Institute of Agriculture and Tourism, Poreč

DARKO SAFTIĆ, B.Sc., Assistant

Institute of Agriculture and Tourism, Poreč

OZREN RAFAJAC, M.Sc., Assistant

Polytechnic of Rijeka

KLARA TROŠT, B.Sc., Assistant

Institute of Agriculture and Tourism, Poreč

DMO MODEL AS A STEP FORWARD IN THE QUALITY OF THE MANAGEMENT OF ISTRIAN TOURIST DESTINATION

The tourist sector is one of the fastest growing economic sectors in the world, but also the one where there is the greatest competition. In present times of globalization, liberalization and deregulation, tourist subjects are facing fearsome competition. That is the reason why the success of a destination depends on the overall level of services quality, which represents the function of a whole series of variables which are united under the same denominator of the destination management (DMO- Destination Management Organization).

Due to the sensitive nature of tourist services, which encompass hundreds and even thousands of various partners and participants, IT technologies play a decisive role in the destination promotion, creation of new market niches, creation of new relationships with clients and optimization of business procedures.

In this article, it is proposed that the key role in the quoted process of management of qualitative structure and organization of the offer of the Istrian tourist destination be taken over by a new organizational body, which will, by means of IT technologies, coordinate the entire tourist offer at different levels of responsibility. The proposed highly professional organization should, by using modern information and communication technologies, facilitate partner relationships in both the private and public sectors, reaching a high level of business profitability, achieving higher quality of tourist services, as well as a new level of guest and local community satisfaction. Ultimately, the proposed model of tourist destination management will enable optimal use of all available tourist resources.

Key words: sustainable development, IT technologies, DMO, tourism Master plan

INTRODUCTION

A tourist destination is defined as a “geographical area, territorial-administrative unit or an important attraction that is trying to offer its visitors experiences which can range from acceptable to unforgettable.”[1] From a conceptual point of view, that is if we take into consideration the manageability of a destination, it is far more efficient to regard a destination as a geographical region that has its necessary critical mass or as a cluster attraction, so that the destination can offer its visitors tourist experiences that attracted them into that area. A destination can be regarded as a combination (or even as a brand) of all products, services and ultimately experiences provided locally. “It also enables us to assess the impact of tourism regionally, as well as manage demand and supply in order to maximise benefits for all stakeholders.”[2]

A successful destination management, in addition to a unifying strategy (the Master Plan of Tourism Development), demands also an appropriate operational management model which will allow a close cooperation between public and private sector of a particular destination. One of the most obvious examples is the process of electronic booking that has had a significant influence on guests’ information acquiring concerning the destination and has lead up to a shorter reservation time period. In the virtual market information and communication technologies (ICTs) have played a decisive role in the destination promotion, creation of new market niches, creation of new relationships with clients and optimisation of business procedures.

Istria’s Master Plan of Tourism Development[3] defined the following goals: transformation of Istria into a quality tourist region – into a destination with 3+/4 stars, creating new tourism development projects and improving the existing ones, along with extending the tourist season, as well as the perception of Istria as a tourist destination based on a long-term sustainable and responsible development. In the same process of quality and quantity management of the Istrian tourist destination offer, in addition to Istria County Tourist Board, the regional authorities including the Tourism Department of the Region of Istria, as well as local tourist boards and governments, the key role should be played also by a new expert body founded with the mentioned purpose and equipped, materially and intellectually.

Such a need can be detected in the regional Tourism Development Master Plan which suggests the implementation of a new body for the realisation and control of the Istrian tourist destination repositioning and restructuring activities in accordance with different levels of responsibility. Given the assumptions mentioned so far concerning the need for coordinating various private and public subjects and of the Istrian tourist offer restructuring process management, what is being suggested is a model of establishing a new organization which will be responsible for destination management on different levels of responsibility.

1. THEORETICAL FRAMEWORK: A BIBLIOGRAPHY REVIEW ON THE DMO MODEL

This chapter of our study shows a theoretical framework of the establishment and function of the DMO model according to the modern international tourism bibliography.

With present business conditions in the global market, tourism represents an economic activity that is carried out in a very competitive surrounding. The same activity involves an increasing market competition between different destinations distant in space and quality. So that, for example, there is a market competition between different destinations from all over the world, both those already established in the market and those emerging, as well as between different destinations within a country and even between different firms within a destination. As a consequence of that and in order to have a successful “struggle” in the international tourism market, there appears a need to obtain and maintain the competitive advantage of a particular tourist destination[4]. In the process it is necessary to involve tourism stakeholders in the destination management operation, and to have in doing that a clear understanding of the way of managing the destination’s development, being at the same time aware of the present and future tourism development trends, in order to avoid the trap of strategic drift in the realisation of the development strategy aimed at.

Tourist firms all over the world are beginning to understand the increasing importance of a strategic management of tourist destinations, with a particular accent on the key role of the implementation process of what has been planned[5]. There appears to be an acceptance of the concept of a strategic approach to planning a destination development by taking into consideration marketing possibilities, but without ignoring the influence the tourism development of destinations on the whole surrounding in which it takes place. Therefore, there is an awareness concerning the necessity for sustainable tourism development, the need to create and maintain a sustainable competitiveness of destination, which implies the definition of balance between economic, social and ecological development components. Ritchie and Crouch[6] have identified tourism policy as a set of factors unifying critical consideration, planning and development in tourism, by defining tourism policy as: “A set of regulations, rules, guidelines, directives, and development/promotion objectives and strategies that provide a framework within which the collective and individual decisions directly affecting tourism development and the daily activities within a destination are taken.” According to them, the concept of tourism policy is trying to create an environment in which tourism within a destination can prosper in a sustainable and adaptable manner. At the same time, they distinguish such a concept of destination planning and development from a much more famous concept of master planning which, in their opinion, entails a much more rigid and a bureaucratic approach where parameters for a long-term destination development are set in a somewhat static way. Although they admit that both concepts share some similarities in formulating policies, they underline substantial differences between the two “macro concepts”, emphasizing that Master plans are often considered as rather “rigidly” defined instructions for the development of a destination. Figure 1. shows the model of destination competitiveness and sustainability:

Figure 1.Destination competitiveness and sustainabilitymodel

Source: Ritchie, J.R.B., Crouch, G.I., “The competitive destination: a sustainable perspective“, Tourism Management, Vol.21, Is.1, February, 2000, 3

The tourism policies mentioned above consist of three components: structurethat defines a frame for the development of interrelations in which specific contents will be defined, while the process of creating the same policies offers a systematic approach for including stakeholders in the consensual formulation of the tourism policy structure and contents for a destination[7].In this whole process which aims at a final result of satisfying tourists’ needs and expectations by providing the highest quality, essential is the issue of the whole approach to the destination management process which will integrate stakeholders (local population, local authorities, entrepreneurs, investors, visitors, tour operators, intermediaries, interest groups etc.) in the respective process. Destination management strategies and activities have to take into consideration the wishes of all stakeholders. Otherwise, it ends up being a very challenging job because of frequent conflict situations that have to be managed among various stakeholders’ interests. At the same time, one of the biggest issues is guaranteeing a rational use of free public goods (as sea, landscapes or mountains) for the benefit of all stakeholders, by preserving, in addition, all resources for future generations.

The key of a long-term destination success is in the capability of finding a compromise solution which would encompass all interests mentioned, especially if the possibility of very probable conflict situations is taken into account, caused by some (greedy) stakeholders who could try to maximize their short-term interests by exhausting those resources8.Only through complete and consistent efforts made by all stakeholders within the destination in order to satisfy tourists’ needs and expectations, it will be possible to achieve the goal9.

It is possible to raise the question on how a destination management body can influence the behaviour of hundreds or thousands of independent legal subjects and individuals and direct them towards the achievement of one or more common goals. This question can be additionally expanded: how can activities undertaken within the destination management adapt to the single actions of individual participants in the tourism market? An attempt to answer these questions has been made by Sainaghi10, who emphasizes the need to find a general model of destination management which would allow the achievement of certain goals of tourism by the inevitable involvement of different stakeholders, legal subjects and individuals. It is important to underline that destination management undertake long-term activities, so that, while being implemented, the same activities can often adapt to newly appeared changes, both to those external, in the market, and to those internal, within the destination. Sainaghi identifiesthe need for establishing a dynamic frame that has to be formed through a systematic observation of specific tourist destinations already successfully existing, and he suggests adopting the model of local destination management organizations (DMO). Jamal and Getz define these collaborative efforts as “a process of joint decision-making among autonomous, key stakeholders of an inter-organizational, community tourism domain [designed] to resolve planning problems of the domain and/or to manage issues related to the planning and development of the domain”11. In addition to this, De Carlo, Cugini and Zerbini define Destination Management Organizations (DMO) essential to fostering collaboration and integration of the main stakeholders in the strategic management of the destination as a whole.Furthermore, they underline that successful destination management requires a system of indicators to monitor the effects of actions on destination competitiveness and the performance of the “actors” in the system. “Furthermore, the implementation of strategy review and performance assessment serves to maintain concentration on the destination's pre-set goals, to sharpen management tools and to increase cohesion among the “actors”.An effectivemonitoring system makes it possible to evaluate the validity of meta-management actions and their impact on the performance of the most important product/market combinations, of the main production cycle links and the most significant business clusters.”12 There are, of course, some challenges that can appear when implementing such a destination management model, as: the problem of a clear definition of both the desired positioning and the specific objectives to reach the end result; the fact that many players within the destination sometimes have conflicting goals for the management of trade-offs in resource use or the lack of information at a destination level (which is partly due to the failure of “actors” to adopt advanced management tools).

Bornhorst, Ritchie and Sheehan[13] offer in their research an exhaustive review of the bibliography on DMOs and destinations appeared so far, and they consequently summarize the managerial functions within destination management organizations as follows: M&P (Marketing & Promotion), M&S (Membership & Stakeholders), P&S (Policy & Strategy/holistic perspective), I&R (Information & Research) and F (Financial Management). On the basis of researches and studies we had so far, it is possible to identify their dominant focus on the function of marketing and promotion within DMOs, with a particular accent on the research concerning the destination promotion efficiency and on measuring and managing the destination image (including destination branding), as well as on the role of stakeholders or their importance for the destination management. It is also evident an increasing interest among researchers for the area of policies and strategies in destination management.

Destination management organization has to work with all subjects within the destination (private, public and non-profit) through a partnership that will coordinate and direct efforts towards the achievement of commonly defined goals. This process is defined as supervisory management or meta-management[14], while the empirical indicators point to the existence of three impact levels of destination’s meta-management, as Figure 2 shows:

Figure 2. Different relevance of DMO process

Source: Sainaghi, R., “From content to process: Versus a dynamic destination management model (DDMM)“, Tourism Management, Vol.27, October, 2006, 1057

• Maximum level (fields I, II, III): resources (for which DMO or some other subject is responsible) are managed by destination management organization
• Medium level (fields IV, VII): resources which are a DMO responsibility are managed by other subject
• Low/non-existing (fields V, VI, VIII, IX): other subjects are responsible for the resources and have to manage them.

1. DESTINATION MANAGEMENT IT TECHNOLOGIES IMPLEMENTATION

Destination management organizations have detected the importance of building destination image by introducing information systems in the promotion of their destinations. Although the use of the Internet influence the market competition, one effect will, however, be achieved with the introduction of an information system (IS) and another with an information technology (IT). Six essential elements, Internet marketing, well defined goals, articulated risks, differentiation, adaptation and continuity, indicate that the source of information competitiveness that forms destination image is in the head of tourists and investors. The winners in this competition will be destinations with the wisest decisions concerning the strategic implementation of IS, on the basis of the listed criteria.

Over the last decade information systems have attracted a great attention among scientists and in the tourism industry. Some researchers, as Froschl and Werthner, consider tourism an information business and, consequently, indicate the need for the introduction of information technologies in order to allow managing of complex and dynamic tourist information. On the other hand, other researchers underline that the introduction of information technologies is related to at least 5 types of competitive advantages, as differentiation, expenses, innovation, growth and strategic connection.

Therefore, many destination management organizations (DMO) have focused on introducing some IT applications expecting them to bring such advantages. It is time for a critical review of the strategic use of information system within the context of information management. The source of the competitive advantage lies by no means in information, but successful in the process of information system implementing will be only those who choose to implement intelligent IT applications that are a product of a strategic reflection.

Internet technology is already widely used in tourism and hospitality industry, and the biggest struggle is related to the price of final services. Marketing agencies were surprised by the way in which the Internet improved the communication between consumers and vendors and through the use of terms as “Internet marketing”, “e-business strategy”, “new economy” forgot the very purpose of IT. Information technologies, including Internet and IS, are technologies which transform rough information into usable data, to deliver them in the right place, at the right time and in the right format. Using the Internet does not mean that there is a strategic implementation of an information system. The Internet facilitates the flow of information, but it does not automatically create business activities of value. Similarly, information systems reinforce the processing of information but they do not create automatically competitive advantages. IT and IS can create competitive advantages but whether the final result will be successful, it depends first of all on the way we use them.

Destination management organizations often believe that it is sufficient to offer their information within the content ofone of the leading commercial search engines (Yahoo, Google) and that by doing it they would be protected from the competition.Suppliers are also interested in being connected via Internet, being forced to sell their products and services at very low prices. Such steps appear inevitable, but at the same time they ignore the strategic use of IS and draw the attention away from the key source of competitive advantages: information.

2.1Who comes first?

Information and investment capital are essential for destination management and strategic planning. Many studies have shown that tourism is an image industry and that information is the key factor in the way tourists create their destination image[15]. The greatest challenge of DM organizations is to promote the location through building a positive tourists’ perception. Tourists are not the only ones to prefer popular destinations. The same preference is present also in the case of investors, for whom investing in popular destinations means a less risky investment. When both, tourists and investors, demand a positive image, the question is “Who comes first?”