Destination Performance Index: Indicators of Performance

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  • 1. Destination Performance Index: Indicators of Performance and Success for Destinations Presented by: J. R. Brent Ritchie Presentation to the WTO Task Force for Destination Management March 6, 2003 – Berlin
  • 2. COMPETITIVE (MICRO) ENVIRONMENT GLOBAL (MACRO) ENVIRONMENT DCSModel-colour(v12).ppt – © RITCHIE & CROUCH, FEB 2003 Crisis Management DESTINATION COMPETITIVENESS & SUSTAINABILITY DESTINATION MANAGEMENT Organization Marketing Resource Stewardship Human Resource Management DESTINATION POLICY, PLANNING & DEVELOPMENT Philosophy/ Values Vision Audit Positioning/ Branding System Definition Development Monitoring & Evaluation Competitive/ Collaborative Analysis Awareness/Image QUALIFYING & AMPLIFYING DETERMINANTS Location Interdependencies Safety/Security Cost/Value Carrying Capacity Hospitality SUPPORTING FACTORS & RESOURCES Infrastructure Accessibility Facilitating Resources Enterprise Political Will Comparative Advantages (resource endowments) * Human resources * Physical resources * Knowledge resources * Capital resources * Infrastructure and tourism superstructure * Historical and cultural resources * Size of economy Competitive Advantages (resource deployment) * Audit & inventory * Maintenance * Growth and development * Efficiency * Effectiveness Information/ Research Visitor Management Finance & Venture Capital Quality of Service/ Experience Entertainment CORE RESOURCES & ATTRACTORS Physiography and Climate Culture & History Market Ties Mix of Activities Special Events Superstructure
  • 3. Comparative Advantages (resource endowments) The competitive strengths which are primarily due to the resource endowments which have been accorded by nature as well as the historical and economic evolution/ development of the destination
  • 4. Competitive Advantages (resource deployment) The competitive advantages which are primarily due to the skill, efficiency, and effectiveness with which existing resources are being utilized by those responsible for destination policy, strategy, and management
  • 5. Global (Macro) Environment Those factors in the global, economic, political, technological, cultural, and social environment over which the destination has little or no control, but which influence the competitiveness and well-being of the destination in a significant way
  • 6. Competitive (Micro) Environment Those behaviours of the present or potential visitor market, and collaborating and competing firms, which must be identified and understood, and adapted to, if the destination is to offer the critical mass of experiences that will attract a sufficient number of appropriate visitors so as to make the destination profitable and ensure the well-being of its residents
  • 7. DCSModel-colour(v12).ppt – © RITCHIE & CROUCH, FEB 2003 Awareness/Image QUALIFYING & AMPLIFYING DETERMINANTS Location Interdependencies Safety/Security Cost/Value Carrying Capacity DESTINATION COMPETITIVENESS & SUSTAINABILITY
  • 8. DCSModel-colour(v12).ppt – © RITCHIE & CROUCH, FEB 2003 DESTINATION COMPETITIVENESS & SUSTAINABILITY CORE RESOURCES & ATTRACTORS Physiography and Climate Culture & History Mix of Activities Special Events Entertainment Market Ties Superstructure
  • 9. DCSModel-colour(v12).ppt – © RITCHIE & CROUCH, FEB 2003 SUPPORTING FACTORS & RESOURCES DESTINATION COMPETITIVENESS & SUSTAINABILITY Hospitality Infrastructure Accessibility Facilitating Resources Enterprise Political Will
  • 10. DESTINATION POLICY, PLANNING & DEVELOPMENT Philosophy/ Values Vision Audit Positioning/ Branding System Definition Development Monitoring & Evaluation Competitive/ Collaborative Analysis DCSModel-colour(v12).ppt – © RITCHIE & CROUCH, FEB 2003 DESTINATION COMPETITIVENESS & SUSTAINABILITY
  • 11. DCSModel-colour(v12).ppt – © RITCHIE & CROUCH, FEB 2003 D E S T I N A T I O N M A N A G E M E N T Resource Stewardship Marketing Organization Information/ Research Visitor Management Human Resource Development Finance & Venture Capital Quality of Service/ Experience Crisis Management DESTINATION COMPETITIVENESS & SUSTAINABILITY
  • 12. COMPETITIVE (MICRO) ENVIRONMENT GLOBAL (MACRO) ENVIRONMENT DCSModel-colour(v12).ppt – © RITCHIE & CROUCH, FEB 2003 Crisis Management DESTINATION COMPETITIVENESS & SUSTAINABILITY DESTINATION MANAGEMENT Organization Marketing Resource Stewardship Human Resource Management DESTINATION POLICY, PLANNING & DEVELOPMENT Philosophy/ Values Vision Audit Positioning/ Branding System Definition Development Monitoring & Evaluation Competitive/ Collaborative Analysis Awareness/Image QUALIFYING & AMPLIFYING DETERMINANTS Location Interdependencies Safety/Security Cost/Value Carrying Capacity Hospitality SUPPORTING FACTORS & RESOURCES Infrastructure Accessibility Facilitating Resources Enterprise Political Will Comparative Advantages (resource endowments) * Human resources * Physical resources * Knowledge resources * Capital resources * Infrastructure and tourism superstructure * Historical and cultural resources * Size of economy Competitive Advantages (resource deployment) * Audit & inventory * Maintenance * Growth and development * Efficiency * Effectiveness Information/ Research Visitor Management Finance & Venture Capital Quality of Service/ Experience Entertainment CORE RESOURCES & ATTRACTORS Physiography and Climate Culture & History Market Ties Mix of Activities Special Events Superstructure
  • 13. Background… (where we started)
  • 14.  
  • 15.  
  • 16.  
  • 17.  
  • 18.  
  • 19.
    • Destination: Countries and major urban areas
    • Performance: A destination’s overall performance vis-à-vis other destinations, on four critical measures:
          • Economic Performance
          • Sustainability
          • Visitor Satisfaction
          • Management Action
    • Index: A statistical compilation of key indicators, which represent over 160 quantitative and qualitative criteria
    About the DPI
  • 20.
    • Objective: To allow Destination Managers (of countries and major urban destinations) to benchmark their ability to:
      • effectively develop and manage tourism
      • provide satisfactory visitor experiences
      • conduct tourism in an economically, culturally, environmentally, and politically sustainable manner
    • Mission: To provide DPI users with information to assist in formulating policy and making strategic decisions
    About the DPI
  • 21.
    • Based on the Ritchie & Crouch Competitiveness/Sustainability Model
    • Derived from:
      • theoretical considerations
      • the research literature
      • input from senior industry managers
    About the DPI
  • 22. The DPI Model Index Core Components Performance Indicators DPI EP VS S MA
  • 23.
    • DIAGNOSTIC TOOL:
    • Through performance benchmarking, provides a consistent and reliable way to compare a destination’s tourism performance relative to other destinations in a comprehensive manner.
    • INCREASED VISIBILITY:
    • The DPI will reinforce the importance of tourism to governments, business and the general public through media exposure.
    Why is the Destination Performance Index important?
  • 24.
    • IMPROVED KNOWLEDGE:
    • Index construction process will raise critical issues central to destination management knowledge and allow better understanding of the key drivers of management action.
    • ENHANCED SUSTAINABILITY:
    • Sustainability indicators, crucial to the Index, will help managers and policymakers focus on key issues which enhance long-term destination sustainability and performance.
    Why is the Destination Performance Index important?
  • 25.
    • Government:
    • The DPI provides essential information for government leaders to benchmark tourism policies
    • Tourism Industry:
    • The DPI guides investment and marketing plans and strategies
    • Visitors:
    • The DPI offers sophisticated visitors a tool to analyze potential destinations
    • General Public:
    • The DPI raises awareness of tourism’s importance among the general public
    • Media:
    • The DPI allows the media to report on tourism destination developments, raising the visibility of the entire field
    • Academia:
    • The DPI collects a significant wealth of data that can be used for further research
    Who will use the Destination Performance Index?
  • 26.
    • “ Something that helps you to understand where you are, which way you are going and how far you are from where you want to be” (Hart 1997)
    • “ The aim of indicators is to produce what is measurable and show us something” (DCMS 1999)
    • “ An indicator’s… purpose is to show you how well a system is working. If there is a problem, an indicator can help you determine what direction to take to address the issue.” (www.sustainablemeasures.com)
    What are Indicators?
  • 27.
    • Relevant
      • Measuring what is intended to be measured
      • Enables comparison
    • Understandable
      • Useful to users and observers
    • Reliable
      • Ability to trust indicator value
      • Temporality
    • Based on Accessible Data
      • Timely
      • Available
      • Cost effective
    Characteristics of Effective Indicators
  • 28.
    • Contribute to one of the four core components
    • Based on one of 35 components in the Ritchie and Crouch Competitiveness / Sustainability Model
    • Both Quantitative and Qualitative
    • Sourced from Expert Opinion, Visitor Surveys, Resident Surveys, Secondary Data
    DPI Indicators
  • 29.
    • Index Core Component: Economic Performance
    • Performance Indicators:
      • 24 out of 163 total index criteria
      • 20 quantitative and 4 qualitative criteria
    • Indicator Examples:
      • Total visitor expenditures (secondary data)
      • Ratio of travel/tourism employee compensation to overall employee compensation (secondary data)
      • Ease of starting a tourism-related business (expert opinion)
      • Travel and tourism GDP/overall GDP (secondary data)
    The DCI Model
  • 30.
    • Index Core Component: Sustainability
    • Performance Indicators:
      • 60 out of 163 total index indicators
      • 7 quantitative and 53 qualitative indicators
    • Indicator Examples:
      • Preservation of natural capital
      • Maintenance of ecological integrity
      • Resident access to tourism infrastructure (resident survey)
      • Level of political support in facilitating tourism efforts (expert opinion)
      • Taxes generated from tourism expenditures (secondary data)
      • Visitor perception of destination having reached its tourism carrying capacity (visitor survey)
    The DCI Model
  • 31.
    • Index Core Component: Visitor Satisfaction
    • Performance Indicators:
      • 32 out of 163 total index indicators
      • 2 quantitative and 30 qualitative indicators
    • Indicator Examples:
      • Perceived richness of destination culture and history (visitor survey)
      • Satisfaction with overall destination quality of service (visitor survey)
      • Level of repeat visitation (secondary data)
      • Perception of resident hospitality (visitor survey)
      • Memorability of the destination experience
    The DCI Model
  • 32.
    • Index Core Component: Management Action
    • Performance Indicators:
      • 47 out of 163 total index criteria
      • 10 quantitative and 37 qualitative criteria
    • Indicator Examples:
      • Satisfaction with destination management (DM) action to competitive pressures (expert opinion)
      • Average visitor length of stay (secondary data)
      • Level of involvement with human resource development programming and support (expert opinion)
      • Satisfaction with destination materials in helping with trip planning (visitor survey)
      • Quality of core attractors (visitor surveys, objective measures)
      • Quality of supporting factors (visitor surveys, objective measures)
      • Quality of destination management (expert opinion)
    The DCI Model DPI
  • 33.
    • Overall DPI Ranking: Weighted and un-weighted results
    • DPI Indicator Ranking: Four key measures of performance
    • Destination Progress Index (DPI) Ranking: Key criteria which measure progress are included in this sub-index
    • Year-to-year (YTY) Country/Urban Centre Analyses
    • Destination Strength and Weakness Charts
    • * While the DPI Report provides numerous dimensions of competitiveness and progress, users of this study will be
    • strongly advised to examine the individual criteria which
    • are of most relevance to their particular destination.
    The DPI Report
  • 34. The Destination Performance Index: Your Partnership is Crucial
    • Focus Group Needs
      • Indicator Screening and Weighting
    • Survey Needs
      • Language Translation
      • Identifying Survey Recipients
        • NTO Executives
        • Tourism Industry Leaders
        • Visitors
        • Residents
      • Survey Administration
        • Mailing and collecting surveys
        • Submitting results to University of Calgary for analysis
    • Based on Accessible Data
      • Timely
      • Available
      • Cost effective
  • 35.
    • Index Research
    • Indicator Selection and Screening
    • Survey Design and Data Collection
    • Data Analysis and Report Generation
    Tasks in Developing the DPI
  • 36. Tasks in Developing the DPI
    • Index Research: Included index formulation, theory and best practices
    Yes and No 33 130 4 Destination Performance Index Yes 24 0 3 Genuine Progress Index No 4 0 3 UNDP Human Development Index No 60 8 5 Environmental Sustainability Index No 128 115 4 IMD World Competitiveness Index Yes 34 140 3 WEF Growth Competitiveness Index Weighted Hard Data Survey Data Core Components Index
  • 37. Tasks in Developing the DPI
    • Criteria Selection and Screening:
      • Selected based on data accessibility, reliability and relevance.
      • Derived from theoretical considerations, the research literature, and input from senior industry managers.
      • An expert panel will review criteria as a final screen and will assign weightings based on index importance. These expert opinions will be used in calculating the Weighted DPI Index.
  • 38. Tasks in Developing the DPI
    • Survey Design and Data Collection:
      • Surveys will be designed for three specific populations: in-destination experts, visitors, and residents.
      • With the assistance of partnering organizations, appropriate survey recipients will be identified. Surveys will be translated, pre-tested, distributed, completed and collected.
      • Relevant secondary data will be also gathered.
  • 39. Tasks in Developing the DPI
    • Data Analysis and Report Generation:
      • Data will be standardized and calculated utilizing statistical approaches common within index construction.
      • DPI reports, which include multiple measures of destination performance and progress along with individual criterion scores for user analysis and decision making, will be assembled and distributed.
  • 40. The Destination Performance Index DPI EP VS S MA
  • 41. The Destination Performance Index: Supplementary Information DPI EP VS S MA
  • 42. Performance Indicators: Weighting
    • To estimate the relative importance of each factor of competitiveness in the model
    • To examine how factor importance might vary as a function of the context (such as target markets, form of tourism, etc.)
  • 43. Performance Indicators: Weighting
    • Survey managers of Destination Management Organizations
    • Gather their opinions regarding the relative importance of competitiveness factors based on their experience with their own and competing destinations
  • 44. Performance Indicators: Weighting
    • Using the Analytic Hierarchy Process – a theoretically sound decision analysis technique
    • Employs Expert Choice software
    • Hierarchically evaluates the importance of decision criteria
  • 45. Performance Indicators: Weighting
    • Participants run Expert Choice using data comprising the model of destination competitiveness
    • Guides participants through the process of evaluating the hierarchy of criteria using pair-wise comparisons
    • Software, model data, and results are distributed and returned electronically
    • Pooled results are analysed to derive importance measures
  • 46.  
  • 47.  
  • 48. Federal Government Airlines Local Economic Development Authority Sponsors University/College Chamber of Commerce Restaurants/Restaurant Association Community/Citizens/Residents Convention Centre/Banquet Facilities Board of Directors Members State/Provincial Tourism Department Attractions/Attraction Association Regional/County Government Hotels/Hotel Association City/Local Government Source : Sheehan & Ritchie (2001) Other Volunteers Retail Stores/Association Recreational Other Policy Makers in Area Non-Tourism Industry Meeting Planners Destination Management Company Arts/Arts Association Advertising Agency Visitors/Tourists Regional CVBs Public Facilities Media Hospitality Industry Stakeholder
  • 49. Questions?!