Does Destination Marketing Actually Help Local Businesses?

Does destination marketing actually lead to an increase in visitors and revenues for local businesses? Tourism companies, local tour operators and shops targeting tourists and visitors? Does advertising and branding by destination marketing organisations (DMOs) really help improve the bottom and top line of the local industry?

Instead of wasting money on consultants proposing and creating destination image or place branding projects, local governments and their destination marketing organisations should use funds available for tourism in a destination to help local tourism and travel businesses. To help them grow visits and boost revenues.

Destinations, local governments, destination marketing organisations (‘DMOs’) and tourism businesses should look beyond ‘destination marketing’ as only being advertising, branding, or positioning. There are many more Ps in the marketing mix which are more effective. Starting with the P of Product. The experiences offered to the visitors to the destination its THE most important factor for success.

There is nearly no research that actually shows that destination branding is directly responsible for increases in visitor arrivals, length of stay, spending and other performance metrics’. Or that DMOs actually can influence competitiveness.

In addition, Internet, mobile, social media, online reviews, Google Travel has completely changed today’s consumer behaviour. They have become immune todestination advertising, branding and promotion.

Destination advertising, ‘catchy’ slogans, online promotion, campaigns, influencers or having a beautiful destination website do not work anymore. Local governments and destination marketing organisations should use funds more effectively. Instead of wasting money on buying paid advertising, expensive marketing agencies and consultants proposing destination image or branding projects. That is: it should help and benefit local tourism and travel businesses. To help them grow visits and boost revenues. It is therefore high time the DMOs need to transform themselves.

Are you doing the right thing?

This post will help local tourism and travel operators to determine whether their DMOs are doing the right thing. And are really helping them to grow visits and revenues. Especially if they are paying membership fees. Or taxes. If the DMOs are not doing the right thing, this post can help local businesses assist their DMOs to transform themselves.

One thing is becoming clear, destination advertising, branding and promotion does not help the local tourism businesses or travel operators. So we need to find other ways to attract visitors. And as I will show in other posts, it actually are your visitors which need to play an important role in your marketing. Your customers have become your marketing team.

Can you create an effective destination image?

Or phrased in another way: does having one destination image, branding and advertising really help local tourism and travel operators to improve their bottom line (income) and topline (revenue)?

There is no such thing as one destination image. People have difefrent perceptions of a destination. They can even have more than one image. Finally they even differ in what they regard to be a destination.

Destination images are for a large part fed by the local tourism and travel businesses themselves. In addition to all the other factors contributing to multiple destination images. As perceived by the visitors of the destinations.

Any effort to create, manipulate, adjust or simplify destination image is therefore a waste of time and money. Moreover, there is no evidence it actually helps the local tourism and travel business to boost visitors to their locations.

Increasingly, the DMOs have been moving into expensive ‘branding’ initiatives since the 1990s in an attempt to be different from other destinations. This then would lead the visitor to actually selecting the destination.

But as explained above, there is no such thing as one destination image. And therefore creating a brand identity is also a waste of time. Moreover, the question how this actually helps local tourism and travel businesses (who often have to contribute fees to their local DMOs) remains unanswered. Although there is and has been a lot of research on destination branding, no evidence has been found it actually works.

Therefore, in stead of wasting money on consultants proposing destination image or branding projects, local governments and DMOs should better use such funds to help local tourism and travel businesses. To help them grow visits and boost revenues.

Why destination branding does not work

Many destination slogans have been and are less than memorable. There are few exceptions, such as the 1970s ‘I ♥ New York’ campaign. But for every exception there are hundreds of examples of mediocre, badly conceived marketing messages. On which local governments waste millions of euros or dollars, etc.

And more importantly, today’s consumer has become close to completely indifferent for slogans, advertisements, and other market communications. Whether you are a local tourism buisness, travel operator or destination marketerr, you should read this book: Marketing Rebellion by Mark Schaefer.

In addition, there are several related issues that cause destination branding not to work:

1. A destination is not a product.
2. DMOs do not have the resources that will differentiate their destination from competing places offering similar features and benefits.
3. Most importantly, consumers actually do not see destinations as ‘brands’, so also cannot be loyal to destinations (the ultimate aim of branding).
4. Researchers nor DMOs have no clear understanding of what ‘destination brands’ are.
5. We do not know what branding does (not only for destinations, also often not for products).
6. There is no evidence destination branding actually leads to more income for the destination as a whole or helps local tourism and travel businesses to improve their revenues and income.

Destinations are too complex to brand?

Even if branding would work, the branding process for destinations is far more complex than that for consumer goods for five main reasons:

1. A destination usually consists of a diverse and comprehensive range of multiple features; this can not easily be summarised into a seven word single-minded value proposition. For a consumer good, the range of differentiating features emphasised is limited to one or a few features or benefits.
2. The market interests of the diverse and eclectic stakeholders are not homogeneous.
3. The politics of DMO decision making can make the best theories unworkable in practise.
4. Destination marketers have no control over the actual delivery of the brand promise.
5. Finally, the ultimate aim of branding is to stimulate brand loyalty, and yet DMOs rarely come into contact with visitors to enable meaningful post-visit engagement to stimulate repeat visitation.

As with design a destination positioning strategy also designing a brand identity for a large entity such as a destination is complex. The key challenges are:

1. Effectively engaging the host community in the brand identity development;
2. Agreeing on a focused direction with a diverse and wide range of active stakeholders, which is not only inspirational but also feasible, and then
3. Ensuring their cooperation in collaboratively supporting the brand positioning required to communicate the brand identity.

Therefore, in stead of wasting money on consultants proposing destination image or branding projects, use the funds to help local tourism and travel businesses. To help them grow visits and boost revenues.

To what extent is destination marketing by DMOs actually working?

There has been a lot of research into destination branding and positioning. However, it is very hard to find studies in DMO market performance measures.

One reason is that DMOs lack systems to monitor performance and effectiveness of their promotions for tourism objectives. So it is unclear how destination marketing leads to increased visits or income for a destination. In addition, DMOs are doing no attemps in most cases to establish visitor number and length of stay metrics, measure marketing communication effectiveness or branding performance. Which is the more surprising, since DMOs are often subsidized with tax payer money through local governments.

Also local tourism and travel businesses contribute as participating members of the DMO often without asking what exactly they get in return for their investments. Or whether monehy shoiuld go to other activities to boost visitors to the destination.

Visitor metrics provide a degree of accountability in terms of return on investment. They aree used by DMOs to show destination marketing spend and spending by visitors from those markets. However, there is no direct cause and effect relationships in these metrics. Destination marketing alone is not the sole determinant of arrivals in a destination as many established econometric studies of arrivals demonstrate.

This does not prevent DMOs and their consultants to use charts as here below:

The chart suggests destination marketing spend on the website is directly related to the number of visitors to the destination!?

Often you have to ask DMOs when they are talking about ‘visitors’ whether they actually mean visitors to the destination itself or visitors the destination website (‘clicks’). The latter proofs absolutely nothing if you do not have more information that website visitors actually converted to actual visitors or booked online with a link provided on the destination website.

DMOs cannot demonstrate marketing communications are effective

DMOs cannot demonstrate how marketing intervention (x) and the deployment of resources (y) contributed to specific outcomes (z) in the short and medium term.

Also the relationship between advertising and sales has yet to be established in destination marketing. There is no evidence and there are no studies pointing into another, more positive direction. There have been some conversion studies but also they are not conclusive.

The central problem is again the difficulty in controlling for the range of external factors over which the DMO has no control, but which will be in play at the time of the advertising.

The lack of DMO performance monitoring extends to the effect of marketing on seasonality. Spreading demand so that more visitors shift their visit to low seasons and vice versa.

Seasonality remains a constant problem for local tourism and travel operators and could be an area a DMO could support.

DMOs admit Public Relations activities also are not measured

The same goes for public relations and publicity performance measurement by DMOs. Many DMOs believe that they cannot measure the success of PR efforts (mostly ‘name in the press’ tactics).

DMOs use ‘equivalent advertising value (EAV)’ to monitor the results of their media activities. EAV is a simplistic measure of the amount of advertising spend required to purchase the equivalent amount of air time or column centimetre generated by the PR initiative. But EAV tells you nothing about how many (extra) visits or revenues the local tourism and travel operators generated. And there is no evidence it actually does. This does not withhold DMOs to argue the case for marketing funding.

Finally, we see the same related to measuring DMO Internet performance. The focus is on their own website succes factors (people visiting website, length of stay on website, effects on destination image), search engine marketing (which is the online form of advertising), social media etc. But not on how the online activities actually support local tourism and travel companies in growing visits and revenues. In addition, the digital channels of DMOs are rapidly losing ground. Today’s consumer (online) behaviour is causing this. And the myriad of other (and as perceived by them: better) options to get information, inspiration and all that is needed for today’s visitor elsewhere. Last but not least from giants as Google,.

How can DMOs help local tourism and travel businesses?

There are several reasons why today’s destination marketing models are reaching their end of life. DMOs should transform itself into a destination ‘marketing support’ organisation. In fact, the distinction between what the core function of DMOs are, requires us to fundamentally rethink and focus on the underlying principles of marketing. And how we should apply these at a destination level.

If DMOs really want to help local tourism and travel operators, they should look at ‘marketing’ in the broader sense of its meaning and focusing more on the other Ps in the marketing mix. Like product development, attracting fresh investments for new product offerings, boosting innovation and thus developing value-added jobs, recruiting new talent.

And DMOs should start supporting and helping tourism and travel businessess in their destinations. Not with (paid) mentions in their brochures or on their own DMO website or expensive online campaign. But by effectively providing resources to local tourism and travel businesses so they can optimize their business, reach their marketing and financial goals.

Therefore, in stead of wasting money on consultants proposing destination image or branding projects, the destination marketing organisations or local governments should use their funds to help local tourism and travel businesses. To help them grow visits and boost revenues.