BML309 - The Competitive Destination lecture notes

BML309: Sustainable Destination Management

Module Learning Outcomes ยง Identify and critically assess the main approaches to Sustainable

Destination Management

ยง Critically evaluate the basic principles and practices related to

Sustainable Destination Management through applied project work

ยง Practically apply the VICE/VERB model and demonstrate how the

objectives of sustainable tourism can be achieved and operationalised within the context of a destination environment

ยง Synthesise good practice in sustainable destination management from

a variety of destination environments

Module Structure § Week 1: Introduction: The Competitive Destination § Week 2: Destination Management Strategies [1] § Week 3: Destination Management Strategies [2] § Week 4: Developing Tourism Partnerships: Community and

Stakeholder Engagement § Week 5: Reading Week § Week 6: Managing Destination Quality § Week 7: Managing Destination Sustainability § Week 8: Experience Development

Module Structure ยง Week 9: Fieldtrip/Guest Speaker (TBC) ยง Week 10: Destination Marketing and Branding ยง Week 11: Destination Monitoring and Benchmarking ยง Week 12: Managing Destinations in Crisis

Module Assessment § Assessment 1: Group Strategy (50%) § Submission 1pm – Wednesday 9th May

§ Assessment 2: Job application § Presentation (30%) and interview (20%) § Scheduled for Friday 11th May

BML309: Sustainable Destination Management

The Competitive Destination

Aims ยง To critically evaluate the characteristics of sustainable and competitive

destination

ยง To critically assess the factors influencing the competitiveness of a

destination

ยง To examine frameworks for understanding competition, with reference

to comparative advantage, competitive advantage and destination success

ยง To introduce and evaluate the Model of Destination Competitiveness

(Ritchie and Crouch, 2005)

ยง To identify alternative models examining destination processes

The Competitiveness Destination Activity 1: Identify: [a] What are the key elements of a sustainable and competitive destination? [b] What factors influence the level of competitiveness within a destination?

The Sustainable Destination: The VICE/VERB Model ‘the objective and detailed evaluation of the economic impact of tourism can be a long and complicated task’

The Sustainable Destination ‘the objective and detailed evaluation of the economic impact of tourism can be a long and complicated task’

The Competitive Destination ‘the objective and detailed evaluation of the economic impact of tourism can be a long and complicated task’

[Source: Ritchie and Crouch, 2005, p. 2]

Key Areas of Competitive Strength Economic ยง Resource and investment

Political ยง Political strength, stability and support (micro and macro)

Technological ยง An increasingly important factor in the promotion and

distribution of the travel experience for many destinations

ยง Destination Management Systems, Social Media, Apps ยง Adoption and use of technology by SMEs

Key Areas of Competitive Strength Socio-Cultural § Social and cultural characteristics are critical for creating a

destination that people want to visit (outweighing any political or economic considerations)

Environmental § The environmental dimension of destination performance

and competitiveness e.g. Sense of Place

§ Environmental integrity of the destination § New Zealand ‘Qualmark’/ ‘Green Tourism Business Scheme’

Key Areas of Competitive Strength Economic – The ‘Porter Diamond’ § Factor conditions - the nation’s position in the factors of

production, such as skilled labour or infrastructure

§ Demand conditions - the nature of home market demand for the

industry’s product or service

§ Related and supporting industries - the presence or absence in

the nation of supplier industries and other related industries that are internationally competitive

§ Firm strategy, structure and rivalry - the conditions influencing

how companies are created, organised and managed, and domestic rivalry

[Source: Ritchie and Crouch, 2005]

Key Areas of Competitive Strength Economic – Factors of Production § Human resources - availability, skills, costs, work ethics and

standard working conditions of available human resources

§ Physical resources - diversity, uniqueness, abundance,

attractiveness of natural features

§ Knowledge resources - available know-how; for example LDCs

have to import knowledge when developing the tourism sector

Key Areas of Competitive Strength Economic – Factors of Production § Human resources - availability, skills, costs, work ethics and

standard working conditions of available human resources

§ Physical resources - diversity, uniqueness, abundance,

attractiveness of natural features

§ Knowledge resources - available know-how; for example LDCs

have to import knowledge when developing the tourism sector

Key Areas of Competitive Strength Economic – Factors of Production § Capital resources - available capital resources; predominance

of SMEs places an emphasis on personal savings and investment

§ Infrastructure and tourism superstructure - infrastructure (e.g.

roads, utility services etc) and tourism infrastructure which serve visitor orientated needs and goals

§ Historical and cultural resources - tangible (e.g. ruins,

monuments etc) and intangible (tradition/customs) historical and cultural resources

Key Areas of Competitive Strength Economic – Factors of Production § Capital resources - available capital resources; predominance

of SMEs places an emphasis on personal savings and investment

§ Infrastructure and tourism superstructure - infrastructure (e.g.

roads, utility services etc) and tourism infrastructure which serve visitor orientated needs and goals

§ Historical and cultural resources - tangible (e.g. ruins,

monuments etc) and intangible (tradition/customs) historical and cultural resources

Defining Destination Competitiveness Competitiveness § Ritchie and Crouch (2005)

‘What makes a tourism destination truly competitive is its ability to increase tourism expenditure, to increasingly attract visitors while providing them with satisfying, memorable experiences, and to do so in a profitable way, while enhancing well-being of destination residents and preserving the natural capital of the destination for future generations’

Defining Destination Competitiveness Comparative Advantage v Competitive Advantage § Comparative Advantage § Relates to differences in the endowment of factors of

production

§ Competitive Advantage § The destination’s ability to use these resources effectively

over the long-term

§ Relates to the effective utilisation of resources (comparative

advantages) - therefore highlighting the importance of a clear tourism vision amongst all stakeholders and a clear destination management and marketing strategy

Defining Destination Competitiveness Frameworks for Understanding Competition ยง Porter (1980): Forces Driving Competition Between Firms

[Source: Ritchie and Crouch, 2005, p.15]

Defining Destination Competitiveness Frameworks for Understanding Competition ยง Additional Factors ยง Chance - alters the circumstances and

introduces opportunities for some and threats to others

ยง Competitiveness is therefore defined as the

ability to respond effectively to crisis situations

ยง Government - indirect impact on the

determinants of advantage

Defining Destination Competitiveness

[Source: Ritchie and Crouch, 2005, p.17]

Defining Destination Competitiveness Poon (1995) Competitive Strategies § Competitive Strategies are critical, because: § Comparative advantages are no longer natural § Tourism is a volatile, sensitive and fiercely competitive industry § The industry is undergoing rapid and radical transformation § What is at stake is not just tourism, but the survival of tourism-

dependent economies

§ The future development and viability of tourism-dependent

economies will depend not only on tourism, but on the entire service sector

Defining Destination Competitiveness Poon (1995) Competitive Strategies ยง Four key strategies for destinations: ยง Put the environment first ยง Make tourism a lead sector ยง Build a dynamic private sector ยง Strengthen distribution channels in the market place

The Competitiveness Destination Activity 2: Identify: • Expand on Poon’s key strategies - how can they be achieved?

Defining Destination Competitiveness Poon (1995) – Principles of Competitive Strategies

Defining Destination Competitiveness Poon (1993) – Put the Environment First

Defining Destination Competitiveness Poon (1993) – Make Tourism a Lead Sector

Defining Destination Competitiveness Poon (1993) – Strengthening the Marketing Channels

Defining Destination Competitiveness Poon (1993) – Develop a Dynamic Private Sector

Defining Destination Competitiveness Poon (1993) – Develop a Dynamic Private Sector

Defining Destination Competitiveness Limitations § Poon’s principles are too broad and general to be managerially

useful

§ A deeper understanding of destination competitiveness is

required

§ However, ‘the information that should guide the decision-

maker in dealing with the targeting of competitive [tourism] resources is lacking in this critical area’ (Haati, 1986, p.13)

Linking Competitiveness to Performance

A Model of Destination Competitiveness

[Source: Ritchie and Crouch, 2005, p.63]

A Model of Destination Competitiveness

[Source: Ritchie and Crouch, 2005, p.80]

A Model of Destination Competitiveness

[Source: Ritchie and Crouch, 2005, p. 93]

A Model of Destination Competitiveness

[Source: Ritchie and Crouch, 2005, p. 96]

A Model of Destination Competitiveness

[Source: Ritchie and Crouch, 2005, p. 96]

Models of Destination Competitiveness

[Source: Butler, 1980]

Models of Destination Competitiveness

[Source: Clegg, 1996]

Models of Destination Competitiveness

[Source: Howie, 2003, p. 63]

Destination Management Handbook/Toolkit

Learning Outcomes: By the end of this session, you should be able to: § Critically evaluate the characteristics of sustainable and competitive

destinations

§ Critically assess the factors influencing the competitiveness of a

destination

§ Examine and critically discuss frameworks for understanding

competition, with reference to comparative advantage, competitive advantage and destination success

§ Discuss and evaluate the Model of Destination Competitiveness § Identify alternative models that examine destination competitiveness § Be familiar with the structure and content of the Destination

Management Handbook