Destination Enabled Marketing
Unlocking new competitiveness in the traditional destination marketing value chain for attractions and hotels.
With digital trends rapidly working against localized content and marketers, traditional destination marketers have a unique opportunity to shift their way of working to own the visitor experience and provide differentiated outcomes to attractions, hotels, and guests.
Global Digital Pressures on the Local Travel Economies
Two decades after Web 2.0 and the advent of online travel during the dot-com boom, the destination marketing industry is still transitioning from convention focused strategies to experience-based strategies which benefit broader local economies and a more diverse (and demanding) membership base.
Today’s destination marketers have it tough. New technologies and changing traveler expectations are forcing destination marketers to evolve their business models to stay relevant and less dependent on public funding. They are being challenged to go beyond brand marketing and member management to provide greater community value by providing shared and enabling services, such as digital web and mobile tools, ticketing services.
Until recently, destinations primarily competed against other destinations for travelers and their share of spend. Now they also compete against a parade of technology giants that command more substantial revenue splits as they control more of the experience. There is a possible future where a family of four spends a long weekend in your destination, and it generates little to ZERO local economic value. Those who own the visitor experience will own the value chain and revenue creation.
The chasm is widening between the competitiveness of local content and what Google’s search algorithm returns. The battle-ground for travel is the search bar on your internet browser. Our research shows that non-localized digital companies (e.g., OTAs and content publishers) beat local 9:1. Try it yourself, Google, “Things to do in [your city]” and how many sources in the first 10 are from your city? Even best in class cities like NYC and Las Vegas average 1 or 2 out of 10, three at best if you count local, for-profit ad sites.
Destination marketers are fighting to remain digitally relevant while for-profit digital companies are playing to win. The winners for page one SERP market share will have the best and most engaging content. This is where destinations have a clear advantage that is ripe to capitalize on.
The Business Model of Marketing a Destination
The founding principles of destination marketing hold today. The city of Detroit, back in 1895, created the first CVB designed to promote itself to conventions. For as much as the industry has evolved, the consumer’s expectations and supporting technologies have evolved considerably faster.
CVBs (aka DMOs) brought coordinated economies of scale in advertising their destination. Advertising is as essential today, yet, destination marketing is a bit more complicated. Or as Chris Fair of the destination branding, marketing, and placemaking consultancy Resonance is quoted in The Place Brand Observer, “The biggest issue for destination marketers and branders continues to be figuring out a way to justify the return on investment to politicians and policymakers. The equation used to be relatively simple: x media spend = y visitors or investment. It’s no longer that simple.”
Good times are a poor forcing function for innovation and destination marketers have ridden the successes of an excellent economy for the last 10+ years and haven’t yet been forced to question the traditional model for how it advocates for its constituents and pleases visitors. The issue when a provider sits between its two core customers (see figure 1); it either becomes a marketplace or a bottleneck. In the DMO’s case, it's more like a benevolent bottleneck. Each additional visitor costs incrementally more than the last and the control of marketable content is limited and controlled.
When revenue contributions are not tied to the turnstile, membership renewals get more challenging. Hotels and attractions feel they are subsidizing the larger destination marketing effort and have to spend again to capture visitors once they arrive. Collective destination marketing arguably lowered the acquisition costs of each visitor to any attraction. Yet, members are increasingly finding competitive alternatives in the private space (e.g., OTAs) which provide clear and meaningful ROI.
The pendulum, however, might just be swinging back as destinations push their operating models to offer enabling benefits to attractions so they collectively can be more compelling to visitors and competitive against other cities and technology companies.
Unblocking Growth — Full Potential Destination Marketing
Differentiated outcomes are the result of leaning into an operating model that fosters collaboration as much as it funds advertising. More collaboration on content allows a destination to speak to and appeal to more visitor demographics. Traditional destination advertising is boiled down to bold, but vanilla, storytelling. Today’s visitors, millennials, in particular, are “experience hunters and gathers”. They don’t think about going to a destination website to plan, book, or guide their experience. Decisions are made on social media and Google. The more vibrant and unique content a destination has the more digital market share it can demand.
In an enabling model (see Figure 2), a destination would publish its agenda (annual marketing objectives, themes, and comms plan) for its members to use as a roadmap for their marketing initiatives. Members create and market content in a coordinated effort with massive social marketing impacts. Destinations and their advertising teams/agencies would have access to a large asset pool of rich, authentic, marketable content to provide the experience hunters exactly what they are looking for; local authenticity with potential to be a sharable memory.
If the principles of the traditional model were to advocate and advertise for a destination, the principles of an enabling model are for the tourism board to set a strategy and invest in platforms that enable members’ growth and provide visitors a unified experience. The results of this would be improved visitor satisfaction and growing destination memberships.
In the gap to parity and the gap to excellence (see figure 3), destinations have an opportunity to play to their strengths vs. paying their competitors. To do this, destinations need to invest in an enabling business model and supporting technologies (like VAMONDE) which promote the creation and distribution of content on shared platforms. Friction in member renewal processes would ease when hospitality partners see the result of higher quality content via SEO/social, more significant economies of scale in booking, and unified visitor experience and analytics platforms.
DMO Maturity Model — Delivering Outstanding Experiences
Investing in not merely making it easier for visitors to interact with destinations, but making traveler’s visits more memorable plays towards the strengths of local via authenticity, guided experiences, and personalization.
The roadmap to full potential destination marketing isn’t long, but it leans on new thinking (see Figure 4). Shifting gears from destination marketing to empowering destinations follows the maturation curve that puts the traveler experience first. Great experiences are why visitors travel in the first place, and experiences become shared stories with friends and family (heavily on digital). These become the memories that make us want to return. Destinations must evolve from being visitor-centric (we’ll take care of you) to brand-centric (other people think we’re great) to experience-centric (you’ll have a great time here).
Experience is the centerline of the road map. And experiences are the one thing that DMOs and their attractions have a clear competitive advantage over OTAs. Trip Advisor nor Airbnb can replicate the authenticity that comes from local sources. Great local experiences are differentiating, scalable, and easier for destinations to create than others outside can produce.
If a destination can think and operate beyond a traditional command and control model, like VAMONDE’s customers in Chicago, Virginia, Grand Rapids, Tucson, and dozens of others, then both attractions and visitors can be the big winner, when they get great local experiences that connect them from one attraction to the next.
Thanks for reading. I look forward to hearing your comments, and I will be writing more about full potential destination marketing in the coming weeks, be sure to follow us on Medium, LinkedIn, or Info.VAMONDE.com.
