The Future DMO
The DMO is not dead.
But it does need to change.
Qualifying the changes in the tourism ecosystem as fragmented is a severe understatement. Travel planning, like so many other consumer industries, is undergoing a shift of massive proportions, driven directly by the empowered consumer and intelligent competition.
Include the current issues facing DMOs such as membership models and tax-based funding, how does the DMO build a sustainable business model for the next 20 years?
What Has Changed
Travel planning has become more complex. More unique. More individualized.
DMOs are remnants of a model that was focused on limited choice.
A simpler time.
An easier choice for travel.
Consider the origins of the DMO. A group of similar, tourism-focused businesses pooled funds to create a larger presence which would raise the visibility of their destination. In years past, this model was effective due, in part, to the limited options presented to the consumer.
Cost, logistics, familiarity were limited in scope, as were the marketing vehicles where one might learn of the destination. Official visitor guides, even with limited information, were highly relevant due to the complexity of independently gathering similar information either by the consumer or potential competition.
While DMOs have slowly embraced the digital revolution, adopting tactics such as email, social media and mobile, the strategy remains rooted in the past.
Aggregate and distribute, with little regard for the individual.
Highly relevant during a time of aggregation and simplistic consumer expectations, DMOs are being affected by this change due to consumer and business shifts toward a unique and often personalized solution.
These causes, outlined in our article 3 Reasons Why The DMO Will Not Survive as well as Frederic Gonzalo’s excellent post, Why The Destination Marketing Organization Model Is Broken, beg the question: what should change?
What Needs To Change
Our industry must consider the near-term and long-term impact of environmental changes, measure those against consumer and industry needs and then refocus and re-position our services to meet the needs of both segments.
Currently, there are four key areas where outdated thinking requires refocusing.
Consumer Goals v. Industry Goals
DMOs need to reconcile the disparate goals of the consumer and the industry. The consumer has made a clear statement that they expect the complete and transparent presentation of information, yet DMOs are handcuffed by the requirements of membership models, stakeholder demands or limited resources.
If the DMO cannot deliver the comprehensive experience that the consumer demands, it should refocus efforts on fulfilling achievable consumer goals which correspond to known and potentially undeveloped industry goals.
The struggle of relevancy is often tied to the inconsistent availability of organizational funding. DMOs associated with local governments face a repetitive process of earning dedicated funds, which has resulted in significant funding for many destinations, but also in drastic reductions or even closures in certain regions.
For the reasons outlined above, those DMOs utilizing the membership model are also facing funding challenges as members look to other opportunities for promotion.
While a funding solution is neither simple nor universal, refocused efforts conceived around consumer and industry need…creating something stakeholders want…should provide a stable, but contracted funding source.
Brand ownership has been eroded by the connected consumer. Particularly for destinations, whose brand has been traditionally developed on the pillars of member products, this shift has been pronounced as well as complex. Developing and maintaining a brand that represents the sum of a whole is challenging enough, but now that whole also includes every consumer who has ever crossed into the DMO’s borders.
By understanding the role of the consumer in shaping a destination’s brand, which is more influential than the partner impact, there is an opportunity to refocus efforts around product and infrastructure development. Indirect methods can shape a brand experience in which direct control now belongs to the consumer.
Several factors are influencing the role of marketing by DMOs, but the most pressing are the fallacy of control, competition and measurement.
DMOs have expanded marketing efforts in an unending search for control of the message, however the idea of control is a modern day fallacy. As NTOs, RTOs and CVBs search for control throughout the travel planning funnel, their collective marketing messages are diluted by confusion.
At the same time, competition from new sources has impacted the top of the travel planning funnel. Firms such as Google and TripAdvisor have cut and claimed large portions of the DMO’s traditional aggregation role, while improving their offerings to a near impenetrable business advantage over the average DMO.
And these same technology-focused organizations are also accelerating measurement techniques for marketing campaigns. With more accurate reporting, DMOs will begin to realize that once consistent marketing campaigns are no longer performing as reported.
DMOs should refocus and optimize marketing efforts around the most relevant and highest delivering tactics, while utilizing their inherent scale and robust partnership structure to primarily support industry peers.
Long-term strategic change demands a comprehensive reconsideration of the DMO’s mission.
It is the creative destruction of the DMO.
What Should DMOs Do In The Future
The foundation of the future DMO is rooted in an unsurpassed knowledge and expertise of the local tourism industry. True expertise guarantees a seat at the table.
At this point in our theoretical development of the future DMO, there are three core areas of expertise:
Building upon a foundation of research, Big Data and Little Data, the future DMO represents the core of tourism intelligence within the community. By building infrastructure and giving away valued tourism services (see 10 Things DMOs Should Be Giving Away), the DMO is in the unique position to capture, aggregate and report on tourism trends unseen to industry partners.
Utilizing this research knowledge as well as a depth of staff knowledge, the future DMO is then capable of offering true (and valuable) educational resources to the tourism industry. Beyond the occasional workshop.
As the DMO gains knowledge about their destination’s consumers, they can actively observe the service design aspects of the visitation experience. From touchdown to takeoff, the future DMO knows the consumer’s path through the destination and can provide recommendations on improvements to the industry.
Leveraging the DMOs position as a community connector, the future DMO, bolstered by expertise, will become a trusted resource for product, event, infrastructure and partner development.
This is where the DMO becomes a consultant.
For new tourism projects, even small businesses, the DMO should embrace and exploit its advisory role to drive key tourism development. Clearly, there are serious political considerations, depending on the structure and governance of the DMO, to be considered prior to adopting this approach, but at the most basic level the DMO should help tourism businesses make better decisions.
If the DMO understands the traffic patterns of pedestrians in a core tourism district (through research), why not help a new business determine the best storefront location?
As the components of the future DMO build upon one another…research, service design, development…the logical confluence is stewardship.
Stewardship of the tourism product for the local community, the environment and future sustainability efforts. If DMOs have a responsibility to increase tourism, they have an equal, if not greater responsibility to manage the impact of tourism.
Tourism destroys tourism.
As more and more governments, businesses and communities reach toward the economic engine that is tourism, a steward representing the varied interests is required to ensure sustainable growth.
DMOs are the ombudsman for tourism development.
The key for the future DMO is to optimize strengths, while reducing the role of receding activities, in order to develop a clear and required expertise. Expertise that does not depend on the scope of marketing campaigns, but rather the intelligence behind those campaigns.
Expertise that is so unique, it creates new opportunities for growth and influence.
The future DMO is less marketing and more R&D.
What Does The Future DMO Look Like
The future DMO is a support organization, comfortable with its strategic role in the background of the travel planning process.
Often an unseen partner in terms of promotion, but known due to marketplace expertise.
The challenge for destination marketing organizations is to recognize and accept this new reality, while aggressively moving toward a new normal that rewards expertise over scale.
The DMO is not dead, just changing.