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Destination Analysis

UNIT 1:
THE CONCEPT OF TOURIST DESTINATION

Chapter objectives
• Understand the general destination concept and the connection between the destination
system and tourism
• Explore the operation of the destination management as the tourist value chain
• Identify and explain the necessities of tourist destination management

Destination Concept

The characters of the destination, its concept, can be opened in the knowledge of its forming factors
and of the “behaviour”, nature of destination. In the conceptual estimation of destination different
standing-points can be followed. In the whole,

“Destination is a physical location where the tourist is spending at least one night. It is containing
tourist attractions, products, relating services that are necessary to meet the stay of a tourist on the
place at least for one day. Destination has physical and administrative limits, which are
determining its management, and has an image and perception. It includes a lot of elements being
concerned, it is capable for constructing a network, a cooperation and to become a bigger
destination; the determination of destination is made from the point of view of the tourist.”

To become a tourist destination the location, the region have to have the factors that determine the
tourist destinations. These factors are determinants in the bordering, determination of the core area
destination; their development is essential by the increase of the competitiveness of the specific
destinations.

According to Buhalis (2000) determinants of the destination are as follows:
• Tourist attractions, e.g. natural factors, factors made by human being, heritage, special
events, etc.;
• Approachability, e.g. the entire traffic system, including roads, traffic means, etc.;
• Tourist services, e.g. accommodation, host services, other tourist services, etc.;
• Product packages;
• All kind of activities that can be run by the tourists during their stay; public-utility services,
e.g. banks, telecommunication, hospitals, etc.

Definition of destination, summarizing the aspects regarding the nature of destination and its
determining factors (Angelo Presenza – Lorn Sheehan – J.R. Brent Ritchie, 2005), the characters
of destination can be summarized as follows:

Destination:
• Area target that is chosen by the tourist as the target of his travel
• Receiving area that is providing services for the tourist and people living on the spot
• It is defined from the point of view of the tourist
• A place/region that is confinable physically and geographically
• A place/region that is containing tourist attractions, products, services and other background
services being necessary for spending at least one day
• The tourist is spending at least one night here
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• It is containing a lot of persons being concerned who are cooperating with each other
• It has an image
• It has perception (it means that each of the tourists can form an opinion about a
destinationthrough his own “screen” subjectively)
• It is providing integrated experience for the tourist
• In a wider sense it is a tourist product that is competing with other tourist products
(destinations) on the market of tourism
• A kind of a complex and integrated system that is taking the existence of a modern tourism
controlling and management system to the successful operation for granted
• It is a system being built from below and supported from above

Not all locations, regions can become a tourist destination. There are such kind of basic criterions
that has to be met so that a location, region could become a tourist destination. The above
mentioned are only the most basic criterions. The determination and bordering of the destinations or
the core area destinations are supposing the development of a special system of criterions that is
made according to preferences, expectations, points of view of the tourist first of all.

Tourist Destination - Definition

The term ‘destination’ used in relation to travel and tourism refers to a place to which a tourist
travels, generally with the intention of “staying” (e.g. making use of accommodation) for some
time.
Some tourist destinations are ‘transitory’ ones; perhaps on the way to another destination. For
example, a tourist might visit a number of islands in a “group”, staying at each one for two or three
days. Many tourists, on the other hand, travel direct to their ‘final destinations’, where they propose
to stay - or to be “based” - for the duration of their tours.

Some tours might provide a “combination”. For instance, a tourist might travel to - and stay for one
or two days at - one or more transitory destinations on the way to the final destination, where he or
she will stay for the remainder of the tour. Of course, in some cases - such as fly-drive tours - there
might be no “final destination” as such, because the tourists decide where they want to stay, and for
how long they want to stay there. Also, some fly-drive and coach tours and cruises start and
eventually finish at the same seaport or airport, etc.

The foregoing examples illustrate just how wide is the range of types of tour available to tourists
today. The range of destinations available to tourists from many countries is also very wide - and is
continually increasing.

Although some people are content to take the “same” holiday over and over again, in the same
resort (sometimes staying at the same hotel, guesthouse, camp site, etc) many other people seek
variety - “something different”, new or exciting. Indeed, in many countries the “traditional” type of
holiday - to a national seaside resort, for example, has declined considerably in popularity.

International travel has blossomed in recent years (although economic restraints and transport
problems - such as airline and air traffic controllers’ strikes - tend to reverse the trend to some
degree) and peoples’ “horizons” have widened. Low-fare airlines and tour operators offering
modestly priced package tours have, of course, been responsible to a large degree for this change in
attitudes, but they must be constantly on the lookout for new destinations (as well as new types of
tours) as tourists’ demands and expectations change.



The connection between the system of destination and tourism

The place of destination in the system of tourism is demonstrated by the system of tourism.
Destination can be found on the side of the supply (the product) from the two sub-systems of the
tourism system. The tourist supplies are consisting of the factors of the receiving area that is used
by the tourist during his stay. Central element of the supply is the tourist product that is containing
the services meeting the demands of the tourist. Tourism is an integrated, open, complex system
operating dynamically each element of which (its micro- and macro environment) there is in a
mutual dependence with the others.

From the factors forming the two sub-systems of the tourism market, the supply (tourist product) is
consisting of the following elements: attractions, accessibility, services, safety, hospitality, etc.. The
elements of the tourist destination according to the above definition (Buhalis, 2000) run as follows:
tourist attractions (natural and made by human being, special events, etc.), accessibility, tourist
services, product packages, active activities, and public services.

Elements of importance for the composition of a holiday include infrastructure (airports, roads,
telecommunications, environmental services, car-hire, etc.), accommodation facilities (hotels,
camping sites, houses for rent, etc.), catering (restaurants, pubs, supermarkets, etc.), entertainment
facilities (shopping, museums, attractions, sports facilities, etc.), and reception services (travel
agencies, promotional offices, information services, guides, etc.).

The emphasis, however, is not only on private, commercial units: infrastructure and some
attractions and information facilities are publicly operated. The product can be only one or several
products as well, however destination can be characterised as a set of complex services and
attractions related to each other. Destination management system being responsible for the tourist
destination controlling and management is forming a connection with the poles of demand and
supply.



Operation of the destination management – as the tourist value chain

The simple value chain is representing such kind of a process that is delivering a product from the
idea through the product development phases to the final user. Michael Porter has characterised the
value chain with the connection of the activities of which each element represents the different level
of providing offers. The principle of the destination operation is similar to the one of the traditional
value chain too. However, destination management as the tourist value chain is leading the tourist
through the entire process of travel, right from the decision of travelling to the return.

The traditional value chain puts first of all the product and its development in the centre; the leading
character of the tourist value chain is the tourist who wants to use the tourist products (tourist
supply of destination) on a more complex way to be able to meet his demands.

The elements of the tourist value chain are consisting of the elements determining and influencing
the travel process and of the offering elements provided by the specific destination. There can be
found different characters behind the offering factors that form destination, just like e.g. the local
self-government, the owners and operators of the attractions, services, local tourist consortiums and
partnerships, civilian organisations, institutions supporting enterprises, tourist developing
institutions, organisations, etc.

The effective operation of destination is taking the conscious cooperation of the characters for
granted that is realized in the harmonized organization and operation of the products and services
mostly. It is important that the service providers should deliver the same high level of quality
because the service of different levels of the key and supplementary functions of destinations can
influence the judgment of the whole destination negatively.



Necessity of the development of tourism destination management

The destinations – as the organizational systems developing on the regional concentration and
cooperation – have to be taken into connection with the economic processes in the world, one basic
principle of which is that the durable industrial and business competitive advantages are appearing
concentrated geographically more and more.

In the competition there are not taking part separate persons of the market but the basic units of the
market competition, the companies, enterprises and regional institutions. The regional concentration
principle is playing a determinant role in the effective operation of the destination as well, which is
generating competitive advantages. The tourist target areas are worth settling to a regional
concentration being significant from the point of view of tourism, based on definitive basic
principles, so that the economic potential of the region can be increased.

Determinant factors of the tourist competitiveness of each region are the development and operation
of the management system with the effective, suitable competences and calculable financing and
organisational background. Modern tourism management and operation, that is the revaluation of
the current traditions, are needed to the development of an effective management system organised
on the basis of the regional concentration principle.

The integrated planning, management and operation of tourism are needed on all levels of tourism.
Development of the system is taking for granted such kind of regional and organisational planning
basic principles as the:

• Revaluation of cooperation, development of consciousness in the cooperation, development,
planning, organisation, operation of the forms of cooperation;
• More close cooperation with other regions, branches in the processes of planning and
development originating from the multiplier effect of tourism;
• More complex approaches in the development of the service system of tourism: beside the
development of the tourist infra- and superstructure the development of the background
infrastructures, the supporting factors have to be emphasized too;
• The use of innovative, modern, up to date technologies in the processes of development.

Destination Competitiveness



Ritchie and Crouch’s (1993) Calgary model recognised 5 key constructs of destination
competitiveness. These constructs are underpinned by a number of destination related factors.

At the outset, Ritchie and Crouch identify a destination’s appeal to be a factor of tourism
destination competitiveness, referring to the destination attractors and deterrents. Attractors include
eleven elements: natural features, climate, cultural and social characteristics, general infrastructure,
basic services infrastructure, tourism superstructure, access and transportation facilities, attitudes
towards tourists, cost/price levels, economic and social ties and uniqueness.

Among destination deterrents are security and safety (i.e. political instability, health and medical
concerns; poor quality of sanitation; laws and regulations such as visa requirements). These factors
can act as a barrier to visiting a particular destination. The Calgary model further emphasises that a
carefully selected and well executed program of destination management can serve to improve the
tourism competitiveness of a destination.

In particular, marketing efforts have the potential to enhance the perceived appeal (e.g. image) of a
destination, whilst managerial initiatives can strengthen the competitive position of a destination.
The model also argues that destination competitiveness can be enhanced through management
organisation capabilities and strategic alliances. Additionally, the use of detailed information
systems is advanced as a basis for decision making, where internal management information
provides the ability to better manage the performance of destination's product. This aspect of the
model is closely linked to a research function, as research enables a destination to adapt to changing
market conditions.

The final construct in the model is Destination Efficiency, which draws on the integrity of
experience, relating to the ability of the destination to provide an appropriate (expected and
promised) experience. The second set of the efficiency factors are termed by the authors as
productivity variables. These include variables which are hypothesised to develop skills and/or
conditions which can increase the quantity and quality of the output of tourism experiences for a
given level of resource input, such as training staff.



UNIT 2:
INTRODUCTION TO DESTINATION ANALYSIS

Chapter objectives
• Outline and describe the tourist destination features
• Analyze different types of destinations and their competitiveness
• Understand the evolving concepts of destinations

Tourist Destination Features

Destination is the location of a position or point in physical space that something occupies on the
Earth’s surface. The location can be reached by using transportation of air, water and also main land
which is by airplanes, ferries, coaches, cars and so on. Currently, there will be many changes to the
locations once there has development in that place – there will have a growth in the economic, as
well as an increase in the standard of living

Generally there are two (2) features for the destination which are:
• Primary feature
• Secondary feature

Primary Features

Climate

Climate encompasses the statistics of temperature, humidity, atmospheric pressure, wind, rainfall,
atmospheric particles count and other meteorological elements in a given region over long periods
of time. Climate can be contrasted to weather, which is the present condition of these same elements
and their variations over periods up to two weeks.

The climate of a location is affected by its latitude, terrain and altitude, as well as nearby water
bodies and their currents. Climate can be classified according to the average and the typical ranges
of different variables, most commonly temperature and precipitation.

Different climate attract different types of tourists. Example, tourist from the Western Hemisphere
tends to choose destination with warm climate as to avoid the colder climate at their country of
origin. Meanwhile, tourist from warmer climate may want to experience the winter season of the
other countries.

Ecology
Ecology is the scientific study of the distributions, abundance, share effects, and relations of
organism and their interactions with each other in a common environment. Ecology can be defines
as the study of the interactions between life and its physical environment; the relationship between
animals and plants and how one species affect another. An eco-system is the unique network of
animal and plant species that depends on the other to sustain life – the interactions between and
among organisms at every stage of life and death can impact the system.



Ecology system is one of the main resources in nature tourism. Destination with well-preserved
ecology will be able to sustain their attractiveness and competitiveness in getting tourists attention
and stay as the top chosen destination among nature lovers.
Cultural heritage

Cultural heritage is the legacy of physical artifacts and intangible attributes of a group or society
that are inherited from past generations, maintained in the present and bestowed for the benefit of
future generations – often though, what is considered cultural heritage by one generation may be
rejected by the next generation, only to be revived by a succeeding generation. Physical or ‘tangible
cultural heritage’ includes buildings and historic places, monuments, artifacts, etc., that is
considered worthy of preservation for the future – these include objects of significant to the
archaeology, architecture, science or technology of a specific culture.

Culture also can include cultural landscapes (natural features that may have cultural attributes). The
heritage that survives from the past is often unique and irreplaceable, which places the
responsibility of preservation on the current generation. Grassroots organizations and political
groups have been successful at gaining the necessary support to preserve the heritage of many
nations for the future.

Cultural heritage is one of the main resources in cultural tourism, and also one of the most
influential tourist’s travel motivations. Learning of different cultural elements and the process of
cultural exchange between the tourists and the host communities are part and parcel in cultural
tourism, and it can only be possible if the cultural heritages are preserved.

Architecture

Architecture means: The art and science of designing and erecting buildings and physical structures.
The practice of an architect, where architecture means to offer or render professional service in
connection with the design and construction of a building, or group of buildings and the space
within the site surrounding the buildings, that have their principal purposes of human occupancy or
usage.

Architecture is both the process and the product of planning, designing and constructing form, space
and ambience that reflect functional, technical, social and aesthetic considerations – it requires a
creative manipulation and coordination of material, technology, light and shadow. Architecture also
encompasses the pragmatic aspects of realizing buildings and structures, including scheduling, cost
estimating and construction administration.

Architecture can be about man-made attractions such as destination landmarks, as well as influential
and iconic structures. Examples of this type of attraction are Taj Mahal, Pyramid of Giza, Great
Wall of China, as well as Sydney Opera House.

Land forms

In the earth sciences and geology sub-fields, a landform or physical feature comprises a
geomorphologic unit, and is largely defined by its surface form and location in the landscape, as
part of the terrain, and as such, is typically an element of topography. Landform elements also
include seascape and oceanic water body interface features such as bays, peninsulas, seas and so
forth, including sub-aqueous terrain features such as submerged mountain ranges, volcanoes, and
the great ocean basins.



Landforms are categorized by characteristic physical attributes such as elevation, slope, orientation,
stratification, and rock exposure and soil type. Some generic landform elements including: pits,
peaks, channels, ridges, passes, pools and plains, may be extracted from a digital elevation model
using some automated techniques where the data has been gathered by modern satellites and
stereoscopic aerial surveillance cameras.

Landforms also can be part of attractions in nature tourism - iconic landforms such as Grand
Canyon, Niagara Falls and Mount Fuji.

Secondary Features

Accommodation

Accommodation in tourist destination is an establishment that provides paid lodging on a short-term
basis – most common are hotels, motels, resorts, etc. The provision of the accommodation consisted
of rooms with modern facilities, including en-suite bathrooms and air-conditioning or climate
control. Additional common features found in hotel rooms are telephone, television, and Internet
connectivity – snack food and drinks may be supplied in a mini-bar, and facilities for making hot
drinks.

Larger establishment may provide a number of additional guest facilities such as a restaurant,
swimming pool or childcare, and have conference and social function services. Some establishment
offer meals as part of a room and board arrangement – in UK, a hotel is required by law to serve
food and drinks to all guests within certain stated hours, to avoid this requirement it is not
uncommon to come across private hotels which are not subjected to this requirement; in Japan,
capsule hotels provide a minimized amount of room space and shared facilities.

Unusual accommodation – there are many accommodation that can be considered destinations in
themselves, by dint of unusual features of the lodging or its immediate environment. The categories
are as follow:
1. Treehouse Hotels
Some hotels are built with living tress as structural elements, for example the Costa Rica
Tree House in the Gandoca-Manzanillo Wildlife refuge, Costa Rica; the Treetops Hotel in
Aberdare National Park, Kenya; the Ariau Towers near Manaus, Brazil; and Bayram’s Tree
Houses in Olympos, Turkey

2. Bunker Hotels
The Null Stern Hotel in Teufen, Appenzellerland, Swirtzerland and the Concrete
Mushrooms in Albania are former nuclear bunkers transformed into hotels

3. Cave Hotels
Desert Cave Hotel in Coober Pedy, South Australia and the Cuevas Pedro Antonio de
Alarcon in Guadix, Spain, as well as several hotels in Cappadocia, Turkey, are notable for
being built into natural cave formations, some with rooms underground. There are all built
underground

4. Capsule Hotels
Capsule hotels are a type of economical hotel that are found in Japan, where people sleep in
stacks of rectangular containers

5. Ice and Snow Hotels



The Ice Hotel in Jukkasjarvi, Sweden, and the Hotel de Glace in Duschenay, Canada, melt
every spring and are rebuilt each winter; the Mammut Snow Hotel in Finland is located
within the walls of Kemi snow castle; and the Lainio Snow Hotel is part of a snow village
near Yllas, Finland
6. Garden Hotels
Garden hotels, famous for their gardens before they become hotels, include Gravetye Manor,
the home of garden designer William Robinson, and Cliveden, designed by Charles Bary
with a rose garden by Geoffrey Jellicoe

7. Underwater Hotels
Some hotels have accommodation underwater, such as Utter Inn in Lake Malaren, Sweden.
Hydropolis, project cancelled 2004 in Dubai, would have had suites on the bottom of
Persian Gulf, and Jules Undersea Lodge in Key Largo, Florida requires scuba diving to
access its rooms

Catering

Catering is the business of providing foodservice at a remote site or a site such as a hotel, public
house (pub), or other location.

1. Mobile catering
A mobile caterer serves food directly from a vehicle or cart that is designed for the purpose.
Mobile catering is common at outdoor events (such as concerts), workplaces, and downtown
business districts.

2. Event catering
Events range from box-lunch drop-off to full-service catering. Caterers and their staff are
part of the foodservice industry.
When most people refer to a "caterer", they are referring to an event caterer who serves food
with waiting staff at dining tables or sets up a self-serve buffet. The food may be prepared
on site, i.e., made completely at the event, or the caterer may choose to bring prepared food
and put the finishing touches on once it arrives.

3. Boxed lunch catering
A box lunch is a lunch consisting of a sandwich, chips, fruit and a dessert. A box lunch is
typically prepared by a caterer and dropped off to a location for a client’s dining needs. Box
lunches are used primarily in the corporate arena for working lunches when they do not have
time to take a break from their meeting yet still need to eat. A box lunch order is placed with
a caterer a couple of days before the delivery date and is a cheaper way to go instead of a
full sit-down lunch. The box lunch option is strictly a drop-off service and does not offer any
type of wait staff or cleanup. The caterer’s only job is to prepare and deliver the food.

4. Catering Officers on ships
Merchant ships often carry Catering Officers - especially ferries, cruise liners and large
cargo ships. In fact, the term "catering" was in use in the world of the merchant marine long
before it became established as a land-bound business.

Transportations

Transport or transportation is the movement of people, cattle, animals and goods from one
location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The
field can be divided into infrastructure, vehicles, and operations.



Transport is important since it enables trade between peoples, which in turn establishes
civilizations.
Transport infrastructure consists of the fixed installations necessary for transport, and may be roads,
railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations,
bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel
stations), and seaports. Terminals may be used both for interchange of passengers and cargo and for
maintenance.

Vehicles traveling on these networks may include automobiles, bicycles, buses, trains, trucks,
people, helicopters, and aircraft. Operations deal with the way the vehicles are operated, and the
procedures set for this purpose including financing, legalities and policies.

In the transport industry, operations and ownership of infrastructure can be either public or private,
depending on the country and mode. Passenger transport may be public, where operators provide
scheduled services, or private. Freight transport has become focused on containerization, although
bulk transport is used for large volumes of durable items.

Transport plays an important part in economic growth and globalization, but most types cause air
pollution and use large amounts of land. While it is heavily subsidized by governments, good
planning of transport is essential to make traffic flow, and restrain urban sprawl.

Transport in London

London's transport forms the hub of the road, rail and air networks in the United Kingdom. It has
its own dense and extensive internal private and public transport networks, as well as providing a
focal point for the national road and railway networks.

London also has a number of international airports including one of the world's busiest, Heathrow(it
have also first London 'pod' system called ULTra), and a seaport. London's internal transport system
is one of the Mayor of London's four policy areas, administered by its executive agency Transport
for London (TfL).

TfL controls the majority of public transport in the area, including the Underground, London Buses,
Tramlink, the Docklands Light Railway, and London Overground rail services within Greater
London; other rail services are franchised to train operating companies by the national Department
for Transport (DfT).

TfL also controls most major roads in the area, but not minor roads The body is organised in three
main directorates and corporate services, each with responsibility for different aspects and modes of
transport. The three main directorates are:

1. London Underground
Responsible for running London's underground rail network, commonly known as the tube,
and managing the provision of maintenance services by the private sector. This network is
sub-divided into three service delivery units:
a. BCV: Bakerloo, Central, Victoria and Waterloo & City lines
b. JNP: Jubilee, Northern and Piccadilly lines
c. SSR (Sub Surface Railway): Metropolitan, District, Circle and Hammersmith & City
lines

2. London Rail, responsible for:



Co-ordination with the operators that provide National Rail service within London.
a. London Overground, although actual operation is undertaken by a private sector
franchisee and maintenance by Network Rail.
b. Docklands Light Railway: normally abbreviated DLR, this is the automatically
driven light rail network in east London, although actual operation and maintenance
is undertaken by a private sector franchisee.
c. London Trams, responsible for managing London's tram network, by contracting to
private sector operators. At present the only tram system is Tramlink in south
London, but others are proposed.

3. Surface transport, consisting of:
a. London Buses, responsible for managing the red bus network throughout London,
largely by contracting services to private sector bus operators. Incorporating
CentreComm, London Buses Command & Control Centre, a 24 hour Emergency
Control Centre based in Southwark.
b. London Dial-a-Ride, which provides paratransit services throughout London.
c. London River Services, responsible for licensing and coordinating passenger
services on the River Thames within London.
d. London Streets, responsible for the management of London's strategic road network.
e. London congestion charge.
f. Public Carriage Office, responsible for licensing the famous black cabs and other
private hire vehicles.
g. Victoria Coach Station, which owns and operates London's principal terminal for
long distance bus and coach services.
h. Cycling Centre of Excellence, which promotes cycling in London and manages the
contract with Serco for the Barclays Cycle Hire scheme
i. Walking, which promotes better pedestrian access.

Types of Destinations

Self-contained resorts

The term "resort" is now also used for a self-contained commercial establishment which attempts to
provide for most of a vacationer's wants while remaining on the premises, such as food, drink,
lodging, sports, entertainment, and shopping. The term may be used to identify a hotel property that
provides an array of amenities and typically includes entertainment and recreational activities.

A hotel is frequently a central feature of a resort, such as the Grand Hotel at Mackinac Island,
Michigan. A resort is not merely a commercial establishment operated by a single company,
although in the late twentieth century this sort of facility became more common.

Destination resort
A destination resort is a resort that contains, in and of itself, the necessary guest attraction
capabilities—that is to say that a destination resort does not need to be near a destination (town,
historic site, theme park, or other) to attract its public.

A commercial establishment at a resort destination such as a recreational area, a scenic or historic
site, a theme park, a gaming facility or other tourist attraction may compete with other businesses at
a destination. Consequently, another quality of a destination resort is that it offers food, drink,
lodging, sports and entertainment, and shopping within the facility so that guests have no need to
leave the facility throughout their stay.



Commonly these facilities are of higher quality than would be expected if one were to stay at a hotel
or eat in a town's restaurants. Some examples are Atlantis in the Bahamas, Costa do Sauípe in the
Northeastern Brazil, Laguna Phuket in Thailand and Sun City near Johannesburg in South Africa.

All-inclusive resort
An all-inclusive resort charges a fixed price that includes most or all items. At a minimum, most
inclusive resorts include lodging, unlimited food, drink, sports activities, and entertainment for the
fixed price. All-inclusive resorts are found in the Caribbean, particularly Cuba, and elsewhere.
Notable examples are Club Med and Sandals Resorts.

An all-inclusive resort includes a minimum of three meals daily, soft drinks, most alcoholic drinks,
gratuities and possibly other services in the price. Many also offer sports and other activities
included in the price as well.

They are often located in warmer regions - The all-inclusive model originated in the Club Med
resorts which were founded by the Belgian Gérard Blitz. Some all-inclusive resorts are designed for
specific vacation interests. For example, certain resorts cater to adults, while even more specialized
properties accept couples only.

Other all-inclusive resorts are geared toward families, with facilities like craft centers, game rooms
and water parks to keep children of all ages entertained. All inclusive resorts are also very popular
locations for destination weddings.

Conference and resort hotels
Conference and resort hotels are hotels which often contain full-sized luxury facilities with full
service accommodations and amenities. These hotels may attract both business conferences and
vacationing tourists and offer more than a convenient place to stay.

These hotels may be referred to as major conference center hotels, flagship hotels, destination
hotels, and destination resorts. The market for conference and resort hotels is a subject for market
analysis. These hotels as destinations may be characterized by distinctive architecture, upscale
lodgings, ballrooms, large conference facilities, restaurants, and recreation activities such as golf or
skiing. They may be located in a variety of settings from major cities to remote locations.

Ways a self-contained resort could compete for tourists

1. provide most of the travel facilities (accommodation, foods and beverages, recreation,
shopping, etc.) within the compound
2. a fixed price that includes most or all items
3. does not need to be near a destination (town, historic sites, theme park, etc)
4. designed for specific vacation interest i.e. certain resorts carter to couple only
5. characterized by distinctive architecture, upscale lodging and recreation activities such as golf
and skiing
6. the facilities provide are of higher quality than would be expected
7. provide special comprehensive programs such as spa services, physical fitness activities, and
healthy cuisine
8. a combination of activities and attractions for both looking for adventure and tranquility in
the vacation



Towns

A town is a human settlement larger than a village but smaller than a city. The size definition for
what constitutes a "town" varies considerably in different parts of the world, so that, for example,
many "small towns" in the United States would be regarded as villages in the United Kingdom,
while many British "small towns" would qualify as cities in the United States.

Towns which are resorts — or where tourism or vacationing is a major part of the local activity —
are sometimes called resort towns. If they are by the sea they are called seaside resorts. Inland
resorts include ski resorts, mountain resorts and spa towns.

Towns such as Sochi in Russia, Sharm el Sheikh in Egypt, Barizo in Spain, Cortina d'Ampezzo in
Italy, Druskininkai in Lithuania, Nice in France, Newport, Rhode Island, St. Moritz in Switzerland,
Blackpool in England and Malam Jabba in Pakistan are well-known resorts.

Seaside resorts
Seaside resorts are located on a coast. Many seaside towns have turned to other entertainment
industries, and some of them have a good deal of nightlife. The cinemas and theatres often remain
to become host to a number of pubs, bars, restaurants and nightclubs. Most of their entertainment
facilities cater to local people and the beaches still remain popular during the summer months.

Although international tourism turned people away from British seaside towns, it also brought in
foreign travel and as a result, many seaside towns offer foreign language schools, the students of
which often return to vacation and sometimes to settle.

Ski resorts
In Europe, ski resorts are towns and villages in ski areas, with support services for skiing such as
hotels and chalets, equipment rental, ski schools and ski lifts to access the slopes.

Village

A village is a clustered human settlement or community, larger than a hamlet with the population
ranging from a few hundred to a few thousand (sometimes tens of thousands). Though often located
in rural areas, the term urban village is also applied to certain urban neighborhoods, such as the
West Village in Manhattan, New York City and the Saifi Village in Beirut, Lebanon, as well as
Hampstead Village in the London conurbation.

Villages are normally permanent, with fixed dwellings; however, transient villages can occur.
Further, the dwellings of a village are fairly close to one another, not scattered broadly over the
landscape, as a dispersed settlement.

Tourism village
Is a village area which have some special characteristics of a place as tourism object. In this area,
the traditions and culture of local community are still pure. A tourism village is also coloured by
some supporting factors, such as local cuisine/food, agriculture system and social system.

Besides, pure nature and environment are added points for a tourism village. Good facilities to
provide a village becoming a tourism object are also important. These facilities make visitors who
come to a tourism village enjoy their vacation. So, all tourism villages are completed by many
supporting facilities, such as transportation, telecommunication, medical, and accommodation
facilities. The accommodations in tourism village are special.



Visitors can spend the nights using homes stay provided in the village - It gives visitors a
memorable moment because they can feel a purely village atmosphere. Until now, there are seven
tourism villages located in Central Java province, Indonesia. - There are Candirejo, Dieng, Duwet,
Karangbanjar, Karimunjawa, Ketenger, and Selo village.

Capital Cities

A capital city (or just, capital) is the area of a country, province, region, or state considered to
enjoy primary status; although there are exceptions, a capital is typically a city that physically
encompasses the offices and meeting places of the seat of government and is usually fixed by law or
by the constitution.

An alternative term is political capital, but this phrase has a second meaning based on an alternate
sense of the word capital. The capital is often, but not necessarily, the largest city of its constituent
area, and is also often a specialized city.

Strategy to maintain capital city competitiveness as tourist destination

a) the construction of new cultural center
b) improve access – enlarging road, improve transportation system
c) more monitoring of accommodation in terms of health and safety standards
d) develop new tourist attractions
e) improvement of public facilities such as toilet, signage
f) continued marketing and advertising activities

Country

A country is a region legally identified as a distinct entity in political geography. A country may be
an independent sovereign state or one that is occupied by another state, as a non-sovereign or
formerly sovereign political division, or a geographic region associated with a previously
independent people with distinct political characteristics.

Regardless of the physical geography, in the modern internationally accepted legal definition as
defined by the League of Nations in 1937 and reaffirmed by the United Nations in 1945, a resident
of a country is subject to the independent exercise of legal jurisdiction, while "Any person visiting a
country, other than that in which he usually resides, for a period of at least 24 hours" is defined as a
'foreign tourist‘.

There are 204 total states, with 193 states participating in the United Nations and 13 states whose
sovereignty status are disputed - The newest state is South Sudan.

International tourist arrivals by country of destination 2010

Out of a global total of 940 million tourists, the top ten international tourism destinations in 2010
were (see the barometer for the full rankings):

Rank Country International tourist arrival
1 France 76.80 million
2 United States 59.75 million
3 China 55.67 million
4 Spain 52.68 million
5 Italy 43.63 million



6 United Kingdom 28.13 million
7 Turkey 27.00 million
8 Germany 26.88 million
9 Malaysia 24.58 million
10 Mexico 22.40 million

Regions and Areas

A tourism region is a geographical region that has been designated by a governmental organization
or tourism bureau as having common cultural or environmental characteristics. These regions are
often named after historical or current administrative and geographical regions. Others have names
created specifically for tourism purposes. - The names often evoke certain positive qualities of the
area and suggest a coherent tourism experience to visitors.

Countries, states, provinces, and other administrative regions are often carved up into tourism
regions. In addition to drawing the attention of potential tourists, these tourism regions often
provide tourists who are otherwise unfamiliar with an area with a manageable number of attractive
options.

Some of the more famous tourism regions based on historical or current administrative regions
include Tuscany in Italy and Yucatán in Mexico. Famous examples of regions created by a
government or tourism bureau include the United Kingdom's Lake District and California's Wine
Country.

Specialty Regions
Wine Regions - Building on the success of wine tourism in regions such as California's Wine
Country, the number of wine regions catering to tourists has grown in recent decades. Although
wine regions have existed since the 1850s in France, wine tourism became increasingly popular in
the 1970s.

Wine regions such as Bordeaux and Burgundy in France were joined by regions in California, Italy,
Spain, and even New York as areas of interest to the potential wine tourist. Currently, several dozen
countries have their own wine regions, while many of these countries have dozens of regions within
their borders.

Many wine regions do not correspond to designated tourism regions. For example, the famous
Bordeaux region in France is part of the political and tourism region of Aquitaine while the Mosel
wine region of Germany is located in the Rhineland-Palatinate state and extends far to the northeast
of the Moselle and Saar tourism region.

Traditional Centers

A national center for traditional arts that usually established by the tourism governing bodies of a
particular country. The goal of the center is overall planning, supporting the related research,
promoting, preserving, and teaching the traditional arts, and also redefining, renovating, and
developing the traditional arts.

Example;
• The National Gugak Center (Formerly: National Center for Korean Traditional Performing
Arts) is the governing body established to preserve and promote traditional Korean
performing arts.



• National Center for Traditional Arts, Taiwan - In addition to organized displays and
performances of culture and art, it also provides a stage where performing artists can show
off their creative works. The emphasis here is on the continuous propagation, innovation,
and renewal of traditional arts.

Touring Center

An attraction that established with variety of activities (especially outdoor pursuit activities) offer at
one place.

Example:
• Elk River Touring Center, West Virginia, US - Walk out the doors of the inn to enjoy world
class West Virginia Fly Fishing, cross country skiing, West Virginia Mountain Biking and
more
• Steamboat Ski Touring Center, US offers fun for everyone of all ages with groomed cross
country ski trails, 10 km of beautiful forested snowshoe trails, ski school, & Nordic shop.

Purpose Built

These are destinations developed specifically for tourists which provide all the facilities needed in
one place. Theme parks are not generally acceptable, although this category may include theme
park resorts such as Disneyland Paris or large holiday centres such as Center Parcs.

It may also include some whole resorts in their own right, such as La Pobla de Farnals - This
purpose-built resort town has the advantage of being easily accessible and close to the lively city of
Valencia. Located in an enclave, around 12 kilometres to the north of the city, the sea is its main
attraction, with a seafront promenade, fine sandy beaches and a central marina – ideal for enjoying a
relaxing stroll.

Evolving Concept of Destinations

Haywood (1990) and Pigram (1992) identify a number of implementation gaps in the adoption of
strategic planning at tourist destinations:

Destinations are comprised of a constantly shifting mosaic of stakeholders and value systems. Each
of these groups has a different view of the role and future of tourism at their destination and
therefore the adoption of strategies becomes a political process of conflict resolution and consensus
In addition, the tourist sector at destinations is characterised by fragmentation and a dominance of
small businesses, who often trade seasonally. This has led to a lack of management expertise at
destinations, a divergence of aims between the commercial and public sectors and a shortterm
planning horizon which in part is driven by public-sector, twelve-monthly budgeting cycles, but
also by the tactical operating horizon of small businesses (Athiyaman, 1995).

The stage of the destination in the life cycle also influences the acceptability of a destination-wide
planning exercise. In the early stages of the life cycle for example, success often obscures the long
term view, whilst in the later stages, particularly when a destination is in decline, opposition to long
term planning exercises may be rationalised on the basis of cost.

Finally, the performance indicators adopted in such exercises can be controversial as tourist volume
is the traditional, and politically acceptable, measure of success in many destinations. In other
words, the tourism industry is often reluctant to make the tradeoff between present and future needs
when success is judged by short-term profitability and volume growth.



Destination Visioning

Destination visioning is a community-based strategic planning approach, effectively placing the
future of the destination in the hands of the local community, government and industry.
As Ritchie (1993) says:

‘residents of communities and regions affected by tourism are demanding to be involved in the
decisions affecting their development’

Of course, this involvement and control is also a key element of delivering a sustainable destination.
Whilst the concept of community involvement in planning is well known, it is the ‘process’ of
visioning that is so well suited to destinations.

Ritchie (1993) identifies three key elements of the process as:
• The vision must bring together the views of the whole community and all tourism
stakeholders;
• The vision must reach concensus and endorsement of the future; and
• The vision defines the long term development of the destination.



UNIT 3:
DESTINATION DEVELOPMENT ANALYSIS

Chapter objectives
• Discuss about destination development analysis in terms of TALC, resort life-cycle and
PLC
• Explain the spatial tourism development in a destination
• Outline the product portfolio and understand its application in destination management
• Describe the business strategies that can be apply in destination developemt analysis

Resort development model

Tourist Area Life-cycle (TALC)

Hypothetical Evolution of a Tourist Area (Adapted from Miller and Gallucci, 2004)

1. Exploration – small numbers of visitors attracted by natural beauty characteristics. Tourist
numbers are limited. Few tourist facilities exist.
2. Involvement – limited involvement by local residents to provide some facilities for tourists.
There is a recognizable ‘tourist season’. There begin to be a definite tourist market.
3. Development – large numbers of tourists arrive. Control passes from the locals to external
organizations. Increase in tension between local people and tourists
4. Consolidation – tourism has become a major part of the local economy. Visitors’ numbers
star to level off (at a high number). Some older facilities are seen as second-rate
5. Stagnation – peak numbers of tourists have been reached. The resort is no longer considered
fashionable.
6. Rejuvenation/decline – attractiveness continue to decline. Visitors are lost to other resorts
and destinations. Long term decline will continue unless action is taken to rejuvenate the
area and modernize.



Tourism Area Life Cycle (TALC) model is that a destination begins as a relatively unknown and
visitors initially come in small numbers restricted by lack of access, facilities, and local knowledge,
which is labeled as Exploration. As more people discover the destination, the word spreads about its
attractions and the amenities are increased and improved (Development). Tourist arrivals then begin
to grow rapidly toward some theoretical carrying capacity (Stagnation), which involves social and
environmental limits.

The rise from Exploration to Stagnation often happens very rapidly, as implied by the exponential
nature of the growth curve. The possible trajectories indicated by dotted lines A-E are examples of a
subset of possible outcomes beyond Stagnation. Examples of things that could cause a destination
to follow trajectories A and B toward Rejuvenation are technological developments or infrastructure
improvements leading to increased carrying capacity. Examples of things that could cause a
destination to follow trajectories C and D are increased congestion and unsustainable development,
causing the resources that originally drew visitors to the destination to become corrupted, or no
longer exist. The trajectory of most interest to this is trajectory E, which is the likely path of a
destination following a disaster or crisis.

It is also important to point out that the Law of Diminishing Returns could cause a destination to
follow trajectories similar to those of C or D, and that the concepts and practices of destination
recovery, as applied to destinations recovering from a disaster, could easily be applied to a
destination in Decline as a result of the Law of Diminishing Returns.



Product Life-cycle

The understanding of a product’s life cycle, can help a company to understand and realize when it is
time to introduce and withdraw a product from a market, its position in the market compared to
competitors, and the product’s success or failure. The product’s life cycle - period usually consists
of five major steps or phases. These phases can be split up into smaller ones depending on the
product and must be considered when a new product is to be introduced into a market since they
dictate the product’s sales performance.

1. Product Development Phase
Product development phase begins when a company finds and develops a new product idea.
This involves translating various pieces of information and incorporating them into a new
product. During the product development phase, sales are zero and revenues are negative. It
is the time of spending with absolute no return.

2. Introduction Phase
The introduction phase of a product includes the product launch with its requirements to
getting it launch in such a way so that it will have maximum impact at the moment of sale.
A successful product introduction phase may also result from actions taken by the company
prior to the introduction of the product to the market.

3. Growth Phase
The growth phase offers the satisfaction of seeing the product take-off in the marketplace.
This is the appropriate timing to focus on increasing the market share. A new growing
market alerts the competition’s attention. Good coverage in all marketplaces is worthwhile
goal throughout the growth phase.

4. Maturity Phase
When the market becomes saturated with variations of the basic product, and all competitors
are represented in terms of an alternative product, the maturity phase arrives. In this phase
market share growth is at the expense of someone else’s business, rather than the growth of
the market itself. This period is the period of the highest returns from the product. A
company that has achieved its market share goal enjoys the most profitable period, while a
company that falls behind its market share goal, must reconsider its marketing positioning
into the marketplace.

5. Decline Phase
The decision for withdrawing a product seems to be a complex task and there a lot of issues
to be resolved before with decide to move it out of the market. Dilemmas such as
maintenance, spare part availability, service competitions reaction in filling the market gap
are some issues that increase the complexity of the decision process to withdraw a product
from the market. Often companies retain a high price policy for the declining products that
increase the profit margin and gradually discourage the “few” loyal remaining customers
from buying it.



Sales and profit

Sales

Profit
s

0 Time

Maturit Declin
Product Introduction Growth
y e
Development
Losses/investmen
t

Spatial process of tourist development

Bortoun defines the procedures for the tourism spatial development as follows:

First phase: The starting point of tourism development is the existence of a residential region
created by the tourist’s production potential, and a potentially remote destination where the tourism
has not yet improved.

This process may begin by the Allocentrics (Tourists seeking diversity), the discoverers and or
those aimless individuals or the well-to-do elites. They are motivated by the interests, curiosity,
educational needs and etc, and they arrange for their own trips by making use of local
transportation. As a result of their narrations and announcements, they identify the destination and
also they gain fame and by means of a few of tourists who are able to travel they visit; the host
society also responds to them by providing some small services.



The second phase: If the living standard of people in the region of tourist production (tourism
market) is promoted and the welfare is increased among them, the second phase of tourism is
started.

During this phase, firstly those who enter feel that some services should be provided in the
destination for which different and new potential tourists search - such as the rich tourists or those
who are similar to Allocentrics. Therefore, a new product is rendered and the lifecycle of the
product begins. The first time, The merchants who are exposed to risk enter into the market. They
start working by provision of travel services directly to the destination and reinforcing the existing
facilities at the destination, and then, they proceed for selling them to the potential tourists
somehow different from the tourists of the first phase. There is limited response on the part of the
host community. They directly make use of tourism emotional motivations and they welcome the
tourists.

The third phase: The tourism industry starts making novel changes in the destination by developing
the first residential-commercial centers for tourism soon.

The tourists of the first phase leave this destination for finding other destinations. Those merchants,
who were not exposed to the risk, enter into the market in order to reinforce the existing services
and facilities. The speed and scope of development are increasing. The accumulation of tourists
who are in search of completely well developed destinations, now are able to travel to such
destinations. The speed of tourism growth leads toward immigrating to a tourism destination since
the local workforce cannot provide services requested by the tourists. Landlords and the local
traders welcome tourism development, however, the majority of the local people are annoyed by
such development.



The fourth phase: The destination is well identified among the population of the Midcentric tourism
generating region. The destination is totally developed and is distinct from its primary shape.

Its attractions are diversified and the potential for meeting tourism demands of major travelers
(Midcentric) grows in an organized manner. A major part of Midcentric tourists are attracted by the
second destination and therefore, the first destination loses a portion of tourists for its own benefit.
The tourism merchants attempt for the provision of services even with cheaper price in the first
destination, while other ones expand their services in the second destination. Coincided with
increasing economic potential of people, in the market of tourist, the tourism improves step by step
in more distant regions.



Tourism Spatial Framework

The Tourism Spatial Framework describes how tourism currently works in space and how it should
work in future. It aims to provide a context for intervention and a rationale for the choice of
specified actions, development areas and anchor projects. It also demonstrates the importance of
using routes to create linkage between areas in order to generate critical mass and maximise use of
resources.

Recognition of the requirement for alignment of strategies partnerships between stakeholders and
organisation and linkages between products is key to success. There is also a need for realism
regarding the developmental role of tourism. The physical product provides a strong basis for
economic growth and social development yet tourism cannot solve all the socioeconomic problems
of every community. Expectations can become unrealistic if the platform from which to begin is set
too high.

Under such circumstances the first step may never happen if stakeholders are overwhelmed by too
many priorities, options and opportunities. Disenchantment and withdrawal of support will be the
result. Perhaps the most important objective of this study is to get all stakeholders talking the same
language and working towards common goals.



In line with the above objectives, focus has been placed on issues and solutions that will direct
change. An important lesson that has been learned from our discussions is that “turnaround” is
possible. It requires capital, prioritisation, drive, action, ambition and delivery but it is achievable.
Miami, Barcelona and Atlanta are cities where diversity has brought unity of purpose.

The tourism spatial framework describes the spatial roles that different places fulfil when tourists
visit the city. For example, some places are the ‘entrance gates’ to the city or parts of the city, others
are places where people stay over and use as a base to visit other areas, and so forth.

The tourism spatial framework also identifies Tourism Development Areas throughout the city.
Each area has a distinctive character in terms of types of tourism products and resources found
there, the types of tourist experiences currently offered, the potential to develop new products and
the characteristics of the population of the area.

The Tourism Spatial Framework provides recommendations regarding the actions that can be
taken in each Tourism Development Area in order to:
• increase the attractiveness of the area by developing unique products and experiences that
build on the resources of the area;
• make it easier for tourists to get to and move around the area; and
• help local people to develop tourism businesses and share in the benefits of tourism.



The desired outcomes of the spatial framework are as follows:
• alignment and integration of tourism projects throughout the city;
• greater equity in the distribution of tourism benefits in all sectors of the community;
• creation of a legible and connected city;
• improvement of local environments through sustainable tourism;
• acceptance and actioning of proposed catalytic developments;
• local, provincial and regional economic development and cooperation; and
• increased visitation and expenditure from both domestic and international tourists.

This approach emphasises the need for prioritisation of resources and alignment of strategies prior
to focus on delivery and implementation. - The Tourism Spatial Framework represents an important
starting point.

Product Portfolio

Introduction

The business portfolio is the collection of businesses and products that make up the company. The
best business portfolio is one that fits the company's strengths and helps exploit the most attractive
opportunities.

The company must:
• Analyse its current business portfolio and decide which businesses should receive more or
less investment, and
• Develop growth strategies for adding new products and businesses to the portfolio, whilst at
the same time deciding when products and businesses should no longer be retained.

Methods of Portfolio Planning

The two best-known portfolio planning methods are from the Boston Consulting Group (the subject
of this revision note) and by General Electric/Shell. In each method, the first step is to identify the
various Strategic Business Units ("SBU's") in a company portfolio.

An SBU is a unit of the company that has a separate mission and objectives and that can be planned
independently from the other businesses. An SBU can be a company division, a product line or even
individual brands - it all depends on how the company is organized.

Growth-share matrix

The BCG matrix (aka B-Box, B.C.G. analysis, BCG-matrix, Boston Box, Boston Matrix, Boston
Consulting Group analysis, portfolio diagram) is a chart that had been created by Bruce Henderson
for the Boston Consulting Group in 1968 to help corporations with analyzing their business units or
product lines.

This helps the company allocate resources and is used as an analytical tool in brand marketing,
product management, strategic management, and portfolio analysis.



Using the BCG Box (an example is illustrated above) a company classifies all its SBU's according
to two dimensions:
• On the horizontal axis: relative market share - this serves as a measure of SBU strength in
the market
• On the vertical axis: market growth rate - this provides a measure of market attractiveness

By dividing the matrix into four areas, four types of SBU can be distinguished:
• Stars - Stars are high growth businesses or products competing in markets where they are
relatively strong compared with the competition. Often they need heavy investment to
sustain their growth. Eventually their growth will slow and, assuming they maintain their
relative market share, will become cash cows.
• Cash Cows - Cash cows are low-growth businesses or products with a relatively high
market share. These are mature, successful businesses with relatively little need for
investment. They need to be managed for continued profit - so that they continue to generate
the strong cash flows that the company needs for its Stars.
• Question marks - Question marks are businesses or products with low market share but
which operate in higher growth markets. This suggests that they have potential, but may
require substantial investment in order to grow market share at the expense of more
powerful competitors. Management have to think hard about "question marks" - which ones
should they invest in? Which ones should they allow to fail or shrink?
• Dogs - Unsurprisingly, the term "dogs" refers to businesses or products that have low
relative share in unattractive, low-growth markets. Dogs may generate enough cash to
break-even, but they are rarely, if ever, worth investing in.

Using the BCG Box to determine strategy

Once a company has classified its SBU's, it must decide what to do with them. In the diagram
above, the company has one large cash cow (the size of the circle is proportional to the SBU's
sales), a large dog and two, smaller stars and question marks.

Conventional strategic thinking suggests there are four possible strategies for each SBU:



• Build Share: here the company can invest to increase market share (for example turning a
"question mark" into a star)
• Hold: here the company invests just enough to keep the SBU in its present position
• Harvest: here the company reduces the amount of investment in order to maximise the
short-term cash flows and profits from the SBU. This may have the effect of turning Stars
into Cash Cows.
• Divest: the company can divest the SBU by phasing it out or selling it - in order to use the
resources elsewhere (e.g. investing in the more promising "question marks").

Business Strategies

Strategy – Mission

A strategic plan starts with a clearly defined business mission. Mintzberg defines a mission as
follows:

“A mission describes the organisation’s basic function in society, in terms of the products and
services it produces for its customers”.

A clear business mission should have each of the following elements:

Taking each element of the above diagram in turn, what should a good mission contain?

A Purpose
Why does the business exist? Is it to create wealth for shareholders? Does it exist to satisfy the
needs of all stakeholders (including employees, and society at large?)

A Strategy and Strategic Scope
A mission statement provides the commercial logic for the business and so defines two things:
• The products or services it offers (and therefore its competitive position)
• The competences through which it tries to succeed and its method of competing
A business’ strategic scope defines the boundaries of its operations. These are set by management.
For example, these boundaries may be set in terms of geography, market, business method, product
etc. The decisions management make about strategic scope define the nature of the business.

Policies and Standards of Behaviour



A mission needs to be translated into everyday actions. For example, if the business mission
includes delivering “outstanding customer service”, then policies and standards should be created
and monitored that test delivery.
These might include monitoring the speed with which telephone calls are answered in the sales call
centre, the number of complaints received from customers, or the extent of positive customer
feedback via questionnaires.

Values and Culture
The values of a business are the basic, often un-stated, beliefs of the people who work in the
business. These would include:
• Business principles (e.g. social policy, commitments to customers)
• Loyalty and commitment (e.g. are employees inspired to sacrifice their personal goals for
the good of the business as a whole? And does the business demonstrate a high level of
commitment and loyalty to its staff?)
• Guidance on expected behaviour – a strong sense of mission helps create a work
environment where there is a common purpose

Strategy: Values and Vision

Values form the foundation of a business’ management style. Values provide the justification of
behaviour and, therefore, exert significant influence on marketing decisions.

Why are values important?

If “values” shape the behaviour of a business, what is meant by “vision”? To succeed in the long
term, businesses need a vision of how they will change and improve in the future.

The vision of the business gives it energy.
• It helps motivate employees.
• It helps set the direction of corporate and marketing strategy.

What are the components of an effective business vision?

Davidson identifies six requirements for success:
• Provides future direction
• Expresses a consumer benefit
• Is realistic
• Is motivating
• Must be fully communicated
• Consistently followed and measured

Strategy: Objectives

"Objectives are statements of specific outcomes that are to be achieved"

As we shall see, objectives are set at various levels in a business - from the top (corporate) and
through the layers underneath (functional and unit). Objectives are often set in financial terms. That
means that the objective is expressed in terms of a financial outcome that is to be achieved. Those
could include:
• Desired sales or profit levels
• Rates of growth


• Amount of cash generated
• Value of the business or dividends paid to shareholders
However, it is incorrect to say that objectives have to be expressed in money terms, or that they
have to be able to be measured. Some objectives are hard to measure, but are often important. For
example, an objective to be:
• An innovative player in the market
• A leading in the quality of customer service

A popular way to look at objectives is to see them as part of a hierarchy of forward-looking terms
which help set and shape the strategy of a business. That hierarchy can be summarised as
follows:

SMART objectives

The SMART criteria are summarised below:

• Specific - The objective should state exactly what is to be achieved.
• Measurable - An objective should be capable of measurement – so that it is possible to
determine whether (or how far) it has been achieved
• Achievable - The objective should be realistic given the circumstances in which it is set and
the resources available to the business.
• Relevant - Objectives should be relevant to the people responsible for achieving them
• Time Bound - Objectives should be set with a time-frame in mind. These deadlines also
need to be realistic



UNIT 4:
SOCIAL AND CULTURAL FEATURES IN DESTINATION ANALYSIS

Chapter objectives
• Identify and explain the tourist destinations main activities
• Outline tourist attractions and activities of interest in a destination
• Understand the determinants that can affect the destination activities: natural disasters
• Discuss the growth of tourism industry in the 20th century

Tourist destination activities

Tourist activities can be segregated into different aspects of activities. The different aspects of
segregations are in terms of tourist activities that are involve in:
• Social activities
• Demographic development
• Economic activities
• Culture
All the tourism activities can help to explore the specialty and uniqueness of the destinations, but
also may slow down the development of those particular destinations.

Social Activities

The concept was primarily developed in the non-positivist theory of Max Weber to observe how
human behaviors relate to cause and effect in the social realm – for Weber, sociology is the study of
society and behavior and must therefore look at the heart of interactions.

The theory of social action, more than structural functionalist positions, accepts and assumes that
human vary their action according to social contexts and how it will affect other people; when a
potential reaction is not desirable, the action is modified accordingly – action can mean either a
basic action or an advanced social action, which not only has a meaning but is directed at other
actors and causes action.

Social change involves changes in the nature, attitudes, and habits of the society – social changes
are continually happening, and trends can be identified.

Some of the identified trends are:
• Rising standard of living may result in wider ownership of consumer and luxury goods,
which have implications for those industries
• Society attitude to business – in UK, increasing obligations and responsibilities are being
heaped on to companies, not least with respect to environmental protection and ethical
conduct
• Increase social division between the rich and the poor have been noted
• Changing family structure – there has been an increase in divorce and single parenthood

Demographics Development



In develop countries, the population is growing slowly or has practically ceased growing –
population is still growing rapidly in developing countries. The age structure in most developed
economies, the proportion of elderly people in the population is increasing.
Geographic distribution, two contrasting factors are decreasing population of inner cities in
developed countries and the flight from the country side in developing countries. Sex is referring to
the proportion of men and women. Class is referring to the distribution of wealth or life chances
between different groups.

Example of demographic development in UK, cause by various activities:
• Service and product – we might expect the consequences of an ageing population to include
greater demand for health care services
• Location of demand – there appears to be a gradual population shift out of the inner cities
towards suburbs and small towns
• Recruitment – a decline in the number of young people entering the workforce has
encourage companies to reconsider their attitudes in employing married women, who leave
work to have children but wish to return to employment later on, as well as older personnel

Economic Activities

The stage of economy affects all organization, both commercial and non-commercial – the rate of
growth in the economy is a measure of the overall change in demand for goods and services.
Growth is an indication of increase in demand – for example, an increase in gross domestic product
of the population has wide effects.

The forecasts state of economy will influence the planning process for organization which operates
within it. In times of boom and increased demand and consumption, the overall planning problem
will be to identify the demand. Conversely, in times of recession, the emphasis will be on cost
effectiveness, continuing profitability, survival and competition. The economic environment
changes continually – predicted changes or developments in the economic environment can be
vitally important for planning decisions.

Culture

Culture is the sum total beliefs, attitudes of mind and customs to which people are exposed in their
social conditioning – for example, the use of English language is one of the features of culture in
UK.

Culture has important implications for business, for example:
• Over emphasis on legal formalities in the early days of commercial relationship might upset
a Japanese partner, but formal legal documentation would be expected by US firm
• The way products are promoted – i.e. nudity in advertising is frowned on in some countries
but acceptable in others
• Social attitudes – the roles of men and women in the household and in society, and their
respective economic power have changed
• The types of products that can be sold to a particular subculture – i.e. in some
cultures/countries, alcohol is prohibited
• Cultural variable are particularly significant for overseas marketing
• Language differences have clear marketing implications – for example, brand names have to
be translate, often leading to entirely different meaning in the new language

Benefits of cultural activities in developing destination:



• can be developed as major attractions in the destination
• introduce the uniqueness of the local culture to the international tourist
• opportunity to do a conservation program of the cultural activities
• provide economic opportunity for local people that involved in the cultural activities
• cross-cultural exchange

Tourists’ attractions and activities

Tourist attractions can be categorized in various ways, all of which are logically based. Gunn
(1988), for example, organizes them into touring circuit attractions (short-stay) and longer-stay
(focused) attractions, based on two types of tourism: those that satisfy touring markets for travelers
on tours involving many separate locational stops and those at or near longer-stay destinations.

Lew (1987) reviewed the research methods used in the study of tourist attractions and the tourist
attractiveness of places and concluded that most studies can be classified into one or more of three
general perspectives: (1) the ideographic listing, (2) the organization and (3) the tourist cognition of
attractions – all these approaches make comparisons of attractions based on their historical,
locational, and valuational aspects.

Common systems of classification are:
• Natural attractions that are based on features of the natural environment
• Cultural attractions that are based on man’s activities
• Special types of attractions that are artificially created

Natural Attractions

Major categories of natural attractions include the following:

Climate
A warm, sunny, dry climate is typically considered desirable by most tourists, especially those from
cold winter areas, and particularly when associated with other attractions such as beaches, marines
and mountain areas. But some types of popular tourist activities such a snow skiing require cold
weather and snow but preferably still clear skies.

Climatic seasonality must be considered in evaluating climate as an attraction. In evaluating
seasonality, consideration must be given to resource opportunities and markets available that
lengthen the tourist season create a double season or extend s high level of visitor use throughout
the year.

Scenic beauty
The overall natural scenic beauty of an area may be a major motivation to visit there – especially if
conservation measure has been applied. Associated are activities such as pleasure driving with stops
at scenic view points, hiking, picnicking, camping and wildlife viewing. Remote scenic areas may
offer opportunities for adventure-oriented tourists engaging in activities such as river rafting, rock
climbing and long-distances trekking.

Beaches and marine areas
Major attractions in many places in the world for activities like sunbathing, swimming, surfing,
water skiing, parasailing, snorkeling, scuba diving, etc. Beach and marine areas should also have
conservation measures applied in the form of parks, reserves and development controls.



Flora and fauna
Unusual and interesting flora and fauna can be very important attractions, especially when
combined with scenic landscapes. Zoos, aquariums and botanic gardens are specialized flora and
fauna features and, if well developed and maintained, can be major international attractions; such as
San Diego Zoo, botanic gardens at Kew near London and Bogor in Java, Indonesia.

Special environmental features
Special environmental features such as high mountains, unusual geological formations, caves,
geysers, hot springs, and mild forms of volcanic activity are important attractions for both general
sight-seeing and special interest tourists.

Parks and conservation areas
Important natural areas and their flora and fauna should be designated for some type of
conservation status – national and regional parks, nature reserves, and wildlife refuges. The
International Union for Conservation of Nature and Natural Resources (IUCN) has specified
categories and criteria for establishment of parks and conservation areas.

Health tourism
Related to the natural environment - i.e. spas based on hot mineral waters. Another type that
developed more recently is the ‘diet’ resorts, a place where people go to lose weight and regain
physical vitality. Some centers for treatment of drug addiction and alcoholism function in certain
ways as resorts and may be considered as a type of health tourism.

Cultural Attractions

Major types of cultural attractions, based on man’s activities, include those described in the
following:

Archaeological, historical and cultural sites
Including cultural and national monuments, historic buildings, districts and towns, important
religious buildings such as churches, synagogues, temples, mosques and monasteries, and places of
historic events such as battlefields.

The United Nations Educational, Scientific and Cultural Organization (UNESCO) has begun the
process of designating, based on certain criteria, the most important archaeological and historic sites
throughout the world as world cultural heritage sites. Important for viewing by tourists and,
reflecting tourism trends in recent years, participation by tourist laymen in archaeological
excavations, on a supervised basis, has become popular.

Distinctive cultural patterns
Cultural patterns, traditions and life-styles that are unusual (different from those of the tourists) and,
in some cases, unique to one place can be of much interest to many tourists. These cultural patterns
include customs, dress, ceremonies, life-styles, and religious beliefs and practices and are often
associated with rural and village life but may be prevalent in some urban places.

Arts and handicrafts
The performing arts forms, including dance, music and drama, and the fine arts of painting and
sculpting can be important attractions – especially if effectively presented. Performing arts centers
and theaters are often developed at considerable cost for presentation of the performing arts,
primarily for the benefit of residents but often substantially supported by tourists. Handicrafts of an
area can be both an interesting attraction for tourists and a source of income for local artisans.



Interesting economic activities
An often successful type of specialized cultural attraction is observation, description and sometimes
demonstration of interesting economic activities such as operation of tea and rubber plantations and
processing plants, use of working elephants in a tropical forest, traditional fishing and agricultural
techniques in many areas. Traditional market places are also widely popular with tourists.

Interesting urban areas
Urban areas with their varied architectural styles, historic buildings and districts, civic centers,
shopping facilities, restaurants, parks and street life are of interest to many tourists who enjoy
general urban sightseeing and absorbing the ambience of a city’s character, as well as visiting
specific attraction features such as museums and public buildings. In some cities, theater
performances, including plays, operas, concerts and dance presentations are major attractions for
tourists as well as residents.

Museums and other cultural facilities
Different types of museums on such themes as archaeology, history, ethnology, natural history, arts
and crafts, science and technology industry, and many specialized subjects. Other cultural facilities
such as cultural centers, important commercial art galleries and antique shops.

Cultural festivals
Various types of cultural festivals related to the local traditions and arts can be major attractions.

Friendliness of residents
Although not quantifiable, a very real attraction for many tourists can be the friendly, hospitable
character of local residents and, more generally, their tolerance and acceptance of tourists visiting
their environment.

Special Types of Attractions

Theme parks, amusement parks and circuses
Theme parks are oriented to particular themes, such as history, adventure, unusual geographic
places, fantasy and futurism, or a combination of these in one park, and offer simulated experiences,
shows, thrill rides, shopping, and a variety of restaurants and snack bars in a clean and controlled
environment

Shopping
Shopping is a significant activity and type of expenditure of many tourists and must be considered
in tourism planning. In urban tourism, large department stores that are internationally well-known
attract many tourists visiting those cities. Duty-free (which actually may refer to low duty but not
free of duty) shopping for consumer goods has been developed as a major attraction in cities such as
Hong Kong and Singapore.

Meetings, conferences and conventions
Many countries, regions, cities, resorts and individuals hotels have developed various types of
meeting facilities and some conference facilities, such as the Trade and Convention Center in
Vancouver, Canada.

Conference tourism is highly competitive and should be carefully evaluated for an area to determine
its overall market and economic feasibility and the most appropriate type of facilities to be
developed. At any scale of development, conference centers must meet certain standards and often
need to include specialized facilities and services such as for simultaneous language translation and
exhibit space.



Special events
Special events can be major tourist attractions for short times period – these are organized for the
purpose of attracting tourists and also for reasons such as national or regional prestige and gaining
new facility complexes for permanent use.

Gambling casinos
Have been developed in certain places as major attraction – usually in areas that have limited
natural and cultural attraction features. Often developed to supplement the basic attraction of an
area such as has been done in Monaco.

Entertainment
Relative to the traditional and contemporary performing arts and its association with gambling
casinos and their resort environment – nightclubs, discos, etc. Some places providing
entertainments based on local culture – folk dancing and singing, or contemporary music and dance.

Recreation and sport
Can be important primary or secondary attractions for tourists – polo grounds, tennis centers, horse
and other types of tracks, etc.

Tourist Facilities and Services as Attractions

Hotels and resorts
Well-designed, historic or unusual hotels and resorts can be attractions in themselves. Beside that,
usually high quality service is associated with these types of hotels and resorts.

Transportation
Interesting, historic and unusual forms of transportation can also be made into attractions such as
the Nile River Cruise in Egypt.

Cuisine
The food of an area, in addition to being an important service for tourists, can be significant
secondary tourist attraction, especially if the area offers a special type of cuisine that is well
prepared and presented.

Other Attractions Considerations

In addition to tourist attraction features, there are several other considerations that must be made in
evaluating the attractiveness of the tourism area.

Ethnic, religious and nostalgic associations
Ethnic associations often relate to the ancestral origin of the tourists – for example, overseas ethnic
Chinese visiting their ancestral villages in China. Religious pilgrimages comprise a major type of
travel in many places of the world, and very important sacred places generate much long-distance
travel.

Examples of historic associations as attractions are the visits made by Japanese and Americans to
places in the Pacific Islands, where they fought during World War II, and of retired colonial
administrators visiting former colonies where they previously stationed and may have lived for
many years – sometimes referred to as nostalgic tourism.



Political stability, public health and safety, and other considerations
Although not an attraction as such, the extent of political stability of an area and the popular
perception of political stability, whether realistic or not, by the potential tourist markets is a
significant factor in attracting tourists. Another important consideration is the extent of public safety
of the country or region and especially in the tourism areas – a high level of crime will be a
deterrent to attracting tourists.

Destination travel cost
A major factor in the attractability to tourists may be the cost of travel to the destination and the
cost of using tourist facilities and services at the destination, compared to the costs of travel to and
within similar destinations elsewhere. Cost is, of course, less of a concern to affluent tourists who
can afford to travel where they want, although they will still expect “good value for their money”.

Determinants that can affect the destination activities

There are many factors which will be able to affect tourism or destination attractions and activities
globally.

Three (3) main determinants are:
• Natural disaster
• Diseases
• Man-made (anthropogenic) disaster

All these factors or determinants may affect the destinations activities in terms of social activities,
demographic development, economic activities as well as culture.

Natural Disaster

A natural disaster is “a natural event with catastrophic consequences for living things in the
vicinity.” It can affect tourism for obvious reasons as it destroys the natural environment and the
things which the industry relies on. There is a very close link between tourism and natural disasters
as in the event of a natural disaster tourism is significantly disrupted and in most cases the industry
is destroyed, then requiring development and adjustment.

Tourism is an important part of countries’ economy and in less economically developed countries
such as those affected by the tsunami, on Boxing Day 2004, the local economy greatly relies upon
the industry’s services for the livelihood of its population. The massive affect a natural disaster can
have on tourism is related to the negative multiplier effect, which involves the impact of the event
spreading through the economy.

Types of natural disaster that often occurred are:
• Tsunami
• Flood
• Earthquake
• Volcano eruption
• Avalanche, etc

The natural disaster had two main affects on tourism:



• Creating the image the area was unsafe
• Physical damage to the area (leaving most tourist resorts in ruins.

The unpredictability of natural disasters and the tourism industry can have disastrous effects when
occurring simultaneously. In general natural disasters have the effect of initially decreasing tourism
but destinations affected can then change and allow the industry to adapt to involve the disaster.

As countries rely so much on tourism there is a need to regenerate their trade and deal with natural
disasters in order to survive.

It can be seen in the following diagram:

Natural Disaster

Decline in number of tourists visiting in the area

Decrease in money being spent in the area due to lack of visitors,
decrease in general economy of the area

Businesses suffer due to lack of money generated through tourism, local businesses close, and
larger businesses decline – possibly leading to closure of parts of the business and job losses.

Unemployment in the area affected by the natural disaster increases, the disposable income of
local’s decreases meaning less money is spent in the area which causes more businesses to
decline.

Government spending increases due to lack of money generated through tax (as less people
are working in the formal sector), combined with the aid needed to recover from the event,
government spending is very high and the area’s economy is at its lowest.

Diseases

A disease is an abnormal condition affecting the body of an organism. It is often construed to be a
medical condition associated with specific symptoms and signs. It may be caused by external
factors, such as infectious disease, or it may be caused by internal dysfunctions, such as
autoimmune diseases.

The effects of the ways in which the government handled the outbreak are important. These include
the imposition of “restricted areas” that include historic sites and tourist attractions, closed
countryside walking paths and waterways, and cancelled/postponed sports and public events. All
are in addition to the mass slaughtering, burning and burying of animals which, in themselves, had
adverse effects on tourism.

An issue of particular concern is whether the government’s policy towards the outbreak succeeded
in limiting the loss of revenue from the livestock and meat trade at the cost of a greater loss of



revenue from tourism and day visits. Disease has a serious impact on the tourist industries of the
places it strikes.

Usually, disease helps to deter people from visiting, and as a result the industry suffers. This can be
due to the extra costs incurred due to vaccination prices, or by the fear of contracting a disease
whilst on holiday. The demographic groups that are most affected by the threat of disease tend to be
older generations and families.

Backpackers, young couples or groups may be attracted to such places through the excitement of
the unknown. Some diseases are prevalent all year round, others have nearly caused worldwide
pandemics, but all have some effect on the tourist industries of the countries they affect.
Examples of diseases are: SARS, Bird Flu, Foot and Mouth Disease, Malaria, Yellow Fever and
Ebola. All in all, disease always has an effect on where it strikes, but this can be negative or
positive, depending on the circumstances - However, most of the time, the effect is resoundingly
negative.

Man-made (Anthropogenic) Disaster

Anthropogenic hazards or man-made hazards can come to fruition in the form of a man-made
disaster. In this case, "anthropogenic" means threats having an element of human intent,
negligence, or error; or involving a failure of a man-made system. This is opposed to natural
disasters resulting from natural hazards.

There are two (2) types of man-made hazards that may affect the tourism industry:
• Sociological hazards
• Technological hazards
However, most of the impacts on tourism occur through the sociological hazards, even though
technological hazards are not that far behind

Sociological hazards

1. Crime
Crime is to breach the rules or laws for which some governing authority (via mechanisms
such as legal systems) can ultimately prescribe a conviction. Modern societies generally
regard crimes as offenses against the public or the state, distinguished from torts (offenses
against private parties that can give rise to a civil cause of action).

2. Arson
Arson is the criminal intent of setting a fire with intent to cause damage. The definition of
arson was originally limited to setting fire to buildings, but was later expanded to include
other objects, such as bridges, vehicles, and private property.

3. Civil disorder
Civil disorder is a broad term that is typically used by law enforcement to describe forms of
disturbance. Rioting has many causes, from antipathy over low minimum wages to racial
segregation. Examples of well-known civil disorders and riots are the Poll Tax Riots in the
United Kingdom in 1990; the 1992 Los Angeles riots in which 53 people died; the 2008
Greek riots after a 15-year-old boy was fatally shot by police; and the 2010 Thai political
protests in Bangkok during which 91 people died.

4. Terrorism



September 11 attacks, which are in multiple categories of man made disaster: terrorist
attack, air disaster, arson, and structural collapse. Can be defined as the use or threatened use
of violence for the purpose of creating fear in order to achieve a political, religious, or
ideological goal.

5. War
War is a conflict between relatively large groups of people, which involves physical force
inflicted by the use of weapons. Warfare has destroyed entire cultures, countries, economies
and inflicted great suffering on humanity.

Technological hazards

1. Industrial hazards
Industrial disasters occur in a commercial context, such as mining accidents. They often
have an environmental impact. The Bhopal disaster is the world's worst industrial disaster to
date, and the Chernobyl disaster is regarded the worst nuclear accident in history. Hazards
may have longer-term and more dispersed effects, such as dioxin and DDT poisoning.

2. Structural collapse
Structural collapses are often caused by engineering failures. Bridge failures may be caused
in several ways, such as under-design (as in the Tay Bridge disaster), by corrosion attack
(such as in the Silver Bridge collapse), or by aerodynamic flutter of the deck (as in
Galloping Gertie, the original Tacoma Narrows Bridge).

Failure of dams was not infrequent during the Victorian era, such as the Dale Dyke dam
failure in Sheffield, England in the 1860s, causing the Great Sheffield Flood. Other failures
include balcony collapses or building collapses such as that of the World Trade Center.

3. Power outage
A power outage is an interruption of normal sources of electrical power. Short-term power
outages (up to a few hours) are common and have minor adverse effect, since most
businesses and health facilities are prepared to deal with them.

Extended power outages, however, can disrupt personal and business activities as well as
medical and rescue services, leading to business losses and medical emergencies. Recent
notable power outages include the 2005 Java–Bali Blackout which affected 100 million
people and the 2009 Brazil and Paraguay blackout which affected 60 million people.

Growth of tourism industry

The World Tourism Organization (UNWTO) forecasts that international tourism will continue
growing at the average annual rate of 4% - with the advent of e-commerce, tourism products have
become one of the most traded items on the internet. It has been suggested that there is a strong
correlation between tourism expenditure per capita and the degree to which countries play in the
global context – not only as a result of the important economic contribution of the tourism industry,
but also as an indicator of the degree of confidence with which global citizens leverage the
resources of the globe for the benefit of their local economies.

Space tourism is expected to take off in the first quarter of the 21st century, although compared with
the traditional destinations; the number of tourists in orbit will remain low until technologies such
as a space elevator make space travel cheap



Tourism and the Universal Declaration of Human Rights

The Universal Declaration of Human Rights (UDHR), adopted by the UN General Assembly on
December 10, 1948, consists of 30 articles which outline the view of the United Nations on the
human rights guaranteed to all people in the world. Although tourism was not widely perceived as
an area where the human rights declaration could find application, its ramifications for tourism are
far and wide.

In fact, a few of the articles of the UDHR are more direct in their application to tourism human
rights than to any other sector: for instance,
• Article 13, which states that everyone has the universal right to freedom of movement; and,
• Article 24, which states that everyone has the universal right to rest, leisure, and holidays
with pay.

Also, some of the objectives of UDHR presented in its preamble are the social objectives of tourism
as well: for instance,
• UDHR speaks of the role of human rights protection in strengthening the development of
friendly relations between nations;
• similarly, one of the evergreen goals of tourism is achieving international harmony and
peace (D’Amore, 1988).

Another major boost in the direction of tourism human rights has been brought by the World
Tourism Organization (WTO) through the 1999 Global Code of Ethics for Tourism (GCET), which
is a comprehensive set of principles whose purpose is to guide stakeholders in sustainable tourism
development: central and local governments; local communities; the tourism industry and its
professionals; as well as visitors, both international and domestic (WTO, 1999).

The Code includes ten articles: nine articles outlining the directives for destinations, governments,
tour operators, developers, travel agents, workers and travelers themselves; the tenth article
involves the redress of grievances.



UNIT 5:
POLITICAL FEATURES IN DESTINATION ANALYSIS

Chapter objectives
• Discuss the government’s roles and responsibilities in a destination planning and
development
• Outline the tourism investment incentives and their examples as apply in Malaysia tourism
industry
• Identify the general development and design standards in destination developement

Government’s role in planning

The government systems and its organization should understand as a consideration to determine
function in tourism development. Different country will often use different plan in developing their
tourism industry.

The government organization relate to tourism industry are:
• Transportation
• Custom
• Communication
• Environment and health
• Culture and art
• Immigration
• Other planning organizations

Government tourism development policies usually influenced by socio-culture and different
environment considerations. Government also needs to make details research and implement
planning in order to maintain the sustainable tourism.

Organizational Structures for Tourism

Importance of tourism organizations

In order to plan, develop, market, coordinate and manage tourism in a country or region, effective
organizational structures are essential. An organizational structure for tourism management includes
public and private sector types of organizations at the regional, national and international levels.

The types of government or public sector structures and the extent of their involvement in tourism
must be adapted to the particular needs and ideological and political structure of the country and the
type and extent of tourism development. In determining the most suitable types of organizational
structures, each area must be specifically evaluated as to what its particular needs and objectives in
developing tourism are and which would be the most effective organizational approach to satisfy
the objectives, within the context of the overall government structure.



Public organizational models

• A separate government ministry – with responsibility for all aspects of tourism management
• A government ministry (or cabinet level department) with a mixed portfolio – part of which
is responsible for all aspects of tourism
• A separate or mixed portfolio government ministry – that is responsible for policy, planning,
and establishing and administering facility and service standards and licensing requirements
and procedures. It often does some development and research, with marketing and perhaps
some development and research being done by a non-statutory board or tourism
development corporation
• A non-statutory board appointed by government – that has no legal powers and is therefore
sub-ordinate to a government department and is responsible for all or certain aspects of
tourism
• A statutory board that is established by law – comprises an autonomous legal entity, and is
responsible for all or certain aspects of tourism
• A tourism development corporation – a separate legal entity funded by government or a
combination of public and private sector funding. It is responsible for all tourism
development and related matters or for development of particular tourism projects

NTA organization

NTA is the National Tourism Administration. Can take various forms depending on the particular
functions and size of the agency - However, some general guidelines can be set forth for a
prototypical organizational structure.

The functions usually are; policy, planning, some development and facility operation, coordination,
statistics, research, marketing and tourist information services, coordination of education and
training, establishing and administering tourist facilities standards, administrative functions and
perhaps some specialized organization of special events

If international tourism is important in the area, a decision will need to be made on whether to
maintain overseas offices in the market origin countries or region, and if so, where these are best
located. Staffing of the NTA will, of course, depend very much on the functional needs and
resources available – it is essential that the staff be properly trained to effectively fulfill their
functions.

Typical NTA Organizational Chart:

Ministry of Tourism



Tourism Advisory Committee

Department of Tourism

Administrative Services

Marketing and Information
Research and Statistics Education and Training Planning and Development
Services

Developme
Market Local Statistical Planning Developmen
nt
Planning Tourist Special Compilation And Training t
Policy
And Information Studies And Programmi Institutions Implemen-
And
Promotion Offices Collection ng tation
Planning

Overseas Facility
Offices Standards
Financing public tourism organizations
Financing of the government tourism office or statutory board activities is usually directly from
government funding. For financing tourism promotional programs, the government typically
provides the funding for overall promotion, while the private sector finances promotion of its
particular products.

Private sector tourism organizations
Serve several important purposes:
• Providing a forum for discussing and resolving common problems of tourism enterprises
• Making coordinated recommendations to the government tourism office for improvements
in the tourism sector
• Providing representation on tourism boards and committees
• Conducting research and training that is relevant to the private sector
• Sponsoring special events

International tourism organizations
These organizations currently perform various important roles and it is expected that their activities
and influence will expand in the future. Often, a staff member of the NTA is designated to be
responsible for maintaining relationship with international organizations and representing the
government at international tourism meetings.

Approach to Policy Formulation

Tourism development policy is determined in the plan formulation stage of the planning process.
Policy is determined based on several considerations:
• The objectives of developing tourism
• Must reflect the overall policy and plan of the country or region
• Related to the respective roles of the public and private sectors in developing tourism
Also evolves from the survey, analysis and synthesis of any present tourism development patterns
and infrastructure, tourist attractions and tourist markets. The government should assume the lead
role in determining the tourism policy.

Policy Considerations



Role of government
A basic policy decision that must be made is whether the government assumes a passive, active or
somewhat intermediate role in the development of tourism. In any country or region that wants to
develop or expand tourism, the government needs to perform an active role in terms;
• Adopting tourism policy, plans and regulations
• Making certain that basic infrastructure is adequate
After tourism become established, the government can assume a more normal active role, including
divesting itself of actual ownership and management of tourist facilities and services.

Environment protection, cultural conservation and sustainable development
Applying contemporary concepts of tourism development, there are usually one or more policy
statements relative to tourism being planned and developed so that the natural environment is not
degraded, archeological and historical sites are conserved, socio-cultural impacts are minimized and
desirable aspects of cultural pattern are maintained and if necessary revitalized.

Reasons for developing tourism
• Economic reasons such as earning foreign exchange
• Social reasons of encouraging cross-cultural exchange
• For domestic tourism, social reasons of providing opportunities for recreation
• Using tourism to help achieve environmental and cultural conservation objectives

Type of tourism to be developed
• Basic policy consideration:
o Types of domestic and international tourism
o Types of tourist markets to aim
• The quality level tourism need to be decided

Extent of tourism development
Related to the type of tourism development, as well as socio-economic and environmental
considerations. A large country or region may decide to develop different levels of tourism in
different areas, and at different times.

Growth rate of tourism
The growth rate of tourism to be aimed for – slow, medium or fast. Desirable to control for several
reasons:
• Social reasons – for allowing residents adequate time to adjust to tourism and participate in
its planning and socio-economic benefits
• Development reasons – of balancing tourism with infrastructure development and the
various other demands on limited capital resources
• Manpower planning reasons – of allowing sufficient time for training persons to work
effectively in tourism
• Economic reasons – of integrating development of various economic sectors, not creating
economic distortions in the economy nor generating undue land speculation

Location and staging of development
General geographic location and staging of tourism development can also be policy decision that is
further defined in the development structure plan.

Other types of policies
• May relate to multi-use of tourism infrastructure



• Relation between domestic and international tourism
• Education and training
• Social integration of tourism
• Investment and employment policies

Tourism investment incentives

Government schemes aimed at stimulating private sector interest in specified types of capital
expenditure, or investment in areas of high unemployment or backwardness. These incentives may
take the form of direct subsidies (investment grants) or corporate income tax credits (investment
credits) that compensates the investors for their capital costs.

The tourism development plan and program recommendations and economic analysis will indicate
the magnitude of capital investment required and the type of investment needed, such as for
development of infrastructure, hotels, resorts and tourist attractions. A basic consideration and
decision that needs to be made by the government is the source of financing infrastructure
development for tourism.

Any new or improved infrastructure should be multi-purpose to the greatest extent possible, serving
general community needs as well as tourism. If there is difficulty in attracting either the limited
local financing or outside capital, then provision of incentives to attract the investment required can
be considered.

If incentives is provided, they should not be greater than is absolutely necessary to attract the
desired investment and should be provided only as long as needed based on prevailing
circumstances - as these changes, the incentives should be adjusted or dropped accordingly.

Investment policies
Before implementing an incentive policy, a destination should first:
• Examine the performance of other countries’ schemes in the light of their resources and
development objectives
• Research the actual needs of investors
• Design codes of investments concessions related to specific development objectives, with
precise requirements of the investors
• Establish targets of achievement and periodically monitor and assess the level of realization
of such targets

Types of investment incentives
• Provision of land at moderate or no cost at suitable sites to develop tourist facilities
• Provision of off-site infrastructure at no cost to the developer
• Provision of all or part of the on-site infrastructure
• Complete or partial exemption from customs duties on imported items used in the initial
development
• Reduction of company taxation
• Complete or partial exemption from property taxes
• Provision of loans up to a certain percentage of investments cost
• Provision of grants for development of tourist facilities
• Allowance of foreign exchange credits from foreign sources for allocation to investments in
tourist facilities
• Provision of subsidies on interest payments of loans



• Unrestricted repatriation of all part of invested capital, profits, dividends and interest subject
• Provision for grants for staff training programs
• Guarantees against nationalization or appropriation of the investment

Example of Malaysia Government Tourism Incentives

Tourism projects, including eco-tourism and agro-tourism projects, are eligible for tax incentives.
These include hotel businesses, construction of holiday camps, recreational projects including
recreational camps, theme parks and construction of convention centres with a capacity to
accommodate at least 3,000 participants.

Hotel businesses refer to the following:
• Construction or renovation of medium and low-cost hotels as certified by the Ministry of
Tourism;
• Expansion/modernisation of existing hotels

Incentives for the Hotel and Tourism Industry

1. Pioneer Status
A company granted Pioneer Status enjoys a 5-year partial exemption from the payment of
income tax. It will only have to pay tax on 30% of its statutory income, commencing from
its Production Day which is determined by the Minister of International Trade and Industry.

2. Incentives for Reinvestment in Hotels and Tourism Projects
Companies that reinvest in the expansion, modernisation, renovation and refurbishment of
hotels and tourism projects are eligible for additional rounds of Pioneer Status or Investment
Tax Allowance as follows:
a. Pioneer Status with income tax exemption of 70% of the statutory income for a
period of five years. Unabsorbed capital allowances as well as accumulated losses
incurred during the pioneer period can be carried forward and deducted from the post
pioneer income of the company; or
b. Investment Tax Allowance of 60% on the qualifying capital expenditure incurred
within a period of five years. The allowance can be offset against 70% of the
statutory income in each year of assessment. Any unutilised allowances can be
carried forward to subsequent years until fully utilised.Companies are eligible to
apply for PS or ITA for the first two rounds of reinvestments. For the third round of
reinvestment, companies are only eligible to apply for ITA.
c. Investment Tax Allowance

As an alternative to Pioneer Status, a company may apply for Investment Tax Allowance
(ITA). A company granted the ITA gets an allowance of 60% on the qualifying capital
expenditure incurred within five years from the date on which the first qualifying capital
expenditure is incurred.

Companies can offset this allowance against 70% of statutory income in the year of
assessment. Any unutilised allowances can be carried forward to subsequent years until fully
utilised.

3. Enhanced Incentives for Undertaking New Investments


Companies undertaking new investments in 4 and 5 star hotels in Sabah and Sarawak are
eligible for the following incentives:
a. Pioneer Status, with income tax exemption of 100% of the statutory income for a
period of five years. Unabsorbed capital allowances as well as accumulated losses
incurred during the pioneer period can be carried forward and deducted from the post
pioneer income of the company; or
b. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred
carried forward to subsequent years until fully utilised.Applications received by 31
December 2013 are eligible for these incentives.

4. Incentive for Healthcare Travel
Private hospitals that invest in expansion, modernisation, renovation, refurbishment of
existing hospitals or in the construction of new private hospital, or setting up of the
International Patients Unit, are eligible for:
a. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred
carried forward to subsequent years until fully utilised.These hospitals must be
registered with the Ministry of Health to qualify for the incentive.

5. Additional Incentives for Healthcare Travel
Double Deduction for Expenses Incur in Obtaining Recognise Accreditation
a. Private hospitals which incur expenses in obtaining domestic or international
recognised accreditation such as from the Malaysian Society for Quality in Health
(MSQH) or Joint Commission International (JCI) qualify for double deduction for
the purpose of income tax computation.
b. Claims should be submitted to IRB.
Automatic Employment/Professional Pass Approval for Medical Specialists
a. Employment/professional pass will be offered automatically to the following
qualified medical specialist who return or come from abroad to serve in Malaysian
hospitals:
b. Malaysian or non-Malaysian medical specialists; and
c. Non-Malaysian spouses who qualify as a professional as per stipulated in the
Malaysian Classification of Occupation (MASCO).

6. Incentives for the Luxury Yacht Industry
The luxury yacht industry is promoted as part of tourism products and is eligible for the
following incentives:
a. Companies that construct luxury yachts are eligible for the Pioneer Status
incentiveApplications should be submitted to MIDA.
b. Companies that carry out repair and maintenance activities for luxury yachts in the
island of Langkawi, Malaysia are eligible for an income tax exemption of 100% for
five years.Applications should be submitted to the Ministry of Finance.
c. Companies that provide chartering services of luxury yachts in the country are
eligible for income tax exemption of 100% for a period of five years.

Additional Incentives for the Tourism Industry

1. Double Deduction on Overseas Promotion



Hotels and tour operators qualify for a double deduction on the expenditure incurred for
promotional activities overseas. The qualifying expenditure are:
a. expenditure on publicity and advertisements in any mass media outside Malaysia;
b. expenditure on publication of brochures, magazines and guide books, including
delivery costs that are not charged to the overseas customers;
c. expenditure on market research into new markets overseas, subject to the prior
approval of the Minister of Tourism;
d. expenditure that includes fares to any country outside Malaysia to negotiate or secure
a contract for advertising or participating in trade fairs, conferences or forums
approved by the Minister of Tourism. Such expenses are subject to a maximum of
RM300 per day for lodging and RM150 per day for food for the duration of the stay
overseas; expenditure in organising trade fairs, conferences or forums approved by
the Minister of Tourism; and
e. expenditure on the maintenance of sales offices overseas for purposes of promoting
tourism in Malaysia.

2. Tax Exemption for Promoting International Conference and Trade Exhibitions
Local companies which promote international conferences in Malaysia qualify for tax
exemption on the income earned from bringing at least 500 foreign participants into the
country. Income earned from organising international trade exhibitions in Malaysia qualifies
for tax exemption as long as the exhibitions are approved by Matrade and the organisers
bring in at least 500 foreign visitors per year.

3. Deduction on Cultural Performances
Expenditure incurred by companies promoting and managing musical or cultural groups and
sponsoring local and/or foreign cultural performances as approved by the Ministry of
Tourism, qualifies for a single deduction.
To further encourage the private sector to sponsor local arts, cultural and heritage
performances and shows, expenditure incurred in sponsoring such performances and shows
has been increased from RM300,000 to RM500,000. However, the ceiling for deductions
allowed on foreign performances and shows remains at RM200,000 per year.

4. Double Deduction on Approved Trade Fairs
Companies are also eligible for a double deduction on expenditure incurred in participating
in an approved international trade fair in Malaysia.

5. Incentive for Car Rental Operators
Operators of car rental services for tourists are eligible for full excise duty exemption on the
purchase of national cars and to enable tourists to explore challenging destinations, tour
operators are also eligible for a 50% excise duty exemption on locally assembled 4WD
vehicles.

6. Tax Exemption for Tour Operators
Foreign Tourists
a. Tour operators who bring in at least 500 foreign tourists in groups in a year inclusive
of tours that enter and exit the country by air, sea or land transportation, will be
exempted from tax in respect of income derived from the business of operating such



tours. This incentive is only applicable to tour operators licensed by the Ministry of
Tourism.

Local Tourists
a. Companies that organise domestic tour packages for at least 1,200 local tourists per
year qualify for tax exemption on the income earned. A domestic tour means any
tour package within Malaysia participated by local tourists (excluding inbound
tourists) by air, land or sea transportation involving at least one night's
accommodation.

7. Tax Exemptions on the Value of Increased Exports
Healthcare services offered to foreign clients are qualified for tax exemption of 50% on the
value of increased exports income subject to 70% of the statutory income for each year of
assessment.

Foreign clients are defined as:
a. A company, partnership, organisation or cooperative society which is incorporated or
registered outside Malaysia;
b. A non-Malaysian citizen who does not hold a Malaysian working permit; or
c. A non-resident Malaysian living abroad.

Effective from the year of assessment 2010 until the year of assessment 2014, this tax
exemption rate has been enhanced to 100% and for the purpose of this incentive the
following foreign clients are excluded:
a. a non-Malaysian citizen that participates in Malaysia My Second Home Program and
his dependants;
b. a non-Malaysian citizen holding a Malaysian student pass and his dependants;
c. a non-Malaysian citizen holding a Malaysian work permit and his dependants; or
d. Malaysian citizens who are non-residents living abroad and his dependants.

However, healthcare services offered to such foreign clients as mentioned above continue to
enjoy existing tax exemption on statutory income to the amount of 50% of the value of
increased exports.

Development and design standards

Importance of Establishing Standards

• Relate to building location, size, and other characteristics, interrelationships with the with
the natural environment, architecture, landscaping, engineering and quality levels
• Influence both the satisfaction level of tourists and the overall quality and character of the
environment for residents
• To guarantee that the resulting tourist facilities development will be appropriate from either
the tourism marketing or environmental quality standpoints

Some Site Planning Considerations

1. Avoiding environmental hazards
• Not located and designed in such a manner that environmental hazards may result
• Improper cut and fill and building design on steep slopes can lead to land slippage
and property damage



2. Building relationships
• The grouping of buildings is an important concern of site planning
• The type of grouping depends on the density and character of development desired
as related to the natural environment
3. Maintaining views
• Maintenance of view or at least view corridors toward the amenity feature, such as
beach, of the site and its setting

Single unit layouts

Solitary units Linear layout Cluster layout

Cluster groupings

5-unit row

6-unit cluster

Courtyard grouping

10-unit cluster

Linear arrangement

Relationship to amenity



Case 1 seafront cottage units all in a line
Case 3 cottage units in a garden setting
Case 2 seafront cottage units staggered and
Case 4 row units in a garden setting
offset
View plane analysis



Site Development Standards

Types of development standards:
• Density of development
• Heights of buildings
• Setbacks of buildings from amenity features, shorelines, roads, lot lines and other buildings
• Ratio of the building floor area to the site area
• Coverage of the site by buildings and other structures
• Parking requirements
• Other requirements, such as for landscaping and open space, public access to amenity
features, signs and utility lines

Design Considerations



Architectural design
Must be more flexible than development standards to allow for the creativity of the architect.
However, basic guidelines should be established and provided to the architects for their use in the
design process. These guidelines also used by the approving authority in its review of the proposed
facility design.

Some basic types of guideline considerations:
• Local styles and motifs
• Roof lines
• Use of local building materials
• Environmental relationships

Landscaping design
Landscaping in tourism areas involves the effective use of plant materials and other features for
such purposes, according to certain principles as:
• Creating an attractive setting conducive to relaxation and recreation
• Screening objectionable views and providing privacy
• Providing vegetative buffers to absorb unpleasant sound, smell and dust
• Arranging plants to provide relief from intense sun glare and rain, as well as to reduce
surface temperatures
• Minimizing the effect of high winds
• Organizing the plant material to complement a landform, to enhance a building line or
façade, to gradually unfold an attractive vista or to frame a major entrance area
• Situating plans in strategic places where they can be best appreciated
• Arranging and massing trees and shrubs to provide dramatic color and textural variation
• Introducing tourists to new species and varieties of plants, especially from the local area



Landscape planting functions:

Groups of plants may be used Plants can be used to screen This engineering with plant
architecturally to form walls, the hot summer sun while design reduces light glare.
canopies or floors. allowing sunlight through
bare branches in winter for a
type of climate control.

This design, employing plants and Plants can form a living
pavements, emphasizes a sculpture on their own, or help
functional and important entry soften surrounding architecture.
approach by directing traffic to the
main entry.

Designing for the Handicapped
Barrier-free design should be applied to tourist transportation facilities and attractions, with
techniques applied such as:
• Developing hard, relatively smooth, wide walkway paving surfaces
• Curbs with ramped cuts at intersections
• Ramped access with automatic door openings or through bars at entrances to buildings
• Restrooms, drinking fountains and public telephones designed for use by persons in
wheelchairs
• Vehicular traffic should be well separated from pedestrian ways

Engineering design
Should be established to ensure that at least minimum infrastructure and construction requirements
are met in tourism development areas. The basic types of engineering standards are:
• Roads
• Drainage
• Water supply
• Electric power
• Sewage disposal
• Solid waste disposal
• Telecommunications
• Boat piers and marinas
• Building construction standards
• Sanitation and public health standards
• Other types of engineering design standards



UNIT 6:
DESTINATION IMAGERY AND BRANDING STRATEGIES

Chapter objectives
• Outline the destination image concept, its formation, as well as the components that made
up a destination image
• Understand the stages and roles of branding a tourist destination
• Discuss the different types of market segmentation that can be apply in a destination
• Describe the concept and application of slogans and logos in destination management

Destination image

Destination image can be defined as an individual's awareness of a destination made up of the
cognitive evaluation of experiences, learning, emotions and perceptions. One of the widest
definitions is the one issued by Echtner and Ritchie in 1991 - They concluded that the image of the
destination contains qualities, attributes, holistic, functional, psychological, common and unique
components.

The image of a nation involves the image of a country altogether, covering political, economic,
historical and cultural aspects. The concept is at the national, multidimensional level and dependent
on the context. Destination image is commonly accepted as an important aspect in successful
tourism management and destination marketing.

The information about a specific destination is an important means of promotion for the tourism
industry and influences destination image. Image plays an important role for destination marketers
so as to differentiate their destination in this highly competitive market. In this sense, formal (that is
brochures) and informal information sources (that is relatives and friends), have an influence on the
image formation of a tourist destination.

On the other hand, tourists formulate images of alternative destinations, so image also emerges as a
critical element in the destination choice process. This is consistent with the notion that information
sources and the attributes of the different destinations form the basis for different image and
experience expectations. The image of a destination is more than a distinguishing element; it is a
component of the supply and brings more value to it.

The image of a tourist destination is strongly connected to the image of a country, the image of a
nation and the image of a place. The image of a place is formed for a receiver naturally by
accumulating experiences with that place, the use of the sources of personal and impersonal
information.

The branding of the place is the conscientious and coordinated process of an image achievement.
Gunn (1972) identified two (2) components of image:
• Organic – images formed by individuals themselves through such things as past experiences
with destinations, and through unbiased sources of information (e.g. news reports, movies,
newspaper articles, etc)
• Induced – images created through information received from external sources, including
destination advertising and promotion



The Process Of Destination Image Formation

The formation of image has been described by Reynolds (1965) as the development of a mental
construct based upon a few impressions chosen from a flood of information. In the case of
destination image, this 'flood of information' has many sources including promotional literature
(travel brochures, posters), the opinions of others (family/friends, travel agents) and the general
media (newspapers, magazines, television, books, movies).

Furthermore, by actually visiting the destination, its image will be affected and modified based
upon first hand information and experience. The influence of these various sources of information
and their role in destination image formation have been put into context by Gunn (1988) in his
model of the seven phases of the travel experience.

The seven phases of the travel experience:
1. Accumulation of mental images about vacation experiences
2. Modification of those images by further information
3. Decision to take a vacation trip
4. Travel to the destination
5. Participation at the destination
6. Return home
7. Modification of images based on the vacation experience.

The process of destination image formation highlights two important points.
• Firstly, it suggests that individuals can have an image of a destination even if they have
never visited it or even been exposed to more commercial forms of information.
• Secondly, since there are changes in destination image before and after visitation, it is
desirable to separate the images of those individuals who have visited and those who have
not.

The components of destination image



Destination image could be considered in terms of both an attribute-based component and a holistic
component. In addition, some images of destinations could be based upon directly observable or
measurable characteristics, (scenery, attractions, accommodation facilities, price levels), while
others could be based on more abstract, intangible characteristics (friendliness, safety, atmosphere) .
Therefore, the notion of functional and psychological characteristics, could be applied to destination
images.

Images of destinations can also range from those based on 'common' functional and psychological
traits to those based on more 'unique‘ features, events, feelings or auras. Based on this conceptual
framework, destination image is defined as not only the perceptions of individual destination
attributes but also the holistic impression made by the destination. For example, a destination's
image can include ratings on certain common functional characteristics, such as price levels,
transportation infrastructure, types of accommodation, climate, etc.

The destination can also be rated on very commonly considered psychological characteristics: level
of friendliness, safety, quality of service expected, fame, etc. On the other end of the continuum,
images of destinations can include unique features and events (functional characteristics) or auras
(psychological characteristics ) .

Examples of truly unique features are easy to provide. For instance, India may evoke an image of
the Taj Mahal, California of Disneyland, Brazil of the Amazon Jungle or the Carnival in Rio. On
the other hand, instances of truly unique auras are much more difficult to provide - However, many
destinations maybe distinguished by special atmospheres. For example, Paris may be perceived as
being romantic, Mexico as slow-paced, Nepal as mystic, etc.

The factors influencing the creation of the image of a country, according to Hans Sussmuth’s
classification in 1993, are the following:
• the historical relation between two states,
• events with profound effects (such as wars, occupation, expel),
• the current policy and the international relations between the two states,
• well-known personalities and social groups,
• the image specific to the country,
• geographical surface and demography,
• the function of the enemy’s image,
• the state of economic development (for example, the quality of the products),
• military potential (possible atomic threat) and the behaviour in solving the conflicts
(diplomacy),
• culture, such as important cultural treasuries,
• antagonistic ideologies, for example the East-West conflict,
• population (behaviour, rituals, etc.),
• politico-social system and home affairs policy (the way the immigrants are treated),
• moral reputation (for example, human rights)

Branding a tourist destination

The brand adds value to the product or service and differentiates it from the competition. In the
industry of hospitality, branding is fundamental in obtaining the competitive advantage.



There is not only one definition of a country branding. For some it is another effect of the origin
country or of the place’s marketing. For others, it refers to a consistent and multilateral branding
strategy which determines a strategic vision for the country and by which it is ensured that this
vision is enriched and re-strengthened by each communication act between the country and the rest
of the world.

Branding a destination contains a set of marketing activities which:
• they require the creation of a name, symbol, logo or other graphs truly identifying and
differentiating a destination;
• they express consistently the holiday memorable expectations which are associated uniquely
with the destination;
• which serve to consolidating and strengthening the emotional connections between the
visitor and destination; and
• which reduce the searching costs of the consumers and perceived risk.

Together, these activities serve to create an image of a destination influencing positively the choice
of the consumerism destination. In branding a nation, the aim is to create a clear, simple idea built
around the emotional qualities which can be symbolised both verbally as well as visually and
understood by different auditors and in different situations. To work, the branding of a nation must
embrace the political, cultural, business, sport activities.

The branding of a nation works with a wide variety of factors and associations: place –
geographical, tourist attraction, natural resources, local products, people – race, ethnic groups,
history, culture, language, economic and political system, social institutions, infrastructure, well-
known people, images and photos. Depending on the context in which it is used, the branding of a
nation can remind of a similar and sometimes intriguing combination of these factors.

The name or the symbol of a country can be used either by a single company or by an organization
to promote the origin country. This form of a nation’s branding has the clear aim to use the image of
the country to promote the export and sales. The second form is actually the branding of the place –
to promote the country (or maybe a city in that country), as a tourist destination. The branding of
the place is a component of the tourism marketing and it is also called the destination marketing and
it promotes a place not only for visitation and tourism, but also for home investments, creation of
jobs.

Definition of Destination Branding

Destination branding is a process used to develop a unique identity and personality that is different
from all competitive destinations. Destination branding also can be defined as “selecting a
consistent brand element mix to identify and distinguish a destination through positive image
building” (Cai, 2000).

Destination branding is about combining all things associated with the ‘place’ (i.e. its products and
services from various industries – agriculture, tourism, sports, arts, investments, technology,
education, etc) that collaborate under one brand. Its aim is to capture the essence of a destination, in
a unified manner, and can be consumed simultaneously at a symbolic and experiential level. It is
then used to market those unique added values to consumer needs and sustaining its success in the
face of competition.



What is Destination Brand?

A destination brand is:
• A way to communicate a destination’s unique identity to visitors
• A means of differentiating a destination from its competitors
• A uniform ‘look’ that all destination partners can consistently use
• A symbol, name, term or design, or combination of these elements

Challenges of destination branding:
• Destinations are not a single product but composite products consisting of a mix of different
components (the destination mix)
• Destination marketers have little control over the destination mix they are branding
• There is a diverse range of organizations and partners involved in crafting and delivering on
the brand
• Often, there is a lack of enough funding for branding efforts
• Political influences may be felt

Good destination branding:
• attractive
• consistent with positioning
• conveys excitement and quality
• expresses the destinations’ personality
• simple and memorable
• transportable to the web as a domain name
• unique and well-accepted by all partners

Five (5) steps in branding:
1. market investigation, analysis and strategic
2. brand identity development
3. brand launch and introduction – communicate the vision
4. brand implementation
5. monitoring, evaluation and review

Market Segmentation

The term ‘market’ means different things to different people – we are all familiar with the
supermarkets, stock market, fish market, and flea market

All these types of markets share several characteristics:
• They are composed of people (consumer market) or organizations (business markets)
• These people or organizations have wants and needs that can be satisfied by particular
product categories
• They have the ability to buy the products they seek
• They are willing to exchange their resources, usually money or credit, for desired products



In sum, a market is people or organizations with need or wants and with the ability and the
willingness to buy. Within a market, a market segment is a subgroup of people or organizations
sharing one or more characteristics that cause them to have similar product needs.

A market segment also known as is a sub-set of a market made up of people or organizations with
one or more characteristics that cause them to demand similar product and/or services based on
qualities of those products such as price or function.

A true market segment meets all of the following criteria:
• it is distinct from other segments (different segments have different needs),
• it is homogeneous within the segment (exhibits common needs);
• it responds similarly to a market stimulus, and
• it can be reached by a market intervention.

The term is also used when consumers with identical product and/or service needs are divided up
into groups so they can be charged different amounts for the services. The process of dividing a
market into meaningful, relatively similar, and identifiable segments or groups is called market
segmentation. The purpose of market segmentation is to enable the marketer to tailor marketing
mixes to meet the needs of one or more specific segments.

Bases for Segmenting Consumer Markets

Marketers use segmentation bases, or variables, which are characteristics of individuals, groups or
organizations, to divide a total market into segments. The choice of segmentation bases is crucial
because inappropriate segmentation strategy may lead to lost of sales and missed profit
opportunities.

The keys is to identify bases that will produce substantial, measurable, and accessible segments that
exhibit different response patterns to marketing mixes. Markets can be segmented using a single
variable, such as age group, or several variable, such as age group, gender, and education.
Although, it is less precise, single-variable has the advantage of being simpler and easier to use than
multiple-variable segmentation.

The disadvantages of multiple-variable segmentation are that
• It is often harder to use than single-variable segmentation;
• Usable secondary data are less likely to be available
• As the number of segmentation bases increases, the size of individual segments decrease

Nevertheless, the current trend is toward using more rather than fewer variables to segment most
markets. Multiple-variable segmentation is clearly more precise than single-variable segmentation.
Consumer goods marketers commonly use one or more of the following characteristics to segment
markets:
• Geographic
• Demographic
• Psychographic
• Behavioral

Geographic Segmentation

Refers to segmenting markets by region of the country or world, market size, market density, or
climate. Market density means the number of people within a unit of land, such as a census tract.



Climate is commonly used for geographic segmentation because of its dramatic impact on
residents’ needs and purchasing behavior.

Geographic segmentation is an important process – particularly for multi-national and global
business and brands. Many such companies have regional and national marketing programs which
alter their products, advertising and promotion to meet the individual needs of geographic units.

Example; (1) regions – in the UK these might be England, Scotland, Wales Northern Island or (at a
more detailed level) counties or major metropolitan areas; (2) countries – perhaps categorized by
size, development or membership of geographic region; (3) city/town size – population within
ranges or above a certain level

Demographic Segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as
age, gender, family size, income, occupation, education, religion, race and nationality.

The main demographic segmentation variables are:
• Age – consumer needs and wants change with age although they may still wish to consume
the same type of product, so marketers, design, package and promote products differently to
meet the wants of different age groups
• Life-cycle stage - a consumer stage in the life-cycle is an important variable – particularly in
markets such as leisure and tourism
• Gender – gender segmentation is widely used in consumer marketing
• Income – another popular basis for segmentation; many companies target either affluent
consumers with luxury goods and convenience services or consumers with relatively low
incomes
• Social class – there is a clear link here with income-based segmentation

Psychographic Segmentation

This type of segmentation divides the market into groups according to customers’ lifestyles – it
considers a number of potential influences on buying behavior, including the attitudes, expectations
and activities of consumers

The main types of psychographic segmentation are:
• Lifestyle – different people have different lifestyle patterns and our behavior may change as
we pass through different stages of life
• Opinions, interests and hobbies – this covers a huge areas and includes consumers’ political
opinions, views on the environment, sporting and recreation activities and arts and cultural
issues

Behavioral Segmentation

Behavioral segmentation divides consumers into groups based on the way they respond to, use or
knowledge of a product.
Behavioral segments can group consumers in terms of:
• User status – many markets can be segmented into non-users, former users, potential users,
first-time users, and regular users of a product. Potential users and regular users often
require different marketing appeals.



• Usage rate – markets can be segmented into light-, medium-, and heavy-user groups. Many
hospitality firms spread their marketing resources evenly across all potential customers.
• Loyalty status – a market can also be segmented on the basis of consumer loyalty. In the
hospitality and travel industries, marketers attempt to build brand loyalty through
relationship marketing.
• Buyer readiness stage – at any given time, people are in different stages of readiness to buy
a product. Some are unaware of the product; some are aware; some are informed; some want
the product; and some intend to buy. The relative number in each stage makes a big
difference in designing a marketing program.

Special occasion segmentation

Special occasion segmentation – buyers can be grouped according to occasions when they make a
purchase or use a product. Occasion segmentation helps firms build product use. For example, air
travel is triggered by occasions related to business, vacation, or family.

Benefits sought

Benefits sought – buyers can also be grouped according to the product benefits they seek. Knowing
the benefits sought by customers is useful in two ways:
• Managers can develop products with features that provide the benefits their customers are
seeking
• Managers communicate more effectively with their customers if they know what benefits
they seek

‘Positive’ segmentation

‘Positive’ - dividing the market into groups of individual markets with similar wants or needs that a
company divides into distinct groups which have distinct needs, wants, behavior or which might
want different products & services

Multivariable segmentation

• Use multiple Demographic Variables such as age,gender, income & education.
• Use various Demographic, Psychographic,Geographic, and Behaviorist Variables
• Geodemographic Segmentation (Combines Geographic and Demographic info)
• Psychographics and Demographics Variables(VALS, based on values, attitudes,
lifestyles,and demographic. Therefore, combines Psychographic and Demographic
variables)

Slogans and Logos

The first evidence of a brand that consumers see is often the logo and tag line. As visual
representations of the brand promise, logos and tag lines are powerful forms of communication.

Big corporations usually use slogans to express their aim or nature of business. - Catch phrases are
created to capture consumers' attention in advertising. Some also use it to establish branding or
create an image.- Some slogans are so successful that people would immediately associate their
product with the slogan.



Logo design is one often a community's most anticipated elements of the branding process,
reflective of a logo's potential power to connect emotionally and motivate. Logos help integrate the
brand promise into the community.

Slogans

Phrase or sentence used repeatedly in the advertising of a product or service that, through its
repetition alone, eventually comes to identify the product or service ~ also known as tagline.
Essentially, slogans serve one of two basic functions:
• To communicate an idea that manufacturers want associated with the product or service
• To retain continuity within an advertising campaign

TOURISM SLOGANS, at their best, become as much a part of a place’s identity as an iconic
landmark: “I ♥ New York”, “Virginia is for lovers”, “Las Vegas: What happens here stays here.” In
real life, where do tourism slogans actually come from? Within the tourism industry, places are not
places. - They are “destinations.”

When tourism becomes relevant enough in an area, public and private interests team up to form a
destination marketing organization, or DMO. National, regional, and city-level DMOs are
responsible for the entire “branding” of the destination, and the slogan is just a part of the overall
marketing campaign.

Destination Slogan Criteria

The goal of a slogan — that succinct phrase — is to encapsulate a destination’s sense of place. If it
does its job, it will be stored in consumers’ working memory. A typology of destination positioning
can be developed, and it is suggested DMO slogans are currently used to position destinations by
one of the following categories of propositions:

• Functional destination attributes, such as ‘Tropical North Queensland – where rainforest
meets the reef’ and ‘Hurunui – alpine Pacific triangle’.
• Affective qualities, such as ‘Brisbane – its happening’ and ‘West Virginia – wild and
wonderful’.
• Travel motivation benefits, such as ‘Hawaii – the island of Aloha’ and ‘Ruapehu – where
adventure begins’.
• Market segmentation, such as ‘Dive into the heart of exotic Micronesia’ and ‘Hawkes Bay
– wine country’.
• Symbols of self expression, such as ‘If travelling is your passion, Brazil is your destiny’ and
‘Pack your six senses – come to Peru’.
• Countering risk, such as ‘Cuba – peaceful, safe and healthy tourism’.
• Brand leadership, such as ‘Zambia – the real Africa’, ‘Egypt – where history began and
continues’ and ‘Eastland – first to see the light’.
• Focus, such as ‘Kalgoorlie-Boulder – gold capital of Australia’ and ‘Auckland – city of
sails’.
• Unfocus, such as ‘Curacao – in the Southern Caribbean. Real. Different’, ‘Ecuador – nature,
culture, adventure and travel’ and ‘Take time to discover Bundaberg, Coral Coast and
country’.



• Combinations of the above, such as ‘Northland Naturally – first region of New Zealand’
and ‘Michigan. Great Lakes. Great times’.

Slogans should be designed to cut-through the media clutter, and might therefore lose effectiveness
if further promotional material is required to explain the proposition. The ideal is for the value
proposition to be stored in working memory, with simplicity the key - As a short statement limited
to around seven words the slogan should be expressed in simple terms and clearly focused on one
value proposition of interest to the target.
Since destination image change occurs only slowly in the market place (Gartner & Hunt, 1987), and
a considerable financial investment is made in brand development, the positioning theme should be
consistent over the longer term.

Examples;

The Tourism Authority of Thailand (TAT)
Taglines: Thailand. Happiness on Earth.
Amazing Thailand - Experience Variety.
Amazing Thailand - Dreams for all seasons.

Malaysia Tourism Promotion Board / Tourism Malaysia
Advertising slogan: Malaysia. Truly Asia.

Queensland, Australia's state Tourist Board
Taglines: Where Else But Queensland
Beautiful one day, perfect the next

Logos

A logo is a graphic mark or emblem commonly used by commercial enterprises, organizations and
even individuals to aid and promote instant public recognition. Logos are either purely graphic
(symbols/icon) or a composed of the name of the organization (a logotype or wordmark).

• An example of an abstract mark is the blue octagon representing Chase Bank
• Representational mark is the ‘everyman’ icon on PBS
• Well-known logotypes are the striped IBM design, Mobil written in blue with red ‘o’, and
Coca-Cola written in flowing red script

In the days of hot metal typesetting, a logotype was a uniquely set and arranged typeface or
colophon. At the level of mass communication or simply in the high street a company’s logo today
is often synonymous with its trademark or brand.



The main goal of a logo is to enhance awareness about the destination and to build a beneficial
destination image. Input from three parties should be considered in the process of developing
destination logos. - These are: (i) the logo owner, (ii) the logo developer, and (iii) the logo
recipients.

A normative model for testing of logos used in destination marketing is delineated, based on input
from these contributors. DMOs believe that a recognized, well-differentiated, and consistent
destination image is central to the success of destination branding.

Destination logos, according to DMOs, exist to accurately represent destination image and its
attributes. Although not practiced among DMOs to a large extent, efforts to ensure effective
destination branding might include:
• ensuring the logo differentiates the destination to provide a unique selling proposition;
• pretesting the logo design so that visitor perceptions are aligned with DMO intentions; and
• continually measuring visitor perceptions of the destination image and logo with appropriate
DMO refinement.

Elements of Travel Logos

Since logos are the symbol of a company’s identity, it is important for travel companies to have
their own travel logos. The main idea of travel logos is to portray the tourism activities that the
company offers while focusing on the services (ticketing, visa drop box, etc.) that the company
provides.

Following are the elements that travel logos must have:

1. Colors:
The colors used in travel logos are
associated with the nature of the
places they deal with. Most companies
have color red, purple, green and/or
blue in their logos. These colors
though not necessarily related to the
destinations; do represent every aspect
of a country.

2. Fonts:
Travel logos have fonts that reflect the
ethnicity and cultural perspectives of a
particular destination. However, there
is no strict rule concerning the
typeface of fonts in travel logos. It can
simply go with the whole facade of the
logo rather than relating to some
aspect/s.

3. Style: counterpart. Yet the style should be
There are many styles that can be simple to recognize, easy to
employed in travel logos. For instance, understand and relevant to the logo.
a travel logo can have the images and
name of the services on its logo; or it
can carry the map of the country or its



Examples;



UNIT 7:
DESTINATION MARKETING ANALYSIS

Chapter objectives
• Discuss the SWOT and PEST analysis in destination marketing analysis
• Outline the competitive positioning in destination marketing analysis
• Identify the marketing mix – 7P’s and their application in destination marketing plan
• Outline the destination marketing plan

SWOT Analysis

A tool that used to identifies the Strengths, Weaknesses, Opportunities and Threat of an
organization. Specifically, SWOT is a basic, straightforward model that assesses what an
organization can and cannot do as well as its potential opportunities and threats. The method of
SWOT analysis is to take the information from an environmental analysis and separate it into
internal (strengths and weaknesses) and external issues (opportunities and threats).

Once this analysis is completed, SWOT analysis determines what may assist the firm in
accomplishing its objectives, and what obstacles must be overcome or minimize to achieved desired
results. SWOT can help management in a business discover:
• What the business does better than the competition
• What competitors do better than the business
• Whether the business is making the most of the opportunities available
• How a business should respond to changes in its external environment

The result of the analysis is a matrix of positive and negative factors for management to address:

Positive factors Negative factors
Internal factors Strengths Weaknesses
External factors Opportunities Threats

The key point to remember about SWOT is that:

Strengths and weaknesses: • Relate to the present situation
• Are internal to the business
Opportunities and threats:


• Are external to the business • Relate to changes in the environment
which will impact the business

1. Strengths are:
• Things a business is good at
• A characteristic giving a business an important capability
• Sources of clear advantage over rivals
• Distinctive competencies and resources that will help the business achieve its
objectives
2. Weaknesses are:
• Things the business lacks or does poorly
• Factors that place a business at a disadvantage
• Issues that may hinder or constrain the business in achieving its objectives
3. An opportunity is any feature of the external environment which creates positive potential
for the business to achieve its objectives.
4. Threats are any external development that may hinder or prevent the business from
achieving its objectives.

Differences between internal and external factors:

• Internal factors include the strengths and weaknesses of the business. These aspects relate to the
present situation and contain within the company environment itself, example the financial
availability and the employees capability.
• External factors relate to changes in the large environment which will impact the whole business
operation in terms of the opportunities and threats. Examples are technological innovation and
demographic change.

Examples of Potential Business Strengths Examples of Potential Business Weaknesses

High market share Technological Low market share Cash flow problems
Achieving economies of leadership Inefficient plant Undifferentiated
scale Brand reputation Outdated technology products
High quality Protected IP Poor quality Inadequate distribution
Leadership & Distribution network Lack of innovation Low productivity
management skills Employee skills Skills shortages
Financial resources

Potential Business Opportunities Potential Business Threats

Technological Higher economic New market entrants Economic downturn
innovation growth Change in customer Rise of low cost
New demand Trade liberalization tastes or needs production abroad
Market growth EU enlargement Demographic change Higher input prices
Demographic change Diversification Consolidation among New substitute products
Social or lifestyle opportunity buyers Competitive price
change Deregulation of the New regulations pressure
Government spending market
programs



PEST Analysis

PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes
a framework of macro-environmental factors used in the environmental scanning component of
strategic management.

It is a part of the external analysis when conducting a strategic analysis or doing market research,
and gives an overview of the different macroenvironmental factors that the company has to take
into consideration. It is a useful strategic tool for understanding market growth or decline, business
position, potential and direction for operations.

1. Political factors
Political factors are how and to what degree a government intervenes in the economy.
Specifically, political factors include areas such as tax policy, labour law, environmental
law, trade restrictions, tariffs, and political stability.

Political factors may also include goods and services which the government wants to
provide or be provided (merit goods) and those that the government does not want to be
provided (demerit goods or merit bads). Furthermore, governments have great influence on
the health, education, and infrastructure of a nation

2. Economic factors
Economic factors include economic growth, interest rates, exchange rates and the inflation
rate. These factors have major impacts on how businesses operate and make decisions. - For
example, interest rates affect a firm's cost of capital and therefore to what extent a business
grows and expands. Exchange rates affect the costs of exporting goods and the supply and
price of imported goods in an economy



3. Social factors
Social factors include the cultural aspects and include health consciousness, population
growth rate, age distribution, career attitudes and emphasis on safety. Trends in social
factors affect the demand for a company's products and how that company operates. - For
example, an aging population may imply a smaller and less-willing workforce (thus
increasing the cost of labor). Furthermore, companies may change various management
strategies to adapt to these social rends (such as recruiting older workers).

4. Technological factors
Technological factors include technological aspects such as R&D activity, automation,
technology incentives and the rate of technological change. They can determine barriers to
entry, minimum efficient production level and influence outsourcing decisions. Furthermore,
technological shifts can affect costs, quality, and lead to innovation.

5. Environmental factors
Environmental factors include ecological and environmental aspects such as weather,
climate, and climate change, which may especially affect industries such as tourism,
farming, and insurance. Furthermore, growing awareness of the potential impacts of climate
change is affecting how companies operate and the products they offer, both creating new
markets and diminishing or destroying existing ones.

6. Legal factors
Legal factors include discrimination law, consumer law, antitrust law, employment law, and
health and safety law. These factors can affect how a company operates, its costs, and the
demand for its products.

Competitive positioning

Competitive positioning is about defining how you’ll “differentiate” your offering and create value
for your market. It’s about carving out a spot in the competitive landscape and focusing your
company to deliver on that strategy.

A good strategy includes:
• Market profile: size, competitors, stage of growth
• Customer segments: groups of prospects with similar wants & needs
• Competitive analysis: strengths, weaknesses, opportunities and threats in the landscape
• Positioning strategy: how you’ll position your offering to focus on opportunities in the
market
• Value proposition: the type of value you’ll deliver to the market

When your market clearly sees how your offering is different from that of your competition, it’s
easier to generate new prospects and guide them to buy. Without differentiation, it takes more time
and money to show prospects why they should choose you; as a result, you often end up competing
on price – a tough position to sustain over the long term. One of the key elements of your
positioning strategy is your value proposition.

These companies are totally focused on delivering their value propositions. They don’t just say it —
they do it, and that makes it easier to win in their respective markets. Rather than leaving your
positioning and value proposition to chance, establish a strategy. Think impartially about the
wants and needs of your customers and what your competition offers. You may find an unmet need
in the market, or you may realize that you need to find a way to differentiate from your competitors.



What you’re ultimately striving for is to be known for something — to own mindshare of the
market. This is difficult to do, but you have a better chance achieving it if you position yourself and
build your brand around your position. As a result, you may decide to promote a different attribute
of your product, or you may find entirely new opportunities to create new products and services.

There are three essential types of value: operational excellence, product leadership and customer
intimacy.

Here is a hypothetical example of each type of value.

OPERATIONAL
PRODUCT LEADERSHIP CUSTOMER INTIMACY
EXCELLENCE
Altra Home Furnishing’s CRC Technology’s customers Starboard’s market is flooded
customers care most about don’t want bells and whistles — with products at all points of the
quality – they want the best they just want a good product at price spectrum.
products. the lowest possible price.
Yet, Starboard’s customers want
Altra is completely dedicated to CRC focuses on operational more than a product off the
innovation and quality. excellence so they can shelf; they want customized
continually offer the lowest price solutions.
They’re constantly working on in the market.
product improvements and new So Starboard’s mission is to
ideas that they can bring to For example, they just patented a know as much as possible about
market. new manufacturing machine that their customers’ businesses so
dramatically lowers their costs. they can deliver the correct
They know what their solutions over time.
competitors are doing and are They’re not trying to come up
completely focused on staying with new or better products; they Starboard knows they can’t just
one step ahead in order to just want to produce more say, “We offer great service.”
capture a greater share of their volume at a lower cost. Starboard’s team knows they
market. have to deliver on that value
CRC’s value proposition is proposition in every interaction
Altra’s culture is all about operational excellence; they they have with prospects and
product leadership, and their convey it in their messages and customers.
market sees it even before they in everything they do.
become customers.

Either way, you’ll strengthen your business in both the short and long terms.

Best Case Neutral Case Worst Case
You provide a one-of-a-kind Your product is somewhat Your prospects see little
product/service that your market different from, and better than, difference between you and your
needs and wants. those of your competitors, and competitors, so you’re
you communicate that competing solely on price.
You have a strong value difference, though probably not
proposition that differentiates as consistently as you should. You have to fight long and hard
you from your competitors; you for every sale.
communicate it consistently in Your prospects partially buy into



everything you do. the value you provide, but you It’s very difficult to meet your
don’t win all of the deals that revenue and profit goals.
Your prospects respond because you could.
you’re completely meeting their
needs.

Competitive Positioning Key Concepts & Steps

Before you begin
Your competitive positioning strategy is the foundation of your entire business – it’s the first thing
you should pin down if you’re launching a new company or product. It’s also important when
you’re expanding or looking for a new edge.

Profile your market
Document the size of your market, and identify your major competitors and how they’re
positioned.
Determine whether your market is in the introductory, growth, mature, or declining stage of its life.
This “lifecycle stage” affects your entire marketing strategy.

Segment your market
Understand the problems that your market faces. Talk with prospects and customers, or conduct
research if you have the time, budget and opportunity. Uncover their true wants and needs – you’ll
learn a great deal about what you can deliver to solve their problems and beat your competitors.
Group your prospects into “segments” that have similar problems and can use your product — in
similar ways. By grouping prospects into segments, you can efficiently market to each group.

Evaluate your competition
List your competitors. Include any that can solve your customers’ problems, even if the
competitors’ solutions are much different from yours – they’re still your competition.
Rate your own company and your direct competitors based on operational efficiency (price),
product leadership and customer intimacy. It’s easy to think you’re the best, so be as impartial as
you can be.

Stake a position
Identify areas where your competition is vulnerable.
Determine whether you can focus on those vulnerable areas – they’re major opportunities.
Identify products/services you can offer to meet the true needs of your market in a new and better
way.

Define your value proposition
There are three core types of value that a company can deliver: operational efficiency (the lowest
price), product leadership (the best product), or customer intimacy (the best solution & service).
Determine which one you’re best equipped to deliver; your decision is your “value proposition.”

Select the mindshare you want to own, and record your strategy


Review the components of your market and evaluate what you want to be known for in the future.
Condense all your research and analysis into “the one thing.”

Marketing

In the hospitality industry, marketing and sales are often thought to be the same, and no wonders:
the sales department is one of the most visible. Sales managers provide prospective clients with
tours and entertain them, thus the sales function is highly visible. Whereas, most of the non-
promotional areas of the marketing function take place behind closed doors. The four-P framework
calls upon marketing professionals to decide on the product and its characteristics, set the price,
decide how to distribute their product, and choose methods for promoting their product. If
marketers do a good job of identifying consumer needs, developing a good product, and pricing,
distributing, and promoting it effectively, the result will be attractive products and satisfied
customers.
Marketing mix

Elements include product, price, promotion and distribution channels. Sometime distribution is
called place and the marketing situation facing a company. Also known as the 4P’s:

1. Product/service
A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible
good or an intangible service. Intangible products are service based like the tourism industry
& the hotel industry or codes-based products like cellphone load and credits. Tangible
products are those that can be felt physically. Typical examples of mass-produced, tangible
objects are the motor car and the disposable razor.

2. Price
The price is the amount a customer pays for the product. The price is very important as it
determines the company's profit and hence, survival. Adjusting the price has a profound
impact on the marketing strategy, and depending on the price elasticity of the product, often,
it will affect the demand and sales as well. When setting a price, the marketer must be aware
of the customer perceived value for the product.

3. Place (distribution channel)
Refers to providing the product at a place which is convenient for consumers to access.
Place is synonymous with distribution. Various strategies such as intensive distribution,



selective distribution, exclusive distribution, franchising can be used by the marketer to
complement the other aspects of the marketing mix.

4. Promotion
Represents all of the methods of communication that a marketer may use to provide
information to different parties about the product. Promotion comprises elements such as:
advertising, public relations, personal selling and sales promotion.
• Advertising covers any communication that is paid for, from cinema commercials, radio
and Internet advertisements through print media and billboards.
• Public relations is where the communication is not directly paid for and includes press
releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events.
• Word-of-mouth is any apparently informal communication about the product by
ordinary individuals, satisfied customers or people specifically engaged to create word
of mouth momentum.
• Sales staff often plays an important role in word of mouth and public relations
The Extended Marketing Mix (7Ps)

The additional Ps have been added because today marketing is far more customer oriented than ever
before, and because the service sector of the economy has come to dominate economic activity in
this country. These 3 extra Ps are particularly relevant to this new extended service mix. The three
extra Ps are:

1. Physical layout (evidence)
Refers to the experience of using a product or service, for example, when a service goes out
to the customer, it is essential that you help him see what he may or may not buy. Examples
are brochures and pamphlets.

2. People (provision of customer service)
Refers to the customers, employees, management and everybody else involved in it. In
tourism industry especially, it is essential for everyone to realize that the reputation of the
brand is in the people’s hand. Example; a FOA service is the first impression of the hotel.

3. Processes
Refers to the methods and process of providing a service and is hence essential to have a
thorough knowledge on whether the services are helpful to the customers. Example; how the
customer services handle customer complaints.

Destination marketing plan



Destination marketing is the process of communicating with potential visitors to influence their
destination preference, intention to travel and ultimately their final destination and product choices.
Destination marketing is a major part of the ‘Implementation’ process; it is the articulation and
communication of the values, vision and competitive attributes of the destination.

The actions implemented in the destination marketing phase should be underpinned by the findings
of the ‘Destination Planning’, process and the subsequent ‘Destination Development’ activities.

Successful destination marketing involves:
• Understanding the motivations and preferences of visitors in their decision-making and
travel planning process and how these behaviours change over time;
• Identifying appropriate visitor markets that ‘fit’ the destination attractions and experiences
and align with community values;
• Developing a ‘Strategic Marketing Plan’ to provide direction for destination marketing
activities;
• Developing a stakeholder agreed, strong and recognised destination brand and image that is
underpinned by the values and unique point of difference of the destination;
• Facilitation of a process to engage stakeholders to implement key marketing activities
including:
o Relevant promotional and advertising actions to influence visitor perceptions,
awareness and destination choice;
o Effective sales and distribution channels to enable conversion of intention to visit
into actual visitation;
o Development of cooperative marketing programs with tourism organisations and
businesses to provide resource synergies and increased visitation potential for a
destination.
• Gaining ‘cut-through’ of your message either through innovative marketing ideas, for
example Tourism Queensland’s ‘Best Job in the World’ campaign or by allocating
significant budget to marketing to gain a greater ‘share of voice’.
• Effectively building a destination brand that is in harmony with the community’s
aspirations.

Strategic Destination Plan

Successful marketing can influence a potential visitor's destination choice, itinerary planning
process and choices, and also encourage word-of-mouth referrals. A Marketing Plan sets the
framework and direction for all marketing activities for a destination including market research,
brand development and management, advertising and promotion, sales, distribution and cooperative
marketing opportunities.

The development of a successful strategic marketing plan should:
• Determine the existing and forecast market characteristics for the destination including
visitor markets and operating environment;
• Identify Trends and influences that may impact on the target markets of a destination, in
their travel preferences and choices;
• Understand the visitor markets’ information-searching and decision-making process and
factors that influence destination choice and product selection;
• Engage stakeholders in a collaborative planning process to develop an agreed strategic
direction and vision for marketing in the region; as demonstrated by Noosa’s award winning
approach to the development of industry partnerships to guide strategic tourism marketing in
the region;


• Identify marketing strategies and techniques that are aligned with the destination’s target
market segments, vision and values; as highlighted in the marketing strategy of the
‘Australia’s Hunter Valley’ which divided the region into precincts based on the type of
tourism experiences available to target different consumer segments;
• Recognise the increasing trend toward e-marketing and use of ICT technologies for
promotion and sales and the impact of this trend on a destination’s target market and
marketing techniques;
• Develop clear timelines and responsibilities for actions identified in the plan;
• Develop key performance indicators to monitor and review the implementation of the plan;
• Link the destination marketing plan to other regional and state plans;
• Identify funding opportunities including cooperative marketing programs, industry
participation and alignment with State marketing programs.

Marketing Plan

A marketing plan for a small business typically includes Small Business Administration Description
of competitors, including the level of demand for the product or service and the strengths and
weaknesses of competitors
• Description of the product or service, including special features
• Marketing budget, including the advertising and promotional plan
• Description of the business location, including advantages and disadvantages for marketing
• Pricing strategy
• Market Segmentation

Seven steps of marketing plan

Step 1. Prepare a mission statement
The marketing plan mission statement clearly and succinctly describes the nature of the
business, services offered, and markets served usually in a few sentences. Sometimes for
larger companies it’s combined with a vision statement that can be two to three paragraphs
in length.

Step 2. List and describe target or niche markets
In this section, list and describe potential groups of users or clients. After you create the list,
identify various segments of a market. Segments can include specific types of people in a
company by role for example, chief executive officer, chief financial officer, or marketing
director. Department heads are another type of market segment.

For segmenting the consumer market, consider age groups. In addition, niche markets are an
integral part of marketing. Within a target market of attorneys, for instance, there may be
niche groups such as trial or malpractice attorneys. In some instances, targeting by firm size
is an important consideration.

Step 3. Describe your services
As mentioned above, its necessary to conduct market research to understand your market
and to identify the services they require. At the same time, inventory the services you
currently offer and identify new services you wish to provide. Determine what it will take to
provide these services in terms of staff, expertise, and costs.



Step 4. Spell out marketing and promotional strategies
Various strategies work better for different target markets and, therefore, several may be
required to triumph. The key for successful marketing is understanding what makes
someone want to use or buy services and what type of marketing strategy they respond to.
This requires you to learn needs, problems, industry trends, and buzzwords.

To get up to speed for a particular business market, read trade journals and attend
professional conferences to meet prospective users or buyers in person. Become active in
various groups whenever possible and form strategic alliances. Find out what works best for
the markets you serve. This is a trial-and-error process that requires testing and interaction
with clients or prospective clients, although reading case studies and interviewing and
consulting with libraries that have already had marketing achievements is one way to save
time.

Basic marketing strategies include the following:
• Network, either in person or electronically, by participating in discussion groups online
where your target markets congregate.
• Direct marketing involves sending out sales letters, capability brochures, flyers, or
special offers on a regular, repeated basis to the same group of prospects. Direct
marketing can only work if you speak the language of your target market and contact
them regularly. Advertise in print media or directories, often with a specific offer to
reap the benefit of an immediate response or sales.
• Advertising lends credibility (image advertising) and, like direct marketing, must be
continuous. Devise training programs that increase awareness about your services.
• Write articles for local media or professional journals and newsletters that describe the
benefits of your services.
• Direct or personal selling is the one-on-one selling, often on site at a prospects office or
company. Direct sales are a particularly costly form of marketing since you only reach
one person at a time. However, if you present your services to a group of people at a
company, such as people from a particular department or several department heads,
direct sales can be beneficial.
• Send out publicity and press releases through local newspapers, radio, and television
stations. Participate in trade shows at the local or regional level. When a strategy
works, repeat it. But if it fails, and you have done it right, drop it. The ability to
develop and implement each of the strategies above requires learning and honing new
skills. It will most likely be necessary to read marketing and sales books, attend courses
or workshops, or hire consultants and specialists to assist you as necessary.

Step 5. Identify and understand the competition
As part of the market planning process, you must learn about your competitors and how to
position yourself in relation to them. Describe your strengths and what you want to
emphasize. Once you identify both direct and indirect competition (for example, the Internet
as indirect competition), you can determine how and why your services are special and
benefit users in a particular way. You can compete based on value, price, product, or service,
or some combination of these. Your unique position in the marketplace must be touted in
your marketing programs and marketing literature.

Step 6. Establish Marketing Goals that are Measurable



Marketing goals can include setting the number of new clients you would like to acquire, the
number of people you would like to reach, or the amount of income you would like to
generate. Be realistic and practical in establishing your goals. Take a good look at the
available skills and resources that you can commit to implement and integrate your goals
into your marketing plan effectively. Study the budget requirements for the strategies you
select and plan accordingly.

Step 7. Monitor your results carefully
By monitoring results, you determine which of your marketing strategies are working and
which are not. Identify strategies that generate leads and sales. This involves tracking and
evaluating customers responses to each marketing strategy. As you get to know your repeat
clients better, meet with them for detailed feedback and ask them for ideas and suggestions
about how you can introduce your products and services to more prospects who are just like
them. Client comments are invaluable for creating or enhancing your market literature, and
you can also learn and incorporate terms or language common to a particular user group
through this process. Just as valuable, these interviews lead to statements that can be used as
testimonials (with permission of course) and in future brochures and promotional activities.

UNIT 8:
DESTINATION AUDITING

Chapter objectives
• Understand the destination audit definition and approach
• Outline the destination audit process and its benefits in the destination management
analysis
• Discuss on how to analyze competitors and determine the competitive advantages
• Analyze the factors affecting destination choice

Destination Audit

An audit is “inherently retrospective, concerned with detection of errors and many evaluative
techniques can be applied retrospectively, concurrently, or prospectively”

Particularly, Kotler (1998: 747) defines the marketing audit as:

“a comprehensive, systematic, independent and period examination of company’s – or business
unit’s – marketing environment, objective, strategies and recommending a plan of action to
improve the company’s marketing performance”.

Extending this concept to the performance analysis, the audit can be understood as an evaluation
and an improvement of the efficiency and effectiveness of an entity’s operating activities related to
that entity’s mission and goals.

According to the definition of Crouch and Ritchie (2004: 9) “the idea of an audit is familiar to most
– it is some sort of an official examination to make sure that everything is in order, and where it is
not, an audit makes recommendations and seeks to provide advices”.

Recent issues on sustainability measurement incorporated the use of audit techniques.
Environmental auditing (EA) has been defined as the process of measuring the actual and potential
environmental impacts of public and private sectors within the tourism industry (Diamantis and



Westlake, 1997; Diamantis, 1998). The EA has been defined by the Central and Government
Environmental Forum – CGEF - (1993: 145) as a management tool comprising a systematic,
documented, periodic and objective evaluation of the performance of the organization, management
system and equipment designed to protect the environment, with the aim of:
• facilitating management control of practices which may have an impact on the environment;
• assessing compliance with the local authority’s environmental policies.

The general objective of a destination audit is to improve its performance, competitiveness, and
sustainability as governed by a vision for the destination.

Destination Audit Approach

Principles that a successful destination balances are including these four (4) key elements:
1. Attractors – the things that motivate people to visit, individually or as part of the key
whole experience. They include attractions, events, shopping offer, etc. increasingly they
include accommodation and restaurants, which are often the prime reason that people visit
places
2. Infrastructure – the facilities that enables visitors to get to the destination and stay there.
Principally, transport, accommodation, and food and beverage. Both could actually be
treated as attractors as accommodation and accessibility are primary factors in choice of
destination
3. Services – information that allows visitors to make the choices as to where they go, to boo,
and to enjoy the experience when they are at the destination. Includes visitor information,
signage, interpretation and facilities like toilets
4. Management – a system responsible for developing and managing the destination brand,
the brand encapsulating all elements of the product and the way in which it presents itself
to the world.

Constructing a destination audit

The information and work needed to carry out an audit comprises both desk and field research. The
desk research will mainly entail a review, analysis and assessment of existing information
concerning the destination.

Such information may cover:
• Domestic and international visitor statistics
• Destination-specific studies established to provide for the assembly of a destination
management database
• Tourism development strategies and plans
• Economic development studies and assessments
• Annual reports on competitor destination
• A wide variety of available information covering various elements of the destination
competitiveness model



This information may be sourced from relevant destination management’s organizations,
government departments, tourism research bureau, university research centre, economic
development agencies, industry associations, tourism enterprises, etc

The field research requirement involves:
• Meeting with representatives and assessing the relevant roles of all major organizations with
responsibilities and programs affecting the development of the destinations in significant
ways
• Identifying the mechanisms in place that govern these different responsibilities and facilitate
coordination and cooperation
• Inspection of the state of tourism resources
• Carrying out destination audit-specific research activities and instituting an on-going
research program to provide improved timely information for future audits

For an audit to be systematic, a structured process for conducting the audit needs to be developed.
While various alternative processes might serve this purpose, they ought to have certain basic
features in common if they are to achieve that goal of an audit

Destination Audit Process

The destination audit process starts with the analysis of the destination vision, goals and objectives,
and links them with desired outcomes. It is fundamental to establish the principal competitors and



the market structure as well as to identify destination competitiveness elements of major
importance.

The audit should then pay particular attention to these critical areas. The examination of the
destination’s environment will reveal important environmental trends, changes, and developments
that could have a significant impact on the destination.

The evaluation of the destination competitiveness dimensions is the most detailed and time-
consuming part of the audit process because it determines “what is”. With the next step, the
attention turns to “what should be”. The auditor, therefore, needs to appraise destination
competitiveness and performance.

The standard for making this appraisal was established in the first step, when the destination vision,
goals, and objectives were determined. The audit process continues with the recommendations for
enhancing and maintaining the destination’s competitiveness and sustainability, and to review the
destination’s competitive position and vision.

The destination audit needs a significant degree of impartiality and independence. It is also
important that the auditor is very experienced, knowledgeable, competent, and creative in order to
adequately evaluate destination competitiveness and to identify courses of action that will improve
the destination’s prospects.
Kotler (1988) notes that the marketing audit can be conducted in six ways:
1) self-audit;
2) audit from across;
3) audit from above;
4) company auditing office;
5) company task-force audit;
6) outsider audit.

Self-audit
The self-audit is the least expensive approach because it is conducted by the destination
management organization. If the main advantage is that the audit is carried out by someone already
very knowledgeable about the destination, the main disadvantage is that this organization often
doesn’t have sufficient time to do the audit and is not very critical of its own performance.
Recommendations are likely to involve only minor change. - However, for small destinations, this
may be the only viable option.

Audit from across
The level of independence is bigger with the audit from across than the self-audit because the audit
is not made by the destination managers but by someone different in the organization or area of
responsibility. The benefits from a familiarity with activities help to understand the
interorganizational relationships but their views may be biased by being either highly critical or not
critical enough.

Audit from above
The audit from above approach relies on more superior managers or organizations assessing
subordinate organizations or managers. Similar problems with independence apply and no one is
left to review the most important player in the destination – the organization or manager at the top.

Auditing office



The independence would be increased with the auditing office. The problem here could be that the
experience of this auditor may have been limited to only the one destination or, if responsible for
other audit needs in government, still have insufficient knowledge of the tourism sector.

Company task-force audit
The members of the task force could be drawn from a range of destination stakeholders including
representatives of the local community and various important interest groups, where no one
organization can dominate. This type of audit also tends to carry more weight and authority. A
potential disadvantage concerns the time it may take to complete an audit undertaken in this way
unless the task force is adequately resourced with research assistance and a strong chairperson.

Outside auditor
The outside auditor – shaped by specialized consultants – can ensure the most independent and
objective appraisal. They have a large knowledge of the issues facing other destinations and can,
therefore, adapt the strategies and solutions that have worked in other contexts.Nevertheless, this
system is expensive and a great deal of time must be spent becoming familiar with the destination to
begin with. - Moreover, with regard to the audit of destination, few such experienced consultants
are available.

Three benefits for a destination undertaking a destination audit:

1. reveal important environment trends, changes and development that could have a
significant impact to the destination
2. identify the destination competitive advantages and core competencies
3. chances to improve the destination overall performance from the recommendation and
corrective action taken

How SWOT analysis would be used during the auditing of a destination?

SWOT analysis used in determining the destination competitiveness in relative to the competitors,
market structure, destination competitive elements (attractors, infrastructures, services,
management), destination environment as well as the destination overall performance.

In terms of the Strengths, Weaknesses, Opportunities and Threats that can be derived from the audit
process.

Analyzing Competitors

Competitor analysis in marketing and strategic management is an assessment of the strengths and
weaknesses of current and potential competitors. This analysis provides both an offensive and
defensive strategic context through which to identify opportunities and threats.

Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework
in the support of efficient and effective strategy formulation, implementation, monitoring and
adjustment. Given that competitor analysis is an essential component of corporate strategy, it is
argued that most firms do not conduct this type of analysis systematically enough.



Instead, many enterprises operate on what is called “informal impression, conjectures, and intuition
gained through the tidbits of information about competitors every manager continually receives”.
As a result, traditional environmental scanning places many firms at risk of dangerous competitive
blind-spots due to a lack of robust competitor analysis

Competitor array

One common and useful technique is constructing a competitor array.

The steps include:
1. Define your industry – scope and nature of the industry
2. Determine who your competitors are
3. Determine who your customers are and what benefits they expected
4. Determine whet the key success factors are in your industry
5. Rank the key success factors by giving each one a weighting – the sum of all the
weightings must add up to one
6. Rate each competitor on each of the key success factor
7. Multiply each cell in the matrix by the factor weighting

This can best be displayed on a two dimensional matrix - competitors along the top and key success
factors down the side.

An example of a competitor array follows:

Key Industry Competitor #1 Competitor #1 Competitor #2 Competitor #2
Weighting
Success Factors rating weighted rating weighted
1 - Extensive
0.4 6 2.4 3 1.2
distribution
2 - Customer
0.3 4 1.2 5 1.5
focus
3 - Economies
0.2 3 0.6 3 0.6
of scale
4 - Product
0.1 7 0.7 4 0.4
innovation
Totals 1.0 20 4.9 15 3.7

In this example competitor #1 is rated higher than competitor #2 on product innovation ability (7
out of 10, compared to 4 out of 10) and distribution networks (6 out of 10), but competitor #2 is
rated higher on customer focus (5 out of 10). Overall, competitor #1 is rated slightly higher than
competitor #2 (20 out of 40 compared to 15 out of 40). When the success factors are weighted
according to their importance, competitor #1 gets a far better rating (4.9 compared to 3.7).

Two additional columns can be added. In one column you can rate your own company on each of
the key success factors (try to be objective and honest). In another column you can list benchmarks.
They are the ideal standards of comparisons on each of the factors. They reflect the workings of a
company using all the industry's best practices.

Competitor profiling



The strategic rationale of competitor profiling is powerfully simple.- Superior knowledge of rivals
offers a legitimate source of competitive advantage. The raw material of competitive advantage
consists of offering superior customer value in the firm’s chosen market. The definitive
characteristic of customer value is the adjective, superior.

Customer value is defined relative to rival offerings making competitor knowledge an intrinsic
component of corporate strategy. Profiling facilitates this strategic objective in three important
ways.
• First, profiling can reveal strategic weaknesses in rivals that the firm may exploit.
• Second, the proactive stance of competitor profiling will allow the firm to anticipate the
strategic response of their rivals to the firm’s planned strategies, the strategies of other
competing firms, and changes in the environment.
• Third, this proactive knowledge will give the firms strategic agility.

Offensive strategy can be implemented more quickly in order to exploit opportunities and capitalize
on strengths. Similarly, defensive strategy can be employed more deftly in order to counter the
threat of rival firms from exploiting the firm’s own weaknesses. Clearly, those firms practicing
systematic and advanced competitor profiling have a significant advantage.

As such, a comprehensive profiling capability is rapidly becoming a core competence required for
successful competition. A common technique is to create detailed profiles on each of your major
competitors. These profiles give an in-depth description of the competitor's background, finances,
products, markets, facilities, personnel, and strategies.

Media scanning

Scanning competitor's ads can reveal much about what that competitor believes about marketing
and their target market. Changes in a competitor's advertising message can reveal new product
offerings, new production processes, a new branding strategy, a new positioning strategy, a new
segmentation strategy, line extensions and contractions, problems with previous positions, insights
from recent marketing or product research, a new strategic direction, a new source of sustainable
competitive advantage, or value migrations within the industry.

It might also indicate a new pricing strategy such as penetration, price discrimination, price
skimming, product bundling, joint product pricing, discounts, or loss leaders. It may also indicate a
new promotion strategy such as push, pull, balanced, short term sales generation, long term image
creation, informational, comparative, affective, reminder, new creative objectives, new unique
selling proposition, new creative concepts, appeals, tone, and themes, or a new advertising agency.

It might also indicate a new distribution strategy, new distribution partners, more extensive
distribution, more intensive distribution, a change in geographical focus, or exclusive distribution.
Little of this intelligence is definitive: additional information is needed before conclusions should
be drawn. A competitor's media strategy reveals budget allocation, segmentation and targeting
strategy, and selectivity and focus.

From a tactical perspective, it can also be used to help a manager implement his own media plan.
By knowing the competitor's media buy, media selection, frequency, reach, continuity, schedules,
and flights, the manager can arrange his own media plan so that they do not coincide. Other sources
of corporate intelligence include trade shows, patent filings, mutual customers, annual reports, and
trade associations. Some firms hire competitor intelligence professionals to obtain this information.



New competitors

In addition to analysing current competitors, it is necessary to estimate future competitive threats.
The most common sources of new competitors are:
• Companies competing in a related product/market
• Companies using related technologies
• Companies already targeting your prime market segment but with unrelated products
• Companies from other geographical areas and with similar products
• New start-up companies organized by former employees and/or managers of existing
companies

The entrance of new competitors is likely when:
• There are high profit margins in the industry
• There is unmet demand (insufficient supply) in the industry
• There are no major barriers to entry
• There is future growth potential
• Competitive rivalry is not intense
• Gaining a competitive advantage over existing firms is feasible

Destination Competitiveness

Over a number of years, Ritchie and Crouch further refined the concepts and propositions
underlying the Calgary model, to a point where it has developed to its current form (Ritchie and
Crouch 2003). This more complex model has some 36 factors divided into five categories with
relatively complex interrelationships.

Chon and Mayer (1995) suggested enhancements to the five constructs on the Calgary model. They
proposed the inclusion of sub factors ‘substitutes’ for the appeal dimension, ‘entry/exit barriers’ for
the management dimension, ‘organisational design’ for the organisation dimension, ‘technology’
for the information dimension, and ‘value’ for the efficiency dimension.

The present model explicitly recognises demand conditions as an important determinant of
destination competitiveness. It also explicitly recognises that destination competitiveness is not an
ultimate end of policy making but is an intermediate goal towards the objective of regional or
national economic prosperity.

Understanding the sequence of events or phases that mark the history of the destination can also
assist in bringing a destination’s inherent potential and its impediments into sharper focus. Butler's
(1980) paper on destination development signified a fundamental turning point into life cycle
research, by intending to show the development of a destination in terms of the series of life stages
defined by infrastructures and number of visitors.

Hovinen’s (1981) work in Lancaster County, Pennsylvania, likely the first use and examination of
Butler's tourism area life cycle (TALC) model, concluded that a destination may be categorised by
the co-existence of several development stages, a stance supported by other tourism researchers.


In recognising this feature, Hovinen substituted Butler’s phases of consolidation (commonly
characterised by factors such as: early signs of declining visitor numbers; the emergence of
discontent towards tourism among permanent residents; some deprivation and restrictions placed
upon visitor activities) and stagnation (where an area is seen to have poorly maintained
accommodation and amenities; has a well-established image, but is no longer in fashion; has a
heavy reliance on repeat visitation traffic) with a stage termed ‘maturity’.

Having resolved that different destinations are affected by a recognised pattern of development,
some tourism researchers (Dwyer and Kim 2003; Enright and Newton 2005) argue that the
principal factors contributing to competitiveness will vary amongst destinations, and as such,
destinations must take a more tailored approach to enhancing and developing tourism
competitiveness, rather than adopting a single, universal policy or strategy. Of particular interest is
the relevance or importance of key competitiveness variables to destinations at different stages of
development or evolution.

Factors affecting destination choice

1. Cost and budget (Total trip expenditure)
2. Time constraint (length of stay)
3. Illness and disability
4. Visiting family and friends
5. Preferred activities
6. Climate (season)


UNIT 9:
THE FUTURE OF DESTINATIONS

Chapter objectives
• Discuss the future of destination in the form of ecotourism and sustainable tourism
• Identify and explain teh different types of carrying capacity
• Understand the general concept of distribution channel in a destination analysis
• Explore the relationship between information technology and a destination including the
concept of virtual reality and travel

Ecotourism and sustainable tourism

Ecotourism

Ecotourism is a form of tourism involving visiting fragile, pristine, and usually protected areas,
intended as a low impact and often small scale alternative to standard commercial tourism. Its
purpose may be to educate the traveler, to provide funds for ecological conservation, to directly
benefit the economic development and political empowerment of local communities, or to foster
respect for different cultures and for human rights.

Generally, ecotourism focuses on volunteering, or "voluntourism", personal growth and
environmental sustainability. Ecotourism typically involves travel to destinations where flora,
fauna, and cultural heritage are the primary attractions. One of the goals of ecotourism is to offer
tourists insight into the impact of human beings on the environment, and to foster a greater
appreciation of our natural habitats.

Responsible ecotourism includes programs that minimize the negative aspects of conventional
tourism on the environment and enhance the cultural integrity of local people. Therefore, in addition
to evaluating environmental and cultural factors, an integral part of ecotourism is the promotion of
recycling, energy efficiency, water conservation, and creation of economic opportunities for local
communities. For these reasons, ecotourism often appeals to environmental and social responsibility
advocates.

According to the definition and principles of ecotourism established by The International
Ecotourism Society (TIES) in 1990, ecotourism is "Responsible travel to natural areas that
conserves the environment and improves the well-being of local people." (TIES, 1990).

Martha Honey, expands on the TIES definition by describing the seven characteristics of
ecotourism, which are:

1. Involves travel to natural destinations
2. Minimizes impact
3. Builds environmental awareness
4. Provides direct financial benefits for conservation
5. Provides financial benefits and empowerment for local people
6. Respects local culture
7. Supports human rights and democratic movements such as:
• conservation of biological diversity and cultural diversity through ecosystem
protection
• promotion of sustainable use of biodiversity, by providing jobs to local populations

• sharing of socio-economic benefits with local communities and indigenous peoples
by having their informed consent and participation in the management of ecotourism
enterprises
• tourism to unspoiled natural resources, with minimal impact on the environment
being a primary concern.
• minimization of tourism's own environmental impact

Benefits of Ecotourism

There are plenty of valid ecotourism businesses, but to qualify, they have to provide long-term
benefits to a community and fulfil the following conditions, at the very least.

The benefits of ecotourism activities can:
• be educational by teaching about local plants and animals
• give you a deeper understanding of a local culture
• be spiritually uplifting and bring you closer to nature
• open you up to new ideas
• take you off the beaten path
• help you lose weight! (by getting you on your feet and on your bicycle!)

If your dollars are spent wisely, here are some of the benefits of ecotourism they will reap:
• money will go back into the community
• endangered habitats and biodiversity will be conserved
• people, both local and visitors, will become more aware of the surrounding environmental
wealth
• providing employment will ensure fewer people leave for the cities
• poor countries often sell their primary resources to survive - water, trees, minerals,
wildlife... so ecotourism provides them with a decent alternative source of income
• provide financial incentives that encourage local people to protect their environment

Beware, though, the benefits of ecotourism are touted by plenty of commercial firms that have no
business using the word. These 'less honest' businesses, by claiming to be involved in ecotourism,
would be guilty of 'greenwashing', pretending to practice ecotourism but focused only on profits.

When the benefits of ecotourism become liabilities, here's what can happen:
• people may be displaced to build resorts, like the Masai in Kenya
• population increases may put too much pressure on land, reducing opportunities for local
people to make a living off the land
• the same can happen if water is diverted from rivers to service tourist resorts
• overcrowding in tourist venues may actually endanger protected areas, as in the Galapagos
Islands, where too many tourists are visiting; in Tibet, the number of tourists visiting Tibet
is higher than the number of Tibetans who actually live in their country
• rare species can be endangered - unusual plants can be picked or trampled, vehicles and
planes can and do pollute
• energy sources can be depleted to accommodate tourist hordes, etc

Sustainable tourism

As more regions and countries develop their tourism industry, it produces significant impacts on
natural resources, consumption patterns, pollution and social systems. The need for
sustainable/responsible planning and management is imperative for the industry to survive as a
whole.

Sustainable tourism is tourism attempting to make a low impact on the environment and local
culture, while helping to generate future employment for local people. The aim of sustainable
tourism is to ensure that development brings a positive experience for local people, tourism
companies and the tourists themselves. Sustainable tourism is not the same as ecotourism -
Sustainable tourism is about re-focusing and adapting. A balance must be found between limits and
usage so that continuous changing, monitoring and planning ensure that tourism can be managed -
This requires thinking long-term (10, 20+ years) and realising that change is often cumulative,
gradual and irreversible. Economic, social and environmental aspects of sustainable development
must include the interests of all stakeholders including indigenous people, local communities,
visitors, industry and government.

Tourists who promote sustainable tourism are sensitive to these dangers and seek to protect tourist
destinations, and to protect tourism as an industry. Sustainable tourists can reduce the impact of
tourism in many ways, including:
• informing themselves of the culture, politics, and economy of the communities visited
• anticipating and respecting local cultures, expectations and assumptions
• contributing to intercultural understanding and tolerance
• supporting the integrity of local cultures by favoring businesses which conserve cultural
heritage and traditional values
• supporting local economies by purchasing local goods and participating with small, local
businesses
• conserving resources by seeking out businesses that are environmentally conscious, and by
using the least possible amount of non-renewable resources

Four Clusters Of Criteria For Sustainable Tourism

1. Community well-being
Sustainable tourism development supports and ensures the economic, social and cultural
well being of the communities in which tourism takes place. The criteria belonging to this
cluster are ranging from the generation of income over the enhancement of local traditions
up to the strengthening of participatory processes.

2. Protection of the natural and cultural environment
Sustainable tourism allows the use of natural and cultural resources for gaining economic
profit while at the same time guaranteeing that these resources are not deteriorated or
destroyed. Additionally, tourism is expected to be a driving force with regard to the
establishment or the enhancement of nature protection and the maintenance of cultural
values.

3. Product quality and tourist satisfaction
The quality of tourism products offered by a region is a key factor for the economic success
of tourism. It is not only characterised by material criteria like the quality of transport,
accommodation and food, but also by non-material criteria like hospitality or the quality of
experiences.

4. Management and monitoring

To ensure that tourism is developed in a way which is feasible and fulfils the criteria of the
first three clusters, adequate management and monitoring must be established. Sustainable
tourism development theoretically could be implemented without management and
supervision, but in reality is not likely to be ensured without.

Benefits of Sustainable Tourism Development

• Helping expand marketing reach by tapping into additional travel motivators, i.e. the desire
for more authentic experiences
• Enhancing customer loyalty by demonstrating best tourism practices
• Increasing the appeal of travel itineraries through “special experiences” such as access to
researchers, behind-the-scene tours, or enhanced interactions with local people
• Improving impact management, helping to ensure the preservation of destinations and
cultures for future generations, which equates to more attractive environments and better
products
• Providing access to standards recognized as best innovative practices within the travel
industry, helping businesses to meet higher standards through continuous improvement
• Adding value to local communities’ economies, helping them to safeguards the livelihood of
local and indigenous people

Carrying capacity

"Tourism Carrying Capacity" is defined by the World Tourism Organisation as “The maximum
number of people that may visit a tourist destination at the same time, without causing destruction
of the physical, economic, socio-cultural environment and an unacceptable decrease in the quality
of visitors' satisfaction”.

Where as Middleton and Hawkins Chamberlain (1997) define it as “the level of human activity an
area can accommodate without the area deteriorating, the resident community being adversely
affected or the quality of visitors experience declining” what both these definitions pick up on is
carrying capacity is the point at which a destination or attraction starts experiencing adverse as a
result of the number of visitors.

There are number of different forms of carrying capacity referred to in tourism, however this article
will focus on the four most commonly used.

1. Physical carrying capacity
This is the max number that area is actually able to support. In the case of an individual
tourist attraction it is the maximum number that can fit on the site at any given time and still
allow people to be able to move. This is normally assumed to be around 1m per person.

2. Economic carrying capacity
This relates to a level of unacceptable change within the local economy of a tourist
destination, it is the extent to which a tourist destination is able to accommodate tourist
functions without the loss of local activates, take for example a souvenir store taking the
place of a shop selling essential items to the local community. Economic carrying capacity
can also be used to describe the point at which the increased revenue brought by tourism
development is overtaken by the inflation caused by tourism.

3. Social carrying capacity

This relates to the negative socio-cultural related to tourism development. The indicators of
when the social carrying capacity has been exceeded are a reduced local tolerance for
tourism as described by Doxey’s Index of irritation.Reduced visitor enjoyment and
increased crime are also indicators of when the social carrying capacity has been exceeded.

4. Biophysical carrying capacity
This deals with the extent to which the natural environment is able to tolerate interference
from tourists. This is made more complicated by the fact that because it deals with ecology
which is able to regenerate to some extent so in this case the carrying capacity is when the
damage exceeds the habitat's ability to regenerate. Environmental carrying capacity is also
used with reference to ecological and physical parameters, capacity of resources, ecosystems
and infrastructure.

Weaknesses Of Carrying Capacity

The main criticism of carrying capacity is that is fundamentally flawed conceptually and practically.
Conceptually, the notion of an inherent carrying capacity assumes a stable and predictable world, a
"J-shaped" curve in the relationship between use level and impact, and techno-scientific view of
what are essential value judgments.

On the practical level, it is difficult to calculate a maximum number of visitors because this is also
dependent on other factors like the way in which the tourists behave ‘a large group of bird Watchers
moving through a landscape will have a different impact compared to a similar sized group of
school children.’

In the case of natural heritage like national parks, visitor impacts change with seasons. What is
important is the acceptability or appropriateness of these impacts, an issue that is largely dependent
on social and cultural value systems with science having an input.

Tourism distribution channel

The concept of distribution channels is not limited to the distribution of physical goods - Although
the principles are the same, the channel distribution for tourism differs significantly from those used
for manufactured goods. This difference stems from the nature of tourism services and their
production system and consumption patterns.

Tourism services require simultaneous production and consumption, meaning the product is not
normally 'moved' to the consumer. Further, the product is often sold in conjunction with another
one, such as airline tickets - Because of the perishability of most of the tourism products, many
traditional channels may not work.

While eliminating some of the functions and problems of transportation and warehousing, a
distribution channel in tourism should consider such reasons in reaching and catering to the market.
A tourism distribution channel may be defined as a total system of linkages between actual and
potential tourists and the suppliers.

The structure of the distribution system may be either direct (from the producer to the seller) or
indirect (the sale to the consumer through an intermediary).

As the definition implies, the challenge is how to get the customer to the consumption site (the
retailer), that is, to make it convenient and accessible - This unique feature raises the need for a
different kind of distribution system in tourism. Suppliers of tourism services and destinations may

use several different methods to distribute their goods and services. These include their own
channels (partially or wholly owned), selling through management and marketing contracts,
franchising, hiring sales representatives and using various intermediaries.
The intermediaries in a tourism channel of distribution consist of three main categories: tour
packagers, retail travel agents and speciality channels. Included in the latter are incentive travel
firms, meeting planners and convention planners, hotel representatives, association executive
marketing organisations, corporate travel offices and others.

New developments in direct access to global distribution systems make tourism arrangements
instant and more accessible. For example, agents can make the flight arrangements, get a rental car,
book a hotel room and buy a ticket to a show without ever using the telephone. In addition, there is
enough evidence to suggest that direct selling, away from the location of production and
consumption, is on the increase since consumers have more access to the world information system
of the Internet and other available information databases.

There are three main channel strategies used by marketing professionals and destination promoters
to stimulate demand:
• the pull strategy - the goal is to entice the consumer to buy the product. Certain inducements
are offered to make the potential tourist more interested or seek the appropriate distribution
channel for the product in question. For example, this includes frequent flyer programmes or
incentives for repeat visitors to a given resort
• the push strategy - The goal is to get the intermediary to sell the product to the consumer.
For example, tour operators and travel agencies that work with resorts and hotels, or
convention and meeting planners may be offered commission to increase bookings for a
given time period. Certain incentives, such as complimentary rooms or free tickets to
destinations, are among commonly used strategies.
• joint promotional efforts or cross marketing - useful and commonly employed strategies in
expanding the market base through intermediaries. For instance, hotels, restaurants and
attractions can utilise coupons in order to bundle products and bridge the gap among
offerings, or hotels working with airlines can arrange specific marketing packages to mutual
destinations.

Large tourism companies can become their own suppliers of products (vertical integration) - This
type of distribution needs a large amount of capital to be successful. Vertical integration allows
businesses to have and exert control over the entire channel of distribution through retail outlet
ownership and organisation of the distribution channel.

Functions of Tourism Distribution Channels

• Identify consumer’s needs, requests and expected experiences
• Assemble tourism products from different providers according to customer expectations
• Provision of coordinated and seamless tourism products
• Facilitate the selling process by reserving and issuing travel documents
• Reduction of prices by negotiating and pre-purchasing tourism products in bulk
• Improve inventory management by managing demand and supply
• Issue and deliver travel documentation, i.e. ticketing, vouchers, etc
• Assessments of quality of facilities and products
• Assistance in legal requirement for consumers (i.e. visa) and suppliers
• Facilitate communications between consumers and suppliers especially in multilingual and
multicultural environment

• Etc.

Information technology and tourism

The tourism industry can be seen as one of the first business sectors where business functions are
almost exclusively using information and communications technologies (ICT). Information
Technology (IT) and ICT has played an important role in the development of tourism.
Computerised reservations Systems (CRS) were among the first applications of IT worldwide.

• Computer Reservation System (CRS)
The technology works by using computers of special kind and leased telephone lines. The
travel agent is connected on-line to the central host computer system or CRS. This system
contributes to a great extent in increasing sales volume and giving precise information on
the availability and selling the products efficiently ensuring substantial profit gain.

• Global Distribution System (GDS)
GDSs are systems which distribute reservation and information services to sales outlets
around the world. Unlike the CRS that used solely by an airline or hotel chain, GDS
distribute more than one CRS to users who are usually travel agents. GDSs were formed
from several CRSs. Example; Amadeus, Galileo, Abacus, Worldspan and Sabre

Initially, CRS and GDS emerged from the hotel and the airline reservation systems respectively, but
meanwhile they also include other tourism relevant products such as holiday packages and other
means of transport. They provide the main links to systems of tour operators and travel agents.
Given that the internet has become already a primary source of information for planning travel and
holidays in the major tourism markets, it is critical for DMOs to achieve a broad distribution of their
online product, i.e. their internet portal. The first and most obvious task is to maximise the number
of visitors to the destination’s website.

The industry is one of the more successful areas of e-commerce because it is largely consumer
oriented and since services and the provision of information is at its centre. Werthner & Klein
(1999) suggest tourism is a hybrid industry since even though it is dominated by the provision of
information, essentially it is about a physical product. This requires the ‘seamless integration of
information and physical service, with flexible configurations of the physical and the informational
parts”.

ICT facilitates this integration and enables customisation of tourism products to suit the needs of
individuals. Due to changes in consumer behaviour of the tourist the market is becoming more
segmented with each potential consumer belonging to a number of market segments
simultaneously. Tourist operators need to be aware of these changes and be equipped to respond, or
better still, take a proactive approach. The challenge for the tourism operator is the provision of
accurate, localised data, increasingly via IT, whilst maintaining a relationship with the tourist.
Rather than being just transaction based longer term relationships need to be fostered and IT can
play a role in this relationship building.

The Internet and tourism

The Internet is especially relevant to tourism since it enables knowledge about the consumer or
tourist to be gathered, as well as vice versa. This gives ‘rise both to global visibility of destinations
and a global merging of market segments’. The use of web-based tourist information systems has
grown significantly.

Travel revenues on the Internet have consistently ranked highly in comparison with other goods and
services (Kadison, et al., 1998). The reasons cited for this prominence relate to the richness and
currency of information provided online and the breadth of the audience as well as the intensity of
competition and the emergence of new players with countless web sites supported by efficient
transaction support. Online technologies within the tourism industry have significantly impacted on
communications, transactions and relationships between the various industry operators and with the
customer, as well as between regulators and operators.

Clayton and Criscuolo (2002) argue that technology behind the modern information society,
particularly by way of the Internet, has bought about four key changes for the way in which
business is conducted. These changes, which apply equally to the tourism sector, are:
1. the ability to turn ideas into marketable innovation for a wide range of customers, with
reduced buyer search costs and costs of access to markets;
2. increased speed to market and access to new product offerings via the Internet;
3. changed processes and the sharing of information within and between organisations; and
4. a shift in the balance of power between suppliers and customers due to the increased
availability of information.

Benefits of the Internet

Benefits from IT, particularly the Internet for tourism, are substantial. These benefits are no longer
dependent on proprietary information systems as has been the past experience, since the Internet is a
commonly available technology. Dogac, et al, (2004) considers the Internet provides many
advantages to players in the tourism industry. Some of these benefits are:
1. enhanced level of collaboration between tourism operators, for example, between travel
agencies and service providers;
2. pre-arrangements with respective suppliers no longer necessary;
3. web service discovery will identify alternatives, enabling holiday packages to be
constructed;
4. greater negotiation of service to be purchased and customization of services/activities; and
5. generally greater levels of interoperability with internal and external applications.

Virtual reality

Virtual reality (VR) allows the user to interact in realistic three-dimensional full immersive
situations and environments generated by a computer that responds to human movements. The user
can navigate, and interact with the virtual environment and directly manipulate objects within the
environments. A virtual environment is a virtual reality application – the cosmos, a landscape, an
imaginary space, the inner side of a painting, a city – that allow users to navigate and interact with a
three-dimensional, computer-generated environment in real time. It is the user to believe he is in
reality, fully immersed in this unique world.

Virtual Reality: Field of Application

1. Arts
Virtual reality and emerging technology has revolutionized the traditional concept of
perspective visualization of viewpoints, the composition and perception of time and space.
Moreover, it has generated a rupture with the precedent art forms, allowing the emergence of
a new way of making art, a diverse style of creativity and above all, the crystallization of a
revolutionary artistic language

2. Cultural heritage
Virtual reality is useful for reconstructuring cultural, historical and archaeological sites to
stimulate environments and cities which no longer exist. What at the beginning appears as
ruins or simple historical structures and barren landscaping can be transformed into
animated places – bustling with life and personal experiences

3. Architecture/design
Virtual reality presents many interesting features for disciplines such as: architecture and
design. It is a valuable visualization tool for: structures, buildings, interior design, habitats,
ambiences and environments. It is also a beneficial tool for both planning and design and
evaluating the planning and design process with customers. Virtual reality can demonstrate
how a planned construction fits into an environment and how it is intended to be built.

Virtual Travel

Virtual tourism, the activity of "visiting" sites of interest over the Internet without having to
physically travel to them, can take on many forms. An early form of virtual tourism presents the
user with a slideshow or video which explores a limited area, for example, a museum. Some
museums offer a 3D graphical interface that allows one to explore the attraction site using simple
directional camera controls.

Most of these early efforts met with limited success and didn't really take off for various reasons,
among them the limited ability to immerse the user in a believable environment. Tourist can choose
to sit at their home office and use various tools and internet and do a virtual travel. Virtual travel
agencies on the net which offers a tour through its gallery and offers a great deal of information. For
example; free package for a week which can be download. After going through this demo, the user
can see the real stuff, if he registers online and pays for it.

Expanding on the concept, some sites now offer free video tours of a city; the user is invited to tour
a city on Street View, and at specific points, watch a short user-created video of the place. With
Google taking over YouTube, users can easily embed videos hosted on YouTube on the Google
Maps service, offering an engrossing interactive environment for the new breed of virtual tourists.

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