The Future of Destination Management Systems essay
It is not a secret that tourism industry is one of the most effective spheres of human activity not only in the United States, but also in other countries of the world. Tourism industry plays “an increasingly important role in the economies of many countries” as it contributes not only to the economic growth, but also to the creation of jobs. In other words tourism business provides employment and income (OECD 129). Today tourism industry is considered to be a growth sector which is focused on global and national competition. That is why it is necessary to pay special attention to the quality of products and services, as well as to the quality of human resources (Buhalis, 2000: 99). Destination management systems can help tourism organizations to succeed in the competitive market. According to Bruce Prideaux, Gianna Moscardo and Eric Laws, “destinations emerge as amalgams of products, facilities and services that satisfy the need for traveling and generate the motivation to visit”(2006: 62). Although managing destinations is a rather difficult task, because it demands to bring stakeholders and local actors together, effective planning, marketing, management and coordination of destinations can help to succeed in the competitive market of tourism industry. Due to the rapid development of new information technologies, which are successfully used in strategic and operational management of the tourism business and destinations, there is a necessity to evaluate the effectiveness of destination management systems (DMSs). The major goal of this paper is to discuss critical success factors and innovative applications that destinations can employ to achieve strategic competitive advantage, paying special attention to the role of DMOs and DMSs.
THE MAJOR ROLE OF DESTINATION MANAGEMENT ORGANIZATIONS IN TOURISM BUSINESS
In order to discuss the role of destination management organizations in tourism industry, it is very important to define the term “destination”. As destination can be viewed as a tourist product, destination management is often focused on “governmental and functional competences, best executed by the public sector” (Koppen, 2009: 5). Moreover, it is found that there are three levels of destination at which a destination management organization functions: the national level, the regional/state level and the urban/municipal level. The major roles of destination management organizations are related to all destination levels (Ritchie & Crouch, 2003: 184). Referring to H. Werthner and Stefan Klein, “the tasks of DMO are manifold” including not only destination management, but also “planning activities, marketing/ branding of the entire destination, training and education” and daily operations (1999: 47). The major role of DMOs is in promoting tourism industry in destination through maintaining the socio-cultural, economic, political and environmental basis. For example, in Austria, DMOs create the so-called hierarchical network, which starts with the local tourism boards as the lowest level and ends in international tourism organizations at the national level. Due to the development of new information technologies, DMOs provide online services, with direct distribution and selling of tourism products (Werthner & Klein, 1999:48).
According to Maria Giaoutzi and Peter Nijkamp, the major goal of DMOs is “to promote a certain area as a tourism destination whilst preserving its social and natural environment, its cultural background and its economy” (2006: 22). Although there are some differences between DMOs, practically each destination has its DMO. Moreover, it is found that DMO may be represented as government organization and non-government organizations (or simple tourism offices). Both types of DMO are “in suitable position to gather information about the local, regional and national tourism product” with the major goal – to effectively distribute this information worldwide or to be involved in partnerships with other companies (Giaoutzi & Nijkamp, 2006: 22).
Moreover, DMOs effectiveness can be strengthened by public policies, which will support them in such activities as marketing and advertisement, “monitoring tourist flows, using distributed reservation/accounting systems, assessment of customers’ satisfaction, design and implementation of new tourism packages, planning initiatives through information collection” (Giaoutzi & Nijkamp, 2006: 22).
THE SIGNIFICANCE OF DESTINATION MANAGEMENT SYSTEMS IN DESTINATION MANAGEMENT ORGANIZATIONS
It is found that today destination management systems (DMSs) play an important role in destination marketing organizations (DMOs). First of all, DMSs help DMOs to achieve the established goals through collecting and coordinating of the appropriate information about a particular destination, according to Abraham Pizam (2010: 162). Secondly, DMSs can be viewed as the “major promotion, distribution and operational tools” in the process of work (Pizam, 2010: 162). Thirdly, DMSs give the tourists an opportunity to make a correct decision in choosing destination, taking into consideration the most important features of the region: climate, historical and cultural traditions, financial issues, etc. According to Stephen Page and Joanne Connell, the best examples of well-developed and organized DMSs include the Australian Tourism Commission, Visit Britain, the Canadian Tourism Commission, the Finnish Tourism Board, the Singapore Tourism Board, etc. (2006: 120). It is also found that the major critical success factors in the implementation of the DMSs are “public sector involvement, high quality data on the region’s tourism industry and products, and links to other external systems”, which include travel e-mediaries and other systems (Page & Connel, 2006: 120).
Additionally, DMSs can be effectively used in the following applications: design and production of printed material (booklets, books, maps, etc.), call center services for tourists, database marketing, project/event management procedures, research design, performance management and performance evaluation, conference marketing, interactive television or multimedia information, tourism information centers, administration and finance procedures, etc. (Page & Connell, 2006: 120). Moreover, Noel Scott, Rodolfo Baggio and Chris Cooper state in their book that “the role of destination management organizations is to maximize positive returns to a community’s overall growth” (2008: 142). The author of the book argues that today DMOs must act as facilitators in the competitive business environment as they link the individual stakeholders and help to achieve the major goals.
Taking into consideration the above mentioned facts, it is necessary to conclude that the term “destination management system” is focused on the IT infrastructure of a DMO and, sometimes, it is described as a number of ways depending on the capabilities of the system. DMSs are used to support not only the websites of DMOs, but also many other promotion and marketing applications (Giaoutzi & Nijkamp, 2006: 92). The most successful destination management systems that are effectively used in today’s competitive environment are Newmind and Newvision. The first one is “an award-winning global e-tourism solution” which includes an effective destination and content management system. Newmind is well-developed to meet the needs of all customers in providing information delivery. In addition, this system is specially developed to combine “the best-of-breed e-tourism technology with leading edge tourism website design and online marketing capabilities” (Newmind. Official Site, 2012). It is proved that this DMS is of great importance for its DMO as it helps to succeed in the competitive global market. The second successful DMS is Newvision. This DMS is very effective in completing tourism management solutions. It is used for coordination of different activities across this or that destination (Newvision. Official Site, 2012). Roger Carter, Mary Hodgson and Gaëlle Renault represent an overview of DMSs in their article Towards E-Business – Best Practice in Tourism Destination Systems, including such systems as InfoRM, Travelinx, Gilliver, ATC, Ossian System and some other DMSs which played a significant role in the development of tourism industry (Carter et al., 2001). VisitScotland, Meridian DMS, EnglandNet are also effective DMSs.
CRITICAL SUCCESS FACTORS AND INNOVATIVE APPLICATIONS THAT DESTINATIONS CAN EMPLOY TO ACHIEVE STRATEGIC COMPETETIVE ADVANTAGE
The major critical success factors that can help destinations to achieve strategic competitive advantage in the market of tourism industry are of great importance for DMOs. Eric Laws, Harold Richins, Jerome Agrusa and Noel Scott state that “destination governance can be regarded a success factor” (2011: 150). Taking into consideration the specific characteristics of each destination, it is possible to conclude that “a critical success factor is an institutionalized self-regulation of the relationships between the destination’s stakeholders” (Law et al., 2011: 150). The experts suggest that it would be better to follow some recommendations for successful implementation of destination governance: to provide strategic planning on a regular basis, to pay special attention to integration of stakeholders, communication practices, to foster networks, etc. (Law et al., 2011: 150).
Moreover, it is found that today advanced DMOs realize the important role of e-tourism in all business processes, including “the entire value chain and the strategic relationships of tourism organizations with their stakeholders” (Buhalis, 2008). The majority of innovative DMOs effectively use ICTs for transformation of their major operational processes (Proll & Retschitzegger, 2000: 28). Moreover, they provide opportunities for the expansion of tourism business in both geographical and marketing senses. In addition, it is found that economic success is the major focus of a destination, while such non-economic factors as “quality of life for the community” should be also considered (Law et al., 2011: 150). That is why the second critical success factor is the ability to use advanced information communication technologies.
In addition, there are a number of other factors that can determine success in the competitive market, which include systematic promotion of cultural events; richness of culture, heritage, history, and traditions; economic, political and social stability of the region; protection of biodiversity; security; cost of air travel; conservation of cultural values and nature, including landscape and climate (Ortigueira & Gomez-Selemeneva, 2011: 208-209).
Besides the above mentioned facts, it is necessary to discuss innovative applications that destinations can employ to achieve strategic competitive advantage in the tourism industry market. The advances in communication technology can provide tourism organizations “with new ways to communicate with and provide services to consumers”, as well as absolutely new ways to learn about destinations and different options to them as tourists (Hall, 301). Besides the use of web social media tools, including discussion forums and blogs, audio and video podcasts and websites with photos and stories about tourism, there may be also other communication technology methods which will promote destinations. (Wang, Y. & Fesenmaier, 2006: 422). Michael Hall and Alan Lew state that “other innovative applications are likely to arise in the future” (2009: 301). One of them is virtual traveling, a technological innovation developed for the future of tourism. It is clear that virtual destinations can be used as motivation tool for real travel. According to Michael Hall and Alan Lew, although “three-dimensional digital rooms in which people are surrounded by a moving display of real and imaginary views are currently in experimental stage”, this innovative application can be widely used in the nearest future (2009: 303).
Taking into consideration the above mentioned critical success factors and innovative applications, it is possible to conclude that to achieve strategic competitive advantage in the market of tourism industry, it is very important to pay attention to relationship marketing and destination management (Shirazi & Som, 2011: 77-78).
CONCLUSION
To sum up, the significance of destination management systems (DMSs) for destination management organizations (DMOs) is obvious. Tourism industry is considered to be one of the most successful applications of e-commerce. Today DMSs are effectively used practically in all DMOs to provide both internal and external functions, such as financial management, performance management and evaluation, customer relationship management, etc. In order to succeed in the competitive market it is very important to take into consideration the major critical success factors (destination governance, the use of ICT, systematic promotion of cultural events, richness of culture, heritage, history, and traditions, etc.) and innovative applications that can be employed by destinations.
