Travel marketing is indeed a very special form of marketing, and I am still not sure if it’s closer to retail marketing or art marketing. Do we sell products, services or dreams? Are we even able to influence the highly complex and sensitive path to purchase?
I would like to leave this question unanswered and move on to another challenge in tourism marketing:
Destination Marketing Organizations (DMOs) structures
As Head of Marketing for Switzerland’s number 1 travel destination*, I am facing these structural challenges every day. It would be an oversimplification to say, “It’s all bad.” My intention is to discuss the complexity and the impact.
Most touristic regions have a DMO and most of them are state-subsidized. The DMO’s job is to promote the destination – or in other words: the DMO is the organization behind the “destination brand.”
It’s in the nature of things that every DMO has a lot (!) of stakeholders, and as they need tax-money, political forces are also playing a big role. Discussion about what’s good and what’s wrong on a very basic level is their daily business.
The structural crux is that a DMO is similar to a “shop-in-shop concept”—speaking in retail marketing words.
Example
Let’s say a DMO is a retail store like Target or Walmart. The DMO-store is working hard to create an image/brand and the management invests time and money into target group analysis, research, etc.
Some of those DMO-stores even have guest cards to collect data and award loyalty. But what are they selling? Most of the DMOs do not have any products. The DMO-store is empty but well decorated with beautiful lakes, mountains, beaches, etc. But there is nothing to buy.
Because the DMO-store is state-subsidized and mostly too small to produce their own products, they invite hotels, restaurants, and other touristic product vendors to open their own shop within the DMO-shop.
The shop-in-shop concept can be very successful as we know from the retail industry but one of the critical factors is “ownership” and “power.”
Why? Imagine a shop-in-shop vendor starts to sell tanks instead of dog food. Walmart may not be happy. As the store owner, Walmart is able to say “no.”
This is not the case for a DMO. They are not able to kick out a hotel of the DMO-store just because it does not fit into the DMOs strategy. For sure within the DMO-store diversification is guaranteed and some guests may honor this.
But when it comes to quality, the guests become sensitive. Let’s say those tanks the vendor is selling are very poor quality. The guests are disappointed and the store now also has a problem because the store’s brand stands for quality and selection.
Again: If the shop owner has the power to kick out the vendor: no problem.
But for the DMO this is not possible. They have to live with bad products within their store.
What are some DMOs doing to avoid the problem?
They create labels like “best kite-surfer hotels” (similar to POS standees at retail stores). This may help, but it does not solve the problem in the long term as the “not labeled hotels” are still part of the financing structure (tax money) of the DMO.
Conclusion
The DMO structure is complex and there will never be “one perfect solution.” Tax paying stakeholders, political forces, uncontrollable quality issues, runaways, and no power are limiting the scope of DMOs significantly. We have to be aware of this when we create requirements and ask for KPIs.
In other words: We cannot ask a dog to lay an egg, but we can ask the dog to retrieve. And how to do this in the best possible way should dominate the discussion.
//*Opinions are my own and not the views of my employer