3 Reasons Why The DMO Will Not Survive

3 Reasons Why The DMO Will Not Survive

The past ten years are littered with unprecedented change. Consumers, technology, travel patterns, airlines and yes, even destinations.

Sometimes for the better, sometimes for the worse.

This change has been the source of numerous (Travel 2.0) clients. They have seen the change happening and need guidance in how to cope. For the last several years, our guidance has tiptoed around a subtle, yet ominous threat for the DMO.

The consumer is changing, you need to change with them.

And up until now, we have not be able to pinpoint the issues causing this stress. But our recent post, Fight or Focus changed that.

It focused our thinking.

Our destination peers are aware that adaptation will be required over the next several years, but most do not understand why. Sure, pundits and prognosticators, con men and consultants have all claimed a rationale…typically related to the scary specter that is social…but few have articulated the cause and potential effect of these changes.

This is our working theory. Factors that are behind the change we all speak of. 3 reasons why the destination marketing organization will not be around in 5 years.

The marketplace is now focused on direct relationships, controlled by the consumer.

The marketplace in which we operate has fundamentally shifted toward the consumer.

20 years ago, companies controlled nearly every part and piece of the purchasing process. They told us what to buy, when to buy it and what to think about it. Due to a lack of information, we simply followed along, believing that Tide really made whites whiter, because, well, the man in the ad said so.

But as we are all keenly aware, that marketplace no longer exists for nearly every consumer good, category or industry.

The transition from a product-focus to a consumer-focus has been rapid, expanding word-of-mouth from small and insignificant to viral and potentially harmful.

Just ask United.

The challenge with this new consumer economy is the focus on the relationship between the consumer and the product. It is no longer indirect, but rather an intimate bond, perpetuated by brands and accepted when useful by the consumer.

For destinations, which do not truly own any of the products they represent, the impact is significant. Without ownership of the product our relevancy in the relationship is void.

Yet we continue to push ourselves into the communication channels, often in the form of a tweet or wall post, only to find that our voice does not carry weight with either the business or the consumer.

Destinations are a middleman at a time when the consumer is actively ignoring the middleman.

Local businesses don’t need collective marketing.

There are 4 million brand pages on Facebook. And beyond the Fortune 500, many of those belong to a small business owner. The same small business owner that destinations have relied upon as the primary foundation for the DMO.

A group of common businesses, joining together to promote themselves as a region because their collective reach was stronger than their individual reach.

The challenges that oppressed the ability of the small business to promote effectively, and therefore require a larger organization to promote on their collective behalf, are systematically being destroyed by organizations such as Google, Facebook and GroupOn.

What was once considered a reasonable membership fee is now more than enough budget to run a comprehensive Adwords campaign. And you know what? Adwords provides direct, bottom-line, ROI results.

For a small business, in this current economic climate, would you rather spend $500 with a guaranteed ROI or $500 for a DMO membership that provides access to a once per year, rubber chicken dinner?

Now, certainly education is still the greatest hurdle to the conversion of the small business into a full fledged marketing machine. But considering the expansion of just the Google sales force, that degree in small biz marketing is clearly within reach.

Small businesses are looking to other marketing channels to promote their offerings to potential tourists.

Tourists expect more information than we can provide.

We have known this for a while. Even in meeting rooms filled with our peers, rarely does a hand go up in acknowledgement of planning with a CVB or DMO.

Information is abundant. Technology is connective. And social provides the personal touch of your own concierge.

Prior to that iPhone in your pocket, local knowledge about a town was restricted to guide books and memories, both of which required curation by a central source…likely the DMO.

Today, we can do everything from translate Dutch to board a plane with just a phone.

Yes, destinations can offer digital versions of listings and information, but the industry is facing incredible competition from the very same organizations that are slowly usurping the local ad dollars.

But what about adoption…people still love guidebooks and brochures. True, they do. But do not underestimate the penetration of technology into our daily lives.

As our peer Jay Baer likes to point out, he once worked in an office that employed a woman whose sole job was to make copies…apparently to prevent the loss of your hand in the complex device that was the 1982 copy machine.

But good technology will propagate throughout our society. We can all make copies, and soon, we will all be able to navigate our phone like a Millennial.

The consumer now has the ability to find unbiased information about anything on the planet.

Conclusion

A new marketplace, smarter local business and connected consumers, three trends that form that foundation for change.

The prelude to the removal of the DMO as we know it. Make no mistake, change is coming…to every industry…but these factors impact our industry in such fundamental ways that the destinations very existence is in question.

Everyone talks about change. We need to change, grow, expand, think outside the box. The problem is, you have no idea what is in the damn box to begin with.

Cheap quips and tweetable sayings are not going to prevent the collapse of your tourism organization. Acknowledge and recognize the challenges that are facing the DMO, understand the perceptions of your stakeholders and consider the shift in travel planning personified by Google.

As a consultancy that makes our living from advising DMOs, we are not trying to accelerate the demise of these organizations. We take no joy is seeing a defunded DMO. And our goal is not writing for the sake of comments.

Our desire is to create a dialogue of critical thinking and consideration.

To provide an opinion based upon our experience.

Asking tough questions now, rather than recounting the way things were.

Can the DMO survive? We think so.

But that is another story.

Comment? @travel2dot0 or email.