Traditionally, economists have attempted to develop indices that measure industry concentration and such indices have become the basis of considerable antitrust litigations. The inverse of industry concentration can give valuable managerial clues about industry diversity and competition. In this paper, we extrapolate these ideas and develop the blueprint for Attraction Diversity Index (ADI), which is conceived as a measure of the diversity of attraction types in a destination area. We also propose its inverse, Attraction Cluster Equity (ACE). In order to demonstrate the usefulness of these indices, some hypotheses linking ADI-ACE with related constructs in destination marketing are proposed and tested.

1. Attraction Diversity Index
Measuring the concentration and diversity of attraction types in a
tourism destination area
Babu P George, Fort Hays State University, USA
Tony L Henthorne, University of Nevada Las Vegas, USA
Alvin J Williams, University of South Alabama, USA
Academy of Marketing Science World Marketing Congress - Christchurch, New Zealand
27 June - 1 July, 2017

2. The Problem
• Managing product diversity is of critical importance to marketers
• Product diversity is a key determinant of competitive advantage (Porter, 1990;
Richard & Charles, 2013).
• “If you can’t measure it, you can’t manage it”
• Yet, there is no systematic and data driven approach to quantifying the
diversity of attraction types in a tourism destination area
• Attraction diversity is the extent of variance among attraction types in a tourism
destination area
• Attraction diversity is akin to product diversity in the general marketing
literature

3. Conceptualizing
Attraction
Diversity
• Stirling (1998) offered a
framework for understanding
diversity.
• Diversity has three
constituent elements:
variety, disparity, and
imbalance.
• This framework could be
used to conceptualize
attraction diversity.

4. Measurement Approaches
• Common approaches for measuring business diversity include:
• Categorical approach (Rumelt, 1982; Wrigley, 1970)
• Classifies businesses into the nominal categories such as single businesses, dominant
businesses, related businesses, etc.
• Count approach (Varadarajan & Ramanujam, 1987; Jacquemin & Berry 1979)
• Directed toward measuring the degree of product diversity.
• E.g.: D = N −1, where D is a measure of diversity and N represents the number of
distinguishable products.
• In the special case of a destination country with only one attraction, D = 0.
• The Herfindahl-Hirschman Index (HHI) provides a more robust
operationalization of the count approach.
• HHI measures the size of firms in relation to the industry
• HHI could be employed as a measure of industry dominance by a single firm, monopoly
in an industry, competition, etc. (Hirschman,1964).

5. Measuring Diversity with HHI
• HHI = ∑MSi
2
• MS is the market share of firm ‘i’ in the industry. Typically, an H below 0.01
indicates a highly competitive, no concentration index.
• An H below 0.15 indicates a largely un-concentrated index.
• An H between 0.15 to 0.25 indicates moderate concentration.
• An H above 0.25 indicates high concentration.
• If HHI measures industry concentration, its inverse measures industry
diversity.
• That is, industry diversity = 1/ ∑MSi
2
• This formulation provides a solid foundation for measuring the diversity of attraction types in a tourism
destination.
• Attraction Diversity Index (ADI) = 1/ ∑MSi
2 whereMSi is market share of attraction type ‘i’.

6. Direct Measurement of ADI
Apply Apply the formula, ADI = 1/ ∑MSi
2
Gather Gather primary or secondary data to calculate the market share of each attraction type
Categorize Categorize them under different attraction types
Identify Identify the top attractions in the destination area under study

7. An Indirect Measure of ADI
Calculate Calculate, Attraction Diversity = Weighted value of the attraction type / ∑ Weighted values of all
the attraction types.
Weigh Weigh each attraction in each category according to the aggregated ‘stars’ assigned (1 to 5 stars)
by the TripAdvisor users. As a rule, attractions rated by less than 30 users may be excluded.
Classify Classify the top attractions for each country into various known attraction categories, say
according to classifications given on TripAdvisor.

8. An Example from Jamaica Tourism
Attraction
Type
Beach & Beach
Activities
Cultural Heritage
Attractions
Wilderness
Attractions
Shopping, City, and
Night Life
Business
Attractions
Weighted
Value of the
Attraction
Type
2 x 4.5 star
beaches,
3 x 3 star beach
activities
2x4.5+3x3=18
1 x 4 star heritage
attraction
1x4=4
1 x 3 star wildlife
refuge
1x3=3
1 x 5 star night life
1x5=5
1 x 4 star business
event location
1x4=4
Attraction
Diversity
18/(18+4+3+5+4)
=.52
4/(18+4+3+5+4)
=.12
3/(18+4+3+5+4)
=.09
5/(18+4+3+5+4)
=.15
4/(18+4+3+5+4)
=.12

9. Attraction Diversity Implications
• As part of a larger study in the Caribbean, the researchers hypothesized
and tested some relations involving attraction diversity and other variables
in tourism.
• Higher attraction diversity reduced the effectiveness of Unique Selling Proposition
(USP) based tourism marketing campaigns.
• Attraction diversity and tourist arrivals did not correlate
• Tourists tended to spend more in attraction diverse destinations, however.
• Variety seeking tourists preferred attraction diverse destinations
• Destinations low in attraction diversity tend to develop more loyal visitors
• Big attraction diverse destinations are likely to benefit from differentiation strategy
• Big attraction homogenous destinations are likely to benefit from cost leadership strategy.
• Small attraction homogenous destinations are likely to benefit from a focus strategy.

10. Conclusion
• This presentation offers a way to quantify the extent of monoculture
of attractions in a destination area and the competitiveness of a
destination in general.
• The attraction index could be used as a frame of reference from
which tourism managers can calibrate their marketing strategies.