CHAPTER 7

The Role of Effective Destination Management in Managing Tourism

Introduction

This chapter explores the role of effective destination management in managing tourism for long-term success and sustainability. It argues how overtourism may be reversed or avoided through effective destination management. Typically, this involves engaging with key industry stakeholders and local residents as well as handling visitor flows more efficiently throughout the day or the year. This in turn can help preserve the local residents’ quality of life while at the same time delivering a high-quality experience for visitors.

In order to deliver positive tourism growth in the future, destinations and DMOs need to prepare for recovery post the coronavirus pandemic by focusing on all three pillars of sustainability in order to manage tourism destinations in a responsible manner. This requires an appropriately structured and funded DMO.

Destination Management Organization (DMO) Structure

The UNWTO defines a DMO as a “leading organisational entity which may encompass various authorities, stakeholders and professionals and facilitates partnerships toward a collective destination vision” (A Practical Guide to Tourism Destination Management | UNWTO 2018). DMOs tend to vary significantly in terms of their governance, organizational structure, remit, and funding model. Some are a single public authority while many are based on a public–private partnership model and others are purely private entities. Furthermore, DMOs can operate at local, regional, or national level, and some destinations do not have a DMO. DMOs that rely on funding by key private sector stakeholders can face a major dilemma when trying to address overtourism, especially if that involves imposing regulations and restrictions on private sector operators in order to limit or reduce visitation from certain segments including coach groups or cruise passengers.

According to the UNWTO: “The DMO emerges as a key player in the development and management of tourism at the destination level, although its mandate and scope of action will be determined by its context, maturity of the destination, resources and other factors” (A Practical Guide to Tourism Destination Management | UNWTO 2018). In summary DMOs are as diverse as destinations. However, traditionally, the primary purpose of DMOs has been destination marketing and promotion. As destinations have evolved and the tourism sector has grown the remit and responsibilities of DMOs have become increasingly broad, but often with limited additional funding and decision-making power.

DMOs are frequently having to take on the responsibility as a mediator between the public and private sectors as well as the local host population, especially when it comes to dealing with overtourism. In recent years, it has become increasingly clear that DMOs need to collaborate more widely and influence a wider and more complex range of stakeholders in order to be successful. Tourism can no longer exist in isolation from the wider local socioeconomic and environmental context, but must form an integral of any long-term plans. A DMO must achieve strategic buy-in from all key stakeholders as well as the local host population and politicians, which requires an appropriate governance model.

The UNWTO considers that effectively managed and coordinated destinations are more likely to have a strong evidence base enabling them to stay on top of trends. This allows them to develop innovative products in order to deliver a high-quality visitor experience and remain competitive (A Practical Guide to Tourism Destination Management | UNWTO 2018). Given the inherent complexity of the tourism industry, some of the key roles and responsibilities of a successful DMO should include some or all of the following:

Effective Destination Management Principles

From the early days of mass tourism, it has been recognized that the pressures caused by tourism can damage the places that tourists travel to visit in the first place. Today tourism is seen as a right by many, and economic advances and commercial opportunities have fueled the rapid growth in international tourism owing to global mass mobility. Thus, the challenge for today’s destination management professionals is to manage the sector effectively and responsibly to avoid overtourism caused by congestion and overcrowding from reoccurring. Many destinations could learn how to better manage visitor flows from major theme park operators such as Disney. Not only are their parks pristine and well maintained, but they excel at crowd management in order to create the best possible visitor experience and maximize spend, which in turn means more on the bottom line.

While many destinations are successful at building new museums, establishing nature reserves and so forth, unfortunately, many fail to get the basics such as transport, parking, signposting, and other visitor-related infrastructure right. This is because the responsibility for these tend to rest with the government or local authority (rather than the DMO) who often lack an in-depth knowledge of the travel and tourism sector. Undoubtedly, this infrastructure forms a key part of creating an authentic and high-quality satisfying visitor experience, so if the infrastructure is not fit for purpose, it is unlikely that a visitor will return. In the worst-case scenario, they will probably share their bad experience instantly across social media with their friends and peers. Investing in the basic tourism infrastructure should be common sense for most destinations be they small remote islands or large iconic destinations such as Venice. One of the key challenges is that most destinations are led by politicians who prefer large flagship projects over implementing an efficient and visitor-friendly parking system or introducing controversial tourism tax/levy to fund investment. A holistic approach to destination management is required in order to avoid overcrowding and increasing visitor numbers from becoming a burden for the destination, its stakeholders, residents, and local community.

Tourism is a key economic driver in many destinations around the world, but it needs to be taken seriously at all levels of government in order to be sustainable and achieve the desired economic outcomes. This also means taking environmental and social impacts into account. Many governments and local authorities underestimate and fail to recognize tourism as an industry owing to its highly fragmented nature, which in turn makes it a challenge to manage and regulate.

Putting in place an appropriate regulatory and legislative framework to avoid overtourism requires strong leadership, collaboration, and building consensus among key industry stakeholders and with the local community and residents at the destination level. This can be difficult to achieve for a DMO without an appropriate governance model. Many politicians do not fully understand the dynamics of the tourism sector and the concept that more visitors do not necessarily equate to a higher economic contribution and may indeed result in higher social and environmental costs. The question is, who is in charge of protecting destinations especially at the local level where resources are often lacking?

With regard to governance, it is useful to adopt a model that considers a “whole-of-destination” approach, which may take the form of a Tourism Destination Task Force or Steering Group. Ideally, this should comprise key public and private sector stakeholders as well as community representatives who meet on a regular basis to discuss tourism issues, challenges, and solutions and ultimately achieve a joined-up approach. One of the advantages of such a governance model is that it facilitates that tourism becomes embedded and prioritized with other economic develop activities and planning considerations without getting lost within the wider destination. Such a model also enables a DMO to provide strategic advice and guidance on tourism product and infrastructure development as well investment requirements.

Currently, building a resilient and sustainable tourism sector requires a shift toward maximizing the economic benefits through attracting the right kind of visitor while at the same time seeking to minimize any negative environmental and social impacts. This involves a shift away from marketing and promotion toward integrating tourism with the destination’s wider land-use planning, housing, retail, and mobility strategies. Amsterdam, Barcelona, Copenhagen, Lisbon, and Paris have taken steps in the right direction as highlighted throughout this book.

According to The World, Amsterdam adopted Kate Raworth’s Donut economic model as part of its coronavirus recovery plan for people and the planet (Raworth 2020). A key element of donut economic thinking is no longer using GDP/GVA as a proxy for society’s success. Post pandemic, Amsterdam is not looking to instantly replace the 20 million annual visitors, but rather seeking to make the city healthy and resilient by focusing on affordable housing and jobs for the community.

Traditional DMOs with a marketing and promotion focus are not set up nor do they have sufficient funding to take on a wider leadership remit as well as the responsibility for monitoring and regulating the tourism industry. However, overcoming overtourism requires governments and local authorities to make bold decisions and take actions (often regulatory) that are not always going to be popular with all stakeholders. An example of such bold action is the Seychelles whose tourism minister announced a two-year ban on cruise ships in May 2020 (Marcus 2020). Officially, this was a move to minimize any chance of a second wave of coronavirus infections, but it could also be seen as a more strategic move to minimize the future number of visitors and in turn potentially avoid overtourism. Similarly, Barcelona City Council recognizes that it has limited influence over Barcelona Port, which makes it difficult to agree a joint strategy on how to tackle overtourism caused by daytrippers including cruise passengers. To put this into context, in 1990 Barcelona received just 115,000 cruise passengers, but by 2019 this had increased to 2.9 million making Barcelona Europe’s busiest cruise port and the fourth busiest in the world. On 139 days of the year the number of cruise passengers visiting the city exceeds 10,000 with the busiest day of the week being Friday. Hence, Barcelona Port is probably the most influential stakeholder when it comes to managing the volume of daytrippers visiting the city (Burgen 2019).

It is evident that effective destination management and good governance is required in terms of planning and managing the complex infrastructure requirements for tourists in order to accommodate future long-term growth in visitor numbers. An effective destination management approach needs to take into account seasonality patterns including peak periods and how these can be managed through dispersal of visitor flows to other periods of the year or alternative geographical locations to avoid congestion. However, investment in new/or overloaded infrastructure and tourism products may be required to achieve such diversification and de-seasonalization. This requires a move away from the traditional marketing and promotion-focused DMOs toward managing visitors effectively. Many DMOs are partially or fully funded by private sector stakeholders who may not have the same goals as the destination overall, for example the primary objectives of airports and cruise ports will be to maximize the number of passengers at all times, which may contradict a destination’s desire to reduce visitor flows at certain peak times. The voice of the local host population is often not heard, which can lead to discontent when visitor numbers increase rapidly, and the destination approaches saturation point or its carrying capacity.

Stakeholder Influence and Engagement

In order for a destination or DMO to engage effectively with stakeholders, it is critical to understand the level of influence the various identified stakeholders have. The tourism sector carries a high reputational risk for politicians and governments if tourism goes wrong. This has been shown during the coronavirus pandemic, which has demonstrated that both too much and too little tourism are equally undesirable. It is therefore essential for DMOs to engage effectively with the most influential stakeholders in order to build consensus and collaborate to achieve the desired destination goals and outcomes for the long term.

Many DMOs fail to understand who the most influential stakeholders are—most will argue that it is the government, but that is not necessarily always the case.

Stakeholder Influence Mapping

Whenever working on a strategic project that requires stakeholder buy-in in order to implement the identified actions, the starting point is usually a destination capsule situation analysis, which will include a stakeholder mapping exercise to identify who the most influential stakeholders are. In the case of Iceland, the conclusion was that the most influential stakeholder was Icelandair Group, which was not very popular with the public sector. However, at the end of the strategy process Icelandair Group did not buy into the strategy and commissioned a separate piece of work, which meant that the strategy recommendations were never implemented in full.

A useful tool is to conduct a simple stakeholder mapping exercise aligned to the destination’s strategic goals in order to identify the most influential stakeholders including those that may need to be convinced and influenced to ensure the destination’s long-term success. Table 7.1 is an example of a stakeholder mapping exercise completed as part of a Long-term Strategy for the Icelandic Tourism Industry in 2011 to 2012 (i.e., prior to the aforementioned rapid growth resulting in overtourism in specific places at certain times of the year).

On the top line the table shows the selected indicators against which each key stakeholder was assessed with each identified stakeholder/stakeholder groups shown down the side. A simple scoring method was used with one dot equating to little influence and three dots implying a high degree of influence. The stakeholder mapping exercise was completed in close collaboration with the client Promote Iceland and showed the level of influence of various tourism industry stakeholders in Iceland, based on their ability to control and influence the tourism strategy objectives as well as their influence on policy, budget, and access to funding.

It is clear from Table 7.1 and the accompanying scores that there were a number of very influential large stakeholders in Iceland at the time (namely, Icelandair Group, the Ministry of Industries and Innovation, Visit Reykjavík, and the Icelandic Tourist Board) who were dominating the voice of the tourism industry. It was also evident that the smaller industry stakeholders, who are often private sector micro- or SME businesses, tended to have much less influence, even though they are crucially important in terms of the provision and delivery of services to visitors. It is also worth noting that there were no cruise industry or local community representatives included as stakeholders at the time, even though there was a certain level of awareness that local residents, especially in Reykjavík and the south, had concerns about the rapid growth in tourism.

It was evident that the Icelandic tourism industry was made up of a few large dominant players as well as a plethora of innovative entrepreneurial micros and SMEs offering a huge range of activities and products. The micros and SMEs formed an important part of the supply chain and had a crucial role to play in supporting livelihoods through job creation especially in the more rural and remote areas. At the time there was no consensus nor shared goals, which resulted in lack of coherence among stakeholders and prevented them from working in a collaborative manner in order to achieve consensus. As mentioned, at the time there were voices of concern that the tourism industry was growing too rapidly and that it was too much for the small local resident population to cope with. Nonetheless, possibly due to lack consensus among the industry stakeholders, the number of tourists to Iceland increased at an almost exponential rate largely driven by increased airlift and destination reach by Icelandair as well as a number of low-cost carriers combined with growth in cruise ship calls and passengers. At the time it was recommended that in the future tourism in Iceland needed to be developed in a manner that was appropriate to the scale and size of the country and its small population. The focus needed to be on value, economic growth, and profitability rather than purely volume.

Coincidentally, the 2012 strategy recommendations included capping the number of annual visitors at one million, limiting the size and number of cruise ships and introducing a conservation fee to pay for tourism-related infrastructure development outside the heavily visited Golden Circle to encourage wider dispersal of tourist flows across the island. If these recommendations had been implemented at the time, Iceland would probably not have faced overtourism to the extent it has.

The 2012 Long-term strategy for the Icelandic tourism industry considered that with gradual growth in volume, it would be possible to reach one million tourists per annum in five years and around 1.5 million by 2030 (Long-term strategy for the Iceland tourism industry 2012). At the time, Iceland knew where it was at, but not where it wanted to be in 2030? It was recommended that sustainability and economic growth should be at the core of the future of tourism in Iceland and many stakeholders agreed. But, unfortunately, there was no clear consensus owing to the previously mentioned lack of strategic stakeholder alignment. However, there was a lot of public interest in tourism locally at the time and during a public consultation exercise tourism came out as the top topic. In retrospect, it is interesting to note that Iceland reached around 2.3 million tourist arrivals in 2018 representing an average annual growth rate of 23.8 percent over five years. Although, this subsequently dropped back to around two million in 2019, it illustrates how lack of stakeholder alignment and consensus can be a major factor in overtourism, especially when the concerns of the local resident population are largely ignored. Fortunately, for Iceland the new 12-year National Infrastructure Plan introduced in 2018 appears to take a long-term view on infrastructure development at public sites of natural and cultural heritage under pressure from tourism owing to the rapid growth of the sector since 2010. This plan supplemented by a dispersal strategy that seeks to distribute visitors more widely across Iceland and away from the key hot spots in the south. Hopefully, this is not too little or too late for Iceland.

Table 7.1 Stakeholder influence mapping Iceland

Shift DMO Focus Toward Effective Management of Tourism Sector

As destinations attract a growing number of visitors and get closer to reaching saturation point or their carrying capacity, the need for destination marketing and promotion becomes less important. At the same time effective management of wider destination issues becomes increasingly important in order to mitigate and avoid overtourism. According to the Travel Foundation there is a growing need for targeted interventions to protect tourism assets worldwide with a focus on the root causes of overtourism. As described earlier in this chapter, this will require more DMOs to move away from purely marketing and promoting the destination to managing the tourism sector for maximum local benefit.

When Barcelona’s tourism department published its Barcelona Tourism for 2020 in March 2017 (Barcelona Tourism for 2020—A collective strategy for sustainable tourism 2020), there were no signs of a global pandemic that would bring tourism to a virtual standstill at the beginning of 2020, rather the city was faced with how to manage a destination that had become a victim of its own success with a sustained increase in visitors having transformed the city’s urban fabric, mobility, and economic activities as well as the daily life of many neighborhoods. Barcelona’s territorial features make it a small city in geographical terms (101km²) with a high population density of 15,887 residents per km². With visitors tending to concentrate in key iconic locations it is not a surprise that rapid growth in visitor numbers led to congestion and overtourism in certain public spaces. Thus, the strategy set out to challenge: “a change from managing tourism in the city to managing the tourist city, making it compatible with other needs of a multiple, complex and heterogeneous city such as Barcelona” (Barcelona Tourism for 2020—A collective strategy for sustainable tourism 2020). It went beyond traditional tourism strategies that seek to promote a destination in order to attract an increasing number of visitors to switching the focus to governance and management of congested areas. Unusually, for a tourism strategy and critically, the strategy development process included consulting with over 200 representatives from local resident associations, companies, trade unions, cultural and social organizations who all became part of the new debate and vision for tourism in Barcelona. The plan looked at tourism’s potential for local development and considered how this could be integrated with territorial business and social initiatives in order to stimulate the multiplier effect from tourism and adding value at local level. Sustainability was considered essential to ensure that tourism remains an innovative and enriching activity for the City of Barcelona. However, the absence of tourists owing to the coronavirus pandemic means that the Barcelona Tourist Board had to re-evaluate its priorities toward a more moderate way of tourism initially targeting the domestic market and neighboring international markets as well as focusing more on specific sectors.

The WTTC recognizes that there are no simple solutions to overtourism nor a one-size-fits-all model. However, it lists the following as possible solutions to overtourism in the short-, medium- and long-term (McKinsey & Company 2017):

The previously mentioned solutions have been discussed and highlighted with case studies throughout this book and it appears that a combination of such measures can help reduce the likelihood of overtourism reoccurring in the future. However, perhaps equally important for DMOs, is the need to communicate and engage with key industry stakeholders as well as the local host population and community to ensure that the tourism sector delivers maximum benefits and contributes toward a balanced economy.

Using the Coronavirus Pandemic Crisis Management to Address Overtourism

The coronavirus pandemic is providing destinations previously suffering from overtourism with a once-in-a-lifetime opportunity to reset and refocus their tourism sector ensuring that sustainability and community are at the core going forward.

A golden rule in any crisis is to start planning for recovery as soon as that crisis starts. Winston Churchill famously said: “Never let a crisis go to waste.” The coronavirus pandemic has put the tourism industry into perspective and never has international cooperation and responsible leadership been more important. The UNWTO believes that tourism will play an important role during the recovery phase when it eventually comes. The coronavirus crisis made it clear that the tourism value chain touches upon every part of society. This makes tourism uniquely placed to promote solidarity, collaboration, and concrete action across borders during challenging times and also ideally positioned to once again drive future recovery.

The following crisis recovery destination management checklist can act as a useful tool for DMOs looking to ensure that their destination emerges stronger and more resilient post the coronavirus pandemic. It includes three key phases (Hindle 2020):

DMOs will need to consider what is travel likely to look like during the recovery phase and post the coronavirus pandemic? A CNN Travel article dated 30 March 2020 highlighted that people are still going to want to travel but may be more cautious in their choices and wishing to be reassured that traveling is safe. Cheaper prices are almost inevitable during the early stages of recovery. The cruise sector is particularly adversely affected, and it is likely to be very difficult to attract new customers even with heavily discounted prices owing to the high infection rates recorded on cruise ships. Hygiene and cleanliness have become crucial issues that will need to be addressed by operators across the travel and tourism industry (Hunter 2020).

Increased focus on sustainability is likely to be one of the positive outcomes of the coronavirus crisis. Prior to the pandemic overtourism, sustainable travel and the environment were among the most talked about topics facing the industry. The travel and tourism industry now has the opportunity to recover and regenerate in a much more responsible and ethical way and respond to consumers’ growing concern with sustainability, especially in terms of climate change and social inclusivity.

Key Takeaways