Managing and Marketing Tourist Destinations

Strategies to Gain a Competitive Edge

Metin Kozak, Seyhmus Baloglu

• Publisher: Routledge
• Year: 2010
• ISBN:
  9781136904745
• Edition: 1
• Topic: Commerce
• Subtopic: Industrie de l'hôtellerie, du voyage et du tourisme

Destination marketing is more challenging than other goods and services. The basis of competitive advantage shifts from tourism resources only (destination marketing) to a location-based or city-wide integrated management (place marketing). In this book, tourism scholars Metin Kozak and Seyhmus Baloglu discuss and synthesize theories, models, techniques, and principles for strategic marketing and management of tourist destinations, and demonstrate ways in which to further develop the concept of destination competitiveness for application within these destinations. The authors highlight the need for managing brand equity, tourist experience, and information systems, as well as involving internal and external stakeholders in strategic planning and implementation.

This book offers practical information directly related to the tourism industry, using the examples of real-world cases to bridge marketing theory with practice. With its international focus and applications for developing a competitive advantage in today's global marketplace, this research will be indispensable to students and scholars of tourism, hospitality, and leisure and recreation programs, as well as practitioners within these industries.

Part I
Destination Competitiveness

1
Why Destination Competitiveness?

Travellers today, domestic or international, are more educated, informed, demanding and experienced. As a result they expect good value, quality and higher standards. The changes happening at demand side, coupled with recent development in information and communication technology, influence all aspects of marketing strategy and travel behavior. From marketing theory perspective, the requirement of meeting or exceeding travellers’ needs and wants should be balanced against the growing requirement of places and destinations to develop and protect destination attractions, assets and resources in the most sustainable way (Middleton and Clarke 2001). Certainly, there are a number of reasons to indicate as to why the measurement and determination of destination competitiveness has become so important in travel and tourism (e.g. the existence of multiple destinations, the emergence of new destinations and so on). Each of these characteristics is explained in this chapter. These may also aid the readers to clearly understand the necessity of writing a textbook on the term ‘destination competitiveness’. This chapter also discusses the distinctive characteristics of the tourism industry along with destinations and evaluating main elements of destination attractiveness.

1.1. MAJOR CHARACTERISTICS OF THE TOURISM INDUSTRY

As a sub-sector of services, tourism has specific characteristics comparing with the manufacturing industry and other elements of the service industry. Such specific characteristics make the tourism industry differ in the management and marketing of tourist destinations, managing the host–guest relationship, and enhancing the competitive edge. These are listed below (for details, see Morrison 1989; Laws 1995; Kozak 2004a):

1. As the production and consumption coincide with time and location, tourists participate in the creation of the services they purchase. Tourists cannot sample the destination or its sub-elements before arriving for their vacations. But, they make their decisions either by looking at brochures or obtaining feedback from their relatives and friends, which is so much different than making decisions to choose a physical product.

2. As a significant part of the service industry, tourist services are composed of intangible rather than tangible attributes. Service is consumed as long as this consumption activity continues. As a consequence of this, pricing of services is more difficult than pricing of products. The customer needs to use intangible products sought in travel and tourism operations in a shorter period because they are not re-consumable.

3. Tangible clues and evidence determine customers’ assessment of the level of service quality (e.g. the type of furniture, the appearance of facility and staff uniforms and so on). This means that the quality of services is not a single criterion to be considered while evaluating tourists’ overall judgment of tourism products provided during a vacation.

4. In tourism services, a much higher level of social interaction takes place among tourists, staff and local residents in buying tourist services than the one in buying tangible products. Thus, emotions and personal feelings, generated by service encounters, influence future purchase intentions. Those employees affiliated with a variety of tourist establishments and encounters contribute to forming an overall picture of tourist experiences with destinations, which might be unique to each user.

5. Distribution channels play an important role in the marketing of tourism products and services. A distribution channel is a set of independent organizations or individuals involved in the process of making a product or service available to the consumer or business user. Most distribution channels are more than simple collections of firms tied together by various flows. Because most channel members also get involved in promoting and selling the destination, an integrated communication and distribution strategy is also needed.

6. Customer experience is shaped by a set of products provided by various establishments and even by events to be participated during a vacation (e.g. advertisements by either governments or tourism establishments, recommendations by friends and travel agents, quality of food, shopping, social interaction with other customers and behaviour of local people). The risk refers to the failure on these elements that may lead to customer dissatisfaction and repeatedly negative word-of-mouth recommendation.

7. Obtaining objective prior information when purchasing services is more difficult than when purchasing products. Thus, word-of-mouth communication helps potential customers obtain information about the alternative services or tourist destinations they would like to purchase and, in turn, decide which one to be purchased.

8. Most tourism services are not easy to be copied. Rather, it may be impossible to be patented, either. Different hotel establishments may have rooms and restaurants with the same size and recreation activities with the same features. This is also the case for tourist destinations where several identical products exist (e.g. beaches, museums, nature, shopping and accommodation facilities).

9. The capacity of either a tourist establishment or a tourist destination is not suitable to be expanded quickly. For example, expanding the accommodation capacity of destinations takes months and sometimes years. Subsequently, such tourist services as beds and meals cannot be stored for sale in a following day when a growing demand appears.

What is served by the supplier and consumed by the consumer in tourism is called ‘the tourism product’. It involves both tangible and intangible features. The tourism product is defined as “comprising attractions of a destination including images, sites, scenery, events and weather; facilities including accommodation, catering and entertainment; and accessibility with regard to the time and cost it takes to reach the destination” (Lewis and Owtram 1986, p. 204). As can be seen, attractions, events and accessibility play a pivotal role in the management and marketing of tourist destinations as they attract visitors; and, in turn, gaining the competitive advantage of tourist destinations. The primary marketing response to the above-mentioned travel and tourism characteristics has been managing and manipulating demand in the short term.

However, given the current trends such as sustainable tourism development and marketing as well as branding, a long-term planning and approach is a necessity, as well. In other words, the marketing responses should have both a strategic approach (long-term planning) and a tactical approach (short-term planning). And the tactics should be shaped and guided by the strategies. The term sustainability has emerged because of increasing consciousness of the countries about finding ways to develop their economies with minimal destruction of their environments and full consideration of the welfare of future generations (Carey, Gountas and Gilbert 1997; Rodríguez, Parra-López and Yanes-Estévez 2008; Prideaux 2009). A sustainable destination will act for the interest of travellers and residents, as well as for the protection of the resources. The triple bottom line suggests that a destination is operating in a way so that its economic interests, society or resident interests and environment interests intersect (Savitz 2006).

1.2. ATTRACTIVENESS OF TOURIST DESTINATIONS

Contributions to the work of classifying major elements of destinations include the following. In an earlier attempt to measure the tourist attractiveness of destinations, Var, Beck and Loftus (1977) note that it is a function of natural, social and historical factors, recreation and shopping opportunities, accessibility and accommodation performing above minimum touristic quality standards. Mill and Morrison (1992) state that a destination is composed of attractions, facilities, infrastructure, transport and hospitality. Similarly, Laws (1995) classifies elements which contribute to the attractiveness of a tourist destination under two main headings. Primary destination features include climate, ecology, culture and traditional architecture. Secondary destination features are those developments introduced particularly for tourist groups such as hotels, catering, transport and entertainment. Laws further claims that the primary purpose of tourists is to enjoy the primary features rather than the others, but the secondary features are necessary to reinforce the attractiveness of the destination. Goodall and Bergsma (1990) consider total cost as a fifth component in addition to attractions, facilities and services, accessibility and image. All these features together contribute to the attractiveness of a tourist destination.

Destination choice, image and satisfaction have all been the subject of considerable tourism research. Numerous attempts have been made to profile tourist motivations and link them to destination choice (e.g. Mayo and Jarvis 1981; Goodall 1988). Findings can be useful and helpful in directing future marketing efforts despite the fact that elements differ from one destination to another depending upon the type of destinations and tourist motivations (Kozak 2002a). In an empirical study, natural beauty, infrastructure, tourist facilities and climate were all found to be prime elements of the destination attractiveness (Gearing, Swart and Var 1974).

In other research, factors affecting tourist destination choices were listed as physical (infrastructure, superstructure, scenery, beaches, climate, historical sights), socio-psychological attractions (attitudes of the local people, cultural events, nightlife and entertainment, novelty of the destination, accessibility, food, quietness and so forth), political and social environment and cost and availability of time (Sirakaya, McLellan and Uysal 1996). In an attempt to investigate international travellers’ destination choices and the factors influencing their choices, Kale and Weir (1986) found that the major factors in general were the availability of things to do and see, cost, climate and accommodation. It was also observed that major factors affecting respondents’ choice of a specific destination were culture, scenery, history and food.

In a further analysis of tourist motivations, a category of push and pull factors is presented. Tourism literature emphasizes the importance of both push and pull factors in shaping tourist motivations and in choosing vacation destinations (Crompton 1979). Push factors are origin-related and refer to the intangible or intrinsic desires of the individual traveller (e.g. the desire for escape, rest and relaxation, adventure, health or prestige). Pull factors are mainly related to the attractiveness of a given destination and tangible characteristics such as beaches, accommodation and recreation facilities and cultural and historical resources (Uysal and Hagan 1993). As stated earlier, pull motivators indicate the extent to which each destination is attractive to its potential customers. Therefore, the destination choice process is related to the tourists’ assessments of destination attributes and their perceived utility values (Kozak 2001a; Nicolau and Más 2006).

1.3. TRENDS OF THE TOURISM INDUSTRY

In figures of 2003, 691 million people who counted for approximately 10 percent of the world population were involved in tourism movements, and tourism revenues amounted to $523 billion (www.world-tourism.com). According to the World Trade Organization (WTO), these figures are expected to be 1.6 billion people and $2 trillion in 2020 and 2 billion people and $2.1 trillion in 2050, respectively (Cho 2003). Moreover, it is estimated that the total revenues of both domestic and foreign tourism will amount to $24.2 trillion in 2050 (Pizam 1999). World Travel and Tourism Council (WTTC) expected that tourism revenues would reach $7.1 trillion in 2006 with an increase of 50 percent, and this will count for 11.5 percent of the world Gross National Product (GNP) and 11.1 percent of the labour force in the next ten years (Crouch and Ritchie 1999). In such a fast-growing industry, the attempts of countries to increase their shares has accelerated competition in tourism and given way to new research perspectives. That is why a lot of tourism countries are in competition to take part in the international tourism market in order to especially acquire foreign exchange, create new fields of occupation and increase their annual GNP, which are surely required for the development of their economies.

1.4. WHY DESTINATION COMPETITIVENESS?

Whereas studies on competition focus generally on examining the exportation success of goods-producing or manufacturing firms, studies on the service industry including tourism are limited. Accordingly, we know very little about both the service industry and competition in tourism destinations. Nevertheless, the increasing weight of tourism in industrialized countries of today, counting for 60 to 70 percent of their GNP, has resulted in rising competition in this industry. It is known that the first studies on tourism competitiveness, in a particular reference to the subject of destination competitiveness that covers a significant proportion of the tourism literature, have been conducted by several researchers within the last few decades (Goodrich 1977; Haahti and Yavas 1983; Heath and Wall 1992; Kozak and Rimmington 1999; Kozak, Baloglu and Bahar 2010).

However, the most comprehensive study so far is that of Ritchie and Crouch (2003). They applied the competitiveness of the service industry

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Table of contents

• Routledge Advances in Tourism
• Contents
• Figures
• Tables
• Boxes and Exhibits
• Preface
• Part I Destination Competitiveness
• Part II Destination Management
• Part III Destination Marketing
• References
• Index