Profit and Planet – A new way of thinking about the supply chain. Can we see problems as solutions?

There is enormous disruption affecting the destination marketing industry. Over the past six months, the Destination Think team has invested a significant amount of time conducting research on these challenges. Through an extensive series of interviews with more than 50 of the world’s leading destination marketers, we have compiled the most important challenges and the most exciting opportunities that they see for their destinations.

Almost everyone we talked to is struggling to find the right organizational strategy, structure and business model to deal with some major disruptions. We have observed four key observations that impact destination marketing organizations (DMOs) now and in the future. These observations have been grouped under “Four Critical Trends Impacting Destination Marketing Leadership in 2016”:

1. Profit and Planet – A new way of thinking about the supply chain. Can we see problems as solutions?
2. Cost and Revenue – New ideas imply new business models. Can we apply creativity to rethink the way we produce revenue?
3. Product and Promotion – Develop what you promote and promote what you develop. Are you equipped to create experiences?
4. Community and Collaboration – People, not product, are your most important assets. Can you market a destination and attract visitors without engaging residents?

This is a four-part series outlining these trends. In Part 1, we’ll discuss Profit and Planet.

Destinations are considering the long-term implications of tourism in order to ensure that the right balance is achieved between economic, environmental and social value. The destination marketing organization (DMO) leaders that we spoke to on this topic from around the world identified a number of topics that are of growing concern as they plan for the future. These include:

  • generating short-term revenue without compromising the long term
  • destination management, product development and improvements
  • capacity planning and organizational requirements to meet changing consumer needs
  • accessibility and an aging population
  • sustainable tourism
  • systems that identify environmentally friendly tourism experiences, aka “green labelling”
  • pricing strategies
  • socio-economic impacts and how to develop destinations without compromising quality of life for residents

Tourism has primarily been fueled by increasing revenues for stakeholders. As travel revenues have increased worldwide, new challenges are arising that need to be factored in. By and large, the tourism industry has never really considered what happens if it starts stretching boundaries, because until now, this hadn’t actually happened in many places. However, more people are traveling today than ever and growth is predicted to continue.

Tourism growth tests the boundaries of the environment and the quality of life for the people who live in popular tourism destinations.

It is important to consider the impact of growing tourism on local residents. This is leading destinations to shift focus toward yield rather than volume. If a destination’s growth goes unchecked, the quality of life for its residents is hugely impacted, either by the sheer volume of visitors, by local culture that gets hollowed out or by businesses replaced by tourist shops. In some destinations, this leads to a backlash from its population. Combined with the impacts on environment, destinations face myriad challenges.

In some cases, unsustainable levels of visitation or unchecked tourism practices are destroying the environment. This can lead to short-term profit. However in the long term, destinations are beginning to see degradation in the visitor experience, which can in turn lead to a decrease in visitation levels.

Change is already happening in pockets around the world. These changes are exciting because they secure long-term value on multiple levels, including the economy, the environment and regarding quality of life. There are profitable solutions where a successful commercial transaction leads to positive effects. Some destinations have risen to the challenge and are innovating for the future, while others are staring it right in the face.

Ecological Innovation

The Galápagos Islands, for example, has placed a cap on visitation, and forged an ambitious plan for environmental tourism that includes education, storytelling and branding that it weaves into various touch points along the traveller journey. On some flights to the Islands, visitors are shown instructional videos about the unique landscape and environment and how to preserve it. Its airport is the first ecological airport in the world, and includes “green construction”, minimum energy use, and sustainable energy. Visitors on guided boat tours are accompanied at all times by specially trained and licensed guides. At the entrance to Galápagos National Park, there is a gate that serves no physical purpose but to share vital information about the sensitive environmental zone that visitors are about to enjoy, and state the strict rules for entry.

Botswana, Africa created the National Ecotourism Strategy as “far back” as 2002. It positioned the country as a leader in sustainable tourism. Higher-end eco lodges and sustainable tourism experiences were created along with the industry-wide, voluntary program called the Botswana Ecotourism Certification System, which was created by Botswana Tourism.

In the Republic of Palau, an island located in the western Pacific, leaders understand the need for environmental protection and have enacted stringent fishing regulations, created ecological conservation projects to address their product on land, water and in forests, the world’s first shark sanctuary, and formed the Green Energy Micronesia Initiative. The destination mitigated loss from fishing revenue by adding a tourism levy.

Bhutan limits the number of visitors allowed in its country and levies a large entry fee on tourists. As a result, it protects its environment and culture, and still brings in revenue based on a high demand.

Solving Overload and Overcrowding

In Europe, many cities have growing concerns around growing tourism levels. The excellent documentary “Bye Bye Barcelona” clearly outlines the challenges of a city whose tourism growth is exponential, and the impact it has on residents and the erosion of its local culture. For any destination that hasn’t considered the impact of unplanned growth, this is an important trend to consider. Unplanned growth can lead to loss of identity as tourism experiences cater to the masses and drives volume, instead of quality tourism.

“Accidental architecture” is another byproduct of overcrowding. As demand for a destination goes up, businesses appear looking to earn their share. But this growth needs to be planned carefully. Without monitoring, a destination can start to lose its identity.

In a continent brimming with low-cost air carriers, people now visit destinations “on the cheap.” Party people arrive on the weekend, and sleep on the beach. Destinations run the risk of becoming magnets that lead to overload and overcrowding. Gone is the balance between profits and sustainability. In one example, Barcelona has announced that it is considering adding a tourism tax for “day trippers” coming to the city and not staying overnight.

But DMOs are internalizing the fact that destination marketing requires destination management. The Netherlands Board of Tourism & Conventions (NBTC) works in a collaborative partnership with Airbnb to drive tourists to accommodations outside the central red light and canal districts of Amsterdam. Amsterdam Marketing works with nearby locations outside of the city to rebrand them as a part of Amsterdam, in order to disperse visitors to protect the visitor experience. Similarly, Copenhagen promotes Swedish tourism product as part of its roster of “Copenhagen experiences”.

With record tourism levels, it is clear that new solutions for balancing profit and planet are at the top of many leading destination marketers’ minds. DMOs now have to consider a variety of factors to consider, beyond just looking at financial gains.

Read Part 2: Cost And Revenue
Read Part 3: Production and Promotion
Read Part 4: Community and Collaboration

Featured image Credit: Richard Allaway, Flickr

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