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Competitiveness
Planning 3.0
<<PLANNING METHODS WHITEPAPER SERIES >>
1. The destination model as a key factor for competitiveness and
sustainability
2
2. Competitiveness assessment methods 8
3. Strategies to enhance sustainable competitiveness 13
4. Implementation 29
CONTENTS
Jordi Pera Segarra
Envisioning Tourism 3.0 CEO
November 2016
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1. The destination model as a key factor for competitiveness
and sustainability
The competitiveness of a tourism destination is not just a matter of tourism operators’
performance. Instead, the potential of a destination for competing in the travel market is
determined from the top government policies regarding urban planning, public services,
territory planning –protecting natural interest areas-, and tourism development planning,
determining tourism related regulations, licence policies, investments in facilities and
infrastructures and also cross-destination marketing planning and execution.
So long as the tourism activity affects not only the tourism operators, but also the residents’
lives, other business sectors and the image of the territory, it is necessary to elaborate a
thorough model attending to the needs and aspirations of all stakeholders. The complexity and
challenge of tourism development planning is namely in the need for reaching a balance point,
considering all the stakeholders’ interests.
A destination model is to provide answers to three main questions:
 What can we do to develop tourism in the destination?
 How can we do it?
 What vision do we want to strive for?
Finding answers to these questions means choosing among different alternatives related to the
tourism to be developed: the development pace, intensity, the limitations to the business
growth, etc. Furthermore, a development model works like a guide and reference framework
for the activities of both public and private agents, and to articulate cooperation between
different public bodies and between public and private ones.
Other advantages and benefits of defining a destination development model are:
 The territorial structure –cluster definition- of the tourism development is clearly defined.
 The destination takes advantage of the market opportunities more effectively.
 The destination’s resources and attractions are leveraged more adequately.
 Government leaders and local operators have a reference framework to orient their strategy.
 The need for infrastructures, facilities, financial, technological and human resources are
clearly defined according to established goals.
 Investors have a reference framework that provides them with valuable orientation.
 Resources are assigned more rationally, effectively and profitably.
 The tourism management has a reference framework to orient the decision making.
 The reaction versus certain changes in the market is faster and more effective.
Once the model is defined, if this is brought into practice, there are even more benefits:
 The destination creates and develops solid and sustainable competitive advantages.
 The destination positioning and image is stronger.
 The tourism businesses operating in the destination are more profitable and increase revenue
 The service quality and tourists’ satisfaction increases.
 The destination inhabitants perceive the positive impact of the tourism activity more clearly.
 All stakeholders have more confidence in the future of the destination.
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1.1 The principles and goals of a destination model
The destination model should consider four main principles: sustainability, competitiveness,
participation and coordination.
1) Sustainability means qualitative and balanced growth preserving both socio-cultural and
environmental value. Sustainable development is defined as “the satisfaction of the present
moment without compromising the capacity of the future generations to satisfy their needs”.
In the tourism industry there are several forces favouring a tourism sustainable development:
 The consumer pressure: greater consciousness about environmental issues, increase of
alternative tourism concepts such as ecotourism, agrotourism, etc. and better preservation
of the destination’s environmental and cultural resources.
 The public authorities: through new regulations incentivizing conservation and recuperation
of the environment.
 The civil society: increasingly concerned about the environment, demanding measures for
the conservation of the cultural, social and natural heritage.
There are however some forces against the sustainable development, namely the economic
growth, which has to be countered with development planning measures and policies.
Businesses want to increase revenue and financial value, the society is demanding
employment, and the public administration needs their taxes to provide public services.
According to Professor Muller from the University of Bern, there are five conditions that a
destination should comply with to be sustainable, all ingrained in the public policies:
 Economic development, intending to develop tourism as an alternative economic sector.
 Environmental conditions, intending to develop environmental consciousness and
preserving the natural heritage.
 Cultural identity, fostering traditions and local cultural heritage.
 Social base, improving the life quality of the destination inhabitants.
 Tourism attractiveness, improving the visitor satisfaction by leveraging the local heritage.
The public administration has to consider the needs of this development in the regulations, and
ensure the participation of the local stakeholders through a campaign to arouse consciousness
and concern about these issues.
2) Competitiveness entails operational effectiveness, constant innovation and quality in the
production procedures of the businesses operating in the destination, offering better products
and services than other destinations’. It is mainly about creating a scenario in which to live out
the type of experiences desired by the visitors at a reasonable cost and with the least possible
discomforts and insecurities. In this regard, it is necessary sometimes to enhance the
information and signposting systems, the urban aesthetics, the cleanliness, etc.
The destination competitiveness stays in the harmony of a large sum of variables and details
that are to be further explained in upcoming sections of this Whitepaper.
3) Participation should be the most inclusive and intensive as possible, encompassing public
and private agents involved in the planning and management of the tourism businesses to
guarantee the success of the development model.
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The effective participation of many stakeholders is the best guarantee of consensus,
commitment and will for implementing the development model. It is convenient to convey an
image of cohesion and effectiveness to the stakeholders outside the tourism industry, so long
as their cooperation is likely to be necessary at some point.
4) Coordination is as much important as participation, to enhance effectiveness and
profitability in the use of material, human and financial resources, generating synergies and
economies of scale. Furthermore, coordination and cooperation among all stakeholders within
the industry makes it possible to develop some programs that are difficult to carry out
individually due to their high cost.
In this regard, it is crucial to develop a new culture of cooperation within the destination
stakeholder system, moving people to shift their attitudes in vision of a future of shared
success. The Whitepaper “Building a culture of cooperation and innovation” is to explain
the benefits and the process to carry out this cultural change.
The destination model should have development goals in at least four areas: economy,
society, culture and environment.
Economy: generate revenue benefiting the local businesses and inhabitants, creating jobs and
empowering the micro service businesses to grow, namely those at the base of the pyramid.
Society: sustain the prosperity of the local population with the enhancement of their quality of
life and the satisfaction of the visitors.
Culture: preserve and leverage the cultural heritage as a key asset of the destination,
encompassing monuments, traditions, gastronomy, etc.
Environment: preserve the natural heritage and landscape, controlling the impact on the
fragile resources of the destination.
The accomplishment of these goals is to be carried out by drafting specific objectives in each
area and key performance indicators to monitor the evolution of the development in relation to
the aforementioned goals.
1.2 Destination models
There are many variables to be considered when defining a destination model, and so several
models may be designed based upon different combinations of these variables. However, as
we all know, many of these variables usually have a strong correlation.
Seasonality: models focused on certain products with strong seasonality are not able to
provide stable jobs to let the employees live all year round in the destination. As a result of
that, many destinations with strong seasonality experience enormous variations of population,
hence becoming “ghost towns” during the low season periods, due to the considerable
proportion of empty hotels and apartments. A key challenge for sustainability is therefore to
balance the demand by developing multiple products with complementary seasonality.
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Product portfolio: some destinations are clearly identified with one product, whereas others
manage to position themselves as multiproduct destinations hence diversifying risk, reducing
seasonality and offering added value to many product categories by allowing multiproduct
combinations, very much appreciated in many cases.
Target markets: as it happens with the products, there are also destinations focusing on a
specific traditional market –national or proximity market most usually-, but for many reasons
are not targeting other more distant markets. The reasons may be the saturation of the
capacity by the current markets, making it unnecessary to attract new tourists; the lesser
profitability of distant markets due to higher negotiation power of the distant markets’ tour
operators, and the lack of adequacy of the destination services to the requirements of distant
markets (language mastery, service standards, etc.), among many others. Conversely, many
destinations have internationalized their demand attracting tourists from many markets.
Product category & target tourists: beyond the aforementioned target markets, it is
necessary to determine the type of tourists that the destination intends to attract. Apart from
variables such as development constraints, accommodation offer, character or style harmony –
which favor the attraction of high-end tourists- the products offered should also satisfy the
needs, motivations and aspirations of the target tourists. In this regard, innovative,
sophisticated and differentiated products are more likely to attract tourists with higher
expenditure, whereas standardized products offering “commodity experiences” compete on
price attracting low end tourists.
Character and style harmony: many destinations pay special attention to the architectural
style and urban aesthetics to guarantee a harmonic urban landscape. This harmony is very
appreciated by most upscale tourists, for it is an important requirement to attract the highest
spenders. These destinations take special care of the traditional urban heritage and require
new developments to follow the same traditional style in harmony with the most authentic
buildings and urban aesthetics. Unfortunately, there are also many destinations that have not
taken any care of this issue, allowing new hotels and apartments to be built disregarding the
harmony with the traditional style of the destination. This is a missed opportunity to offer an
experience with a differentiated value that only destinations with character can provide.
Development & tourist flow constraints: closely correlated to the “character and style
harmony”, destinations have to decide the maximum capacity of tourists they are able to
sustain, depending on their concern on sustainability and also on the type of tourists they are
willing to attract. Upscale tourists are to be more exigent regarding congestion issues that may
spoil the experience, and so prefer staying somewhere a bit more exclusive with
accommodation capacity constraints. Conversely, destinations with little capacity constraints
are more likely to attract middle to low end profile tourists, who are not that much concerned
about congestion problems.
Other constraints may be those related to the visitors allowed in the natural or cultural
heritage sites, to prevent both congestion issues and to manage tourist flows according to the
site’s carrying capacity. This capacity is determined by experts who assess the impact of the
tourism activity on the site, and establish a limit of visitors per hour or per day that
guarantees the sustainability of the tourism activity in the site.
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Accommodation mix: the combination of different types of accommodation services is also a
relevant variable to consider. In this point there are two main issues to resolve: first, the mix
between hotels and real estate, considering also intermediate formulas. Hotels create jobs and
tax revenues, whereas real estate may be an important source of funds to leverage for
investments, and also to create loyal tourists. Second, there has to be the decision on the
accommodation mix of categories –namely for hotels- according to the types of tourists that
the destination intends to attract.
Sustainability management: the control of the tourism activity impact and the protection of
the environment and cultural heritage in the development are also a key factor to take into
account. Many tourism activities carried out in natural environments require damaging the
landscape or threaten its fragility. Therefore the constraints on the tourism development in
natural areas and the protection status given to these areas are an essential issue to consider
in tourism development planning. In this point, it is necessary to determine the carrying
capacity of the natural areas and determine the accommodation capacity accordingly.
Branding: all the aforementioned variables along with the natural and cultural assets of the
destination define the destination experiences and determine the attributes and values of the
brand. The branding messages contained in all marketing materials and campaigns should go
in accordance with them. Branding also refers to the image that the destination conveys as a
territory, for it is a political issue of major importance: the destination model is not only to be
decided by the local tourism operators, but rather through consensus among all stakeholders.
Partnership structure: even if most destinations –cultural destinations- are driven by many
DMCs and one DMO, there may be many different formulas to structure their relationship in
terms of partnership. In most cases the DMO is controlled by the government, but there may
be different levels of participation from the private operators (DMCs) in the strategic direction,
funding and management of the DMO. In some cases the operators are just listened to during
the definition of the destination strategy in order to consider their valuable inputs, whereas
some other models are more integrative. More integrative models are those where both the
private sector and government provide funding for the DMO activities, both have the power to
appoint members of the DMO board, and have to agree on the DMO strategic direction and
management. In some cases, the DMO is exclusively run by the private operators.
Ownership structure: even if most destinations are run by many operators of all kinds –
accommodation, activities, food & beverage, transportation, etc.-, in some destinations there
is one operator dominating the business, and in some cases –ski resorts, theme parks, etc.-
the destination has only one operator, or many operators belonging to the same owner or
holding. Regarding the composition of the operators’ ownership, there are many models:
 Integrated resorts: all businesses are controlled by the same owner. This is the case of
some theme parks, ski resorts, golf resorts, etc.
 Resort based destinations: one resort is the main attraction but many other operators can
also take advantage of the tourist flows.
 Cultural destinations: their natural and/or cultural heritage is the main attraction, with
many operators of different sizes but without a dominant one.
 Destinations 3.0: it may correspond to different kinds of attractions, and the ownership
may be shared between government, investors and small stakeholders, in partnership with
other small businesses and other types of organizations.
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1.3 What makes destinations 3.0 more competitive
To better realize how destination models 3.0 outperform other models in creating value,
reducing efforts and marketing efficiently, hereby are compared three destination models:
KEY DIFFERENCES BETWEEN THE THREE DESTINATION MODELS
CULTURAL
DESTINATIONS
RESORT
DESTINATIONS
DESTINATIONS 3.0
VALUE PROVIDED
Experiences Typically local
cultural experiences
Based upon cultural
& natural resources,
and locals creativity
Rather standardized
experiences
Based on standard
products, natural and
artificial resources
Life-changing,
tailored and creative
experiences
Based on co-creation
by stakeholders
Feelings Cultural character
and authenticity with
heritage protection
and hospitality
programs
Lack of character and
authenticity
(replicated facility
style)
Enhanced
authenticity through
urban aesthetic
harmony and locals’
inclusiveness as
experience suppliers
Service quality
control
Some service
suppliers have
Quality certifications
Ratings for
restaurants and
accommodations
Comprehensive
service quality control
Ratings for
accommodation
Comprehensive and
incentivized service
quality control
EFFORTS REQUIRED
Discomforts Dependent upon
every service
supplier and local
service standards
Fully specified
comfort standards,
adapted to the needs
of tourists
Only discomforts
associated to cultural
or natural
environment
Insecurities &
risks
Dependent upon
government
regulations and
control
Full information and
safety controls on
critical issues
Full information
Safety based upon
public regulations
ENVIRONMENT COSTS
Sustainability
management
Dependent upon
government
regulations & control
Dependent upon
government
regulations & control
Sustainability
ingrained in the model
mission
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MARKETING
Needs satisfied Functional and
emotional
Mostly functional, but
also emotional
Functional, emotional
and human spirit
Target tourists All kinds of tourists Limited segments All kinds of tourists,
but mainly tourists 3.0
Marketing
guidelines
Differentiation Differentiation or
price
Mission, vision &
values
Tourist
relationships
Sales transactions
and satisfaction
monitoring
Sales transactions
and satisfaction
monitoring
Experience co-
creation, storytelling
through communities
Marketing
channels
TTOO, TTAA and
direct sales
TTOO, TTAA and
direct sales
Mission driven agents,
communities
COMMUNITY
IMPACT
Economic profits
distributed among
business owners
Economic profits
concentrated in the
resort owner(s)
Poverty alleviation,
socio-cultural change,
environment care
MAIN
CHALLENGES
Harmonize value
system and quality
standards
Develop unique
and memorable
experiences
Integrate and
associate stakeholders
Foster culture change
As it is extensively explained in the Whitepaper “Envisioning destination models 3.0”, there
are many aspects that set destination models 3.0 apart from others, but their key strength is
their appealing mission that motivates many stakeholders to contribute to the product co-
creation, to create and tell stories about the destination experiences and to become brand
ambassadors or establish different types of partnership leveraging partners brand reputation.
2. Competitiveness assessment methods
The tourism activity is carried out in relation to three different experience categories: the
experience with the products, the experience in every cluster, and the cross-destination
experience. Therefore, destination competitiveness has to be assessed at 3 different levels:
1) Product competitiveness
2) Cluster competitiveness
3) Cross-destination competitiveness
Every level refers to different parts of the overall experience, and so the analysis is to be
focused on different aspects. To further instruct our readers, a different methodology will be
used in each section, noting that many of these methodologies could be used to analyze
competitiveness for the other sections, especially the ones used in the last two sections.
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2.1 Product competitiveness
Every type of product or business has a series of key success factors that ensure somehow its
capacity to attract clients and compete with the best products of its category, at least within a
market segment. It is therefore essential to identify these key success factors for every type of
product as well as the importance of each factor for the product competitiveness.
The key success factors assessment method is one of the most useful to assess product
competitiveness, as it may be used both in the cases when the product is operating in the
destination and when it is not operating and we want to assess the destination’s capability to
develop the product successfully.
The key success factors are to be identified by a pool of experts, namely tour-operator product
managers and benchmark operators. They are also those who have to determine the relative
importance of each key success factor, in order to weigh every factor’s compliance in the final
assessment.
Then, once the importance of each factor in the overall assessment is determined, there has to
be analysis of the level of compliance of the destination for every factor in a scale of 1-10 and
then assess the gap matching capability for all the factors where the assessment is lower than
10. The gap matching capability is to explain how likely the destination is to obtain the
maximum assessment in the short-middle term at a reasonable cost. It may be assessed as
low, medium or high to simplify the procedure.
Out of the key success factors compliance and gap matching capabilities for every factor, we
make an overall assessment for each of the two types, which determine the destination
capacity to compete in the business.
In the cases where the product or business is already operating in the destination, there may
be use of the method of the competitive position & potential. In this case, we have to
calculate the Relative market share of the destination for the product (destination revenues in
the business / main competitor revenues in the sector) and the relative market share growth
of the destination for this business within a rating range from 0 to 1. Weighing the Relative
market share at 70% and the Relative market share growth at 30%, the destination
Competitive position is obtained for the business object of assessment.
Then, the Competitive potential results from the assessment of the destination’s Service
Quality, its Resources and experiences, its discomforts and insecurities, its costs and its
marketing, also rating them from 0 to 1. The weighing of each of these variables is up to the
consultant criteria; however, every variable is given a weight to orientate the reader.
The Service quality rating is to consider the overall satisfaction of the tourists with the service
quality standards of the destination, though it can also be measured through the consultant’s
assessment of the destination’s service quality standards in relation to the international
standards. The Service quality suggested weight is at 10%.
The Resources and experiences rating is to consider the value of the destination’s resources
related to the product, as well as its capacity to provide satisfactory and memorable
experiences to the visitor. This is one of the most important factors and therefore its
suggested weight is at 30%.
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The Discomforts and insecurities rating is to consider all the inconveniences and risks that the
visitor is exposed to during the experience. These may refer to pollution, noise, dirtiness,
language barriers, lack of price transparency, transfers length, etc. The suggested weight for
the discomforts and insecurities is at 15%.
The Costs rating is to consider both the price that the tourist has to pay for the experience and
the negative impact that the tourism activity creates on the destination and its inhabitants. In
this point it is necessary to carry out a sounder analysis on the congestion issues affecting
locals’ lives, environmental issues, etc. The suggested weight is at 15%.
The Marketing rating is to consider the adequacy of the destination branding for the product,
the product & brand awareness in its market, the adequacy of the product packaging, and the
efficiency and effectiveness of the marketing system for this product in the destination. The
suggested weight for marketing is at 30%.
Out of every rating and weighing, a final assessment is obtained for every factor, and the
overall assessment is the result of the factors’ sum for the Competitive position and the
Competitive potential. The Whitepaper “The 5 Competitive forces & Business Strategy”
explains these two methodologies in a more visual way, and also how these Competitiveness
assessments are used within the McKinsey matrix method to design the destinations Business
portfolio strategy.
2.2 Cluster competitiveness
Tourism clusters are areas –often encompassing many tourism sites- that are internally
homogeneous or with a distinct character. Defining clusters is structuring the territory in
smaller geographical areas which help us identify where the tourism activity is carried out and
where it can be developed, among other issues.
To assess competitiveness in a cluster there has to be analyzed both the value created by the
tourism activity for the tourists and the local community, and the efforts demanded to the
tourists and the local community. These two main assessments are to be structured in the
following points:
The value created for the tourists and the local community:
 Experiences lived, namely those that result from the services provided, which are the main
purpose of the trip and account for the greatest importance in the value assessment.
 Feelings, sensations and emotions experimented on as a result of the destination
atmosphere, natural and urban landscape, local hospitality, sounds, smells, illumination, etc.
 Service Quality provided, in relation to the service standards stated in the accommodation
ratings and expectations of all services in accordance with international standards.
 Positive impact created by the tourism activity in the local community and environment,
namely in terms of job creation, wealth distribution, heritage conservation, etc.
The efforts demanded to the tourists and the local community:
 Discomforts suffered as a result of pollution, noise, lack of cleanliness, poor comfortability
of transport, restoration or accommodation services, long transfers, congestion issues, etc.
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 Risks perceived and insecurities associated to lack of transparency in the deals, criminality,
lack of understanding due to language barriers, poor quality of transport means, etc.
 Price paid including all services, payment facilities commissions (credit card and check
allowance), currency exchange rate & commissions, complements’ price, etc.
 Negative impact created by the tourism activity on the environment, congestion issues
affecting the locals lives, business spoiling the local culture, landscape destruction, etc.
The optimum way to carry out this assessment is through enquiring from the tourists on site
when visiting the cluster area, with open questions first and closed questions regarding all
relevant items after. Tourists’ assessment and satisfaction is the best indicator to consider,
though the budget available to do this assessment is not always sufficient, and then the
experts’ assessment on site is the best alternative. Further, to assess the positive and negative
impacts, the survey should be carried out by enquiring from the local population on their
satisfaction about the aforementioned issues. Impact such as the environmental should be
assessed by specialized experts, as they are not always visible to the eyes of the population.
The Whitepaper “Clustering strategy” deepens in cluster competitiveness analysis, cluster
definition and development as a key strategy within the destination development.
2.3 Cross-destination competitiveness
Once the competitiveness of both products and clusters is analyzed, the final assessment is
that of the key factors for competitiveness common to the whole destination. This assessment
may also include brief strategy recommendations, both to further leverage the strengths and
to overcome the weaknesses, as a starting point for the strategy and action plan that usually
follows the Competitive analysis.
The cross-destination competitive assessment analyzes the strengths and weaknesses of the
destination in the following areas:
Cross-destination resources and attractions: (non-product related)
 Intangible assets such as history, glamour, traditions, gastronomy, etc.
 Groups of special clients attracting other clients, providing social networking value
 Conservation of the natural environment
 Destination character as a result of the cultural heritage conservation across the destination
 Cultural life, offering an attractive calendar of events
 Shopping offer
 Nightlife and entertainment offer
 Unexploited resources for tourism
 Proximity with other destinations with which it is possible to create routes or packages
Infrastructures, facilities and services
 Signage across the destination
 Accessibility from the outbound markets (flight connections, railways, roads, harbors, etc.)
 Public facilities and services (hospitals, public transportation, police, etc.)
 Experiential value of the transport systems between clusters and attractions
 Adaptability of facilities for handicapped people
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Human resources
 Locals’ hospitality
 Adequacy of training for the tourism professionals in skills, know-how, attitudes, etc.
 Locals’ consciousness about the importance of tourism for the economy
 Destination knowledge, and language skills of the local population
Destination atmosphere
 Air and noise pollution
 Cleanliness
 Safety
 Congestion issues
 Pedestrian streets
 Urban landscape harmony and attractiveness
 Destination life bringing opportunity to mingle among the locals social lives
Tourism services and information
 Character, capacity and quality of the accommodation services
 Proper segmentation of the accommodation offer
 Quality and diversity of the restoration offer
 Restoration and accommodation services adapted to handicapped visitors
 Availability of food & beverage for groups with special needs
 Information services available in many languages (at least those of the outbound markets)
 Information available through different channels: information offices, internet, Apps
 Precision, clarity and up to date information provided
 Quality and quantity of the information provided in the Tourism Guides
 Local Tourist guides services
Organization and management
 Importance of tourism in the Government Agenda
 Cooperation culture between public and private agents. Public-private bodies dynamism
 Professionality, integrity and proactivity of the tourism related bodies (Government, DMO)
 Adequacy of regulations to the tourism development needs
 Efficiency of the bureaucracy system to attract and develop investments
 Level of consensus on the destination model to develop
Sustainability
 Effectiveness of the monitoring system in detecting relevant issues with regards to negative
impacts related to the environment and other aspects.
 Effectiveness of the monitoring system in tracking the evolution of the tourism impacts
 Participation in the educational programs related to sustainability
 Effectiveness of new environmental friendly practices in reducing negative impacts
 Satisfaction of the local community with the tourism development
 Adequacy of the regulations to the necessary policies to guarantee sustainability
 Effective enforcement of the regulations related to development constraints & sustainability
 Conservation of the cultural and natural heritage
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Tourism 3.0 approach
 Defined mission with the support of local stakeholders and community
 Mission awareness and appeal to the target social networks
 Participation of the locals and visitors in the product co-creation and storytelling
 Percentage of tourists attracted by the stories about the life-changing experiences
 Participation of the micro-entrepreneurs at the base of the pyramid in the tourism business
 Number of local service suppliers and outside stakeholders partnering with the destination
 Success in the implementation of the culture change towards collaboration and innovation
 Satisfaction of the tourists with the life-changing experiences
It is recommendable that the consultant somehow states the priority level or importance of the
strengths to be leveraged and the weaknesses to be overcome to orient decision makers in the
design of their policies regarding investment priorities. All these cross-destination assessments
could also be accompanied with a comprehensive marketing audit, for which you may find the
methodology in the Whitepaper “The Marketing Plan 3.0”.
3. Strategies to enhance sustainable competitiveness
Once the competitiveness diagnosis is completed, and the needs for improvement are
detected, it’s time to design the strategies to solve the competitiveness gaps through cross-
destination programs, cluster competitiveness programs, and product development programs
fixing the issues mentioned in the corresponding assessment.
3.1 Cross-destination competitiveness programs
Corresponding to the cross-destination competitiveness analysis from the previous section,
these programs are to overcome weaknesses and competitiveness gaps that occur throughout
the whole destination. Hereby are explained some of the most usual programs.
Signage system. There has to be a homogeneous and integral tourism signage system for all
the destination resources, attractions and services such as accommodation, restaurants, etc.
The signage system should include at least three categories of signage, with a different design
for each: pedestrian signs, site maps, and road signs.
Signposting is to orientate tourists on how to get to every tourist attraction –both pedestrians
and car drivers-, whereas site maps are to provide the tourists with an overall vision of the site
they are visiting. Signposting should be located in all crossings that pose a question on which
way to follow, whereas site maps should be at least in the entrance of every site, and ideally
also in many points of the site, depending on its extension. They should both indicate the
interest points and the tourist routes, stating also the distance to be driven or walked until the
destination point, except for those indicating that the tourist has already arrived to the site.
As long as possible, especially for the pedestrian signposting and site maps, these should be
designed in accordance with the urban aesthetics style reflecting the character of the
destination, to enhance the sensation of harmony in the visitor. Once on the site the signs
explaining each location within the site should also be designed in accordance with the style of
the signage system.
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Route partnering with neighbor destinations. Regardless of whether nearby destinations
are within the same country or not, for some tourism sectors such as International touring or
Fly & drive, marketing an attractive route encompassing a selection of interesting destinations
is likely to be far more efficient and effective than marketing these destinations independently.
Further, it makes the product far more competitive.
This partnership may be also attractive for some types of Special Interest travel, especially in
the case of the long haul markets, whose tourists are more likely to do long routes once they
land at the destination. The sum of Special interest attractions of the same kind within a route
makes it an attractive product to justify a trip for many of these long-haul travelers. This is
also an opportunity to develop new products for many destinations in the same area, making it
a win-win development project.
Therefore it is convenient to explore partnership agreements with neighbor destinations which
are suitable for adding value to the final product, so as to share marketing costs while creating
a more attractive product. Even if many tour operators create these routes themselves, the
marketing activities not only directed to tour operators (fam-trips, workshops, etc.), but also
to the final client, are likely to increase the results of the marketing efforts.
New flight connections. A key program to develop is connecting the destination with all
target markets, by all possible means, but mostly focusing on flight connections. Accessibility
is a key factor for competitiveness, and so enhancing the capacity and the competition among
transport operators benefits also the destination competitiveness.
Attracting new flight connections is not at all an easy challenge. First, and most importantly,
the destination has to arouse sufficient demand to make the airline operator identify a
business opportunity. To do so –whenever the destination is also an outbound market for the
other- it is convenient to join efforts with the other destination’s DMO and Government in
order to boost demand to clearly creating a profitable opportunity.
The Government and DMO should share with the airline operator the Tourism development
plan, to build confidence and make them envision the business growth they can take
advantage of, highlighting the marketing activities planned for their market. It is important to
highlight that the intervention of the Government executives is very recommended, even in
the cases when it is not strictly necessary, so as to build trust from the very beginning.
Congestion, noise & air pollution management. Many tourism areas suffering from
congestion also have noise and air pollution issues, spoiling the quality of the experience and
hence reducing competitiveness. Depending on the case, there are many possible types of
solutions for both congestion and pollution.
Transforming road streets into promenades or pedestrian streets, or restricting transit to
neighbors is one of the most effective strategies, as it not only reduces all types of pollution
but also creates tourist friendly spaces and boosts the street food & beverage and retail
businesses. Some famous tourist towns have prohibited gasoline vehicles, allowing only
electric motor taxis to operate, solving both congestion and pollution issues, while providing
public transportation services.
Defining the carrying capacity for every area and constraining flows according to this capacity
is essential to manage congestion and the resources sustainability. Such restriction may be
managed by assigning entrance schedule in advance through online ticket booking or on site.
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In line with the aforementioned ideas, it is also possible to close transit to private vehicles and
allow non-polluting public transportation only to operate in the tourist areas threatened by
congestion and pollution. When there is no advance ticket booking system, but only queuing, it
is advisable to inform visitors about the estimated queuing time at every site or attraction, so
as to let them plan their experience most efficiently. This is a common practice in Theme
Parks, but it may be applied to other cases. Finally, selling priority tickets at a higher price for
those willing to skip queues or not having time to wait provides added value service and an
extra source of revenue for the destination operator.
Charming transport systems. In line with the aforementioned congestion challenges, a
smart solution to both release congestion and boost visits to the least popular sites is to
develop charming transport systems connecting all sites and attractions throughout the
destination. Both within and between clusters, the charming transport systems make the
mobility an iconic experience of the destination, stimulating visitors to discover all hidden spots
beyond the most crowded ones.
Such transport systems may be boats whenever there are water canals or lakes, rickshaws in
Asia, horse carriages, old fashioned tramways, trains and funiculars with character, seaplane
flights, snowmobiles, sledding carriages pulled by horses or reindeer, old fashioned taxis,
bicycle rental, animal ride –elephant, camel, horse, etc.- in wilderness areas, etc.
This is not to be confused with some sightseeing products, whose goal is to let the visitor see
all the destination spots without necessarily getting off the transport system; it is a sightseeing
experience but it’s major goal is to move people from one site to another, releasing crowded
areas and enhancing visits to the least accessible ones, spreading the tourist flows throughout
the destination while enhancing its character.
Enhancing urban aesthetic harmony. As stated in previous sections, urban landscape is an
important part of the destination attractiveness and therefore is something to consider in
competitiveness plans. Elements such as the construction style, facade colors and materials,
urban aesthetics style –dustbins, benches, fountains, etc.- and premises signs determine the
aesthetic experience of the visitor by enhancing the character of the destination.
Destinations lacking this kind of style harmony should carry out a Plan stating the colors,
materials and designs of all urban aesthetic elements, the intended illumination atmosphere
banning premises signs that shine disrupting the atmosphere, the creation of green spaces,
the style, range of colors and materials allowed in the buildings facades, the need for cleaning
the facades, etc.
Implementing such a kind of program is a serious challenge, so long as it entails sometimes
enforcing the house owners to clean or carry out work on their houses facades, which usually
goes beyond their obligations stated by law. In these cases, it is advisable to plan an incentive
system together with a subsidy or soft credit plan not to charge private owners with the whole
cost of the Plan. So long as the result is a much more attractive destination, this is a profitable
investment to carry out.
Consciousness and hospitality campaign. It sometimes happens that tourists are regarded
as aliens by the local residents, not making them feel welcome during their stay. Connection
with locals is indeed very appreciated for many tourists, and making them feel welcome is
likely to increase their satisfaction and therefore the destination competitiveness.
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The solution to that challenge is to carry out a campaign informing the local inhabitants about
the importance of the tourism industry for the local economy: the amount of businesses and
jobs that are directly and indirectly created and sustained thanks to the tourists. It is
necessary to make them understand the importance of their attitude towards visitors to keep
the business developing in favor of the economy.
In this point it is necessary to point out that some tourists do not behave properly while they
are visiting their holiday destination, and so contribute to create a feeling of rejection by the
local population towards visitors. In these cases, the hospitality campaign should be preceded
by a redefinition of the targeting strategy to prevent certain types of tourists coming, and at
the same time controlling the tourists’ behaviors by the local police.
Regulation and bureaucracy system audit. As mentioned in the cross-destination
competitiveness diagnosis, the adequacy of the regulation is essential to foster sustainable
development. Regulations are to enforce the policies determined in the strategic development
plan, and so whenever there is any strategic shift or new practices are to be implemented, the
regulation has to adapt to these changes.
Carrying out a regulation audit is to detect gaps in the present regulations with regards to the
intended policies. This may mean some needed changes in the regulations, adding new articles
within the existing regulations, or in some cases elaborating new regulations. The audit should
state what kinds of behaviors, undesired actions or practices are being permitted by the
current regulation to justify a change, and what risks are assumed by the current gaps.
Furthermore, there should be auditing of the bureaucracy system concerning the starting up
procedures for new businesses to detect inefficiencies and bottlenecks that cause unnecessary
delays. An agile bureaucracy system is an important factor that enhances chances of
entrepreneurs and investors choosing the destination to set up a new business.
Conservation of natural and cultural heritage. The cultural and natural heritage is the
bulk of the destination landscape and also the core of many tourism experiences. A proper
conservation is therefore essential for the tourism competitiveness and sustainability, and so
this type of program should always be among the top priorities.
The conservation of the natural environment entails not only cleaning, but also managing the
risks like fire or epidemics in forests, water depuration, installation of the proper systems to
manage waste, and prevent people from littering and damaging the environment. In some
cases, when there is some heritage of special value, it is convenient to create a protection area
to prevent visitors from entering and spoiling the natural life.
With regards to the cultural heritage, there may be many types of assets to consider: historic
buildings and monuments, where restoration is necessary; traditions, to be leveraged by
creating events marketable to the tourists; local gastronomy, arts and crafts to be leveraged
through the creation of outdoor markets; history, to be leveraged through the creation of
ethnographic and history museums.
Human resources training. Many competitiveness gaps in service quality are usually due to
HR training deficiencies. Identifying these competencies gaps with precision is therefore
necessary to overcome this challenge. This should be a responsibility of those in charge of the
monitoring system, to track the evolution of HR training needs, by enquiring executives on
their employees’ training needs. The support of foreign experts may be also necessary.
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Such training needs may correspond either to higher educational programs (University level)
or professional training programs (Professional schools). Sometimes it may be needed to
improve the existing programs including new competencies and knowledge, but in other cases
it may be necessary to create brand new programs. In this regard, the availability of the target
users should be carefully assessed, to consider the convenience of programming also distance
learning versions of the same program when possible, and to determine the courses schedules
to make them compatible with the professionals working ones.
Moreover, it may be convenient to consider subsidizing language courses or creating free and
engaging language courses through radio or TV channels for the locals to improve their
language skills, in order to communicate and connect better with the tourists. In relation with
the aforementioned hospitality, this would help also enhancing the visitor experience.
Accommodation upgrade and development. In accordance with the desired development
and expected growth, the strategic repositioning or new segmentation, it may be convenient to
attract new investors to develop new hotels, to upgrade the category level of the existing
ones, or to convert them into new concept accommodation facilities.
When upgrading accommodation facilities, the strategies to follow are implementing quality
certifications and upgrading the international star based rating. These are to ensure certain
quality standards related to the provided service and the procedures. Such implementation
could be incentivized in many ways: preferential position in the DMO marketing activities and
materials, fiscal incentives, soft credits, partial subsidy, etc.
In the cases when the destination reshapes the segmentation strategy –focusing the attention
on new specific targets, with special needs-, the implementation of a Brand label system is the
most appropriate solution. There could be brand labels for families, singles, GLBT, Chinese
(food), people with food constraints (celiacs, diabetics, etc.), vegans & vegetarians, etc.
Eco-label system. To help some operators set themselves apart in terms of sustainability
management, the implementation of an eco-label system may also help to foster an eco-
friendly culture among the destination operators. There should be different eco-labels
depending on the environmental impact degree of the operator, describing precisely the
obligations, practices and constraints to comply with for every label category. These would be
different depending also on the type of operator.
To extend the implementation of this eco-label system, it would be convenient to design an
incentive system consisting of both fiscal and marketing incentives. These last ones may
consist of privileged position in both marketing materials and activities.
Eco-labels are especially convenient for destinations marketing ecotourism related products,
and also when targeting geographical markets that are especially sensitive to environmental
issues such as the Nordic Countries, Germany, Australia, Canada, etc. This is a must have
program for destinations intending to approach the vision of Tourism 3.0, as it is an effective
and visible way to reduce negative impacts in the environment, enhancing sustainability.
DMC incubator. One of the key goals of Tourism 3.0 is to create life-changing experiences
while fostering entrepreneurship at the base of the pyramid to alleviate poverty. The best way
to do so is to create DMC incubators, where new entrepreneurs are trained and provided with
the necessary infrastructure and services to start operating their business at no cost. They are
designed to be the perfect environment to start up a business.
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Given the nature of the tourism businesses, this idea is only –or mostly- applicable to DMC,
businesses offering activities and integrated packages. However it should provide training and
advisory services to other types of businesses such as accommodation, food & beverage, etc.
This could be also the place where to organize the co-creation workshops, to inspire these DMC
owners in developing their products; and should be closely collaborating with the open
innovation system, to benefit from the collective intelligence and imagination in their product
development challenges.
Tourist information offices. A necessary facility to provide the tourists with information and
support while at the destination is the information office. There should be one in every hot
area of the destination, where all the tourists arrive within a cluster or an important site.
There should be also a central information office at the destination main transport hub or one
of the hottest points, from where all information services are coordinated. In this point, there
should be also a call centre for all tourists willing to obtain information by phone. This would
extend its service schedules beyond the tourist information offices’, to provide at least 12 hour
uninterrupted service every day.
These call centres could also provide a translation service for foreign tourists not mastering the
local language. The translation service would help the tourists to establish communication with
locals when asking for some information, but also to translate text to be sent through the
mobile. This could be very appreciated by tourists, and also an extra source of revenue for the
DMO, responsible for the tourist information offices.
Destination App. Apart from the tourist information offices and guides, modern tourists like
to have all or most of the information in their smartphone. Apps provide excellent information
services, being able to provide tailored information on demand, high quality pictures and
videos, downloadable maps, and many other features.
In the case of Tourism 3.0, Apps may be also a tool to foster tourist contribution to the content
marketing system and product co-creation. Apps can operate like a channel through which the
tourist provides service reviews and ratings, creative reviews about products, pictures, videos
and text based stories, etc. It is important to point out that the destination should count on
many free wifi areas to empower the Apps in providing all the possible services and up to date
information.
Finally, Apps may also be a sales channel, providing access to the destination branded
souvenirs online store, booking service, and also offering special deals near the location of the
tourist through the geo-localization technology. Altogether, it is a very powerful tool, which is
actually likely to become the main information supplier and the main channel to connect
tourists with the destination operators. Closely related to the App services, the new
technologies for augmented reality should also be included to provide a higher experiential
value to the tourists through their mobile devices.
More ideas on how to enhance competitiveness approaching Tourism 3.0 may be found in the
Whitepapers “The Marketing Plan 3.0” and “Envisioning destination models 3.0”.
When elaborating the Competitiveness Plan, it is necessary to explain for each program the
goals, the strategy and actions to take, the bodies and persons accountable for its
implementation, the program priority level and an estimated budget, encompassing all the
relevant details to make it effective.
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3.2 Cluster development: enhancing value, reducing efforts
As it has been explained in previous sections, competitiveness is the relationship between
value offered and efforts demanded, and therefore increasing competitiveness is to be
achieved either by increasing the value offered and/or diminishing the efforts demanded. This
section explains all kinds of value factors that may enhance competitiveness, and all types of
efforts that diminish it, so as to have a more practical approach and inspire strategists in their
Competitiveness Plan recommendations for every cluster, considered as an independent
geographical unit for the Competitiveness planning.
In accordance with the formula explained in the Cluster Competitiveness assessment section,
the factors to develop are Experiences, Feelings, Service Quality, Discomforts, Risks, Price and
impacts of the tourism business on the destination. When assessing all these factors, it is
important to understand the kind of value that every factor contributes to generate:
 Spiritual value: the relationship between the positive impacts and the negative ones is
what makes the destination more or less appealing to the tourists’ human spirit.
 Emotional value: the relationship between experiences, feelings, discomforts and
insecurities is what makes the destination generate positive and negative emotions.
 Value for money: the relationship between service quality and price appeals to the rational
mind of the tourist, and is the least influential in the decision making process.
3.2.1 Spiritual value
The programs or actions to neutralize or reduce the negative impacts of the tourism activity
are nearly or exactly the same ones that eventually manage to create positive impacts. In
most cases, it is just a matter of the initial state of the destination and the intensity and
ambition of the program what makes the difference between neutralizing or reducing negative
impacts, and creating positive ones. Such impacts may correspond to three different spheres
of influence: social, economic and environmental impacts. The main factors that create
spiritual value in a destination are the following:
Fostering entrepreneurship at the base of the pyramid and training the poorer layers of
the local community to integrate in the labor market not only reduces poverty but also
enhances social cohesion, and creates a spirit of social harmony as a result of the integration
of these groups of people in the community. This is very likely to be perceived by the visitors
and appreciated by their human spirit.
Encouraging community members to contribute through the open innovation system in
creating stories, co-creating products and bringing in ideas to enhance competitiveness is
also a powerful social impact generator. Leveraging people’s talents, rewarding and giving
them recognition for their contribution makes them feel like valuable protagonists within the
tourism industry system, and helps them grow personally, eventually shifting their attitude
towards tourists, being more hospitable and helping them have a memorable experience.
Preserving the natural environment and fostering the growth of the local endemic
species helps the destination boost its uniqueness and character. Creating green spaces both
in the public and private areas with typically local trees, plants and flowers conveys a spirit of
healthy environment. Furthermore, in the cases where there are typically local animal
species, it is also good to make them be part of the destination experience. Both lush animal
and vegetable life provide positive impacts to the visitors’ human spirit.
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Enhancing the attractiveness of the destination also makes it a pleasant living place for
its inhabitants. Improving cleanliness, heritage restoration, developing cultural entertainment
–events, museums, etc.-, creating green spaces, clearing pollution, making the urban areas
more human friendly, harmonizing urban aesthetics and enhancing other aspects of the
landscape are appealing to all community stakeholders.
Boosting economic development and wealth creation is one of the main goals of tourism
development. The tourism 3.0 approach intends to spread the generation of wealth among
all types of stakeholders. A clear indicator of success is therefore the increase of disposable
income throughout all layers of society. The extent to which the destination collaborative
model expands is one of the main key success factors to make it happen.
The key idea behind the creation of spiritual value is the balanced development and shared
growth, considering tourism businesses, employees and micro-entrepreneurs, local inhabitants
not related to the tourism activity, non-tourism businesses, and the cultural and natural
heritage. Tourism development should be a win-win activity for all elements that are part of
the destination life to make it appealing to the visitors’ human spirit.
3.2.2 Emotional value
The value created by the experiences and feelings in relation to the discomforts and risks lived
by the tourists during their holiday in the destination is referred to as emotional value. In this
point, there are many types of experiences, feelings, discomforts and risks to talk about, for
each of these four factors is explained through the development of many categories.
Experiences
When classifying experiences, there are many possible criteria that can be used. According to
the relationship established between the tourist and the destination:
 Edutainment: to learn while entertaining in an active relationship that keeps the tourist
mentally absorbed.
 Entertainment: to see, listen, smell, touch in a rather passive relationship that keeps the
tourist mentally absorbed.
 Escapism: to do some kind of sporting or physical activity that keeps the tourist active and
physically immersed in the destination.
 Esthetic: to be there, rather sightseeing entailing a passive relationship that keeps the
tourist physically immersed in the destination.
Furthermore, the life-changing experiences leading the development of tourism 3.0 could
also be classified in many categories depending on the type of transformation or change
experienced by the tourist:
 Personal awareness & discovery, and spiritual development
 Social awareness and cross-cultural understanding
 Environmental consciousness and education
 Skill development in arts, communication and leadership
 Transfer of values and wisdom
 Personal transformation by discovering the fulfillment of contributing to the greater good
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Finally, the experiences may also be classified according to the product or service they are
generated by. In this classification, we distinguish many kinds of experiences:
 Restaurants: food-street markets, panoramic restaurants, underwater restaurant, show
cooking, boutique restaurant in a special location like a boat, self-cooking, terrace with view,
cave restaurant, restaurant with live music & performance, etc.
 Sightseeing with original & charming transport systems: gondolas, old fashioned
tramway, rickshaw, seaplane, tourist train, dogsledding, snowmobile, camel/horse/elephant
ride, hot balloon, helicopter, cable-car, transparent bottom boat, charming old boat, etc.
 Accommodation: huts in trees, Ice hotel, monastery, boutique hotel, boat hotel, huts in the
jungle, transparent ceiling igloo, cave hotel, castle, underwater hotel, etc.
 Shopping: street markets, theme markets, shopping villages, artisans show-crafting,
educational shopping –explaining how the product is done, or/and its benefits-, etc.
 Culture & entertainment: Imax/3D cinema, charming villages & old towns, botanical
garden, zoo, aquarium, wildlife watching, storytelling performance, museum, religious
ceremony in a temple, visiting a Palace or a castle, theatre, opera, music festivals, music &
fireworks & springs, street theatre, acrobatics show, etc.
 Fun: adventure park & zip lines, roller coaster, party boat, water park, amusement park, etc.
 Iconic experiences: these take place in an iconic building and may consist of many
different types of activities such as sightseeing from a privileged position, attending events,
museums, accommodation, etc. The iconic buildings may be a telecom tower, big wheel,
Congress Centre, Opera House, Wellness & Spa center, Sporting events venue, Imax
Cinema, bridge, hotel, museum of science, national theatre, temple, stadium, etc.
 Special interest: cycling, hiking, learning to cook, bird watching, climbing, diving,
snorkeling, sailing, learning languages, marathon, Sport events, learning about art, Cultural
events, pilgrimages, wildlife discovery, skydiving, etc.
Feelings
There are also many kinds of feelings that the destination atmosphere may create in the
visitor. Such sensations can be created through adding several kinds of features or extras that
provide feelings of life, authenticity & harmony, magic atmosphere, variety, fun, etc. Such
extras may be, for every kind of feeling:
 Harmony & authenticity: urban aesthetics, people /employees dressing in traditional
costumes, architectural style, souvenirs, cultural monuments & sculptures, natural smells,
open kitchen in a restaurant, religious ceremonies, artisans handcrafting products, etc.
Charming destinations are famous for their identity reflected in their architectural style.
 Life: wildlife (birds, butterflies, squirrels on trees, flying fish, ducks and swans on water
canals or lakes, etc.), artists performing outdoors (human sculptures, musicians, painters,
acrobats, etc.), street markets, water springs, liveliness of local population, plants and
flowers on balconies, people performing traditional arts (dancing, tai chi, etc.), and
everything else that turns sightseeing into life-seeing and feeling.
 Magic feelings: Night illumination with different colors, attractive smells, fireworks,
inspiring music, dancing springs, permanent nice surprises, sophisticated street
performances, etc. and the synchronicity between all these elements.
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 Variety: different kinds of shops in shopping streets, broad range of courses in a menu,
facades of different colors, markets with wide variety of products, gardens with many types
of plants and flowers, options for amusement, architecture, etc.
 Hospitality: cleanliness, proper indoor temperature, kindness of the local population, proper
condition of the cultural and natural heritage, interior design and materials, service
personalization, etc.
 Relax: birds singing, water flowing, relaxation music, green areas, silence, etc.
 Safety: cleanliness and good conservation of the urban landscape, kindness and honesty of
the local population, peaceful atmosphere, lack of beggars in the streets, illumination at
night, police in the streets, smooth traffic, good functioning of public services, etc.
Besides, there are some feelings closely related to Tourism 3.0:
 Personalization: making the tourist feel as a unique person, being called by one’s name by
service suppliers, being able to tailor the service experiences, small personalized gifts, etc.
 Contribution: letting people know how their contribution in the open innovation or content
marketing system is useful for the destination, letting people visualize the result of their
contribution, letting visitors provide ideas and opinions on as many issues as possible, etc.
 Growth: learning new skills, opening one’s mind, gaining personal and social awareness,
acquiring new good habits, and all that results from the life-changing experiences.
 Recognition & reward: being mentioned in a public place or document for your
contribution, receiving an award, receiving a tangible reward, etc. for your contributions.
Discomforts
There are many sources of discomforts that tourists may have to face:
 Lack of cleanliness: in the accommodation, transport facilities, restaurants, streets, tourist
sites, urban and natural landscape, etc.
 Lack of proper services and infrastructure: uncomfortable transportation means, poor
comfortability of the accommodation, poor variety and quality of food & beverage, etc.
 Adverse weather & air conditions: temperature, wind, humidity, rain, air pollution, etc.
 Bureaucratic procedures: visas, money exchange, special permits, etc.
 Cultural differences: different schedules, language barrier, different values, food, having to
dress in a certain way, etc.
Risks
There are many types of issues that create insecurities in the tourists:
 Safety: Lack of proper safety standards in services and infrastructure, lack of street security
(vandalism, terrorism, pickpockets, etc.), meteorological threats, etc.
 Health: lack of emergency & medical services, threat of contagious illnesses, etc.
 Information: lack of information about the destination, language barriers, lack of proper
signage, lack of price transparency, etc.
 Service quality: possibility of luggage lost or late arrival, transport delays, etc.
 Uncontrollable risks: weather conditions impeding the planned activity, etc.
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3.2.3 Value for money
The value assessed by the rational mind is that which takes into account the services and
service quality received in relation to the prices paid and overall costs. This is usually the least
important of the factors to assess the destination competitiveness, but it should not be
disregarded, as the importance of every type of value depends on the type of target, and price
sensitive tourists abound. In this regard, it is important that the destination offers a range of
services –namely accommodation- to match all targets’ budget. There are many different
issues to consider when assessing both Service quality and price.
Service quality
Service quality may be defined as compliance with the client’s expectations in all kinds of
services provided throughout the trip:
 Transport: punctuality, comfort, schedule availability and adequacy, staff attention, added
services like entertainment, food, etc.
 Accommodation: staff attention, compliance with the rating system & quality certifications.
 Food & Beverage: taste, variety, originality, healthy production procedures, quality of the
ingredients, cleanliness of the premises, etc.
 Activities: safety, staff kindness, compliance with sales information, etc.
Price
Price issues encompass many factors affecting the overall cost:
 Currency exchange: both the exchange rate and commission may entail a significant cost
 Package price: the bulk of the budget goes to transport and accommodation, especially
when buying a holiday package
 Tips: many countries are used to receiving tips in service businesses
 Daily expenses: all costs related to daily life not included in the package, like meals, public
transport, snacks, etc.
 Shopping & souvenirs: this is sometimes one of the main activities or purposes of a trip,
and so eventually accounts for a considerable percentage of the overall budget.
Improving cluster competitiveness is a complex challenge to tackle, as it entails a large array
of variables which in many cases have to be coordinated. Further, it is important to know
which of these factors are more and less important to our targets, to prioritize our efforts.
3.3 Product development and competitiveness programs
Beyond the cluster’s and cross-destination conditions, product competitiveness is no doubt a
key factor to consider in the overall assessment and strategy. Product competitiveness
strategies entail sometimes developing new products and others just improving the current
ones. In this regard, this section explains the key product development strategies and
methods, some product development programs that are used in most destinations, and also
the product competitiveness strategy and most common programs.
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3.3.1 Product development strategy
Developing new products is not an easy challenge. Once the product portfolio strategy is
defined, the product categories to develop are established. Then, from the product category to
the marketable product is where creativity and product development mastery make the
difference. The main steps of the product development are the following:
1. Conceptualization
2. Business model design & test
3. Feasibility study and assessment of social and environmental impacts of the product
4. Business Plan
5. Launch
6. Monitoring performance & improvement
Even if the Product Manager is solely responsible for the product development, in Tourism 3.0,
the co-creation and the ideas coming from the open innovation bring support in the steps 1, 2
and 6. Steps #1 and #2 are supported by the contribution of the co-creation workshops and
the Open Innovation System through various types of contributions: professional and non-
professional; whereas the step #6 is supported by the visitor’s creative reviews after their
experience with the product.
The case of the life-changing experiences is where co-creation and open innovation play the
most decisive role, due to their complex nature, as they have to provoke some kind of
personal transformation in the visitor, far beyond the usual tourism experiences. Their
development process is therefore more complex as well. The development of life-changing
experiences entails the following steps:
1. Starting from the mission as an inspirational mantra, and listening to related stories to
better understand the life-changing idea, define the experience concept based on its life-
changing goals (effects or impacts), the constituents of the positive change (those who
benefit from the activity), and the activity behind the experience.
2. Try to include storytelling training as a part of the experience, to generate new stories
3. Business model design & test
4. Feasibility study and assessment of social and environmental impacts of the product
5. Business plan
6. Launch
7. Monitoring performance & improvement
In this case, the Product Manager has to supervise the adequacy of the ideas being
developed through the open innovation, the product development contests and the co-creation
workshops, to help improve & refine them, and to invigorate contribution. The Product
Manager is also in charge of selecting and managing channel partners, organising the
aforementioned events, benchmarking and managing customer feedback.
Once the life-changing experience product has been launched, the performance is monitored
and creative reviews are encouraged, along with the creation of stories about the experience.
These two are the most inspirational sources for product improvement and new products
development. The capacity of the product to be customized for every tourist makes it more
productive in terms of stories created and creative reviews.
COMPETITIVENESS PLANNING 3.0
w w w . e n v i s i o n i n g t o u r i s m . c o m 25
Beyond customization right before or during the experience, co-creation may take place in
many different ways:
 Co-creation workshops, organized as a creative and educational activity open to all
stakeholders, which in turn may provide valuable ideas to develop products.
 Product development contests, organized to promote contribution to the open innovation
system providing elaborated ideas on how to develop new life-changing experiences.
 Ideation bank contributions, permanently accessible as a section of the open innovation
system, where innovation needs are posted, and solutions are submitted and voted.
 Product Manager’s creation based on inputs from creative reviews and new stories,
permanently inspiring and nurturing the marketers’ creativity.
 Local service supplier creation based on own creativity, inputs from reviews and stories,
and the technical support of the Product Manager.
The Product co-creation workshops play a critical role as both educational and productive
events. There, Product Managers explain the product development process and the key
success factors for creating life-changing experiences according to the destination’s mission.
The workshops educate the attendants in the art of ideation and team working to generate and
refine ideas leveraging all group members’ creativity.
Attendance should be mandatory for local DMC like the micro-entrepreneurs from the base of
the pyramid, but also the participation of all other community stakeholders should be
encouraged. Other interesting targets could be school students as part of their education,
members of mission driven organisations such as NGO, etc.
3.3.2 Product development programs
There are certain types of products that may be developed in many destinations:
 Events calendar: there should be an Events committee in charge of designing an attractive
calendar of events, both to cover seasonality gaps and to strengthen the value during the
high season, when there is the toughest rivalry among destinations.
 Theme routes: leveraging both material and immaterial natural or cultural heritage may be
achieved by creating theme routes. These may consist of visiting places related to a story or
a historical character, or just linking related resources.
 Shopping streets: streets with a sufficient number of attractive stores could be marketed
as shopping streets creating a brand, attracting new ones, and enhancing the stores service
competitiveness to guarantee a premium shopping experience.
 Attraction of DMC to the destination offering special interest experiences that are being
developed in other destinations to broaden the product portfolio. Some DMCs know-how may
be highly appreciated and even have a market prestige that attracts visitors themselves.
 Souvenir product line: all destination brands may be leveraged through the creation of a
merchandise product line, encompassing typical branded products (t-shirts, caps, etc.) and
also genuinely local souvenirs related to the unique destination assets.
 Destination smart card: specially conceived for city destinations, the smart card
encompasses public transport allowance, free entrance to many sites and discounts for many
other sites, along with some vouchers for restaurants and other services.
COMPETITIVENESS PLANNING 3.0
w w w . e n v i s i o n i n g t o u r i s m . c o m 26
3.3.3 Product competitiveness strategy
Beyond the development programs to create new products, there are also programs to
improve the current products’ competitiveness. In this point, however, it is also necessary to
talk about product competitiveness strategy, as the programs are in fact a concrete idea as a
result of the product improvement strategy.
The product improvement strategy follows the same methodology of the cluster improvement
strategy: creating more value and reducing efforts, which ultimately means creating more
resources, experiences and feelings to add value, and developing or improving infrastructures
and services to reduce discomforts and risks. Furthermore, when assessing every product
individually, it is also convenient to make management and marketing recommendations to
attract more visitors and/or to increase their expenditure, reduce congestion problems,
increase safety, and other practices to reduce risks and discomforts.
The following examples may better illustrate the product improvement strategy:
Resources and experiences
Restaurants: adapting charming buildings’ spaces, gardens or terraces as a restaurant may
be a very profitable way to create new experiences and revenue streams.
Souvenir shops: when the tourist is satisfied with the site experience, he/she often looks for
some kind of object to remember that experience, or to have more information about it.
Creative activities: it is well known that many tourists are willing to take an active role in
their tourist experience. Creative tourism is a new trend adaptable to many cases.
Animation: improving the atmosphere feelings may be achieved by integrating performing
artists such as musicians or painters, adequate music and illumination, shifting from
sightseeing to life-seeing.
Guided visits: either through audio-guides or tour guides, providing interesting information
and stories about the site always enhances the value of the experience.
Decoration: the details make the difference between an outstanding experience and a normal
one. All decoration elements should be carefully regarded to create an excellent atmosphere.
Infrastructures and services
Signage: not only to arrive to the site but also to move around within it, good signage is
essential to help the visitor get the best out of his or her time.
Food & beverage: even if it is not an essential part of the experience, it is necessary to
provide visitors with the chance to buy snacks or drinks, offering a good range of products.
Personnel training: ongoing human resources education in the right attitudes and skills
development is recommended to guarantee a good service.
Information: offering precise information to get to the site (website, leaflets, guides, etc.) is
as much important as information about the site resources, itineraries, stories, etc.
COMPETITIVENESS PLANNING 3.0
w w w . e n v i s i o n i n g t o u r i s m . c o m 27
Accessibility: sometimes there are sites isolated within their cluster, with limited accessibility
due to poor public transport service. Services such as “taxi calling” can solve this issue.
Urban aesthetics: some elements such as benches, dustbins, public lighting are essential to
keep the tourist areas clean and safe, as well as to provide comfort to the visitors.
Congestion: some sites suffer from congestion issues to be solved through regulated group
sizes, scheduled visits to control flows, queuing time information, etc.
Marketing and management
Connection with other sites: arranging public transportation and sightseeing services to
connect sites between them helps the visitor to have time to see more attractions.
Venue for events: some sites may be offered to hold special events such as weddings,
concerts, cultural performances, exhibitions, etc. bringing in an extra source of revenue.
Accommodation: some sites offer an excellent condition to operate accommodation services,
adapting an old building as a boutique hotel, for instance, to obtain a new source of revenue.
Price: depending on the improvements made, the price may be revised accordingly. It is also
convenient to make a deal with the aforementioned smart card, discounts for groups, etc.
The priority need for one or another improvement is to be assessed by the consultants, though
a survey enquiring from the tourists about their satisfaction on many issues and the suggested
improvement needs is highly recommended.
3.3.4 Product competitiveness programs
Beyond the aforementioned recommendations for specific products or sites, these
competitiveness programs should also be taken into account, as they apply to the whole
product category:
Product clubs are voluntary associations of stakeholders related to the product category,
working like a forum or think tank, and led by the DMO Product Manager responsible for the
product category, with the following goals and functions:
 Carrying out market intelligence research
 Analyzing competitiveness gaps, marketing KPIs and weaknesses to overcome
 Planning, funding and coordinating the marketing activities
 Developing new products and improving product competitiveness
 Monitoring the result of the marketing activities and product operations
 Lobbying to solve problems affecting the product business
 Training the local operators in marketing and management
Product Quality labels facilitate the identification of key attributes by the tourists to help
them prioritize their visits. Obtaining a label entails complying with certain quality
requirements that eventually encourage operators to improve product competitiveness.
COMPETITIVENESS PLANNING 3.0
w w w . e n v i s i o n i n g t o u r i s m . c o m 28
For instance, there could be labels such as “Gourmet restaurant”, “Charming village”,
“Historical site”, “Boutique hotel”, etc.
The method to develop the Product Quality labels should be the following:
1. Selecting the special labels to create
2. Defining the requirements in cooperation with the Product Clubs
3. Labels graphic designing
4. Carry out communication campaign targeting local operators to adhere to the label
5. Assessing interested operators on the requirement compliance
6. Introducing the Product Quality Labels in the marketing materials
Benchmarking trips are organized by the Product Club for the destination product operators
with three main goals oriented to improve product competitiveness:
 Learn best practices from the best performing destinations and operators
 Learn about the destination model key success factors and competitive advantages
 Inspire operators with ideas on developing products, providing more value with less efforts
The benchmarking trip organisation should consider the following steps:
1. Identifying possible benchmarks: destinations and operators
2. Studying every benchmark to figure out what can be learnt from each one
3. Choosing the benchmarks with the most applicable know-how to the destination
3.4 Enhancing competitiveness through open innovation
As explained in many previous Whitepapers, the Open innovation system is one of the key
features that set destinations 3.0 apart from competitors. One of the outcomes of the
innovation system is the generation of ideas for improving competitiveness at all levels:
product, cluster and cross-destination.
Product
 Ideation bank for developing new products
 Product development contests
 Forum discussions to detect weaknesses and new ideas
 Professional advisory on improving product competitiveness
Cluster
 Forum discussions to detect weaknesses and new ideas
 Professional advisory on improving cluster competitiveness
 Mission driven innovation challenges to tackle cluster competitiveness issues
Cross-destination
 Forum discussions to detect weaknesses and new ideas
 Professional advisory on improving cross-destination competitiveness
 Mission driven innovation challenges to tackle cross-destination competitiveness issues
COMPETITIVENESS PLANNING 3.0
w w w . e n v i s i o n i n g t o u r i s m . c o m 29
Further, it is important to remember that the Monitoring system is to gather information that
eventually should help in determining competitiveness improvement priorities and orientating
improvement direction. This information is obtained as a result of the following research goals:
 Tourists’ needs, problems, and concerns in view of identifying insecurities and discomforts to
be addressed through improvement or development of new services and facilities.
 Tourists’ motivations and concerns to sense the convenience of developing new products or
mission driven tourism activities.
 Tourists’ opinions to pre-test ideas on new products or marketing initiatives, to ensure their
viability and adequate development.
Beyond these outcomes, both the open innovation and monitoring system are flexible and so
permanently open to add new features and activities to tackle new challenges in the most
appropriate way, and so the variety of outcomes may increase constantly. The Whitepaper
“Envisioning Open Innovation in destinations” is to explain further details on these issues.
4. Implementation
Once the elaboration of the Competitiveness Plan is considered to be finished, the final step is
implementation. Implementing strategy through the aforementioned programs entails 6 key
sequential activities:
1. Reaching a certain degree of consensus on the priorities to assign budget funds
2. Defining all the tasks to be carried out to implement every program
3. Establishing accountabilities for each of the tasks of every program
4. Operationalizing the key performance indicators (KPI)
5. Measuring the evolution of performance in accordance with the KPIs
6. Assessing the results of the KPIs on a pre-defined frequency to consider the need to reorient
strategy or carry out tactical changes
4.1 Tracking destination performance for the Competitiveness Plan
At the end of the Plan the key performance indicators are defined. As done in any Strategic
Plan, every KPI is assigned with an accountable person in charge of its tracking and
interpretation, a priority level to determine its relative importance compared to other
indicators, and a frequency determining how often the indicator has to be measured.
The Observatory in charge of the monitoring service is likely to be the most appropriate agent
to carry out the tracking of the KPI, in close collaboration with the Competitiveness Club, the
DMO and representatives of the Government. For most of the programs, the only way is to
carry out a survey on satisfaction asking the tourists about all the correspondent issues. The
best moment to do so is when they are about to leave the destination, while at the check-in
queue or waiting hall at the airport, for instance. Airports provide us with an excellent
opportunity to target specific segments for geographical markets. Another good option is to do
it in the hotel halls. The survey should ask about their satisfaction on every issue object of
study, their assessment about it on a scale of 1-5, and the importance given also from 1 to 5.
COMPETITIVENESS PLANNING 3.0
w w w . e n v i s i o n i n g t o u r i s m . c o m 30
However, there are some competitiveness programs for which specific KPIs can be designed.
With regards to the cross-destination programs, this is the case of the following programs:
New flight connections: considering not only the connections themselves, but also the
overall capacity (number of flights x airplane capacity). Consider also the capacity increase in
the current connections.
Congestion, noise & air pollution: there are specific sensors to measure both noise and air
pollution, and also to measure the number of vehicles transiting through a certain point. To
count people, there have to be “counters” –persons- in the critical bottlenecks or hot points.
Human resources training: the attendance and successful compliance of the learning goals
assessed through skill and knowledge examinations is the main way to measure the
effectiveness of this program.
Accommodation upgrade & development: the number of new accommodation facilities
built, as well as the number of facilities having been certified with a quality certification or a
higher star rating should be the main indicator.
Eco-label system: the number of eco-labels certified for each kind of operator, as well as the
number of certifications for each eco-label category for every type of operator, to measure
both the environmental friendliness of every type of operator in percentage and intensity.
DMC incubator: both the number of micro-entrepreneurs working in the incubator and their
business growth should be measured. Besides, also the time needed for them to be self-
sufficient and abandon the incubator, as well as the training assessment should be considered.
Tourist offices & call center: in both cases the service demand should be measured, paying
attention to what kinds of information are most demanded. Ideally, also the service demand
concentration in certain hours should be measured to provide the adequate resources.
Destination APP: not only the number of downloads, but also other facts such as the number
of content uploads by the users (photos, stories, etc.), creative reviews, map downloads, geo-
localized deals received and accepted, etc.
With regards to the cluster competitiveness improvements assessment, the indicators to be
measured other than by the tourists’ assessment survey are mostly those related to spiritual
value, and so on the benefits for the local population and heritage:
Local inhabitants’ survey asking about their satisfaction on several issues such as:
 Street & public spaces cleanliness
 Employment & income
 Pride about the destination
 Destination model
 Cultural heritage preservation
 Noise & Air pollution
 Congestion issues
 Tourists’ behavior
 Cultural life (events calendar)
 Natural heritage preservation
Further, many other aspects related to the benefits for the destination should already be
measured by the Government such as the unemployment rate and the average salary, or by
the destination management such as the level of contribution to the open innovation system,
the growth of the collaborative model, etc.
COMPETITIVENESS PLANNING 3.0
w w w . e n v i s i o n i n g t o u r i s m . c o m 31
The KPIs related to environmental impacts should be designed by specialized consultants
specifically for every destination –depending on the type of environment and issues to tackle-,
whereas some of the KPIs to track the evolution of poverty alleviation could be:
 Newly created tourism businesses in the poorer layers of the community
 Increased disposable income in the poorer layers of the community
 Newly created “non-tourism” businesses serving the poorer layers of the community
 Increased turnover of old businesses serving the poorer layers of the community
 Increased number of households with access to Internet and computer literacy
 Increased access to primary & secondary education in the poorer layers of the community
Concerning the value for money, service quality could be measured in two ways other than the
tourists’ satisfaction:
 Mystery tourist system, consisting of periodical service evaluation by outsourced
professionals pretending to be casual tourists.
 Tracking of congestion and “early sold out” services through systematic observation, to
identify bottlenecks and unsatisfied demand for critical services.
With regards to the aforementioned product programs, the correspondent KPIs could be:
Product clubs: number of created clubs, active participants in each club, and the product
operators’ satisfaction with the activities carried out.
Product Quality labels: number of operators certified with every label created, product
operators’ satisfaction, tourists’ satisfaction, and outbound operators assessment.
Benchmarking trips: number of trips organised, number of participants, and product
operators’ satisfaction with the results.
4.2 Monitoring sustainability issues
Beyond the indicators related to the Competitiveness programs and mission related goals –
poverty alleviation & environment protection-, it is also recommendable to carry out a
comprehensive assessment of sustainability issues through the elaboration of a set of
Sustainable Tourism Indicators (STI).
First of all, tourism sustainable development has to be based upon three main principles:
 Equitability: the generation of wealth out of the tourism activity should be fairly distributed
among all the destination stakeholders.
 Livability: the tourism activity should allow the destination’s inhabitants to cover their
present and future needs, ensuring a long-lasting quality of life.
 Viability: development has to respect the carrying capacities of the destination ecosystems
without using non-renewable resources
The indicators have to play the role of analyzing all types of factors affecting the structure of
the tourism industry, assessing the benefits and impacts of the tourism activity, identifying
critical issues that need to be addressed, measuring the achievement of the Plan’s objectives
and orientating in the need for strategy shift in line with the objectives achievement.
COMPETITIVENESS PLANNING 3.0
w w w . e n v i s i o n i n g t o u r i s m . c o m 32
Based on the 20 main sustainability issues identified in the WTO’s “Indicators of sustainable
development for tourism destinations: a Guidebook”, Tangenay, Rajaonson and Therrien
developed a list of 20 STI as the main indicators to monitor the key sustainability issues within
a destination. These are exposed in the following table.
Sustainability issue Indicator
Ecosystem Area of natural protected space
Water Water consumption (tourism sector)
Atmosphere Air pollution (tourism sector)
Energy Energy consumption (tourism sector)
Waste Volume of waste recycled or treated/total volume generated
Well-being Level of satisfaction of the local population
Resilience and risk Environmental vulnerability
Security and safety Ratio of tourists to local population at cultural events
Health Quality of bodies of water (lakes, rivers and sea)
Satisfaction Level of tourist satisfaction
Public participation Level of public participation in election
Culture Level of maintenance of heritage sites
Accessibility Frequency, capacity of services, or level of use by existing transport
modes to the destination
Investments Percentage of new real estate developments intended for tourism
Ecotourism promotion Number and % of businesses that acquired an eco-responsible label
Economic vitality Percentage of income generated by tourism in the community
Employment % of new jobs in the tourism sector occupied by local residents
Marketing Percentage of return visits
Distinction Number of visits to heritage sites
Traffic Volume of tourists
Whenever data is not available, other indicators for the same issue should be found according
to the available data related to this issue in the destination. Further, in relation to the previous
section about monitoring the implementation of the Plan, the STI scorecard has to include
indicators directly related to the destinations policy on sustainability.
4.3 Competitiveness clubs
Beyond the DMO’s Board of directors, who are accountable for the implementation of the
Tourism Development Plans –along with other stakeholders-, there can be created a sort of
Think Tank usually called a Competitiveness Club, with representatives of both the private and
the public sector, to work as a consultation body that gives support and advice in the
elaboration and implementation of the Tourism development Plans.
This is a volunteer driven organisation, where members participate driven by their professional
interest in exchanging opinions and visions on the challenges of the local and global tourism
industry. Particularly, when elaborating the competitiveness assessments and improvement
programs, the Competitiveness club is due to provide support in the assessment of the
conditions of the destinations’ operators, products, facilities, infrastructures and related
supporting sectors.
Competitiveness wp
Competitiveness wp

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  • 1. Competitiveness Planning 3.0 <<PLANNING METHODS WHITEPAPER SERIES >> 1. The destination model as a key factor for competitiveness and sustainability 2 2. Competitiveness assessment methods 8 3. Strategies to enhance sustainable competitiveness 13 4. Implementation 29 CONTENTS Jordi Pera Segarra Envisioning Tourism 3.0 CEO November 2016
  • 2. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 2 1. The destination model as a key factor for competitiveness and sustainability The competitiveness of a tourism destination is not just a matter of tourism operators’ performance. Instead, the potential of a destination for competing in the travel market is determined from the top government policies regarding urban planning, public services, territory planning –protecting natural interest areas-, and tourism development planning, determining tourism related regulations, licence policies, investments in facilities and infrastructures and also cross-destination marketing planning and execution. So long as the tourism activity affects not only the tourism operators, but also the residents’ lives, other business sectors and the image of the territory, it is necessary to elaborate a thorough model attending to the needs and aspirations of all stakeholders. The complexity and challenge of tourism development planning is namely in the need for reaching a balance point, considering all the stakeholders’ interests. A destination model is to provide answers to three main questions:  What can we do to develop tourism in the destination?  How can we do it?  What vision do we want to strive for? Finding answers to these questions means choosing among different alternatives related to the tourism to be developed: the development pace, intensity, the limitations to the business growth, etc. Furthermore, a development model works like a guide and reference framework for the activities of both public and private agents, and to articulate cooperation between different public bodies and between public and private ones. Other advantages and benefits of defining a destination development model are:  The territorial structure –cluster definition- of the tourism development is clearly defined.  The destination takes advantage of the market opportunities more effectively.  The destination’s resources and attractions are leveraged more adequately.  Government leaders and local operators have a reference framework to orient their strategy.  The need for infrastructures, facilities, financial, technological and human resources are clearly defined according to established goals.  Investors have a reference framework that provides them with valuable orientation.  Resources are assigned more rationally, effectively and profitably.  The tourism management has a reference framework to orient the decision making.  The reaction versus certain changes in the market is faster and more effective. Once the model is defined, if this is brought into practice, there are even more benefits:  The destination creates and develops solid and sustainable competitive advantages.  The destination positioning and image is stronger.  The tourism businesses operating in the destination are more profitable and increase revenue  The service quality and tourists’ satisfaction increases.  The destination inhabitants perceive the positive impact of the tourism activity more clearly.  All stakeholders have more confidence in the future of the destination.
  • 3. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 3 1.1 The principles and goals of a destination model The destination model should consider four main principles: sustainability, competitiveness, participation and coordination. 1) Sustainability means qualitative and balanced growth preserving both socio-cultural and environmental value. Sustainable development is defined as “the satisfaction of the present moment without compromising the capacity of the future generations to satisfy their needs”. In the tourism industry there are several forces favouring a tourism sustainable development:  The consumer pressure: greater consciousness about environmental issues, increase of alternative tourism concepts such as ecotourism, agrotourism, etc. and better preservation of the destination’s environmental and cultural resources.  The public authorities: through new regulations incentivizing conservation and recuperation of the environment.  The civil society: increasingly concerned about the environment, demanding measures for the conservation of the cultural, social and natural heritage. There are however some forces against the sustainable development, namely the economic growth, which has to be countered with development planning measures and policies. Businesses want to increase revenue and financial value, the society is demanding employment, and the public administration needs their taxes to provide public services. According to Professor Muller from the University of Bern, there are five conditions that a destination should comply with to be sustainable, all ingrained in the public policies:  Economic development, intending to develop tourism as an alternative economic sector.  Environmental conditions, intending to develop environmental consciousness and preserving the natural heritage.  Cultural identity, fostering traditions and local cultural heritage.  Social base, improving the life quality of the destination inhabitants.  Tourism attractiveness, improving the visitor satisfaction by leveraging the local heritage. The public administration has to consider the needs of this development in the regulations, and ensure the participation of the local stakeholders through a campaign to arouse consciousness and concern about these issues. 2) Competitiveness entails operational effectiveness, constant innovation and quality in the production procedures of the businesses operating in the destination, offering better products and services than other destinations’. It is mainly about creating a scenario in which to live out the type of experiences desired by the visitors at a reasonable cost and with the least possible discomforts and insecurities. In this regard, it is necessary sometimes to enhance the information and signposting systems, the urban aesthetics, the cleanliness, etc. The destination competitiveness stays in the harmony of a large sum of variables and details that are to be further explained in upcoming sections of this Whitepaper. 3) Participation should be the most inclusive and intensive as possible, encompassing public and private agents involved in the planning and management of the tourism businesses to guarantee the success of the development model.
  • 4. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 4 The effective participation of many stakeholders is the best guarantee of consensus, commitment and will for implementing the development model. It is convenient to convey an image of cohesion and effectiveness to the stakeholders outside the tourism industry, so long as their cooperation is likely to be necessary at some point. 4) Coordination is as much important as participation, to enhance effectiveness and profitability in the use of material, human and financial resources, generating synergies and economies of scale. Furthermore, coordination and cooperation among all stakeholders within the industry makes it possible to develop some programs that are difficult to carry out individually due to their high cost. In this regard, it is crucial to develop a new culture of cooperation within the destination stakeholder system, moving people to shift their attitudes in vision of a future of shared success. The Whitepaper “Building a culture of cooperation and innovation” is to explain the benefits and the process to carry out this cultural change. The destination model should have development goals in at least four areas: economy, society, culture and environment. Economy: generate revenue benefiting the local businesses and inhabitants, creating jobs and empowering the micro service businesses to grow, namely those at the base of the pyramid. Society: sustain the prosperity of the local population with the enhancement of their quality of life and the satisfaction of the visitors. Culture: preserve and leverage the cultural heritage as a key asset of the destination, encompassing monuments, traditions, gastronomy, etc. Environment: preserve the natural heritage and landscape, controlling the impact on the fragile resources of the destination. The accomplishment of these goals is to be carried out by drafting specific objectives in each area and key performance indicators to monitor the evolution of the development in relation to the aforementioned goals. 1.2 Destination models There are many variables to be considered when defining a destination model, and so several models may be designed based upon different combinations of these variables. However, as we all know, many of these variables usually have a strong correlation. Seasonality: models focused on certain products with strong seasonality are not able to provide stable jobs to let the employees live all year round in the destination. As a result of that, many destinations with strong seasonality experience enormous variations of population, hence becoming “ghost towns” during the low season periods, due to the considerable proportion of empty hotels and apartments. A key challenge for sustainability is therefore to balance the demand by developing multiple products with complementary seasonality.
  • 5. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 5 Product portfolio: some destinations are clearly identified with one product, whereas others manage to position themselves as multiproduct destinations hence diversifying risk, reducing seasonality and offering added value to many product categories by allowing multiproduct combinations, very much appreciated in many cases. Target markets: as it happens with the products, there are also destinations focusing on a specific traditional market –national or proximity market most usually-, but for many reasons are not targeting other more distant markets. The reasons may be the saturation of the capacity by the current markets, making it unnecessary to attract new tourists; the lesser profitability of distant markets due to higher negotiation power of the distant markets’ tour operators, and the lack of adequacy of the destination services to the requirements of distant markets (language mastery, service standards, etc.), among many others. Conversely, many destinations have internationalized their demand attracting tourists from many markets. Product category & target tourists: beyond the aforementioned target markets, it is necessary to determine the type of tourists that the destination intends to attract. Apart from variables such as development constraints, accommodation offer, character or style harmony – which favor the attraction of high-end tourists- the products offered should also satisfy the needs, motivations and aspirations of the target tourists. In this regard, innovative, sophisticated and differentiated products are more likely to attract tourists with higher expenditure, whereas standardized products offering “commodity experiences” compete on price attracting low end tourists. Character and style harmony: many destinations pay special attention to the architectural style and urban aesthetics to guarantee a harmonic urban landscape. This harmony is very appreciated by most upscale tourists, for it is an important requirement to attract the highest spenders. These destinations take special care of the traditional urban heritage and require new developments to follow the same traditional style in harmony with the most authentic buildings and urban aesthetics. Unfortunately, there are also many destinations that have not taken any care of this issue, allowing new hotels and apartments to be built disregarding the harmony with the traditional style of the destination. This is a missed opportunity to offer an experience with a differentiated value that only destinations with character can provide. Development & tourist flow constraints: closely correlated to the “character and style harmony”, destinations have to decide the maximum capacity of tourists they are able to sustain, depending on their concern on sustainability and also on the type of tourists they are willing to attract. Upscale tourists are to be more exigent regarding congestion issues that may spoil the experience, and so prefer staying somewhere a bit more exclusive with accommodation capacity constraints. Conversely, destinations with little capacity constraints are more likely to attract middle to low end profile tourists, who are not that much concerned about congestion problems. Other constraints may be those related to the visitors allowed in the natural or cultural heritage sites, to prevent both congestion issues and to manage tourist flows according to the site’s carrying capacity. This capacity is determined by experts who assess the impact of the tourism activity on the site, and establish a limit of visitors per hour or per day that guarantees the sustainability of the tourism activity in the site.
  • 6. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 6 Accommodation mix: the combination of different types of accommodation services is also a relevant variable to consider. In this point there are two main issues to resolve: first, the mix between hotels and real estate, considering also intermediate formulas. Hotels create jobs and tax revenues, whereas real estate may be an important source of funds to leverage for investments, and also to create loyal tourists. Second, there has to be the decision on the accommodation mix of categories –namely for hotels- according to the types of tourists that the destination intends to attract. Sustainability management: the control of the tourism activity impact and the protection of the environment and cultural heritage in the development are also a key factor to take into account. Many tourism activities carried out in natural environments require damaging the landscape or threaten its fragility. Therefore the constraints on the tourism development in natural areas and the protection status given to these areas are an essential issue to consider in tourism development planning. In this point, it is necessary to determine the carrying capacity of the natural areas and determine the accommodation capacity accordingly. Branding: all the aforementioned variables along with the natural and cultural assets of the destination define the destination experiences and determine the attributes and values of the brand. The branding messages contained in all marketing materials and campaigns should go in accordance with them. Branding also refers to the image that the destination conveys as a territory, for it is a political issue of major importance: the destination model is not only to be decided by the local tourism operators, but rather through consensus among all stakeholders. Partnership structure: even if most destinations –cultural destinations- are driven by many DMCs and one DMO, there may be many different formulas to structure their relationship in terms of partnership. In most cases the DMO is controlled by the government, but there may be different levels of participation from the private operators (DMCs) in the strategic direction, funding and management of the DMO. In some cases the operators are just listened to during the definition of the destination strategy in order to consider their valuable inputs, whereas some other models are more integrative. More integrative models are those where both the private sector and government provide funding for the DMO activities, both have the power to appoint members of the DMO board, and have to agree on the DMO strategic direction and management. In some cases, the DMO is exclusively run by the private operators. Ownership structure: even if most destinations are run by many operators of all kinds – accommodation, activities, food & beverage, transportation, etc.-, in some destinations there is one operator dominating the business, and in some cases –ski resorts, theme parks, etc.- the destination has only one operator, or many operators belonging to the same owner or holding. Regarding the composition of the operators’ ownership, there are many models:  Integrated resorts: all businesses are controlled by the same owner. This is the case of some theme parks, ski resorts, golf resorts, etc.  Resort based destinations: one resort is the main attraction but many other operators can also take advantage of the tourist flows.  Cultural destinations: their natural and/or cultural heritage is the main attraction, with many operators of different sizes but without a dominant one.  Destinations 3.0: it may correspond to different kinds of attractions, and the ownership may be shared between government, investors and small stakeholders, in partnership with other small businesses and other types of organizations.
  • 7. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 7 1.3 What makes destinations 3.0 more competitive To better realize how destination models 3.0 outperform other models in creating value, reducing efforts and marketing efficiently, hereby are compared three destination models: KEY DIFFERENCES BETWEEN THE THREE DESTINATION MODELS CULTURAL DESTINATIONS RESORT DESTINATIONS DESTINATIONS 3.0 VALUE PROVIDED Experiences Typically local cultural experiences Based upon cultural & natural resources, and locals creativity Rather standardized experiences Based on standard products, natural and artificial resources Life-changing, tailored and creative experiences Based on co-creation by stakeholders Feelings Cultural character and authenticity with heritage protection and hospitality programs Lack of character and authenticity (replicated facility style) Enhanced authenticity through urban aesthetic harmony and locals’ inclusiveness as experience suppliers Service quality control Some service suppliers have Quality certifications Ratings for restaurants and accommodations Comprehensive service quality control Ratings for accommodation Comprehensive and incentivized service quality control EFFORTS REQUIRED Discomforts Dependent upon every service supplier and local service standards Fully specified comfort standards, adapted to the needs of tourists Only discomforts associated to cultural or natural environment Insecurities & risks Dependent upon government regulations and control Full information and safety controls on critical issues Full information Safety based upon public regulations ENVIRONMENT COSTS Sustainability management Dependent upon government regulations & control Dependent upon government regulations & control Sustainability ingrained in the model mission
  • 8. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 8 MARKETING Needs satisfied Functional and emotional Mostly functional, but also emotional Functional, emotional and human spirit Target tourists All kinds of tourists Limited segments All kinds of tourists, but mainly tourists 3.0 Marketing guidelines Differentiation Differentiation or price Mission, vision & values Tourist relationships Sales transactions and satisfaction monitoring Sales transactions and satisfaction monitoring Experience co- creation, storytelling through communities Marketing channels TTOO, TTAA and direct sales TTOO, TTAA and direct sales Mission driven agents, communities COMMUNITY IMPACT Economic profits distributed among business owners Economic profits concentrated in the resort owner(s) Poverty alleviation, socio-cultural change, environment care MAIN CHALLENGES Harmonize value system and quality standards Develop unique and memorable experiences Integrate and associate stakeholders Foster culture change As it is extensively explained in the Whitepaper “Envisioning destination models 3.0”, there are many aspects that set destination models 3.0 apart from others, but their key strength is their appealing mission that motivates many stakeholders to contribute to the product co- creation, to create and tell stories about the destination experiences and to become brand ambassadors or establish different types of partnership leveraging partners brand reputation. 2. Competitiveness assessment methods The tourism activity is carried out in relation to three different experience categories: the experience with the products, the experience in every cluster, and the cross-destination experience. Therefore, destination competitiveness has to be assessed at 3 different levels: 1) Product competitiveness 2) Cluster competitiveness 3) Cross-destination competitiveness Every level refers to different parts of the overall experience, and so the analysis is to be focused on different aspects. To further instruct our readers, a different methodology will be used in each section, noting that many of these methodologies could be used to analyze competitiveness for the other sections, especially the ones used in the last two sections.
  • 9. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 9 2.1 Product competitiveness Every type of product or business has a series of key success factors that ensure somehow its capacity to attract clients and compete with the best products of its category, at least within a market segment. It is therefore essential to identify these key success factors for every type of product as well as the importance of each factor for the product competitiveness. The key success factors assessment method is one of the most useful to assess product competitiveness, as it may be used both in the cases when the product is operating in the destination and when it is not operating and we want to assess the destination’s capability to develop the product successfully. The key success factors are to be identified by a pool of experts, namely tour-operator product managers and benchmark operators. They are also those who have to determine the relative importance of each key success factor, in order to weigh every factor’s compliance in the final assessment. Then, once the importance of each factor in the overall assessment is determined, there has to be analysis of the level of compliance of the destination for every factor in a scale of 1-10 and then assess the gap matching capability for all the factors where the assessment is lower than 10. The gap matching capability is to explain how likely the destination is to obtain the maximum assessment in the short-middle term at a reasonable cost. It may be assessed as low, medium or high to simplify the procedure. Out of the key success factors compliance and gap matching capabilities for every factor, we make an overall assessment for each of the two types, which determine the destination capacity to compete in the business. In the cases where the product or business is already operating in the destination, there may be use of the method of the competitive position & potential. In this case, we have to calculate the Relative market share of the destination for the product (destination revenues in the business / main competitor revenues in the sector) and the relative market share growth of the destination for this business within a rating range from 0 to 1. Weighing the Relative market share at 70% and the Relative market share growth at 30%, the destination Competitive position is obtained for the business object of assessment. Then, the Competitive potential results from the assessment of the destination’s Service Quality, its Resources and experiences, its discomforts and insecurities, its costs and its marketing, also rating them from 0 to 1. The weighing of each of these variables is up to the consultant criteria; however, every variable is given a weight to orientate the reader. The Service quality rating is to consider the overall satisfaction of the tourists with the service quality standards of the destination, though it can also be measured through the consultant’s assessment of the destination’s service quality standards in relation to the international standards. The Service quality suggested weight is at 10%. The Resources and experiences rating is to consider the value of the destination’s resources related to the product, as well as its capacity to provide satisfactory and memorable experiences to the visitor. This is one of the most important factors and therefore its suggested weight is at 30%.
  • 10. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 10 The Discomforts and insecurities rating is to consider all the inconveniences and risks that the visitor is exposed to during the experience. These may refer to pollution, noise, dirtiness, language barriers, lack of price transparency, transfers length, etc. The suggested weight for the discomforts and insecurities is at 15%. The Costs rating is to consider both the price that the tourist has to pay for the experience and the negative impact that the tourism activity creates on the destination and its inhabitants. In this point it is necessary to carry out a sounder analysis on the congestion issues affecting locals’ lives, environmental issues, etc. The suggested weight is at 15%. The Marketing rating is to consider the adequacy of the destination branding for the product, the product & brand awareness in its market, the adequacy of the product packaging, and the efficiency and effectiveness of the marketing system for this product in the destination. The suggested weight for marketing is at 30%. Out of every rating and weighing, a final assessment is obtained for every factor, and the overall assessment is the result of the factors’ sum for the Competitive position and the Competitive potential. The Whitepaper “The 5 Competitive forces & Business Strategy” explains these two methodologies in a more visual way, and also how these Competitiveness assessments are used within the McKinsey matrix method to design the destinations Business portfolio strategy. 2.2 Cluster competitiveness Tourism clusters are areas –often encompassing many tourism sites- that are internally homogeneous or with a distinct character. Defining clusters is structuring the territory in smaller geographical areas which help us identify where the tourism activity is carried out and where it can be developed, among other issues. To assess competitiveness in a cluster there has to be analyzed both the value created by the tourism activity for the tourists and the local community, and the efforts demanded to the tourists and the local community. These two main assessments are to be structured in the following points: The value created for the tourists and the local community:  Experiences lived, namely those that result from the services provided, which are the main purpose of the trip and account for the greatest importance in the value assessment.  Feelings, sensations and emotions experimented on as a result of the destination atmosphere, natural and urban landscape, local hospitality, sounds, smells, illumination, etc.  Service Quality provided, in relation to the service standards stated in the accommodation ratings and expectations of all services in accordance with international standards.  Positive impact created by the tourism activity in the local community and environment, namely in terms of job creation, wealth distribution, heritage conservation, etc. The efforts demanded to the tourists and the local community:  Discomforts suffered as a result of pollution, noise, lack of cleanliness, poor comfortability of transport, restoration or accommodation services, long transfers, congestion issues, etc.
  • 11. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 11  Risks perceived and insecurities associated to lack of transparency in the deals, criminality, lack of understanding due to language barriers, poor quality of transport means, etc.  Price paid including all services, payment facilities commissions (credit card and check allowance), currency exchange rate & commissions, complements’ price, etc.  Negative impact created by the tourism activity on the environment, congestion issues affecting the locals lives, business spoiling the local culture, landscape destruction, etc. The optimum way to carry out this assessment is through enquiring from the tourists on site when visiting the cluster area, with open questions first and closed questions regarding all relevant items after. Tourists’ assessment and satisfaction is the best indicator to consider, though the budget available to do this assessment is not always sufficient, and then the experts’ assessment on site is the best alternative. Further, to assess the positive and negative impacts, the survey should be carried out by enquiring from the local population on their satisfaction about the aforementioned issues. Impact such as the environmental should be assessed by specialized experts, as they are not always visible to the eyes of the population. The Whitepaper “Clustering strategy” deepens in cluster competitiveness analysis, cluster definition and development as a key strategy within the destination development. 2.3 Cross-destination competitiveness Once the competitiveness of both products and clusters is analyzed, the final assessment is that of the key factors for competitiveness common to the whole destination. This assessment may also include brief strategy recommendations, both to further leverage the strengths and to overcome the weaknesses, as a starting point for the strategy and action plan that usually follows the Competitive analysis. The cross-destination competitive assessment analyzes the strengths and weaknesses of the destination in the following areas: Cross-destination resources and attractions: (non-product related)  Intangible assets such as history, glamour, traditions, gastronomy, etc.  Groups of special clients attracting other clients, providing social networking value  Conservation of the natural environment  Destination character as a result of the cultural heritage conservation across the destination  Cultural life, offering an attractive calendar of events  Shopping offer  Nightlife and entertainment offer  Unexploited resources for tourism  Proximity with other destinations with which it is possible to create routes or packages Infrastructures, facilities and services  Signage across the destination  Accessibility from the outbound markets (flight connections, railways, roads, harbors, etc.)  Public facilities and services (hospitals, public transportation, police, etc.)  Experiential value of the transport systems between clusters and attractions  Adaptability of facilities for handicapped people
  • 12. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 12 Human resources  Locals’ hospitality  Adequacy of training for the tourism professionals in skills, know-how, attitudes, etc.  Locals’ consciousness about the importance of tourism for the economy  Destination knowledge, and language skills of the local population Destination atmosphere  Air and noise pollution  Cleanliness  Safety  Congestion issues  Pedestrian streets  Urban landscape harmony and attractiveness  Destination life bringing opportunity to mingle among the locals social lives Tourism services and information  Character, capacity and quality of the accommodation services  Proper segmentation of the accommodation offer  Quality and diversity of the restoration offer  Restoration and accommodation services adapted to handicapped visitors  Availability of food & beverage for groups with special needs  Information services available in many languages (at least those of the outbound markets)  Information available through different channels: information offices, internet, Apps  Precision, clarity and up to date information provided  Quality and quantity of the information provided in the Tourism Guides  Local Tourist guides services Organization and management  Importance of tourism in the Government Agenda  Cooperation culture between public and private agents. Public-private bodies dynamism  Professionality, integrity and proactivity of the tourism related bodies (Government, DMO)  Adequacy of regulations to the tourism development needs  Efficiency of the bureaucracy system to attract and develop investments  Level of consensus on the destination model to develop Sustainability  Effectiveness of the monitoring system in detecting relevant issues with regards to negative impacts related to the environment and other aspects.  Effectiveness of the monitoring system in tracking the evolution of the tourism impacts  Participation in the educational programs related to sustainability  Effectiveness of new environmental friendly practices in reducing negative impacts  Satisfaction of the local community with the tourism development  Adequacy of the regulations to the necessary policies to guarantee sustainability  Effective enforcement of the regulations related to development constraints & sustainability  Conservation of the cultural and natural heritage
  • 13. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 13 Tourism 3.0 approach  Defined mission with the support of local stakeholders and community  Mission awareness and appeal to the target social networks  Participation of the locals and visitors in the product co-creation and storytelling  Percentage of tourists attracted by the stories about the life-changing experiences  Participation of the micro-entrepreneurs at the base of the pyramid in the tourism business  Number of local service suppliers and outside stakeholders partnering with the destination  Success in the implementation of the culture change towards collaboration and innovation  Satisfaction of the tourists with the life-changing experiences It is recommendable that the consultant somehow states the priority level or importance of the strengths to be leveraged and the weaknesses to be overcome to orient decision makers in the design of their policies regarding investment priorities. All these cross-destination assessments could also be accompanied with a comprehensive marketing audit, for which you may find the methodology in the Whitepaper “The Marketing Plan 3.0”. 3. Strategies to enhance sustainable competitiveness Once the competitiveness diagnosis is completed, and the needs for improvement are detected, it’s time to design the strategies to solve the competitiveness gaps through cross- destination programs, cluster competitiveness programs, and product development programs fixing the issues mentioned in the corresponding assessment. 3.1 Cross-destination competitiveness programs Corresponding to the cross-destination competitiveness analysis from the previous section, these programs are to overcome weaknesses and competitiveness gaps that occur throughout the whole destination. Hereby are explained some of the most usual programs. Signage system. There has to be a homogeneous and integral tourism signage system for all the destination resources, attractions and services such as accommodation, restaurants, etc. The signage system should include at least three categories of signage, with a different design for each: pedestrian signs, site maps, and road signs. Signposting is to orientate tourists on how to get to every tourist attraction –both pedestrians and car drivers-, whereas site maps are to provide the tourists with an overall vision of the site they are visiting. Signposting should be located in all crossings that pose a question on which way to follow, whereas site maps should be at least in the entrance of every site, and ideally also in many points of the site, depending on its extension. They should both indicate the interest points and the tourist routes, stating also the distance to be driven or walked until the destination point, except for those indicating that the tourist has already arrived to the site. As long as possible, especially for the pedestrian signposting and site maps, these should be designed in accordance with the urban aesthetics style reflecting the character of the destination, to enhance the sensation of harmony in the visitor. Once on the site the signs explaining each location within the site should also be designed in accordance with the style of the signage system.
  • 14. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 14 Route partnering with neighbor destinations. Regardless of whether nearby destinations are within the same country or not, for some tourism sectors such as International touring or Fly & drive, marketing an attractive route encompassing a selection of interesting destinations is likely to be far more efficient and effective than marketing these destinations independently. Further, it makes the product far more competitive. This partnership may be also attractive for some types of Special Interest travel, especially in the case of the long haul markets, whose tourists are more likely to do long routes once they land at the destination. The sum of Special interest attractions of the same kind within a route makes it an attractive product to justify a trip for many of these long-haul travelers. This is also an opportunity to develop new products for many destinations in the same area, making it a win-win development project. Therefore it is convenient to explore partnership agreements with neighbor destinations which are suitable for adding value to the final product, so as to share marketing costs while creating a more attractive product. Even if many tour operators create these routes themselves, the marketing activities not only directed to tour operators (fam-trips, workshops, etc.), but also to the final client, are likely to increase the results of the marketing efforts. New flight connections. A key program to develop is connecting the destination with all target markets, by all possible means, but mostly focusing on flight connections. Accessibility is a key factor for competitiveness, and so enhancing the capacity and the competition among transport operators benefits also the destination competitiveness. Attracting new flight connections is not at all an easy challenge. First, and most importantly, the destination has to arouse sufficient demand to make the airline operator identify a business opportunity. To do so –whenever the destination is also an outbound market for the other- it is convenient to join efforts with the other destination’s DMO and Government in order to boost demand to clearly creating a profitable opportunity. The Government and DMO should share with the airline operator the Tourism development plan, to build confidence and make them envision the business growth they can take advantage of, highlighting the marketing activities planned for their market. It is important to highlight that the intervention of the Government executives is very recommended, even in the cases when it is not strictly necessary, so as to build trust from the very beginning. Congestion, noise & air pollution management. Many tourism areas suffering from congestion also have noise and air pollution issues, spoiling the quality of the experience and hence reducing competitiveness. Depending on the case, there are many possible types of solutions for both congestion and pollution. Transforming road streets into promenades or pedestrian streets, or restricting transit to neighbors is one of the most effective strategies, as it not only reduces all types of pollution but also creates tourist friendly spaces and boosts the street food & beverage and retail businesses. Some famous tourist towns have prohibited gasoline vehicles, allowing only electric motor taxis to operate, solving both congestion and pollution issues, while providing public transportation services. Defining the carrying capacity for every area and constraining flows according to this capacity is essential to manage congestion and the resources sustainability. Such restriction may be managed by assigning entrance schedule in advance through online ticket booking or on site.
  • 15. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 15 In line with the aforementioned ideas, it is also possible to close transit to private vehicles and allow non-polluting public transportation only to operate in the tourist areas threatened by congestion and pollution. When there is no advance ticket booking system, but only queuing, it is advisable to inform visitors about the estimated queuing time at every site or attraction, so as to let them plan their experience most efficiently. This is a common practice in Theme Parks, but it may be applied to other cases. Finally, selling priority tickets at a higher price for those willing to skip queues or not having time to wait provides added value service and an extra source of revenue for the destination operator. Charming transport systems. In line with the aforementioned congestion challenges, a smart solution to both release congestion and boost visits to the least popular sites is to develop charming transport systems connecting all sites and attractions throughout the destination. Both within and between clusters, the charming transport systems make the mobility an iconic experience of the destination, stimulating visitors to discover all hidden spots beyond the most crowded ones. Such transport systems may be boats whenever there are water canals or lakes, rickshaws in Asia, horse carriages, old fashioned tramways, trains and funiculars with character, seaplane flights, snowmobiles, sledding carriages pulled by horses or reindeer, old fashioned taxis, bicycle rental, animal ride –elephant, camel, horse, etc.- in wilderness areas, etc. This is not to be confused with some sightseeing products, whose goal is to let the visitor see all the destination spots without necessarily getting off the transport system; it is a sightseeing experience but it’s major goal is to move people from one site to another, releasing crowded areas and enhancing visits to the least accessible ones, spreading the tourist flows throughout the destination while enhancing its character. Enhancing urban aesthetic harmony. As stated in previous sections, urban landscape is an important part of the destination attractiveness and therefore is something to consider in competitiveness plans. Elements such as the construction style, facade colors and materials, urban aesthetics style –dustbins, benches, fountains, etc.- and premises signs determine the aesthetic experience of the visitor by enhancing the character of the destination. Destinations lacking this kind of style harmony should carry out a Plan stating the colors, materials and designs of all urban aesthetic elements, the intended illumination atmosphere banning premises signs that shine disrupting the atmosphere, the creation of green spaces, the style, range of colors and materials allowed in the buildings facades, the need for cleaning the facades, etc. Implementing such a kind of program is a serious challenge, so long as it entails sometimes enforcing the house owners to clean or carry out work on their houses facades, which usually goes beyond their obligations stated by law. In these cases, it is advisable to plan an incentive system together with a subsidy or soft credit plan not to charge private owners with the whole cost of the Plan. So long as the result is a much more attractive destination, this is a profitable investment to carry out. Consciousness and hospitality campaign. It sometimes happens that tourists are regarded as aliens by the local residents, not making them feel welcome during their stay. Connection with locals is indeed very appreciated for many tourists, and making them feel welcome is likely to increase their satisfaction and therefore the destination competitiveness.
  • 16. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 16 The solution to that challenge is to carry out a campaign informing the local inhabitants about the importance of the tourism industry for the local economy: the amount of businesses and jobs that are directly and indirectly created and sustained thanks to the tourists. It is necessary to make them understand the importance of their attitude towards visitors to keep the business developing in favor of the economy. In this point it is necessary to point out that some tourists do not behave properly while they are visiting their holiday destination, and so contribute to create a feeling of rejection by the local population towards visitors. In these cases, the hospitality campaign should be preceded by a redefinition of the targeting strategy to prevent certain types of tourists coming, and at the same time controlling the tourists’ behaviors by the local police. Regulation and bureaucracy system audit. As mentioned in the cross-destination competitiveness diagnosis, the adequacy of the regulation is essential to foster sustainable development. Regulations are to enforce the policies determined in the strategic development plan, and so whenever there is any strategic shift or new practices are to be implemented, the regulation has to adapt to these changes. Carrying out a regulation audit is to detect gaps in the present regulations with regards to the intended policies. This may mean some needed changes in the regulations, adding new articles within the existing regulations, or in some cases elaborating new regulations. The audit should state what kinds of behaviors, undesired actions or practices are being permitted by the current regulation to justify a change, and what risks are assumed by the current gaps. Furthermore, there should be auditing of the bureaucracy system concerning the starting up procedures for new businesses to detect inefficiencies and bottlenecks that cause unnecessary delays. An agile bureaucracy system is an important factor that enhances chances of entrepreneurs and investors choosing the destination to set up a new business. Conservation of natural and cultural heritage. The cultural and natural heritage is the bulk of the destination landscape and also the core of many tourism experiences. A proper conservation is therefore essential for the tourism competitiveness and sustainability, and so this type of program should always be among the top priorities. The conservation of the natural environment entails not only cleaning, but also managing the risks like fire or epidemics in forests, water depuration, installation of the proper systems to manage waste, and prevent people from littering and damaging the environment. In some cases, when there is some heritage of special value, it is convenient to create a protection area to prevent visitors from entering and spoiling the natural life. With regards to the cultural heritage, there may be many types of assets to consider: historic buildings and monuments, where restoration is necessary; traditions, to be leveraged by creating events marketable to the tourists; local gastronomy, arts and crafts to be leveraged through the creation of outdoor markets; history, to be leveraged through the creation of ethnographic and history museums. Human resources training. Many competitiveness gaps in service quality are usually due to HR training deficiencies. Identifying these competencies gaps with precision is therefore necessary to overcome this challenge. This should be a responsibility of those in charge of the monitoring system, to track the evolution of HR training needs, by enquiring executives on their employees’ training needs. The support of foreign experts may be also necessary.
  • 17. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 17 Such training needs may correspond either to higher educational programs (University level) or professional training programs (Professional schools). Sometimes it may be needed to improve the existing programs including new competencies and knowledge, but in other cases it may be necessary to create brand new programs. In this regard, the availability of the target users should be carefully assessed, to consider the convenience of programming also distance learning versions of the same program when possible, and to determine the courses schedules to make them compatible with the professionals working ones. Moreover, it may be convenient to consider subsidizing language courses or creating free and engaging language courses through radio or TV channels for the locals to improve their language skills, in order to communicate and connect better with the tourists. In relation with the aforementioned hospitality, this would help also enhancing the visitor experience. Accommodation upgrade and development. In accordance with the desired development and expected growth, the strategic repositioning or new segmentation, it may be convenient to attract new investors to develop new hotels, to upgrade the category level of the existing ones, or to convert them into new concept accommodation facilities. When upgrading accommodation facilities, the strategies to follow are implementing quality certifications and upgrading the international star based rating. These are to ensure certain quality standards related to the provided service and the procedures. Such implementation could be incentivized in many ways: preferential position in the DMO marketing activities and materials, fiscal incentives, soft credits, partial subsidy, etc. In the cases when the destination reshapes the segmentation strategy –focusing the attention on new specific targets, with special needs-, the implementation of a Brand label system is the most appropriate solution. There could be brand labels for families, singles, GLBT, Chinese (food), people with food constraints (celiacs, diabetics, etc.), vegans & vegetarians, etc. Eco-label system. To help some operators set themselves apart in terms of sustainability management, the implementation of an eco-label system may also help to foster an eco- friendly culture among the destination operators. There should be different eco-labels depending on the environmental impact degree of the operator, describing precisely the obligations, practices and constraints to comply with for every label category. These would be different depending also on the type of operator. To extend the implementation of this eco-label system, it would be convenient to design an incentive system consisting of both fiscal and marketing incentives. These last ones may consist of privileged position in both marketing materials and activities. Eco-labels are especially convenient for destinations marketing ecotourism related products, and also when targeting geographical markets that are especially sensitive to environmental issues such as the Nordic Countries, Germany, Australia, Canada, etc. This is a must have program for destinations intending to approach the vision of Tourism 3.0, as it is an effective and visible way to reduce negative impacts in the environment, enhancing sustainability. DMC incubator. One of the key goals of Tourism 3.0 is to create life-changing experiences while fostering entrepreneurship at the base of the pyramid to alleviate poverty. The best way to do so is to create DMC incubators, where new entrepreneurs are trained and provided with the necessary infrastructure and services to start operating their business at no cost. They are designed to be the perfect environment to start up a business.
  • 18. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 18 Given the nature of the tourism businesses, this idea is only –or mostly- applicable to DMC, businesses offering activities and integrated packages. However it should provide training and advisory services to other types of businesses such as accommodation, food & beverage, etc. This could be also the place where to organize the co-creation workshops, to inspire these DMC owners in developing their products; and should be closely collaborating with the open innovation system, to benefit from the collective intelligence and imagination in their product development challenges. Tourist information offices. A necessary facility to provide the tourists with information and support while at the destination is the information office. There should be one in every hot area of the destination, where all the tourists arrive within a cluster or an important site. There should be also a central information office at the destination main transport hub or one of the hottest points, from where all information services are coordinated. In this point, there should be also a call centre for all tourists willing to obtain information by phone. This would extend its service schedules beyond the tourist information offices’, to provide at least 12 hour uninterrupted service every day. These call centres could also provide a translation service for foreign tourists not mastering the local language. The translation service would help the tourists to establish communication with locals when asking for some information, but also to translate text to be sent through the mobile. This could be very appreciated by tourists, and also an extra source of revenue for the DMO, responsible for the tourist information offices. Destination App. Apart from the tourist information offices and guides, modern tourists like to have all or most of the information in their smartphone. Apps provide excellent information services, being able to provide tailored information on demand, high quality pictures and videos, downloadable maps, and many other features. In the case of Tourism 3.0, Apps may be also a tool to foster tourist contribution to the content marketing system and product co-creation. Apps can operate like a channel through which the tourist provides service reviews and ratings, creative reviews about products, pictures, videos and text based stories, etc. It is important to point out that the destination should count on many free wifi areas to empower the Apps in providing all the possible services and up to date information. Finally, Apps may also be a sales channel, providing access to the destination branded souvenirs online store, booking service, and also offering special deals near the location of the tourist through the geo-localization technology. Altogether, it is a very powerful tool, which is actually likely to become the main information supplier and the main channel to connect tourists with the destination operators. Closely related to the App services, the new technologies for augmented reality should also be included to provide a higher experiential value to the tourists through their mobile devices. More ideas on how to enhance competitiveness approaching Tourism 3.0 may be found in the Whitepapers “The Marketing Plan 3.0” and “Envisioning destination models 3.0”. When elaborating the Competitiveness Plan, it is necessary to explain for each program the goals, the strategy and actions to take, the bodies and persons accountable for its implementation, the program priority level and an estimated budget, encompassing all the relevant details to make it effective.
  • 19. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 19 3.2 Cluster development: enhancing value, reducing efforts As it has been explained in previous sections, competitiveness is the relationship between value offered and efforts demanded, and therefore increasing competitiveness is to be achieved either by increasing the value offered and/or diminishing the efforts demanded. This section explains all kinds of value factors that may enhance competitiveness, and all types of efforts that diminish it, so as to have a more practical approach and inspire strategists in their Competitiveness Plan recommendations for every cluster, considered as an independent geographical unit for the Competitiveness planning. In accordance with the formula explained in the Cluster Competitiveness assessment section, the factors to develop are Experiences, Feelings, Service Quality, Discomforts, Risks, Price and impacts of the tourism business on the destination. When assessing all these factors, it is important to understand the kind of value that every factor contributes to generate:  Spiritual value: the relationship between the positive impacts and the negative ones is what makes the destination more or less appealing to the tourists’ human spirit.  Emotional value: the relationship between experiences, feelings, discomforts and insecurities is what makes the destination generate positive and negative emotions.  Value for money: the relationship between service quality and price appeals to the rational mind of the tourist, and is the least influential in the decision making process. 3.2.1 Spiritual value The programs or actions to neutralize or reduce the negative impacts of the tourism activity are nearly or exactly the same ones that eventually manage to create positive impacts. In most cases, it is just a matter of the initial state of the destination and the intensity and ambition of the program what makes the difference between neutralizing or reducing negative impacts, and creating positive ones. Such impacts may correspond to three different spheres of influence: social, economic and environmental impacts. The main factors that create spiritual value in a destination are the following: Fostering entrepreneurship at the base of the pyramid and training the poorer layers of the local community to integrate in the labor market not only reduces poverty but also enhances social cohesion, and creates a spirit of social harmony as a result of the integration of these groups of people in the community. This is very likely to be perceived by the visitors and appreciated by their human spirit. Encouraging community members to contribute through the open innovation system in creating stories, co-creating products and bringing in ideas to enhance competitiveness is also a powerful social impact generator. Leveraging people’s talents, rewarding and giving them recognition for their contribution makes them feel like valuable protagonists within the tourism industry system, and helps them grow personally, eventually shifting their attitude towards tourists, being more hospitable and helping them have a memorable experience. Preserving the natural environment and fostering the growth of the local endemic species helps the destination boost its uniqueness and character. Creating green spaces both in the public and private areas with typically local trees, plants and flowers conveys a spirit of healthy environment. Furthermore, in the cases where there are typically local animal species, it is also good to make them be part of the destination experience. Both lush animal and vegetable life provide positive impacts to the visitors’ human spirit.
  • 20. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 20 Enhancing the attractiveness of the destination also makes it a pleasant living place for its inhabitants. Improving cleanliness, heritage restoration, developing cultural entertainment –events, museums, etc.-, creating green spaces, clearing pollution, making the urban areas more human friendly, harmonizing urban aesthetics and enhancing other aspects of the landscape are appealing to all community stakeholders. Boosting economic development and wealth creation is one of the main goals of tourism development. The tourism 3.0 approach intends to spread the generation of wealth among all types of stakeholders. A clear indicator of success is therefore the increase of disposable income throughout all layers of society. The extent to which the destination collaborative model expands is one of the main key success factors to make it happen. The key idea behind the creation of spiritual value is the balanced development and shared growth, considering tourism businesses, employees and micro-entrepreneurs, local inhabitants not related to the tourism activity, non-tourism businesses, and the cultural and natural heritage. Tourism development should be a win-win activity for all elements that are part of the destination life to make it appealing to the visitors’ human spirit. 3.2.2 Emotional value The value created by the experiences and feelings in relation to the discomforts and risks lived by the tourists during their holiday in the destination is referred to as emotional value. In this point, there are many types of experiences, feelings, discomforts and risks to talk about, for each of these four factors is explained through the development of many categories. Experiences When classifying experiences, there are many possible criteria that can be used. According to the relationship established between the tourist and the destination:  Edutainment: to learn while entertaining in an active relationship that keeps the tourist mentally absorbed.  Entertainment: to see, listen, smell, touch in a rather passive relationship that keeps the tourist mentally absorbed.  Escapism: to do some kind of sporting or physical activity that keeps the tourist active and physically immersed in the destination.  Esthetic: to be there, rather sightseeing entailing a passive relationship that keeps the tourist physically immersed in the destination. Furthermore, the life-changing experiences leading the development of tourism 3.0 could also be classified in many categories depending on the type of transformation or change experienced by the tourist:  Personal awareness & discovery, and spiritual development  Social awareness and cross-cultural understanding  Environmental consciousness and education  Skill development in arts, communication and leadership  Transfer of values and wisdom  Personal transformation by discovering the fulfillment of contributing to the greater good
  • 21. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 21 Finally, the experiences may also be classified according to the product or service they are generated by. In this classification, we distinguish many kinds of experiences:  Restaurants: food-street markets, panoramic restaurants, underwater restaurant, show cooking, boutique restaurant in a special location like a boat, self-cooking, terrace with view, cave restaurant, restaurant with live music & performance, etc.  Sightseeing with original & charming transport systems: gondolas, old fashioned tramway, rickshaw, seaplane, tourist train, dogsledding, snowmobile, camel/horse/elephant ride, hot balloon, helicopter, cable-car, transparent bottom boat, charming old boat, etc.  Accommodation: huts in trees, Ice hotel, monastery, boutique hotel, boat hotel, huts in the jungle, transparent ceiling igloo, cave hotel, castle, underwater hotel, etc.  Shopping: street markets, theme markets, shopping villages, artisans show-crafting, educational shopping –explaining how the product is done, or/and its benefits-, etc.  Culture & entertainment: Imax/3D cinema, charming villages & old towns, botanical garden, zoo, aquarium, wildlife watching, storytelling performance, museum, religious ceremony in a temple, visiting a Palace or a castle, theatre, opera, music festivals, music & fireworks & springs, street theatre, acrobatics show, etc.  Fun: adventure park & zip lines, roller coaster, party boat, water park, amusement park, etc.  Iconic experiences: these take place in an iconic building and may consist of many different types of activities such as sightseeing from a privileged position, attending events, museums, accommodation, etc. The iconic buildings may be a telecom tower, big wheel, Congress Centre, Opera House, Wellness & Spa center, Sporting events venue, Imax Cinema, bridge, hotel, museum of science, national theatre, temple, stadium, etc.  Special interest: cycling, hiking, learning to cook, bird watching, climbing, diving, snorkeling, sailing, learning languages, marathon, Sport events, learning about art, Cultural events, pilgrimages, wildlife discovery, skydiving, etc. Feelings There are also many kinds of feelings that the destination atmosphere may create in the visitor. Such sensations can be created through adding several kinds of features or extras that provide feelings of life, authenticity & harmony, magic atmosphere, variety, fun, etc. Such extras may be, for every kind of feeling:  Harmony & authenticity: urban aesthetics, people /employees dressing in traditional costumes, architectural style, souvenirs, cultural monuments & sculptures, natural smells, open kitchen in a restaurant, religious ceremonies, artisans handcrafting products, etc. Charming destinations are famous for their identity reflected in their architectural style.  Life: wildlife (birds, butterflies, squirrels on trees, flying fish, ducks and swans on water canals or lakes, etc.), artists performing outdoors (human sculptures, musicians, painters, acrobats, etc.), street markets, water springs, liveliness of local population, plants and flowers on balconies, people performing traditional arts (dancing, tai chi, etc.), and everything else that turns sightseeing into life-seeing and feeling.  Magic feelings: Night illumination with different colors, attractive smells, fireworks, inspiring music, dancing springs, permanent nice surprises, sophisticated street performances, etc. and the synchronicity between all these elements.
  • 22. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 22  Variety: different kinds of shops in shopping streets, broad range of courses in a menu, facades of different colors, markets with wide variety of products, gardens with many types of plants and flowers, options for amusement, architecture, etc.  Hospitality: cleanliness, proper indoor temperature, kindness of the local population, proper condition of the cultural and natural heritage, interior design and materials, service personalization, etc.  Relax: birds singing, water flowing, relaxation music, green areas, silence, etc.  Safety: cleanliness and good conservation of the urban landscape, kindness and honesty of the local population, peaceful atmosphere, lack of beggars in the streets, illumination at night, police in the streets, smooth traffic, good functioning of public services, etc. Besides, there are some feelings closely related to Tourism 3.0:  Personalization: making the tourist feel as a unique person, being called by one’s name by service suppliers, being able to tailor the service experiences, small personalized gifts, etc.  Contribution: letting people know how their contribution in the open innovation or content marketing system is useful for the destination, letting people visualize the result of their contribution, letting visitors provide ideas and opinions on as many issues as possible, etc.  Growth: learning new skills, opening one’s mind, gaining personal and social awareness, acquiring new good habits, and all that results from the life-changing experiences.  Recognition & reward: being mentioned in a public place or document for your contribution, receiving an award, receiving a tangible reward, etc. for your contributions. Discomforts There are many sources of discomforts that tourists may have to face:  Lack of cleanliness: in the accommodation, transport facilities, restaurants, streets, tourist sites, urban and natural landscape, etc.  Lack of proper services and infrastructure: uncomfortable transportation means, poor comfortability of the accommodation, poor variety and quality of food & beverage, etc.  Adverse weather & air conditions: temperature, wind, humidity, rain, air pollution, etc.  Bureaucratic procedures: visas, money exchange, special permits, etc.  Cultural differences: different schedules, language barrier, different values, food, having to dress in a certain way, etc. Risks There are many types of issues that create insecurities in the tourists:  Safety: Lack of proper safety standards in services and infrastructure, lack of street security (vandalism, terrorism, pickpockets, etc.), meteorological threats, etc.  Health: lack of emergency & medical services, threat of contagious illnesses, etc.  Information: lack of information about the destination, language barriers, lack of proper signage, lack of price transparency, etc.  Service quality: possibility of luggage lost or late arrival, transport delays, etc.  Uncontrollable risks: weather conditions impeding the planned activity, etc.
  • 23. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 23 3.2.3 Value for money The value assessed by the rational mind is that which takes into account the services and service quality received in relation to the prices paid and overall costs. This is usually the least important of the factors to assess the destination competitiveness, but it should not be disregarded, as the importance of every type of value depends on the type of target, and price sensitive tourists abound. In this regard, it is important that the destination offers a range of services –namely accommodation- to match all targets’ budget. There are many different issues to consider when assessing both Service quality and price. Service quality Service quality may be defined as compliance with the client’s expectations in all kinds of services provided throughout the trip:  Transport: punctuality, comfort, schedule availability and adequacy, staff attention, added services like entertainment, food, etc.  Accommodation: staff attention, compliance with the rating system & quality certifications.  Food & Beverage: taste, variety, originality, healthy production procedures, quality of the ingredients, cleanliness of the premises, etc.  Activities: safety, staff kindness, compliance with sales information, etc. Price Price issues encompass many factors affecting the overall cost:  Currency exchange: both the exchange rate and commission may entail a significant cost  Package price: the bulk of the budget goes to transport and accommodation, especially when buying a holiday package  Tips: many countries are used to receiving tips in service businesses  Daily expenses: all costs related to daily life not included in the package, like meals, public transport, snacks, etc.  Shopping & souvenirs: this is sometimes one of the main activities or purposes of a trip, and so eventually accounts for a considerable percentage of the overall budget. Improving cluster competitiveness is a complex challenge to tackle, as it entails a large array of variables which in many cases have to be coordinated. Further, it is important to know which of these factors are more and less important to our targets, to prioritize our efforts. 3.3 Product development and competitiveness programs Beyond the cluster’s and cross-destination conditions, product competitiveness is no doubt a key factor to consider in the overall assessment and strategy. Product competitiveness strategies entail sometimes developing new products and others just improving the current ones. In this regard, this section explains the key product development strategies and methods, some product development programs that are used in most destinations, and also the product competitiveness strategy and most common programs.
  • 24. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 24 3.3.1 Product development strategy Developing new products is not an easy challenge. Once the product portfolio strategy is defined, the product categories to develop are established. Then, from the product category to the marketable product is where creativity and product development mastery make the difference. The main steps of the product development are the following: 1. Conceptualization 2. Business model design & test 3. Feasibility study and assessment of social and environmental impacts of the product 4. Business Plan 5. Launch 6. Monitoring performance & improvement Even if the Product Manager is solely responsible for the product development, in Tourism 3.0, the co-creation and the ideas coming from the open innovation bring support in the steps 1, 2 and 6. Steps #1 and #2 are supported by the contribution of the co-creation workshops and the Open Innovation System through various types of contributions: professional and non- professional; whereas the step #6 is supported by the visitor’s creative reviews after their experience with the product. The case of the life-changing experiences is where co-creation and open innovation play the most decisive role, due to their complex nature, as they have to provoke some kind of personal transformation in the visitor, far beyond the usual tourism experiences. Their development process is therefore more complex as well. The development of life-changing experiences entails the following steps: 1. Starting from the mission as an inspirational mantra, and listening to related stories to better understand the life-changing idea, define the experience concept based on its life- changing goals (effects or impacts), the constituents of the positive change (those who benefit from the activity), and the activity behind the experience. 2. Try to include storytelling training as a part of the experience, to generate new stories 3. Business model design & test 4. Feasibility study and assessment of social and environmental impacts of the product 5. Business plan 6. Launch 7. Monitoring performance & improvement In this case, the Product Manager has to supervise the adequacy of the ideas being developed through the open innovation, the product development contests and the co-creation workshops, to help improve & refine them, and to invigorate contribution. The Product Manager is also in charge of selecting and managing channel partners, organising the aforementioned events, benchmarking and managing customer feedback. Once the life-changing experience product has been launched, the performance is monitored and creative reviews are encouraged, along with the creation of stories about the experience. These two are the most inspirational sources for product improvement and new products development. The capacity of the product to be customized for every tourist makes it more productive in terms of stories created and creative reviews.
  • 25. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 25 Beyond customization right before or during the experience, co-creation may take place in many different ways:  Co-creation workshops, organized as a creative and educational activity open to all stakeholders, which in turn may provide valuable ideas to develop products.  Product development contests, organized to promote contribution to the open innovation system providing elaborated ideas on how to develop new life-changing experiences.  Ideation bank contributions, permanently accessible as a section of the open innovation system, where innovation needs are posted, and solutions are submitted and voted.  Product Manager’s creation based on inputs from creative reviews and new stories, permanently inspiring and nurturing the marketers’ creativity.  Local service supplier creation based on own creativity, inputs from reviews and stories, and the technical support of the Product Manager. The Product co-creation workshops play a critical role as both educational and productive events. There, Product Managers explain the product development process and the key success factors for creating life-changing experiences according to the destination’s mission. The workshops educate the attendants in the art of ideation and team working to generate and refine ideas leveraging all group members’ creativity. Attendance should be mandatory for local DMC like the micro-entrepreneurs from the base of the pyramid, but also the participation of all other community stakeholders should be encouraged. Other interesting targets could be school students as part of their education, members of mission driven organisations such as NGO, etc. 3.3.2 Product development programs There are certain types of products that may be developed in many destinations:  Events calendar: there should be an Events committee in charge of designing an attractive calendar of events, both to cover seasonality gaps and to strengthen the value during the high season, when there is the toughest rivalry among destinations.  Theme routes: leveraging both material and immaterial natural or cultural heritage may be achieved by creating theme routes. These may consist of visiting places related to a story or a historical character, or just linking related resources.  Shopping streets: streets with a sufficient number of attractive stores could be marketed as shopping streets creating a brand, attracting new ones, and enhancing the stores service competitiveness to guarantee a premium shopping experience.  Attraction of DMC to the destination offering special interest experiences that are being developed in other destinations to broaden the product portfolio. Some DMCs know-how may be highly appreciated and even have a market prestige that attracts visitors themselves.  Souvenir product line: all destination brands may be leveraged through the creation of a merchandise product line, encompassing typical branded products (t-shirts, caps, etc.) and also genuinely local souvenirs related to the unique destination assets.  Destination smart card: specially conceived for city destinations, the smart card encompasses public transport allowance, free entrance to many sites and discounts for many other sites, along with some vouchers for restaurants and other services.
  • 26. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 26 3.3.3 Product competitiveness strategy Beyond the development programs to create new products, there are also programs to improve the current products’ competitiveness. In this point, however, it is also necessary to talk about product competitiveness strategy, as the programs are in fact a concrete idea as a result of the product improvement strategy. The product improvement strategy follows the same methodology of the cluster improvement strategy: creating more value and reducing efforts, which ultimately means creating more resources, experiences and feelings to add value, and developing or improving infrastructures and services to reduce discomforts and risks. Furthermore, when assessing every product individually, it is also convenient to make management and marketing recommendations to attract more visitors and/or to increase their expenditure, reduce congestion problems, increase safety, and other practices to reduce risks and discomforts. The following examples may better illustrate the product improvement strategy: Resources and experiences Restaurants: adapting charming buildings’ spaces, gardens or terraces as a restaurant may be a very profitable way to create new experiences and revenue streams. Souvenir shops: when the tourist is satisfied with the site experience, he/she often looks for some kind of object to remember that experience, or to have more information about it. Creative activities: it is well known that many tourists are willing to take an active role in their tourist experience. Creative tourism is a new trend adaptable to many cases. Animation: improving the atmosphere feelings may be achieved by integrating performing artists such as musicians or painters, adequate music and illumination, shifting from sightseeing to life-seeing. Guided visits: either through audio-guides or tour guides, providing interesting information and stories about the site always enhances the value of the experience. Decoration: the details make the difference between an outstanding experience and a normal one. All decoration elements should be carefully regarded to create an excellent atmosphere. Infrastructures and services Signage: not only to arrive to the site but also to move around within it, good signage is essential to help the visitor get the best out of his or her time. Food & beverage: even if it is not an essential part of the experience, it is necessary to provide visitors with the chance to buy snacks or drinks, offering a good range of products. Personnel training: ongoing human resources education in the right attitudes and skills development is recommended to guarantee a good service. Information: offering precise information to get to the site (website, leaflets, guides, etc.) is as much important as information about the site resources, itineraries, stories, etc.
  • 27. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 27 Accessibility: sometimes there are sites isolated within their cluster, with limited accessibility due to poor public transport service. Services such as “taxi calling” can solve this issue. Urban aesthetics: some elements such as benches, dustbins, public lighting are essential to keep the tourist areas clean and safe, as well as to provide comfort to the visitors. Congestion: some sites suffer from congestion issues to be solved through regulated group sizes, scheduled visits to control flows, queuing time information, etc. Marketing and management Connection with other sites: arranging public transportation and sightseeing services to connect sites between them helps the visitor to have time to see more attractions. Venue for events: some sites may be offered to hold special events such as weddings, concerts, cultural performances, exhibitions, etc. bringing in an extra source of revenue. Accommodation: some sites offer an excellent condition to operate accommodation services, adapting an old building as a boutique hotel, for instance, to obtain a new source of revenue. Price: depending on the improvements made, the price may be revised accordingly. It is also convenient to make a deal with the aforementioned smart card, discounts for groups, etc. The priority need for one or another improvement is to be assessed by the consultants, though a survey enquiring from the tourists about their satisfaction on many issues and the suggested improvement needs is highly recommended. 3.3.4 Product competitiveness programs Beyond the aforementioned recommendations for specific products or sites, these competitiveness programs should also be taken into account, as they apply to the whole product category: Product clubs are voluntary associations of stakeholders related to the product category, working like a forum or think tank, and led by the DMO Product Manager responsible for the product category, with the following goals and functions:  Carrying out market intelligence research  Analyzing competitiveness gaps, marketing KPIs and weaknesses to overcome  Planning, funding and coordinating the marketing activities  Developing new products and improving product competitiveness  Monitoring the result of the marketing activities and product operations  Lobbying to solve problems affecting the product business  Training the local operators in marketing and management Product Quality labels facilitate the identification of key attributes by the tourists to help them prioritize their visits. Obtaining a label entails complying with certain quality requirements that eventually encourage operators to improve product competitiveness.
  • 28. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 28 For instance, there could be labels such as “Gourmet restaurant”, “Charming village”, “Historical site”, “Boutique hotel”, etc. The method to develop the Product Quality labels should be the following: 1. Selecting the special labels to create 2. Defining the requirements in cooperation with the Product Clubs 3. Labels graphic designing 4. Carry out communication campaign targeting local operators to adhere to the label 5. Assessing interested operators on the requirement compliance 6. Introducing the Product Quality Labels in the marketing materials Benchmarking trips are organized by the Product Club for the destination product operators with three main goals oriented to improve product competitiveness:  Learn best practices from the best performing destinations and operators  Learn about the destination model key success factors and competitive advantages  Inspire operators with ideas on developing products, providing more value with less efforts The benchmarking trip organisation should consider the following steps: 1. Identifying possible benchmarks: destinations and operators 2. Studying every benchmark to figure out what can be learnt from each one 3. Choosing the benchmarks with the most applicable know-how to the destination 3.4 Enhancing competitiveness through open innovation As explained in many previous Whitepapers, the Open innovation system is one of the key features that set destinations 3.0 apart from competitors. One of the outcomes of the innovation system is the generation of ideas for improving competitiveness at all levels: product, cluster and cross-destination. Product  Ideation bank for developing new products  Product development contests  Forum discussions to detect weaknesses and new ideas  Professional advisory on improving product competitiveness Cluster  Forum discussions to detect weaknesses and new ideas  Professional advisory on improving cluster competitiveness  Mission driven innovation challenges to tackle cluster competitiveness issues Cross-destination  Forum discussions to detect weaknesses and new ideas  Professional advisory on improving cross-destination competitiveness  Mission driven innovation challenges to tackle cross-destination competitiveness issues
  • 29. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 29 Further, it is important to remember that the Monitoring system is to gather information that eventually should help in determining competitiveness improvement priorities and orientating improvement direction. This information is obtained as a result of the following research goals:  Tourists’ needs, problems, and concerns in view of identifying insecurities and discomforts to be addressed through improvement or development of new services and facilities.  Tourists’ motivations and concerns to sense the convenience of developing new products or mission driven tourism activities.  Tourists’ opinions to pre-test ideas on new products or marketing initiatives, to ensure their viability and adequate development. Beyond these outcomes, both the open innovation and monitoring system are flexible and so permanently open to add new features and activities to tackle new challenges in the most appropriate way, and so the variety of outcomes may increase constantly. The Whitepaper “Envisioning Open Innovation in destinations” is to explain further details on these issues. 4. Implementation Once the elaboration of the Competitiveness Plan is considered to be finished, the final step is implementation. Implementing strategy through the aforementioned programs entails 6 key sequential activities: 1. Reaching a certain degree of consensus on the priorities to assign budget funds 2. Defining all the tasks to be carried out to implement every program 3. Establishing accountabilities for each of the tasks of every program 4. Operationalizing the key performance indicators (KPI) 5. Measuring the evolution of performance in accordance with the KPIs 6. Assessing the results of the KPIs on a pre-defined frequency to consider the need to reorient strategy or carry out tactical changes 4.1 Tracking destination performance for the Competitiveness Plan At the end of the Plan the key performance indicators are defined. As done in any Strategic Plan, every KPI is assigned with an accountable person in charge of its tracking and interpretation, a priority level to determine its relative importance compared to other indicators, and a frequency determining how often the indicator has to be measured. The Observatory in charge of the monitoring service is likely to be the most appropriate agent to carry out the tracking of the KPI, in close collaboration with the Competitiveness Club, the DMO and representatives of the Government. For most of the programs, the only way is to carry out a survey on satisfaction asking the tourists about all the correspondent issues. The best moment to do so is when they are about to leave the destination, while at the check-in queue or waiting hall at the airport, for instance. Airports provide us with an excellent opportunity to target specific segments for geographical markets. Another good option is to do it in the hotel halls. The survey should ask about their satisfaction on every issue object of study, their assessment about it on a scale of 1-5, and the importance given also from 1 to 5.
  • 30. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 30 However, there are some competitiveness programs for which specific KPIs can be designed. With regards to the cross-destination programs, this is the case of the following programs: New flight connections: considering not only the connections themselves, but also the overall capacity (number of flights x airplane capacity). Consider also the capacity increase in the current connections. Congestion, noise & air pollution: there are specific sensors to measure both noise and air pollution, and also to measure the number of vehicles transiting through a certain point. To count people, there have to be “counters” –persons- in the critical bottlenecks or hot points. Human resources training: the attendance and successful compliance of the learning goals assessed through skill and knowledge examinations is the main way to measure the effectiveness of this program. Accommodation upgrade & development: the number of new accommodation facilities built, as well as the number of facilities having been certified with a quality certification or a higher star rating should be the main indicator. Eco-label system: the number of eco-labels certified for each kind of operator, as well as the number of certifications for each eco-label category for every type of operator, to measure both the environmental friendliness of every type of operator in percentage and intensity. DMC incubator: both the number of micro-entrepreneurs working in the incubator and their business growth should be measured. Besides, also the time needed for them to be self- sufficient and abandon the incubator, as well as the training assessment should be considered. Tourist offices & call center: in both cases the service demand should be measured, paying attention to what kinds of information are most demanded. Ideally, also the service demand concentration in certain hours should be measured to provide the adequate resources. Destination APP: not only the number of downloads, but also other facts such as the number of content uploads by the users (photos, stories, etc.), creative reviews, map downloads, geo- localized deals received and accepted, etc. With regards to the cluster competitiveness improvements assessment, the indicators to be measured other than by the tourists’ assessment survey are mostly those related to spiritual value, and so on the benefits for the local population and heritage: Local inhabitants’ survey asking about their satisfaction on several issues such as:  Street & public spaces cleanliness  Employment & income  Pride about the destination  Destination model  Cultural heritage preservation  Noise & Air pollution  Congestion issues  Tourists’ behavior  Cultural life (events calendar)  Natural heritage preservation Further, many other aspects related to the benefits for the destination should already be measured by the Government such as the unemployment rate and the average salary, or by the destination management such as the level of contribution to the open innovation system, the growth of the collaborative model, etc.
  • 31. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 31 The KPIs related to environmental impacts should be designed by specialized consultants specifically for every destination –depending on the type of environment and issues to tackle-, whereas some of the KPIs to track the evolution of poverty alleviation could be:  Newly created tourism businesses in the poorer layers of the community  Increased disposable income in the poorer layers of the community  Newly created “non-tourism” businesses serving the poorer layers of the community  Increased turnover of old businesses serving the poorer layers of the community  Increased number of households with access to Internet and computer literacy  Increased access to primary & secondary education in the poorer layers of the community Concerning the value for money, service quality could be measured in two ways other than the tourists’ satisfaction:  Mystery tourist system, consisting of periodical service evaluation by outsourced professionals pretending to be casual tourists.  Tracking of congestion and “early sold out” services through systematic observation, to identify bottlenecks and unsatisfied demand for critical services. With regards to the aforementioned product programs, the correspondent KPIs could be: Product clubs: number of created clubs, active participants in each club, and the product operators’ satisfaction with the activities carried out. Product Quality labels: number of operators certified with every label created, product operators’ satisfaction, tourists’ satisfaction, and outbound operators assessment. Benchmarking trips: number of trips organised, number of participants, and product operators’ satisfaction with the results. 4.2 Monitoring sustainability issues Beyond the indicators related to the Competitiveness programs and mission related goals – poverty alleviation & environment protection-, it is also recommendable to carry out a comprehensive assessment of sustainability issues through the elaboration of a set of Sustainable Tourism Indicators (STI). First of all, tourism sustainable development has to be based upon three main principles:  Equitability: the generation of wealth out of the tourism activity should be fairly distributed among all the destination stakeholders.  Livability: the tourism activity should allow the destination’s inhabitants to cover their present and future needs, ensuring a long-lasting quality of life.  Viability: development has to respect the carrying capacities of the destination ecosystems without using non-renewable resources The indicators have to play the role of analyzing all types of factors affecting the structure of the tourism industry, assessing the benefits and impacts of the tourism activity, identifying critical issues that need to be addressed, measuring the achievement of the Plan’s objectives and orientating in the need for strategy shift in line with the objectives achievement.
  • 32. COMPETITIVENESS PLANNING 3.0 w w w . e n v i s i o n i n g t o u r i s m . c o m 32 Based on the 20 main sustainability issues identified in the WTO’s “Indicators of sustainable development for tourism destinations: a Guidebook”, Tangenay, Rajaonson and Therrien developed a list of 20 STI as the main indicators to monitor the key sustainability issues within a destination. These are exposed in the following table. Sustainability issue Indicator Ecosystem Area of natural protected space Water Water consumption (tourism sector) Atmosphere Air pollution (tourism sector) Energy Energy consumption (tourism sector) Waste Volume of waste recycled or treated/total volume generated Well-being Level of satisfaction of the local population Resilience and risk Environmental vulnerability Security and safety Ratio of tourists to local population at cultural events Health Quality of bodies of water (lakes, rivers and sea) Satisfaction Level of tourist satisfaction Public participation Level of public participation in election Culture Level of maintenance of heritage sites Accessibility Frequency, capacity of services, or level of use by existing transport modes to the destination Investments Percentage of new real estate developments intended for tourism Ecotourism promotion Number and % of businesses that acquired an eco-responsible label Economic vitality Percentage of income generated by tourism in the community Employment % of new jobs in the tourism sector occupied by local residents Marketing Percentage of return visits Distinction Number of visits to heritage sites Traffic Volume of tourists Whenever data is not available, other indicators for the same issue should be found according to the available data related to this issue in the destination. Further, in relation to the previous section about monitoring the implementation of the Plan, the STI scorecard has to include indicators directly related to the destinations policy on sustainability. 4.3 Competitiveness clubs Beyond the DMO’s Board of directors, who are accountable for the implementation of the Tourism Development Plans –along with other stakeholders-, there can be created a sort of Think Tank usually called a Competitiveness Club, with representatives of both the private and the public sector, to work as a consultation body that gives support and advice in the elaboration and implementation of the Tourism development Plans. This is a volunteer driven organisation, where members participate driven by their professional interest in exchanging opinions and visions on the challenges of the local and global tourism industry. Particularly, when elaborating the competitiveness assessments and improvement programs, the Competitiveness club is due to provide support in the assessment of the conditions of the destinations’ operators, products, facilities, infrastructures and related supporting sectors.