) The Discovery understanding and analysis. Proceedings of the
of Grounded Theory. Aldine, Chicago, Illinois. 43rd Congress of the International Associa-
Kirker, W.S. and Crouch, G.I. (1994). Competing tion of Scientific Experts in Tourism, 17–23
urban destinations: is productivity a relevant October, San Carlos de Bariloche, Argentina,
concept? In: Proceedings of the Quality pp. 23–71.
Management in Urban Tourism Conference, Ritchie, J.R.B. and Crouch, G.I. (1995) Developing a
10–12 November, University of Victoria, successful Canadian/US/Mexican travel desti-
British Columbia, pp. 466–476. nation: a model of competitive and cooperative
Kotler, P. (1988) Marketing Management: Analysis, advantage. USIA Trilateral Affiliation Pro-
Planning, Implementation, and Control, gram, San Diego State University, San Diego,
6th edn. Prentice-Hall International, Englewood California, and Colegio del Frontera Norte,
Cliffs, New Jersey. Tijuana, Mexico, April 1995.
Nadler, D.A. and Tushman, M.L. (1997) Competing Ritchie, J.R.B. and Crouch, G.I. (2000) Are
by Design: the Power of Organizational Archi- destination stars born or made: must a com-
tecture. Oxford University Press, New York. petitive destination have star genes? In:
Naisbitt, J. (1994) Global Paradox. William Morrow, Nickerson, N.P., Moisey, N. and Andereck, K.L.
New York. (eds) Proceedings of the 31st Annual Travel
Neuman, W.L. (1994) Social Research Methods: and Tourism Research Association Confer-
Qualitative and Quantitative Approaches, ence, 11–14 June, Burbank, California,
2nd edn. Allyn and Bacon, Needham Heights, pp. 306–315.
Massachusetts. Ritchie, J.R.B. and Crouch, G.I. (2001) Achieving
Otto, J.E. and Ritchie, J.R.B. (1995) Exploring the destination competitiveness and sustainability:
quality of service experience: a theoretical and an integrated policy and management frame-
empirical analysis. Advances in Services work. Keynote presentation, 2001 World
Marketing and Management 5, 37–61. Tourism Organization General Assembly,
Pine, J.B. II and Gilmore, J.H. (1999) The Seoul, Korea and Osaka, Japan, September
Experience Economy: Work is Theatre and 2001.
Every Business a Stage. Harvard Business Ritchie, J.R.B. and Smith, B.H. (1991) The impact
School Press, Boston, Massachusetts. of a mega-event on host region awareness: a
Porter, M.E. (1980) Competitive Strategy: longitudinal study. Journal of Travel Research
Techniques for Analysing Industry and 30, 30–10.
Competitors. Free Press, New York. Ritchie, J.R.B., Crouch, G.I. and Hudson, S. (2001)
Porter, M.E. (1990) The Competitive Advantage of Developing operational measures for the
Nations. Free Press, New York. components of a destination competitiveness/
Ritchie, J.R.B. (1984) Assessing the impact of sustainability model: consumer versus manage-
hallmark events – conceptual and research rial perspectives. In: Mazanec, J.A., Crouch,
issues. Journal of Travel Research 23, 2–11. G.I., Ritchie, J.R.B. and Woodside, A.G. (eds)
Ritchie, J.R.B. (1993) Crafting a destination vision: Consumer Psychology of Tourism, Hospital-
putting the concept of resident-responsive ity and Leisure, Vol. 2. CAB International,
tourism into practice. Tourism Management Wallingford, UK, pp. 1–17.
14, 379–381. Woodside, A.G. and Lysonski, S. (1989) A general
Ritchie, J.R.B. and Crouch, G.I. (1993) Competitive- model of traveler destination choice. Journal of
ness in international tourism: a framework for Travel Research 27, 8–14.
4
The Macroenvironment: Global Forces
Shaping World Tourism
Comparative Competitive
advantages advantages
(resource endowments) Destination competitiveness and sustainability (resource deployment)
Global (macro)environment
Destination policy, planning and development
Destination management
In Chapter 1, we reviewed the evolution of but also that they are beyond the influence of
competition from the early days of global socio- any one individual group or organization.
economic activity to the present. In that review, In the same way, just as certain global
it was seen that the nature of competition on a factors define the nature of competition, others
particular day is shaped by the context of the exert a major influence on the ability of a given
day. It follows that, as the factors defining con- destination to compete successfully in the
text change over time, they set in motion a marketplace. The goal of this chapter is to
parallel evolution of competitiveness itself. identify these global forces and to examine
An examination of the factors defining the manner in which they affect each of
the context of competitiveness confirms their the components of our model of destination
global nature. In speaking of the ‘global nature’ competitiveness (Chapter 3).
of these factors, we mean not only that they While this book focuses primarily on the
affect competitiveness in all parts of the world factors and processes within a destination that
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
(J.R. Brent Ritchie and Geoffrey I. Crouch) 79
80 Chapter 4
determine its competitiveness and sustain- the challenges and opportunities they create
ability, the analytical framework which we have for the tourism destination in its effort to suc-
described in Chapter 3 also stresses that desti- ceed. There are undoubtedly a variety of ways
nation performance and success can also be in which these forces might be categorized.
influenced significantly by a broad range of The framework we have found appealing is
global forces. These forces are so pervasive that that given graphically in Fig. 4.1. As shown,
their influence extends well beyond tourism into the totality of global forces affecting destina-
all aspects of the economy and society. Since tion competitiveness/sustainability is captured
tourism is, of course, part of the global totality, it within what we term an ‘onionskin taxonomy’.
must attempt to adapt to or take advantage of By this we mean that the global forces may
those forces which it cannot control or even be viewed as consisting of different layers
influence. surrounding the destination (represented by
the globe in the centre). The innermost layer,
or layer 1, of the ‘onion’ consists of three types
of forces that tend to affect changes in the
Global Forces: an Onionskin performance and well-being of the destination
Taxonomy most directly, in that they normally fluctuate
widely and rapidly within short periods of time.
This chapter first seeks to identify and catego- These forces can usually be categorized as eco-
rize these global forces, and subsequently to nomic, political and technological. The next
provide readers with a basic understanding of layer of the onion, layer 2, contains forces that
tend to be somewhat more stable, and there- USA contribute relatively little to the competi-
fore a bit easier to predict. We have placed tive abilities of the country, and thus its ability to
demographic and sociocultural forces in layer attract visitors profitably. Should a significant
2. Finally, there are forces that, in normal environmental concern suddenly emerge, it
times, are quite stable and that can be antici- could become a major deterrent to visitation
pated with a fairly high degree of reliability. In in the short term.
this layer (layer 3) we have placed climatic To summarize, when examining the
forces, geographical forces and environmental global forces that may create challenges and
forces. opportunities for a tourism destination, it is
In presenting this taxonomy, we stress that essential to examine both their importance
it reflects the stability of the global forces but not and their stability/predictability. Unimportant
necessarily their importance. Consequently, at forces (i.e. forces that have little effect on a
any given point in time, any particular force destination’s competitiveness) that are unstable
within any of the layers can be having the great- may be ignored. Important but stable forces
est impact on destination competitiveness/sus- must be addressed, but they offer a destination
tainability/success. For example, climate may time to prepare for their consequences. It is the
be the greatest determinant of competitiveness important forces that become unstable that
for particular destinations. At the same time it is pose the greatest challenge, but they often
one that is normally the most predictable within present the greatest opportunities for managers
a broad range. In contrast, while political stabil- of a tourism destination.
ity may overwhelm climatic desirability at a Table 4.1 attempts to capture visually
given point in time as a factor affecting a the above discussion by comparing the varying
destination’s competitiveness or sustainability, combinations of stability and importance of
this is usually not the case for most destinations. impact of the different global forces that affect
In other situations, the rapidly evolving destination competitiveness and sustainability.
culture of a destination (such as the changes
occurring in the USA resulting from the influx of
immigrants and the rapidity with which techno-
logical and social innovations are introduced) The outer layer
may be one of its main competitive strengths
in both industry and tourism. By comparison, The forces we are dealing with here are in
highly stable environmental forces within the many ways so fundamental that true change is
Table 4.1. Global forces and their significance for destination management: stability versus importance
of impact.
Very stable Require minimal amount of Specific managers should Require high attention on a
DMO attention review these factors to periodic basis to detect
(hotel capacity) understand changes of ‘surprises’
particular relevance to (climate)
their area of responsibility
(destination infrastructure)
Modestly Require some monitoring by Require some monitoring Require systematic attention
stable/ lower level management to by middle management by middle-level management
unstable detect (airline prices) to identify unusual changes
(visa policies) (price levels)
Very unstable Require ongoing monitoring Require sophisticated Require constant attention
by a mechanical system and monitoring to detect by top-level DMO managers
lower-level DMO managers specific types of shifts of (political situation)
(short term exchange particular significance
rate fluctuations) (Internet marketing)
82 Chapter 4
too slow to allow any meaningful measurement Every destination manager is increasingly
from the standpoint of managerial action. faced with the questions of how far tourism is
contributing to environmental degradation, and
Climatic forces whether and to what extent any such degrada-
tion affects the appeal of the destination and the
An examination of the data regarding the quality of the visitor experience. The challenge is
climate of any given destination (Pearce and to know the extent to which any environmental
Smith, 1990) shows that the temperature, the damage that tourism causes can be minimized,
amount of precipitation and the number of and how this can be achieved. At the same time,
hours of sunshine are relatively predictable on some opportunities present themselves as a
a seasonal basis. Because of this, the nature of result of environmental interest and concern.
destinations is usually quite stable over time. These include the strong and growing (although
Consequently, tourism operators, investors and still small) ecotourism market, the development
tourists themselves can plan with a reasonable of interpretive centres and guiding, increased
degree of confidence the development of a interest in wildlife viewing (including marine
destination and the choice of a destination for life), and travel for environmental education.
a vacation. In summary, in many ways concern for the
While we know that not every visitor likes environment has now taken centre stage in
the same kind of climate in their destination, we tourism. This reality is a reflection of a broad
also know that certain types of destinations do societal realization that protection of the
tend to be preferred over others. For example, world’s natural environment is imperative. It is
warm, sunny destinations are generally pre- increasingly clear that ‘spaceship earth’ has a
ferred to cold, dreary ones. Despite this reality, limited capacity to sustain life as we know it.
it is important that those market segments that Consequently, tourism policy makers in particu-
do prefer unusual climes can count on their lar need to examine carefully what the tourism
expectations being met – and vice versa. industry’s relationship with responsibility for
It is interesting to note that, given the the environment should look like – and how to
current concern about climate change, certain proceed with realizing this vision.
colder destinations might be the beneficiaries While scientific debate still rages with
of global warming, while traditional, sunnier respect to the above questions, it is becoming
places could be net losers. This is of course no increasingly clear that the majority of govern-
reason to encourage climate change, but it does ments in the world believe that global warming
demonstrate that not all tourism destinations is serious, and that it has been exacerbated,
will necessarily be affected negatively. if not caused, by excessive carbon emissions
into the atmosphere. As a result, most nations
Environmental forces appear to be moving towards ratification of the
Kyoto agreement, an agreement that commits
While the environment and the climate tend to all signatories to reducing overall emissions
be interlinked in this Kyoto era, they are dis- by at least 5% below 1990 levels during
tinct and do present some very different types the commitment period 2008–2012 (United
of challenges. While it may be simplistic, it may Nations, 1997, p. 9).
be helpful from the standpoint of destination Should the Kyoto agreement be ratified
management to view climatic challenges as and implemented by the majority of the world’s
those that are ‘above ground’ while environ- nations, it could have serious consequences for
mental challenges involve issues ‘on or below’ travel and tourism, at least as we know it today.
the ground. Examples of these issues include The use of fossil fuels for transportation and
species diversity and protection, wildlife their polluting effect are obvious problems
habitat preservation, the maintenance of water in this respect, and the continued economic
quality and aquatic biodiversity, the destruction growth of the tourism sector might be severely
of farming-quality land, the use of pesticides affected unless alternative, non-polluting
and the quality of the food system, hazardous energy sources become available at competitive
waste, and the protection of vegetation. prices for consumers.
Global Forces Shaping World Tourism 83
that are seeking reliability, quick service and of management; for example, how you orga-
familiar tastes rather than innovation and the nize a destination management organization
excitement of the new flavours that can be (DMO) or how you control large-scale produc-
provided by cultural dishes and their exotic taste tion in logistical systems (Porter, 1997). This
experiences. distinction is sometimes referred to as hard
versus soft technology.
However defined, technology has had and
The inner layer continues to have dramatic impacts on the abil-
ity of destinations to compete. The introduction
The inner layer of our onionskin model con- of the jet engine defined the arrival of long-haul
tains three major types of global forces that, mass tourism, particularly enhancing the com-
because of their high rate of change within petitiveness of more remote destinations. Com-
relatively short periods of time, must be moni- puter reservation systems have totally restruc-
tored constantly, particularly if they are judged tured information management and flows, and
to have a great impact on destination success. have enabled multinational chains to dominate
key sectors of the accommodation market. The
Internet continues to dramatically change the
Economic forces
way large numbers of consumers access infor-
While a number of economic forces within a mation before and during travel, and how they
destination can be controlled or influenced by make travel purchases. The result has been
destination managers, there are many others a major shift in marketing practices and
that cannot – hence their classification as in the power structure within tourism-related
global forces. Factors such as the shift to marketing systems.
a market economy, international exchange The emergence of the Convention and
rates, interest rates, the buoyancy of the world Visitor Bureau (CVB) as the primary form of
economy, the existence and structure of world DMO has almost single-handedly redesigned
trading blocs, and the amount of savings the power structure of planning and decision
consumers have in the bank all create special making at the municipal level. It can be argued
challenges (or realities) that must be recognized that the CVB organizational approach provides
and adapted to by a destination if it is a range of operating strengths and efficiencies
to remain relatively competitive in the world that enhance the ability of destinations to gain
marketplace. Conversely, these same forces competitive advantages over destinations that
also present a range of new opportunities that, use other organizational approaches, or none
if appropriately prepared for, can enhance at all.
destination competitiveness. Because technology evolves so rapidly, a
An important consideration to keep in major challenge facing DMO managers is to
mind is that, by definition, these global forces ensure that they are up to date from both a
and the realities and opportunities they present hardware and software perspective. Otherwise,
apply equally to all destinations. It is the ability a hard-earned competitive advantage can
of each destination to adapt to these realities vanish quite quickly.
and to seize the opportunities that will eventu-
ally determine if the destination will emerge as Political forces
competitive or become more competitive.
The world of politics represents another type
Technological forces of rapidly shifting global force that can sub-
stantially alter the ability of a destination to
‘Technology’ is a very imprecise term that can compete. A change in government at the local,
mean many different things. The definition regional or national level often brings with it a
may be very narrow, focusing on specific areas change in political ideology. Such ideological
such as microelectronics, computers and bio- shifts can result in major modifications of fiscal,
technology. On the other hand, it can also be environmental and immigration policies, for
defined very broadly to include the technology example, and any of these can either enhance
86 Chapter 4
or detract from the appeal of a destination and destination, the apparent gelling of Europe
the efficiency of its tourism operators. as an economic, political, social and possibly
It should be understood that senior DMO cultural entity, combined with the emergence
managers must be capable of effectively inter- of Asian and North/South American trade
facing with government officials at every level, blocs, provides a foundation for examples of
since these officials have control over policies what might be termed the ‘superdestination’.
and programmes that can alter the ability of the Whether these entities possess substantial
destination to compete. At the municipal level, meaning from a tourism destination perspec-
a DMO faces the major challenge of attempting tive remains to be seen. As opposed to the
to educate local politicians concerning the city-state, which does appear to provide an
benefits that tourism already provides to their ideal management unit as a tourism desti-
constituents. Lack of sophistication and general nation, the superdestination may well prove
unawareness on the part of politicians con- unappealing or unmanageable for tourism
cerning the nature of tourism and the extent of purposes. In either case, those responsible for
its contributions are widespread and common. destination management need to be vigilant
This, combined with the constantly shifting and prepared to adapt as soon as either
composition of municipal councils, means the outcome appears inevitable.
job is never done.
At more senior levels of government, the
increasing sophistication of politicians and
the longer terms of office they seek can make Analysing and Understanding
the task of interfacing with policy makers some- Global Forces
what less frustrating. Conversely, the fact that
senior-level politicians have greater resources So far in this book, we have expended consid-
available to them means that it is much more erable effort in order to identify and categorize
costly, in terms of the amount of information from a macro perspective the global forces that
needed and the degree of preparation required, affect or may affect the competitiveness and
to make arguments to support positions when sustainability of a tourism destination. In order
dealing with governments at high levels. The to make this effort more conceptually and prac-
best example is undoubtedly in the area of the tically useful, we now attempt to provide greater
environment, where rigorous standards may insight for both academics and managers.
give rise to extensive environmental screening The first way in which greater meaning can
of tourism development proposals. Aside be extracted from the global forces is to identify
from cost considerations, the politically the challenges that must be overcome in dealing
sensitive nature of many initiatives leaves little with them. A second is to identify the opportu-
room for poorly prepared documentation or nities they present to enhance destination com-
incompetent presentations. petitiveness. Because of limited space in the
present treatise, we will examine only a small
number of global forces in order to demonstrate
the essence of the analysis we are suggesting. In
The Interdependence of doing so, we will use a tabular format (Table
Global Forces 4.2). A particular merit of the tabular format in
which the analysis is summarized is that it lends
While we need to study each of the global itself to ongoing updating and/or expansion. It
forces affecting tourism in considerable depth, may also be adapted to the needs of individual
great care must be taken to avoid examining scholars and practitioners in order to reflect
them in isolation. Despite their individual their particular situation.
significance, it must be recognized that these To keep the framework current for a given
forces are highly interdependent; that is, the destination, it is important that management
impact of each is dependent on the impact of maintains a monitoring system to identify and
all factors as a whole. In contrast to the emer- analyse the global forces it believes are relevant
gence and growing importance of the city-state to their needs. Periodic working group sessions
Global Forces Shaping World Tourism 87
Table 4.2. Challenges and opportunities presented by global forces: examples for a selected subset of
forces.
Challenges Opportunities
Economic forces
Shifts to the market economy
• Many high-quality public facilities and attractions • Market competition will prove a powerful force
that have traditionally been supported and/or in keeping the costs of travel under control, thus
subsidized by governments will come under keeping tourism accessible to a large
serious funding pressures percentage of the population
• It will become more difficult to justify and publicly • There will be new opportunities for innovative
finance large scale ‘mega-projects’ or ‘mega- financing for mega-projects and mega-
monuments’, some of which become major developments that enjoy the support of the
symbolic tourist attractions. Also, supporting residents of a destination (e.g. community
infrastructure, such as roads and airports, will boards)
be more difficult to finance
Challenges Opportunities
• There is a real possibility that traditional amounts • Those destinations that have adopted a
of venture capital will dry up as a reflection of transparent, community-based, consensus-
investor fears. This could threaten not only oriented approach to destination planning and
innovations, but sustainability as well development can (and should) emphasize this
strength, not only in tourism but also in other
industry sectors
Technological forces
The knowledge-based society
• Modern technology is increasingly attempting to • Travellers will increasingly want to truly
provide alternatives to physical travel. experience and understand a destination. As a
Teleconferencing is finally gaining wider result, they will be interested in spending more
acceptance; virtual-interface technology purports time in a region and interfacing with residents in
to provide the travel experience without travel more meaningful ways
• Knowledge-based employees tend to work in • Travellers of the future will be increasingly
sanitized, controlled environments. With this receptive to technologies and services that
conditioning, they may shun travel experiences facilitate travel while reducing costs and
that are physically challenging, moderately minimizing the need for menial and/or
uncomfortable, or culturally threatening demeaning labour
Sociocultural forces
Shifting value systems
• Leisure/vacation travel could be viewed as • Increased emphasis on special interest
frivolous, wasteful and harmful in a world where tourism – such as cultural, educational and
economies are stagnant, renewable resources professional-development travel – may greatly
are declining and toxic emissions threaten the strengthen and enrich the meaning of the travel
health of the planet experience
• The developing mood to look inward may lead • Increased emphasis on human relationships
to greater economic protectionism (at the may encourage new forms of tourism in which
macro-level) and more home/family-oriented contact between hosts and guests is less
uses of leisure time (at the micro-level). Both superficial and leads to more intense and
developments would reduce the demand for travel enduring relationships
continued
90 Chapter 4
Political forces
Rise of the city-state
• Large countries will find it less desirable and less • Highly focused destinations with high visibility,
productive to undertake general awareness-type good access, an attractive product and the will
promotions; budgets for such promotions will to develop a distinctive image will dominate the
decline market
• Smaller destinations having no particularly unique • Strategic alliances and reciprocal agreements
characteristics will find it even more difficult to between city-states that complement one
compete with more high-profile centres another will grow in importance
Demographic forces
Demographic shifts are occurring which will dramatically influence the level and nature of tourism
• The ageing of travellers from traditional tourism- • For the next 20 years the residents of
generating countries will cause demands for new developed nations aged 45–65 will increase
experiences and new facilities. As a consequence, substantially. These individuals will have the
existing tourism plants may become economically time, the discretionary income and the desire to
obsolete travel
• Increasingly diverse lifestyles will make market • Firms that can read, anticipate and respond to
segmentation increasingly important. However, the specific needs/desires of high-quality niche
the tailoring of designer vacations will make it or special interest markets in innovative ways
harder to standardize the tourism product and will have great opportunities for success
thus to control costs • Astute analysis of ongoing lifestyle changes will
• Patterns of travel are being changed by provide considerable insight into opportunities
increasingly diverse lifestyles. The changes are for innovative products, and even for new
rendering much of the current tourism product destination development
obsolete • The ageing of travellers will increase their
sensitivity to health concerns and the need to
build the supply of medical facilities into the
tourism product
• Increasing concern for health will strengthen the
appeal of traditional health spas and open up
opportunities for a broad range of new health
businesses, physical well-being
destinations/resorts
Environmental forces
The environment in the Kyoto era
• There is a recognition that there are finite • Conservation, preservation and restoration
limitations to tourism development, in terms of present new themes for the design of tourism
both physical and social carrying capacity of experiences. Regions that are presently
destinations undeveloped or in a natural state have a unique
• Virtually all future tourism development will be opportunity to provide an attractive experience
constrained by the need for environmental impact to visitors
assessments • Emphasis on the quality of the tourism
• The non-economic costs of tourism will need to experience will reduce growth in the number of
be factored into development decisions. The costs travellers, but enhance net financial and
of development, using non-traditional accounting non-financial impacts on tourism destinations
frameworks, will increase, thus forcing higher
prices on the travel experience
to review the results of the monitoring process Global forces and tourism supply
and to integrate them into management think-
ing and strategic planning can be very useful. Just as destination managers need to under-
While the use of external consultants can be stand the detailed effect of global forces on
helpful in enhancing this process, it is not demand, they must also be able to compre-
necessary. hend the systematic effect of these forces on
the various dimensions of tourism supply
within their destination. Figure 4.2 provides
Global forces and tourism demand an overview of how this analysis might be
undertaken. In brief, managers must carefully
It is important to understand the manner and examine the most significant and current
the extent to which global forces can affect the global forces and how they might affect most
various dimensions of tourism demand. The of the important core resources and attrac-
most obvious aspect of these effects is that of tions. They must also study their impact on the
demographic forces, such as the current age- destination’s supporting factors and resources,
ing of the population of many of the tourism- its superstructure, its activities, its events, its
generating countries. This factor is affecting culture, and even its climate and physiography.
such aspects of demand as the characteristics
of travellers, the nature of travel undertaken,
the price sensitivity of demand, the timing Assessing the impact of global forces
of their travel, and the spatial distribution of on destination performance
demand (i.e. where they travel). Most impor-
tantly, the total economic value of travel is An important first step in global performance
affected. Similarly, many of the global forces, analysis, as the previous section argues, is to
such as technology, politics and environmental understand global forces from a macro per-
forces, also affect virtually all the dimensions of spective. From a destination management
tourism demand. perspective, it is important to comprehend
Global Forces Shaping World Tourism 93
Fig. 4.2. Global forces: an analytical framework for assessing their impacts.
how a given global force might affect more on policy may be substantial. For example,
generally the preference for a particular desti- changes in political forces may substantially
nation. For example, as people age, they tend alter the system of philosophy and values on
to seek less adventurous destination experi- which tourism within a destination is devel-
ences. In addition, as global concern about ter- oped. Broad changes in consumer reaction to
rorism grows, the destination manager needs advertising may force quite meaningful alter-
to know how this might affect perceptions ations in the positioning and branding policy
about the safety of various destinations. Figure for a destination. Similarly, all aspects
4.2 provides a framework that may be helpful of a destination’s tourism policy need to be
in this regard. In summary, this framework examined in relation to each and every global
attempts to stress that global forces can affect force of significance.
both the attractiveness of various components
of the destination and the effectiveness of the
different policy and managerial processes that Global forces and destination
determine management performance within management
the destination, and thus its ultimate success.
While many, if not most, destination managers
tend to consider global forces as being rather
Global forces and destination policy irrelevant to their responsibilities (i.e. they
belong to policy makers!), they must neverthe-
Since global forces are by nature major and less keep in mind that these forces do – some-
long-term, it is not surprising that their effects times more than they realize – affect the daily
94 Chapter 4
functioning of the destination. For example, to the nature of the destination organization,
recent criticisms regarding the lack of integrity such as the type of organization, its structure
of information provided to investors are very and size, board composition and voting proce-
relevant and will be of much greater relevance dures, are policy decisions that are often not
in the future. And while destination positioning affected by global forces, a plethora of other
may be primarily a policy responsibility, the operational decisions can be significantly
development of positioning programmes must affected by these forces. Perhaps the most
be done through promotion and advertising notable of these is the growing change that is
that will convince visitors that the destination occurring at the interface between the nature
will deliver the experience that is com- of work and the quality of life. This is one force
municated by its positioning. Consequently, that all employees must deal with.
the global force related to the generation gap
in advertising effectiveness cannot be ignored.
Similarly, although many concerns related to References
destination organization and resource steward-
ship may indeed be of the greatest relevance Foot, D.K. and Stoffman, D. (2001) Boom, Bust and
to policy makers, they cannot be ignored by Echo: Profiting from the Demographic Shift
those making daily operational decisions in in the 21st Century. Stoddart Publishing,
these areas. Toronto, Ontario, Canada.
Pearce, E.A. and Smith, G. (1990) World Weather
Guide. Random House, New York.
Porter, M.E. (1997) Creating tomorrow’s advantages.
Global forces and destination In: Gibson, R. (ed.) Rethinking the Future. Free
Press, New York.
organization
Schlosser, E. (2001) Fast Food Nation: the Dark
Side of the All-American Meal. Houghton
Here again, we are dealing with the fine dis- Mifflin, Boston, Massachusetts.
tinction that often occurs between organiza- UN (1997) Kyoto Protocol. United Nations Frame-
tional policy decisions and those related to work Convention on Climate Change, 1–11
daily operational decisions concerning the December. Available at: unfccc.int/resource/
organization. While the major decisions related docs/cop3/07a01.pdf
5
The Competitive (Micro)environment: the Destination
and the Tourism System
Comparative Competitive
advantages advantages
(resource endowments) Destination competitiveness and sustainability (resource deployment)
Global (macro)environment
Destination policy, planning and development
Destination management
Having discussed some of the global forces Normally, when the competitive (micro)
and trends shaping today’s tourism and environment is considered, the perspective
hospitality industry in the preceding chapter, taken is that of an individual enterprise or orga-
we now turn to the industry – or perhaps nization. Under these conditions (i.e. when the
more correctly, the tourism system – itself, unit of analysis is a company), the competitive
to see how destination competitiveness is (micro)environment is usually depicted as illus-
affected by the way in which the tourism trated in Fig. 5.1 (see for example Kotler et al.,
system functions. We introduced some of the 1996, pp. 102–105). In this situation, the main
principal elements of the competitive (micro) groups of players are the company itself (i.e. its
environment in Chapter 3, but it is now time internal environment), its competitors, suppli-
to take a closer look at how these elements ers, customers and publics, and the marketing
are structured in the context of a tourism intermediaries and facilitators that help connect
destination. the company to its customers.
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
(J.R. Brent Ritchie and Geoffrey I. Crouch) 95
96 Chapter 5
However, the subject of this book is the govern its own internal environment. Whereas
destination, not the individual tourism enter- a company governs, directs and controls,
prise. Although it is possible to define or delin- a DMO merely influences, facilitates and
eate a destination, this does not exist as an coordinates. The DMO is not the destination.
entity, at least in the way that a company is an Figure 5.2 is an adaptation of Fig. 5.1 that
entity. A company is well defined by law. Its reflects the relationship between one desti-
actions, policies, control of resources and orga- nation, the principal elements of the tourism
nizational structure are manifest. A destination, system and other tourism destinations. The
on the other hand, is a geographical rather than competitive (micro)environment for the destina-
a legal or business entity. Although a desti- tion in question includes both local and foreign
nation management organization (DMO) may enterprises and organizations. Local tourism
have been constituted to spearhead or facilitate and hospitality enterprises provide a destination
tourism development and management, its with the goods and services that constitute
ability to do so for the destination as a whole the tourism experience provided by the destina-
does not compare to the power of a company to tion. A destination’s suppliers and supporting
Fig. 5.1. A company's competitive (micro)environment (adapted from Kotler et al., 1996).
industries, marketing intermediaries and facili- the destination because it increases the extent
tators, publics and customers may be both to which relevant organizations are trying to
local and foreign. The situation is similar for move towards the same goal. Competition, on
alternative destinations. the other hand, creates an environment in the
Figure 5.2 illustrates an intersection destination that encourages innovation, quality,
between destinations. This intersecting region efficiency and effectiveness. While both compe-
identifies players within each element of the tition and cooperation can enhance the com-
competitive environment that are connected petitiveness of the destination, some forms
with more than one destination. For example, of both can be destructive when they are
many of a destination’s customers are also likely incongruent with the overall direction and goal
to be potential or existing customers of other of the destination.
destinations. The majority of marketing inter- In this chapter we look at the individual ele-
mediaries and facilitators (e.g. travel agents, ments of the competitive (micro)environment
tour packagers, financial institutions) serve the in greater detail. We begin by examining the
tourism and hospitality industries in numerous basic elements of the microenvironment in turn:
destinations. Suppliers too, such as souvenir suppliers and supporting industries, tourism
manufacturers, food and beverage suppliers and hospitality enterprises, marketing inter-
and the oil industry, often serve multiple desti- mediaries and facilitators, customers, and the
nations, but many small suppliers may only DMO and other publics. We finish the chapter
provide for the needs of the local destination with three further sections that integrate the
and tourism industry. Similarly, small local impacts of these elements in terms of their
tourism and hospitality enterprises, such as overall effect on the destination in question,
hotels, restaurants and attractions, may only the effect of competing destinations, and the
serve their local destination, but increasingly, as tourism system as a whole.
the globalization of the tourism industry pro-
gresses, multinational tourism enterprises (such
as airlines, hotel chains, restaurants and theme
parks) operate in many different destinations. Suppliers
The destination, then, is really a loose col-
lection of enterprises, organizations and groups The first component of the competitive
which work together in a semi-organized, partly (micro)environment that shapes the determi-
cooperative fashion, but which are ultimately nants and structure of destination competitive-
driven largely by their own self-interest. These ness is suppliers. The USA is a strong tourist
organizations may perceive that a large part of destination in part because of the low cost of
their own self-interest rests with the interests of energy and the low cost and high quality of
the destination itself. In these situations, one food production. Labour productivity rates are
would expect to see a great deal of interaction, also comparatively high in the USA. Natural,
communication and cooperation, as well as a cultural and historical resource endowments
shared sense of vision about where the destina- are also important factors in tourism produc-
tion is trying to go. A DMO, if one exists, is tion. Although not consumed by the tourism
likely to play a focal role in these instances. The industry in the same way as energy, food
opposite situation – that is, disorganization, or construction materials, these resources
alienation and dysfunction – is also a possibility are also a form of supply or factor inputs.
where tourism organizations perceive that the Competitive advantages in home-based sup-
costs of cooperating as a destination outweigh plier industries such as these confer potential
the benefits. advantages on a destination, particularly when
The opposing forces of competition they produce inputs that are important for
and cooperation among organizations centred overall industry innovation and performance.
around the destination shape the actions, styles For the purposes of this discussion we
and modus operandi of the destination as a define suppliers as those firms or organizations
whole. Both of these forces are vital to a com- that supply the tourism industry with basic fac-
petitive destination. Cooperation strengthens tor inputs, such as labour, materials, equipment
98 Chapter 5
and facilities. Related or supporting industries, (comparative advantages) and the ability of a
on the other hand, although playing a some- destination to deploy its resources appropri-
what similar role to that of suppliers, are those ately (competitive advantages). Clearly then,
which share activities in common with tourism supplies (endowments) and suppliers (deploy-
but whose demand is not principally derived ment) are a cornerstone of competitive tourism
from travellers or tourists. For example, cultural development. Interestingly, in the case of tour-
industries provide products and services that are ism, many of the most important resources (e.g.
complementary to those of the tourism indus- national parks, other public lands, public facili-
try, but tourists usually represent a minor share ties, infrastructure) are in public hands and are
of the market for these products. In contrast, thus controlled by governments, who are there-
airlines and hotels, for example, derive the great fore a type of supplier to the tourism industry.
majority of their demand from the travel and However, a government’s role in this regard,
tourism industry, so we classify these as tourism unlike that of most other suppliers, should and
and hospitality enterprises in Fig. 5.2 rather must take the form of stewardship rather than
than as related or supporting industries. We commercial exploitation, to maximize benefits
discuss the role of related and supporting indus- to society as a whole over the long term. The
tries later in this chapter. (For a discussion of the tourism industry must compete against other
impact of related and supporting industries on industries for the opportunity for access to a
national advantage in a particular industry, see share of these resources.
also Porter, 1990, pp. 100–107.) The services Suppliers are also important because their
of financial institutions, advertising agencies productivity determines the cost of inputs, and
and marketing research consultants, etc. facili- cost is a major determinant of competitive
tate tourism marketing and are also discussed advantage. In addition, supplies may be an
separately later in this chapter (in the section important source of innovation, new tech-
Marketing Intermediaries and Facilitators: nology, new materials and new ideas and
the Industry’s Lubricants). processes. For example, the US tourism indus-
Suppliers that provide the inputs to the try enjoys an advantage arising from its leader-
‘downstream’ tourism industry are many and ship in various entertainment technologies. The
varied because tourism consumption is a close USA also benefits from the many excellent
microcosm of consumption in general (studies tourism and hospitality schools situated within
have found that changes in the cost of tourism respected universities. US energy costs are also
goods and services follow approximately low, and service quality standards are generally
changes in the general consumer price index). high. French cuisine and the training of chefs
Some of the more important supplies and sup- confer a distinct advantage on the French tour-
pliers, however, include the following: labour ism industry. The low cost and high quality of
(including education and training), energy, con- food and wine produced in Australia are advan-
struction equipment and materials, land/real tages for that country as a tourist destination.
estate, primary produce and its wholesalers, Strong, home-based suppliers are able to
recreational vehicle producers (such as manu- lower input costs, raise input quality and assist
facturers of automobiles, mobile camping homes, downstream users to utilize inputs more effec-
snowmobiles and water craft), manufacturers of tively. As Porter (1990) notes, their proximity
entertainment and recreational equipment and to downstream customers reduces transaction
technology (e.g. theme park rides and attrac- costs and encourages preferential, rapid and
tions, camping goods and fishing and hunting efficient resource utilization. National pride
suppliers) and aircraft manufacturers. Many of also ties home-based suppliers more closely to
the resources used in the tourism industry are their domestic customers, and cultural bonds
‘free’, such as beaches, scenery and national enhance communication and cooperation.
parks. Although we have emphasized the com-
How important are the suppliers of these petitive strengths conferred by the presence of
resources to the competitiveness of tourism strong home-based suppliers, foreign alter-
destinations? In Chapter 2 we emphasized the natives might also enhance a destination’s
importance of both resource endowments competitiveness. This is particularly the case
The Destination and the Tourism System 99
for developing countries or regions that lack or cultural resources may act as a catalyst
options domestically. However, some care may for tourism development and entrepreneurial
be required by destinations in these circum- behaviour. But as we have discussed earlier,
stances to ensure that the dependent relation- effective resource deployment (competitive
ship on foreign suppliers is managed in the best advantage) is not guaranteed by resource
long-term interests of the destination and its abundance (comparative advantage) (recall the
residents. The transfer of technology may, for comparison between Russia and Singapore in
example, be part of such a relationship. Chapter 2, Part I).
The second principal explanation is that a
variety of social, cultural, political and economic
factors may create a more fertile environment
Tourism and Hospitality Enterprises in which enterprises are able to develop, grow,
flourish and sustain competitive advantage in
A destination’s tourism and hospitality enter- tourism. We explore this matter in greater detail
prises provide the backbone of its product. It towards the end of this chapter and again
is these firms that actively produce the core in Chapter 8. For the moment it is important
commercial services that tourists consume to note that these factors differ across desti-
once they are at the destination. They are nations, and that the nature and mix of these
distinguished from other commercial enter- factors may be conducive or detrimental to the
prises involved in the competitive (micro)envi- creation of a competitive, thriving cluster of
ronment (i.e. suppliers, related and supporting tourism and hospitality enterprises.
industries, and marketing intermediaries and Porter (1990, p. 117), who has examined
facilitators) in that: (i) the products and services this situation extensively, notes that ‘Among the
they produce are targeted principally at tourist strongest empirical findings from our research
markets; (ii) they produce core services and is the association between vigorous domestic
products for tourists; and (iii) they have a high rivalry and the creation and persistence of
level of interaction with tourists. competitive advantage in an industry’. There-
Collectively, however, these enterprises do fore, an environment that encourages vigorous
not produce and deliver all of what a tourist con- rivalry is more likely to result in innovative,
sumes while visiting a destination because the adaptable and customer-responsive tourism
tourism and hospitality industry’s product is no enterprises ready to exploit new market
less than the gestalt of all experiences, commer- opportunities and technological advancement.
cial and otherwise, arising from the destination Rivalry also places emphasis on the efficiency of
as a whole. And as we discussed earlier, much operations and opportunities for productivity
of the quality of the visitor experience stems improvements.
from non-commercial activity, such as enjoying The tourism industry covers a large
the climate and scenery, mixing socially with number of enterprises that vary greatly in size
local inhabitants, using free public services and and in the nature of their products. There are
infrastructure, and strolling along a beach. some very large enterprises, such as the airlines,
Thus, the competitiveness of a destination hotel corporations and some food service firms.
is significantly dependent on the competitive- As tourism continues to grow, many of these
ness of its local tourism and hospitality enter- companies have become major multinational
prises, both individually and collectively. What is operations. There are also a vast number
it that creates a situation in which some destina- of small to medium-sized enterprises spread
tions enjoy a strong, vibrant tourism industry throughout the industry. Many of these are very
with numerous active, innovative and competi- small firms representing the grass roots of the
tive firms whereas other destinations lack these industry, but increasingly, through the expan-
characteristics? There appear to be two princi- sion of franchising and management contracts,
pal explanations. First, the tourism industry the tourism and hospitality industry is under-
may be driven by an abundance of comparative going something of a revolution in the con-
advantages that favour tourism development. centration, consolidation and cross-ownership
For example, climate, scenery and historical of many of these small companies. Small
100 Chapter 5
businesses, though, are likely to remain a evidence. The net effects of inter-firm rivalry
feature of the tourism and hospitality industry. work to promote rather than hinder industry
As in any industry, industry associations competitiveness over the long term.
may play a critical role in creating the sort of The perceived profitability or returns on
environment that affects the health and vitality investment, together with the perceived risks of
of tourism enterprises in a destination over the investing in tourism enterprises in a destination,
long term. Positive outcomes, for example, will influence the interests of investors and
might stem from concerted efforts, coordinated entrepreneurs in the tourism and hospitality
through these associations, to maintain, industry. Differences between destinations in
improve and foster factor creation. Many strong these perceptions and in attitudes towards
industries have found that the establishment short- and long-term profitability and risk will
and funding of university research centres can substantially govern the extent of private sector
help an industry and its enterprises to better interest in tourism development and the com-
address long-term development issues. In tour- petitive attributes of destinations that depend
ism, there is a need for more interdisciplinary upon this interest.
research, which commercial research is often Finally, where pride and prestige are at
unable or unwilling to address. While com- stake, greater importance may be placed on a
mercial research tends to focus on the needs of nation or destination doing well in an industry.
individual enterprises, interdisciplinary research Where tourism is seen to be an important
can attend more to the needs of the industry tool for economic development and prosperity,
and destination as a whole. Issues concerning tourism and hospitality enterprises are more
the social and environmental effects of tourism, likely to attract promising graduates into the
sustainable tourism development and the broad industry, as well as entrepreneurs and capital
questions of destination competitiveness are resources. Increasingly, many cities and nations
examples of research needs that specialized take great pride in showcasing their home to the
university centres would be able to address. world.
Australia’s Cooperative Research Centre for
Sustainable Tourism Pty Ltd, in which govern-
ment, industry and 15 universities participate, is
an excellent example of the sort of arrangement Marketing Intermediaries and
that can foster interdisciplinary and strategic Facilitators: the Industry’s Lubricants
industry research.
Industry associations may also take a Tourism and hospitality enterprises are con-
lead role in developing industry standards, nected to customers through tourism market-
improving training and professional standards, ing channels consisting of intermediaries and
and demonstrating the need for specialized facilitators. This system of contacts, inter-
infrastructure or tourism superstructure. connection and accessibility between operators
There is also the risk, however, that some and customers enables destinations and their
collective industry actions, although super- enterprises to reach the market with their
ficially appearing to be in the best interests of products and services. The same system pro-
the industry as a whole, may work over the long vides a convenient and efficient network that
term to decrease industry competitiveness. For allows customers to access tourism products
example, ‘It is often argued that domestic and services from around the world. Thus,
competition is wasteful, because it leads to the competitiveness of a destination is in part
duplication of effort and prevents firms from dependent upon the efficacy with which the
gaining economies of scale. The right solution destination utilizes marketing intermediaries
is seen as nurturing one or two firms who and facilitators.
become “national champions”, with the scale Intermediaries and facilitators streamline
and strength to compete against foreign rivals the tourism system by performing several
or, alternatively, to promote inter-firm coopera- worthwhile functions that confer advantages
tion’ (Porter, 1990, p. 117). Porter found this on operators and customers. Middleton (1994,
view not to be supported by overwhelming pp. 205–206) identified ten of these functions.
The Destination and the Tourism System 101
1. Points of sale and convenient customer and speciality channels, such as incentive travel
access, either for immediate purchase or for houses, corporate travel departments, meeting
booking in advance. and convention planners, automobile clubs, dis-
2. Distribution of product information, such count travel clubs, tourist information centres,
as brochures and leaflets, to provide choice for information kiosks and global distribution sys-
customers. tems or computer reservation systems, play a
3. Display and merchandising opportunities. direct role in the transfer of information and
4. Advice and purchase assistance, such reservations between operator and customer,
as itinerary planning and helpful product and are therefore performing roles as market-
knowledge. ing intermediaries. Conversely, facilitators such
5. Arranging transfer of title to a product as financial institutions (credit cards, travellers
through ticketing and travel documentation. cheques, currency exchange, etc.), insurance
6. Receiving and transmitting sales revenue companies, advertising agencies, market
to principals. research consultants, embassies and consul-
7. Possible provision of ancillary services, ates, information technology providers and the
such as insurance, advice on inoculations, visa Internet perform indirect functions which assist
applications, passports and travel advisories. or facilitate the activities of the travel trade.
8. Possible sources of marketing intelligence Some players in the tourism system may
for principals. perform roles that could be classified, from the
9. Supplementing the principal’s promo- perspective of a destination, either as a tourism
tional activities. and hospitality enterprise or as a marketing
10. Receiving and assisting with complaints intermediary. For example, an airline may
from customers. transport customers to a destination as well
as performing a role as a tour packager/
In addition to these ten functions, inter-
wholesaler through its vacations department.
mediaries and facilitators perform several other
It may then transport tourists within the
valuable roles, including the following.
destination after arrival.
11. Buying in bulk and sorting and assembling A destination’s use of marketing intermedi-
tourism services into packaged tourism aries and facilitators is clearly going to affect its
products. overall competitiveness. What is less clear is just
12. Sharing risks with regard to demand how competitiveness is shaped by these alterna-
fluctuations and uncertainties. tives. A large, dominant destination, such as the
13. Financing part of the transfer of services USA, will seek to use marketing intermediaries
to customers by purchasing services and and facilitators intensively. Indeed, it has the
reservations in advance. positioning and power in the market to com-
14. Branding to enhance awareness and mand the attention, interest and compliance of
customer assurance. the travel trade. By contrast, a small, developing
15. Accreditation systems and providing a pool destination will need to be much more selective
of funds in the industry to protect customers in its choice of channel options and strategies.
against bankruptcy and fraud. For such a destination, it may make much more
16. Providing a network that more effectively sense to focus marketing resources so that it
reaches into the market. is able to achieve a critical mass in its use of
17. Providing ancillary services that support all channel options. It might, for example, enter
of the above functions. arrangements with only one retail travel chain
to act as a specialist agent.
The distinction between intermediaries A further strategic issue for a destination
and facilitators rests with the degree to which and its use of intermediaries and facilitators con-
the function performed is associated directly cerns the relative emphasis on ‘push marketing’
with the delivery of the tourism service by the versus ‘pull marketing’. A destination empha-
operator to the customer. Travel agents, tour sizing push marketing seeks to gain the cooper-
packagers and wholesalers, travel shows or ation of the travel trade through commissions,
exhibitions (both consumer and trade shows) other financial incentives and promotional
102 Chapter 5
programmes and assistance directed to players customers and their needs stand as the
in the marketing channel itself. A pull marketing ultimate driving force behind competition and
strategy, on the other hand, focuses on the gen- competitiveness. Competitive actions derive
eration of strong consumer demand through from customer demand. If we are to under-
consumer promotions that, in turn, elicits the stand the competitive (micro)environment and
cooperation of the travel trade. In this case, cus- its impact on destination competitiveness,
tomer demand pulls tourism services and prod- we surely need to understand how customers
ucts through the marketing channel. affect destinations.
Opportunities for more direct marketing In Chapter 2, we briefly discussed the sig-
that bypasses intermediaries and facilitators nificance of domestic tourism, noting that, with
are increasing. The Internet, toll-free telephone few exceptions, destinations derive the majority
numbers and ticketless travel are allowing desti- of their customers domestically. Domestic
nations and their enterprises to expand their tourism significantly exceeds the volume of
direct communication with customers and international tourism, so that for most national
achieve higher profitability by minimizing com- destinations it is domestic tourism demand that
missions to intermediaries. This is particularly has shaped the nature and competitiveness of
relevant in the airline industry. On the other the nation’s tourism industry.
hand, some operators that have tried to rely As we move from an international to
solely on direct marketing are struggling a regional or local perspective, however, the
to survive on this basis alone. For example, proportion of customers of tourism services
Greyhound Airlines in Canada found that it had originating from outside the borders of the
to switch to using travel agencies to provide the destination increases. Nevertheless, domestic,
one-stop-shopping convenience that travellers local or home-based demand has a particularly
were seeking. critical impact on the actions of competing
A destination which possesses strong firms and the functioning of the destination
home-based players in international tourism tourism system as a whole.
marketing channels has an advantage over Destinations that enjoy a sizeable local
destinations that lack the loyalty, pride and demand (which is the case in most industrially
cultural ties which local intermediaries and developed countries or regions) have a reliable,
facilitators are likely to display towards their comparatively stable demand base upon which
own local destination. tourism can be planned and developed. While
The interest of foreign-based marketing foreign inbound tourism may experience ups
intermediaries and facilitators in a destination and downs, local demand remains somewhat
will depend on the intrinsic touristic qualities insulated from foreign disturbances.
and potential of the destination. In addition, Strong local demand creates an environ-
however, as with any foray into foreign markets ment that fosters the development of a rich
by multinational enterprises, all factors likely to variety and range of tourism amenities, facili-
affect the returns and risks of operating in such ties, attractions and services. Indeed, without
destinations will weigh heavily on any such substantial local demand, many of these facili-
decision. Government policies, social norms ties and services, particularly those provided
and general business practices within a destina- by governments and funded through taxation,
tion can affect the attractiveness of a destination would not exist to the same extent. Govern-
for foreign-based intermediaries and facilita- ments provide public services which the private
tors. We explore some of these issues further in sector cannot or will not provide. While foreign
the last three sections of this chapter. tourists may be able to enjoy the benefits of
these public services and facilities, where they
exist, it is domestic demand that provides the
Customers: the Ultimate Driving real basis for their need and funding.
Force The economies of scale that the tourism
industry enjoys are therefore largely driven by
Although the competitive (micro)environment the size of local demand. But more important
is subject to numerous forces and motives, than these static efficiencies are the dynamic
The Destination and the Tourism System 103
impacts of local demand (Porter, 1990, p. 86). industry) may spread out to foreign markets. A
For example, in competing for local customers, variety of factors may contribute to this diffusion
tourism and hospitality enterprises are more of customer tastes and demand. For example,
likely to engage in more competitive behaviour residents of a destination themselves travel to
in general. Foreign visitors may only visit and other destinations, taking their experiences and
use the commercial services of a destination tastes with them. The media, movies, fashion,
once, whereas local people remain the corner- food, music and other forms of cultural commu-
stone of each tourism firm’s customer base. nication and ties between destinations facilitate
Local customers are also much more knowl- the demonstration effect of fashions in travel
edgeable about the range of choices available and tourism experiences. In addition to cultural
to them in their own backyard. So domestic ties and influences, several other forms of
demand provides very significant stimulation for interdestination relationships may also contrib-
local competition. ute to the diffusion of customer preferences and
Local or domestic demand for the touristic demand, including migration, history, sport and
services of a destination also shapes the nature politics. For example, consider how tastes in
and character of the industry. For example, the food have spread around the world.
French penchant for fine cuisine and social dis- We emphasized above the important effect
course has resulted in a tourism and hospitality of home demand on the competitive behaviour
industry that is characterized, in part, by wonder- of firms in a destination, and noted how local
ful restaurants and street-side cafés. American customers are more knowledgeable about local
tourists display a propensity for big entertain- tourism products and services and are often
ment, so it is not surprising to find that theme more price-sensitive towards them. In addition,
parks, gambling and cruises are characteristic of there may be a certain pride associated with a
the US tourist industry. Australians have a very firm’s competitiveness in its own local market.
outdoor lifestyle and hence the tourism industry Notwithstanding these points, foreign custom-
is strong in outdoor recreation and experiences, ers also represent a strategically important
particularly in coastal environments. market that drives the egos of managers of local
Local demand is also an important influ- tourism enterprises. There may be a certain
ence on the improvements and innovations that prestige associated with success in servicing
govern competition. Take the hospitality sector foreign markets. Destinations also display a
as an example. In crowded Japan, the cubicle strong interest in foreign markets because
hotel room was born. In contrast, the US they represent new money. And whereas local
demand for service, variety and choice has cre- markets are, to some extent, captive markets,
ated an enormous range of hotel styles and foreign markets are freer to choose alternative
classes. destinations. In this sense, destinations today
Where local customers are more demand- must be internationally competitive if they are
ing and sophisticated, competing firms are to attract foreign customers.
accustomed to providing higher levels of ser- A destination experienced in the ways
vice. Americans, for example, complain more of other cultures is also likely to develop com-
readily about substandard service than most petitive strengths in its ability to serve and satisfy
other cultures. A destination with a more expe- foreign customers. A multicultural destination,
rienced and demanding home market must or one that has had a history of serving foreign
develop knowledge, skills and services which visitors on business or education, for example,
meet new emerging and advanced customer is more likely to have acquired and diffused the
needs and tastes. Being further along the knowledge of other cultures into its tourism and
learning curve, these destinations are then in a hospitality firms.
stronger competitive position to provide these A final impact of customers on the compet-
experiences to foreign markets as these emerg- itive (micro)environment concerns the degree
ing travel trends and fashions spread to other of congruency between targeted customer
countries. segments. As customers must be present in the
Domestic tourism preferences (and associ- destination to experience its tourism product
ated local competitive strengths in the tourism directly, interaction among customer segments
104 Chapter 5
is inevitable. The choice and mix of targeted on tourism can be substantial. Some cities, how-
segments determines how customer behaviour ever, have a longstanding reputation for their
affects local residents as well as other tourists. A enthusiasm for sport and prowess in regularly
destination that has carefully considered which hosting major sporting events. In sports-crazed
customer segments represent an appropriate Australia, for example, Melbourne’s reputation
and congruent match with its tourism develop- for attracting, hosting and attending national
ment goals, tourism resources, resident and international sporting events, such as the
attitudes and opinions, and other customer Formula One Grand Prix, the World Motorcycle
segments is augmenting its competitive Championship, the Australian Open Tennis
strengths. Discordant selection of markets will Championship (the first leg of the Grand
weaken its competitive position. Slam circuit) and football, cricket and golf
tournaments, has made Melbourne something
of a Mecca for sports enthusiasts.
A strong retail industry offering a wide
Related and Supporting Industries range of competitively priced, high-quality
goods may also complement the destination’s
The effect of related and supporting industries tourism industry. Shopping can be a major
on destination competitiveness operates in a tourism activity, accounting for a substantial
similar fashion to that of suppliers. Instead of share of tourist expenditure. The Japanese, in
factor inputs, however, we are now dealing particular, are known for their propensity to
with parallel, complementary products and return home with many purchases for them-
services that reinforce and strengthen a desti- selves and their friends and family. Some city
nation’s tourism industry by their presence in destinations are also known for the excellent
the destination. Earlier we mentioned various variety and quality of their restaurants.
cultural industries as an example. The arts Although retailers and restaurants rarely gain
are part of the activities of many tourists, more than a small share of their customers as
particularly in urban regions. Theatre, music, tourists, competitive strengths in these related
literature, film, live entertainment, art galleries, industries nevertheless advantage their location
festivals, etc. are key elements in the competi- as a tourist destination.
tiveness of many successful urban destinations, As we noted above, a destination endowed
such as New York, Paris and London. While with strong, thriving and competitive related or
these cultural events and activities are normally supporting industries is of benefit to the tourism
patronized and attended by local residents in industry, but what is at least as important is
the majority, they may be so significant as to the degree of cooperation and coordination
attract large foreign audiences, which is the that occurs between them. Indeed, many
case for Broadway in New York and the West of these other industries have recognized that
End of London. There is also a significant flow the tourism industry represents a significant
of New Zealand tourists to Australia to take in opportunity for their ongoing success and even
some of the major theatre productions in survival. The arts community, for example, has
Melbourne and Sydney, which can be too begun to realize the importance of the tourism
expensive to stage in New Zealand, given the market and, in many places, is now work-
size of the market there. ing enthusiastically with tourism enterprises,
Sport, leisure and recreation industries, organizations, joint ventures and alliances
too, can enhance the competitiveness of tour- to obtain a greater share of the market.
ism destinations where local strengths exist in
these areas. Major events, such as the Summer
and Winter Olympics, the World Cup in soccer,
world athletics championships, golf tourna- Destination Management
ments and American-football championships Organizations
are coveted by many urban destinations.
Although many of these events are often held The role of DMOs has strengthened and
only once in a particular location, their impact spread as destinations have attempted to play
The Destination and the Tourism System 105
a more proactive role in fostering and manag- increases, we believe it is time to let the ‘M’
ing the benefits of tourism development. in ‘DMO’ stand for ‘management’. For this
Increasing competition for tourism dollars has reason, we illustrate in Fig. 5.2 the role of
prompted responses at all levels of destination the DMO, stretching from the upstream (i.e.
development and management. At the inter- suppliers) to the downstream (i.e. customers)
national level, organizations such as the Pacific reaches of the competitive (micro)environment.
Asia Travel Association, the Baltic Sea The DMO is not the only player involved in
Tourism Commission, the Caribbean Tourism the broad task of destination management. All
Organization and the Tourism Council of entities of the competitive (micro)environment
the South Pacific seek to advance tourism have a potential role in this task. Industry associ-
development across cooperating nations. ations typically represent individual enterprises.
National destinations have established Several different government departments
national tourist offices. At the next level, states, (dealing with transportation, the environment,
provinces and territories have also created education and training, economic develop-
similar organizations. Many cities today have ment, etc.) have an interest and responsibility
their own Convention and Visitor Bureaux, and in this area. Numerous publics, which we
smaller municipalities or rural regions have, in will examine in the next section, also strive
many cases, set up regional tourism bureaux or to express views on the matter of how a desti-
offices. nation is developed and managed over the
Some cooperation between the different long term.
levels of DMO is evident, but at this point in time In Chapter 9 we examine destination
the extent of cooperation seems generally to be management, including the role of the DMO, in
rather limited. If the real objective of DMOs is some detail. For the moment, however, it is suf-
to advance the overall interests of the area, ficient to note that the DMO plays a potentially
residents and industry it represents, greater critical role in managing the competitiveness of
cooperation would appear to be called for. the destination it represents. Notwithstanding
Although we have chosen to use the word the more restricted range of tasks that many
‘management’ in labelling these organizations, DMOs currently pursue, the DMO is often
many of the organizations who label themselves either the only or the most pivotal organization
as DMOs see the word ‘marketing’ in with the broadest mandate for destination
this initialism. However, for many such competitiveness.
organizations ‘marketing’ is an exaggeration of
the extent of their role. Marketing is a much
broader function than promotion, yet some of
these organizations seem to believe that any Publics: Stakeholders and
activity that is not directly promoting the Watchdogs
destination is a waste of effort and funds. This
view is certainly counter to the modern view of The competitive (micro)environment is bor-
marketing, which regards promotion as only dered by a number of institutions, organiza-
one of a number of complementary tools tions, groups and individuals that, although not
available to a marketer. directly part of what we might call ‘the indus-
Where a DMO adopts a role limited try’, nevertheless exert an influence – possibly
primarily to promotion, the role of the DMO is a very considerable influence – on the behav-
little different from that of other marketing iour and practices of those within the industry.
intermediaries and facilitators. There are, how- Publics are all of the groups and individuals
ever, some DMOs that have begun to adopt an who are affected by a destination’s tourism
expanded perspective of their role beyond pro- development, either materially or psycho-
motion and even marketing alone. And because logically. In this sense, then, they are the
we believe that the trend will continue in this destination’s stakeholders or watchdogs.
direction as competition between destinations The general public is one such stakeholder.
intensifies and the interest in tourism’s broader Citizens, in general, take an interest in tourism
economic, sociocultural and ecological impacts development and its impacts on their quality of
106 Chapter 5
life. In the past we might have defined the between the industry and these publics, a
general public in terms of its geographical prox- mutually supportive relationship can exist
imity to the destination (e.g. residents of a city, which ensures that, over the long term, a
state or nation). Today, however, many individ- destination can develop its tourism industry in
uals take an interest in issues on a global scale a way that benefits all stakeholders. On the
because circumstances in one part of the world other hand, if the tourism industry views publics
(e.g. pollution, the economy, social problems) merely as impediments to growth and develop-
can affect other regions. The phrase ‘the global ment to be defeated or overcome, an environ-
village’ encapsulates these public attitudes. ment of mistrust, suspicion and opposition can
For this reason, tourism’s general public may emerge, and this is likely to hinder destination
indeed be global. The exploitation of aboriginal competitiveness and prosperity in the long run.
peoples, the destruction of the environment A destination’s tourism industry must
and the desecration of a cultural heritage of compete for the opinion of the general public as
global significance are examples of tourism well as of all other publics if it is to be competi-
development issues that might arouse tive. This is more likely to occur in cases where
worldwide attention. democratic principles are prevalent, there is a
The local residents of the destination – tradition and culture of tolerance for the views
those members of the general public most and opinions of others, communication and
immediately affected – are another important consultation are normal practices, and society
public. These are likely to be among the most has set up mechanisms (such as town hall
vocal of the groups demanding a say in how meetings, review boards and task forces) which
tourism is developed in their own community. facilitate and encourage the contribution of
Citizen-action groups may be formed to public opinion to the process of visioning,
represent certain opinions and viewpoints on planning and development. As discussed in
issues related, for example, to the environment, Chapter 2, the will of a society to envision its
aboriginal rights, taxation, development and future and plan for tourism’s role in this future
growth, and social problems. is the cornerstone for the successful manage-
Another important public is labour, partic- ment of the role of publics in a destination’s
ularly organized labour. Tourism today is a competitive (micro)environment.
sophisticated industry and, as such, it must
compete against other industries to attract the
necessary mix of skills, talents and workplace
attitudes. Additionally, as the tourism industry The Destination: Internal
operates around the clock and relies heavily on Environment and Modus Operandi
standards of customer service, labour publics
can play a critical role in the competitiveness of Figure 5.2 illustrates the relationship between
tourist destinations. We explore this in greater all of the elements of a destination’s competi-
detail in the next section. tive (micro)environment discussed so far in this
Other important publics include financial chapter, namely suppliers, tourism and hospi-
institutions and investors, the media, the vari- tality enterprises, marketing intermediaries and
ous government departments and authorities facilitators, customers, related and supporting
(particularly in transportation, the environment, industries, DMOs and publics. Some portion of
economic development, planning, education the players in each of these categories will be
and industrial policy), and a number of associated with any particular destination. For
consumer groups (such as the International example, certain suppliers will provide a desti-
Airline Passengers Association, the Rail Users nation with inputs and resources to the tourism
Consultative Committee in the UK, the Associ- and hospitality industry, and that destination
ation of Business Travellers and the Profes- will serve some portion of global tourist market
sional Convention Management Association). segments (i.e. customers).
The role of publics in a destination’s com- The bold dotted line in the figure delimits
petitive (micro)environment is a critical one. the subset of players in the competitive (micro)
With the right communication, and interaction environment associated with a particular
The Destination and the Tourism System 107
destination. This is the destination’s internal and provide appropriate infrastructure, support
environment. By ‘internal environment’ we do facilities and a competitive environment will
not necessarily mean only organizations or improve the competitiveness of the destination.
individuals that are located within the bound- Another area is the attitudes and styles
aries of the destination. Rather, the internal of managers of tourism and hospitality enter-
environment is to be interpreted as consisting of prises in the destination. Are they consistent
all entities which are involved in the operation with the principles of stewardship of the
and delivery of the destination’s tourism prod- destination’s resources? Are they willing to
uct or experience. Customers are also part of compete globally for tourist markets? What
this environment because they, too, participate are their attitudes to matters such as customer
in the production of the product. Similarly, the service, innovation and different languages
light dotted line identifies the subset of players and cultures?
associated with other competing destinations. Social differences, too, are likely to be
The intersection between these two subsets important. For example, resident attitudes to
includes those firms, organizations, groups or visitors shape a destination’s reputation for
individuals that are associated with more than friendliness and hospitality. Attitudes to work,
one competing destination. For example, many wealth, risk-taking, skill development, authority
multinational enterprises or organizations and customer service are each important. For
would belong in this intersecting region. example, in some countries servile positions
So far in this chapter we have examined (e.g. that of a waiter in a restaurant) are
the individual effect of each group in the micro- regarded more highly than in others. Talented
environment on destination competitiveness. people are attracted to industries that carry a
In this and the next two sections we briefly degree of national prestige and priority.
consider effects across groups. The degree of traditional rivalry among a
The internal environment of the desti- destination’s tourism and hospitality enterprises
nation and its modus operandi – that is, the is a catalyst for innovation, productivity and
characteristic way in which the destination goes improvements, and a focus on customer
about the business of organizing and developing satisfaction. On the other hand, appropriate
its tourism industry, attracting visitors and oper- forms of cooperation among enterprises are
ating itself to serve tourists – are shaped by the also important. For example, the willingness
practices, traditions and values that distinguish of firms to cooperate in the marketing of the
one destination from another. Porter (1990, destination and in packaging complementary
pp. 107–124), who studied the competitive services would be expected to enhance desti-
advantage of national industries, examined firm nation competitiveness. Inappropriate forms of
strategy, structure and rivalry within a national cooperation, that is, cooperation designed to
industry as a manifestation of these attributes. reduce competition among firms rather than
He noted that the goals, strategies and ways of to improve the product and service delivered
organizing firms within industries vary among to customers, impedes the development of a
nations. One would expect to find variation competitive destination.1
among destinations in the modus operandi of Vertical cooperation among different
their own tourism industries. The greatest varia- levels of the tourism marketing channel can
tion is likely to exist among destinations defined lead to efficiencies and product improvement
at the national or supranational/continental as long as such cooperation does not stifle
level. But some variation could also be expected competition by precluding other enterprises.
among cities, regions or states within a particu- Outside of the cruise and all-inclusive resort
lar nation or culture as, even at this level, we can markets, individual enterprises produce only
observe different regional ‘personalities’. one element of the product purchased by
In what areas might variations exist which the tourist (i.e. the destination experience).
could significantly affect the competitiveness of As a result, there is considerable scope for
a destination? One such area concerns govern- productivity improvement through inter-firm
ment policy. Policies that encourage sustainable cooperation. And as long as the focus is
forms of tourism development, attract investors on better serving customers rather than on
108 Chapter 5
blocking competitors, the competitiveness of destinations. He inferred from his research that
the destination should improve as a result. Italy and Yugoslavia are mutually competitive;
however, Italy seemed to be Greece’s com-
petitor, but Greece seemed to complement
Italy. Yannopoulos (1987) also noted that
Other Competing Destinations non-symmetrical complementary relationships
appear to exist.
Likewise, other competing destinations pos- All of this points to the necessity of
sess their own unique internal environment determining the significant competitive and
and modus operandi. No two destinations complementary relationships between destina-
share the same competitive profile because tions for each targeted market segment, so that
each destination has its own characteristic mix a destination has a clear understanding of the
of traditions, values, goals and styles. Hence, competitors it should benchmark itself against,
as we noted in Chapter 2, destination competi- the complements it should partner with, and the
tiveness is not something that can be measured competitive profile required for each market
along a single dimension. A destination may be segment.
very competitive in meeting the needs of one
tourist market segment, but quite uncompeti-
tive in a distinctly different segment where a
very different competitive profile is called for. The Tourism System:
For this reason, it makes no sense to observe Integrative Impacts
that destination A is a competitor to destina-
tion B without reference to a market segment One of the most dramatic transformations to
context. occur in the tourism and hospitality industry
But there is a further issue that governs since the early 1980s has been its globaliza-
the relationship between destinations, and it tion. Over time, the business of tourism has
concerns the relative geographical proximity of shifted from a regional or national clustering of
the destinations concerned, and of the market activity to operate on an increasingly global
as well. For example, the province of British scale. And although small enterprises remain
Columbia in Canada and the state of Washing- the lifeblood of the industry and continue to
ton in the USA largely compete against one vastly outnumber large tourism and hospitality
another to attract tourists from the Pacific corporations, big businesses and multinational
Northwest region (i.e. Alberta, British Colum- enterprises (MNEs) in particular are profoundly
bia, Washington, Idaho, Montana and Oregon). changing the way the tourism system
But this same province and state are comple- functions, worldwide.
ments for markets outside the Pacific North- These large corporations are bringing
west. That is, a potential visitor from the east economies of scale, branding and improved
coast of North America would be likely to management practices to the industry that
regard British Columbia and Washington as are beyond the ability of many smaller firms.
part of the same destination. In other words, the However, at the same time as these changes
destination is no longer defined by provincial or are occurring, tourist markets are becoming
state boundaries but by the Pacific Northwest increasingly sophisticated, demanding and
region as a whole. Strengths in one part of this diverse in their needs. As a consequence,
larger region add to or complement, rather than changes in the business of global tourism
compete against, strengths in other parts of the have not been allowed to ignore these equally
region as a whole. significant changes in the market. The global-
So nearby or neighbouring areas generally ization of tourism, then, has seen great change
become complements rather than substitutes in terms of both supply and demand.2
the more distant the market. Anastasopoulos The global scale of the tourism system
(1984) did find, however, some research data to today and the accompanying globalization of
suggest that pairs of countries may not be mutu- the business of tourism have significant ramifi-
ally competitive or complementary as tourist cations for destinations. Multinational tourism
The Destination and the Tourism System 109
and hospitality enterprises are prevalent now in involving competitors take place through independ-
most sectors of the industry, but particularly ent entities, can be beneficial in some circumstances',
in hotels and resorts (ITT Sheraton, Marriott, such as cooperative research and development, or
trade association programmes for the purpose of
Club Med), airlines (One World and Star
factor creation. 'The best structure is one in which
alliances), food services (McDonald’s, Hard
cooperative activities are managed independently
Rock Cafe, Planet Hollywood), retail travel and have precise charters, so that participants face
agents (Thomas Cook, Thompson’s, American no mixed motives in being involved. At the same
Express), entertainment (Disney, Cirque du time, companies must compete vigorously on product
Soleil) and tour wholesalers/operators (Gray development, pricing, and other aspects of strategy.'
Line Worldwide, Insight Vacations, Trafalgar 2
Poon (1993) discusses in detail the juxtaposition
Tours). Enterprise growth, mergers, and of these interdependent changes in demand and
acquisitions, partnerships and alliances, man- supply, describing the global transformation as a
agement contracts and franchising, business change from 'old tourism' to 'new tourism'. Chapter 4
of Poon's book examines the emergence of new
networks and virtual corporations, etc. have
tourism in terms of the attributes of new consumers,
resulted in tourism and hospitality MNEs that
new technologies, new production practices,
may have operations in a large number of new management techniques and new frame
destinations. Each enterprise views its business (i.e. environmental) conditions.
as a portfolio of operations in different destina-
tions. The success and profitability of the MNE
is therefore a function of its ability to manage
this portfolio of destinations by allocating
References
resources among operations in each location,
Anastasopoulos, P.G.E. (1984) Interdependencies
and adding destinations to and deleting them in international travel: the role of relative
from its portfolio. prices. A case study of the Mediterranean
The competitiveness of a destination in region. PhD thesis, New School for Social
each market segment will be a major factor Research, New York.
in the portfolio management decisions of Kotler, P., Bowen, J. and Makens, J. (1996)
MNEs in tourism. Any increase or decrease in Marketing for Hospitality and Tourism.
the inherent competitiveness of a destination Prentice Hall, Upper Saddle River, New Jersey.
will be magnified by the strategic decisions Middleton, V.T.C. (1994) Marketing in Travel and
multinationals make either to increase/expand Tourism, 2nd edn. Butterworth-Heinemann,
Oxford.
or decrease/withdraw from a destination.
Poon, A. (1993) Tourism, Technology and
Competitive Strategies. CAB International,
Wallingford, UK.
Notes Porter, M.E. (1990) The Competitive Advantage of
Nations. Free Press, New York.
1
Porter (1990, p. 667) notes that direct Yannopoulos, G.N. (1987) Intra-regional shifts
competitor-to-competitor cooperation usually under- in tourism growth in the Mediterranean
mines the competitive advantages of industries in the area. Travel and Tourism Analyst 1987
long run. 'Indirect cooperation, where joint efforts (November), 15–24.
6
Core Resources and Attractors: the Essence of
Destination Appeal
Comparative Competitive
advantages advantages
(resource endowments) Destination competitiveness and sustainability (resource deployment)
Global (macro)environment
Destination policy, planning and development
Destination management
Physiography
Culture and history Mix of activities Special events Entertainment Superstructure Market ties
and climate
One of the great challenges facing tourism 1. The physiography of the destination, most
managers is to clearly understand the factors particularly the landscape, scenery and climate.
that motivate individuals to choose one In effect, it is the visual and sensual pleasure
particular destination over the myriad other derived from these elements that provides some
possibilities. When all the complexities of of the most fundamental physical enjoyments of
destination choice are stripped away, it is tourism.
essentially the core resources and attractors 2. The culture and history of the destination
that underlie the basic desire to travel to in turn furnish much of the intellectual
a given destination. These also provide the satisfaction from visitations.
foundation for an exciting and memorable 3. The range and mix of activities available at
destination experience. As shown in Fig. 6.1, a destination provide the primary foundation of
the core resources and attractors are of seven both the physical and emotional stimulation
major types. that excites and challenges the visitor.
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
110 (J.R. Brent Ritchie and Geoffrey I. Crouch)
Core Resources and Attractors 111
Fig. 6.1. Core resources and attractors: the factors that motivate travel and draw visitors to a
destination.
4. The various special events offered by destination with competitive appeal or create
a destination create much of the dynamics barriers that must constantly be adapted to,
and the uniqueness that make a destination overcome or managed around. A comfortable,
memorable. constant climate immediately provides a base-
5. The different components of the destina- line of attractiveness for the great majority of
tion’s superstructure, while often highly varied visitors. While niche markets may seek unique
in nature, tend to provide a substantial percent- and demanding climates, these are generally
age of what is perceived as the fundamental the exception. Market segments wishing to
tourism character of a destination. visit extremes of hot and cold, such as deserts,
6. The types of entertainment found at a jungles and arctic regions, represent a
destination are frequently designed to comple- relatively small percentage of the total travel
ment the different activities and events that a market. While these market segments may be
destination offers. Conversely, for other desti- lucrative in the right circumstances, they do
nations the strength of the entertainment may not represent the mainstream of tourism.
itself be the primary appeal of the destination. Those destinations that are blessed with
7. The strength of market ties frequently a ‘natural edge’ are becoming increasingly
serves as a major catalyst for destination attractive in today’s world of overpopulation
visitation that involves human relationships. and pollution. Indeed, this dimension of destina-
tion appeal has become so significant that it has
recently resulted in the creation of ‘natural area
tourism’ (Newsome et al., 2002). Newsome
Destination Physiography and et al., in turn, identify four subcategories that
Climate: the Natural Edge they define as adventure tourism, nature-based
tourism, wildlife tourism and ecotourism.
From a tourism management perspective, it Regardless of the semantics, their book
is somewhat ironic that natural physiography provides an excellent overview for those desti-
and climate – among the most important nation managers who wish to develop and focus
determinants of destination competitiveness – on the natural edge as the strategic philosophy
are largely beyond the control and even the for a destination.
influence of destination managers. The extent The majority of destinations that have a
to which the natural climate and terrain are favourable climate tend to build their competi-
hospitable to humans provides a set of natural tive position around this natural advantage.
parameters (Fig. 6.2) that either endow a Spain, for example, has developed a symbol
112 Chapter 6
Fig. 6.2. Destination physiography and climate: elements of the natural edge.
based on the sun that has almost become its America all compete to attract travellers who
national flag. The many island destinations that seek eye-popping mountain views, the thrill of
enjoy favourable climates in attractive locations traversing high mountain passes and, for some,
have given rise to the well known three ‘S’s’ the challenge of mountaineering in the world’s
in tourism: sun, sand and sea. Aggressive most elevated peaks.
marketers have sometimes added a fourth ‘S’. An excellent example of a destination that
As is well known in marketing, sex sells! thrives on the appeal of its majestic vistas is
Closely tied to climate is the actual physical Canada’s Banff National Park. In this instance,
character of the destination. The degree to the destination is so successful that we are
which the physiography of a destination is hos- faced with the need for both marketing and
pitable to human activity again provides very ‘demarketing’. The goal of tourism marketing
fundamental advantages and disadvantages. is to attract visitors who are interested in high-
Relatively smooth, vegetation-covered terrain quality nature but to limit total visitation to a
that has convenient access to fresh water and level that is not injurious to the environmental
high-quality recreation areas provides humans health of the region.
(and animals) with a physical environment that As we embark on a new century, Banff
most easily accommodates their physiology. National Park currently welcomes over 5 mil-
While variations in topography, as well as in lion visitors annually. The park is so successful
vegetation and wildlife, add novelty and variety, that this level of visitation risks incurring ecolog-
the human body prefers to avoid extremes. ical damage so severe that it could eventually
Other destinations may not possess destroy much of the park’s appeal. The ecologi-
entirely favourable climates but are blessed cal damage that experts allege is taking place
with magnificent scenery. Regions that contain relates both to the level of visitation (the number
rugged mountain ranges provide some of of people) and the type of visitation (what
the world’s most spectacular scenery. The Alps people do while in the park). Because of the
of Europe, Asia’s Himalayas, South America’s park’s success, the environmental marketing
Andes and the jagged Rockies of North goal is to ensure that visitors who are attracted
Core Resources and Attractors 113
will respect the environmental integrity of the comparative advantage that greatly strengthens
region. its competitive position. In contrast, other
From a destination marketing perspective, destinations that must live with more limited
the challenge in such situations is twofold. First, markets and an unfavourable (or at best medio-
the overall level of demand needs to be be cre) physiography or climate must initiate
kept at a point that can be comfortably accom- strategies to counter, minimize or even take
modated by the existing infrastructure. This advantage of their impacts on the destination’s
seeks to make optimal economic use of existing ability to compete. Some of these strategies will
investments without creating the need for new now be discussed.
facility developments that could contribute to
environmental degradation in the area. Second,
• The building of artificial environments
that negate the environmental inhospi-
within existing levels of visitation, attempts
tality of a region. By far the most com-
must be made to attract those visitors whose
mon way of managing around adversity
behaviour while in the Park is most environ-
is evident in the thousands of air-
mentally sensitive. Such visitors will have
conditioned convention centres and hotels
minimum impact on the ecological integrity
that attract and accommodate visitors to
of the Park.
destinations all over the world, whose
Marketing efforts that pursue the above
climates many consider unbearably hot
goal have two characteristics. First, they should
and humid during certain times (or even
be such as to appeal to environmentally con-
all) of the year. By creating comfortable
scious individuals. Second, they must be placed
artificial worlds within well-known desti-
within media most commonly read/viewed by
nations during their off season, some
environmentally conscious citizens. Regardless
destinations have managed to remain
of how it is done, all marketing related to the
relatively competitive, thereby keeping a
natural edge of a destination’s physiography
large investment in facilities and employ-
and climate must constantly keep in mind
ees operating and acceptably profitable.
that this competitive edge is a gift that is only
sustainable if it is carefully managed.
• Using a unique attraction to effectively
take physiography and climate out of
Those destinations that possess neither a
the picture as a competitive factor. For
particularly favourable climate nor outstanding
example, the city of Xian, China, a quite
scenery are left to improvise in their efforts to
average destination, attracts large num-
compete in the very competitive tourism
bers of visitors by promoting the recently
marketplace. For many, this amounts to an
discovered terracotta soldiers. This site is
often futile effort to attract visitors to a destina-
a world-class archaeological find whose
tion that most would prefer either to leave or
uniqueness and quality enable this modest
to bypass. The spark of genius is especially
urban destination to build a thriving
required in such situations. Branson, Missouri
tourism industry.
(a very ‘ordinary’ destination) has become the
number one bus tour destination of the USA
• The development and promotion of
a special event that takes advantage
through the development of a very special and
of and even highlights physiographical
limited product that appeals to a very specific
and/or climatic adversity. As an
segment of the population – it is claimed to have
example, Quebec City, Canada, tackled
more live entertainment than anywhere else in
the adversity of the coldest climatic period
the USA. Las Vegas, USA, emerges as a desti-
of the year by creating the Quebec Winter
nation that demonstrates how an arid desert
Carnival, in effect a celebration of winter.
region can be transformed into a tourism Mecca
Part of the celebration involves the
through ingenious policy changes combined
construction of ice sculptures as part of
with managerial imagination and entrepreneur-
an international ice-sculpting contest, and
ship. Before lavishing too much praise on
the hosting of a canoe race across the
Las Vegas, however, one must keep in mind
broad, ice-filled St Lawrence River attracts
the importance of location. Its proximity to
the international media, which in turn
the large markets of California provides a
114 Chapter 6
Table 6.1. Relative importance of general factors influencing the attractiveness of a tourism region
(from Ritchie and Zins, 1978).
What is culture?
As might be expected, all the elements house auctions not to purchase but simply to
of culture are not equally effective as ‘sub- observe them as an element of the local culture.
attractors’ to a destination. Furthermore, it is Similarly, Ritchie and Zins (1978) found
important that the destination manager realizes that the factors of education, dress and religion
that the different elements of culture appear were accorded little importance by both resi-
somewhat differently to non-resident visitors dents and non-residents. The most notable
to a region and to those who live in or near the difference between the evaluations for these
destination. The extent to which non-residents two groups involved the relative importance of
and residents agree or disagree on which the leisure activities element. The point to be
cultural events attract them to a destination and made is that the different elements of culture
the relative importances of these elements in may have different levels of appeal to resident
attracting them are summarized in Table 6.2. and non-resident tourists. So destination
While there are certainly similarities in the managers should seek to determine how best
importance of each of the elements between to utilize culture as a core attractor for each
the two market segments, it can be seen that market segment of interest.
traditions and history and the appearance given
to a destination by architecture tend to have
greater drawing power for visitors from outside Major dimensions of cultural
the destination. Destination managers will also attractiveness
want to note the high degree of importance
accorded by both residents and non-residents As Ritchie and Zins (1978) noted, although
to the gastronomy of the region. It would great care had been taken in specifying the 12
appear that high-quality, distinctive meals are elements of culture, it was possible that certain
a powerful element in the cultural dimension aspects of tourism attractiveness regarding
of a destination’s attractiveness. In general, it culture were present more than once within
appears that residents often underestimate the the framework of those variables retained for
extent to which visitors are interested in things study; that is, it was possible in the extreme
that they themselves regard as commonplace. case that two or more of the items employed in
For example, in Melbourne, Australia, a pro- a given case were really different measures of
portion of homes are sold by auction. Tourists the same underlying dimension of attractive-
have often been known to turn up at these ness of a tourism region. Accordingly, each of
the scales was further analysed to discover
Table 6.2. Relative importance of sociocultural whether a more restricted set of dimensions
elements influencing the cultural attractiveness of might underlie the scales measuring the gen-
a tourism region: non-residents compared with eral and cultural attractiveness of a tourism
residents (from Ritchie and Zins, 1978). region.
Overall order Overall order
From this analysis four major dimensions
of importance: of importance: of cultural attractiveness were identified. Based
Elements non-residents residents on these findings, destination managers need to
recognize that visitors may typically focus on
Traditions 1 3 the following main aspects of a destination from
Gastronomy 2 2 a sociocultural perspective:
History 3 5
Architecture 4 7 • the basic elements of daily life, that is,
Handicrafts 4 3 how people go about their daily living;
Leisure activities 6 1 • the more sophisticated elements of
Art and music 7 5 the good life of residents, such as art,
Language 8 9 museums and food;
Work
Dress
9
10
8
11
• the elements of work in the society; and
Education 11 10 • cultural remnants of the past, with
Religion 12 11 emphasis on museums, architecture and
religion.
118 Chapter 6
Demanding
Soft adventure
Relaxing
Hard adventure
Easy access
Outdoor
Difficult access
Indoor
Adult-oriented
Winter
Family-oriented
Recreational
Summer
• it should provide activities across all itself a unique characteristic that makes it stand
seasons found at the destination; and out in the marketplace, then the development
• it should provide activities that are eco- of special events has proved to be one way
nomically viable yet, where appropriate, to achieve visibility and to build a reputation.
suited to a range of incomes. While mega-events and/or hallmark events
(such as a World Fair and the hosting of
Olympic Games, the Super Bowl, the World
Cup of soccer and G8 gatherings of world
Special Events: In Search of the leaders) can raise a destination from obscurity
Stroke of Genius That Creates to international prominence, there are only
Destination Uniqueness Through so many of these ready-made events to go
Local Insight and Entrepreneurship around. Given this reality, destinations must
seek to develop their own mega-event or hall-
Perhaps the major challenge facing destination mark event. In this regard, have you ever asked
managers is to develop a unique or distinctive yourself why the Boston Marathon is held in
position among the large number of destina- Boston? Or, more generally, how is it that a
tions from which potential visitors can choose. running race that could be held almost any-
If a destination is blessed by some uniqueness where in the world has become so famous
of nature (e.g. the Grand Canyon in Arizona, that it stands out among all other marathons?
USA), by some relative uniqueness of its Similarly, we may ask why the Master’s Golf
culture (e.g. the province of Quebec, Canada, Tournament, the Kentucky Derby, the New
within North America, the Masai Mara region Orleans Mardi Gras, the Munich Oktoberfest
of Kenya and the Afro-Caribbean-influenced and the Calgary Stampede have achieved such
Atlantic coast of Costa Rica), by a long and international recognition and acclaim when
distinctive history (e.g. Rome, Italy), by a there are plenty of other golf tournaments,
particularly outstanding work of design, engi- horse races and local celebrations. What is the
neering or architecture (e.g. Paris, France) or key factor – the stroke of genius – that elevates
by some other unique dimension, then it has a what could be ordinary to being renowned?
tremendous competitive advantage. But if, like Superficial reflection indicates that it may just
many destinations, it must rely on innovative be a question of fortunate timing or a stroke of
insight and/or simply hard work to create for luck. On the other hand, more careful analysis
120 Chapter 6
indicates it is often the insights and commit- just ‘a success’. Other international events, such
ment of one individual, combined with hard as the soccer World Cup, other world champi-
work, persistence and a lot of community onships (tennis, curling, etc.) and events such as
effort, that creates an event that consistently the US Super Bowl that attract high levels of
rises above the ordinary and that outperforms media attention can help to create, build or
all others in terms of the unique experience it is enhance a destination’s awareness and image.
perceived to provide to visitors and residents Clearly, there is a difference in the roles of
alike. one-time and repeating events. While one-time
The term ‘stroke of genius’ is particularly events may provide a worldwide burst of expo-
relevant to the Masters Golf Tournament. sure for a destination, the impacts and aware-
Looking to provide a service to golf by hosting a ness can be fleeting if there are no follow-up
tournament, world-famous golfer Bob Jones activities to consolidate the destination’s
and his colleague Clifford Roberts decided reputation. The value of ongoing, annual events
to host an annual event, starting in 1934 is that they provide destination managers with
(visit www.masters.org for further details). Their the ability to slowly build awareness and reputa-
devotion to excellence has created not only a tion. Like the Masters, ‘Wimbledon is Wimble-
world-renowned event, but also a golfing facility don’ because every year it is sure to typify the
in Augusta (Georgia, USA) that is nearly as pinnacle of excellence in tennis. Similarly,
revered as the birthplace of golf, St Andrews, the New Orleans Mardi Gras, the Oktoberfest
Scotland. in Munich and the Running of the Bulls in
Many well-known events have their origins Pamplona (Spain) are celebrations that are
tied to religious themes. The New Orleans rooted in local values and have acquired interna-
Mardi Gras started in the 1700s as a pre-Lenten tional stature in terms of their reputations, their
ball (www.nola.com/mardigras). The German appeal and their ability to draw visitors from all
Oberammergau Passion Play, which is held over the world. Through time, they have tended
every 10 years in the Bavarian region, was to characterize a destination and to make it
originally based on deeply held religious con- a must-see, often whether or not the event is
victions. While it retains its religious roots, it actually occurring at the time of visitation.
has increasingly become a tourism event that While the foregoing provides examples of
attracts visitors from all over the world. events that have attained success and that have
The Olympic Games, both Summer and provided host destinations with visibility and
Winter, are the flagship example of a growing the basis for ongoing tourism and community
number of sports-based events that can contrib- development, the ability to develop events that
ute in a major way to increasing international will serve as drivers for destination competitive-
awareness of the host destination – even though ness on a sustainable basis requires systematic
the event may only be held there only once in analysis in order to achieve an understanding
several generations. Aside from enhancing the of the underlying factors that determine
general awareness of the host city, an Olympic event success, combined with professional
Games often tends to create a highly simplified management that takes advantage of this
‘one-liner’ in the mind of the world population. understanding.
As an example, the 1972 Munich Games are One of the world’s leading experts in the
remembered for the terrorism they engen- field of event management is Dr Donald Getz.
dered, the Mexico City Games of 1968 have His book, Event Management and Event
become the symbol of Black Power, and the Tourism (Getz, 1997), has become a classic
1976 Games in Montreal are remembered for reference. As Getz notes, there are a number of
the ‘legend of debt’ they left behind. The Los fundamental underlying factors that create or
Angeles Games of 1984 marked ‘the beginning heighten the quality of specialness that is essen-
of the commercialization’ of the Games. The tial for an event if it is to help a destination
Moscow Games of 1980 were the ‘Games achieve the stature and level of recognition
no-one attended’. The Atlanta Games of 1996 that turns an event core attractor into a truly
are remembered by many as the ‘Games of the competitive advantage for a destination. These
bomb’, while the Sydney Games of 2000 were factors are summarized in Table 6.3. While
Core Resources and Attractors 121
Table 6.3. Factors that help to make an event a competitive core attractor (from Getz, 1997).
• A multiplicity of goals: specialness is related to the diversity of goals that events successfully pursue
• Festive spirit: specialness increases with the ability of events to create a true festive spirit. The
ambience can encourage joyfulness (even revelry), freedom from routine constraints, and inversion of
normal roles and functions
• Satisfying basic needs: all the basic human needs and related leisure and travel motivations can be
satisfied in part through events. Specialness increases as the number of needs and related motives
are better satisfied
• Uniqueness: mega-events rely on a must-see, once-in-a-lifetime uniqueness to attract visitors; all
events, to some degree, can manage their product and promotions to create the specialness
associated with a unique happening
• Quality: poor quality will destroy any pretence of being special; high-quality events will go beyond
customer expectations and generate high levels of satisfaction
• Authenticity: this is related to uniqueness, in that events based on indigenous cultural values and
attributes will be inherently unique. To the tourist, specialness will be heightened by a feeling of
participation in an authentic community celebration
• Tradition: many events have become traditions, rooted in the community, and attractive to visitors
because of the associated mystique. Hallmark events, which are closely associated with the host
community, so that event and destination images are mutually reinforcing, are traditional by nature
• Flexibility: events can be developed with minimal infrastructure, can be moved in space and time, and
can be adapted to changing markets and organizational needs. This fact makes them special products
for organizations and destinations
• Hospitality: the essence of hospitality is to make every event-goer feel like an honoured guest. In
destinations, the tourist is provided with community hospitality and the resident is proud to be a host.
Some events and communities are recognized for the special welcome they give to visitors
• Tangibility: all elements of the event can be themed to maximize festive spirit, authenticity, tradition,
interactions and customer service. Theming adds to the feeling of specialness
• Symbolism: the use of rituals and symbols together adds to the festive atmosphere, and can also give
an event special significance above and beyond its immediate purpose and theme
• Affordability: events providing affordable leisure, educational, social and cultural experiences will be
special to large segments of the population without the means to pay for alternatives
• Convenience: events can be special opportunities for spontaneous, unplanned leisure and social
opportunities. This is of increasing importance in a hectic, work-oriented world, especially in urban
environments
every event will not possess all of these is more than one type of event that can be a
characteristics, destination managers should successful core attractor.
seek to identify those that are most relevant As noted earlier, those events that tend to
to the kinds of events that seem to fit their have the greatest and often the most lasting
destination. impact on the reputation and renown of a
Efforts can then be directed towards activi- destination are referred to as ‘hallmark events’
ties that enhance the specialness of an event, and ‘mega-events’. While there may be an
and that therefore heighten its probability overlap between these two categories, they can
of achieving sustainable success. While none be broadly distinguished as follows. Hallmark
of these factors alone determines success, an events are events that, irrespective of their size
event’s uniqueness provides the one element or economic impact, are so unique and of such
that every destination manager wants above all a quality that their very mention immediately
others. This said, it must also be emphasized brings to mind the destination that hosts them.
that it is careful management of all factors that The Boston Marathon (USA), the Wimbledon
ultimately determines the extent to which a Lawn Tennis Championships (England), the
given event will add to the core attractiveness of Oktoberfest (Germany) and the Mardi Gras in
a tourism destination. This multidimensional New Orleans (USA) are examples of hallmark
view of event success clearly implies that there events.
122 Chapter 6
Table 6.4. A classification of hallmark and mega-events (adapted from Ritchie, 1984).
A more complete classification is given defined primarily by their size and economic
in Table 6.4. A formal definition of hallmark impact rather than their status or significance.
events is as follows. Regardless of whether a large event is formally
Major one-time or recurring events of limited
classified as a hallmark event or mega-event, it
duration, developed primarily to enhance will provide a range of impacts (Table 6.5) that
the awareness, appeal and profitability of a include both positive and negative components.
tourism destination in the short and/or long The challenge facing destination managers who
term. Such events rely for their success on seek to incorporate such events into their strate-
uniqueness, status, or timely significance to gic planning is to try to manage the positive
create interest and attract attention. benefits while minimizing the negative ones.
(Ritchie, 1984, p. 2) Not all events that are important to a
While mega-events may be or may (and destination’s success are large or internationally
often do) become hallmark events, they are significant. Getz (1997) has provided a typology
Core Resources and Attractors 123
Table 6.5. Types of impacts of hallmark events and mega-events (from Ritchie, 1984).
Manifestations
Table 6.6. A typology of planned events (from increasingly fantastic mix of fantasyland/hotel
Getz, 1997). complexes is enabling the destination manage-
ment team to reposition this Xanadu in the
Cultural celebrations Educational and
• Festivals scientific desert as a family vacationland.
• Carnivals • Seminars, But Las Vegas should not be given all
• Religious events workshops, clinics the attention. For many years, as noted above,
• Parades • Congresses the theatre districts of New York and
• Heritage • Interpretive events London have been major tourism draws, but
commemorations Recreational these two cities have had so many other attrac-
Art and Entertainment • Games and sports tors that the entertainment dimension of core
• Concerts for fun attractors, while substantial, has not seemed
• Other performances • Amusement quite so overwhelming as it does in Las Vegas
• Exhibits events
today.
• Award ceremonies Political and state
Business and Trade • Inaugurations Las Vegas, however, is not alone in the use
• Fairs, markets, sales • Investitures of entertainment as a key core attractor. While
• Consumer and trade • VIP visits Disneyland, Disney World, Disney Europe and
shows • Rallies Disneyworld Japan are attractions that include
• Expositions Private events many activities, they have also integrated
• Meetings and Personal celebrations a broad range of entertainment into a total
conferences • Anniversaries package that draws and retains visitors. Other,
• Publicity events • Family holidays smaller destinations have focused their appeal
• Fund-raiser events • Rites of passage on some specialized aspect of the entertain-
ment industry. Nashville (Tennessee, USA) has,
Sport Competitions Social events
• Professional • Parties, galas
• Amateur • Reunions from a tourism perspective, grown up around
the ‘Grand Ole Opry’, a traditional Mecca for
country music for more than 75 years.
But Nashville has not escaped competi-
tion. Branson (Missouri, USA) bills itself as the
certain destinations – most notably Las Vegas ‘Live Music Show Capital of the World’, with
– have become primarily entertainment-driven over 30 theatres playing host to over 60 shows.
destinations. The success of Dollywood, located in the same
Activities and events have established country music region of the USA as Nashville,
themselves as traditional components of desti- demonstrates how a destination can be built
nation attractiveness for virtually all destina- around the reputation and performances of a
tions. Entertainment, however, has tended to single entertainer, in this case, Dolly Parton, a
be a local characteristic of certain destinations, well-known, highly identifiable country music
such as London, New York (in the English- singer. Of particular interest with regard to
speaking world) and Paris. The theatre in Branson and Dollywood is that in both cases the
London, the Broadway shows of New York and destination has been developed from a limited
the nightlife follies of Paris grew up primarily resource base, somewhat similar to the situation
as entertainment for the large metropolitan of Las Vegas’ original site. In both cases, how-
populations that surrounded them. Because ever, rather than working as employees of
they were well established before television an entertainment complex, many entertainers
sharply reduced their geographical advantages, have sought to keep control of ownership and
they have been able not only to survive, but to development.
become an important reason for much of the In Europe, because of its richness in
visitation to these ‘gateway cities’. Las Vegas historic and cultural attractors, American-style
owed its beginnings to the draw of legalized entertainment destinations have not been seen
gambling, but it has slowly but surely trans- as either necessary or desirable. Just the same,
formed itself into an entertainment Mecca. and despite their lower profile, the many
While gambling remains, the entertainment ingrained cultural performances throughout
extravaganza that is taking place within an Europe, and indeed many major cities in
Core Resources and Attractors 125
Asia and in isolated parts of Africa, are also Tourism Superstructure: ‘If You
significant ‘cultural tourism’ attractors for more Build it, They Will Come!’
limited segments of the travel market. As
indicated earlier, the Oberammergau Passion Tourism superstructure is defined as buildings
Play, held every 10 years in southern Germany, or facilities that primarily serve the needs or
is a religion-based entertainment spectacle interests of tourism/hospitality visitors. While
having major tourism implications. In South the majority have been built specifically for
America, the Inti Raymi Festival is held annually tourism, others, perhaps built in earlier eras for
in Cusco, Peru, to render homage to the sun other reasons, now serve mainly as tourism
god Inti (see www.condorjourneys.adventures. attractions. The most common examples of
com/peru for further details). this superstructure are hotels, restaurants, visi-
tor information centres and visitor attractions.
Unfortunately, ‘tourism superstructure’ is a
term that hides much of the glamour that the
Developing and managing reality contains. While ‘activities’ refers to the
entertainment tourism general range of things people can do and
events that are highly focused on thematic sets
Since there are few destinations that have of activities, the tourism superstructure pro-
the established entertainment head-start vides most of the facilities in which many of the
of London, New York, Las Vegas or events take place or in which entertainment is
Oberammergau, most destination managers provided. Certain tourism superstructures are
who feel they wish to develop entertainment so unique that they are attractions in them-
as a core attractor are faced with the challenge selves (e.g. the Eiffel Tower in France, the
of conceptualizing and developing the kind of Leaning Tower of Pisa in Italy, the Empire
entertainment package that will provide their State Building and the Statue of Liberty in
destination with a competitive/sustainable New York City, the Golden Gate Bridge
advantage. To meet this challenge requires in San Francisco, the Tower of London and
an understanding of how tourism and the London Eye in England, Sydney Harbour
entertainment are, or can be, linked in a Bridge and Sydney Opera House in Australia,
realistic yet imaginative manner. the statue of Christ the Redeemer in Rio
A useful starting point for achieving this de Janeiro, Brazil, China’s Great Wall, the
understanding is an overview work by Hughes Parthenon in Athens, the Taj Mahal in India,
(2000). He provides some basic definitions that and Ankor Wat in Cambodia).
managers may find useful in understanding the Certain other examples of tourism super-
arts, entertainment and tourism (Table 6.7). structures are almost complete destinations in
• Visitors: non-local residents who are either day visitors or staying visitors (tourists)
• Tourists: people who travel and stay away from home overnight
• Arts: performing arts and entertainment (a more popular form of the performing arts) performed in
theatres, concert halls, arenas, etc.
• Arts-related tourism: any tourism that includes a visit to the arts (regardless of initial interest, etc.)
• Arts-core tourists: travel in order to see the arts
• Arts-peripheral tourists: travel for some non-arts purpose, but also see the arts
• Culture-core tourists: travel in order to visit cultural attractions
• Culture-peripheral tourists: travel for some non-cultural purpose, but also visit cultural attractions
• Seaside resort: a coastal town, the prime function of which is as a holiday destination. This is different
from the US use of the term ‘resort’, which refers to a purpose-built holiday complex similar to a large
hotel rather than a town
• Tourist board: an organization, usually with government involvement, which has the role of promoting
a town, region, state or country as a tourist destination. Also known as a visitor bureau, convention
and visitor bureau, tourist authority, tourism commission, etc.
126 Chapter 6
themselves. The most famous of these are Las (be it paper-based or electronic), its reputation is
Vegas, and the Disneyland and Disney World further enhanced.
complexes in California and Florida, USA, A more structured framework that destina-
respectively. Among other so-called theme tion managers may find helpful for analytical
parks of worldwide fame is LegoLand in and planning purposes is given in Table 6.8. As
Denmark. Often many somewhat lesser attrac- shown, this framework envisages three main
tions are clustered together to create a major types of tourism superstructure. The functional
composite attraction. Examples include Califor- elements listed in the table are those that have
nia with Disneyland, Knott’s Berry Farm and been developed almost exclusively with tourism
Universal Studios; Florida with Disney World, in mind. While they are not always glamorous,
Busch Gardens, Wet ‘n’ Wild and Universal they are essential for the functioning of the
Studios; and the Gold Coast of Australia with tourism system.
Warner Movie World, Dreamworld, Wet ‘n’ Elements of the second type are termed
Wild and Sea World. ‘enhanced built elements’. This term reflects the
In addition, there are many built complexes fact that although these elements were not, in
worldwide that, because of the distinctiveness of general, built with tourism in mind, their current
their architecture, their contents or some other and potential appeal as attractors has been
unique aspect, have become must-see attrac- well recognized and they have been actively
tions for visitors to the destination. Well-known enhanced by the tourism industry to the point
examples include the world-famous museums where their original purpose has faded into
(such as the Louvre in Paris, the Smithsonian the background, and they have largely been
Institution in Washington, DC and the Hermit- absorbed into the tourism superstructure.
age in St Petersburg, Russia) and structures Finally, there is a parallel set of elements
such as the Taj Mahal in India, the Royal that we may term ‘enhanced natural or normal
Temple of the Grand Palace of Ayutthaya elements’. Generally, these attractions were
in Bangkok, Thailand, the Forbidden City in ‘just there’. While they have some natural
Beijing, China, the cathedral of La Sagrada appeal to visitors, they are in many cases iso-
Familia in Barcelona, Spain, Westminster lated, difficult to access or unknown. However,
Abbey in London, England, St Peter’s Basilica even a natural part of a destination must be
in Rome, Italy, the Kennedy Space Center at managed much as many other components of
Cape Canaveral, Florida, and the Air and Space the destination are managed. This may be done
Museum in Washington, DC, USA. by means of ‘industry enhancement’ (which
Attractions such as these have become may involve the physical upgrading of the
strong magnets for visitors. And each time natural element and/or physical improvements
another photograph showing a visitor at one of to facilitate access to the phenomenon or
these attractions goes into a photograph album convenience in viewing or experiencing it)
and through advertising and promotion to viewed as falling into two major categories:
enhance awareness of the phenomenon or to personal and professional/organizational. The
increase its renown. challenge facing the destination manager is
not only to identify the individuals to whom
these ties apply but also to determine how the
Market Ties: the Ties That Bind destination can use these bonds to stimulate,
facilitate or divert travel to the destination in
Despite the magnificence and attractiveness question.
of many destinations, which make them the
choice of millions of tourists, there are many
less obvious attractors that stimulate people to Personal ties
visit destinations they would not normally visit.
Figure 6.5 provides a graphic overview of what Probably the strongest and most enduring of
we term ‘ties that bind’. These ties can be personal ties that bind are those of family.
128 Chapter 6
Historical patterns of migration, trade and Sports can also be a tie that binds. At
culture have created these family ties. Close the personal level, amateur sport can be the
behind are those due to friendship. Together, underlying motivation that brings together
these two markets make up what is commonly both individuals and families having common
known as the ‘VFR’ (visiting friends and rela- sporting interests. Aside from participating
tives) market. Since destination managers can themselves in sporting tournaments that reflect
do relatively little to create or influence family common interests, it is not unusual for entire
or friendship ties, they must do their best to families to follow the exploits of one family
encourage visits to the destination by existing member who is particularly good at a given
family and friends. This may be done by creat- sport. Hockey and figure-skating come to mind
ing events such as ‘Old Home Weeks’ and here. Also, various countries share certain
family/graduation reunions, in which residents sporting heritages that stimulate tourism (e.g.
are encouraged to invite relatives for a visit to soccer, cricket and rugby).
celebrate the passing of time. Less directly, Finally, a type of personal relationship that
destinations may create events that appeal to a has emerged is one that is directly derived from
broad audience, but also stimulate destination technology. The ability to use Internet chat
residents to invite family and friends. The his- groups has greatly facilitated communication
tory of a mega-event like the Olympic Games among individuals having common interests.
provides an excellent opportunity for invita- These technological relationships may, over
tions of this type – invitations which many fam- time, become so strong that they create what
ily and friends are only too pleased to accept. have been termed ‘cybertribes’ – groups
Another intensely personal type of tie of ‘cyberfriends’ who become emotionally
is related to an individual’s religion. While attached. These emotional attachments may
religious activity is normally localized in nature, eventually lead to direct personal friendships
religious organizations from time to time that, in turn, lead to interdestination travel.
organize large, centralized events that stimulate
members of the faith to gather together. In
certain religions, there is a strong inherent
motivation to visit particular religious cities. Organizational and professional ties
Mecca (for the Islamic faith), St Peter’s Basilica
in Rome (for the Catholic faith) and Jerusalem While personal ties are strong, it may well
(for the Jewish, Christian and Islamic faiths) be that organizational ties are more pervasive
all have special meaning and thus serve as as motivators of travel, and they may create
motivators for travel to these destinations. greater value of travel. In general, they offer
In contrast, other religious conferences move the destination manager greater opportunities
from one site to another, thus presenting to stimulate and influence travel-related
potential opportunities for a limited number decisions.
of destinations to compete for their business. The world of conventions, conferences
Somewhat related to religion may be and corporate meetings is highly dependent on
destinations that reflect the ethnic roots of ties that bind. Managers from all levels and
people now living all over the world. Individuals areas of a large corporation regularly converge
of African-American ethnicity have returned on destinations that provide them with func-
to visit various African destinations where tional meeting facilities, often combined with
their ancestors were born and lived. People of supporting recreational or vacation opportuni-
Scottish origin not uncommonly wish to visit the ties. Similarly, members of a plethora of differ-
Scottish Highlands, or even to play a round of ent associations come together annually to
golf at the birthplace of the sport, St Andrews. get to know one another, to share ideas and
Similarly, persons of French, Italian, German, to extend their personal and professional net-
Polish, Hungarian (and so on) ethnic origin works. These associations may have a common
can often be incited to visit their homeland at interest that is professional, fraternal or simply
least once in their lifetime, preferably with their social. In any event, they offer the destination
entire family. manager a unique yet demanding opportunity
Core Resources and Attractors 129
to influence the choice of destination where the of their lives. An astute destination manager
particular convention, conference or meeting can encourage the establishment of education
will be held, and possibly its timing. linkages between his/her destination and mar-
Other ties are often more basic, more kets where long-term links are seen as desirable.
associated with daily life – and are thus often The pay-off is admittedly long term, but the
overlooked in significance by destination man- USA and UK have demonstrated that it can be
agers, even though their long-term and ongoing powerful and significant.
impacts on travel may be very substantial. To conclude, identifying and/or develop-
The structures of economic trade blocs and ing the ties that bind requires astuteness, careful
political unions, once they are consolidated, research and innovative marketing. But this
have tremendous influence on travel flows. For process can provide cities, regions and coun-
example, the creation of the North American tries with powerful competitive advantages that
Free Trade Agreement (NAFTA) and its Euro- are definitely sustainable. The key point that
pean and Asian equivalents has determined and must be made when starting is to distinguish
restructured travel patterns, particularly those between those that are personal and those that
concerned with organizations and profession- are organizational, institutional or professional.
als. While the trading/political bloc decisions While they eventually become intertwined,
are beyond the control of destination managers, they require distinct research and marketing
they may have influence (sometimes substantial) approaches.
during the formative stages. Similarly, the
existence of monetary system blocs (such
as the dollar bloc, the Euro bloc and the UK
pound bloc) has a similarly subtle but important References
influence on political and corporate decisions
and the travel related to these decisions. American Heritage Dictionary: Second College
Edition (1985) Houghton Mifflin Company,
Although military travel is formally
Boston, Massachusetts.
excluded from World Tourism Organization Getz, D. (1997) Event Management and
travel statistics, it is still real, with real economic Event Tourism. Cognizant Communication
consequences. Just as trade and political ties Corporation, New York.
influence travel and tourism flows, so do military Hughes, H. (2000) Arts, Entertainment and
alliances. The North Atlantic Treaty Organiza- Tourism. Butterworth-Heinemann, Oxford.
tion (NATO) is undoubtedly the most influential Kluckhohn, C. and Kelly, W.H. (1945) The concept of
of these alliances, and probably the one with the culture. In: Linton, R. (ed.) The Science of Man
greatest impact on the travel system and travel in the World Crisis. Columbia University Press,
expenditures (even though they are not formally New York, pp. 78–107.
McCracken, G. (1988) Culture and Consumption:
counted). It is clear that decisions related
New Approaches to the Symbolic Character
to military travel are beyond the purview of of Consumer Goods and Activities. Indiana
destination managers. Just the same, an astute University Press, Bloomington and Indianapolis,
destination manager may see – and seize upon Indiana.
– a whole range of travel decisions that Newsome, D., Moore, S.A. and Dowling, R.K. (2002)
are on the periphery of military travel and that Natural Area Tourism: Ecology, Impacts
take advantage of off-duty travel by military and Management. Channel View Publications,
personnel. Clevedon, UK.
Finally, the process of education can Ritchie, J.R.B. (1984) Assessing the impact of
create ties that bind for a lifetime. Students who hallmark events: conceptual and research issues.
Journal of Travel Research 23, 2–11.
study in a foreign country establish links and
Ritchie, J.R.B. and Zins, M. (1978). Culture as
relationships that frequently underlie travel- and determinant of the attractiveness of a tourism
tourism-related behaviours for many years. For region. Annals of Tourism Research 5,
example, young students who undertake their 252–267.
studies in the USA and the UK commonly Wolf, M.J. (1999) The Entertainment Economy:
develop ties that influence a whole range of How Mega-Media Forces are Transforming
personal and professional decisions for the rest our Lives. Random House, New York.
7
Supporting Factors and Resources:
Elements that Enhance Destination Appeal
Comparative Competitive
advantages advantages
(resource endowments) Destination competitiveness and sustainability (resource deployment)
Global (macro)environment
Destination policy, planning and development
Destination management
Figure 3.1 positions supporting factors and significantly constrained in their ability to pull
resources as the foundation of a competitive tourists.
tourism and hospitality industry. The core Describing supporting factors and
resources and attractors represent the princi- resources as the foundation of a competitive
pal ‘pulling’ force driving the demand for desti- tourist destination is quite apt. Any structure
nation tourism, but if these are inaccessible, requires a solid foundation if it is to function
if the private sector is unable or unwilling to effectively. While the superstructure is very
create the necessary business services which visible and serves to house the main functions
bring core resources to the market, if the eco- that a structure performs, the supporting foun-
nomic and social infrastructure is insufficient, dation remains mostly buried and hidden, yet it
and if the resources which facilitate tourism fulfils a vital role. Supporting foundations and
development are limited or substandard, abun- resources are the equivalent of the footings and
dant core resources and attractors will be foundations, the basement, boiler, plumbing
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
130 (J.R. Brent Ritchie and Geoffrey I. Crouch)
Supporting Factors and Resources 131
and electrical systems, etc., without which the is unlikely, on its own, to be able to control or
rest of the structure cannot perform. The tour- reverse a less-than-adequate competitive profile
ism superstructure is akin to the walls and in this area.
floors, corridors, stairways and open spaces, Nevertheless, a destination must pay a
while the other core resources and attractors good deal of attention to this aspect of competi-
represent the tenants and contents of the tiveness if balanced decisions are to be made
building; that is, the sine qua non for attracting and resources allocated in the most effective
visitors and customers. To take the analogy one manner. For example, a poorly developed
final step further, those involved in destination destination with deteriorating roads, a contami-
management are, one might say, the struc- nated water supply system, a poorly educated
ture’s landlords. population that knows little about starting and
So supporting factors and resources managing small businesses, and an untrained
are critical to the competitiveness of a desti- labour force, might find that until some of these
nation, but specifically how is competitiveness problems are addressed at least to some extent,
affected? When the foundation of a building is improvements in any of the other four groups
weak and insufficient a building might tilt, sink, of factors may realize little overall advance
buckle or crack a little, causing it to perform in competitiveness. Even worse, residents
below expectation. Perhaps even the use of may object strongly to seeing public funds go
the structure might need to be restricted in towards improving conditions for tourists while
order to minimize further undue deterioration. residents continue to live in squalor. This must
If the foundation is completely inadequate, the be balanced with the fact that, in such a situa-
structure might fail catastrophically. Likewise, tion, it is the ailing economy which is failing to
if the supporting factors and resources of a provide the tax dollars that could go towards
destination are insufficient the result can improvements in infrastructure, education and
range from performing a little below visitor government-backed funding programmes for
expectations to major failure, damaging the new ventures, for example. This is where
longer-term fortunes of the destination. tourism dollars may have a role to play in kick-
On the other hand, when the foundations starting economic growth and fuelling other
of a building have been overdesigned the result aspects of economic and social development
is barely noticeable. The building may have that, in turn, facilitate continued tourism devel-
cost more to construct, and this may affect opment. There are no easy answers here: each
landlords, tenants and guests, but there will be destination’s circumstances are unique, calling
no significant positive impact on the building’s for tailored solutions.
ability to perform the job for which it was Our model of destination competitiveness
designed. Similarly, tourist satisfaction and identifies six groups of supporting factors and
demand and destination competitiveness, resources. The first concerns the state of a
although bolstered, will not benefit from over- destination’s general infrastructure and its
abundance to the same extent that insufficiency impact on destination competitiveness. Under
in supporting factors and resources would accessibility, the model accounts for the ease
reduce destination competitiveness. or difficulty confronting tourists in travelling to
As is also the case with qualifying and the destination. The chapter then turns to a
amplifying determinants (Chapter 10), support- discussion of the facilitating resources of a
ing factors and resources cannot be controlled supporting (rather than core) nature that enable
or manipulated by a tourist destination with any the industry (specifically human, knowledge and
significant sensitivity. An industrialized nation is financial capital). A further area of support
likely to enjoy a general abundance of these stems from the friendliness and general level of
elements, whereas a Third World or developing hospitality displayed by the destination’s host
nation is likely to be deficient in these areas, community. We will also look at the ways in
possibly to a considerable extent. While which a sense and spirit of enterprise and
the tourism industry can, no doubt, pursue entrepreneurship contribute to competitive des-
programmes and influence government policy, tinations. Finally, there is political will – we will
which might help to address any weaknesses, it consider the question of the political standing of
132 Chapter 7
the tourism industry and how this may affect reason ought to be regarded as infrastructure
government support for tourism development. rather than as tourism superstructure. Exam-
ples of such basic services infrastructure
include the broad range of retail and shopping
facilities, food stores, garages and vehicle
Infrastructure: Providing a maintenance facilities, gas (petrol) stations,
Foundation for Successful Tourism drug stores (chemist shops), bookstores
and news kiosks, hairdressers, dry cleaners,
Elements of infrastructure can be broadly launderettes (e.g. laundromats), etc.
classified into two groups from a tourism The basic services infrastructure is
destination perspective. The first group, which normally delivered by the private sector. In
might be labelled general infrastructure, contrast, much of the general infrastructure is
includes the facilities, systems and services, provided by governments and funded through
etc. that one normally tends to think of as the various forms of taxation – at least, this
infrastructure. This would include a destina- has been the case in the past – on the basis that
tion’s transportation systems (e.g. roads and society as a whole benefits from their provision.
highways, airports, rail systems and facilities, However, many of these systems and services
bus terminals and services, ferries and ship- have been privatized as governments grapple
ping, taxis, and related services), public safety with deficits, customer service is seen to be
(police, fire and other emergency services), superior in the private sector, and methods
water resources and supply systems (for both of charging actual users are developed and
potable and industrial uses), electrical genera- instituted. Destination competitiveness is there-
tion and transmission systems (e.g. power fore a function of the ability of both the public
stations, high-voltage power lines, domestic and private sectors to provide and maintain
and industrial delivery, electrical contractors), the sorts of infrastructure that sustain tourism
sanitation and drainage systems (e.g. sewage development and the needs of both the travel
systems, treatment plants, storm drainage trade and its customers.
systems, garbage pickup, flood control works), While a philosophical debate about the
natural gas services (extraction, processing, respective roles of the public and private sectors
distribution and delivery services), telecommu- in providing infrastructure offers no clear
nications systems (e.g. telephone, telegraph, answers, what is of real importance is the
satellite services, cellular phone systems, cable quality of the infrastructure, regardless of who
companies, broadcast services, fibre optics), happens to be responsible for its creation,
mail and freight services (e.g. regular mail, operation and maintenance. The quality of a
couriers, trucking companies, airlines and rail destination’s infrastructure cannot be assessed
services), medical systems (hospitals, clinics, with one or two simple measures. In general,
laboratories and testing, ambulance and para- however, the quality of a nation’s infrastructure
medical services, and related services), finan- is very largely a function of the level of wealth,
cial systems (e.g. banks, credit unions, credit prosperity and productivity enjoyed by the
card companies, brokers, stock markets), nation and its citizens. However, across desti-
administrative services (e.g. the legal system, nations which enjoy similar levels of wealth,
government departments), the education sys- we can observe differences in the quality of
tem (e.g. schools, universities, vocational col- infrastructure which seem to depend on further
leges, libraries), a system of national defence, factors, such as: (i) attitudes of citizens to the
and so on. importance of infrastructure in social and eco-
Beyond these forms of infrastructure are nomic development and quality-of-life issues; (ii)
other basic services which tend generally not to the competency of policy makers, planners and
be thought of as infrastructure but which pro- managers to anticipate, coordinate and develop
vide critical support services to the effective infrastructure strategies; (iii) the extent to which
functioning of destinations. Such basic services governments and industries display innovative
typically derive only a minor portion of their behaviour (consider, for example, the quality
demand from tourists and visitors, so for this of infrastructure and attitudes to innovation
Supporting Factors and Resources 133
in a place like Singapore); (iv) the incentives corridors, doorways and signs, etc. are
available to the private sector to participate in arranged. A subway system with maps available
infrastructure operations and development; (v) in all locations, simple-to-use ticket vending
cultural attitudes and norms; and (vi) population machines with a small number of fare options or
densities. an unlimited day-use fare, and an attendant who
The quality of infrastructure can also vary is there to help those in difficulty are essential if
spatially within a destination. This difference is unfamiliar users of the system are to be able to
usually most evident between urban and rural cope. Good design addresses much more than
environments. Urban infrastructures benefit just the architectural and physical appeal of
from a larger population, concentration of an infrastructure facility. Designers should
industries, government patronage and higher be equally concerned with functional layout,
incomes and taxes. process flow, the suitability of equipment, and
A number of salient infrastructure qualities the impact of the facility on the ability of
are worth emphasizing vis-à-vis destination service employees to perform their duties.
competitiveness. Visitors and tourists are likely Designers need to be aware of the lessons of
to be particularly concerned with issues affect- environmental psychology.
ing reliability, efficiency, safety, cleanliness, Infrastructure quality affects destination
design, ease of use, availability, cultural and competitiveness in important ways. First, the
language sensitivities, way-finding, integrity, quality of a destination’s infrastructure may
etc. Visitors, for example, are often confused or serve to attract or deter tourists. In the process
uncertain in an alien environment. They may of choosing a destination, the image of infra-
find it hard to know what to do or where to structure will play some role. For example, the
go because signs are in a foreign language. general image of Russia’s infrastructure is one
Tourists often find that large, unfamiliar air- of poorly maintained roads, deteriorating public
ports present labyrinthine uncertainties. The buildings and unreliable airline and rail services,
purchasing of a train or metro ticket from an etc. By comparison, Japanese infrastructure is
automatic vending machine may present a perceived to be very modern, clean, safe and
daunting challenge to tourists who find the reliable, but many first-time Western visitors
instructions hard to follow, and they may rely may be concerned about problems arising
instead on watching how the local people use from linguistic differences. These images and
these machines to obtain their tickets. expectations may influence destination choice.
Tourists require answers to all sorts of A second major way in which infrastruc-
infrastructure-related questions, such as do the ture may significantly shape destination com-
trains run on time? is the water safe to drink? petitiveness concerns the degree to which the
where can I find a reliable doctor? how do I functioning of the tourism system is helped or
make a long-distance telephone call? what is the hindered by infrastructure. Suppliers, tourism
cheapest way to get from A to B? what voltage and hospitality enterprises, marketing interme-
is the electrical system? what type of gasoline diaries and facilitators, related and supporting
(petrol) does my rental car require? when are industries, and destination management organi-
the banks open? and as a disabled traveller, will I zations depend upon infrastructure in order for
be able to cope? the tourism system to function efficiently and
Destinations must make their infrastruc- effectively. Entrepreneurs may develop strong
ture as user-friendly as possible for visitors, yet ideas for creating new tourism ventures but find
most destinations do a particularly poor job in that they are not feasible because the required
this regard. It is easy not to appreciate the con- utility services are unavailable in the location
siderable difficulties visitors may have, because demanded by the venture, or perhaps trans-
we take for granted the fact that local residents portation services to the site are inadequate.
are familiar with the answers to these questions. Alternatively, the cost of infrastructure services
Many problems of this sort can be addres- may be prohibitively expensive.
sed through good design. Finding your way in What can a destination do to improve
an airport, for example, can be aided a great and maintain the necessary standard in its
deal by the way in which open spaces, infrastructure? Again, this is a difficult question
134 Chapter 7
because many elements of infrastructure are the necessary permission to be allowed entry
subject to very broad concerns and influences. into the destination. Destinations employ a
However, if the tourism industry is not partici- variety of methods of controlling access to
pating in infrastructure decisions and voicing visitors and of prescribing any conditions upon
the needs and concerns of the industry, infra- which entry is permitted. These regulations and
structure will meet the needs of industry only by practices are most evident at the national level
chance rather than by design. The destination but can apply in more subtle ways to regions
management organization and industry associa- within nations. For example, the ‘product’
tions clearly play a pivotal role in this regard. offered by a destination may be targeted to
In terms of public infrastructure, the industry attract a certain market segment. This targeting
must seek to work with relevant government may implicitly, and perhaps even explicitly,
departments, town and regional planning bod- seek to deter visitors from non-targeted seg-
ies, public officials, political and civic leaders, ments. For example, an exclusive coastal resort
and utilities, etc. With respect to the infrastruc- may wish to attract wealthy individuals or
ture provided by the private sector, destinations couples but might see families as adversely
need to undertake studies and market research affecting the quality of the tourism experience
to help demonstrate a need for the infra- provided to the resort’s targeted market.
structure services that are lacking, and in Pricing practices, facilities, the number of beds
this way they can attract investors who see a per room, and even the image and message
business opportunity in filling the gap. communicated to customers through all forms
of promotion, may be designed to deter certain
potential customers as much as to attract
others.
Accessibility: Addressing the Curse While these methods of persuasion work in
or Blessing of Location non-exacting ways, visas and other forms of
permits are much more direct and specific in
Destinations can also vary greatly in terms terms of the restrictions they place on a visitor.
of the ease or difficulty involved in travelling Visas are most often used to restrict access to
to and entering the region concerned. While potential visitors that a nation would find quite
accessibility is in part governed by spatial unacceptable or undesirable, such as criminals,
issues, location alone is not enough to explain terrorists and drug-smugglers. Visas, however,
the extent to which tourists are able to travel to are often used to control illegal migration and to
and within a destination. So, as a supporting govern permissible activities, in particular to
factor, accessibility concerns a set of issues provide a mechanism for restricting the rights of
different from those we will discuss in Chap- employment, payment of taxes, etc.
ter 10 in connection with the qualifying and Visas, however, are used for political as
amplifying determinant of location. well as legal purposes. They can be used to
Until the recent peace accord between retaliate against the citizens of a nation when
Israel and Jordan was signed, these two disputes arise over trade, human rights, etc.
neighbouring destinations were effectively The US Helms–Burton Act, for example, was
inaccessible from one another. Within China introduced to restrict access into the USA
it has traditionally been difficult for Western of anyone doing business in or trading with
tourists to move around freely. The airline Cuba in a way that involves American assets
hub-and-spoke system can sometimes make the confiscated by Cuba when Fidel Castro came
journey to a nearby location quite lengthy and to power. This was a controversial piece of
time-consuming. These are just a few examples legislation and has particularly irked Canada
of ways in which a destination’s location alone and a number of European nations that have
can belie the degree to which it is accessible to economic relations with Cuba.
tourists. The Spanish government retaliated against
Accessibility can be determined by numer- Canada in the mid-1990s when a Canadian
ous factors. One of these relates to any frigate seized a Spanish trawler operating
formalities and barriers involved in obtaining off the Grand Banks fishing grounds, but in
Supporting Factors and Resources 135
international waters, using an illegal net to catch agreement did little to save Canadian Airlines
undersized fish. It did so by stopping the issue of from its financial problems and it eventually
visas to Canadian tourists for a brief period. yielded to Air Canada. An airline with landing
This created particular hardship for some tour rights may still find, however, that it is difficult to
groups already operating in Europe when the operate in a destination. Its access may still be
restriction was imposed. restricted in terms of the availability of a suffi-
In Myanmar, the government required cient number of landing slots (i.e. available
tourists to exchange US$200 for Foreign take-off and landing times and gate facilities). In
Exchange Certificates (FECs) upon entry and these days of congested airport facilities and
spend the FECs before departing the country. congested skies, the future growth of the airline
In the past, some countries behind the iron industry faces continued capacity problems.
curtain required tourists, in order to gain entry, As the airline industry continues to privat-
to undertake to bring in and spend a certain sum ize, commercialize and rationalize, inter-airline
of money before departing the country. alliances, code-sharing, cross-ownership, etc.
Some countries display a ready willingness are reshaping the way in which the industry
to use various forms of control, restriction or operates. The use of airport hubs, too, as briefly
intimidation of tourists for political purposes. discussed earlier, is also helping airlines to
Visas are the most obvious of these methods. operate more efficiently, perhaps, but not
The requirement to hold an appropriate visa necessarily more effectively. This has opened
can therefore depend on a range of sometimes up some opportunities for small regional
complex political, legal, social and economic carriers to exploit routes and markets that are
issues. The need for visas is often, therefore, poorly served by the larger airlines. The success
determined on a bilateral basis between coun- of Southwest Airlines in the USA dramatically
tries and may depend upon the existence of demonstrates the importance of customer
extradition treaties, trade disputes, smuggling, service as an operational strategy.
refugee problems, illegal migration, etc. The tourism industry in many instances
A further way of controlling access arises often calls upon governments to increase airline
from government restrictions over airline land- access, believing that this will bring many more
ing rights. In the past, many governments have visitors to the destination. The industry also
either owned and operated or at least had a frequently believes that existing airlines are not
major stake in national flag-carrier airlines. doing enough to increase the frequency of
Governments believed, and most still do, that inbound flights. Airlines counter-argue that they
the national interest was at stake in seeing and would be quite prepared to increase flights if the
facilitating a strong national airline. Notwith- demand called for this, but are reluctant to do so
standing the fact that, in recent years, many unless and until they are sure that most flights
governments have privatized national airlines will be able to operate profitably. The tourism
and have reduced their share of ownership, industry and airlines are therefore frequently
most nations today still see a need to exert their engaged in a circular argument, the industry
authority in order to ensure that the national asserting that more visitors would come if there
airline is able to survive and prosper in an era were more flights and airlines pointing out that
of cut-throat competition. By and large, this there would be more flights if there were more
authority is exercised on a bilateral basis by demand.
offering landing rights to a foreign airline on It is in the interest of airlines to see desti-
a reciprocal basis so that the nation’s own nations performing successfully in attracting
flag-carrier has access to other markets. In visitors, as the result can only be more business
recent years, government intervention and for airlines. The challenge for destination
regulation has been relaxed somewhat. For managers is to find ways in which destinations
example the Open Skies agreement between and airlines can work together to help develop
Canada and the USA has further stimulated and maintain competitive industries. Boeing,
the demand for air travel. Although airlines for example, has provided a service to desti-
welcomed this move, a number of airlines still nations for a number of years, and the World
struggle to make a profit. The Open Skies Travel and Tourism Council, representing
136 Chapter 7
many of the world’s largest travel and tourism capital resources, infrastructure and tourism
enterprises, has worked with several destina- superstructure, and historical and cultural
tions to help them further build their tourism resources. Physical resources, historical and
sectors. cultural resources and tourism superstructure
Of course, airlines are not the only mode of were discussed in detail in Chapter 6, where
tourism transportation and access, although we explored a destination’s core resources
they do vastly dominate long-haul travel. Auto- and attractors. Earlier in this chapter we also
mobiles, buses, trains, ferries and other ships examined the important role of infrastructure
also provide important modes of accessibility in supporting the development of a competi-
for short-haul travel to destinations and for tive tourism destination. This leaves human,
access to sites within destinations. Appropriate knowledge and financial capital resources that
forms of transportation infrastructure, as noted can be deployed and used to support the
in the preceding section, are a prerequisite if a development of the tourism industry, and these
destination hopes to avoid being held back in its will be discussed below. In Chapter 9, we also
tourism development by limited accessibility. examine the role of destination management
To address the question of accessibility, in developing and fostering the supply of such
destinations must fully adopt and practise the resources to serve the needs of the tourism
marketing philosophy, as we have noted industry.
earlier. As marketing deals with everything The human resources required to serve the
that is required to satisfy the needs and wants needs of a tourism destination are particularly
of targeted customers, this philosophy, when diverse. Unfortunately, however, the important
practised effectively, ensures that any organiza- role of human resources in facilitating tourism
tion pays attention to any issue which affects development is typically overlooked or under-
the satisfaction of customers’ needs and wants. estimated. This attitude to the significance of
Destinations that equate promotion with mar- human resources in tourism and hospitality has
keting are likely to fall into the trap of blindly much in common with similar attitudes that
focusing an undue level of effort on building seem to exist generally towards many other
tourism demand while losing sight of some of areas of the service economy. There is a general
the hurdles involved in satisfying that demand. misconception that employment in the service
For a destination to have an impact on sector requires few skills and that the supply of
decisions that affect its accessibility, it needs suitable human resources is not a critical issue
to ensure that it is a player in these decisions. for the development of the industry. This
And it is not enough for the tourism industry general view seems to be held most acutely in
to simply be at the table expressing faith in the case of jobs in the tourism and hospitality
the idea that better accessibility will result sector. That is, such jobs are seen to entail a
in more visitors. The destination needs to be preponderance of tasks which demand skills
doing its own unbiased and rigorous research no greater than those of the stereotypical
to demonstrate how demand is hindered by ‘hamburger-flipper’.
existing constraints in access, and what would In Chapter 5, however, we discussed the
be different if these constraints were relaxed or competitive (micro)environment of the tourism
removed. system and emphasized the broad range of
firms and organizations that play a role as the
engine of tourism development. While tourism
and hospitality may require human resources
Facilitating Resources: Human, to fulfil lesser-skilled forms of work, such jobs
Knowledge and Financial Capital are only the tip of the tourism and hospitality
employment iceberg. There are many forms of
In Chapter 2 we briefly described the six work in the travel trade that call for specialist
elements that constitute a destination’s skills. We will examine some of these in a
comparative advantages. These elements, or moment, when we turn our attention to knowl-
resource endowments, were human resources, edge resources. The important point is that the
physical resources, knowledge resources, supply and quality of human resources to the
Supporting Factors and Resources 137
tourism and hospitality sector are critical for depends upon the quality of the people it
several reasons. employs. Like any industry, tourism and
First, a destination’s competitiveness is hospitality must compete against other
based on its ability to deliver unique, superior, industries, professions and careers to attract
unforgettable and hassle-free experiences to the brightest, most talented and resourceful
visitors. Although the purchase of tangible people to its ranks.
goods may form a part of tourism consumption, The skills, knowledge and know-how that
tourism experiences are predominantly deliv- turn human resources into productive assets are
ered through the many intangible services that the final reason for the importance of human
collectively constitute the destination experi- resources to the tourism industry. The World
ence. That is, the tourism product is largely the Tourism Organization places great emphasis
result of the deeds, acts and performances on the dissemination of knowledge and the
provided to visitors by a destination through development of tourism and destination man-
individuals who are employed to interact with agement skills in Third World and developing
and serve the industry’s customers. As many destinations. Without the necessary knowledge
service firms have come to realize in recent resources, a destination attempting to build,
years, exceptional customer service delivered maintain and manage its competitiveness is
by employees who have the appropriate skills likely to find that its ability to do so is severely
and attitudes represents both a key to success limited.
and also, perhaps, one of the greatest chal- The diversity of organizations in tourism
lenges. Given the level of unemployment in calls for a diversity of skills and knowledge. Any
many economies today, finding employees is effort to list the broad range of skills and knowl-
not the problem. But finding people who have edge required is likely to merely trivialize the
the right attitude to their work, particularly matter. Suffice it to say that the knowledge
where it involves serving customers, is, as many resources required for a competitive destination
firms attest today, one of the great challenges in are as different as, for instance, engineering,
human resource management. the culinary arts, service quality management,
Because the cost of a destination is marketing, hotel management, environmental
inherently a critical competitiveness issue, a management and new venture development.
second major factor is the cost of available Educational and research institutions must
human resources, given the labour-intensive play a key role in conjunction with the industry
nature of many types of tourism and hospitality to help develop the knowledge and human
enterprises. Human resource costs depend resources required to lead the industry into a
upon the general level of wages and salaries in new era of professionalism. Recognizing this
a destination’s economy, labour productivity, need, many governments have established
work ethics, labour unions, and typical working specialist training organizations for the develop-
conditions and employee benefits. Research by ment of the necessary vocational skills in tour-
the World Travel and Tourism Council found ism. The government of Canada, for example,
that the level of wages and salaries in jobs through Industry Canada, has established the
created by tourism is similar to that in the Canadian Tourism Human Resources Council.
economy generally. The Council has estimated The World Travel and Tourism Council spon-
that travel and tourism compensation is approx- sors the Pacific Rim Institute of Tourism’s activi-
imately 5% higher than the average compensa- ties on human resource management issues in
tion in other economic sectors among OECD tourism.
countries (WTTC, 1993). There are also a number of other organiza-
A third factor is the attitudes to careers tions which take a leading role in tourism and
in tourism and hospitality, which also vary hospitality education and training, including the
significantly internationally. In some countries, Council for Hotel, Restaurant and Institutional
careers as chefs, waiters and small business Education and the Travel and Tourism
entrepreneurs are held in much higher regard Research Association. Numerous associations
than in other countries. The tourism and hospi- have been formed in the last several years to
tality sector must recognize that its success promote and facilitate education and research
138 Chapter 7
in many countries, including the Council for breed of educated professionals entering the
Australian University Tourism and Hospitality industry today, it is hoped, will help expedite
Education, the Asia-Pacific Tourism Associa- these changes.
tion, the American Marketing Association’s While academic institutions are changing
Special Interest Group in Tourism, Hospitality, the shape of education in tourism and hospital-
and Leisure Marketing, the Tourism Society in ity, the industry and individual firms and
the UK, and the European-based Association organizations have a responsibility to continue
Internationale d’Experts Scientifique du to encourage employee training and develop-
Tourisme, to name just a few. Several electronic ment on the job. The industry’s future, and that
bulletin boards have been established to facili- of the destinations it represents, rests with the
tate communication among tourism educators quality, knowledge and skills of the people it
and researchers. Some of these are TRINET recruits and the careers it fosters.
(Tourism Research Information Network), Tourism development and destination
HOTEL-L, infotec-travel and tourism-request. competitiveness also depend on available finan-
Academic institutions and the academic cial resources. The supply of financial resources
community have recognized and responded to to an industry depends principally on the finan-
the industry’s education and research needs cial performance of that industry. An industry
with enthusiasm. For example, in the USA, that provides a satisfactory return on invest-
the UK and Australia, academic programmes ment will attract greater financial resources.
in tourism and hospitality have multiplied Financial performance in the tourism and
significantly. The World Tourism Organization hospitality industry has been rather mixed over
has encouraged this growth in education the years. There have been some very poor
and research by designating an international projects and investments, but there are also a
network of specialist university centres in number of large, successful and profitable
tourism and hospitality management. The corporations in the tourism and hospitality field.
World Tourism Organization has also prepared Every sector of the industry (airlines, hotel cor-
a list of knowledge and skills (known as the porations, restaurants, tour operators, etc.) has
Graduate Tourism Admission Test, or GTAT) its winners and losers, the quality of manage-
that it believes will help the industry and educa- ment dictating the fate of each individual com-
tional institutions determine the education pany. The high proportion of small businesses
and research needs of students. Paralleling this in tourism, many of which are lifestyle enter-
growth in education, training and research has prises rather than entrepreneurial ventures, has
been an explosion in the publishing of academic produced an industry in which managerial
journals in the field. The argument could be talent and financial competence is a scarcity. As
made that there may now be too many an industry, tourism also displays alluring quali-
academic institutions offering programmes in ties that seem sometimes to attract investors
tourism and hospitality, spreading the limited with more money than common sense.
qualified faculty too thinly, and that govern- The mixed and sometimes very poor finan-
ments might do better by concentrating such cial performance of many enterprises in the
resources in fewer institutions. industry has created an investment climate in
Despite the rapid expansion taking place in which financial institutions and investors are
tourism and hospitality education and training, now much more wary. Perhaps the industry
attitudes within the industry to the important needs not so much an increase in investment
role of education and research seem to be and financial capital, but smarter investment.
changing slowly. Few managers in the industry Destinations can play a role here to
today graduated from such programmes encourage the availability of investment capital
because there were so few programmes of by helping to inform, advise and direct investors
this type in existence when most of today’s and investment into appropriate projects and
industry’s leaders went through university. The areas of clear market need. Research studies
tourism industry, however, is gradually develop- and reports on market trends, tourism prod-
ing more professional attitudes and traditions ucts, demand forecasts, etc. will help to provide
with respect to the role of education. The new investors with the sort of information needed
Supporting Factors and Resources 139
for wise and effective decision making. The spirit of hospitality that will, in turn, greatly
Tourism Forecasting Council1 in Australia is an enhance the perceived value of all other aspects
example of one initiative in which the financial of the visitation experience.
community has come together to undertake Tourists expect generally to be treated with
the sort of research that is necessary if tourism friendliness and courtesy. So when they experi-
projects are to be based on sound and reliable ence such behaviour they find it unremarkable,
information. Efforts like this, in conjunction and it is therefore unlikely to significantly
with quality education, training and research affect their overall perception of a destination
programmes, will help to build a better basis and their degree of satisfaction. Research has
upon which investment decisions in tourism and shown that it usually takes the unexpected (i.e.
hospitality development can be made. This in experiences that occur outside some ‘zone of
turn will foster a financially successful industry tolerance’2) for there to be a substantial positive
that will continue to attract the interests of all or negative impact on customer satisfaction.
forms of investment capital. Thus, surprisingly high levels of service,
friendliness and hospitality can leave an
indelible impression in the mind of a visitor.
Unfortunately, it seems anecdotally more com-
Hospitality: Resident Attitudes mon that surprisingly poor hospitality leaves a
Towards Tourists and Tourism sour taste for many visitors. Tourists are often
very vulnerable. They visit unfamiliar places and
It is quite common to observe the claim by may not know from whom or how to seek help
many destinations that its people are among when problems occur. Indeed, they may simply
the friendliest. While it is possible for all not have the time or money to take action if,
destinations to have friendly residents and for example, a paid-in-advance tour fails to be
employees in the tourism industry, it is by provided or visitors are affected by criminal
definition impossible for all or even most to be activity. In such circumstances, when residents
the friendliest. Thus it is likely that only a few come to the aid of a distressed tourist, some-
exceptional destinations can really differentiate times this good-samaritan response can have
themselves, at least partly, on the basis such a powerful impact that the visitor actually
of being particularly friendly and hospitable. ends up feeling good about their experience.
Nevertheless, clearly friendliness and a spirit of While the hospitality displayed by a desti-
hospitality can serve to enhance a destination’s nation’s residents towards tourists and tourism
competitiveness. can play an important role in a destination’s
While the hospitality of tourism industry competitive profile, hospitality is not a prerequi-
employees is an important part of the overall site for competitiveness. It is possible for a desti-
service experience that we discuss in detail in nation to do well in spite of the reputation of
Chapter 9, the hospitality displayed by residents residents. France, for example, is not known for
is more a general supporting factor and is a friendly attitude to tourists yet has been able to
governed more by social and cultural values maintain a position as one of the world’s leading
than by tourism industry training. Many destina- tourist destinations. New Yorkers also have a
tions, however, do endeavour to promote the reputation as being tough, bad-mannered and
economic significance of the tourism industry to short-tempered, with little time for or interest in
residents, with the goal of gaining their support assisting visitors. However, New York has long
as well as encouraging friendly and hospitable been one of the great tourist cities of the world.
behaviour and a welcoming attitude towards So friendliness and hospitality matter and
tourists. So destinations must encourage their can make a significant difference, but usually at
permanent residents to behave as friendly hosts the margins. Few, if any, destinations have
to visitors who are in unfamiliar surroundings. established their competitiveness on the basis of
They should convey a friendly attitude and, friendliness alone. Indeed, it might be argued
when required, offer basic information and that sometimes the poor reputation or behav-
a helping hand. These small but important iour of a destination’s residents might even be
gestures will do much to foster a destination an attraction in itself. First-time visitors to New
140 Chapter 7
York might expect and actually even want the is required because of frequent changes in
stereotypical New York taxi experience so they demand, the demand for small quantities in a
can return home having experienced the real wide variety of styles, or rapidly developing
thing. techniques of production; (ii) manual labour and
We are not advocating actions to maintain personal attention to details by the owner/
poor service or inhospitable residents, but manager are of dominant importance; (iii)
merely pointing out that one should always try demand is strictly local; and (iv) both raw
to understand the views and expectations of the materials and finished products are perishable.
visitor when managing destination competitive- Tourism fits these conditions extremely well,
ness, and that authenticity, as perceived by visi- with the exception of condition (iii), as the
tors, should play a part in these considerations. necessity for travel in tourism negates its signifi-
cance (Baumbeck and Lawyer, 1979, p. 16).
Therefore, tourism enterprise – the small
tourism business in particular – is of fundamen-
Enterprise: the Generation of tal importance to the development of tourism
Human Energy3 as an industry. However, ‘there are very few
specific works which address the relationship
In capitalistic, free-enterprise systems, it is between tourism and entrepreneurship’ (Din,
axiomatic to note the economic importance 1992, p. 10). ‘This topic remains a relatively
of business enterprises. Small enterprises neglected research focus in the literature on
particularly are regarded as the engine of free- tourism and economic development, and yet
enterprise economics, typically accounting for it holds an important key to understanding
the largest portion of employment and output. tourism’s impact on local economies’ (Shaw
In a functional sense, Baumbeck and Lawyer and Williams, 1990, p. 68).
(1979) note three particular reasons for the Several authors have noted the role
importance of small, independent businesses. of entrepreneurship in the development of
First, all business is interdependent. Big busi- a tourism destination. Butler (1980) views
nesses and small businesses work hand in hand entrepreneurial development by local residents
as both suppliers and buyers, enabling each as occurring spontaneously in response to
business to specialize. Second, in addition to growth in tourist demand. Christaller (1964)
these complementary relationships, competi- emphasizes the direction of tourism develop-
tion among businesses provides the stimulus ment from a core outwards to peripheral
for change and improvement. ‘It is the best regions, aided by a ready supply of entrepre-
insurance that our economy will remain neurs. The evolutionary perspective of Butler
dynamic and provide a continuous stream and the diffusionist perspective of Christaller do
of innovations, new ideas, experiments, and not apply, in the view of Din (1992, p. 18), in
pioneering efforts’ (p. 13). The third reason Third World destinations, where ‘the receiving
is that small business provides the greatest community may not possess the cultural and
source of new ideas and inventions and a economic capacity to appreciate the opportuni-
proving-ground for them. ties, let alone exploit them’. Din (1992) and
The tourism, hospitality and leisure indus- Echtner (1995) therefore emphasize the
tries are replete with small to medium-sized importance of entrepreneurial training in
enterprises. Quinn et al. (1992) attribute this these situations.
to the relatively low entry barriers, the small Porter’s (1990) model for the determinants
number of restrictions that are imposed and the of national advantage (covered in Chapter 2)
few skills required. To this list could be added captures the principal link between enterprise
the desire by many to mix pleasure with and industry competitiveness in two of the
business by turning a leisure hobby into a four factors which constitute his competitive
living. The attractiveness of these industries ‘diamond’ (see Chapter 1): firm strategy, struc-
often extends beyond economic motivations. ture and rivalry, and related and supporting
The small enterprise has inherent advan- industries. Porter also notes the role of chance
tages where: (i) a high degree of flexibility driven by entrepreneurship. ‘Invention and
Supporting Factors and Resources 141
entrepreneurship are at the heart of national • Growth. The growth of the destination
advantage’ (Porter, 1990, p. 125). Porter depends largely on the actions of individ-
argues that the role of chance does not ual enterprises. Time- and location-
mean that industry success is unpredictable, as dependent services seek multisite,
entrepreneurship is not random. multiservice or multisegment growth
Tourism enterprise, particularly with strategies. Franchising, management
regard to entrepreneurship, new venture contracts and consortia occur frequently.
development and small business, contributes to • Income distribution and equity. Tourism
destination development and competitiveness enterprises help to disperse the economic
in the following possible ways. benefits of tourism development through-
out the local population. In particular,
• Competition. Clearly, a competitive
small, locally owned firms localize the eco-
destination depends in part on a local
nomic benefits. Resident support for tour-
tourism industry consisting of numerous
ism development fosters a competitive
alternative suppliers who must survive on
destination.
the basis of services that are either unique
or superior in some way or are available at
• Risk-taking. Tourism entrepreneurs
encourage innovation and development
a lower cost. Competition among firms
through their willingness to assume a
creates an environment for excellence.
substantial share of the financial risk.
• Cooperation. The interdependence of
Many ideas might never get off the ground
business (as discussed above) and mutual
without this contribution.
self-interest in the success of the desti-
nation encourages inter-firm cooperation.
• Productivity. The productivity of the
destination tourism system is likely to be
Cooperation is evident in the form of
improved when entrepreneurs are willing
marketing alliances, sectoral associations
and able to exploit opportunities that
and management structures.
benefit the destination.
• Specialization. The existence and growth
• Gap-filling. A healthy system of enter-
of numerous tourism enterprises enables
prise ensures that market gaps and unmet
each firm to concentrate on its core
needs remain unrecognized and unfilled
competencies and expertise. The diverse
for only a short time.
nature of the tourism product and the
growing sophistication of travel consum-
• Product diversification. A destination’s
diversified portfolio of tourism products,
ers demands more specialized services.
services and experiences enhances
• Innovation. A competitive destination is
its attractiveness and therefore its
aided by the development of innovative
competitiveness.
tourism services and experiences. New
ventures and small businesses provide an
• Seasonality. A destination’s seasonal
constraints can be partly overcome when
ideal mechanism for the identification and
tourism enterprises expand the range of
development of new ideas.
seasonal experiences available.
• Facilitation. Tourism relies on the provi-
Disequilibrium. Market disequilibria
sion of numerous ancillary services, such
•
created by, for example, changes in
as marketing research consultants, food
regulations or technology are perceived
services, laundries, automotive repairs
and adjusted to quickly where enterprise
and financial institutions. Destinations
thrives.
function more effectively when these
services are abundant. Despite these numerous contributions,
• Investment. The flow of investment several problems and challenges are also evi-
capital (both debt and equity) to the dent. The existence of so many small businesses
tourism industry is possible largely in tourism means that many owner-managers
through the efforts and existence of lack the skills, expertise or resources to function
tourism enterprises seeking to exploit efficiently and effectively. The alluring qualities
profitable opportunities. of the tourism industry have often led many
142 Chapter 7
entrepreneurs to make bad investment 1990, p. 79). Such research might address the
decisions. Dreams of an attractive lifestyle following important needs:
may cloud economic judgements.
The relatively low entry barriers, the few
• a typology of tourism ancillary firms and
the functions they perform;
skills required and the small number of restric-
tions or regulations imposed in the tourism
• an analysis of the interdependencies
between enterprises and their role in the
industry encourage the proliferation of small
destination tourism system;
firms (Quinn et al., 1992). Many small tourism
firms lack business training and do not appreci-
• an appraisal of the specific and
unique managerial challenges in tourism,
ate its value. They are often very reluctant to
particularly of the small firm;
invest in staff training when employee turnover
is high and employment is seasonal. Owner-
• an assessment of the information needs
of small firms and the ways in which
managers often have little understanding of
government and industry associations
how to finance their business and most are
could assist; and
so busy or distracted by their own business
• a study of the effective role of industrial
that they fail to recognize their dependency on
policy in stimulating the desired behaviour
the competitiveness of the destination as a
of entrepreneurs in tourism.
whole.
Externalities, particularly environmental, There is much speculation and debate
social and cultural ones, are also often signi- about the employment market. The structure
ficant in tourism. Small tourism enterprises and nature of work seem to be undergoing
may not recognize or care about the wider fundamental changes, at least in developed
and long-term consequences of some of their economies. Firms are not only downsizing
actions. but are frequently contracting out for many
Those who have examined the extent of services. A consensus seems to be emerging
research in tourism enterprise, particularly the that more people will become self-employed
role of the small business, have been disap- in order to create a need for their skills and
pointed to find little effort to date. Shaw and services, and that future economies will consist
Williams (1990, p. 71) noted that the ‘literature of ‘virtual corporations’ involving a network of
is remarkably uninformative on the influence smaller enterprises.
of small or medium-sized business . . . little Tourism destinations are very much like
is known about the economic behavioural these virtual corporations. And just as there has
characteristics of entrepreneurs within tourism been much interest in the competitiveness
economies or, more importantly, the impact of of traditional business entities, we can expect
the entrepreneurs on economic development’. to see growing interest in the competitiveness
Berrett et al. (1993) and Quinn et al. (1992) of these new types of business structures. In
drew the same conclusion. Quinn et al. (p. 12) tourism, we already have an opportunity to
noted a concentration of research effort on explore this phenomenon.
larger tourism establishments and recognized
the difficulty of carrying out research on small
tourism firms because they are typically
sceptical of investigation, often operate in the Political Will: Is Tourism Part of the
black economy, generally do not wish to be part Political Landscape?
of ‘the system’, and are not encouraged by
the attitudes of industry trade associations to Although tourism has been an important
research. economic sector for some time in most coun-
If we wish to understand tourism’s contri- tries, cities, towns and regions in comparison
bution to economic development and the with other, more traditional economic sectors,
impact of tourism enterprise on a destination the tourism industry has long struggled for
and its competitiveness, then ‘a major advance recognition by governments. The attitude
. . . can be achieved through research on of government to the industry has largely
entrepreneurial activity’ (Shaw and Williams, been one of general indifference. Other
Supporting Factors and Resources 143
industries, employing fewer people and the tourism industry in Australia both in the
contributing less towards a nation’s gross minds of the general public as well as politically.
domestic product, have historically attracted Although we have so far focused the dis-
more interest and attention by governments. cussion of political will on government and poli-
Implicitly, there seemed to be a view that ticians, it must be emphasized that political will
tourism was a frivolous industry creating little should be viewed more broadly. All elements of
wealth and involving low-skilled, low-paying an organized society and its systems reflect and
jobs and, although important in terms of are affected by political will. So, for example,
quality of life, it was of limited benefit to the willingness of institutions to work together
a society compared with agriculture and to enable the development of tourism is also a
high-tech industries, for example. reflection of the extent of political will in a desti-
This view has been changing, and nation. Where political will creates a supportive
increasing numbers of governments and policy environment, tourism entities are more likely to
makers are recognizing the valuable economic display a progressive and innovative approach
and social contribution made to societies by towards the development of tourism and the
the tourism industry. Nevertheless, in many strategic direction it takes. They are more likely
destinations political will and interest in sup- to suggest new or innovative solutions in the
porting tourism development are not high on knowledge that at least these ideas will receive
the agenda. fair consideration and will be judged on merit.
One of the important roles of government The saying, ‘where there’s a will, there’s a way’
is to set policies and allocate scarce resources. illustrates this point. The presence of political
Tourism development may not receive much will helps drive ideas and initiatives forward.
support from government because other indus- The absence of political will stymies good ideas
tries are seen to be more important when or serves to discourage ideas in the first place.
viewed from this perspective. When such is the
case, provided attitudes are informed by the
facts about tourism, there can be little argu- Notes
ment. However, often the tourism industry has
been ignored more by default and ignorance 1
The Tourism Forecasting Council was estab-
than by a proper assessment of the facts. lished and structured by the Australian Minister for
Australia is an example where political will Tourism to draw on the experience and expertise 'of
and an interest in the fortunes of the tourism the private and public sectors in tourism, construc-
industry has been a particularly important factor tion, property investment and finance . . . to encour-
behind its competitiveness. In the mid-1980s, age awareness among investors that, like other
a member of the then federal Labour govern- opportunities, investment in tourism facilities needs
ment, John Brown, was particularly effective in to be based on professional business planning,
long-term operating viability and an achievable vision
convincing his colleagues in government that
of the industry's future' (Commonwealth Department
Australia should devote much greater resources of Tourism, 1994).
to the promotion of Australia as a tourism 2
According to Zeithaml and Bitner (1996), a
destination. A personal friend of Paul Hogan customer's zone of tolerance ranges between their
(of Crocodile Dundee fame), John Brown 'desired service level' and the level they consider to
recruited the actor’s assistance to present an represent 'adequate service'.
argument to the federal government that the 3
This section is based largely on the paper by
tourism industry of Australia could become Crouch and Ritchie (1995).
a major trade initiative. Subsequently, this
relationship led to the series of very successful
television commercials promoting Australia as References
a tourism destination overseas. Although the
extent of government support for tourism in Baumbeck, C.M. and Lawyer, K. (1979) How
Australia has had its ups and downs ever since, to Organize and Operate a Small Business,
John Brown’s success has had a major and 6th edn. Prentice-Hall, Englewood Cliffs, New
long-term impact on the high profile enjoyed by Jersey.
144 Chapter 7
Berrett, T., Burton, T.L. and Slack, T. (1993) Quality Din, K.H. (1992) The ‘involvement stage’ in the
products, quality service: factors leading to evolution of a tourist destination. Tourism
entrepreneurial success in the sport and leisure Recreation Research 17, 10–20.
industry. Leisure Studies 12, 93–106. Echtner, C.M. (1995) Entrepreneurial training in
Butler, R.W. (1980) The concept of a tourist area developing countries. Annals of Tourism
cycle of evolution: implications for management Research 22, 119–134.
of resources. Canadian Geographer 24, 5–12. Porter, M.E. (1990). The Competitive Advantage of
Christaller, W. (1964) Some considerations of tour- Nations. Free Press, New York.
ism location in Europe: the peripheral regions – Quinn, U., Larmour, R. and McQuillan, N. (1992)
underdeveloped countries – recreation areas. The small firm in the hospitality industry.
Papers of the Regional Science Association International Journal of Contemporary
12, 95–105. Hospitality Management 4, 11–14.
Commonwealth Department of Tourism (1994) Shaw, G. and Williams, A.M. (1990) Tourism,
Forecast: the first report of the Tourism Fore- economic development and the role of entrepre-
casting Council, Australia. Canberra, Australia, neurial activity. Progress in Tourism, Recre-
Commonwealth Department of Tourism. ation and Hospitality Management 2, 67–81.
Crouch, G.I. and Ritchie, J.R.B. (1995) Destination WTTC (1993) Travel and Tourism: a Special Report
competitiveness and the role of the tourism from the World Travel and Tourism Council.
enterprise. Proceedings of the Fourth Annual Elsevier Science, Oxford.
World Business Congress, 13–16 July, Zeithaml, V.A. and Bitner, M.J. (1996) Services
Istanbul, Turkey, pp. 43–48. Marketing. McGraw-Hill, Columbus, Ohio.
8
Destination Policy, Planning and Development
Comparative Competitive
advantages advantages
(resource endowments) Destination competitiveness and sustainability (resource deployment)
Global (macro)environment
Destination policy, planning and development
System Philosophy/ Positioning/ Competitive/ Monitoring and
Vision Development collaborative Audit
definition values branding analysis evaluation
Destination management
By this point, readers should have an under- (both internal and external) are satisfied to the
standing of the global forces that influence greatest extent possible.
tourism in general and destination competitive- Chapter 6 focused on the explicit identifi-
ness and sustainability in particular. They cation of those core resources and attractors
should also have some grasp of the opposing that provide the primary motivation for visiting
forces of competition and cooperation the destination, while Chapter 7 examined the
among organizations within the destination supporting factors and resources that make it
– and the important role of the destination possible for the tourist to visit the destination
management organization (DMO) in shaping easily and comfortably.
the mode of operation of the destination as a An attractive, well-functioning and highly
whole. Indeed, we argue that the DMO plays a competitive destination does not exist by
particularly critical and vital role in efforts to chance. It requires a well-planned environment
ensure that the expectations of stakeholders within which the appropriate forms of tourism
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
(J.R. Brent Ritchie and Geoffrey I. Crouch) 145
146 Chapter 8
Table 8.1. A listing of the many stakeholders commonly associated with the term ‘strategy’, it
that DMO managers feel are relevant to destina- is considered advisable to reserve its use to the
tion success (from Sheehan and Ritchie, 2002). description of specific major actions or patterns
Hotels/hotel association of actions that might be used to attain the
City/local government objectives of a tourism system. In place of the
Regional/county government term ‘overall strategy’, the more appropriate
Attractions/attraction association concept of the ‘megapolicy’ will be employed.
State/provincial tourism department
Board of directors/advisory board
Convention centre/banquet facilities
Members Distinguishing between destination
Community/citizens/residents policy, planning and development
Restaurants/restaurant association
and destination management
University/college
Chamber of commerce
Sponsors We also wish to clarify and emphasize the
Airlines important distinctions between destination
Federal government policy, planning and development (DPPD)
Hospitality industry and destination management. This clarification
Local economic development authority is critical since, at a superficial level, there
Media may appear to be overlap and/or duplication
Regional convention and visitor bureaux among the terms and concepts used in both.
Visitors/tourists
Although both DPPD and destination man-
agement seek to improve the competitiveness
Advertising agency
Arts/arts association
Destination management company and sustainability of the destination, they differ
Meeting planners fundamentally in that DPPD is essentially
Non-tourism industry an intellectual process that uses information,
Other policy makers in area judgement and monitoring to make macro-level
Public facilities decisions regarding the kind of destination that
Parks department is desirable, the degree to which ongoing
Recreational performance and related changes in the nature
Retail stores/association of visitation and the physical character of the
Travel companies/association
destination are contributing to the achievement
of the kind of destination that stakeholders
Volunteers
want.
In contrast, destination management is
• It must be constructed to permit and facili-
more of a micro-level activity in which all the
tate a continuing dynamic social process
many resident and industry stakeholders carry
requiring inputs from multiple sources.
out their individual and organizational responsi-
• It must break down the traditional bound-
bilities on a daily basis in efforts to realize the
aries between disciplines and industry
macro-level vision contained in policy, planning
sectors in tourism.
and development. Both DPPD and destination
• It must relate policies of the tourism
management must be done well to achieve des-
subsystem to those of the total socio-
tination success. If the policy is ill-conceived and
economic system of a nation or region
poorly implemented, the efforts of many can be
of which it is a part.
misdirected, ill-supported and ultimately wasted.
In summary, tourism policy formulation Conversely, no matter how brilliant a policy and
can be characterized as a dynamic social pro- its associated planning and development, it can
cess within which an intellectual process is collapse like the proverbial house of cards if
imbedded. From a terminology standpoint, the daily management and operational tasks are
output of this process is commonly referred to not performed effectively and efficiently.
as an overall strategy for tourism development. In order to make the above distinction
However, because of the lack of rigour between policy and management clearer in
148 Chapter 8
operational terms, let us examine the phenom- maximizes the benefits to stakeholders while
enon of destination positioning/branding, minimizing the effects, costs and impacts asso-
which is relevant and important at both the ciated with ensuring the success of the destina-
policy and management levels of our destina- tion. In effect, tourism policy seeks to provide
tion competitiveness/sustainability framework high-quality visitor experiences that are profit-
(Fig. 3.1). able to destination stakeholders, while ensuring
We are defined by the experiences and actions
that the destination is not compromised in
of our lifetime. So are brands. terms of its environmental, social and cultural
(Bedbury and Fenichell, 2002, p. 19) integrity. As Table 8.1 demonstrates, DMO
managers must appreciate the fact that a desti-
At the policy level, we are concerned with nation’s stakeholders include a broad spectrum
the overall manner in which the destination is of individuals and organizations. While many
perceived, from a strategic perspective, by the are residents of the destination, many are not.
marketplace with respect to the total package of
experiences it delivers compared with major
competitors. In more everyday parlance, this
strategic package of experiences can be Why is tourism policy important?
referred to as a ‘destination brand’.
At the same time, there are many aspects Because it is often poorly understood, tourism
of branding that must also be addressed at the policy is often overlooked as an important
level of destination management. For example, factor in ensuring the success of a tourism
it is important to develop a destination logo that destination. Perhaps its most important role is
conveys the desired strategic brand image and to ensure that a given destination has a clear
to regularly monitor destination brand aware- idea of where it is going or what it is seeking to
ness within key market segments. It is these become in the long term. In parallel, it must
daily support activities related to branding that strive to create a climate in which collaboration
translate a grand concept into a marketplace among the many stakeholders in tourism is
reality. both supported and facilitated. In more specific
terms, tourism policy fulfils the following
functions:
Tourism Policy: a Definition • it defines the rules of the game – the
terms under which tourism operators
Tourism policy can be defined as: must function;
a set of regulations, rules, guidelines, directives
• it sets out activities and behaviours that
and development/promotion objectives and are acceptable;
strategies that provide a framework within • it provides a common direction and guid-
which the collective and individual decisions ance for all tourism stakeholders within a
directly affecting tourism development and the destination;
daily activities within a destination are taken. • it facilitates consensus around the specific
vision, strategies and objectives for a given
The purpose of tourism policy is to cre-
destination;
ate an environment that provides maximum
benefit to the stakeholders of the region
• it provides a framework for public and
private discussions on the role of the
while minimizing negative impacts. The host-
tourism sector and its contributions to the
ing of visitors by a tourism destination is
economy and to society in general; and
primarily undertaken to provide its stakeholders
• it allows tourism to interface more effec-
(Table 8.1) with a broad range of economic and
tively with other sectors of the economy.
social benefits – most typically employment and
income. This employment and income allows In the light of the foregoing, it is important
stakeholders to reside in and to enjoy the quality to keep in mind that tourism policy affects
of the region. Tourism policy seeks to ensure the extent to which all of the day-to-day
that the hosting of visitors is done in a way that operational activities – such as marketing, event
Destination Policy, Planning and Development 149
development, attraction operations and visitor • interest rate policy – affects costs and
reception programmes – are successful. It is therefore profitability;
not just a theoretical concept but has very real • bilateral air agreements – determines
implications in day-to-day practice. foreign visitor access;
• environmental policy – limits growth and
access to attractive but sensitive areas;
• customs and immigration policy – can
Areas addressed by tourism policy facilitate or hinder international visitation;
• communications policy – can restrict the
In general terms, a formal tourism policy for a use of certain advertising media;
given destination will address such areas as • minimum wage policy – can affect labour
(at the national level): markets;
• the roles of tourism within the overall
• welfare policy – can influence the nature
and behaviour of the work force;
socioeconomic development of the
destination region;
• education policy – can affect the quality of
the workforce;
• the type of destination that will most
• cultural policy – can affect the preserva-
effectively fulfil the desired roles;
tion and promotion of national heritage;
• types and levels of taxation;
• foreign investment policy/regulations –
• financing for the tourism sector (sources
can affect the availability of investment
and terms);
capital;
• the nature and direction of product
• local zoning policy/by-laws – can
development and maintenance;
restrict or encourage tourism facility
• transportation access and infrastructure;
development;
• regulatory practices (e.g. airlines, travel
• national/provincial/local policy with
agencies);
respect to funding support for major
• environmental practices and restrictions;
public facilities (e.g. stadiums, convention
• industry image and credibility;
centres, museums, parks) – can drastically
• community relationships;
affect destination attractiveness;
• human resources and labour supply;
• infrastructure policy – can make
• union and labour legislation;
destinations safer for visitors;
• technology;
• currency and exchange rate policies –
• marketing practices; and
directly affect destination cost com-
• foreign travel rules.
petitiveness and may discourage resident
A warning: the tourism destination and travel to foreign destinations; and
tourism policy do not exist in a vacuum. • the legal system – determines consumer/
In all of the foregoing discussions, it needs visitor protection legislation (e.g. liability
to be kept in mind that tourism policies are but for failing to deliver advertised facilities,
part of the social, economic and political poli- tours or experiences).
cies which govern and direct the functioning of
To summarize, there is a whole range
the overall society within which tourism exists
of social, economic, legal and technological
and functions.
policies that greatly affect the appeal, attractive-
In brief, there are a number of more
ness, competitiveness and sustainability of a
general policies (regulations, rules, directives,
tourism destination. Some are under the control
objectives, strategies) that are controlled by
of the tourism sector (such as visitor satisfaction,
governments and by other industry sectors and
guarantee policy, truth in advertising policy),
organizations, which may have a significant
but the great majority are not. Thus, the
effect on the success of tourism and tourism
challenge facing tourism managers is to try to
destinations. These include:
influence global policies where they can and
• taxation – affects costs and therefore adapt to them as effectively as possible where
profitability; they cannot.
150 Chapter 8
The many other influences on Each of these interfaces can pose either
tourism policy a threat or an opportunity for tourism. The
environmental sector and the extractive indus-
As we have stressed above, tourism does tries have traditionally viewed tourism as a com-
not exist in a vacuum. It can only function peting force; the technology, entertainment
smoothly if it shares, cooperates and dialogues and transportation sectors most often perceive
effectively with many other sectors of society tourism as an ally or a business opportunity.
and of the economy (Fig. 8.2). Many of these The political and governmental sectors provide
sectors have little understanding of, or explicit a pervasive policy environment that the
interest in, tourism in the region – unless, of destination, in collaboration with its many
course, visitor activity somehow appears to sector partners, must constantly assess and
detract from the functioning or well-being of attempt to modify where necessary.
another sector. Conflicts between tourism and In order to dialogue and to present its case
other sectors most commonly arise when there effectively at each interface, the tourism sector
is competition for a shared resource (e.g. the must be as capable, as well-trained and as well-
extractive industries), where there is a common prepared as the professionals of any specific
need for specific individuals or types of individ- sector at any given point in time. Otherwise,
uals (e.g. those engaged in entertainment, tourism risks being undermined and weakened.
technology and education sectors) or where Consequently, it may miss a critical market
there may exist a divergence of philosophical opportunity or fail to establish an innovative
views (e.g. in the environment, parks and alliance or partnership. All too often, tourism’s
transportation sectors). lack of sophistication and preparedness has
Fig. 8.2. Tourism: some of the multiple interfaces between tourism and other sectors of the economy
and society where policy can affect destination competitiveness and sustainability.
Destination Policy, Planning and Development 151
resulted in government decisions and policies Types and levels of tourism destinations
that significantly weaken its ability to compete –
or to compete more profitability. In certain Tourism destinations are most commonly
cases, the tourism sector has not even been defined in formal terms by recognized political
aware of the extent to which it has been jurisdictions such as:
disadvantaged by its naiveté or by its failure to
proactively and adequately prepare its case. • a nation or country;
This can be particularly disastrous in public • a macro-region, consisting of several
countries (e.g. Europe), or other group-
forums, where both the issue at hand and the
ings that either transcend national borders
industry’s long-term credibility can be lost.
(such as the European Riviera) or reflect
economic trade zones (e.g. the North
American Free Trade Agreement and the
The multidisciplinary nature of Americas);
tourism and tourism policy • a province or state within a country;
• a localized region within a country, such
As explained earlier in this book, tourism is, as Western Canada, the US Northwest
by its very nature, a multidisciplinary pheno- and the state of Bavaria in Germany;
menon (Fig. 1.3). The tourism experience is • a city or town; or
influenced by a range of economic, psychologi- • a very unique locale, such as a national
cal, societal, technological, legal and political park, a historic site or a memorial/monu-
forces. It follows that, in order to formulate ment that is in itself sufficiently significant
policies that accommodate or address these to attract visitors. Other examples include
multiple forces, those involved must appreciate substantive and readily identifiable institu-
the complexities of each discipline and their tions such as Disney World in Orlando,
interactions in any given situation. The disci- Florida, the Hermitage in St Petersburg
plines of psychology, economics, sociology and St Peter’s in Rome. These may in
and law are but some of the disciplines that themselves exert sufficient drawing power
can enhance our understanding of interna- to be classified as a destination.
tional marketing. The environmental sciences,
political science and the behavioural sciences
are essential to the formulation of a policy for
The major parameters of tourism policy
national parks that defines the levels and types
and tourism destination management:
of tourism that are appropriate and desirable.
competitiveness and sustainability
enhance the commemorative, social and cul- which policy is formulated, the overall structure
tural integrity of the destination. It also involves of a policy, and the specific policy content
the ability to effectively manage the human found within that structure. In the same vein,
presence within the boundaries of the destina- it is necessary to distinguish among the static
tion. This human presence has two main com- concepts of policy context, structure and
ponents: visitor management and resident/ content, and the dynamic concept of policy
community management. formulation. Context provides the setting
Finally, the tasks of resource deployment within which policy is formulated. Structure
and resource stewardship are linked by the and content define the ‘what’ of tourism pol-
shared need for a tourism destination manage- icy; the process of policy formulation describes
ment information system (TDMIS) to support the ‘how’ of defining the structure of a destina-
policy formulation, strategic planning, day-to- tion’s policy and determining the content of
day decision making and overall performance policy found within that structure. In tourism,
evaluations (Ritchie and Ritchie, 2002). Infor- the process, or the ‘how’, provides:
mation management has, in turn, two major
components. The monitoring component pro-
• an overview of the different stages or
steps involved in the policy formulation
vides stakeholders, particularly the DMO, with
process; and
an ongoing auditing and assessment of destina-
• a review of the various possible methods
tion assets and performance across a broad
that might be used within, or across, the
range of indicator variables. These indicator
stages of policy formulation.
variables should be carefully chosen so as to be
representative of the overall health of the desti-
nation in terms of both competitiveness and
sustainability. Monitoring also includes an ‘envi- The context of tourism policy
ronmental scan’ component, which seeks to
identify unusual or emerging trends and forces Macro-policy, or what some have referred to
that have the potential to significantly affect the as ‘total system mega-policy’, involves determi-
competitiveness or sustainability of a destina- nation of the postures, assumptions and main
tion, both currently and well into the future. guidelines to be followed by specific policies. In
The research component of the TDMIS is brief, mega-policy represents a kind of holistic
normally structured to play several distinct roles. master policy that surrounds the tourism sys-
One of these is to provide research for policy tem of the destination and is clearly distinct
formulation. Policy research is characterized by from detailed discrete tourism policies (Dror,
the analysis of the overall situation of the desti- 1971). In this regard, tourism policy is viewed
nation. It is undertaken with a view to providing as being directly based upon and derived from
information that assists in developing well- the policies that direct the total socioeconomic
defined but broad guidelines that serve to estab- system of the nation or region in which the
lish priorities to direct the activities of the desti- tourism subsystem is located. In fact, it is the
nation (Ritchie and Goeldner, 1994). More spe- general content of these total system policies
cifically, policy research seeks to gather and that provides much of the basis upon which
interpret macro-level data related to present well- to derive the tourism philosophy of the
being, and the evolution of trends of major eco- destination region in question.
nomic, social, technological and political factors Now that we have provided the definitional
that bear on the success of the destination. and contextual foundations for destination pol-
icy, we turn to an elaboration of its components.
In discussing tourism policy, it is helpful to As shown in our overall framework (Fig. 3.1),
distinguish clearly among the context within we view policy as encompassing some eight
154 Chapter 8
distinctive components, which, when com- in determining the context of tourism policy. In
bined, address not only intellectual policy effect, the values of residents provide the
formulation but also more pragmatic strategic foundation on which the policy and its various
planning, as well as the translation of both components rest. In the end, tourism policies
policy and planning into reality – a process that do not reflect the values of the destination
commonly referred to as ‘development’. The stakeholders, or ‘hosts’, will inevitably fail
components of destination policy planning and to gain ongoing popular or political support.
development will now be discussed. Policies that do not maintain long-term political
support are doomed to failure.
System definition The philosophical distinction sometimes
made between value-driven and market-driven
While conceptually simple, the first component destinations, while conceptually appealing, is
of tourism policy (as shown in Fig. 3.1) is somewhat ambiguous in practice. No destina-
a formal definition of the destination in tion can be competitive unless it succeeds in
question and a determination of the identity appealing to profitable segments of the market
and salience of each of its stakeholders. This over the long term. By the same token, no
component, while often neglected, is critical destination can be sustainable unless, while it
since all that follows relates directly back to the generates economic rewards, it also succeeds
destination as it has been defined. in maintaining the value-driven legitimacy
The first element of the system definition required by a democratic society.
is a delineation of the geographical and/or
political boundaries that physically and juris- The destination vision
dictionally define the destination. Examples
of boundaries commonly used are those of Although a tourism philosophy sets out the
countries, states, cities and regions. It must overall nature of tourism in a destination, it is
be emphasized here that destinations can be the destination vision that provides the more
theoretically defined from both a demand and a functional and more inspirational portrait of
supply perspective. While the tourism industry the ideal future that the destination hopes to
is usually more comfortable with the supply-side bring about in some defined future (usually 5,
perspective, we must keep in mind that the 10, 20 or 50 years).
tourist defines the destination not only in terms Visions can take many different forms.
of geography and attractions but also in terms Some are very concise (the equivalent of a
of the experiences it is likely to provide. corporate mission statement); others are
much more extensive and idealistic. Regardless
Tourism philosophy/values of its specific form, the destination vision is
the essence, and indeed the most critical com-
An explicit tourism philosophy is an essential ponent, of tourism policy. We will therefore
foundation on which to develop a coherent devote a major part of the chapter to exploring
policy. In general, a philosophy may be defined the precise nature of a destination vision by
as ‘a system for guiding life, as a body of princi- providing two in-depth examples with which
ples of conduct, beliefs or traditions; or the we are familiar regarding how the destination
broad general principles of a particular subject visioning process may be carried out. The first
or field of activity’. Adapting this general defi- concerns a more pragmatic vision, while the
nition for present purposes, a tourism philoso- second deals with a more idealistic one.
phy may be defined as a general principle or
set of principles that indicates the beliefs and
values of members of a society concerning how
tourism shall serve the population of a country Crafting Versus Formulating a Vision
or region, and which acts as a guide for evalu-
ating the utility of tourism-related activities. The preparation, formulation or crafting of a
It is important to stress the critical role destination vision is a stimulating intellectual
that the values of destination residents exert process that often attracts and involves the
Destination Policy, Planning and Development 155
Table 8.2. Terms of reference for the Calgary Visioning Task Force (from Ritchie, 1993).
Table 8.3. Principles underlying the vision of Calgary (from Ritchie, 1993).
the total process outlined by the terms of While the individual facilities, events and
reference, task force members subsequently programmes in Figs 8.4–8.6 are by nature very
focused their attention on efforts to both specific to the community in question, a number
identify and prioritize the major facilities, do have characteristics that could be general-
events and programmes that they felt would ized to other settings. The important point to
be necessary to put in place over the next 20 be emphasized, however, is that each of the
years if Calgary was indeed to establish itself as various facilities, events and programmes bears
the kind of ‘Host, Consultant and Educator to a direct relation to one or more of the vision
the World’ defined by the composite vision statements developed by members of the
statement. community.
With this goal in mind, the task force first
generated a large number of possible initiatives Developing an action plan
and then selected a more limited set of higher-
priority items. The outcome of this process is While space does not allow discussion here,
shown visually in Figs 8.4–8.6. These figures the final steps in the process defined by the
identify the specific facilities (Fig. 8.4), events task force’s terms of reference was to develop
(Fig. 8.5) and programmes (Fig. 8.6) that mem- a relatively detailed action plan which speci-
bers felt would contribute to the realization of fied, as far as possible, the organization(s) most
each of the nine elements of the vision. It should appropriately responsible for undertaking each
be noted that each of the figures contains proposed initiative, the desired timing of vari-
facilities, events or programmes that reflect: ous actions, and some preliminary estimate of
the magnitude of the resources that would be
• projects that are already in place
likely to be required to develop a particular
and require additional support to
facility, event or programme.
encourage evolution towards recognized
international excellence;
• projects that have been proposed by oth-
ers and that are currently under review; Example 2: a more idealistic vision
and
• suggested new projects that flow logically The second case also concerns an example
from the vision defined by the task force. where the authors have direct experience. It
158 Chapter 8
AL CONCE
NTR
* Upgraded Stampede
9. Major-events and
E PT
3. attractions
C 3. Western heritage
3. and native
* (Horizon 2000)
3. culture
Host,
Consultant
* Winter sports and Educator * Native cultural
* facilities
8. An all-season * and heritage
3. city to the World 4. Education and
3. training * centres
* Glenbow, Heritage
* Civic art gallery * Park, Fort Calgary
7. Cultural
3. diversity 5. Transfer and use
3. and arts 3. of knowledge * Cochrane Ranch
* Science centre
* International
* Conference and
* centre
* trade centre
Fig. 8.4. Facilities required to realize the vision (from Ritchie, 1993).
involves a vision statement prepared for the The Bow Valley Study will be a comprehensive
Banff-Bow Valley Region, within which is analysis of the state of the Bow Valley
located Banff National Park, Canada’s oldest watershed in Banff National Park. The
study will provide a baseline for understanding
national park and the crown jewel of its
the implications of existing and future
national park system (Ritchie, 1999).
development and human use, and the impact
In this case, a professional task force was of such on the heritage resources. The study
assembled by Canada’s federal government will integrate environmental, social and
to conduct what was formally known as the economic considerations in order to develop
Banff-Bow Valley Study (BBVS). The task force management and land use strategies that are
was led by a prominent environmental studies sustainable and meet the objectives of the
academic and included a professional environ- National Parks Act.
mental consultant, a university biological (BBVS, 1996, p. 2)
scientist, a former executive from a large
oil company and a tourism scholar. Objectives
The Banff-Bow Valley study’s formal
terms of reference described its purpose as Within this overall purpose, the study had
follows: three major objectives:
Destination Policy, Planning and Development 159
STRATEGIES * Environmental
* EXPO 2005
* Stampede
* Spruce Meadows
RAL CONCE
9. Major-events and
3. attractions ENT PT 3. Western heritage
C 3. and native
* World-class 3. culture
Host, * Major conference on
* winter sports
* events Consultant * human resource needs
and Educator * in 21st century
8. An all-season
3. city to the World 4. Education and
3. training
* Educational
* EXPO 2005
* International
* festivals 7. Cultural
3. diversity 5. Transfer and use * Major international
3. and arts 3. of knowledge * business conference
6. Hospitable
3. environment of
* Canadian films
3. exchange
* Trading and
* technology shows
* Trade show on
* consulting
* services
Fig. 8.5. Events required to realize the vision (from Ritchie, 1993).
• to develop a vision and goals for recommendations. As will be seen, this guide-
the Banff-Bow Valley that integrate line heavily influenced the direction and work
ecological, social and economic values; of the task force. At the outset, the task force
• to complete a comprehensive analysis identified six major initiatives it felt would allow
of existing information and to provide it to fulfil its mandate:
direction for future collection and analysis
of data to achieve ongoing goals; and
• develop a programme to involve the
public;
• to provide direction on the management
of human use and development in a
• collect and assess existing information
about the Banff-Bow Valley;
manner that will maintain ecological
values and provide sustainable tourism.
• draft a vision, principles and values for the
valley;
• identify and assess key issues;
The task force and study process • draft specific objectives and actions; and
• prepare recommendations for the
In assigning the task force this mandate,
Minister of Canadian Heritage.
the then minister stressed the importance of
consulting the Canadian public, in order to The task force made an early decision that
include them in the study process and to show the study process should be explicitly driven by
respect for their views, when formulating final all stakeholder groups having an active and
160 Chapter 8
proven interest in ensuring the environmental, consulting the public. It asked them to share in
economic and social well-being of the park. In the responsibility for making decisions about
order to turn this philosophical commitment their national parks based on their interests
into hard reality, the task force established a rather than their positions (Fisher and Ury,
formal round-table process. This round table 1991). This approach to consensus planning
served as the heart of the consultation, advisory has been labelled ‘interest-based negotiation’
and analysis activities that provided the task (IBN). In contrast to other approaches for
force with the information, ideas, insights obtaining public input and consensus, the IBN
and understanding used to formulate its final model not only sought consensus from partici-
recommendations. pating stakeholders; it also transferred a mean-
ingful percentage of actual decision-making
The round table: process, structure power from the task force (representing the
and composition national government) to participating stake-
holders (representing all Canadians). In specific
The round-table process, which served as terms, members of the task force agreed to the
the primary vehicle for soliciting public and principle that if full consensus were reached by
community input, represented a shift from the round table on any recommendation of
* Greening of
* Calgary * River Valley
* Vision 2020
* management
STRATEGIES * programme*
* Healthy City
* Programme * Air Improvement
* Programme
* Support
RAL CONCE
9. Major-events and
3. attractions ENT PT 3. Western heritage * current
C 3. and native * educational
* Banff School
3. culture * institutions
Host,
Consultant
and Educator * World data bank
8. An all-season * development* * *
3. city to the World 4. Education and
3. training
* Tourism education
* Twinning and
* and research
* international
* strategic alliances * Programmes to
7. Cultural
3. diversity 5. Transfer and use * develop/educate
3. and arts 3. of knowledge * consultants
6. Hospitable
3. environment of
* Multilingual * New Venture
3. exchange
* training * development/entrepreneurship
* programme
* Infoport
* International
* business
* programmes
Fig. 8.6. Programmes required to realize the vision (from Ritchie, 1993).
Destination Policy, Planning and Development 161
substance, then that recommendation would, challenges. These challenges stemmed largely
without further analysis or debate, be included from the valley’s location in a national park.
in the task force’s final report to the minister. First, it had to consider that people in all parts of
In areas where full consensus was not the country are concerned about what happens
achieved, responsibility for weighing the inputs in Banff National Park. It is normal for the
received and the subsequent framing of final people who live in, work in and frequently
recommendations fell to the appointed task visit the park to have a special interest in the
force. Bow Valley. But national parks belong to all
The round table was composed of some Canadians. Consequently, the vision had to
14 ‘interest sectors’ (Fig. 8.7). Each of these reflect the ideas and aspirations of all citizens,
sectors, as the name implies, was established to regardless of their extent of visitation.
represent the interests of its constituents within A second difficulty was the need to capture
the process designed to plan the future of the the essential purposes of a national park. While
Banff-Bow Valley region. Each sector, in turn, national parks make a useful and often sizeable
comprised a chair, a working committee and contribution to the economy, their broader
a supporting constituency. The information- significance is not easy to quantify. The vision
sharing and negotiation process was facilitated had to recognize the intrinsic value that dollars
by a technical expert who worked with the and cents have difficulty measuring (Prugh
round table members to develop procedural et al., 1995).
rules, to formulate a vision, principles and goals While crafting a vision is ‘a license to
for the future of the region, to analyse the major dream’, one must temper dreams with reality. In
issues involved, to reach consensus and to put imagining the desired future for the Banff-Bow
forth final recommendations. Valley, it was important to remember that
In imagining the future of the Banff-Bow achieving qualitative richness has a cost, one
Valley, the round table faced several unique that all Canadians must be willing to pay. The
framework for the vision had to capture all these structure and content of the vision into
complexities. context. The second component was a set of
anchor values that defined the main values on
Destination vision: a conceptual framework which the development of the vision should be
based. As Fig. 8.8 attempts to emphasize, the
As noted earlier, a vision can take many forms. total vision rests firmly on the values from
In the present case, the members of the round which it was derived. The set of values agreed
table agreed upon the conceptual framework to by members of the round table is summa-
shown in Fig. 8.8. The framework had five dis- rized in Table 8.5.
tinct components. The first was a preamble,
an introduction that sought to put the purpose, The core vision
The third vision component, the core vision,
Preamble consisted of a brief statement that consolidated
all key dimensions of the desired future for the
Core region. It was, in effect, the heart of the vision-
vision
Elements ing document – a portrait describing how the
of the vision task force hoped the region would evolve as it
moved into the next century. The core vision
Ecology
Awareness
Visitor experience reads as follows:
Economy
Community
Governance
The Bow Valley in Banff National Park
reveals the majesty and wildness of the Rocky
Values
On which the vision is based Mountains. It is a symbol of Canada, a place
Principles of great beauty, where nature is able to
Guiding implementation of the vision flourish and evolve. People from around the
world participate in the life of the valley,
Fig. 8.8. Destination vision: a conceptual finding inspiration, enjoyment, livelihoods
framework (from BBVS, 1996). and understanding. Through their wisdom and
Table 8.5. A statement of the values on which the vision for the Banff-Bow Valley is based (from
BBVS, 1996).
As Canadians concerned about the future of the Banff-Bow Valley, we are guided by these fundamental
values:
• The value of exercising restraint and self-discipline today, for the sake of future generations
• The value of nature in and of itself
• The value of nature to human experience
• The value of national parks as protected areas
• The value of Banff National Park for all the people of the world as a World Heritage Site
• The value of the Banff-Bow Valley for its essential ecological role in the context of the park and the
larger ecosystem
• The value of the Banff-Bow Valley, including the national transportation corridor, to the national,
regional and local economy
• The value of safe, healthy, and hospitable communities
• The value of culture and history
• The value of open, participatory decision making
• The value of equal opportunity for a sense of wildness and a range of quality park experiences
• The value of predictable, consistent, and fair regulation
• The value of competent, accountable management
• The value of national parks to Canadians’ sense of identity
• The value of wilderness preservation to Canada’s image around the world
• The value of respect for others
• The value of freedom of access
• The value of education, enjoyment, and other park related benefits of the Bow Valley to visitors
Destination Policy, Planning and Development 163
foresight in protecting this small part of the • An economic theme. ‘A healthy eco-
planet, Canadians demonstrate leadership in nomic climate, based on the heritage
forging healthy relationships between people values of the Park, contributes to national,
and nature. The Banff-Bow Valley is, above all
provincial and local economies. Busines-
else, a place of wonder, where the richness of
ses evolve and operate along aesthetically
life is respected and celebrated.
(BBVS, 1996, p. 21) pleasing and environmentally responsible
lines. Innovative ideas, designs and tech-
nology are emphasized when providing
Key themes
services including education, transport-
Following acceptance of the core vision, the ation, waste management, and other
working group felt it important, particularly infrastructure.’
from an operational standpoint, to identify a • A community theme. ‘Communities in
fourth component that consisted of a limited the Bow Valley are healthy and viable and
number of supporting elements that expanded are leaders in the quest for environmental
on the core vision by developing various key and cultural sustainability. Residents are
messages in some detail. The intent was to hospitable and pride themselves in accept-
ensure that the core theme will be translated ing their responsibility for protecting and
into more specific statements that, while still sharing this natural and cultural heritage
inspirational in nature, provided more concrete for the benefit of present and future
yardsticks against which to measure success in generations.’
translating the vision into reality. In the case of • A governance theme. ‘Federal, provincial
the Banff-Bow Valley, a total of six key themes and municipal authorities cooperate in
were defined (BBVS, p. 21). protecting and managing the National
Park and regional ecosystem. To achieve
• An ecological theme. ‘The Bow Valley in this, they nurture cooperation with
Banff National Park is a living example of businesses, organizations, and individuals.
the way in which ecological values are Public participation processes contribute
protected while appropriate kinds and to open, accountable, and responsible
levels of human activity are welcomed. decision-making. Principles of precaution
Within the valley, natural systems and all are exercised when the effects on
their component native species are free the ecosystem are uncertain. Laws
to function and evolve. The Bow Valley and regulations affecting the economy
supports and is supported by the natural and the environment are consistent and
systems of the region around it.’ predictable. Enforcement of regulations is
• A visitor experience theme. ‘The Bow consistent for all.’
Valley in Banff National Park is available
to all Canadians and international guests
Realizing the vision
who wish to participate in a diverse range
of appropriate activities. They treat the The vision statement for the Banff-Bow Valley
park with respect. The quality of the is admittedly rather idealistic and somewhat
natural environment is fundamental to lengthy. Nevertheless, it has already served as
the visitor experience, which is enriched the basis for the development of a heritage
by the quality of services provided.’ tourism strategy for the region (Sanford, 1997).
• An awareness/education theme. ‘Under- This strategy, which stresses visitor education
standing the value of our National Parks facilitated by both public and private sector
is a part of being Canadian. Education programmes, is being guided in its realization
and awareness about National Park val- by a series of guiding principles, which in
ues, ethics, natural and cultural heritage, themselves form the final component of the
and services are provided both within and vision statement. The principles are given in
beyond the boundaries of the Park. Intro- Table 8.6.
duction to this knowledge is a fundamen- In addition, the vision provided a consider-
tal part of each visitor’s experiences.’ able amount of direction for the preparation of
164 Chapter 8
Table 8.6. Principles guiding implementation of the vision (from BBVS, 1996).
The following principles guide all actions by government, business, communities, and the public.
• All actions, initiatives and programs undertaken to realize the Vision are implemented in full
accordance with the spirit and requirements of the National Parks Act, Parks Canada’s Guiding
Principles and Operational Policies, and the Town of Banff Incorporation Agreement
• Standards are defined, enforced, and reviewed so as to ensure the maintenance of Ecological and
Commemorative Integrity
• Regulation and decision-making are responsive, open, participatory, consistent, and equitable
• There is individual and shared responsibility to provide for protection and preservation of heritage
resources, including buildings, within the Park
• Proactive, adaptive, and precautionary management take into account cumulative effects and limits to
growth in recognition of the finite nature of the Valley
• Service and opportunities that provide high quality, affordable park experiences from front country to
wilderness and that enhance understanding of national park values are stressed
• Stewardship, based on sound science, is practiced through environmentally sensitive management,
mitigation, and restoration
• Education and experiences foster knowledge and understanding of the Banff-Bow Valley, its role in the
larger ecosystem, and as part of a National Park and a World Heritage Site
• Educational opportunities are provided to foster understanding, appreciation, and respect for local
culture
• Integrity and common sense underlie all decision making
• Economic analyses include consideration of natural, social, and cultural assets
• Only the kinds and levels of activities, facilities, and services that are appropriate to Banff National
Park are permitted
• Marketing and communication programs are designed to develop a knowledge and understanding of
Banff National Park, including expectations and limitations and reach out to all
• There is recognition that people enjoy and learn about nature in a variety of ways
• Residents within Banff National Park act in accordance with Park values, have a need to reside, and
understand their ethical responsibilities to the rest of Canada
• The geographic area of the Town of Banff will not change, although the boundaries may be adjusted to
achieve the goals of ecological integrity
• New communities are not developed within Banff National Park; the only communities that exist are
the Town of Banff and the Lake Louise Visitor Centre
• The unique culture and history of the Bow Valley is preserved and presented
• Planning and decision making are coordinated on a regional basis
• The national transportation corridor is maintained and improved
• Partnerships are encouraged, subject to appropriate checks and balances
• There is a shared responsibility to achieve ecological, social, cultural, and economic sustainability
a revised Banff National Park Management the strategic positioning of the destination in
Plan (Parks Canada, 1997). This plan is the the marketplace. In brief, positioning seeks to
primary document that prescribes the actions define how the destination is viewed both by
for all development decisions and for the the tourism market as a whole and by specific
ongoing operations of the Park. market segments in terms of the benefits and
experiences it is likely to provide vis-à-vis the
many competitive destinations from which
travellers may choose. In effect, positioning
Destination Positioning/Branding involves strategic policy-level decisions by a
destination regarding how it will seek to both
Once consensus has been reached by stake- differentiate itself from certain destinations
holders regarding the value-based philosophy while attempting to compete directly with
and the vision that will drive the future of tour- others. In doing so, the destination will
ism in the destination, it then becomes possible position itself so as to appeal strongly to
to define the fourth major policy component: certain market segments while accepting that
Destination Policy, Planning and Development 165
from the managerial intuition of senior policy objectives. This indication of relative impor-
makers and managers, in order to make the tance provides a basis for decision making
destination work even better in the future. In should different strategies or programmes for
brief, the audit represents the culmination of achieving the objective be in conflict. Fifth,
the policy/management cycle of learning, with the objectives must be related to a given time
a view to improved action in the future. period, as is stated directly in the above defini-
Because of the importance of the audit in tion. Finally, the objectives that are stated must
helping to make the destination work better as be reasonable. They should serve to offer a real
we move into the future, we have devoted an challenge, but as the destination seeks to realize
entire chapter (Chapter 11) to this topic. its vision the goals that are virtually impossible
to attain will quickly become a negative rather
than a positive source of motivation.
One further remark concerning the formal
Relating Policy to Strategy and the statement of objectives is in order. Objectives
Development Process identify those events or results that we wish to
bring about. While not universally so, the word
As we have stressed, the role of tourism policy ‘objective’ implies that the result is a positive
is to establish a socioeconomic environment entity, such as a certain number of visitors. In
that will enable tourism to develop and prosper fact, the managers of a tourism system may be
in a sustainable manner. It must constantly be seeking goals with respect to what they do not
kept in mind, however, that this sustainable want to happen as a consequence of their
development must in itself take place within activities. Examples include the avoidance
a broader surrounding social, economic, of environmental and cultural pollution. These
environmental, cultural, legal and political types of results could be stated as specific objec-
system which provides the larger mega-policy tives of the tourism system. Although they are
framework that tourism must acknowledge and very important, their essentially negative nature
function within. provides little incentive for management action.
As tourism strives to develop, it must adopt An alternative and more satisfactory manner
specific strategies in order to implement the of dealing with effects that one wishes to avoid
policies defined by the destination vision. As a is to express them in the form of constraints.
first step in the adaptation, it is useful to specify A common approach to formally stating con-
a range of tourism objectives that operationalize straints on system activities is to specify, where
the steps required to realize the destination possible, the maximum level of each undesir-
vision. able outcome (e.g. pollution) that can be toler-
The objectives of the tourism system should ated as a result of tourism activity. Even where
possess a number of important characteristics. it is difficult to quantify the tolerable levels
First, since the objectives are formulated in the of undesirable outcomes, constraints can be
light of the tourism vision, their achievement formulated so as to at least provide explicit
should clearly contribute to the fulfilment of this indications as to the type of outcomes to be
vision. Second, in order for the objectives to be minimized or avoided.
qualified as operational, it is essential that man- Tourism development strategies may be
agers are able to measure the extent to which viewed as falling into three broad categories:
desired results have or have not been attained. supply development strategies, demand devel-
This implies that we must have some explicit opment strategies and organizational structure
means of quantifying appropriate performance strategies.
standards. Third, we must ensure that the mea-
sures selected with respect to each objective are
indeed valid indicators of the desired results;
that is, they measure what we truly want to Supply development strategies
achieve. Fourth, in the common situation where
the tourism system has multiple objectives, it is Strategies in this category are concerned with
advisable to indicate an order or priority among major actions related to five main groupings of
168 Chapter 8
the destination may also be done to minimize provision of a broad range of necessary skills.
the impacts of unpleasant climatic conditions. These skills are difficult to define and even
They might include the irrigation of the land in more difficult to measure. In essence, these
dry, hot climates, or the provision of protective human resources skills are those that deliver
shelters in colder climates. The second type the functionality required, that give the tourist
consists of policies to maintain and improve the feeling that their presence is both welcome
the general infrastructure and the basic ser- and appreciated, and that service is being
vices infrastructure. The third type includes provided willingly and with enthusiasm. From a
those components of destination attractiveness strategic management standpoint, the question
that are directly related to and largely of the quality of tourism personnel must be
controlled by the tourism system, and that we addressed through education and training
refer to as the tourism superstructure. They programmes designed to improve both profes-
include visitor access and transport facilities, sional and human relations skills. Finally, the
residential and receptive tourism plant, tourism mix of human resources refers to the distribu-
attractions and, to a lesser degree, attitudes or tion of available tourism personnel throughout
hospitality towards visitors. the tourism system, both in terms of quantity
Finally, an increasingly significant physical and quality. An imbalance in the mix exists
resource is the environment, where concern when the number of personnel having par-
for determining the appropriate carrying ticular skills is either insufficient or exceeds
capacity of a destination is critical, and largely the requirements of particular sectors of the
determined by visitor impacts, which need to be
carefully monitored. The end goal is a compre-
hensive programme of resource stewardship,
of which the environment is only one part. Box 8.1b. Human resources policy:
Clearly, the ability of the tourism manager to dimensions of policy
directly influence the desirability of a destination Quantity dimension
differs for the different types of physical • Level/number of personnel required by the
resources. tourism system of the destination
Quality dimension
Human resources policy • Technical, professional and managerial
competence of personnel required by the
Human resources represents a second major destination
category of supply resources that must be con-
sidered when formulating supply development
Human resource mix dimension
• Achieving the proper balance in terms of
strategies in tourism (Box 8.1b). Concern here personnel types
must focus on the quantity, the quality and the • Achieving the proper balance in terms of
mix of personnel available to meet the tourism seasonality of demand
needs of the country or region in question. • Flexibility, adaptability of personnel
Quantity measures the number of persons
Institutional capability
wishing to work in tourism-related activities • Ensuring the availability of institutions
and is to a large extent determined by the capable of providing education/training to
attractiveness of working conditions in the human resource needs
tourism field relative to those provided by other
opportunities. Strategic actions in this regard
Enterprise development
• Initiatives to strengthen and maintain the
must therefore be directed at improving the entrepreneurial capability and spirit of
desirability of tourism careers in terms of both individuals and firms in the destination
their monetary and non-monetary dimensions. • Development and support of career paths
Quality, as it refers to human resources in for members of the local tourism industry
tourism, is a more complex issue. It refers to
Hospitality development
the technical, professional and managerial • Encouragement and facilitation of resident
competence of personnel as reflected in their willingness and ability to welcome visitors
ability to perform the tasks essential to the
170 Chapter 8
tourism system. The strategic management of resource planning involves decisions concern-
human resources must therefore be focused in ing amounts of capital, sources of capital and
two main directions. First, it must concentrate the conditions under which it is obtained. The
on forecasting human resource needs in order amounts of capital required depend on the
that educational and training activities can size and scope of the actions planned for phys-
be appropriately adjusted. Second, in a field ical and human resource development. These
as diverse and seasonal as tourism, strategic capital needs will also depend on the amount
human resource planning must be also required for investment (or destination facility
concerned with developing flexibility among development) and the amount required for
personnel in order to offer individuals greater operating purposes.
opportunity while at the same time improving Identifying and selecting sources of capital
the performance of the total system. is a complex issue and one that takes heavily
Once the quantity, quality and mix dimen- into account the tourism philosophy and objec-
sions of human resource policy have been tives of the country or region, as well as its
formulated, it then becomes essential to deter- available economic resources. Consequently,
mine how these needs will be met – either strategic decisions concerning sources of capi-
through the education and training of destina- tal must consider the extent to which private or
tion residents or by importing foreign labour. public funding is desired, whether foreign capi-
Given a policy of self-determination, it becomes tal is to be sought or permitted, and whether
necessary to define and develop the institu- funding is available from special sources, such
tional capabilities that will be needed to deliver as international development agencies. Finally,
the education and training that are required to decisions must also be made concerning the
support the human resource policy needs of the conditions under which funding will be provided
destination. to projects in both the public and the private
As an underlying element of human sectors. Examples of strategic decisions in this
resources policy, efforts should also be made to area are those regarding the desired mix of
foster the entrepreneurial or enterprise spirit debt and equity capital, the optimal length
of individuals and firms within the destination. of borrowing periods and the desirability or
And finally, while the resident population necessity of incentives, or public subsidization,
may be viewed as a physical resource, efforts for specific forms of development.
must be made from a training perspective to
encourage and facilitate their willingness and Information resources policy
ability to host visitors in a hospitable manner
that will make them feel welcome. Another critical support area of supply policy
is that of information resources (Box 8.1d).
Financial resources policy While information may have been regarded
as somewhat of a luxury in the past, DMOs
Financial resources (Box 8.1c) is another are now fully aware of the vital role of relevant
component of tourism supply development
strategies. Once the strategic development
requirements have been identified with respect
to physical and human resources, it becomes Box 8.1c. Financial resources policy:
necessary to find the capital to implement the dimensions of policy
chosen strategy. In making this statement, it is Financial needs policy
recognized that the formulation of physical and • Supply of venture capital
human resource development strategies could • Long-term capital investment needs
not originally have been carried out without • Operational capital needs
some reference to the possibilities of funding. • Source of capital policy
The process thus tends to be an iterative • Public versus private capital
one that necessarily recognizes the inter-
• Domestic versus foreign capital
• Debt versus equity capital
dependence of physical, human and financial • Special incentives policy
resources. Given this situation, financial
Destination Policy, Planning and Development 171
Dissemination
• Membership support
• Resident awareness development of a DMO that ensure that policies, ideas and
• Key stakeholder relations concepts get translated into reality on a very
practical basis. From a policy perspective,
these efforts tend to be developed around
and timely information. The ability to respond three themes. The first of these is the planning
to shifting market demands and the growing and development of the facilities needed
social pressure on tourism is totally dependent for the destination to compete successfully.
on an awareness and understanding of these Second is the planning and establishment of
factors. events of the kind of that will enhance destina-
The awareness factor of information pol- tion appeal, with a constant effort being made
icy is typically fulfilled by the ongoing monitor- to identify and support innovative ideas for
ing of market conditions and public opinion. new types of events that may be emerging –
This monitoring is commonly referred to as particularly those that will help build the
‘environmental scanning’ – a process by which destination vision. Third, there is a need for
exceptions to managerial expectations serve determining how best to categorize the broad
as a trigger for DMO actions. In contrast to range of activities that go on within a desti-
monitoring, the understanding factor of infor- nation into programmes, so that they can
mation policy is met by more focused and more be managed effectively and efficiently. Exam-
in-depth research on critical topics identified by ples include membership development pro-
the environmental scanning process – or by grammes that seek to expand and strengthen
issues that emerge on a crisis basis. the membership of a DMO, and membership
The factors discussed above represent support programmes (training, access to
inflows of information, but destinations must financing). Other programmes that might
also concern themselves with the strategic be envisaged are collaborative promotions,
outward dissemination of information. Efforts consolidated purchasing programmes and
are directed primarily to the support of mem- community relations programmes.
bership, building resident awareness of the To conclude, it must be emphasized that,
significance of tourism and the need to wel- once overall supply development strategies
come visitors, and particularly to information have been enunciated and appropriate
designed for building relationships with key implementation structures put in place, these
stakeholder groups. strategies must be translated into specific pro-
grammes of an operational nature. At this level,
Programme/activity resources policy the management process becomes one of de-
tailed planning and execution of the many tasks
The final component of supply policy repre- necessary to provide the individual tourist with
sents to some extent a consolidation of all the the satisfying yet challenging experience that he
dimensions (Box 8.1e). Programme or activ- or she is seeking. A more detailed discussion of
ity resources are the various focused activities tourism management is given in Chapter 9.
172 Chapter 8
The need to effectively translate strategic amount that is finally available is especially
ideas into real-world actions cannot be stressed critical in that it limits the extent to which the
too strongly. Without effective execution, even destination can compete against its many rivals.
the most brilliant policies will prove of little
value. SELECTION OF STRATEGIC TARGET MARKETS.
The selection decision concerning appropriate
targets of demand development activities is also
Demand development (marketing) critical since it determines which markets are
strategies excluded from future consideration. Given the
importance of this decision, it is essential that
Demand development strategies in tourism it be based on the best possible information
involve decisions with respect to three primary concerning the potential of alternative markets
components and three secondary components and the feasibility of tapping each market. Once
(Box 8.2). the most desirable target markets have been
identified, one then proceeds to define demand
objectives that should be met for each market
Primary components
segment. These objectives form the basis for
These are: the ultimate evaluation of demand management
efforts.
• the overall level of marketing support that The determination of the appropriate mix
should be provided; of demand management efforts within each
• the selection of strategic target markets; target market requires an in-depth understand-
and ing of the information needs and decision-
• strategic destination positioning in making processes of the members of each
strategic markets. target market segment. For certain types of
markets, such as the corporate travel market, a
OVERALL LEVEL OF MARKETING SUPPORT.
highly selective personal selling approach may
The total level of expenditures for demand prove most effective. In the case of special inter-
development should ideally be derived from est groups, careful selection of print media may
an analysis of the effort needed to meet the offer the greatest returns. In yet other markets,
demand objectives in each target market. Com- where awareness of a destination is low, tradi-
monly however, this ideal amount will exceed tional mass media advertising, accompanied
the maximum total of funds that are available to by public relations press articles, may prove
support such efforts. In these instances, the to be an essential first step in demand develop-
actual level of funds available may be defined by ment. Most target markets can be most effec-
some arbitrary figure, possibly some percent- tively attacked through a judiciously chosen
age of total tourism receipts. In any event, the combination of all available techniques.
destination to define its image in the market- Finally, decisions must be made concern-
place. Nevertheless, DMOs can have some ing the most appropriate timing for the imple-
meaningful influence on how potential visitors mentation of demand development efforts and
view their destination. Creative advertising, the most appropriate theming within each
carefully orchestrated press stories, the hosting target market. Given the variations in demand
of major events and the judicious choice of sym- across different time periods that are commonly
bols and icons can raise the profile and modestly found in tourism and the highly variable
modify the image of a city, state or country. mentalities of target markets, it is essential that
Finally, uncontrollable world events can some- strategies be developed to ensure that demand
times prove to be highly fortuitous and at other development efforts are instituted at the time
times highly negative. when they are likely to have the greatest impact.
Similarly, the message conveyed must be
Secondary components relevant and meaningful for each potential
visitor.
While decisions regarding promotion policy,
pricing policy and packaging and distribution PRICING POLICY. One look at the advertise-
policy may be termed ‘secondary’ from a stra- ments in the travel section of any newspaper
tegic perspective, they are nevertheless not to will highlight the importance that the
be dismissed lightly. Although the decisions travel industry places on ‘visible prices’ in the
tend to be somewhat more operational in marketplace. One should not, however, be
nature, they very directly affect the nature misled. The travel market is becoming increas-
and structure of demand development. If not ingly sophisticated. With every passing year,
executed properly, they can negate the value the well-travelled elements of the market are
of a brilliant overall policy. increasingly able to discern true value in travel,
and they cannot be duped in most circum-
ADVERTISING/PROMOTION POLICY. Decisions stances. Accordingly, destinations that are
concerning the allocation of available funds for seeking to be competitive on a sustainable basis
destination advertising and promotion across must offer value for money. It follows that the
target markets is directly related to the mix of pricing of travel experiences, to the extent that
efforts selected. Certain types of promotional they are controllable by a destination, must be
activities may be more expensive relative kept realistic in relation to alternative offerings.
to others. In addition, they may require some This requires high-quality information concern-
minimum or threshold level of expenditure to ing visitor needs and competitive pricing and
achieve any impact at all. Despite these com- the ability to deliver travel experiences in an
plexities, decisions must be made concerning efficient manner.
how to divide total available funds across target
markets that offer different potential returns PACKAGING AND DISTRIBUTION. As discussed
and which may be at different stages of develop- very early in this book, the nature of distribution
ment in terms of their current propensity to of the travel product is evolving at an alarming
visit a given country or region. These different speed. The traditional distribution channels
stages may require advertising and promotion (through travel wholesalers and retailers) are
designed to simply increase awareness of the constantly being challenged by technologically
destination as a potential vacation site. Some- driven alternatives. While all this is happening,
what better known destinations will place a however, destination managers and travel
greater stress on enhancing knowledge and industry operators need to keep clearly in mind
understanding of the destination. In cases that they are selling unique travel experiences to
where the destination is very well known in many different individuals, who realize these
a specific target market, advertising and promo- experiences one at a time. Because of this, the
tion expenditures are more likely to focus need for simplification and for human concern
on influencing more immediate decisions in the delivering of tourism services is an under-
regarding destination choice for specific travel lying force that will never be totally replaced by
experiences. high-tech solutions.
174 Chapter 8
• Serve as the body responsible for coordinating the marketing and promotional efforts of the
destination
• Provide leadership concerning the overall nature and direction of tourism planning and
development for the destination
• Act as a catalyst to initiate and facilitate the realization of destination development priorities
• Serve as an effective voice of the tourism sector in efforts to enhance the awareness and
understanding of both governments and the general public concerning the economic and social
importance of tourism
• Act as a representative of the tourism sector in all public and private forums where the views and
position of the tourism sector need to be presented and explained
• Provide an easily recognizable and easily accessible interface between tourism and other sectors
of the economy
• Coordinate the identification and delivery of commercial visitor services (such as information/
service centres)
• Coordinate the identification and meeting of the information/research needs of the tourism sector
with the destination
• Attempt to ensure that the education and training needs of the tourism sector are adequately met
• In certain cases, act as an investor/owner/operator of tourism facilities considered essential to the
development and well-being of the destination
• Identify and coordinate the establishment of partnerships and alliances which strengthen the
competitiveness of the destination
• Where possible and appropriate, assist in the search for sources of financial assistance for
members of the tourism sector of the destination
Destination Policy, Planning and Development 175
Roles, tasks and responsibilities of the countries, notably the USA, the diversity of the
destination management organization country and the existence of relatively strong
private sector associations in tourism have led
A DMO may be either a public sector agency to a low level of public sector leadership with
or a private sector-driven organization. respect to tourism development. In addition,
Whatever its nature, it must be constituted in this situation appears to be exacerbated by a
a manner that provides it with certain key lower level of government regulation of both
characteristics. supply and demand development activities than
• It must be clearly identifiable as the orga- is found in many other countries.
nization responsible for coordinating and
directing the efforts of the many parts of Organizational structure of the destination
the diverse and complex tourism system. management organization
• It must command the support of all
important sectors and all major actors in In addition to defining the roles of the DMO
the tourism system. (Box 8.3), organizational policy should also
• It must be capable of influencing the provide guidance concerning the appropriate
decisions and actions of the many public internal structure for it. Several alternatives are
sector agencies/departments and private possible. Some DMOs are primarily based on
firms that directly determine the nature individual membership and others tend to be
and quality of the tourism experience structured as a federation of supporting organi-
provided to visitors. zations (such as chambers of commerce, hotel
• It must possess the tools necessary to associations, restaurant associations and other
stimulate and encourage the type and city ‘booster groups’). The internal structure of
amount of supply development that others reflects the fact that they are, in reality,
is required by the overall tourism a department of the municipal government.
megapolicy. It is interesting to note that few, if any,
• It must be sufficiently independent and countries/regions have experimented with more
flexible to develop innovative strategies novel forms of organization lying somewhere
that can be implemented in a timely man- between the public and the private models. For
ner in response to rapidly evolving market example, a public sector model has been used in
and environmental conditions. a number of countries/regions to direct and
coordinate national/provincial efforts in such
Following a review of the above require- diverse fields as air service, petroleum develop-
ments, it becomes more evident why it is gener- ment, postal services, rural services, medical
ally felt that the most effective organizational services and hydroelectric power. These fields
form is an independent organization, be it a have some common characteristics. Impor-
ministry of tourism or a CVB. In cases where tantly, most of them are primarily involved in
such a ministry or bureau does not exist, the the provision of services (often public utilities)
explanation usually derives from two main rather than the manufacture of products. Also,
sources. It may be that tourism is a relatively most depend heavily on the use of public or
unimportant economic factor in the country, natural resources and all must satisfy some mini-
region or city in question and as such does not mum standards of performance. Currently, the
merit the expenditure of the funds necessary to Korean Tourism Corporation is one example
support an independent ministry or bureau. In of a public sector corporation in tourism.
these cases, tourism policy and development Alternatively, increasing pressure for pri-
responsibilities are commonly subsumed within vatization of the tourism system in some desti-
some larger ministry or city department, such as nations has led to the creation of some hybrid
those concerned with economic development, organizational forms. In Canada, the Canadian
parks and recreation, or even cultural affairs. A Tourism Commission (CTC), while driven by
second major reason why a ministry or bureau the private sector, depends very heavily on
does not exist may reflect the political philoso- public sector funding. In addition, it has incor-
phy of the country, region or city. In certain porated into itself many of the resources and
176 Chapter 8
personnel of the former federal government financial needs. A large number may claim
department known as Tourism Canada. The that they are not in the tourism business even
province of Alberta, Canada, briefly experi- though they may benefit significantly from
mented with a public/private sector model visitor expenditures.
known as the Alberta Tourism Partnership. Given the above problems, which should
It was not particularly successful. be a policy issue addressed by the DMO’s board
of directors, they are often passed on to the
Funding policy for the destination DMO’s manager, with the result that he or she
management organization will be forced to expend an enormous amount
of time and energy raising funds – and conse-
The organizational structure that is adopted quently be diverted from managerial responsi-
has a major impact on DMO funding policy. bilities. The practical problems of addressing
Membership-based DMOs rely heavily on DMO funding are dealt with at greater length in
membership fees; federation-based structures the chapter on destination management.
are usually financed by constituents of the
federation. Municipal department DMOs, as The process of tourism policy formulation
might be expected, are highly dependent on
local taxation for funding. These tax funds may Discussion to this point in the chapter has
come directly from city coffers or indirectly by focused on the structure and content of tour-
means of a local hotel tax, which may be either ism policy. In this section, attention is directed
voluntary or compulsory (the norm). towards understanding the process by which
A problem of major concern in relation tourism policy, as presented in Fig. 3.1, may
to DMO funding is the ‘free-rider’. Many be developed. This process is conceptualized
firms, organizations and individuals who benefit as containing 11 distinct stages grouped into
substantially from the leadership, coordination four main phases (Fig. 8.10). These phases
and promotional activities of the DMO refuse to are identified as the definitional phase, the
become members of the DMO, or at least analytical phase, the operational phase and
avoid becoming members or contributing to its the implementation phase.
Fig. 8.10. The process of tourism policy and strategy formulation and implementation.
Destination Policy, Planning and Development 177
Acco
e mmo
trad
Str
d
vel secto ation
ip
Tra ector
N
ate
dsh
TE
TIO
CH
g
MA
NO
w ar
y
OR
To rvic
LO
se
ur es
INF
GY
Ste
ism
or
Pu
ect
ts
ts s
bl
en
national national
ic
en
Planning
Transportation
Ev
PHYSIOGRAPHY
sec
associations tourism offices
CLIMATE
Evaluation
sector
tor compone
State and provincial State and provincial
travel industry government
Attra
Local
ction
CULTURE
GOV
and regional
Local and city
te
tourism associations/
r nt
s se
government
ERN
convention and
iva
nt
se inme
vistor bureaux tourism
s
departments
ctor
Pr
ANC
cto
ta
ter
Mo
ent
E
En
nito
Adv
pm
en
rec ture a es
ring
rvic
elo
rea n
tion d out d se
sec door Foo sector
Dev
tor
IN
Im
FR E
AS UR
pa
TR CT
UC RU
cts
T
TU RS
RE PE
SU
ing
Ex k et
pe
rie ar
n PEOPLE M
ce Industry–Residents–Visitors
s
a tion
Behavio
u rs Visit
CARE
ERS IN TOURISM
Fig. 8.11. The tourism phenomenon: components of tourism and tourism management (from Goeldner
and Ritchie, 2003).
deliberate and structured process, current think- desirability of alternative means of attaining
ing emphasizes the intuitive and interactive the destination vision and to achieve the goals
nature of effective strategy planning and policy defined by the vision.
formulation. Nowhere in the policy process is The overall process of analysis is best
this truer than in the preparation of a destina- viewed as being composed of two major
tion vision statement. Given the fundamental subprocesses: an internal or supply-oriented
importance of this phase of policy formulation, analysis, and an external or demand-oriented
it has been addressed in detail earlier in this analysis.
chapter (see Crafting versus formulating a The internal/supply analysis consists of
vision, pp. 154–164). a thorough review and analysis (frequently
termed an audit) of two major elements. The
SPECIFYING DESTINATION OBJECTIVES. As first element relates to existing policies and
noted earlier, a destination vision paints an programmes for the development of the various
inspirational portrait of an ideal future at some components of tourism supply. These policies/
relatively distant point in the future. The vision- programmes must be reviewed critically to
ing process is therefore a creative and value- determine the extent to which they are both
laden one. In contrast, the process of specifying consistent with and effective in developing the
destination objectives requires a less idealistic type of tourism facilities and services that are
process that is closer in touch with immediate likely to achieve the goals of the region, given
realities. While still consensus-oriented, the the nature of demand facing that region. As can
process of setting objectives seeks to define be quickly seen, this statement implies a direct
measurable goals, which are most frequently interaction between the supply analysis and the
tied to visitation and revenue levels and to orga- demand analysis. In effect, the analytical phase
nizational performance (effectiveness and effi- involves parallel, iterative forms of analysis that
ciency). In addition, the time frames involved must constantly relate one to the other.
are much shorter and more tightly defined. A second element of the supply analysis
is termed a resource audit. A resource audit
SPECIFYING DESTINATION CONSTRAINTS. The should be conducted with two goals in mind.
process of specifying policy constraints must First, it should provide a comprehensive cata-
also be considerably more hard-nosed than logue of the quantity and distribution of tourism
the process of visioning. Here it is necessary facilities and services within the tourism system.
to have common agreement on the negative Such information is basic to an understanding
possibilities that simply cannot be tolerated. of the current state of affairs of supply develop-
While environmental groups often play a ment. Second, the resource audit should pro-
dominant role in this area, the realities of the vide some assessment of the quality of existing
marketplace and human nature are also major facilities and services. Again, the execution of
determinants of the constraints that are placed the audit to assess the adequacy of the quantity,
on tourism development within a destination. distribution and quality of supply can only
be meaningful if it is eventually related to
Analytical phase the analysis of demand. There are no absolute
measures of desirability in terms of supply –
The analytical phase of tourism policy develop- only those that relate to a given demand at a
ment, while perhaps less stressful than the given point in time for a given market segment
previous one from a managerial standpoint, are relevant.
involves considerably greater amounts of The third form of internal analysis is a
effort. The definitional phase requires funda- strategic impact analysis. This analysis seeks to
mental, value-based decisions concerning the provide policy makers with well-defined bench-
nature and direction of tourism development in marks of the extent to which tourism is currently
a region. The analytical phase accepts these impacting the destination in economic, eco-
decisions as a given and proceeds to carry logical, social and cultural terms. Economic
out the extensive collection and assessment of benchmarks have traditionally been the most
information needed to identify and assess the requested forms of impact analysis as both
180 Chapter 8
managers and politicians seek to measure and tourism market. The purpose of gaining this
understand the level of tourism receipts as well understanding is to provide those responsible
as the incomes and employment they create. for supply development with the information
Virtually any proposal for investing in tourism needed to design facilities and services which
development is required to provide at least a will appeal most to each of the various demand
global estimate of the economic benefits and segments. In addition, such data facilitate the
taxes to be generated. More comprehensive task of those responsible for the promotion of
economic impact analyses will also estimate the existing facilities and services.
possible negative impacts, such as exorbitant The final component of external/demand
land prices resulting from increased tourism and analysis involves a review and evaluation of
the additional taxes that may be required to competitive and supportive tourism develop-
build a facility such as a municipal convention ment and promotion policies and programmes.
centre. Competitive analysis is a common form of man-
In addition to economic reviews, ecological agerial investigation. In this case, it is designed
(or environmental) impact analysis is increas- to produce a clear picture of the identity,
ingly becoming another standard requirement strength and strategies of those tourism destina-
for meaningful policy formulation. Typically a tions most likely to be appealing to the same
‘state of the ecology’ report is a starting point segments of demand as those of interest to the
for tourism policy formulation in any region that tourism region in question. Such information is
is in any way environmentally sensitive. In such essential if a region is to effectively counter the
cases, these ‘state of’ reports are normally efforts of such competitors from the standpoint
complemented by an Environmental Impact of both supply development and demand
Assessment (EIA) for all proposed tourism modification.
developments. The analysis of supportive policies and
In certain instances, social and cultural programmes is an activity that is frequently
impact benchmarks and analyses may also be neglected in the highly competitive world of
requested. These are typically, but not always, tourism. As a result, policy makers may over-
restricted to situations where a culture is threat- look potential sources of synergy that may be
ened or where a community feels that increased developed by cooperating or forming alliances
tourism will adversely affect its way of life. with either other tourism regions or other
The external/demand analysis is com- public/private sector organizations within the
posed of three distinct types of analytical region, but in non-tourism fields. While care
activity. The first involves macro-level analysis must be exercised in deciding what forms
of data that describe and define the overall of cooperation are most likely to be attractive,
nature and structure of current tourism demand failure to explore such avenues may deprive a
and those markets having a potential for future region of the possibility of appealing to new or
demand. This form of analysis relies heavily distant markets.
on aggregate statistics measuring the flows of
tourists and travel-related expenditures within a Operational phase
region; it must not limit itself to such historical
data. In addition, macro-level analysis must Once the various types of analysis have
be future-oriented and attempt to monitor the been carried out, policy makers must move to
environment constantly in order to identify develop specific strategies and action plans
shifts or trends in social, political or technologi- that can be implemented. As shown in Box
cal factors that might significantly affect the 8.3, this operational phase is envisaged to
region’s success in its field of tourism. contain three conceptually different types of
The second type of external/demand activity; in reality these different activities are
analysis is micro-level analysis. Here, rather executed almost simultaneously.
than focusing on aggregate trends in tourism The identification of strategic conclu-
demand, attention is directed towards gaining sions flows directly out of the analytical phase
an understanding of the motivations and and has as its goal the synthesis of the large
behaviour of the different segments of the total amounts of information obtained into a limited
Destination Policy, Planning and Development 181
region. The detailed components of supply and empirical analysis. Advances in Services
and demand development strategies are then Marketing and Management 4, 37–61.
discussed. Parks Canada (1997) Banff National Park Manage-
ment Plan. Minister of Public Works and Gov-
Finally, the chapter focuses on the process
ernment Services, Ottawa, Ontario, Canada.
of policy formulation, the processes by which
Prugh, T., Costanza, R., Cumberland, J.H., Daly, H.,
all of the foregoing components of policy are Goodland, R. and Norgaard, R.B. (1995)
defined. The chapter identifies the major Natural Capital and Human Economic
components of tourism policy and strategy Survival. ISEE Press (International Society of
formulation and implementation and discusses Ecological Economics), Solomons, Maryland.
the activities involved in each. Ritchie, J.R.B. (1993) Crafting a destination vision:
putting the concept of resident-responsive
tourism into practice. Tourism Management
14, 379–389.
References Ritchie, J.R.B. (1999) Crafting a value-driven vision
for a national tourism treasure. Tourism Man-
Aaker, D.A. (1991) Managing Brand Equity: agement 20, 273–282.
Capitalizing on the Value of a Brand Name. Ritchie, J.R.B. and Goeldner, C.R. (1994) Travel
Free Press, New York. Tourism and Hospitality Research: a
BBVS (Banff-Bow Valley Study Group: Page, R., Handbook for Managers and Researchers.
Bayler, S., Cook, J.D., Green, J.E. and John Wiley, New York.
Ritchie, J.R.B.) (1996) Banff-Bow Valley: at Ritchie, J.R.B. and Ritchie, R.J.B. (1998) The brand-
the Crossroads. Technical Report, Banff-Bow ing of tourism destinations: past achievements
Valley Task Force. Prepared for the Honourable and future challenges. Conference Proceedings
Sheila Copps, Minister of Canadian Heritage, of the Annual Congress of the International
Ottawa, Ontario, Canada. Association of Scientific Experts in Tourism
Bedbury, S. and Fenichell, S. (2002) A New Brand (AIEST), Marrakesh, Morocco, 1 September,
World: Eight Principles for Achieving Brand pp. 89–116.
Leadership in the 21st Century. Viking/ Ritchie, R.J.B. and Ritchie, J.R.B. (2002) A frame-
Penguin Group, New York. work for an industry supported destination
Dror, Y. (1971) Design for Policy Sciences. marketing information system. Tourism
American Elsevier, New York. Management 23, 439–454.
Fisher, R. and Ury, W. (1991) Getting to Yes: Sandford, R.W. (1997) The Banff Bow Valley
Negotiating Agreement Without Giving In. Heritage Tourism Strategy. Heritage Tourism
Penguin Books, New York. Working Group, Banff, Alberta, Canada.
Getz, D., Anderson, D. and Sheehan, L. (1998) Sheehan, L.R. and Ritchie, J.R.B. (2002) A theory
Roles, issues, and strategies for convention and based exploration of destination stakeholder
visitors’ bureaux in destination planning and identity and salience. Working Paper, University
product development: a survey of Canadian of Calgary, Alberta, Canada.
bureaux. Tourism Management 19, 331–340. Smith, S.L.J. (1995) The tourism satellite account:
Goeldner, C.R. and Ritchie, J.R.B. (2003) Tourism: perspectives of Canadian tourism associations
Principles, Practices, Philosophies, 9th edn. and organizations. Tourism Economics 1,
John Wiley & Sons, New York. 225–244.
Mintzberg, H. (1987) Crafting strategy. Harvard WTO (2001) Tourism Satellite Account (TSA):
Business Review 65(4) 66–75. Implementation Project – The Tourism
Morgan, N., Pritchard, A. and Pride, R. (eds) (2002) Satellite Account as an Ongoing Process:
Destination Branding: Creating the Unique Past, Present and Future Developments.
Destination Proposition. Butterworth- World Tourism Organization, Madrid, Spain.
Heinemann, Oxford. WTO (2002) Tourism in the Age of Alliances,
Otto, J.E. and Ritchie, J.R.B. (1995) Exploring the Mergers and Acquisitions. World Tourism
quality of the service experience: a theoretical Organization, Madrid, Spain.
9
Destination Management: the Key to Maintaining a
Sustainable Competitive Advantage
Comparative Competitive
advantages advantages
(resource endowments) Destination competitiveness and sustainability (resource deployment)
Global (macro)environment
Destination policy, planning and development
Destination management
In the previous chapter we examined how and then providing them with a memorable
tourism policy provides a framework within visitation experience. In doing so, the policy
which a competitive tourism destination can be attempts to minimize the degree to which the
developed on a long-term, sustainable basis. destination’s qualifying determinants eliminate
Tourism policy is seen as critical for creating it from consideration by potential visitors
the conditions within which tourism can suc- or maximize the degree to which amplifying
ceed and for providing visionary guidance as to determinants can enhance its appeal in the
how tourism development most appropriate highly competitive marketplace.
for the destination can take shape and grow In this chapter, we assume that the
successfully. This policy formulation seeks to policy, planning and development process
take maximum advantage of the degree has succeeded in creating the framework
to which a destination’s core resources and for a competitive/sustainable destination. The
attractors are first capable of attracting visitors challenge now faced by the destination is to
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
(J.R. Brent Ritchie and Geoffrey I. Crouch) 183
184 Chapter 9
manage its various components in a way that made available. In any case, it is essential that a
ensures its economic profitability while avoiding destination’s DMO be functional from both the
degradation of the factors that have created its strategic and the operational perspective. As
competitive position. noted, the leadership and coordination roles
that a DMO must perform are the essence of
ongoing, long-term success. However, as the
The Process of Destination chief executive officers of many DMOs have
Management found out, the DMO must also effectively
perform the many tactical roles that demand
As seen from our model of destination close daily attention if it is to maintain the
competitiveness and sustainability, given in competitiveness of the destination for which it
figure on the previous page, the destination is responsible.
management module consists of a total of As Chapter 8 also pointed out, tourism
nine components, presented in a linear fashion policy broadly defines the roles of the DMO, the
within the module. Each component contains nature of the structure that is appropriate in
individual destination managerial tasks that the circumstances, and the general means by
must be carefully attended to by the destination which funding to support operations will be
manager. While presented linearly, the process generated. In this chapter, we now examine,
of destination management is, in practice, from a managerial perspective, how these
much more circular or iterative. That is, it is policy directives can be implemented. Before
not always obvious which component comes doing so, however, it is important to make
first, and in addition, all components are highly clear how circumstances can modify the
interdependent. Thus, while resource steward- implementation of basic policy guidelines.
ship is addressed towards the end of the discus-
sion in this chapter, it is in reality an ongoing
management activity that must continually be
Level of the destination management
considered along with all of the other eight
organization
components of the destination management
process. Readers should keep this conceptual
While Chapter 8 discussed some six levels of
reality clearly in mind as they review the total-
destination, there are essentially three funda-
ity of the chapter. This said, if there is any
mental levels at which a DMO most commonly
management activity that must be performed
functions. They are the national level the
before the others, it is probably organization,
regional/state/provincial level, and the urban/
and it is with this topic that we start the
municipal/city-state level. While there are
chapter.
many commonalities across these levels, it is
wise to keep these distinctions in mind when
discussing managerial responsibilities and the
Organization means of meeting them. While the basic roles
of a DMO are generally similar at all destina-
In Chapter 8, we saw that tourism policy tion levels, the type of structure which is used
provided the guidelines for the framework and the approaches to funding tend to vary
within which to establish and operate the substantially. These latter two areas will be
organization that will provide the leadership examined first.
and coordination necessary to make a desti-
nation function competitively on an ongoing DMO structures
basis. Chapter 8 also pointed out that the
actual structure of the destination management Table 9.1 shows the range of alternative DMO
organization (DMO) that any given destination structures that are commonly found at different
puts in place depends on many factors, most destination levels. It is important to understand
notably the nature of the destination and the the structure that exists at any particular desti-
level of funding that is required or that can be nation since it can have profound implications
Destination Management 185
Table 9.1. Some alternative DMO structures at their structure and mode of functioning, it
different destination levels. is primarily at the urban/municipal/city-state
level where different types of organizational
Level Alternative structures
structures begin to appear. At present, there
National • Government tourism department are commonly two main alternative organiza-
(country) • Government tourism and economic tional structures that set the tone for city-
development/recreation/parks/ oriented tourism development and promotion.
culture department The city tourism department is the public
• National tourism commission
service equivalent of the national/provincial
• National tourism authority
tourism department, while the City Convention
• Crown/government corporation
and Visitor Bureau generally claims to be a
State/ • Government tourism department private sector organization (despite the fact
provincial • Joint public/private agency that it often draws heavily on public funds).
Urban/ • City tourism department Consequently, this type of DMO management
municipal/ • Convention and visitors bureau varies in its public/private emphasis in decision
city-state • Member-based making – and must be constantly looking over
• Non member-based both shoulders.
• City Inc. (joint Economic
Development and Promotional
Tasks of the DMO
Agency)
If we assume that the policy-level issues sur-
rounding the basic structure of the DMO and
the nature of its funding base have been
for the nature of the challenges that destina- determined (admittedly, these are major
tion management faces. One of the most sig- assumptions), then we must address the daily
nificant of these implications concerns whether managerial tasks that are essential to an
DMO management reports to a publicly effective, smoothly operating DMO. Table 9.2
elected official, to a board of directors elected summarizes these managerial tasks. In general,
by industry members, to a corporate/agency they tend to fall into two major categories:
board of directors (who may often be appointed internal and external programmes. While these
by government) or, in certain cases, to a part- two categories are not entirely separate, inter-
nership involving a joint public/private sector nal programmes have, in general, an inward-
board of directors. Regardless, the organiza- looking nature, whereas external programmes
tional structure can modify both the tone and are outward-looking and as such tend to
the specific DMO managerial practices that communicate what the outside world (including
tend to dominate. What is particularly critical DMO stakeholders) sees as the functioning of
is whether the board to which management the DMO.
reports has a public or private sector orienta-
tion. In the first case, the organizational philos-
ophy to which managers must respond will
tend to have an emphasis on public service Internal programmes
and community development. In the latter, the
private sector philosophy will tend to view Even within this category, there are program-
the DMO as a business in which cost controls mes (or activities) that are very much internal in
and accountability will normally dominate the nature, while others, although internal to the
environment within which the DMO manage- destination, are primarily concerned with desti-
ment functions. It is not that either the public nation members rather than DMO members.
or the private philosophy is better or worse Indeed, many are truly more administrative
than the other; as is normally the case, each than managerial. Just the same, they are
has its merits and each its shortcomings. critical to the success of the DMO. As shown
Since national and state/provincial gov- in Table 9.2, the internal tasks are primarily
ernments often seem to mirror one another in those required to enable the DMO to function
186 Chapter 9
Table 9.2. Managerial tasks to ensure an original members of the tourism industry
effective, smoothly operating DMO. feel the added cost cannot be justified.
The consequence is often the emergence
Internal
• Definition of organizational by-laws of the free-rider problem, a situation
• Determination of committee structures in which many who benefit from tourism
• Determination of budget/budgeting process refuse to join the DMO or to support
• Organizational administrative procedures its efforts. Consequently, this funding
• Membership management alternative is not particularly popular or
• Community relations well-accepted.
• Publications • A local hotel tax. Such a tax may be
External legislated or voluntary. In either instance,
• Marketing while it may provide a substantial,
• Visitor services/quality of service/visitor relatively stable source of DMO funding,
management it is often viewed by the hotel sector as
• Visitor management one-sided, and thus unfair. The argument
• Information/research is that hotels represent only part of
• Finance and venture capital management the tourism industry and its associated
• Resource stewardship revenues. The counter-argument is that
• Human resource management visitors do not come to a destination just
to stay in hotels – and so the hotel sector
administratively. The external tasks are, with benefits enormously from the investments
one exception, the major managerial chal- in facilities and promotion that must be
lenges facing the DMO. That one exception is made by all other components of the tour-
constant concern for financing and the DMO ism sector. It is also usually pointed out
budget. that a hotel tax is much simpler to admin-
ister than many other ways of raising
DMO funding funds, since it can be incorporated into
existing sales tax collection procedures.
Most of the organizational funding issues that • In an attempt to retain both equity and
must be addressed by DMO management flow integration of collection, certain juris-
directly from – and are answered by – the kind dictions have attempted to legislate a
of DMO organizational structure that has been tourism/recreation tax. Because it is
put in place, as discussed above. In the distant, much more widely spread than a hotel
traditional past, it was generally much easier to tax, it can be much lower as a percentage
be a government department and to simply of sales. But while conceptually logical it is
ask the question ‘how much do we need this not so simple in practice, since it becomes
year?’ of political masters. But somewhere in difficult (if not impossible) to define which
the 1980s (or so), governments at all levels firms are in the tourism/recreation indus-
started to face programme funding demands try and which are not. While many retail
that exceeded revenues. As a consequence, shops benefit from visitor expenditures,
DMO management at all levels was forced to many do not. Similarly, while many recre-
start looking for alternative sources of funding, ation facilities also benefit from visitor
and most of this had a private sector origin. expenditures, a large percentage do not.
Some typical sources that have emerged are As a consequence, this seemingly logical
discussed below. approach has tended to fail because of its
complexity of administration.
• Increased membership fees for industry
members. While this approach seems to Other approaches to DMO funding have
make sense to many, it has generally not sought to go completely outside of government
been successful and has frequently weak- grants and various forms of taxation. One of
ened the DMO that seeks to implement it. the most popular has been the private sector
In effect, membership can decline as the sponsorship alliance.
Destination Management 187
• The private sector sponsorship alliance most cases, are charged with preparing detailed
is an arrangement in which firms that budget proposals for review and approval.
benefit substantially from visitor travel Budget preparation is just one of the many
agree to donate a certain amount or given administrative procedures that go on within a
percentage of their revenues within a des- DMO. A large number pertain to the financial
tination to the DMO in return for promi- management of the budget resources, once
nent advertising visibility throughout the these have been approved. Procedures for the
destination and in the destination’s pro- preparation of an operating statement, describ-
motional programmes. Companies in the ing the financial status of the DMO, the moni-
credit card business, the alcoholic bever- toring of cash flows, the maintenance of indus-
age industry and gasoline retailing are try and government funding programmes, and
typical candidates for such sponsorship the achievement of all budgeted revenue are all
alliances. However, despite their short- procedures that are triggered by the budget.
term potential, such alliances have not In addition, other control procedures may
always provided the levels of long-term, be part of a DMO’s internal management tasks.
stable revenue that a DMO requires if it is For example, the monitoring of merchandizing
to be effective on a sustainable basis. programmes, fixed asset performance, the
accommodation reservation system and all
Internal managerial tasks information systems in general are important
managerial responsibilities that must not be
First, for the DMO to run in a way understood neglected.
by all, it requires a set of by-laws that define
the rules of governance of the organization. Managing DMO membership
While responsibility for maintaining a current
set of by-laws is usually regarded as a fairly The first task facing DMO management is to
boring task, it is only when the DMO faces comprehensively identify those stakeholders
an organizational or political crisis that their of the destination region who are legitimate
value is appreciated. Since by-laws determine potential members. This task is not as trivial as
such things as officer responsibilities, voting it may sound. As discussed above (see DMO
rights, election procedures, terms of office and funding) the free-rider issue makes this task a
the distinction between volunteer and full-time challenging one. When identified, an active
paid positions, they are important, but they and ongoing campaign of membership recruit-
tend to go unnoticed in times of normal ment must be put in place – and when an
operation. individual or organization is formally signed
Another managerial task that is often up, the task of dues collection truly confirms
viewed as rather mundane is the determination membership. Throughout the processes of
of committee structures and membership. recruitment and dues collection, a functional
If structures are defined by organizational by- database of members needs to be established
laws, then membership decisions may be made and maintained for accuracy.
by either volunteers or full-time staff, depending Once membership has been confirmed and
upon the organizational nature of the DMO. recorded, the DMO must then make sure that
The purpose of DMO committees is to allocate members perceive membership as worthwhile.
responsibilities for specific managerial and To get things off on the right foot, an orientation
administrative tasks to small subgroupings of programme that helps the new member fully
the total managerial team. understand how the DMO can help the organi-
One committee of traditional significance zation or individual benefit from membership is
is the budget committee, which, as the name essential for maintaining the enthusiasm of new
indicates, is responsible for managing the bud- members. It also helps new members feel that
geting process for the DMO. While final deci- they are truly part of the DMO family.
sions or budget allocations are normally the In order not to lose enthusiasm once it has
responsibility of the DMO board of directors, it developed, the internal task of membership
is the management and staff of the DMO who, in management is to put in place a comprehensive
188 Chapter 9
membership programme that delivers value for must pay close attention to the content and
the members. Such a programme commonly effectiveness of the information it makes
includes three elements. The first consists of available to the members, all stakeholders, the
routine, ongoing programmes that primarily community at large and potential visitors.
include regular meetings and networking
sessions. The second element, special area
programming, may involve guest speakers, External programmes
strategic planning sessions and visits to member
facilities. Third, membership development pro-
The external managerial tasks of the DMO,
grammes are for many a major reason for loyal
listed in Table 9.2, are generally so important
DMO membership. They consist of education
that they merit detailed discussion. For this rea-
and training that can be either periodic or sys-
son they have been identified in our model as
tematic, and workshops and seminars on timely
distinct components of destination manage-
topics – the latter are often appreciated but
ment. So, rather than considering them simply
may not provide as much substance as a more
as sub-components of the organization func-
systematic, long-term training and certification
tion, we present them at the same level of
programme.
importance. Before doing so, however, we feel
Regardless of the membership develop-
the need to address an as-yet unresolved
ment programme that is adopted, these three
debate.
elements are all essential for membership
maintenance and renewal. If members do
not renew, the DMO is faced with the difficult The DMO debate: destination marketing or
question of why they have not done so. destination management organization?
The next two areas of DMO managerial
Marketing, or perhaps more correctly, promo-
responsibility may be viewed as either internal
tion and selling, has for many years been the
or external.
primary task that destination managers felt was
their job. In the past, the importance of the
Community relations marketing and promotion roles of the DMO
were of such a high priority that the DMO label
The task of community relations is primarily
was understood to mean ‘destination market-
intended to maintain the DMO’s visibility and
ing organization’. It is only in recent years that
reputation in the community that it serves.
DMOs have acknowledged how significant
The community relations programme can be
their non-marketing roles are in developing,
focused on those who make the decisions on
enhancing and maintaining destination com-
DMO funding or can be more broadly directed
petitiveness. Nearly all progressive and effec-
towards the entire DMO membership, or
tive DMOs in today’s world now appreciate
even the entire community. In any event, the
the importance of their more broadly based
message to be conveyed is ‘your DMO cares
mandate and use DMO to mean ‘destination
about your support and is attempting to serve
management organization’. We strongly agree
your needs’.
with this position.
Publications programme
Again, a DMO publications programme must Marketing (Promotion?)
serve both internal and external audiences.
Many publications are produced for the DMO Regardless of one’s position in the foregoing
membership and for the entire community debate, marketing remains an important func-
the DMO serves. Traditionally, a paper-based tion of the DMO. Because of this, the develop-
publications programme has been very costly. ment of demand strategies (the essence of mar-
With the advent of the Internet, much of the keting) is viewed as a major component of
paper has been replaced by an effective DMO destination policy. In this chapter we attempt
home page. Despite this change, management to provide more operational insights into how
Destination Management 189
the elements of marketing (Fig. 9.1) are imple- destination planning and development function
mented. Nevertheless, there are limits on the is often not viewed as an integral part of the
level of detail that can be provided in this book, marketing function.
and readers wishing a greater level of detail Our framework clearly places a high
about the total marketing process are referred priority on the destination product by recog-
to the books by Morrison (1989) and Kotler nizing it as a critical component of the overall
and Bowen (1998). competitiveness and sustainability model. We
Another debate that lies below the surface will not repeat here our discussion on desti-
in the tourism marketing world is the distinction nation (product) development. However, we
between tourism marketing and tourism stress that, from an effective marketing
promotion. In discussions with practitioners, perspective, the product being delivered to the
one often gains the clear impression that these customer (in this case the destination visitation
two terms are considered to be equivalent. experience) needs to be viewed as an integral
In particular, there seems to be considerable part of the marketing function.
neglect of the product innovation and develop-
ment dimension of the traditional ‘four
Ps’ (product, promotion, price, place) and par-
ticular emphasis on the promotion dimension Identification of strategic markets for
of the total marketing ‘onion’, although admit- the destination
tedly there is also great concern for pricing and
for the distribution of the tourism product. The first operational marketing challenge fac-
This seeming lack of concern for product ing the destination manager is to determine
is, however, somewhat deceptive. It is simply explicitly which specific visitor markets the
that in the traditional tourism world the destination should actively pursue. The initial
questions destination managers must ask about challenge becomes one of attempting to deter-
their destinations are: who have we attracted mine which market will be most cost-effective
in the past? and who can we best serve now, to address on a sustainable basis. This requires
given our strengths? As part of this process, measurement of the current level of awareness
destinations need to review visitor history data and the image of the destination in each poten-
to understand visitation trends among various tial market. A low level of awareness and/or a
market segments. In this process, destination poor or misunderstood image implies much
managers should realistically delineate the higher costs for efforts to enhance the desti-
strengths of the destination in terms of nation’s competitive appeal in a given target
the experiential benefits it can provide to the market. Clearly, a balance must be sought
potential visitor. This analysis will very quickly between the apparent profitability of a feasible
define whether the destination will appeal to ideal target market and the costs associated
the leisure market or the business/convention/ with efforts to obtain these profits.
meeting market, or to both markets. The measurement of a destination’s
More explicitly, destination managers awareness can be undertaken in two
should seek to identify the experiences for main ways. ‘Top-of-mind’ awareness measures
which they feel they have a possible competitive attempt to determine whether prospective
advantage. Examples of the types of experi- clients in the destination are simply aware of
ences they might consider for the leisure the existence of a destination for a given type
and business/convention/meeting markets are of experience. Conversely, ‘prompted recall’
outlined in Tables 9.3 and 9.4, respectively. measures of awareness indicate whether or not
Once the range of experience types the respondent can recognize the destination
is understood by a destination, management is when its identity is given in one of several forms.
then in a position to undertake a process of The measurement of destination image
experience market matching based on a com- has been a major focus of much tourism
parison of the experiences the destination research for many years. Echtner and Ritchie
is capable of offering and the needs, wants (1991) have identified three major dimensions
and behaviours of markets where it is deemed along which image should be measured
that the destination is potentially competitive. (Fig. 9.6). They are:
In carrying out this matching process,
destinations must keep in mind behavioural,
• a dimension that distinguishes between
the functional characteristics (specific
locational and cost constraints that may negate
benefits provided) and the psychological
an ideal match because the client is, in practice,
characteristics (the more abstract feelings
unable to pursue the satisfaction of his or her
experienced) of a destination;
needs and desires at the destination. Distances
may be impossible to overcome because of
• a dimension that measures the specific
attributes of a destination versus the mea-
timing or cost. Certain locations may be
surement of a more holistic impression
unacceptable for legal or cultural reasons. While
of the destination (Table 9.5); and
a destination may be able to provide the desired
• a dimension that distinguishes between
experience for some markets, it may be unable
the measurement of aspects that are
to so for others because of religious factors,
common to virtually all destinations versus
or simply because of functional reasons that
those that are unique to a particular
involve specific or unusual facility requirements.
destination.
While it is important that a destination
be perceived positively with respect to those
Measuring destination awareness functional and psychological attributes that
and image are common to most destinations, and that a
favourable holistic impression is created, what
Once feasible ideal target markets have been is especially desirable is the development of a
identified by a destination for both the leisure positive unique image that distinguishes one
and the business markets, the marketing destination from the many competitors that
Destination Management 191
but also to a certain degree, household members. While admittedly (and necessarily) having multiple
dimensions that can be difficult to manage in terms of quality control, it is a risk that many visitors
consider very worthwhile (see www.irishfarmholidays.com)
• The understand-the-real-world experience
While some may interpret this kind of experience as a version of the adventure experience, it depends
on the traveller. What this experience implies is visitation to a destination in which the traveller is not
artificially protected from some of the realities of living that many of the world’s residents experience
every day. Visits to many regions of Africa, India, China and Asia in which the visitor does not stay
in high-quality hotels, eats the food of the common people and travels using the local modes of
transportation are not for everyone, but they can provide memorable lifetime experiences for those
in good physical condition and in the right mindset
Table 9.4. Examples of business and organizational market benefits and experiences.
Table 9.5. Examples of attributes used by researchers to measure destination image (from Echtner
and Ritchie, 1991).
more of a defensive measure designed to When US states such as Florida and Utah
protect the good name that many destinations claim that ‘FLA/USA’ and ‘Utah!’ are brands,
had built up over the years. However, branding what do they really have in mind concerning the
has now become a much more proactive and roles or functions that the brand will play? While
positive dimension of a destination’s overall it may not have been a conscious strategy, a
marketing strategy (Morgan et al., 2002). select number of resort destinations and ski cen-
Despite this shift to a more positive approach, tres have built up over the years what effectively
the concept of destination branding is often amounts to a brand identity. Spas such as
being applied without a clear understanding of Baden-Baden in Germany and resorts such as
the true nature and the fundamental functions Palm Springs in California, USA, evoke strong
of a destination brand. images in the minds of travellers. Ski centres
196 Chapter 9
Table 9.6. Most frequent responses to open- many other functions that are equally impor-
ended image questions for Jamaica (from Echtner tant, if not more important, from an overall
and Ritchie, 1993). marketing perspective. Before examining
Images or characteristics evoked when these, it is essential to have a basic understand-
thinking of Jamaica as a vacation destination ing of fundamental brand theory and brand
• Beaches (80.5%) management. As a first step in gaining this
• Tropical climate (61.1%) understanding, it is useful to review a summary
• Sun (44.3%) of the terminology of branding (Upshaw,
• Ocean (30.2%) 1995) (Table 9.7). With these definitions as a
• Negroid peoples (25.5%) foundation, we now turn to the development of
• Music/reggae (25.5%) a definition of destination branding.
• Rum and tropical drinks (18.1%) A simple transference of Aaker’s well-
• Poverty (17.4%) known definition of branding would infer that
• Friendly, hospitable (16.1%)
• Palm trees (16.1%) a destination brand is a ‘distinguishing name
• Water sports (16.1%) and/or symbol (such as a logo or trademark)
• Scenery (13.4%) intended to identify the destination and to
• Culture (11.4%) differentiate it from competitive destinations’
• Fun, parties (11.4%) (Aaker, 1991, p. 7).
• Tropical vegetation (11.4%) Because of the importance that we attach
• Food, fruits (10.7%) to the concept of experience in tourism theory
Descriptions of the atmosphere or mood and management, we propose the following
expected while visiting Jamaica definition:
• Relaxing (55.0%)
• Friendly, hospitable (41.6%) A destination brand is a name, symbol,
• Fun, parties (38.9%) logo, trademark or other graphic that both
• Slow pace (38.3%) identifies and differentiates the destination;
• Happy (21.5%) furthermore, it conveys the promise of a
• Exciting (17.4%) memorable travel experience that is uniquely
• Tropical (11.4%) associated with the destination. It also serves
• Romantic (10.1%) to consolidate and reinforce the post-travel
Distinctive or unique tourist attractions in recollection of pleasurable memories of the
Jamaica destination experience.
• Beaches (57.3%)
• Water sports (17.9%)
• Ocean (16.2%) The branding of experience
• Music/reggae (14.5%)
• Culture (13.7%) Since our definition heavily involves the con-
• Tropical climate (12.0%) cept of experience, some further background
• Montego Bay (11.1%)
will be useful. The branding of experience is
one of the most powerful contributions that
tourism and leisure research has made to the
such as St Moritz, Kitzbühel, Chamonix and marketing field (Pine and Gilmore, 1999). In
Cortina d’Ampezzo in Europe, and Aspen, effect, this paradigm asserts that consumers
Vail, Lake Tahoe and Whistler (BC) in North are not really concerned with the quality of a
America all have names that are immediately particular product or the quality of a particular
recognized world-wide. Whether or not such service transaction. What is truly important is
name recognition alone constitutes branding their overall satisfaction with the product use
is questionable. However, there is little doubt experience. While part of this satisfaction
that these centres are greatly concerned with certainly involves the product, it also involves
maintaining and protecting the reputation that many other factors that surround and influence
their names are associated with. the use of a product.
While the importance of reputation protec- From a tourism perspective, we similarly
tion should not be minimized, branding has must recognize that the overall travel
Destination Management 197
Fig. 9.2. Measuring the extent to which the 1988 Olympic Winter Games in Calgary, Canada increased
levels of awareness of the host city over the period 1986–1989: a comparison with the neighbouring city
of Edmonton, Canada (from Ritchie and Smith, 1991).
• Brand equity: the total accumulated value or worth of a brand; the tangible and intangible assets that
the brand contributes to its corporate parent, both financially and in terms of selling leverage
• Brand identity: part of the brand’s overall equity; the total perception of a brand in the marketplace,
driven mostly by its positioning and personality
• Brand positioning: what a brand stands for in the minds of customers and prospects, relative to its
competition, in terms of benefits and promises
• Brand personality: the outward face of a brand; its tonal characteristics most closely associated with
human traits
• Brand essence: the core or distillation of the brand identity
• Brand character: having to do with the internal constitution of the brand, how it is seen in terms of its
integrity, honesty and trustworthiness
• Brand soul: related to the brand character, defined as the values and emotional core of the brand
• Brand culture: the system of values that surrounds a brand, much like the cultural aspects of a people
or a country
• Brand image: generally synonymous with either the brand’s strategic personality or its reputation as a
whole
experience consists of a chain of transactions this concept one step further, we can argue that
and behaviours that together define the travel the marketing focus should be on the experien-
experience (Otto and Ritchie, 1995). Taking tial benefits provided by a company or a brand
198 Chapter 9
OF THE DESTI
IO N S NAT
NS IO
ME N
DI EX
Y PE
R
A R
D IE
N N
O
C
C
E
E
S
¥ Majestic scenery
¥ Unspoiled environment
¥ Closeness to wildlife
¥ Learning about nature
¥ Exercise in a healthy setting
¥ Psychological tranquillity
¥ Quality hotels
¥ Restaurants
¥ Photographic stores
¥ Signage
¥ Grocery stores
¥ Gas stations
¥ Banking machines
Table 9.8. Measures of destination brand performance (from Ritchie and Ritchie, 1998).
Roles Measure
Recollection • The ease, frequency and strength of recall of the destination experience
Sub-components • The extent to which the brand helps create memories of the destination and the
visitor’s experiences
• The intensity or warmth of memories elicited
• The degree of comfort provided that the future/current choice is/was a sound one
Consolidation • The ability of the brand to serve as a catalyst to tie together the many memories
of the destination experience
Reinforcement • The ability of the brand to cement a consolidated and coherent memory of the
destination experience
Destination
(examples) Brand effectiveness dimension
ION
nt
n
tion
CT
nce
me
ION
atio
on
tion
o
LLE
cati
lida
ura
rce
tati
enti
CT
a
ticip
ntifi
nso
info
CO
ass
pec
LE
fer
Ide
RE
SE
Re
Co
Re
Dif
An
Ex
States of the United States
Florida
Texas
New York
California
Vermont
Oregon
Illinois
Kansas
National city-states
Paris
Munich
Rome
New York
London
Beijing
Sydney
Toronto
Rio de Janeiro
Tokyo
Seoul
position can be based on how the consumer While Disney World may compete with Las
perceives the attributes of a destination’s Vegas for family vacations as a fun experience,
image, or on its holistic image. Some very basic when it comes to family vacation experiences
examples of how the same destination may be that emphasize education, even Disney’s Epcot
positioned differently depending on the impor- Center must take a back seat to destinations
tance of the primary positioning criteria are such as Washington, DC.
given in Fig. 9.5. As shown (depending on the In the same vein, while Paris, France,
market segment), Las Vegas may be positioned and Vancouver, Canada, compete as attractive,
as either a family or an adult experience destina- liveable cities, Paris competes with Rome,
tion. In fact, this has been a positioning issue Italy, as a historical city while Vancouver com-
that the management of Las Vegas has had to petes more with a city such as Oslo, Norway,
address as the destination has evolved from pri- as a city that emphasizes environmental
marily a gaming destination to a more multidi- quality.
mensional one providing an array of different Figure 9.6a–c provides some basic
experiences. As a gaming experience destina- examples of how the positioning of destina-
tion, Las Vegas’ competition is a destination tions is sometimes represented, and how a
such as Atlantic City. As a family fun vacation destination (Jamaica) may be positioned dif-
experience, it must compete with destinations ferently depending on the positioning criteria
such as Disney World. employed.
202 Chapter 9
Nature- High-
based entertainment
experience experience
Highly Low-
developed entertainment
Family
experience
experience
Adult
experience
Fig. 9.5. An example of how one particular destination (Las Vegas) may be positioned differently,
depending on the importance of positioning criteria to the market.
Functional
characteristics
* **
¥ Beaches and ocean in
¥ Climate ¥ a sunny tropical
¥ setting
¥ Nightlife
¥ Scenery ¥ Local people are
¥ Negroid
Holistic
Attributes
(imagery)
Functional
characteristics
* **
¥ Climate ¥ Montego Bay
¥ Nightlife ¥ Tropical climate
¥ Scenery ¥ Ocean
¥ Beaches
¥ Water sports
Attributes Unique
* **
Psychological
characteristics
Common
characteristics
* **
¥ Climate ¥ Beaches and ocean in
¥ a sunny tropical
¥ Nightlife
¥ setting
¥ Scenery ¥ Relaxing
¥ Local people are
¥ friendly
Holistic
Attributes
(imagery)
¥ Montego Bay ¥ Slow-paced and
¥ Negroid people ¥ relaxing, but also
¥ fun–party and
¥ Reggae music ¥ happy
¥ Local people are
¥ Fun–party
¥ Negroid
¥ Reggae music
** **
Unique
characteristics
reality, a destination must fully understand the branding, the entire effort must be actively
concept of market segmentation when estab- supported by thematic advertising that com-
lishing its market position and not attempt to municates the brand message to all major
over-simplify the use of positioning. target markets. This requires the involvement
of a creative advertising agency. Once the
message is created, management must oversee
the timing of the actual advertising by market
Market segmentation
segments. Timing decisions must consider
the behavioural patterns of individuals and/or
As Kotler and Bowen (1998) point out, there
groups in key target markets, the cost of alter-
are many ways to segment a market. But in
native media during different time periods,
making this statement they also assert that, to
the nature of competitive timing of advertising
be useful, market segments must have certain
and promotion, and the lead time required
characteristics, and these are summarized in
to ensure that desired time periods can be
Table 9.9. The challenge facing destination
captured. In the case of certain promotional
marketing is to use the right combination of
activities, such as the hosting of familiarization
segmentation criteria that identify enough mar-
visits by tour operators and travel writers, the
kets where the destination is truly competitive
schedules of others often determine the timing
in the experiences it provides.
of these activities.
Once the above insights have been gained,
As for destination logos themselves, Blain
destination managers are then in a more realis-
and Ritchie (2002) have studied the process
tic position to formulate the specifics of the
of developing them in some detail. While it is
advertising/promotion types and themes that
clear that destination managers attach great
will be necessary to build the desired destination
importance to the development of a destination
brand and to support the intended competitive
logo – and, indeed, equate it heavily with the
position in the minds of the consumer.
branding process – it is surprising that few
carry out a significant amount of research to
understand how their logos are perceived and
Developing logos, themes and interpreted by the travelling public and by the
advertising support industry itself.
Examples of the logos of several of the
While the development of a destination logo is major urban areas included in the Blain and
an integral part of the process of destination Ritchie study are given in Fig. 9.7.
Table 9.9. Requirements for effective segmentation (from Kotler and Brown, 1998).
• Measurability. The degree to which the segment’s size and purchasing power can be measured.
Certain segmentation variables are difficult to measure, such as the size of the segment of teenagers
who drink primarily to rebel against their parents
• Accessibility. The degree to which segments can be accessed and served. One of the authors found
that 20% of a college restaurant’s customers were frequent patrons. However, frequent patrons lacked
any common characteristics. They included faculty, staff and students. There was no usage difference
among part-time, full-time and class-year of the students. Although the market segment had been
identified, there was no way to access the heavy-user segment
• Substantiality. The degree to which segments are large or profitable enough to serve as markets.
A segment should be the largest possible homogeneous group economically viable enough to support
a tailored marketing programme. For example, large metropolitan areas can support many different
ethnic restaurants, but in a smaller town, Thai, Vietnamese and Moroccan food restaurants would
not survive
• Actionability. The degree to which effective programmes can be designed for attracting and serving
segments. A small airline, for example, identified seven market segments, but its staff and budget
were too small to develop separate marketing programmes for each segment
Destination Management 205
Managing the Quality of Visitor service quality and on the more functional and
Service and the Visitor Experience technical aspects of service delivery. In fact,
traditional measures of service quality have
Next to marketing, the provision of visitor ser- been shown to apply in the evaluation of ser-
vices (particularly information) has traditionally vices in the leisure and tourism industries. For
accounted for most of the external efforts of example, the dimensions that LeBlanc (1992)
DMOs. While this is still probably true, the found that travellers used in evaluating service
conceptual nature of this component of desti- quality in travel agencies were not materially
nation management has evolved considerably different either from those captured by the
in recent years. In brief, the DMO must now SERVQUAL instrument (Parasuraman et al.,
be concerned with efforts to ensure that the 1985) (e.g. timeliness, competence, physical
destination provides a total high-quality visitor evidence) or from those used to evaluate
experience. Despite this evolution in thinking, service quality in organized tours, as noted by
perhaps the most straightforward manner in Luk et al. (1993). Similarly, Fick and Ritchie
which to apply a services marketing perspec- (1991, p. 9) showed SERVQUAL to be
tive to tourism is to borrow general marketing adequate for monitoring and comparative pur-
measurement instruments directly from the poses in service industries such as ski resorts.
field and apply them to tourism. Most research However, Fick and Ritchie also advocated the
of this nature has focused on the evaluation of use of supplementary qualitative measures to
206 Chapter 9
capture key dimensions, noting that a strictly paradigms. These authors advocate a focus on
quantitative scale does not adequately address the self to truly understand satisfaction with
those affective and holistic factors ‘which such phenomena.
contribute to the overall quality of the service We further argue here that even when
experience’. tourism sectors have a clear functional compo-
However, focusing only on the objective, nent, as do accommodation and transportation
technical aspects of tourism services leaves services, experiential benefits will remain a
untapped a crucial aspect of total visitor satis- critical part of the process evaluation. The
faction. This is the ability to understand and intimate, hands-on nature of the service
manage the true nature of consumer satis- encounter itself affords many opportunities for
faction as it occurs in the context of service affective responses. Elements of the physical
delivery. Research has shown that affective or environment – what Bitner (1992) calls the
emotion-based elements form the basis of much ‘servicescape’ – also have strong potential
of the quality of the service experience. In brief, to elicit emotional and subjective reactions
they contribute a significant, but often ignored, (Wakefield and Blodgett, 1994). For example,
portion of visitor satisfaction (Oliver, 1993). We the tranquil beauty of a mountain resort’s
conclude, then, that a more complete measure setting affords psychological benefits that
of the quality of the service experience might be clearly transcend the physical need to sleep
a useful complement – if not an alternative – to somewhere. In addition, it has long been
traditional quality of service measures. acknowledged that human interaction itself is
Table 9.10 demonstrates, from both a an emotionally charged process. The extended
conceptual and a measurement standpoint, the interaction with a tour guide or other service
difference between the quality of service and the provider can also lead to experiential reactions
quality of experience (Otto and Ritchie, 1995). (Arnould and Price, 1993). In other cases, as in
Perhaps more than any other service purely recreational activities, the experiential
industry, tourism holds the potential to elicit benefits will be ends in themselves (Holbrook
strong emotional and experiential reactions and Hirschman, 1982).
in consumers. Accordingly, at least two other
researchers in the field have noted that
utilitarian and rational information processing
schemes, which focus on functional or purely Structure of the service experience
attribute-based elements, are not commensu-
rate with leisure and tourism. Dimanche and Our research has found that the service
Samdahl (1994) refer to tourism as unique, experience in tourism can be envisaged to
owing to its symbolic expressive dimensions, contain four main dimensions (Table 9.11).
while Arnould and Price (1993) focus on the The hedonics dimension reflects the desire/
extraordinary experience offered by extended need of tourists to be doing what they love or
leisure pursuits (in their case, white-water like, to have their imaginations stirred, and to
rafting trips), both of which render the experi- be thrilled by the service/experience activities.
ence incompatible with traditional evaluative Further, they want to be able to have
Table 9.10. Comparison of QOS and QOE frameworks (from Otto and Ritchie, 1995).
Table 9.11. Dimensions of the service experi- Our research has shown that service experience
ence in tourism (from Otto and Ritchie, 1995). factors are not soft, elusive abstracts, but rather
are specific dimensions that can readily be
Dimension one: hedonics
• Doing something I really like to do measured so that satisfaction can be better
• Doing something memorable understood. Indeed, if industry managers use
• Doing something thrilling only service quality or attribute-based measures
• Having a once-in-a-lifetime experience in their satisfaction evaluations, they may be
• Sharing my experience with others later on forcing people to evaluate tourism services on
• A feeling of escape more functional and utilitarian dimensions than
• Being challenged in some way is appropriate or even relevant.
• My imagination is being stirred From the perspective of marketing strat-
• On an adventure egy, advertising experiential benefits is not
• Having fun new to either product or services marketing. A
• Doing something new and different
clearer understanding of the customer-specific
Dimension two: peace of mind
experience as it relates to a service or company
• Physically comfortable
• Property is safe can contribute to a more effective strategy for
• Relaxed positioning, promotion and communication,
• Personal security a point that has been supported in previous
• Privacy is assured research. Vogt et al. (1993) found that travel-
Dimension three: involvement lers demonstrated the need for aesthetic infor-
• Involved in the process mation as well as for functional information. In
• Element of choice in the process other words, consumers will, consciously or
• Have control over the outcome otherwise, seek out information on what type of
• Being educated and informed experience to expect at the level of both the
• Cooperation destination and, by extension, the company. In
Dimension four: recognition practical terms, this means that the need for
• Taken seriously information on such aspects as pricing and
• Important
operating hours may be supplemented (if not
supplanted) by the need to promote psycho-
logical factors. While this may be obvious
memories to keep to themselves and/or to and commonplace in advertising for tours and
share with others later on. Second, visitors attractions, incorporating experiential dimen-
seek peace of mind, the desire for both sions into more functional services may offer a
physical and psychological safety and comfort. unique competitive edge. As noted by Arnould
Third, tourists seek involvement in the pro- and Price (1993), ‘although it may seem a
cess of service delivery, a distinct willingness stretch to promise a renewed sense of self from
to be active participants in certain service stopping at McDonald’s for breakfast, several
systems, as indicated by the desire to have award-winning advertisements do just that’.
choice and control in the service offering. On Effectively accomplishing this objective is
the other hand, tourists seem to also demand tied into the type of medium used to convey
that they be educated, informed and imbued product information. While glossy brochures
with a sense of mutual cooperation within the are an advantage over newspapers, the current
service experience. Finally, tourists want to trend to video-based advertising in tourism will
derive a sense of personal recognition from provide even more opportunity to convey the
their individual service encounters and the richness of the customer experience in service
service experience as a whole, such that they encounters.
feel important and are confident they are being The multifaceted nature of the service
taken seriously. experience also implies that it could be a useful
In managerial terms, it appears critical that means by which to classify services. Our data
practitioners in the tourism industry should have provided evidence that both the nature
not lose sight of the true nature of consumer and the degree of the service experience differ
benefits, motivations and subjective responses. significantly across the sectors of tourism.
208 Chapter 9
Clearly, the primary message emerging for kind of consumer understanding is high. They
tours and attractions is ‘entertain me’, while further argue that it is more efficient and
that for airlines and hotels is ‘keep me feeling economical to design all service standards based
safe’. Of secondary importance to both airlines on proper consumer understanding in the first
and hotels is the tourist’s need for recognition as place than to have to retrace one’s steps and
a customer, while for tourism and attractions redesign systems that were built according to
both involvement and peace of mind are pri- inaccurate or even insufficient information.
mary considerations. Looking closely at these While it is conceptually satisfying to under-
differences indicates a means by which one can stand the nature of the challenge facing the
categorize services based on their respective destination manager who is seeking to provide
experiences. That is, certain services will offer a rewarding visitation experience within the
experiential benefits as they relate to the way total destination experience, it must be recog-
the business is run (i.e. they are process nized that there are many links in the total
variables) while others will offer experiential ‘experience chain’. The greater challenge fac-
benefits as they relate to the overall purpose of ing the destination manager is to attempt to
your business (i.e. they are outcome variables). ensure, as far as possible, that all the ‘experi-
An example of the former would be airlines, ence links’ within his or her destination are all
whose primary purpose is functional (transport- satisfactory and mutually reinforcing. Unfortu-
ing passengers from A to B), while the delivery nately, it is also a reality that overall visitor satis-
of the service can be enhanced by the incorpo- faction with a total travel experience will relate
ration of experiential benefits. An example to links in the experience chain that are beyond
of the latter would be a theme park, whose the control of the DMO. An exasperating
purpose is experiential but whose service experience with an airline used to reach the
environment would be enhanced by the destination may disproportionately colour the
incorporation of service quality or functional memories of the destination visit. This reality
variables. In other words, the functional and the must be communicated to all destination
experiential are two ends of a continuum along stakeholders.
which both service processes and outcomes An indirect way of enhancing the quality of
might be evaluated and classified. visitor services and the visitor experience is to
Of course, the challenge will lie in trans- take a leadership role in the design and develop-
lating the service experience into specifics con- ment of service standards within a destination.
cerned with service encounter, service delivery Those operators meeting these standards are
and service environment. As noted above, the then allowed to display decals or some other
coexistence of these ostensibly opposing form of recognition that conveys to the visitor
dimensions (thrills versus safety, functional their commitment to the delivery of quality
versus experiential) underscores the need for services.
service providers in tourism to understand their
customers fully so that they can provide an
environment which offers that critical balance.
From a measurement standpoint, a related diffi- Management implications of adapting a
culty arises in the need to get more involved in quality-of-experience framework
measuring and understanding one’s customers
and their feelings rather than simply focusing The foregoing discussion strongly implies that
on the more readily assessed and more easily the DMO needs to examine the total visitor
controllable internal measures, such as waiting experience from the moment they start search-
time and uniform style. In the short term, imple- ing for a destination to visit until after they
mentation of service experience standards arrive back home after the trip. Admittedly,
will potentially increase marketing costs, as the much of the travel experience is outside the
administration of customer surveys is naturally destination’s control, or even its influence.
more expensive than internal audits and reviews. Nevertheless, the truly competitive DMO
According to Ozment and Morash (1994), should be constantly searching for ways in
however, the payoff from an investment in this which it can effectively and profitably (from the
Destination Management 209
Monitoring of
industry
Monitoring of Destination members/sector
target markets awareness/image performance
Monitoring of measures
destination Understanding of
performance specific
management issues
Monitoring of
competitive
destinations Information on
INWARD FLOWS visitation impacts
(economic and environmental)
Environmental
scanning
Feedback re:
Information visitor experience
affecting Destination satisfaction
tourism policy information/
research Internal destination
Information on information
evolving research system
methods Internal DMO
Information information
for external
destination
stakeholders
Information for Information
prospective OUTWARD for visitors
investors/developers FLOWS
Communication of
strategic information to
Dissemination of community stakeholders
information to
destination members Information for
destination
Information for daily policy and planning
management decisions
Fig. 9.8. DMO information/research management: types and roles.
210 Chapter 9
it can function more competitively and more information can take several forms. The most
sustainably. The inward flows are of two main basic information is that provided by the
types: monitoring flows, which involve infor- DMO’s own internal accounting system,
mation collected on a continuous basis, and which informs management about its control
research flows, which involve information over cost and expenditures, with emphasis on
obtained periodically as the need arises. identifying deviations from the budget that has
Outward flows of information pertain to infor- been approved by the DMO’s board of direc-
mation that should be provided to a broad tors. A second set of destination performance
range of both close and distant destination measures is external to the DMO, but internal
stakeholders. Wise and prudent management with respect to the destination as a whole.
of outward information flow is often neglected. These measures seek, in effect, to monitor the
extent to which the destination is meeting its
overall performance goals. Thus, they first mea-
sure collective factors, such as total visitation,
Managing inward I/R flows total revenues and total employment in the
tourism sector. In addition, they also seek to
As Fig. 9.8 demonstrates, there are many monitor the distribution of visitation among all
different types of I/R that a competitive/ destination attractions and to measure the prof-
sustainable destination must gather, interpret, itability of individual attractions/stakeholders.
understand and utilize as it seeks to establish an These measures not only allow individual firms
effective destination management information to compare their performance with colleague
system (Ritchie and Ritchie, 2002). firms within the destination, but they may also
The monitoring of target markets per- permit a critical comparison of major destina-
haps provides the most fundamental infor- tion components with those of competing and
mation that a DMO must have available as collaborating destinations.
guidance for the development of its ‘experience In addition to the above incoming flows of
products’ and for the design and delivery of information, which are largely under the control
its advertising and promotional programmes. of the DMO and its stakeholders, destinations
One specific sub-component of target market must also attempt to systematically gather infor-
monitoring is the gathering of destination mation on competitive activities and competi-
awareness and image measures. tive performance. Some of this information
While target market monitoring focuses on may be obvious and easy to collect, but much of
the attractiveness and behaviours of current it may be difficult to access, and then only on
markets, the process of environmental scan- a quid pro quo basis. It is here that industry
ning is designed to identify new trends that associations may play an important role.
are likely to create the markets of tomorrow. A final form of inward flowing information
Both of the these flows of information is defined as formal management research.
concern visitors before they arrive at the desti- This involves the undertaking of structured
nation. It is also important to monitor visitor research enquiries that seek to provide under-
satisfaction regarding their experience at the standing and insight into the resolution of
destination. Ryan (1995) provides an excellent specific management problems or concerns.
technical source of guidance to DMOs for the For example, sudden increases in employee
design, collection and use of visitor satisfaction turnover, unexplained drops in visitation from
data. In parallel with understanding the level certain strategic target markets and the need to
of visitor satisfaction is the monitoring of the determine areas of resident support/non-
visitation impacts brought about by these support for future development all lend them-
visitors. All dimensions of these impacts – selves to in-depth research that may assist DMO
economic, environmental, social and cultural – management in both daily decision making and
should be considered. long-term policy formulation. Other research,
An equally fundamental form of internal such as a review of the evolving impact of
DMO information is that which captures government regulations and fiscal and taxation
the performance of the destination. This policy on the competitiveness and sustainability
Destination Management 211
of tourism, may focus much more specifically Since politicians’ views are democratically
on the formulation of strategic tourism policy. determined by the population at large, a DMO
The foregoing discussion of information must attempt to develop processes that keep
pertains to the important flow of information destination residents aware and informed
from outside the DMO, so as to allow more regarding the value of tourism to the commu-
effective marketing and improved visitor experi- nity, and how future development can enhance
ences. It is also important to note that, in tour- community well-being. While this is not an easy
ism management, there is also heavy flow of task, it cannot be neglected.
information from the destination to the market- Yet another outward flow of information
place. Travel is one area of consumer expendi- that virtually all DMOs recognize – and that
ture where the buyer often does a lot of research most handle well – is that provided to both
into the choice/purchase decision. It is not potential and actual visitors. The flow to
uncommon for prospective travellers to accu- potential visitors is defined as promotion and
mulate and access information on alternative advertising, while the flow to current visitors is
destinations for many months. This reality has usually subsumed under visitor services.
increased with the advent of the Internet. Con- A final and often demanding request for
sequently, from a competitive perspective it is destination information comes from potential
essential that consumers have access to the investors. While these requests are frequently
amount and variety of information that they made indirectly by consultants who serve many
desire, and that this information should be of masters and not all have the destination’s
the highest quality. But, as destinations provide interests at heart, they nevertheless are difficult
this information, they will have to continuously to ignore.
assess the cost-effectiveness of each informa-
tion channel and each information type.
Table 9.12. Levels and types of human resource training and education relative to tourism.
While true success in this area is probably experiences that are memorable. As Pine and
more a policy than a management issue, an Gilmore (1999) have pointed out, the Walt
effective DMO should do all it can to assist its Disney Company is continually ‘imagineering’
members in gaining ready access to funding and new offerings by which to apply the experien-
to assist them in determining how best to access tial expertise it has developed through Disney-
and manage venture funds. While this latter role land and Disney World over several decades
falls into the category of member services, any- in an effort to continually create new visitor
thing the DMO can do within the external finan- experiences. As a result, Disney has, for
cial environment to improve the financial com- example, created the Disney Institute and
munity’s understanding of the nature of tourism the Disney Cruise line.
and the opportunities it provides for both firms The implication of the search for experi-
and the community as a whole will be a service ences is that each and every destination man-
that will be valued highly and greatly appreci- ager must attempt to view his or her destination
ated. In addition, this ambassador/educator not simply as a place to visit and a place to do
role within the financial community is one that things, but, more importantly, as the provider
the DMO is best positioned to play on behalf of of visitor experiences – preferably enjoyable,
tourism. Only the DMO has the necessary memorable experiences – that will generate
understanding of tourism, and the mutual moral high levels of visitor satisfaction and the subse-
ground it shares with the financial community quent favourable word-of-mouth advertising
renders it credible in this role. that is essential to both competitiveness and
In some cases, DMOs have been known to sustainability.
take equity positions in certain key develop- It is also important for the entire tourism
ments within their destination. However, in industry within a destination to realize that an
most cases, their financial assistance takes the individual or a family’s degree of satisfaction
form of promotional expenditures, frequently in with a business trip or family vacation is depend-
collaboration with private operators. As for ent upon the entire series of events and/or
access to venture capital, the DMO’s role is service transactions that occur from the time
largely one of providing information to both the individual/group leaves home until they
sides: to the private sector operators regarding return (Otto and Ritchie, 1996). In fact, satisfac-
sources of capital, and to venture capitalists tion with the total travel experience is depend-
regarding potential investments in the local ent on all the links in the experience chain
tourism industry. (Fig. 9.9). A bad experience with respect to only
a few links – or even one important link – in the
experience chain can leave the traveller with a
feeling of dissatisfaction regarding the entire
Visitor Services and Visitor travel experience.
Management The challenge facing destination managers
would be difficult even if they controlled the
Services and the experience economy quality of the experience for all links of the
experience chain. However, as we all know,
While leisure travellers who visit a destination they do not. Many of the links are not even
are looking for high-quality service, in a more located within one destination, and are thus
meaningful sense they are seeking quality total beyond the control or even the influence of a
single destination manager. Indeed, this is the destination, site or monument grows, it has
case more often than not. All that a given desti- become more important to develop visitor man-
nation manager can realistically do on a daily agement systems that are fair, efficient and
basis is to focus on ensuring that as many as cost-effective, while at the same time allowing a
possible of the experience links within his/her satisfactory visitor experience. Although the
destination deliver what they promise. From advent of computers has made the task of visitor
a longer-term, broader perspective it is thus management somewhat easier, great care must
clearly important that all destination managers be taken to avoid the impression that visitors are
work together in an attempt to deliver an being herded like animals for the convenience
industry-wide quality travel experience. of an attraction operator. Visitors realize that
The foregoing emphasis on the need for some degree of mechanization or depersonal-
quality links, both within a destination and ization is necessary in order to deal with large
across the industry, underscores the impor- crowds at popular venues. At the same time, the
tance of the DMO and regional, national and ability to maintain the personal touch wherever
international tourism industry associations. It is possible remains extremely important.
only through the cooperation and coordination Table 9.13 provides some examples of the
that is provided by these leadership organiza- types of approaches that have been developed
tions that the tourism sector can hope to to minimize the negative impacts on the
strengthen the highly interdependent links of visitation site and to provide fair and equitable
the travel experience. While the degree of per- access to locales that have a limited capacity to
fection required for total traveller satisfaction is provide a high-quality experience to visitors.
clearly unattainable, either within or across des- An examination of the approaches to
tinations, this ideal must constantly be our goal. visitor management in Table 9.13 reveals that
they are essentially of eight main types:
• those that seek to attract only visitors
Systems for visitor management who are likely to have a minimal negative
impact while still providing benefits to the
While we must keep in mind the need for a destination;
quality total experience for the visitor, the tra- • those that admit visitors only to those
ditional approach to visitor services is an exter- parts of the destination that are least
nal DMO activity that has always been viewed sensitive from a physical, environmental
as one of the cornerstones of the DMO’s being or cultural perspective;
and of its success – to the point where one of • those that seek to restrict the number of
the first locations sought out by the visitor is visitors to sensitive areas through pricing
the DMO visitor information centre. Despite policies that attempt to redirect those
this importance, the visitor information centre visitors likely to negatively impact that
is still but an element in a DMO’s total efforts destination or, failing that, to ensure
to help ensure a high-quality visitor experi- that the costs of negative impacts are
ence. Another major component of the total covered;
information services provided to visitors is often • those that actually limit the number of
the one responsible for their visit. Destination visitors to sensitive areas;
visitor call centres, using a toll-free telephone • those that allow only certain types of
number, have traditionally been the nerve transportation modes within the
centre through which potential visitors have destination;
gathered screening information to help them • those that carefully control the flow and
make their destination choice. The Internet parking of traffic;
has now substantially replaced the visitor call • those that limit the amount of time that
centre, although many people still appreciate visitors may spend in sensitive areas/sites
the assistance provided by a human being. within a destination; and
As the size of tourism grows, and as • those that seek to alter visitor behaviour
the number of visitors to each individual before or during the visit.
Destination Management 215
Examples of destinations that have had to the destination have a high-quality experience
address the visitor management issue in a major but leave the destination unimpaired for future
way include: visitors.
While responsibility for visitor manage-
• the city of Venice, Italy, whose sensitive
ment is normally the responsibility of the indi-
canal system simply could not handle
vidual owner/operator, the DMO can enhance
the hordes of visitors generated by its
the overall reputation of the destination by
popularity;
encouraging its members to adopt effective visi-
• the Acropolis in Athens, which found that
tor management and to advertise the nature of
the volume of visitors climbing over the
its visitor management processes. It may also
site was physically degrading historic trea-
encourage the sponsoring of local seminars and
sures that were already being threatened
workshops on how to design and implement
by air pollution;
visitor management systems. Again, as in most
• the town of Byron Bay in Australia, which
instances, leadership and coordination are the
has considered charging visitors a fee just
key principles that the DMO must observe as it
to enter the town;
seeks to ensure high-quality, memorable visitor
• the Alhambra Palace in Spain, which uses
experiences.
a computer system to issue tickets that
specify the time of entry and the required
time of exit;
• Banff National Park in Canada, which Stewardship: Taking Care of the
provides a very limited amount of parking
Tourism Resource Base
space near some of the most popular
isolated sites, in effect restricting levels of
From the beginning, this book has stressed the
visitation; and
competitive dimensions of destination manage-
• the island of Bermuda, which, because of
ment, but always with sustainability in mind.
limited water supply, restricts water use by
Despite our emphasis on competition, the
visitor facilities.
reader needs to be fully cognizant of the fact
The above are but a very few of the many that, in order to be effective as a competitor, it
examples of situations where the management is essential to constantly care for the most fun-
of visitor behaviour is an integral part of damental of all the resources on which tourism
the process of destination management. In all ultimately depends: the physical resource base
cases, the underlying challenge for destinations and the human resource base. The manage-
fortunate enough to have excessive demand is ment of these two primary resource bases,
to ensure that all visitors who are allowed to visit because of its special emphasis on caring for
216 Chapter 9
the long-term well-being of the resources in determine if the impacts of tourism are serious
question, is referred to as ‘stewardship’. enough to be of concern. And once it has been
In our view, the concept of stewardship confirmed that the threat from tourism is real,
is essential to sustainable destination manage- each consequence requires its own particular
ment. In the case of the physical resources, the form of stewardship in order to address the
concept implies a special effort to ensure that impacts that have been identified.
the physical and ecological integrity of the Stewardship of the built environment
destination is maintained. The motivation for may not require the same level of monitoring or
this special effort, while pragmatic in the sense scientific expertise to find out whether a prob-
that the industry does not want to destroy lem exists. While this would appear to be an
the goose that lays the golden egg, reflects a advantage from a stewardship perspective, it
genuine moral concern for the ecological health only masks a difficulty of another form – the fact
of the destination region. In a similar vein, the that measurement of the impacts is heavily
concept of stewardship applies equally well to ‘value-laden’. Whereas the measurement of
the management of the human resource base. environmental impacts tends to be relatively
Also, since destination stewardship requires a scientific and objective, measures that relate to
high degree of cooperation among those who change in character through development and
are often competitors, we often characterize beautification or ‘uglification’ can be highly sub-
destination stewardship as competing by caring jective. Thus, it is often more difficult to reach
and cooperating. consensus on whether the impacts of tourism
Once it is accepted that stewardship of all are real or imagined, or negative or positive.
components of the destination is a major com- While the impacts of tourism on the cul-
ponent of destination management, the task tural and social environment may be slightly
facing managers is how to ensure stewardship. easier to measure in objective terms, they can
Since this concept is fairly new, its implementa- also be highly influenced by the values of those
tion has not yet received widespread attention. defining the measures and gathering the impact
However, one approach that has been pro- data. Although the leakage of foreign exchange
posed is the creation of a Tourism Stewardship and the exclusion of local produce and materials
Council (Woolford, 1998). According to the can be measured in reasonably objective terms,
Woolford framework, the primary purpose of a the adoption of servile attitudes towards visi-
Tourism Stewardship Council is to turn the idea tors, for example, may be hard to distinguish
of sustainable tourism within a destination into from improved quality of service. Whether the
reality. In effect, this means that a programme impact is categorized as positive or negative
must be put in place to ensure that the broad may well depend on the values and perceptions
range of potential impacts of tourism is of the researcher examining the impact.
controlled so as to ensure the sustainability of
tourism in the region. The particular impacts
identified by Woolford are shown in Table 9.14.
What Table 9.14 points out is that steward- Must stewardship be formalized?
ship is a very multidimensional concept – and
that caring for the destination, depending upon The managerial function of stewardship can
the complexity and diversity of its resources, readily be viewed as a generic responsibility
can represent a very major challenge if it that belongs to everyone and should therefore
is to be done thoroughly. To simplify the pervade the entire tourism destination.
task, Table 9.14 demonstrates that stewardship Woolford (1998) has argued, however, that to
needs to be tackled along at least three major ensure effective stewardship this function must
dimensions. be formalized – and not just from a top-down
Stewardship of the natural environment policy perspective. Furthermore, he asserts
is the area most commonly of concern. As that the traditional Environmental Impact
shown in the table, it has at least five distinct Assessment (EIA) approach, while valuable,
aspects. Each of these aspects in turn requires tends to be very subjective, and that ‘the ele-
its own type of scientific expertise simply to ments it addresses vary enormously dependent
Destination Management 217
upon by when, and for whom the assessment exchange over and above planning controls
is made’ (p. 26). He further argues that since restricting free market development, that there
host governments that conduct EIAs are often is a need for the industry itself to adopt a
keen to pursue the promise of jobs and foreign responsible attitude. Woolford is concerned
218 Chapter 9
that the industry may not adopt such a respon- Crisis Management: the Emergency
sible attitude on its own, despite the need to Side of Stewardship
protect the assets and which its future rests;
he argues for establishing a formal Tourism In the previous section we emphasized the
Stewardship Council to persuade industry of importance of taking care of the destination
the benefits of long-term planning and to and its many diverse and complex resources on
enable destinations to adopt systematic, effec- an ongoing basis. In recent years, in particular,
tive EIAs and planning measures to oversee we have also learned that it is also essential
the stewardship of destination resources. for a destination to develop the capability to
While Woolford acknowledges that sup- anticipate and address the broad range of
port for broadly based local participation in crises that have the potential to undo many
exercising the stewardship function may be years of careful stewardship. Indeed, this
theoretically and democratically desirable, he concern has been so serious that it has been
believes that practical limitations make the the topic of a special issue of the Journal of
industry a better choice. Travel Research. In this issue, Pizam (1999),
While the concept of the Tourism Steward- based on a review of 300 acts of crime and
ship Council may not yet be sufficiently devel- violence that occurred at tourism destinations
oped to obtain widespread acceptance and around the world, reports the comprehensive
implementation, it is felt that certain desti- typology that he has created. The typology,
nations may wish to consider the possibility in which is given in Table 9.15, identifies:
order to facilitate consideration of its adoption.
Some of the key concepts put forth by Woolford • five attributes of the criminal/violent act,
are summarized in Box 9.1. namely motive, victim, location, severity
and frequency;
Box 9.1. Some key concepts of a tourism stewardship council (from Woolford, 1998)
Concept definition
The tourism stewardship council (TSC) would be an international, independent, charitable,
not-for-profit and non-governmental organization representing all interests within the tourism industry,
from tour operators and tourists, to host governments, local communities and NGOs. It would offer a
collaborative forum within which mutually shared objectives could be identified as the basis on which
to promote responsible, environmentally appropriate, socially beneficial and economically viable
tourism activity, while maintaining the natural and social capital of the host environment. This would
be guided by developing:
• a set of principles to guide sustainable tourism development
• a set of criteria by which holidays and/or destinations would be independently certified as
sustainable
• A TSC certification logo as a market incentive to promote a ‘quality’ product
The TSC would thus require that sustainable holidays or destinations be based upon:
• the maintenance of natural and social capital in host environments
• the development and maintenance of effective tourist management systems
• compliance with relevant local/national laws and standards
• the full cooperation and participation of all concerned stakeholders
The organizational structure of a TSC would comprise:
• an international coordinating body, the TSC, with representatives from all stakeholder groups
• a series of TSC-accredited independent certifying bodies, either national or international, and
• a series of national alliances between tour operators that commit to servicing certified destinations
and/or providing certified holidays
continued
Destination Management 219
• three attributes of the effect, namely In addition, as part of this special issue
magnitude, expanse and duration; of the Journal of Travel Research, Mansfeld
• methods for prevention; (1999) presents information on a study that
• parties responsible for prevention; examined the management of tourism crises in
• methods for recovery; and Israel in the wake of security breakdowns in this
• parties responsible for recovery. high-profile Middle Eastern country. More spe-
cifically, he reviews the determinants and the
Table 9.15. Pizam’s typology of acts of crime and violence related to tourism (from Pizam, 1999).
management of these crises and the subsequent As the foregoing examples and the events
recovery of the Israeli tourism industry. In doing of 11 September 2001 in New York City
so, he identifies principles and guidelines on appear to demonstrate, terrorism has generally
how destinations should cope with cycles of become the most common and most wide-
violence in tourism. A second, more recent spread generator of crises in tourism. Despite
examination of the impact of political crises on this, terrorism is not the only generator of
tourism in Israel and the Middle East has been tourism crises, or necessarily the most serious.
reported by Beirman (2002). As Miami, Florida and Washington, DC, came
Sonmez et al. (1999) present a second to realize in the 1990s, ordinary street crime
study in this special issue in which they discuss can create its own crises; these can cause
terrorism as a tourism crisis and offer sugges- fear among visitors and eventually destroy the
tions for managing the effects of terrorism. appeal of the environment that attracts them.
In other examples in the special issue, Leslie As a further example, the floods in Europe in
(1999) examines the effects of terrorism on 2002 had a major impact on tourism. Similarly,
tourism in Northern Ireland, while Ioannides a fire in the Uffizi Gallery in Florence, Italy, in
and Apostolopoulos (1999) examine tourism 1993, which was caused by terrorists, damaged
on the divided island of Cyprus and discuss the many valuable paintings and sculptures, some
prospects for crisis management and recovery. of which could not be saved, thus effectively
Also, Dimanche and Lepetic (1999) present detracting from the gallery’s cultural appeal to
a case study that examines crime and tourism tourists forever. These are only a few examples
situations in New Orleans and show how of the broad range of crises that can seriously
various stakeholders have responded to the affect tourism in a destination.
problem. As executives in all areas of business have
Finally, the special issue contains two come to realize, crises can hit even good com-
articles examining the role of tourism after the panies and, by extension, good destinations
violence in the destination has ceased. The (Marconi, 1997). Every effort must be made to
first of these, by Anson (1999), uses a second manage crises before they happen. This point
example involving Northern Ireland. The has been made very forcefully in an excellent
second, by Richter (1999), explores the nature book on crisis management by Mitroff and
of political unrest in the Philippines, Sri Lanka Anagnos (2001). Their arguments are most
and Pakistan, and makes suggestions as to what eloquently based on a five-component best-
steps need to be taken to provide a better practice model for crisis management, which is
foundation for future tourism. Another, more summarized graphically in Fig. 9.10.
recent work examining the management of a As shown in the figure, their best-practice
tourism crisis in South-east Asia in the late model identifies five factors that companies
1990s, with emphasis on the important role must understand and manage before, during
of national tourism organizations, has been and after a major crisis. These five factors are: (i)
reported by Henderson (2002). the types and risk categories of crises they face;
A particularly useful paper, in that it seeks (ii) mechanisms to deal with these crises; (iii) the
to provide a general framework for addressing organizational systems that assist in detecting,
and managing the impacts of tourism-related interpreting and acting upon the crises; (iv) the
disasters (Table 9.16), is due to Faulkner stakeholders who can assist in addressing a
(2001). In another highly relevant paper, crisis; and (v) scenarios for crisis resolution.
Young and Montgomery (1998), based on their
research on crisis management and its impact
on destination marketing, provide a detailed
guide for Convention and Visitor Bureaux. Types of risk/crisis
They assert that the standardized crisis manage-
ment procedures they recommend will contrib- While it is extremely difficult, if not impossible,
ute to faster and more efficient recovery for any to give a precise and general definition of a
destination. The details of these procedures are crisis, Mitroff and Anagnos (2001) provide
summarized in Table 9.17. a guiding definition of a major crisis. First, a
222 Chapter 9
Table 9.16. Faulkner’s tourism disaster management framework (from Faulkner, 2001).
Phase in disaster Elements of the disaster management Principal ingredients of the disaster
process responses management strategies
6. Resolution Review
Routine restored or new
improved state
establishment
Destination Management 223
Table 9.17. Overview of a comprehensive crisis plan for Convention and Visitor Bureaux (CVBs) (from
Young and Montgomery, 1998).
2. The telephone hotline providing up-to-date information and conditions should be well
communicated and publicized to travel agents, tour operators, meeting planners, and travel
organizations and associations.
3. A promotional video should be sent to all travel trade resources, in addition to the media.
4. A promotional piece profiling the destination’s strengths should be designed and mailed to
travel agents, tour operators, meeting planners, and travel and trade organizations, both
nationally and internationally.
5. CVB employees should personally call every meeting planner with conventions business
booked in the destination for the next year, reassuring them and reconfirming their bookings.
6. CVB employees should call all members of relevant trade associations, as well as managers
of major travel agencies, updating them with accurate information and urging them to reinstate
tours and group bookings and continue scheduling new ones.
7. Informational updates on the destinations should be placed in computer reservation systems
regularly assessed by travel agents (for example Sabre, Apollo and PARS).
8. Travel trade should be brought to the destination for familiarization tours, in order to allow them
to experience recovery efforts firsthand and get a personal perspective on the condition of
tourist resources in the destination.
9. A schedule of international and domestic sales trips and travel trade shows should be
developed, in order to encourage confidence in the destination and support from travel trade.
10. Print advertisements should be published in major convention and travel publications, focusing
on recovery efforts and the destination’s strengths and positive aspects.
c) Member communications
1. A newsletter and/or travel advisory should be sent to members on a regular basis, keeping
them updated with any new information.
2. The CVB should ensure that all Bureau members are informed of the telephone information
hotline.
3. The documentary video should be made available to members.
4. CVB staff should personally contact each of its members in order to keep them fully briefed on
the status of tourism resources and CVB services – perhaps with a communication tree.
5. CVB staff should hold a roundtable meeting with representatives from each of their member
organizations in order to answer questions and reassure them of recovery efforts and
continuing service from the CVB.
6. The CVB should hold a seminar with member organizations to assist them in developing and
implementing crisis management plans on an individual basis, and to inform them of the CVB’s
crisis recovery and post-crisis recovery strategies.
7. CVB employees should donate all time possible in order to assist Bureau members with any
individual assistance that may be warranted.
8. If time and resources permit, the Bureau should sponsor fundraising activities to help the
hardest hit tourism organizations in the area, particularly Bureau members.
9. A permanent emergency information network should be formalized among the CVB, Bureau
members, and state Travel Information Centers, by the use of fax and telephone
communications.
d) Consumer communications
1. The telephone hotline should be highly publicized to consumers.
2. Travel Information Centers should provide travelers with emergency travel and lodging
information, and local residents with evacuation and temporary lodging information.
3. Special news releases and other publications should be issued to inform tourists of the status
of local tourist resources and the recovery effort.
4. Special advertising campaigns should be implemented in travel publications, newspapers, etc.,
placing emphasis on the destination’s strengths, as well as the destination’s recovery efforts.
5. The CVB should conduct consumer surveys in order to track changing public perceptions of
the destination and its viability in comparison with the actual condition of tourism in the
destination.
continued
226 Chapter 9
6. Special letters or memos should be mailed to potential visitors and those consumers
requesting information about the destination, addressing the condition of tourism in the area,
the recovery efforts, and any other important information or commonly asked questions.
major crisis affects or has the potential to affect declines in stock prices, and fluctuations
the whole of an organization. If it is an event or declines in major earnings;
that will affect only a small, isolated part of the • informational crises, such as a loss of
organization, it may not be a major crisis. proprietary and confidential information,
A major crisis will also exact a substantial tampering with computer records or the
toll on human lives, property, financial earnings loss of key computer information with
and the reputation and/or general health and regard to customers and suppliers;
well-being of a destination. Often these effects • physical crises, such as loss of key
occur simultaneously. As a result, a major crisis equipment, plants and material suppliers,
cannot be completely contained within the des- breakdowns of key equipment and indus-
tination’s boundaries. And some major crises, trial plant, loss of key facilities and major
such as the financial one suffered by Barron’s plan disruptions;
Bank several years ago, can virtually destroy an • human resource crises, such as loss
organization (or destination). Similarly, in the of key executives, loss of key personnel,
travel and tourism field, both TWA and Eastern increased absenteeism, increased vandal-
Airlines in the USA were brought down by ism, an increased number of accidents
financial crises. and a rise in workplace violence;
Mitroff and Anagnos divide major crises • reputation crises, such as slander, gossip,
into seven general types and/or categories of rumours, damage to corporate reputation
risk: and tampering with corporate logos;
• economic crises, such as labour strikes,
• crises resulting from psychopathic acts,
such as product tampering, kidnapping,
labour shortage, market crashes, major
Destination Management 227
Table 9.18. Cohn’s Seven Deadly Sins of crisis management (from Cohn, 2001).
Fig. 9.11. Duration and intensity of crises: a useful distinction for defining management response (from
Ketelhohn, 1989).
Kotler, P. and Bowen, J. (1998) Marketing for Hos- Pine, B.J. II and Gilmore, J.H. (1999) The Experi-
pitality and Tourism, 2nd edn. Prentice-Hall, ence Economy: Work is Theatre and Every
Upper Saddle River, New Jersey. Business a Stage. Harvard Business School
LeBlanc, G. (1992) Factors affecting customer Press, Boston, Massachusetts.
evaluation of service quality in travel agencies: Pizam, A. (1999) A comprehensive approach to
an investigation of customer perceptions. classifying acts of crime and violence at tourism
Journal of Travel Research 30, 10–16. destinations. Journal of Travel Research 38
Leslie, D. (1999) Terrorism and tourism: the Northern (Special Issue), 5–12.
Ireland situation – a look behind the veil of Richter, L.K. (1999) After political turmoil: the
certainty. Journal of Travel Research 38 lessons of rebuilding tourism in three Asian
(Special Issue), 37–40. countries. Journal of Travel Research 38,
Luk, S.T.K., de Leon, C.T., Leong, F.-W. and 41–45.
Li, E.L.Y. (1993) Value segmentation of Ritchie, J.R.B. and Ritchie, R.J.B. (1998) The brand-
tourists’ expectations of service quality. Journal ing of tourism destinations. Keynote address,
of Travel and Tourism Marketing 2, 23–38. Annual Congress of the International Associa-
Mansfeld, Y. (1999) Cycles of war, terror, and peace: tion of Scientific Experts in Tourism (AIEST),
determinants and management of crisis and September 1998, Marrakesh, Morocco,
recovery of the Israeli tourism industry. Journal pp. 89–116.
of Travel Research 38 (Special Issue), 30–36. Ritchie, J.R.B. and Smith, B. (1991) The impact
Marconi, J. (1997) Crisis Marketing: When Bad of a mega-event on host region awareness: a
Things Happen to Good Companies. NTC longitudinal study. Journal of Travel Research
Publishing Group, Chicago, Illinois. 30, 3–10.
Mitroff, I.I. and Anagnos, G. (2001) Managing Crises Ritchie, R.J.B. and Ritchie, J.R.B. (2002) A
Before They Happen: What Every Executive framework for an industry supported destina-
and Manager Needs to Know About Crisis tion marketing information system. Tourism
Management. Amacom, New York. Management 23, 439–454.
Morgan, N., Pritchard, A. and Pride, R. (eds) Ryan, C. (1995) Researching Tourist Satisfaction:
(2002) Destination Branding: Creating the Issues, Concepts, Problems. Routledge,
Unique Destination Proposition. Butterworth- London.
Heinemann, Oxford. Schmitt, B. and Simonson, A. (1997) Marketing Aes-
Morrison, A.M. (1989) Hospitality and Travel thetics: the Strategic Management of Brands,
Marketing. Delmar Publishers, New York. Identity, and Image. Free Press, New York.
Oliver, R.L. (1993) Cognitive, affective, and attribute Sonmez, S.F., Apostolopoulos, Y. and Tarlow, P.
bases of the satisfaction response. Journal of (1999) Tourism in crisis: managing the effects
Consumer Research 20, 1–13. of terrorism. Journal of Travel Research 38,
Otto, J.E. and Ritchie, J.R.B. (1995) Exploring the 13–18.
quality of the service experience: a theoretical Upshaw, L.B. (1995) Building Brand Identity: a
and empirical analysis. Advances in Services Strategy for Success in a Hostile Marketplace.
Marketing and Management 4, 37–61. John Wiley, New York.
Otto, J.E. and Ritchie, J.R.B. (1996) The service Vogt, C.A., Fesenmeier, D.R. and MacKay, K. (1993)
experience in tourism. Tourism Management Functional and aesthetic information needs
17, 165–174. underlying the pleasure travel experience.
Ozment, J. and Morash, E.A. (1994) The augmented Journal of Travel and Tourism Marketing 2,
service offering for perceived and actual service 133–146.
quality. Journal of Marketing Science 22, Wakefield, K.L. and Blodgett, J.G. (1994) The impor-
352–363. tance of servicescapes in leisure service settings.
Parasuraman, A., Ziethaml, V.A. and Berry, L.L. Journal of Services Marketing 8, 66–76.
(1985) A model of service quality and its Woolford, J. (1998) Stewardship Council: Applica-
implications for future research. Journal of bility of the Model and Stakeholder Attitudes.
Marketing 49, 41–50. TSC Research, University of London, London.
Penning, J.M.E., Wansink, B. and Meulenberg, Young, W.B. and Montgomery, R.J. (1998) Crisis
M.T.G. (2002) A note on modeling consumer management and its impact on destination
reactions to a crisis: the case of the mad cow marketing: a guide for convention and
disease. International Journal of Research in visitors bureaus. Journal of Convention and
Marketing 19, 91–100. Exhibition Management 1, 3–18.
10
Qualifying and Amplifying Determinants: Parameters
that Define Destination Potential
Comparative Competitive
advantages advantages
(resource endowments) Destination competitiveness and sustainability (resource deployment)
Global (macro)environment
Destination policy, planning and development
Destination management
We now turn our attention to the last augment the impact of all other determinants.
main component of the conceptual model of A destination may, for example, be inherently
destination competitiveness. In this chapter we competitive because it is innately attractive, is
examine what we have labelled as qualifying well managed and possesses strong supporting
and amplifying determinants, which, as resources, but still be uncompetitive because
we briefly introduced them in Chapter 3, the situation it finds itself in qualifies this poten-
represent factors whose effect on the competi- tial in one or more significant ways. Conversely,
tiveness of a tourist destination is to define its a destination which is intrinsically weak may
scale, limit or potential. have its tourism potential boosted by some
Qualifying and amplifying determinants amplifying factor which enables the destination
or conditioners are factors of competitiveness to attract a larger market share than its tradi-
that either moderate, modify, mitigate and tional touristic qualities would suggest vis-à-vis
filter, or magnify, strengthen, enhance and its competitors.
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
(J.R. Brent Ritchie and Geoffrey I. Crouch) 233
234 Chapter 10
These conditioners may affect competi- conditions and potential discontinuities that
tiveness by subtle and incremental amounts. may change the fortunes of the destination.
But their effect can also be so fundamental, Destinations with an eye on qualifying and
dramatic and dominant that they might com- amplifying determinants will be more likely
pletely overpower other categories of determi- to act proactively because they are in a better
nants, turning an otherwise strong or weak position to predict opportunities and threats, or
destination into a respectively minor or major at least judge the probability of them. For exam-
competitor. One recent dramatic example of ple, the competitiveness of a destination will be
such a qualifying determinant is the impact of enhanced by anticipating the emergence of new
the terrorism events of 11 September 2001 in markets and the decline of traditional markets,
the USA, which overwhelmed other competi- and by positioning itself to lead rather than lag
tiveness factors in varying degrees for many behind these changes as a function of changing
tourism destinations. circumstances.
These conditioning factors are not static – There is also another important reason
they are circumstantial and can therefore why this group of intervening determinants is
change over time, either gradually or abruptly. important. A destination with its eyes closed to
Situational changes are subject to some very the reality of these conditions is more likely to
broad and complex phenomena, and might make poor judgements when it comes to priori-
depend on a variety of social, economic, politi- ties for tourism development. For example,
cal and cultural events or trends. Consequently, there is little point in expanding hotel capacity,
they are not subject to micromanagement by building new airports, enlarging a convention
destinations or the tourism industry alone. centre or budgeting more on promotion if a
While qualifying and amplifying determinants qualifying determinant imposes a ceiling on any
may exert powerful influences on a destination, growth in tourism demand that these improve-
they are in turn not affected by tourism phe- ments are expected to produce. Conversely,
nomena other than in quite minor ways. Conse- certain amplifying factors may act to leverage
quently, this category of determinants of desti- other alternatives that might otherwise be
nation competitiveness lies beyond the ability of judged to be of little value.
destination managers to control. The tourism The conceptual model of destination
sector may exert some influence, but this is competitiveness identifies six qualifying and
likely to be superficial. For this reason, this amplifying determinants. We now discuss each
group of determinants is shown in Fig. 3.1 of these individually to illustrate their roles in
as being separate from the more manipulable shaping destination competitiveness. We begin
factors constituting the destination manage- by examining the significance of destination
ment category. Qualifying and amplifying location. Destination safety, cost, image, carry-
determinants are also shown cutting across ing capacity and the interdependent nature of
the pathways to destination competitiveness in relationships with other destinations are then
order to depict the intervening nature of their covered in turn.
impact.
Although it may be beyond a destination’s
ability to do much about changing its situational
conditioners, it is vital that it should have an Destination Location:
understanding of their impact so that it is in a Blessing or Curse?
position to exploit favourable circumstances
and defend itself against unfavourable develop- A destination’s physical location can have a
ments or trends. Such an understanding also huge impact on its ability to compete for
enables a destination to articulate its concerns and attract tourist markets. All other things
and wishes to policy makers and stakeholders in being equal, a more (less) favourable location
general, so that the industry’s voice is heard in amplifies (qualifies) tourism potential. And
wider spheres of influence. In addition, knowl- usually a more favourable location can be
edge of such factors is likely to sensitize a desti- equated with a location that is closer to the
nation’s managers to trends, events, evolving most important origin markets.
Qualifying and Amplifying Determinants 235
Of course, rarely are all other things region, including Japan, South Korea, Taiwan,
approximately equal because differences in Singapore and Hong Kong. The prospects for
proximity to origin markets usually also affect economic change in other neighbouring
other determinants in the model of destination nations, such as China, Malaysia, Thailand and
competitiveness. In particular, accessibility possibly Indonesia, are likely to continue this
is closely correlated with location. Normally, trend. It is no coincidence that destinations in
although not necessarily, accessibility improves the Asia-Pacific region have experienced the
the closer the destination is to its markets. In highest rates of growth in tourism demand
addition, market ties (i.e. various forms of over this period. Destinations that were once a
association between a destination and its tourist world away from the traditional tourism hub in
markets related to religion, trade, culture, etc.), Western Europe, North America and the North
the extent of marketing activity and the avail- Atlantic now find that their distant location from
ability and dissemination of general informa- these traditional markets is no longer a competi-
tion between a destination and its markets are tive disadvantage, as new markets have arisen
also to some extent a function of the desti- on their doorstep. Australia and New Zealand,
nation’s relative location. For this reason it for example, once received the majority of their
is perhaps difficult to assess how significant international visitors from the UK, but now find
location per se is in determining destination their most important markets in Asia.
competitiveness when it is confounded with Market changes such as these can occur on
these other variables, which are addressed any scale from local through to the sorts of
separately elsewhere in the model. global changes evident in the above examples.
We do believe, however, that the effects of For example, a destination in a developing
location are not fully explained by differences country, relying initially on foreign markets,
in accessibility, market ties, marketing and may find that as its economy improves and
information, and that location introduces diversifies over time an increasing proportion
certain overarching effects that would be missed of its customers comes from among its own
in our model if it were omitted as a qualifying residents.
and amplifying determinant. Population changes, too, can alter the dis-
What are the additional or incremental tribution of origin markets. Globally, birth rates
effects of location per se and how do they are typically lowest among developed nations.
influence the competitiveness of tourist desti- Migration also shifts the spatial location of
nations? In Chapter 3 we noted that, although people and wealth. In the USA, relative popula-
the absolute physical location of a destination tion growth has occurred in the south and west.
cannot change, its location relative to important In Canada, the western provinces, particularly
origin markets can change over several years. British Columbia and Alberta, account for an
Market segments are not static. They grow, increasing proportion of Canada’s residents.
mature and decline, or perhaps largely disap- In Australia, there has also been a shift in
pear. New markets emerge as travel tastes population from southern to northern states,
change. Old markets might fade as changing particularly to Queensland. The density and
economic, demographic or social circum- redistribution of people often also have signifi-
stances alter abilities and desires to travel. cant economic consequences. Areas growing in
A destination’s present markets are probably population require housing and other services,
different from what they were in the 1970s and this spurs demand in numerous industries.
or 1980s, and future markets are just as likely Populations move in search of jobs, a better cli-
to be different again. These market shifts mate or a better quality of life. What motivates
have locational implications that can improve young married couples to move is often quite
or harm the competitiveness of a destination. different from the motives stimulating retirees.
On a global scale, the greatest of these Sociocultural and political developments
market changes since the 1950s has been and trends present similar gradual or sudden
the emergence of new markets around the changes in tourist markets and behaviour. Rela-
Asia-Pacific Rim arising largely from economic tively sudden changes, such as the dismantling
progress in a number of countries in this of the Iron Curtain, the worsening crisis in
236 Chapter 10
the Middle East, the transition from British to some of the other determinants of destination
Chinese rule in Hong Kong and the signing of competitiveness begin to explain improved per-
free trade agreements can produce major and formance. This is most obvious when changes
abrupt shifts in the locational fortunes of desti- in relative location occur suddenly, as occurred
nations. More gradual social changes can be in East European countries following the break-
equally profound and are potentially even more down of communism, for example. Admittedly,
profound. For example, attitudes towards and much of this sudden change had to do with
interest in other cultures have changed dramati- improved accessibility, but it was at least
cally. Although racism and racial stereotypes as much the abrupt psychological shift
still exist in abundance, people throughout the that opened up new opportunities for East
world are today more tolerant of and curious European destinations.
about other cultures than ever before. Migration To the extent that a destination responds
and global communication has had much to do early to locational changes in markets, or
with this. Take, for example, attitudes to food: perhaps even anticipates these changes by
the diet of Western consumers today is much redirecting some resources towards them, a
more diverse as a consequence of increased destination can amplify its competitive position.
exposure to foods from other cultures. To do this successfully, the destination needs to
Political and sociocultural changes such as have one eye on the future. It will naturally be
these have altered the mobility of people and paying close attention to its existing important
stimulated changes in attitudes, interests and origin markets, but if it hopes to remain com-
opinions towards other cultures. In turn, these petitive, efforts to track market trends and to
latter changes have reconfigured the nature and sense particularly the economic, political and
spatial pattern of relationships between races, sociocultural changes in potential new markets
cultures and nations. are very important.
The geographical distribution of tourist Two further points need to be made
markets and market segments therefore ebbs regarding location as a qualifying and amplify-
and flows as a function of economic, demo- ing determinant. First, we should consider
graphic, social, cultural and political forces, the attributes of location as a geographical
and the fortunes of destinations wax and wane construct. Perceptions of distances and spatial
accordingly. relationships can greatly distort reality. You
When these changes occur, destinations may have seen the wall poster that depicts a
are likely to respond reactively. That is, one New Yorker’s view of the world. It shows the
would expect to observe a lag or delay between various boroughs of New York spreading away
a change in a destination’s locational situation from Manhattan. Beyond the Hudson River lies
and its response to a new realization that the rest of the USA and the insignificant area
proximate and distant markets are either disap- representing the rest of the world rests on the
pearing or growing. For example, the belated horizon. The point is that our mental map of
recognition that a nearby origin market of the world bears only a limited resemblance to
potential tourists is emerging is likely to result in reality. The world seemed a much larger place
efforts to improve accessibility. Airlines rarely to the likes of Columbus, Vasco de Gama and
lead demand in air traffic. Demand must be Magellan. To these explorers, the phrases ‘it’s a
proven before airlines are willing to commit small world’ and ‘it’s a shrinking world’ would
resources to serving new markets. Increased have seemed quite incomprehensible. Our dis-
trading ties are likely to follow, and destination torted mental map of the world and the implied
marketing programmes typically appear to be spatial relationships between destinations and
tied more to market share than future prospects tourist origin markets evolve under influences of
for developing the market. the sorts discussed above.
In other words, it normally takes a period The second point is that proximate loca-
of time for the tourism industry in a destination tions, although normally advantageous, are not
to adjust to new market opportunities, so that universally so. Distant destinations somehow
the destination’s competitiveness increases as a seem more exotic and may beckon the tourist
result of improved locational fortunes before powerfully. Nearby destinations may appear
Qualifying and Amplifying Determinants 237
too familiar. Location can therefore act as largely disappear. Some travellers are clearly
a double-edged sword. Canada, for example, not merely non-risk-averse but actually seek
which receives around 13 million American risky experiences; they are risk-seekers or risk-
tourists per year, seems to suffer somewhat takers. These tourists seek thrilling, challenging
from this affliction. and conquering experiences. Examples are not
Thus, destination location in itself governs hard to find: mountain climbers, lone sailors,
competitiveness in a number of important and polar explorers, bungee jumpers, around-the-
complex ways. Destinations seeking to enhance world bicycle riders, white-water rafters, and the
their competitive position need to recognize list goes on. There are even examples of people
and understand this group of influences if travelling to war-torn areas or the sites of
important pieces of the puzzle are not to be natural disasters. Clearly, there is a side of
overlooked. human nature that values risk and insecurity.
The thrill, adrenalin rush and euphoria
that come from confronting and conquering
fear can represent pleasure to many people.
Destination Safety: Destinations need to know what forms and
Security or Threat? levels of risk tourists seek and what they would
prefer to avoid.
The degree to which tourists feel safe in a des- Issues of safety for tourists appear to
tination is a further qualifying and amplifying fall into three principal categories: physical,
determinant that can affect the competitive- psychological and financial safety. Many situa-
ness of a destination in dramatic, and possibly tions that arise for the tourist, however, involve
catastrophic and sudden, ways. Tourists expect more than one of these forms. Crime, for exam-
to feel safe but will display a level of tolerance ple, jeopardizes all three forms of safety. Levels
for low levels of risk. A destination with a of crime are often well publicized and certain
reputation and image for exceptionally high nations, states and cities have strong reputa-
levels of security may therefore find that its tions for being either particularly dangerous or
competitiveness is amplified to some modest safe in terms of the threat from criminal activity.
extent. Above a certain threshold representing Japan, for example, has enjoyed a reputation
the limits of general tolerance, however, the for low rates of crime, although the poison-gas
incremental impact of an increased level of terrorism incidents a few years ago and the
safety is likely to be marginal. The upside for increased media coverage of Japanese gangs
a destination is therefore probably not par- (particularly in movies) has tarnished this image.
ticularly significant, but the downside conse- American crime statistics (particularly for
quences can be powerful to the extent that crimes involving the use of guns), the interna-
they can overwhelm most other positive tourist tional influence of the American media, and the
attributes. No matter how attractive a destina- dramatization and the popularization of crime
tion, if it is inherently unsafe many potential in American movies and on television have
visitors will choose to stay away. Reputation raised a great deal of concern in the minds of
rather than reality governs choices by tourists, tourists. Some cities, such as New York and
so even a ‘bad rap’, as the Papua New Guinea Chicago, have had a long-standing reputation
Tourism Promotion Authority understands,1 for high rates of criminal activity. However, the
can significantly harm a destination’s image. image of New York has improved considerably
Having recognized the normal situation, it now that former mayor Rudy Giuliani has
is important to acknowledge that some tourists achieved a degree of real and perceived success
are not averse to all risks. Indeed, risk seems to in lowering crime statistics. Other reputations
be a vital part of many forms of travel when have been acquired more recently. Perhaps
tourists choose to visit a destination precisely the best example is the state of Florida, where
because it is different and somewhat unfamiliar. several events involving criminal acts against
It is this sense of exploration that spices up Canadian and European tourists have been well
a journey. If there were no form of risk what- publicized internationally. In September 1993 it
soever, the intrigue and excitement would was reported, following the shooting death of a
238 Chapter 10
German tourist, that eight visitors to Florida had the world, with 18,983 murders reported in
died violently as a result of crime in the past 1995. Crime in Cape Town and Johannesburg
year. After a ‘bump-and-rob’ tactic, which is has particularly hurt the industry.7 Australia’s
used by some robbers on Florida roads, the reputation in the UK as a safe destination
German tourist kept driving, as advised in a was significantly tarnished by recent separate
safety pamphlet provided by car rental firms, events, including the murder of two backpack-
but was killed by a shot fired through the ers in 2001 and 2002 and the death of six
window of the car.2 A British tourist, the ninth British backpackers in a deliberately lit fire at a
victim, was murdered a week later. Two of the backpacker hostel in the state of Queensland in
nine victims were Canadian. Canada is the most 2000. More recently, two British tourists in
important source of foreign tourists for Florida. outback Northern Territory were forced off
After the incident involving the British tourist, the road. The female tourist was bound but
Canadian Holidays started offering full refunds managed to escape and the male tourist is pre-
to tourists who had booked a trip to Florida.3 sumed murdered. Two German tourists were
The tourism industry in Florida reacted with also bound and tied to a tree in the same area of
great concern, developing a strategy to address the country. Both events received a consider-
both the crime problem itself, insofar as it posed able amount of coverage in the Australian and
a threat against tourists, and to handle the pub- foreign media, raising concern about the image
lic relations dimension of the threat (personal of Australia as a safe destination for tourists.
interview with W.C. Peeper, Executive Director Related activities involving terrorism, wars,
and CEO of the Orlando/Orange County social and political unrest, overzealous police
Convention and Visitor Bureau, 23 September and security forces and authoritarian govern-
1993). One result was to introduce a fleet of ments create similar problems. Before 11 Sep-
rental cars equipped with electronic maps advis- tember 2001, terrorism had its worst years in
ing visitors of appropriate routes to take when the mid-1980s, centred on the Mediterranean
navigating the streets of Miami. The system also and Middle East. Several incidents involving
provided a ‘panic button’ that signalled the tourists at airports, on a cruise ship and else-
nearest police department via satellite when- where severely affected tourism in this region.
ever a tourist needed help.4 But the bad press Religious fundamentalists have focused on
for Florida continued. In March 1997 a Florida tourists in Egypt as an easy economic target in
sheriff made international news by warning that their struggle to gain political power. The first
the state was too dangerous to visit after the Gulf War in 1991 made tourists nervous about
release of 300 violent felons as a result of travel all around the world. The second Gulf
overcrowding in prisons. The same news item War in 2003 has again depressed international
reported that a further 2400 prisoners would go tourism, and the resulting concerns that this war
free early ‘in the coming months and years’.5 may worsen the threat of terrorism in the future
Other destinations with growing crime prob- are likely to dampen the prospects for a recov-
lems affecting the tourism industry include ery in international tourism for some consider-
Russia and South Africa. In 1995, an armed able time. Continuing social and political unrest
Russian seized 25 South Korean tourists in and atrocities in Algeria, Central Africa, the
a tourist bus parked in Red Square, Moscow, Balkans, the Middle East, southern Russia and
initially demanding a ransom of US$10 million. elsewhere have drastically curbed tourism in
The gunman was shot to death by about 20 these regions, whereas peace in other areas
commandos who stormed the bus, freeing (e.g. Central America, and the peace accord
all hostages.6 Strong growth in South African between Israel and Jordan, until the dramatic
tourism following the end of apartheid took increase in suicide bombing by Palestinians and
a turn for the worse after ‘gruesome tales of the retaliatory action by the Israelis in 2002) has
crime and violence splashed across newspapers substantially improved prospects for the growth
and television screens around the world [which] of tourism. Race riots in Los Angeles in the
have spooked potential tourists and given an early 1990s were shown on news telecasts
edge to other countries’ (Cheary, 1996). South around the world. The occasional poor treat-
African crime statistics are among the worst in ment of visitors and tourists by security forces,
Qualifying and Amplifying Determinants 239
legal authorities and authoritarian governments environment. These threats can range from
is a further concern. China and Singapore have wildlife, through natural disasters to severe
unfavourable reputations in this regard. Some weather conditions. Reports occur annually of
years ago, the film Midnight Express portrayed bear and occasional cougar attacks on campers
the legal system in Turkey in most unflattering and hikers in western Canada. Visitors to Aus-
terms. The threat of physical, psychological and tralia fear spiders, snakes, sharks, crocodiles
financial harm from incidents such as these can and sea wasps. Tornadoes, hurricanes and
decimate a destination’s tourism industry for earthquakes regularly afflict regions of North
months or even years. America. Aircraft, bus and passenger ferry
But the impact of terrorism in the USA accidents have made headlines at times over
on 11 September 2001 surpassed that of all the years. For example, in 2000 a large
previous violent events that had significantly group of tourists drowned while canyoning in
altered the competitive position of tourism des- Switzerland, when a heavy rainstorm produced
tinations. The effect was such that many people a flood surge that swept many members of the
felt that the world had changed for ever on that group to their deaths.
day. There was also a strong sense that further The actual risk posed by many of these
similar acts of terrorism were likely in the USA, events is usually very small and is often less than
Britain and indeed other parts of the world. The the risk people take in their daily lives driving to
demand for travel and tourism around the world and from work. But the dramatic, shocking and
changed in an instant. The effect was most often explicit coverage of these events height-
dramatic in the USA but the ramifications were ens their horror and magnifies the perception of
felt globally. The US airline industry closed risk.
down for several days. Even a year later there Destinations that lack safe drinking water,
still appeared to be a long way to go before well-behaved motorists, well-maintained and
travel and tourism in the USA would fully safe infrastructure, proper building and fire reg-
recover. On the other side of the world in Aus- ulations, reliable emergency services, qualified
tralia, the immediate aftermath of 11 Septem- medical practitioners, modern and sterile hospi-
ber also produced a decline in tourism, but tal facilities, safe sanitary conditions, appropri-
the industry there has recovered much more ate regulations and controls for food safety and
quickly. The bombing of a Bali night club on 12 hygiene, etc., or that expose visitors to high risk
October 2002, targeting Western tourists, and of diseases, such as malaria, AIDS and infection
the 2003 war against Iraq are the most recent with exotic and dangerous viruses, present
dramatic examples of conflict affecting tourism. additional risks. These health risks demand a
The safety and security of tourists is further significant amount of predeparture preparation
threatened by the risk of accident and mis- (medicine and knowledge) and they also involve
adventure. Tourists are typically exposed to costs that are often not covered by insurance.
higher levels of such risk compared with local Airline flights out of India stalled for a few days
residents, who are more familiar with risks in some years ago when there was an outbreak
their own environment and how to minimize of a dangerous disease. For a while, baggage
them. For example, in northern tropical Austra- handlers at Toronto airport refused to unload
lia it is usually the tourist, not the local resident, aircraft arriving from India. In Britain, the tour-
who is taken by a crocodile swimming in waters ist industry was affected dramatically when it
that locals know to avoid. Something as simple was reported that Creutzfeld–Jakob disease
as crossing the street in a foreign country, may have been been transferred to humans
where cars travel on the opposite side of the from cattle with bovine spongiform encephalo-
road, or driving with unfamiliar traffic regula- pathy (mad cow disease) and when this was
tions, exposes the visitor to additional dangers. followed by an outbreak of foot and mouth
Some tourism activities themselves, as discus- disease in cattle. The most recent impact of
sed above, are inherently more dangerous than disease affecting tourism occurred when a num-
the usual daily mix of activities at home. ber of travellers from Asia contracted severe
There is also the threat, real or per- acute respiratory syndrome (SARS), resulting in
ceived, contained in a destination’s natural a number of deaths. The impact in the affected
240 Chapter 10
countries was substantial and the fallout for Herald, 1994). In another case, 45 Canadian
tourism has been severe. Mature or elderly tourists planned to initiate a class-action lawsuit
travellers, particularly those who require medi- against a Montreal travel agency after they were
cation or who are at some health risk during robbed in Venezuela when their bus was hijack-
their trip, are likely to pay particular attention to ed by three bandits at an apparently deserted
such concerns. Disabled travellers, too, will be Caracas airport at 3 a.m. (Hustak, 1994).
most concerned to ensure that a destination Finally, there is the psychological risk
will be able to meet their needs. The presence involved when tourists confront unsettling or
of embassies and consulates may alleviate the disturbing situations, particularly when travel-
fears of some tourists in countries where risks ling in Third World destinations and foreign
are perceived to be high. One Australian entre- cultures. Poverty, squalor, starvation, begging
preneur developed a business helping ill and and even brutality are unfortunately a part of life
injured Australian travellers overseas into a in many parts of the world. Although tourists
$5.5 million-a-year enterprise, handling 7000 usually have some understanding of the
cases involving Australians, and arranged over conditions they can expect, they are rarely
100 evacuations in 1991 alone. The company, prepared for the reality. For example, some
Worldcare, works in conjunction with insurance tourists to India find their experience witnessing
underwriters. Many customers involve compa- poverty and squalor quite disturbing.
nies with executives travelling and working in As noted earlier, conditions in a destina-
places like China (Thomas, 1991). tion that pose a threat to the physical, psycho-
A further group of risks faced by tourists logical or financial safety of tourists can be
concerns their vulnerability as consumers. In so significant as to overwhelm any capacity a
foreign destinations, particularly those encum- destination might have to compete effectively
bered with an unreliable legal system, tourists in tourism markets. Although many of these
can be easy prey for unscrupulous operators. problems might be beyond the power of the
Tourists in such a situation are often reluctant to tourism industry alone to rectify, if they are
seek redress or take legal action when they are left unattended other competitive actions by a
not clear about their rights, are unsure where destination might be quite ineffectual.
to turn for help, and have limited time and When tourist safety is threatened, the con-
resources available. To deal with these occur- sequences for a destination can be immediate
rences, destinations may introduce a code of and might be quite out of proportion to the
practice or take action against companies that real risk. The resulting drop in competitiveness
violate consumer laws. Government regulation can be rapid, but it may take a great deal of time
may be required in certain sectors. Some indus- to overcome the problem and the lingering
tries establish compensation funds to protect unfavourable market perceptions.
tourists in cases in which fraud or bankruptcy
occurs. Where consumer protection is insuffi-
cient, a destination can gain an unfavourable
reputation that spreads throughout markets and Destination Cost Levels:
the travel trade. Increasingly, however, tourists Reality or Perception?
are beginning to assert their legal rights more
forcefully. A number of cases have been Cost is a fundamentally critical element
reported in the media in which tourists have of competitiveness, so much so that one
sued travel agencies or tour operators for failing frequently finds, when reading an article on
to meet their obligations. One Michigan tourist competitiveness (particularly when it has been
sought US$4 million in actual damages and written by an economist rather than a mar-
US$10 million in punitive damages from a keter), that the author is really talking about
travel agency and its parent company, claiming cost-competitiveness and not competitiveness
that he was misled into believing he could in its broader sense. In very simple terms, com-
engage in water sports safely. He spent 51 petitiveness in a market can be broken down
hours in shark-infested water in the Caribbean into two dimensions. These are: (i) what you
after a rented jet-ski broke down (Calgary get (i.e. the product); and (ii) what you pay for
Qualifying and Amplifying Determinants 241
what you get (i.e. the price). Taken together, has the option of spending their vacation in
these two dimensions determine the value any number of alternative destinations. Alterna-
gained in purchasing a product. tively, the potential traveller may decide to
Porter (1980) recognized that, fundamen- forgo a trip altogether in order to purchase
tally, a competitive advantage can only be sus- another product (e.g. a new car or home
tained in one of three possible ways that relate furnishings). Hence, the price of these other
to the two dimensions identified above. A firm products may well influence the demand for
has a competitive advantage either because it is travel to a particular destination.
the lowest cost producer or because it offers a Price is therefore a complex construct in
better product. The product may be better the case of tourism destinations. Price may be
either because it is differentiated from other measured in either absolute or relative terms.
competing products in ways which offer added If the price is measured in relative terms, should
value to the customer, or because the firm, by it be related to the cost of tourism services in
focusing on the needs of a particular segment the traveller’s country of residence, the cost of
of the market and providing superior service tourism in alternative destinations (and if so,
to that segment, serves the total needs of its which destinations), or the cost of other goods
customers more effectively. Differentiation and and services? How should changes in exchange
focus enable a firm to develop a competitive rates be taken into account? Are travellers more
advantage and charge a price premium that or less sensitive to changes in exchange rates
reflects the added value in their product than they are to changes in foreign or domestic
compared with that of the lowest-cost producer. prices? Should the cost of transportation to a
For the purpose of this discussion we draw destination be regarded as part of the price of
a distinction between cost and price. Price is the destination?
the amount charged to a customer. Cost is the A further complication concerns the
expenditure that a producer incurs in providing complexity of price information. Tourism is an
the product to the customer. The difference amalgam of goods and services. Therefore, it is
represents the profit to the producer from the extremely difficult to define the tourism price,
transaction. Costs are therefore a major (but not as it is a function of the total mix of goods and
the only) determinant of price. As price is a services consumed by each tourist. Although
significant factor in customer choice, costs of some attempts have been made to develop
production are critical. The prices charged by a a tourist price index (World Tourism
tourism destination depend both on the cost Organization, 1985; Martin and Witt, 1987),
structure of the tourism and hospitality industry such information is limited. Frequently, tourism
and on the nature of competition among rival prices in destinations have been represented by
firms, which affects rates of profitability. The published consumer price indexes (CPIs). The
cost of factor inputs and the productivity of choice of CPIs has been largely expedient, but
an industry in converting inputs into products it has been argued both that the mix of goods
are therefore significant determinants of the and services consumed by tourists is not too
industry’s cost-competitiveness. different from the mix constituting the CPI and
For a product like tourism, price has that the changes in the CPI fairly reflect changes
numerous components. The costs of goods and in the prices of goods and services consumed by
services purchased in a destination would nor- tourists. One can also gauge the cost of living in
mally account for the major portion of the total a destination based on per diem allowances
price. The cost of transportation to a destina- paid by governments to Foreign Service per-
tion may also be quite significant, particularly in sonnel, or by the United Nations to its staff in
the case of long-haul air travel. Other costs and foreign postings. Runzheimer International has
factors, such as travel insurance, the opportu- measured the per diem costs (based on a night’s
nity cost of travel time and changes in exchange lodging and the price of three meals) for busi-
rates, may be important and can affect costs. ness travellers in various cities worldwide and
A further aspect includes the price of found the five most expensive cities to be Hong
other substitute or complementary products. Kong, Tokyo, Moscow, Buenos Aires and
A potential visitor to a particular destination Paris. Hong Kong, the world’s most expensive
242 Chapter 10
city, came in at US$474 for a first-class hotel to the maintenance of competitive advantage.
room and three meals (Business Week, 1997). For a long time it was felt that there was little
Much of the research evidence suggests scope for productivity improvements in the ser-
that tourists’ response to changes in exchange vice sector. Whereas technological innovation
rates is not the same as their response to has been the basis of enormous advances in
changes in the cost of living within national productivity in other areas, such as manufactur-
destinations. Tourists are generally much better ing, agriculture, mining and construction, the
informed about exchange rates but have service sector was regarded as offering minimal
imperfect knowledge of local price levels opportunities for productivity improvement.
(Little, 1980, p. 42; Lin and Sun, 1983, p. 52; The labour-intensity of many services, it was
Truett and Truett, 1987, p. 183; Tremblay, felt, severely limited alternatives for substituting
1989, p. 480). Hence, tourists may base their technology for labour, and therefore the service
decisions prior to departure on a knowledge of sector was a drag on productivity and prosper-
exchange rates but might alter their intended ity. These attitudes, however, have begun to
length of stay and level of spending upon arrival change in the light of new evidence on service
as they adjust to local currency prices. Little productivity.8
(1980, p. 47), quoting from an article in The With respect to a tourist destination,
Economist, suggested that ‘nominal exchange- potential improvements in efficiency exist in
rate movements have predictable effects on many areas. Global distribution systems have
tourist spending’ but ‘tourists could often be enormously enhanced the ability of the travel
kidding themselves that things are cheaper over trade to distribute information efficiently and
the fence, until they find out what that weak effectively and to handle reservations. The
currency has done to retail prices in their preference of airlines for reducing reliance on
holiday haven’. travel agents and marketing directly to consum-
A study by one of us (Crouch, 1992), which ers has lowered airline costs. The Internet and
reviewed the empirical results of a large number other online tourism marketing systems are also
of studies into the determinants of international revolutionizing the way in which other tourism
tourism demand, found that although results and hospitality enterprises are reaching cus-
have been quite mixed, in general the cost of tomers. The focal, coordinating role played by
transportation to a destination, exchange rates industry associations and destination manage-
and the local currency price of tourism services ment organizations and the increased number
each have a significant impact on the demand of marketing and operational alliances, partner-
for travel to a destination. ships, consortia, networks and joint ventures
What can a destination do to improve and have had a positive impact on destination pro-
manage its cost-competitiveness? The answer is ductivity. At the same time, as noted in Chapter
probably not a great deal, and it is for this rea- 5, tourism industries have become more sophis-
son that our model of destination competitive- ticated and competitive in general. Increased
ness places cost among the qualifying and rivalry between firms places emphasis on inno-
amplifying determinants rather than among vation, cost control and process improvement.
elements of destination management. We do Although many small, independent operators
not suggest that a destination has no responsi- still characterize the tourism industry, manage-
bility for its costs. Indeed, there are a number of ment contracts and franchising are bringing
things destinations can do to improve their specialization and greater skills to the industry.
cost-competitiveness. However, because costs Productivity improvements are not neces-
are driven by a broad range of economic, tech- sarily reflected in lower costs. In the service sec-
nological, sociocultural, political and environ- tor, many efforts at productivity improvement
mental factors at the regional, national and have been aimed at improving service quality
global levels, it is more appropriate to recognize rather than reducing or containing costs. And
that the impact which a tourist destination is the link between price, quality, value and the
able to exert on costs is rather limited. destination’s reputation, image and overall
We noted above the importance of produc- competitiveness is critical. Keane (1996) exam-
tivity improvements in an industry with respect ines this link through the economics of
Qualifying and Amplifying Determinants 243
reputation and quality decisions for a tourism destinations are complementary while in the
destination, and identifies the implications of latter they are competitive substitutes.
these decisions for destination competitiveness. The relationship between two or more
A study by Tourism Canada (Stevens, 1992) destinations is much more complex than this,
concluded that measures ‘of travellers’ price/ however, as noted in Chapter 5. Two destina-
quality perceptions are key to determining a tions may, for example, be adversaries fighting
country’s or industry’s competitiveness, because for a share of one market segment, but
competitive advantage grows out of a value that might work synergistically to attract a different
a country is able to create for its buyers’. segment. This is often the case where market
Tourism markets hold various perceptions segments are defined geographically and is
of the price and value offered by different desti- apparent when the most extreme cases are con-
nations. A further way in which a destination sidered. For example, the provinces of Ontario
can improve its competitiveness is by influenc- and British Columbia in Canada are clearly
ing these perceptions. Murphy and Pritchard adversaries in their attempt to attract domestic
(1997) found price–value perceptions to vary tourists from within Canada. One of these two
seasonally and according to the origin of the provinces is likely to attract domestic tourists at
visitor. Lawson et al. (1995) investigated the the other’s expense because a domestic tourist
awareness of prices for attractions and activities is less likely than an international tourist to visit
in destinations and concluded that the level of both provinces in a single trip. A foreign tourist,
knowledge about actual prices charged was low. however, particularly if residing in a very distant
Destinations should track levels of awareness market, such as New Zealand or South Africa, is
and perceptions of both price and value over more likely to choose Canada as a destination,
time to monitor competitiveness in this respect. including a visit to both provinces, if each
Although, as noted earlier, many aspects province builds on the other’s competitive
of the cost structure and price of a destination advantages. For this reason, it makes no sense
lie beyond the capacity of the tourism industry to make a blanket statement that destination
to change, players in the industry certainly have A is destination B’s substitute or complement
it within their capacity to voice their concerns unless the specific market segment connected
and wishes to policy makers on matters relating with the adversarial or synergistic relationship,
to taxation, regulation, industrial policy, pro- respectively, is specified.
motional programmes, infrastructure and the The relationship between two destinations
many other areas which can govern the overall is also not necessarily reciprocal. There is
cost of a destination. nothing in theory that would indicate that an
interdependent relationship is perfectly sym-
metrical, although it is difficult to imagine a case
where a synergistic or adversarial relationship
Destination Interdependencies: would not exist in both directions, even though
Synergy or Substitute? the significance of the dependency might vary.
Take, for example, the case of destinations that
Another qualifying and amplifying determinant rely on stopover traffic for a significant share of
that can significantly shape the competitive their visitors. While Fiji, Hawaii and Tahiti are
fortunes of destinations is the nature of any attractive destinations in their own right, they
interdependent relationships among desti- do attract a substantial portion of visitors for a
nations. In simple terms, this relationship can few days as a stopover in their travel across the
either be synergistic or adversarial. In a syner- Pacific. Were Australia and New Zealand, for
gistic relationship, competitive strengths in one example, to decline in competitiveness, there
destination convey advantages on other desti- would be some significant impact on visitation
nations with which it shares the relationship. of these island destinations around the Pacific
In an adversarial relationship the opposite is Rim. Countries like Australia, New Zealand,
true; that is, a strong destination weakens Hong Kong and Thailand also benefit from the
the competitiveness of the destinations that fact that travellers from North America are able
constitute its adversaries. In the former case, to break their long journey across the Pacific in
244 Chapter 10
these islands, so that the overall relationship Australia, and has been one of that country’s
between the island destinations in mid-Pacific principal vacation destinations for many years.
and continental countries is complementary. In combination with Broadbeach, Burleigh
The advantage, however, is probably greatest Heads, Coolangatta and other communities, it
for the islands as they are more likely to serve as forms part of the larger destination region along
secondary destinations. this area of the southeast Queensland coast
The categorization of destinations as pri- known as The Gold Coast. Several other coastal
mary versus secondary is not confined to those resort areas exist along the 1600 km of popu-
where stopover traffic is involved. Many inter- lated Queensland coast, including The Sun-
national tourists visit more than one country in a shine Coast, The Whitsunday Island region and
single trip, as national borders often represent Far North Queensland, centred on Cairns. As a
rather artificial barriers. Americans visiting state, Queensland is Australia’s most rapidly
Europe frequently enter a number of countries developing tourist destination. At the national
but often one or two (e.g. the UK and France) level, Queensland and the other states and terri-
serve as the primary destination(s), other peri- tories combine to offer international tourists a
pheral countries acting as secondary attractions. broad range of attractions and activities, includ-
If one considers the interdependencies ing beaches, rainforests, deserts and the out-
between destinations in the light of the enor- back, country towns and cosmopolitan cities. At
mous growth in global travel since the 1950s, the next highest level, the region known as
it seems reasonable to conclude that, by and Oceania, covering Australia, New Zealand and
large, alternative destinations have profited the South Pacific, forms a further destination
from the increased competitiveness of desti- identity. Finally, the entire Asia-Pacific Rim
nations worldwide. As more companies enter region encompasses perhaps the highest mean-
an emerging industry, the effect is often to ingful destination unit in this part of the world.
expand the size of the total market such that Vertical interdependencies occur between
all competitors are better off for the added destinations at different levels in this hierarchy,
competition. Increased competition can have whereas horizontal interdependencies concern
the effect of justifying or legitimizing the destinations at the same level. The competitive-
industry. The combined marketing efforts of ness of any one destination at any level is
competitors can attract much greater attention inextricably dependent upon its network of
and develop overall demand more effectively. horizontal and vertical relationships with other
Although competitors may be fighting over a destinations in this hierarchy. A change in the
share of the market pie, the result of competi- competitiveness of any destination will rever-
tion may be to increase the size of both the berate through the network, the impact being
pie and of each individual share, more than a function of the synergistic and adversarial
compensating for the effect of dividing the pie relationships tying the fate of the destinations
among a greater number of players. together.
We can also think of the interdependent To a large extent, interdependent relation-
relationships between destinations in either a ships between destinations are governed by
horizontal or a vertical sense. Vertically, there geopolitical circumstances that cannot be
exists a hierarchy of destinations, each higher- readily actuated and manipulated at will. How-
order destination encompassing two or more ever, the actions of a destination might affect
lower-order destinations. At the lowest levels relationships at the margin. For example, the
are the smallest meaningful units of analysis, marketing strategy of a destination might
such as local resort areas. Bordas (1994) refer- choose to emphasize any complementary rela-
red to these as ‘clusters’. In some cases this tionships with other destinations (or destination
might include a single, all-inclusive operation, levels) to communicate the added value that
such as a Club Med. More often, however, it will such a relationship offers the potential tourist,
include a town or city, or some defined natural or it might explicitly aim to position the
region surrounding a valley, lake, mountain, destination against its competitive substitutes.
beach or forest. For example, Surfers Paradise Any decision to ignore or exploit such
is a resort city on the coast of Queensland, interdependencies carries with it certain risks. A
Qualifying and Amplifying Determinants 245
decision to link the destination with another tourism-targeted information, which attempts
works well as long as that other destination to develop a favourable image.
remains competitive. But should the other Our model addresses destination market-
destination suffer some problem, such as ing, positioning and branding elsewhere, under
publicity over crime or a devastating hurricane, the categories of both destination management
the drop in competitiveness of that destination and destination policy dimensions. We have
will carry over to affect other destinations with situated destination awareness and image under
which it is associated. qualifying and amplifying determinants in order
There are therefore advantages and disad- to recognize the fact that these elements are
vantages in trying to manage interdependent largely driven by a diverse range of influences
relationships. A go-it-alone strategy, however, that often extend well beyond the design or
also faces risks. Linkages developed with other control of destinations themselves.
complementary destinations may help to buffer Hence, a very favourable image of a desti-
the destination from the vicissitudes of its own nation combined with high levels of awareness
fluctuating and uncertain fortunes. in an important target market can serve to
amplify the competitiveness and success of the
destination in that market. On the other hand, a
very poor image of a destination or low aware-
Destination Image: Perceptions of ness will constrain or qualify the destination’s
People and Place ability to attract visitors.
Research on the way in which tourists con-
The awareness and image of a destination in sider, compare and evaluate alternative tourism
the mind of potential visitors is, not surpris- destinations suggests that the choice process is
ingly, one of the most important of the factors cognitively structured in terms of choice sets of
that affect destination competitiveness. Indeed, destinations (Woodside and Lysonski, 1989).
as the role of most destination management Those destinations of which tourists are either
organizations centres around the promotion unaware or insufficiently aware constitute the
of the destination, a considerable amount of unawareness set. The aware destinations may
attention, effort and activity is devoted to the be mentally assigned by the intending tourist to
task of developing a strong awareness of one of three sets. The inept set comprises
the destination in key markets, and shaping destinations that the tourist regards as being
the formation of a favourable, attractive and unable to satisfy their particular travel needs and
enticing image of the destination in order to desired experiences because their image of
attract tourists. such destinations is, in some way, negative
Despite the efforts that most destinations with respect to these needs and experiences.
these days go to in order to establish awareness Destinations that have rather neutral images
and shape an image, awareness and image are in the mind of the intending traveller (i.e.
usually a function of such a wide variety of the image of the destination does not contain
sources and forms of information about a place strong positive or negative content vis-à-vis the
and its people that explicit efforts by a destina- traveller need) may be grouped together as
tion management organization in this regard the inert set. Those destinations that come to
normally play only a minor role – often perhaps mind most readily when the tourist first starts
only a very minor role. Consider, for example, to consider which alternatives are most likely to
the awareness and image of China as a tourism satisfy their needs or desires are known as the
destination. How much of your awareness and evoked set. Rarely do more than just a few (typi-
image of China stems from promotional activity cally three to five) destinations make the evoked
carried out by organizations engaged in the set, and those that do are the ones of which the
Chinese tourism industry? Initially, probably tourist is usually most aware and which present
very little. But if you start to contemplate a the strongest or most unique image as related to
trip to China and get to the point of actually the particular needs of the intending tourist.
gathering touristic information on China, then Of course, images may not be accurate
you might begin to be influenced by more of the or correct. But if such images represent how
246 Chapter 10
tourists perceive reality, their travel decisions While destination promotion and marketing
and therefore the competitiveness of the can clearly play an important role in creating
destination will be affected accordingly. For awareness and shaping image, an approach
example, many first-time visitors to China which involves the tourism industry going it
today are surprised by the modern and clean alone would seem unlikely to be successful. For
character of its large cities compared with their this reason, in recent years some countries or
image of a mostly poor country. destinations have adopted a comprehensive
Strong images are hard to develop and branding approach which integrates tourism,
even harder to change, once formed. They economic development, international or inter-
have an inertia such that individual pieces of regional trade, social development and other
information will do little to change them unless place-marketing goals into an integrated place-
they are reinforced by other consistent mes- branding strategy (see Kotler et al., 1993, for
sages and information. This builds up over time examples and an approach to place marketing).
until a point is reached when the weight of
evidence is such that an individual begins to
question the accuracy and validity of the
previous held perceptions. It may therefore Carrying Capacity: Hard and Soft
be possible, over time, to correct false or Constraints to Growth
out-of-date impressions and images, but it
is doubtful that tourism promotion can alter The last qualifying and amplifying determinant
mostly accurate but unfavourable images unless in our model of destination competitiveness is
other sources of information about a destina- the destination’s carrying capacity. Carrying
tion, the place and its people can be suppressed capacity concerns a destination’s ability to host
in some significant way. demand and therefore represents some form
In seeking to enhance a destination’s of upper limit to the volume of demand it can
competitiveness through the target market’s handle. Yosemite National Park in the USA
awareness of the destination and through its is an example of a destination operating
image, several steps can be identified: under capacity conditions during peak tourism
periods. Limited accommodation and camp-
• assess the destination’s present image and
ing facilities act as a constraint on overnight
level of awareness in those target markets
visitor numbers. While Yosemite is a breath-
of interest, recognizing that different
takingly beautiful area and draws large num-
markets may well have different images;
bers of visitors, its attractiveness is adversely
• understand why or how these images have
affected by the size of crowds in summer.
formed and what sources of information
Additional accommodation facilities could
or influences have, over the years, led to
be provided, but the visitor experience would
this image;
diminish.
• determine what image is desired or ought
The notion of a maximum desirable desti-
to be developed, recognizing reality and
nation carrying capacity has received increased
the challenges involved in changing an
attention as the concept of sustainability has
image; and
permeated modern approaches to tourism
• develop a plan for bringing this about –
development. Carrying capacity has received
while such a plan may include an impor-
most interest and attention with respect to
tant role for destination promotion and
the potential negative impact of tourism
communication, success will depend on
development in ecologically sensitive areas. But
the degree to which the plan formulates
the concept of carrying capacity can also be
an integrated strategy involving and incor-
applied in connection with adverse sociocultural
porating all image-formation influences,
impacts, or in terms of capacity constrained
organizations and entities.
more objectively by limited infrastructure or
Studies of destination image point the way tourism superstructure. For example, limited
in terms of how the first step in this task can be accessibility to a site in terms of travel mode,
accomplished (e.g. Echtner and Ritchie, 1993). limited accommodation facilities and other
Qualifying and Amplifying Determinants 247
constraints on tourists and tourism activity satellite maps of vegetation and habitat loss, it
can equally present a barrier to tourism growth is often difficult to find agreement among the
and potential. different interested parties as to what level
Although there are some similarities across constitutes a problem.
these different sources of limited carrying Hard capacity constraints, such as the
capacity in that they each imply some notional number of hotel rooms, act as a definite ceiling
maximum level of tourism demand that can to the level of demand that can be satisfied.
or should be accommodated, there are also Provided demand is less than capacity, all such
important differences. For example, where the demand can be serviced. Soft constraints occur
destination is underdeveloped and demand is when there is no definite ceiling to capacity, but
currently constrained by the limited availability demand is self-regulating. For example, the
of accommodation or transportation facilities, growth in demand may begin to soften as the
expanding these facilities may address the prob- increasing number of visitors begins to have
lem or constraint and therefore improve the an adverse effect on the quality of the visitor
destination’s competitiveness. However, where experience. When this threshold is first crossed,
capacity is constrained by social or environmen- the decline in the visitor experience is only
tal factors, the alternative of increasing capacity marginal, so that demand continues to grow. As
may be quite nonsensical. Instead, a destination the visitor experience further deteriorates with
might seek to alter the form of tourism to lessen increased visitor numbers, demand plateaux as
environmental or social impacts, so that every additional visitor is offset by the loss of
possibly larger numbers of tourists might be one other discouraged visitor. If these strained
accommodated without adding to the negative circumstances persist, it is possible that word-
impacts. For example, in a national park where of-mouth or deteriorating physical conditions
tourists have previously ventured uncon- might lead to an overall decline in visitor
strained, making their own trail, specific trails interest.
might be built and tourists constrained to these Destinations can address these types
trails so that larger numbers of visitors present of problems by explicitly incorporating the
fewer problems than the previously smaller question of carrying capacity into a strategic
number of visitors presented. Similarly, when plan for destination development. This way,
social problems arise in connection with carrying capacity issues become planned
excessive numbers of tourists interacting with for rather than default outcomes. Forecasts of
indigenous populations, it might be possible demand need to be made for this purpose.
to build some sort of visitor centre in order to The destination’s target market strategy might
present cultural experiences to visitors without be influenced, as a result, by consideration of
the attendant social problems. which types of tourists (and their impacts) best
It is comparatively easy to measure a fit the destination.
destination’s carrying capacity objectively with As the tourism industry continues to grow
respect to man-made facilities and services and worldwide and more destinations find that their
to know when it has been reached. For exam- ability to satisfactorily serve demand begins to
ple, one can analyse hotel occupancy rates, come under strain, or environmental or social
port arrivals, convention centre usage, the problems arise, those destinations that take the
length of lift queues at ski resorts, the size of time to understand and anticipate their carrying
audiences at entertainment venues, the volume capacity and plan accordingly will outperform
of water in storages, etc. The capacity of such those that do not.
infrastructure or superstructure is normally
quite definite. In contrast, determining carrying
capacity in terms of ecological and social Notes
impacts is much more subjective and is
therefore controversial. While certain objective 1
In an article titled 'Falling off the map: Papua
indicators might be used, such as the number of New Guinea's bad rap is keeping tourists away - and
resident complaints, the count of endangered locals poor', the author observes that 'The headlines
species, crime statistics in tourism resorts, and aren't wrong: the fractious young nation faces huge
248 Chapter 10
problems. Crime is one of them, and tourists are Keane, M.J. (1996) Quality and pricing in tourism
occasionally attacked, robbed or raped. But headlines destinations. Annals of Tourism Research 24,
aren't the whole story. Most of the country is tranquil 117–130.
and its people friendly' (Feizkhah, 2002). Kotler, P., Haider, D.H. and Rein, I. (1993)
2
‘Tourism trouble: latest Florida killing has Marketing Places: Attracting Investment,
officials scrambling' (Calgary Herald, 14 September Industry, and Tourism to Cities, States, and
1993). Nations. Free Press, New York.
3
‘So far, tourists take slayings in stride' (Calgary Lawson, R., Gnoth, J. and Paulin, K. (1995)
Herald, 22 September 1993). Tourists’ awareness of prices for attractions
4
‘Florida tourists hit panic button' (Calgary and activities. Journal of Travel Research 34,
Herald, 14 September 1994). 3–10.
5
‘Florida "very dangerous" for tourists, sheriff Lin, T.-B. and Sun, Y.-W. (1983) Hong Kong. In:
warns after 300 prisoners freed' (Calgary Herald, Pye, E.A. and Lin, T.-B. (eds) Tourism in Asia:
15 March 1997). the Economic Impact. Singapore University
6
‘Tourists get the jitters: Russia's image hurt by Press, Singapore, pp. 1–100.
bloody incident' (Calgary Herald, 16 October 1995). Little, J.S. (1980) International travel in the US
7
‘Crime puts the choke on South African tourism' balance of payments. New England Economic
(Calgary Herald, 24 November 1996). Review (May/June), 42–55.
8
There is a 'tendency of existing data to Magnet, M. (1993) Good news for the service
understate service productivity growth – to fail to economy. Fortune, 3 May, p. 46–52.
capture important classes of productivity advances' Mandel, M.J. (1997) Whodunnit to inflation.
(Magnet, 1993, p. 48). 'Services are the unsung Business Week, 12 May, p. 36–38.
heroes in keeping overall rates [of inflation] down' Martin, C.A. and Witt, S.F. (1987) Tourism demand
(Mandel, 1997, p. 36). forecasting models: choice of appropriate
variable to represent tourists’ cost of living.
Tourism Management 8, 223–245.
Murphy, P.E. and Pritchard, M. (1997) Destination
References price–value perceptions: an examination of
origin and seasonal influences. Journal of
Bordas, E. (1994) Competitiveness of tourist destina- Travel Research 35, 16–22.
tions in long distance markets. Tourist Review 3 Porter, M.E. (1980) Competitive Strategy:
(94), 3–9. Techniques for Analysing Industry and
Business Week (1997) The daily tab for travellers. Competitors. Free Press, New York.
7 April, p. 30. Stevens, B.F. (1992) Price value perceptions of
Calgary Herald (1994) Florida tourists hit panic travelers. Journal of Travel Research 31,
button. 14 September, p. C1. 44–48.
Cheary, M. (1996) Crime puts the choke on Thomas, T. (1991) Saving lives with a fast getaway.
South African tourism. Calgary Herald, Business Review Weekly, 8 November,
24 November, p. A8. pp. 56–57.
Crouch, G.I. (1992) Effect of income and price Tremblay, P. (1989) Pooling international tourism in
on international tourism demand. Annals of Western Europe. Annals of Tourism Research
Tourism Research 19, 643–664. 16, 477–491.
Echtner, C.M. and Ritchie, J.R.B. (1993) The mea- Truett, D.B. and Truett, L.J. (1987) The response
surement of destination image: an empirical of tourism to international economic condi-
assessment. Journal of Travel Research 31, tions: Greece, Mexico and Spain. Journal of
3–13. Developing Areas 21, 177–190.
Feizkhah, E. (2002) Falling off the map: Papua New Woodside, A.G. and Lysonski, S. (1989) A general
Guinea’s bad rap is keeping tourists away – and model of traveler destination choice. Journal of
locals poor. Time, 18 March, p. 12. Travel Research 27, 8–14.
Hustak, A. (1994) Holiday horror: travellers sue after World Tourism Organization (1985) Guidelines for
heist in Venezuela. Calgary Herald, 20 March, Constructing a Tourist Price Index. World
p. A2. Tourism Organization, Madrid, Spain.
11
The Destination Audit: Putting the Model to Work
Comparative Competitive
advantages advantages
(resource endowments) Destination competitiveness and sustainability (resource deployment)
Global (macro)environment
Destination policy, planning and development
Audit
Destination management
In this book we have endeavoured to develop a component of its economic development, and
general understanding of the concept of com- perhaps also of its sociocultural fabric and
petitiveness, explore how the concept might ecological environment, such a tool could play
relate to the management of tourist destina- a very useful role.
tions, and construct a conceptual model that How might this model be put to use? There
identifies the elements and structure of desti- are three main uses we envisage for the model.
nation competitiveness and sustainability. The The first of these is as a communication tool.
aim of this work has been to create a tool that The model establishes a lexicon for under-
can be used by any destination wishing to standing, studying, diagnosing, discussing and
enhance and maintain its competitiveness in a sharing ideas and thoughts about a destination’s
sustainable way. As almost every nation, state, competitiveness. An important part of the chal-
province, region, city and town around the lenge of dealing with any problem involving
world today identifies tourism as an important multiple parties is to establish a language with
©CAB International 2003. The Competitive Destination: a Sustainable Tourism Perspective
(J.R. Brent Ritchie and Geoffrey I. Crouch) 249
250 Chapter 11
which each party can discuss and understand narrowly, promotional issues alone. Even when
points of view and thereby educate others. This some attempt is made to conduct such a review,
may be the most important of the three uses it is rarely objective or methodical.
because of the very large number of organiza- In this chapter, therefore, we suggest a
tions, enterprises, groups and individuals parti- means by which the model can be used to
cipating in, or associated with, a destination’s perform the function of a destination audit. We
tourism industry. Without some shared sense begin by examining the concept of the audit
of the problem and means of communicating in other fields, such as management, the
‘what’ and ‘how’, efforts to address competitive environment, finance and marketing. We then
problems are likely to stall. adapt these philosophies and approaches to
The second use of the model is as a describe a systematic procedure for carrying out
framework for management. In our executive a destination audit.
development work, many of the participants
have remarked that they find the model
provides a useful vehicle for comprehending the
magnitude and complexity of the challenges
The Philosophy of the Audit Concept
they face daily as they seek to fulfil their
Audits play a vital role in civilized society. Flint
responsibilities. It is easy to overlook potentially
(1988) emphasizes the social role of auditing
important factors or to focus effort on the
and its importance to, and concern for, the
management of just a subset of factors when
faced with complex tasks. So the model can be a well-being of society. The purpose of an audit
managerially useful mechanism for explicitly is to ensure that those organizations and
acknowledging all important factors and for individuals that have an interest or stake in the
ensuring that destination managers do not lose performance of some organization or entity
sight of the forest for the trees. know how well that entity is performing and
The third use, which is the subject of this whether the claims and assertions made about
remaining chapter, concerns the application of its performance can be relied upon. The audit
the model in order to undertake what we call a concept, therefore, finds particular application
destination audit. The idea of an audit is famil- in business and government. An annual audit
iar to most – it is some sort of an official exami- is required of all public and large proprietary
nation to make sure that everything is in order, companies. Government departments, statutory
and where things are not in order the audit authorities, municipalities, government com-
makes recommendations and seeks to provide panies and business undertakings, and not-for-
answers to questions which might arise. In the profit organizations are also subject to audit.
context of a tourism destination, such questions The basic concept and approach to
may include: where is the destination headed? conducting an audit derives principally from
which are the destination’s most significant the practices of the accounting profession and
competitors? what is the destination’s image in focuses on financial performance and account-
key market segments? in what areas is the desti- ability. The American Accounting Association
nation competitively strong (weak)? does the (1973, p. 2) defines auditing as:
destination’s current strategy meet present and a systematic process of objectively obtaining
future challenges? and does the present devel- and evaluating evidence regarding assertions
opment of the destination meet the needs and about economic actions and events to ascer-
aspirations of the residents of the destination? tain the degree of correspondence between
those assertions and established criteria and
While the principal tourism-related organi-
communicating the results to interested
zations in a destination may conduct their own
parties.
periodic, organizational review, rarely is this
carried out for the destination as a whole. Statutory audits are audits required by law
Destination or tourism development plans and have their scope determined by legislation.
themselves rarely consider all the potentially Private audits, on the other hand, involve no
important elements of destination competitive- legal obligation and are undertaken, as desired,
ness and often focus on marketing or, more by an interested party and have their scope
The Destination Audit 251
destination audit will sound the alert before competitive destinations that use the destina-
problems become painfully obvious. tion audit concept regularly can conceivably
reap the greatest rewards from this approach.
Destinations can always find room to improve
their competitive position and condition. It has
The Nature of a Destination Audit been said that the one thing harder than getting
to the top is staying on top. Complacency is
The application of this philosophy and these often the undoing of many competitors that
principles to a destination is straightforward. reach the top. Even the most competitive desti-
While relevant government tourism depart- nations need to seek continuous improvement
ments, national tourism offices, Convention since few destinations can expect to be success-
and Visitor Bureaux and other similar organi- ful in the long term by maintaining the status
zations might assert that they constantly evalu- quo. Experience has shown that destinations
ate their performance and operations, these occasionally need to reinvent themselves in
do not constitute an audit of the destination. order to avoid the fate of the so-called destina-
They are too limited in scope to be an audit tion life-cycle. Butler (1980) used the notion
and, while focusing on the performance of an of the product life-cycle from the marketing
organization, do not take a perspective of the literature to develop the concept of a tourist
destination as a whole. area cycle of evolution. The concept of the
When destinations do look at themselves destination audit is therefore as applicable to
as destinations rather than in terms of certain healthy and successful destinations as to sick
key tourism organizations, the catalyst is often a destinations.
particular problem that has arisen, needing Hence, in addition to the above character-
urgent attention. Naturally, when this occurs, istics, the distinguishing features and most
the focus of attention is the problem itself, and important purposes of the destination audit are
solutions tend therefore to be narrow. An audit as follows:
of the destination, in contrast, is concerned
more with preventing problems than with fixing
• it should not be a crisis-motivated activity,
but should be part of a regular routine of
them once they have been discovered.
good management and on-going success;
A destination audit is much like an annual
check-up with your doctor. Instead of waiting
• it is a carefully structured programme of
appraisal in which the destination, rather
until one becomes ill, a check-up is designed to
than any single organization, serves as the
be preventative. If medical problems are discov-
subject of the audit;
ered and attended to early, the prognosis for
treatment is usually much brighter. A thorough
• it is primarily preventative and only
secondarily curative;
medical check-up has all the characteristics of
an audit. It comprehensively evaluates the wide
• although involving an evaluation of the
past and present (diagnosis), a destination
range of physical and biological factors charac-
audit is ultimately concerned with the
terizing one’s state of health. It is undertaken
future (prognosis);
systematically, relying on the use of various
standard tests, activities and indicators. As an
• although it is particularly interested in
identifying competitive weaknesses, it is
independent expert, the doctor is skilled and
also concerned with more effectively
able to assess the patient’s state of health objec-
deploying strengths and revealing hidden
tively. Doctors themselves seek the assistance
opportunities; and
of other doctors when evaluating their own
• it requires the participation of, and input
medical condition because of the need for a
from, many varied organizations and
diagnosis free of emotion. Finally, check-ups
stakeholders, many of which may not be
are advised on a periodic basis, with the period
regarded primarily as a player in the
dependent on the potential pace of change
tourism industry.
(usually quicker in the case of older patients).
It is a fallacy, therefore, to use destination The model of destination competitiveness
audits at times of crisis. Indeed, successful, (Fig. 3.1) identifies the components of the
The Destination Audit 253
destination audit. Chapters 4–10 of this book • inspection of the state of tourism
provide a detailed discussion and framework for resources; and
analysing and assessing the competitive state of • carrying out destination audit-specific re-
health of the destination within each of these search activities and instituting an ongoing
components. The section on destination diag- research programme to provide improved
nostics later in this chapter suggests some of the timely information for future audits.
sorts of variables or indicators of competitive-
For an audit to be systematic, a structured
ness that might be used in the audit process.
process for conducting the audit needs to be
Before we look at these diagnostics, however,
developed. While various alternative processes
we consider the issues involved in preparing for
might serve this purpose, they ought to have
and implementing a destination audit.
certain basic features in common if they are
to achieve the goal of an audit. These are
illustrated in Fig. 11.1.
The first task of the audit is to determine
Preparing for a Destination Audit
the destination vision, goals and objectives,
because competitiveness needs to be judged
The information and work needed to carry
and evaluated against these desired outcomes.
out an audit comprises both desk and field
This was emphasized in Chapter 2. Clearly, it is
research. The desk research will mainly entail
impossible to determine the competitiveness of
a review, analysis and assessment of existing
anything without knowing what it is competing
information concerning the destination. Such
for. Knowledge of these desired outcomes also
information may cover:
clarifies which segments of the tourism market
• domestic and international visitor statistics; are being targeted by the destination.
• destination-specific studies established to It is quite possible that no such destination
provide for the assembly of a destination vision has ever been expressed formally. If
management database; this is the case, then clearly one of the most
• tourism development strategies and plans; important outcomes of the destination audit will
• economic development studies and be to recommend that a programme for achiev-
assessments; ing such a destination vision be prepared and
• annual reports, documents and publica- carried out as a high priority. As the tourism
tions by tourism organizations; industry professionalizes, more destinations are
• reports on competitor destinations; and engaging in strategic planning exercises. At the
• a wide variety of available information national and state or provincial levels, a good
covering various elements of the number of destinations have gone to the trouble
destination competitiveness model. these days of formulating a vision for the
destination. Many major cities have also done
This information may be sourced from
the same. At the regional or small-town level,
relevant destination management organiza-
however, it is common to find no formalized
tions, government departments, tourism
destination vision. Nevertheless, it is usually
research bureaux, university research centres,
possible to gain some sense of the informal,
economic development agencies, industry
implied vision for the destination by speaking
associations, tourism enterprises, etc.
with the key players in the industry.
The field research required involves:
With this information at hand, the next
• meeting with representatives and step in the process is to establish the principal
assessing the relevant roles of all major competitors and the market structure. The
organizations with responsibilities and determination of the destination vision reveals
programmes affecting the development of the destination’s various target markets. This, in
the destination in significant ways; turn, helps to identify the other destinations that
• identifying the mechanisms in place that become the main competitors against which the
govern these different responsibilities and destination needs to be compared and bench-
facilitate coordination and cooperation; marked. Where target markets have not been
254 Chapter 11
identified explicitly, one can again develop a accessibility, infrastructure, tourism super-
sense of these markets by examining the mar- structure and entertainment. In contrast, an
keting programmes of key tourism enterprises ecotourism destination will be more concerned
and destination management organizations. Infor- with physiography and carrying capacity. The
mation on the main origins and characteristics next step, therefore, is to identify destination
of existing visitors will also indicate the com- competitiveness elements of major impor-
bined outcome of these marketing programmes. tance. The audit should then pay particular
The comprehensive character of an audit attention to these critical areas.
requires all elements of the conceptual model of Before doing so, however, it is necessary
destination competitiveness and sustainability to examine the destination’s environment.
to be evaluated, but, depending on the destina- Chapters 4 and 5 can be used as a guide to
tion vision, key competitors and target markets, undertaking this examination of the desti-
certain elements of the model may be much nation’s global (macro)environment and the
more important than others. For example, a competitive (micro)environment respectively.
city destination targeting the conventions and This examination will reveal important environ-
meetings market segment will need to pay mental trends, changes and developments
particular attention to elements such as that could have a significant impact on the
The Destination Audit 255
destination, either currently or at some point change of vision. As discussed in Chapter 2, the
in the future. It will help to place the destination vision should be a function of the
evaluation of the elements of the destination’s views and preferences of all stakeholders – with
competitiveness into the proper context. respect both to the tourism industry itself and to
The central and probably most detailed and residents and the broader community.
time-consuming part of the audit process then
follows – to evaluate each of the dimensions
of destination competitiveness as specified in Implementing the Audit
the conceptual model. Chapters 6–10 serve as
a guide to this critical part of the audit process, The overall objective of a destination audit is to
and the final section of the present chapter improve its performance, competitiveness and
(Destination Diagnostics) suggests many of the sustainability as governed by a vision for the
measures that might be used depending on the destination. To achieve this objective, a num-
particular circumstances defining the audit’s ber of specific audit sub-objectives are relevant.
domain. These sub-objectives concern the information
Up to this point, the audit has determined upon which the auditor bases the evaluation
‘what is’. Now attention turns to ‘what should and recommendations. Organizations have a
be’. The auditor therefore needs to appraise vested interest in their continued existence and
destination competitiveness and perfor- support. As the auditor will be relying on
mance. The standard for making this appraisal market research reports, economic impact
was established in the first step, when the desti- studies, advertising conversion studies, etc.,
nation vision, goals and objectives were deter- part of the job of the auditor is to assess the
mined. To the extent possible, the auditor should reliability and validity of the information for the
document the appraisal by linking each element purpose of making the audit.
of destination competitiveness to the degree to An example of how these concerns
which each has contributed to or hindered the have become significant relates to studies
pursuit of the destination vision. Where prob- of advertising effectiveness. Governments have
lems are noted, the appraisal might suggest substantially increased the destination advertis-
some action to improve the destination’s ing budgets of many destination management
competitiveness with respect to that element. organizations in recent years to cope with an
Alternatively, it may be that the destination increasingly competitive tourism industry. As
vision is in need of either change or fine tuning. this funding has increased, there has been an
Hence, the final two stages in the audit increase in the scrutiny of these programmes
process are to recommend a strategy for in order to verify whether they provide an
enhancing and maintaining the destination’s adequate return on the expenditure. The
competitiveness and sustainability and to validity of some of the claims made in such
review the destination’s competitive position studies, however, is sometimes questionable.
and vision. Although some recommendations The reason for this lies more in the difficulty of
might be broad and others quite specific, all measuring the incremental impact of advertis-
recommendations should be actionable. That ing expenditure than in any attempt deliberately
is, there should be a clear indication of the type to produce favourably biased results. In any
of corrective action or improvement needed. event, it is the responsibility of the auditor not to
To facilitate the implementation of the correc- take the information provided at face value, but
tive action, recommendations should state what to also assess the accuracy of the conclusions
is needed, who or what should assume responsi- drawn and claims made.
bility, and what time frame for completion is The auditor must therefore evaluate the
desirable and appropriate. evidence used (following Gill and Cosserat,
When a review of the destination’s com- 1996, pp. 158–160) in terms of:
petitive position and vision is required, although
the auditor needs to be clear about the reasons • assertions about the existence or occur-
for a review and may make some suggestions, it rence of various tourism resources, assets
is not the role of the auditor to decide on a or events;
256 Chapter 11
• assertions about the completeness of all The ‘audit from above’ approach relies on
measures used to assess the competitive higher-level managers or organizations assess-
position of the destination; ing subordinate organizations or managers.
• assertions about the roles and responsi- Similar problems with independence apply and
bilities of the various key tourism organi- no one is left to review the most important
zations and destination stakeholders; player in the destination – the organization or
• assertions about the valuation or manager at the top.
measurement of visitor numbers, visitor A further option would be for the govern-
expenditure, economic impacts, advertis- ment to establish or use an auditing office.
ing effectiveness, environmental quality or Independence would be increased but the
condition, etc.; and auditor may have limited experience of only the
• assertions about the presentation or dis- one destination or, if responsible for other audit
closure of the potential adverse conse- needs in government, may have insufficient
quences of tourism development on the knowledge of the tourism industry and issues.
ecological environment, culture and soci- An approach that could work quite well for
ety, aboriginal communities, etc., including a destination audit, given that a destination is a
conflicts of interest involving stakeholders. collection of organizations rather than a single
organization, would be to establish a task force.
As noted earlier, the destination audit
The members of the task force could be drawn
needs to be undertaken by an independent
from a range of destination organizations and
party that can exercise objectivity in their
stakeholders, such as representatives of the
appraisal and can be free to criticize and praise
local community and various important interest
as appropriate. Although some significant
groups. This is likely to lead to a more balanced
degree of impartiality and independence is
appraisal and benefits from the fact that no one
therefore important, the auditor must also be
organization can dominate the task force. A
very experienced, knowledgeable, competent
task force’s recommendations also tend to carry
and creative in order to adequately evaluate
more weight and authority. A potential disad-
destination competitiveness and identify
vantage concerns the time it may take to com-
courses of action that will improve the
plete an audit undertaken in this way, unless the
destination’s prospects.
task force is adequately resourced with research
The self-audit approach requires the prin-
assistance and a strong chairperson.
cipal destination management organization to
Employing a specialized consultant as an
conduct the audit. The main advantage is that
outside auditor is likely to ensure the most inde-
the audit is carried out by someone already very
pendent and objective appraisal. Unfortunately,
knowledgeable about the destination, and it is
with regard to the audit of destinations, few
also the least expensive approach. The main
such experienced consultants are available.
disadvantage is that the organization is unlikely
They are likely to be costly and must spend a
to be very critical of its own performance, and it
great deal of time becoming familiar with the
may not have sufficient time to do the audit.
destination to begin with. However, an experi-
Recommendations are likely to involve
enced consultant may also bring a broader
only minor change. However, for small
knowledge of the issues facing other destina-
destinations, this may be the only viable option.
tions and the strategies and solutions that have
An improvement in the level of independ-
worked in other contexts.
ence occurs with the ‘audit from across’
approach, in which destination managers
assess not their own but someone else’s
organization or area of responsibility. This Destination Diagnostics
benefits from a familiarity with activities and an
understanding of inter-organizational relation- As a systematic approach is one of the charac-
ships, but the auditing destination managers’ teristics of a good audit, some type of system-
views may be biased either to be highly critical atic measurement method is desirable. For
or not critical enough. example, in the literature on marketing audits,
The Destination Audit 257
Table 11.1. Consumer versus industry measures of competitiveness: a comparison of core resources
and attractors.
Component: entertainment
• Consumer preference for passive vs. active • Amount of entertainment available
experiences • Diversity of entertainment available
• Visitor desire to expand range of life experiences • Size and scope of entertainment
• Values of visitor and resulting acceptance/liking • Uniqueness of entertainment
of different forms of entertainment • Appropriateness of entertainment for destination
• Desire to experience entertainment first-hand • Media coverage of destination entertainment
vs. indirectly • Personality/reputation of entertainers
• Importance of seeing personalities live
Component: superstructure
• Consumer liking for built attractions • Number of attractions at destination
• Consumer preference for different types of • Investment in attractions
accommodation • Range of different attractions
• Preference for professional vs. personal travel • Number and quality of lodging units
• Perceived degree of maintenance of • Number of independent vs. chain units
superstructures • Existence and quality of convention centre
The Destination Audit 259
Table 11.2. Consumer versus industry measure: a comparison of qualifying and amplifying
determinants.
Component: location
• Consumer perception of closeness/remoteness • Absolute distances from key target markets
of destination • Relative distances from key target markets
• Consumer perception of remoteness may differ compared with major competitor
for different individuals and markets • Possibility of land access by major target market
• Consumer acceptance of/tolerance for distances groups
to destination via land/air/sea • Possibility of sea access by major target market
• Consumer perceptions of severity of barriers to groups
reaching a given location/destination • Frequency/capacity of air access by major target
• Consumer perceptions of ease of access/level market groups
of ‘hassle’ to reach destination
Component: interdependencies
• Likelihood of traveller diversion en route • Need to pass through/stop-over in another
• Consumer acceptance/ability to function using a destination en route
foreign language/currency/reservation system • Domestic use of a foreign currency
• Visitor acceptance of or desire for local • Use of an international reservation system
gastronomy (airlines/hotels)
• Event (e.g. riots) in substitute or complementary • Use of outside travel statistics/research
destinations can effect visitation • Need to use English (other foreign) language
• Need to import foreign foodstuffs
Component: safety/security
• Level of resident concern/discomfort re: • Crime statistics on local robberies, assaults,
personal safety homicides, etc.
• Visitor perceptions regarding concerns for • Statistics re: attacks on visitors and foreigners
personal safety • Incidents of terrorism, hostage-taking at a near
• Perceived trust that visitors place with destination
destination police/security forces • Expenditures on anti-burglary equipment for local
homes/businesses
• Number of guns in destinations
• Number of media stories on crime
• Existence of a state of war/insurrection
• Number of prison cells serving destination
• Number of police personnel in destination
• Number of inquiries received from potential
visitors regarding safety of destination
Component: awareness/image
• Awareness levels re: destination • Relative level of awareness compared to
• Nature of perceived image of destination competitors
• Strength of consumer image of destination • Accuracy of potential visitor image
• Consumer attitudes towards destination • Relative level of knowledge of destination
compared with competitors
• Relative liking of destination compared with
competitors
• Positioning of destination relative to competitors
continued
260 Chapter 11
Component: cost/value
• Consumer perceptions of value received for a • Price levels at destination as per Travel Price
range of travel products and services Index
• Consumer reactions to advertising messages • Price levels at destination as compared with other
on value for money spent destinations
• Exchange rates at a given point in time and over
periods of time
• Advertising expenditures to convey message of
value for money spent
Table 11.3. Consumer versus industry measure: a comparison of supporting factors and resources.
Component: infrastructure
• Consumer perceptions of the adequacy of • Extent and quality of road system at/in destination
each component of the infrastructure in • Extent and quality of airports at destination
relation to: • Extent and quality of cruise boat harbours
• Their functional needs • Extent and quality of modernity of
• Infrastructure at their place of residence telecommunications/media system
• Quality and safety of electricity, water, and waste
disposal systems
Component: accessibility
• Consumer perceptions as to how easy it is • Number of ports of entry to destination:
to gain access to the destination • Number of road entrances
• Number of airports
• Number of airlines, flights serving a destination
Component: hospitality
• Visitor perceptions as to friendliness of • Resident acceptance of/support for tourism industry
destination residents • Extent to which residents welcome visitors, in
• Visitor sentiment that the region wants them general
to visit • Existence of resident hospitality development
• Visitor perception that destination is providing programmes (e.g. B.C. Superhost and the Calgary
information services that reflect an Way)
appreciation of their visit • IRRIDEX Index
• Resident reaction to requests for
information/assistance
• Visitor usage of information/service centres
Component: enterprise
• Perception of an industry that truly wishes to • Programmes to monitor/ensure high levels of visitor
satisfy the visitor satisfaction
• Perception that facilities, services and • Research to understand visitor likes and dislikes
experiences have been adapted to individual regarding destination
preferences • Responsiveness to visitor needs/wants in the design
and development of tourism facilities and
experiences
Table 11.4. Consumer versus industry measure: a comparison of destination policy, planning and
development.
Component: philosophy/values
• Visitor perception that destination has a clear • Existence of a formal vision for the long-term
idea of the kind of destination it wants to be development of tourism in the destination
and the kinds of experiences it wants to offer
continued
262 Chapter 11
Component: vision
• Global consumer perception of the degree of • Existence of a strategic plan for the destination
congruency across all facets of destination • Existence of a well-articulated vision of
development and direction destination development
• Degree to which stakeholders in the destination
contributed to the development of the vision and
support its goals
• Progress towards the actual implementation of
the vision
Component: positioning/branding
• Consumer perceptions as to the ‘evoked set’ • Industry has a clear understanding of its position
of destinations they view as primary alternatives in the market (e.g. its strengths and weaknesses
when choosing a travel destination in a given vis-à-vis its competitors)
set of circumstances • Existence of a formal destination vision
• Consumer definition of the ideal destination for • Identification of major competitors and the
a given type of travel experiences, attractors they offer
Component: development
• Consumer perceptions of the ongoing • Existence of a coherent, long-term destination
emergence of an exciting, high-quality destination development plan flowing from destination vision
• Consumer views as to type of development most • Consistent, systematic translation of development
needed to enhance the appeal of the destination plans into reality (e.g. on-the-ground facilities,
• Favourable consumer reaction to specific new services and programmes for visitors)
facilities, services and programmes
Component: marketing
• Favourable consumer reaction to destination • Level of total marketing expenditures
brand and supporting visual icons • Clear definition of target markets
• Consumer understanding and liking of the • Understanding of experiences desired by each
type of experience they can expect at the target market
destination • Destination brand that conveys the essence of
desired vision
• High levels of brand recognition
• Effective packaging of destination experiences
• Strong relationships between destination and
travel trade
Component: information/research
• Consumer willingness to serve as respondents • Amounts spent on research/monitoring
in destination research projects • Number of research projects
• Extent to which research findings are integrated
into planning and decision making
• Number of different types of methodologies
employed
Component: organization
• Consumer and community perceptions • Measures of community support for the DMO
regarding the roles, visibility and contributions • Similarity of DMO structure and roles to those in
of the DMO other destinations
Schiemann, W.A. and Lingle, J.H. (1999) Bullseye! Woolf, E. (1997) Auditing Today, 6th edn. Prentice
Hitting Your Strategic Targets Through Hall, Hemel Hempstead, UK.
High Impact Measurement. Free Press, Young, S.S. (1994) Environmental Auditing.
New York. Cahners Publishing, Des Plaines, Illinois.
Index
267
268 Index
impacts 34, 35, 41, 46, 47, 48, 49, 50, 93,
217 natural resources 20–21, 29
indicators 3, 37, 49–50, 51 see also resources
information/research (I/R) 183, 209–211, north–south gap 90
264
inward I/R flows 209–210
outward I/R flows 209, 211 Olympic Games 114, 119, 120, 122, 126,
infrastructure 20, 21, 23, 29, 39, 70, 116, 128, 193, 197
130, 132–134 Open Skies Agreement 135
interdependencies 75, 233, 259 organizations see destination, management
internal organizations (DMOs)
environment 106–108
managerial tasks 187
programmes 185 partnerships 37
Internet see technological forces; technology see also strategic alliances
perceptions of people and place 245
personal ties 127
knowledge resources 21, 29 physical resources 20–21, 168
see also resources see also resources
Kyoto agreement 82, 92 physiography 110, 111–115, 168, 257
see also climate
place marketing 10–11
location 75, 134–136, 233, 234–237, see also destination marketing
259 planning see destination policy, planning and
development
policy 15, 18
market see also destination, policy; tourism,
segmentation 11, 204 policy
ties 68, 111, 127–129, 258 political
organizational and professional competitiveness 3
128–129 forces 65, 85–86, 90–91
personal 127–128 sustainability 47
marketing see destination, marketing will 71, 130, 142
mega-events 114, 119, 121–123 positioning see destination, positioning
see also special events promotion 189
mix of activities see activities policy 173, 189
Model of Destination Competitiveness publications programme 188
60–78, 131 see also advertising
competitive (micro)environment 66–68 publics see stakeholders
core resources and attractors 68–69,
110–129
destination management 73–75 quality 205–209
global (macro)environment 62–66 of experience 73, 183, 208–209
Index 271
of life 15, 18, 30, 35, 48, 70, 132, 143 forces 84–85, 89–90
of service 183, 206–208 impacts 123
SERVQUAL 205 sustainability 47, 49
space travel 5
spas 196
resident attitudes 11, 71, 116, 131, special events 11, 110, 111, 113–114,
139–140 119–123, 258
see also hospitality stakeholders 11, 51, 96, 105–106,
resources 15, 17, 23, 29 146–147, 228
allocating 31–32 stewardship 75, 152–153, 168, 183,
augmentation of 21–22 215–218, 263
capital 21, 29 formalized 216
core 68–69, 110–129, 257–258 key concepts 218–219
cultural 22, 29 strategic
depletion of 21–22 alliances 15, 18
facilitating 70, 130, 136–139 markets 10, 31, 172, 189, 190
financial 170 strategy
historical 22, 29, 68 for competitiveness 7–8, 18, 25–26
human 20, 29, 39, 74, 136–139, 169, demand development 172–181
183, 211–212, 263 selection of target markets 172
information 170–171 superstructure 21, 23, 29, 69, 111,
infrastructure 132–133 125–126, 258
inventory of 24 suppliers 97
knowledge 21, 29 supply development strategies 167
natural 20–21, 29 sustainability
physical 20–21, 168 ecological 44–46
supporting 69–71, 130 economic 46
see also stewardship evolving nature of 1–8
risk management 8, 229 political 47–49
types of 221 sociocultural 47, 49
see also crisis management; safety; sustainable
security competitive advantage 183–232
see also competitive, advantage
destination 33–59
safety 8, 23, 63, 76, 233, 237–240, 259 creating and managing a 49
see also crisis management; security system 151
security 8, 56, 58, 63, 76, 90, 165, 207, development 33–36
220–221, 233, 237–240, 259 tourism 36–37
see also crisis management; safety achieving 49
service experience 19, 73, 139, 205–208, the birth and evolution of 33–36
263 a comprehensive examination of
structure of the 206–208 36
services 18–19 managing 44, 49
and the experience economy 213 system definition 71, 154
SERVQUAL 205
size of economy 21, 29
social values 7, 47 target markets 11, 15, 27–28, 189
societal well-being 3 see also marketing
see also quality of life technological forces 85, 88–89
sociocultural 65, 117 technology 5–6, 64, 85, 88–89
competitiveness 5, 7 terrorism 8, 14, 237, 239, 259
272 Index