Topic 3. Tourism Destination Competitiveness Lecture Plan
The concept of tourism destination competitiveness.
Value chain of tourism destinations.
Models of tourism destination competitiveness
Bibliography:
Basic: 1, 2, 3, 4
Supplementary: 10, 14, 19, 21, 25.
Key words: tourism destination competitiveness; classes of competition; Value chain; Conceptual Model of Destination Competitiveness; Model of Destination Competitiveness and Sustainability; The Travel & Tourism Competitiveness Index (TTCI)
The concept of tourism destination competitiveness Evolution of views on tourism destination competitiveness
Dwyer, Forsyth and Rao (2000) |
a general concept that encompasses price differentials coupled with exchange rate movements, productivity levels of various components of the tourist industry and qualitative factors affecting the attractiveness or otherwise of a destination’ |
d’Hartserre, (2000) |
the ability of a destination to maintain its market position and share and/or to improve upon them through time’ |
Hassan, (2000). |
the destination’s ability to create and integrate value-added products that sustain its resources while maintaining market position relative to competitors’ |
Ritchie & Crouch, (2003) |
a country’s ability to create added value and thus increase the national wealth by managing assets and processes, attractiveness, aggressiveness and proximity, and thereby integrating these relationships within an economic and social model that takes into account a destination’s natural capital and its preservation for future generations. |
Dwyer and Kim |
a very complex concept that combines several elements that may be observable or not, and that in many cases are not easy to measure. |
The competitive position of each product/destination can be defined within four broad classes of competition for tourist destination:
products
which share the same consumer target (for price and
quality)_________________
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Value chain of tourist destinations
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Models of tourism destination competitiveness
Poter`s Diamond model, is supposed to represent how an economy , firm or cluster can create competitive advantage, through its four facets as:
(a) Firm strategy, structure and rivalry: reflects attitudes toward competition, market institutions, degree of competition in domestic market and other cultural and historical factors
(b) Factor conditions reflect: human resources, specialized infrastructure(physical and administrative) and natural resources, capital resources
(c) Demand conditions reflect: sophisticated and demanding local customers that push firms on innovation, unusual local demand in specialized segments that can serve globally and customer need that anticipate those elsewhere
(d) Related and supporting industries: presence of capable local based suppliers and competitive related industries, stimulate cooperation and rivalry and ultimately lead for competitiveness.
Government can influence each of the above four determinants of competitiveness. Clearly government can influence the supply conditions of key production factors, demand conditions in the home market, and competition between firms. Government interventions can occur at local, regional, national or supranational level.
Chance events are occurrences that are outside of control of a firm. They are important because they create discontinuities in which some gain competitive positions and some lose.
Poon (1993) suggests four key principles which destinations must follow if they are to be competitive:
put the environment first_____________________________________________
make tourism a leading sector________________________________________
strengthen the distribution channels in the market place;___________________
build a dynamic private sector________________________________________
Go and Govers (1999) suggests seven attributes of destination competitiveness:
facilities_________________________________________________________
accessibility______________________________________________________
quality of service___________________________________________________
overall affordability________________________________________________
location image____________________________________________________
climate__________________________________________________________
environment______________________________________________________
attractiveness_____________________________________________________
Hassan (2000) posits four determinants of market competitiveness:
comparative advantage(includes those factors associated with both the macro and micro environments that are critical to market competitiveness)__________
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demand orientation (the destination’s ability to respond to the changing nature of the market demand)______________________________________________
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industry structure (existence or absence of an organized tourism-related industry)_________________________________________________________
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environmental commitment (the destination’s commitment to the environment)
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Ernie Heath’s Model (2003) is presented in the form of a house with foundations, cement, building blocks and roof:
The Foundations provide an essential base for competitiveness. These include:
Providing and Managing the Key Attractors (e.g. history, culture, climate, events, entertainment, etc.);
Optimising the Comparative and Competitive Advantages;
Addressing the Fundamental Non-negotiables (e.g. personal, safety and health issues);
Providing the Enablers (e.g. infrastructure (airports,roads, signage, etc.), managing capacity);
Capitalising on the‘Value Adders’ (e.g. location,value, and destinationlinkages);
Ensuring Appropriate Facilitators (e.g. appropriate airline capacity, accommodation, distributionchannels, etc.);
Focusing on the Experience Enhancers (e.g. hospitality, service excellence, authentic experiences).
´ The Cement binds and links the respective facets of competitiveness. These include:
continuous and transparent communication channels;
balancing direct and indirect stakeholder involvement and beneficiation;
information management, research and forecasting;
managing competitive indicators and benchmarks.
The Building Blocks are essential to make tourism ‘happen’ in a destination. These include:
Sustainable Development Policy and Framework (policy and legislative framework, organisational and financing framework,resources and capabilities, investment climate, sustainable environmental principles);
Strategic and Holistic Destination Marketing Framework and Strategy (destination image and branding, competitive positioning, target marketing/demand management, innovative marketing strategies, visitor satisfaction management).
´ The Roof (the key success drivers) comprises the ‘people’ part of destination competitiveness. These include:
shared tourism vision and leadership,
guiding values and principles,
placing strategic priority on the ‘people’ factor (political will, entrepreneurship, community focus and human resources development).
Conceptual Model of Destination Competitiveness ((Dwyer et al. 2004)
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Natural resources define the environmental framework within which the visitor enjoys the destination. They include:
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Heritage and culture of a destination provide a basic and powerful attracting force for the prospective visitor:
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Created resources:
Tourism infrastructure _______________________________________
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Special events ________________________________________________
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Range of available activities ____________________________________
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Entertainment ________________________________________________
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Shopping____________________________________________________
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Supporting factors and resources
Destination’s general infrastructure ______________________________
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Accessibility of the destination ___________________________________
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Hospitality ___________________________________________________
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Market ties __________________________________________________
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Destination Management
Destination marketing management________________________________
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Destination planning and development______________________________
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Destination management organization_______________________________
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Human resource development_____________________________________
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Environmental management_______________________________________
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Situational conditions
Destination location determines the physical distance from markets and must affect travel time from origin markets, even allowing for changes in transportation technology___________________________________________________________
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Competitive (micro) environment includes the components that shape the immediate industrial environment within which firms in the tourism industry must adapt in order to compete.
B1. The capabilities of destination firms and organizations can be classified in terms of each of the major functional business areas – management, marketing, finance, production/operations, research and development_____________________
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B2. The strategies of destination firms and organizations:
Specialisation___________________________________________________
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Innovation______________________________________________________
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Investment_____________________________________________________
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Risk taking_____________________________________________________
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Productivity improvements - variables as another set of factors that contribute to the efficiency and effectiveness of a destination_____________
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Ethical Business Behavior: honesty, fairness, open-mindedness, team spirit, loyalty, dedication, frank and full communication, life-long learning and constant improvement____________________________________________
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Alliance Formation_______________________________________________
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Global (macro) environment is a range of global forces including laws and regulations, growing concern forthe environment,restructuring of economies, shifting demographics of the marketplace, the increasingly complex technology–human resource interface, including computerization________________________________
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Safety and security: political instability/unrest, probability of terrorism, crime rates, record of transportation safety, corruption of police/administrative services, quality of sanitation, prevalence of outbreak of disease, quality/unreliability of medical services,and availability of medication____________________________
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Price competitiveness of a destination depends on the respective prices of the goods and services that cater to tourists needs________________________________
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Demand Conditions
The competitiveness framework comprises three main elements of tourism:
Awareness can be generated by various means, including destination marketing activities.
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Perceptions_____________________________________________________
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Preferences _____________________________________________________
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