DMOs AND THE SHARING ECONOMY: Taking the leap

This report discusses the role of the sharing economy in city tourism. While it’s easy to see the sharing economy as a cluster of challenges, in reality it can be a useful tool for city authorities to manage destinations effectively, connect visitors with local experiences and bring economic benefits to local people. However it also has to be regulated in a way that is fair to all stakeholders.

The more the different segments of the tourism sector realize the dynamics of the sharing economy the more we expand the scope of our work on practical aspects and implications. TOPOSOPHY has produced this free discussion paper for DMOs to help understand their role, and plan the way ahead. The paper includes:

• Analysis of recent trends in the sharing economy, and consumer motivations for using sharing economy services
• Discussion of how DMOs can update their regulations on sharing economy activities
• Practical tips on building a sharing economy impact assessment, and monitoring systems
• Step-by-step guide to making the sharing economy work in favour of the destination and local residents

Visit our new website or Click here to download the full report (free)

The Destination Marketing Landscape: The Role of DMOs

2012 has been declared as the year of integrated online & offline marketing while digital technology is nowadays at the epicenter of the tourism experience.

Since the budget of a DMO and its allocation are determined in relation to the benefits which it ultimately brings to the destination and of course to its stakeholders, the fact that the majority of the marketing spent is now being allocated to the online presence and digital applications, shows among others the importance of a targeted digital marketing strategy.

According to “2012 DMO Marketing Activities Study”, a new research conducted by Destination Marketing Association International (DMAI), destination management organizations (DMOs) are making “significant” investments in digital marketing, although they still spend a majority of their budgets on traditional marketing vehicles.

For the purposes of this benchmark study on DMO marketing practices, primarily in the leisure travel market, DMAI surveyed 240 DMOs from around the U.S and found that print advertising accounts for 33% of the typical DMO’s leisure marketing budget, while TV and radio advertising account for 8% and 5%, respectively.

Meanwhile, Internet marketing accounts for 30%, according to DMAI, which said DMOs have spent more than $39 million on website and mobile app development in the last three years.

According to DMAI, half of responding DMOs market internationally, and those who do invest one-third of their marketing budget outside the United States — mostly in Canada, the United Kingdom and Germany, which were identified as the most popular countries where DMOs are marketing.

“In order to reach these and other global consumers, more than ever DMOs are integrating their online activities, especially social media, into their overall marketing efforts,” DMAI reported. “Banner ads and search engine marketing dominate the online spending landscape, and almost all responding DMOs said they were present on Facebook, Twitter and YouTube.”

Further illustrating DMOs’ increased spending on Internet marketing is the fact that more than three-quarters use a Content Management System (CMS) and almost half have at least one staff person devoted to website content management.

When it comes to mobile, meanwhile, half of DMOs have or plan to have a destination app by the end of 2012, and almost all have or plan to have a mobile version of their website.

As far as results are concerned, the study found that DMO’s new group room bookings grew 4.8% last year; a total of 35.6 million group room nights occurred as a result of DMO sales and marketing efforts; while, in the 275 markets where DMOs are active in group sales, DMOs represented 19%, or 1-in-5, of all group room demand in 2011.

Meanwhile, at the other side of the Atlantic, the European Cities Marketing (ECM) reports that 56% of DMOs have an annual budget higher than 5 mil., whereas 50% of their marketing budgets is allocated online.

More info: www.destinationmarketing.org, www.europeancitiesmarketing.com

Why the Travel Industry Needs to Wake Up to Mobile

61% of online travel companies surveyed in a recent global EyeforTravel poll do not have a mobile friendly website. 71% do not have a mobile app.

There are many articles and presentations circling around at present detailing a multitude of mind blowing statistics highlighting the growth of mobile and the importance of this key trend for the travel industry but why is the travel industry not listening?

It’s no longer just a handful of customers looking for your brand via mobile – it’s millions. Jeremy Copp, VP Mobile Europe, comScore, a speaker at the EyeforTravel Summit event in May, shared that in the EU5 countries (France, Germany, Spain, UK, Italy), 11.3 million consumers accessed travel services via mobile in February 2011 alone. Travel application access grew by 52% YoY.

Out of the EU5, 36% of mobile market now use apps or their mobile browser. Interestingly, Spain is leading the way in terms of smartphone adoption (adopting at a higher rate than even the US) but EyeforTravel found that French travel companies were the heaviest investors in mobile followed by Germany.

For the travel companies that are investing in mobile, experiences have been largely positive. So how are such companies taking advantage of mobile and preparing for future growth in this area? Dan Craig, e-Commerce Director, Hotels.com shared that they invested heavily in mobile in 2009 & 2010 and are now seeing the rewards. This year they saw a 500% YoY increase in bookings via smartphones.

Craig found that investing heavily in native apps has been very beneficial as native apps provide a superior user experience than the web and lead to higher customer engagement and loyalty. From Hotels.com’s experience, customer primarily want to use mobile for last minute bookings and itinerary look up so they have designed their app around these key features .

Craig emphasized a fact that is often not considered when deciding where to allocate app spend – tablets are rapidly replacing laptops and desktops in the home particularly for ‘fun’ and ‘easy’ tasks. As leisure travel surely falls into this category, designing an app for tablets might just be worth that added investment.

Another important consideration when developing your mobile strategy is the fact that travel consumers are likely to be experiencing your brand on various different devices (tablet, desktop, mobile) depending where they are and what’s quickest and easiest for them at that time. A cross device experience for the customer should therefore be considered.

Nathan Clapton, VP Mobile Partnerships, Mobile, TripAdvisor shared that 6 million unique visitors now visit the TripAdvisor mobile site per month. He recommended launching new features quickly and acting fast to fix and improve user experience issues. In the rush to develop mobile apps, many forget to promote the app once it’s launched and in the following months. Clapton’s, emphasized the key to TripAdvisor’s mobile success was their approach to ‘promote, promote, promote’.

Clapton also shared that it’s worth considering whether your mobile app would be suitable to be featured as a pre-loaded app on a device. Pre-load is a powerful discovery channel (with many preferring apps with map features).

Mobile is only going to continue to grow. The rapid development of social networking sites and the consequent need to be constantly connected is fuelling mobile growth. Japan’s social networking site ‘Mixi’ shows how social networking trends can encourage mobile access and overtake desktop access. 84% of their page views are now via mobile (report by Morgan Stanley as cited by Dave Scheine, Director of European Operations, Yelp).

Many travel companies don’t want to hear that they need to invest money into yet another distribution and marketing channel but quite simply, if your customer is searching for travel information online and your site is not optimised for mobile or you don’t have an app then chances are they will find your competitors first.

Source:  www.eyefortravel.com

Presentation: Destination Marketing Organizations – The Case of Athens Tourism

Many wonder what role can DMOs play in a country already suffering from organizational overcrowding, bureaucracy, centralization, lack of continuity in policies and constant structural changes further complicated by the current economic crisis and its consequences?

In order to follow the global trend Greece had to establish decentralized, locally-based destination management structures around the country by taking into consideration a number of geographical, economical, social & environmental factors. The intensive occurrence of the aforementioned problems & barriers (bureaucracy, centralisation etc) throughout the Greek public administration mechanism creates huge barriers for local destinations to be self-sufficient and achieve their strategic objectives in the long term. Athens was the first Greek city which understood the necessity of establishing a DMO for coordinating the local tourism industry and promoting the local tourism product while many other Greek destinations are expressing their interest in setting up similar bodies. However, this trend should be engaged with national tools & guidelines for destination management at the local level in order to ensure that DMOs will be launched only in regions & places where the appropriate ground for development exist (strong local partnerships, sustainable tourism culture, expertise knowledge, adequate funds). After all, Destination Management/Marketing Organizations are expected to become the dominant, most influential and most respected force behind the world’s largest services sector and the Greek tourism should not miss that train. Having worked for many years with the Athens Tourism & Economic Development Co (Breathtaking Athens) I had the chance  to become one of those few Greek practitioners on our field with actual experience in creating a destination management/marketing structure from the scratch…. Literally! A couple of weeks ago, I have been asked from the City of Sofia, Bulgaria to present the case of Athens DMO as a benchmark for other South Eastern Europe destinations. Please take a moment and check out the presentation I did for the City of Sofia authorities and feel free to make your comments. Cheers!