3.1 Introduction
Meagan A. McGuire
What is a Destination Management Organization?
A Destination Management Organization (DMO) promotes a city, region, county, state, nation, or area to potential visitors and, or alternatively, manages multiple aspects of tourism within a destination. These organizations can be private, government, quasi-government, or non-profit. The DMO coordinates with tourism-related stakeholders (those with an interest in tourism in a destination), including local businesses, attractions and events, hotels and event facilities, local government, and community groups, to strategically plan the promotion, development, and continuity of tourism for the destination.
Although variations exist in the terminology used to describe different types of DMOs (discussed below) that denote slight variations in organizational focus, structure, and geographic boundaries, these organizations are similar enough to draw general conclusions about their roles within the hospitality and tourism industry. The term “Destination Management Organization” and the acronym “DMO” will be used throughout this chapter as an umbrella term to designate all variants.
DMOs serve as the nucleus of the local tourism industry. As a result, anyone entering the career fields of hospitality or tourism will have the opportunity to work with a regional DMO. In turn, all professionals working in hospitality and tourism are impacted by their local DMO and its regional marketing and sales efforts. For those working in hospitality and tourism, DMOs typically offer many opportunities for career training and advancement, including cooperative marketing and sales campaigns as well as research and training programs.
Defining a Destination
The term destination is used by the tourism industry to identify a geographic area that attracts visitors. A destination can include one city or multiple cities; an entire state, territory, or country; or a region of a country, such as the Pacific Northwest. In the case of a DMO, the boundary defining the region as a ‘destination’ is typically established by the administrative body that has commissioned the management of the region, such as a community organization or a governmental entity like a city council.
Often, the boundary of a DMO is based on its financial sources. DMOs are typically funded by a variety of sources (to be discussed later in this chapter) including Tourism Promotion Area and Business Improvement District assessments, hotel occupancy taxes, and other types of taxes. Assessments and taxes are charged to businesses or taxpayers within a defined area of a district, city, county, or state. If a DMO is funded by one or more of these sources, then the boundary of their destination typically mirrors the assessment or tax boundary.
Types of Tourism Organizations
The diagram below, the result of a worldwide survey of DMOs conducted by Destinations International and MMGY NextFactor (2023), shows the variety of business models involved in destination marketing and management.
Examples
- Chambers of Commerce (4%): Some Chambers of Commerce conduct tourism promotion in addition to their non-tourism work. For example, the Kittitas County Chamber of Commerce in Ellensburg, Washington, offers a visitor center, helps manage tourists (especially during the famous Ellensburg Rodeo), and works with municipalities to promote Kittitas County as a premier tourism destination (Kittitas County Chamber of Commerce, n.d.).
- Government Departments and Authorities (21%): In some destinations, governmental bodies promote tourism and may rely on the work of economic development departments at various levels of government. The Ministry of Economy, Development, and Tourism, for example, manages tourism promotion in Chile.
- Non-profit Organizations with memberships (35%): Some DMOs are membership-based, which means that they supplement their funding by selling memberships to the tourism businesses in their destination. For example, Visit Seattle in Seattle, Washington, is funded by a variety of sources, including membership fees (Visit Seattle, n.d.).
- Non-profit Organizations with no membership (17%): Some DMOs do not charge membership fees to the tourism businesses in their destination and rely solely on other funding sources. Explore Seattle Southside, which represents the cities south of Seattle, is funded by a Tourism Promotion Area assessment only (Explore Seattle Southside, 2024).
- Other (13%): Additional business models exist to market and manage tourism in a destination.
The way a tourism organization is structured can influence how it operates. For example, a partnership between private and public organizations will usually experience heavier influence from the private partner to accomplish a specific goal. Chambers of Commerce have broader missions for supporting their business partners, and tourism marketing is but one component of that support. Government organizations are often restricted by adherence to the political will of those parties in power. Non-profit organizations with membership may be influenced by their member base while non-profit organizations without membership will usually have another funding source to maintain. One business model is not better than another, and they all have their strengths and weaknesses.
National Tourism Organizations and Administrations (NTOs and NTAs) and Ministers of Tourism (MOTs)
At a national level, National Tourism Organizations (NTOs) & Ministers of Tourism (MOTs) are governmental bodies that focus on tourism development for their countries. These entities actively promote destinations, either directly or through a contracted marketing agency, and often act as oversight organizations, developing policies and helping dictate rules and regulations for the travel sector.
In the United States, the National Travel and Tourism Office (NTTO) works to “enhance the international competitiveness of the U.S. travel and tourism industry and increase its exports, thereby creating U.S. employment and economic growth” (International Trade Administration, n.d., para 1). NTTO accomplishes this goal by reducing barriers that international travelers may face to enter the U.S. as well as through robust marketing campaigns administered through their marketing agency, Brand USA. In addition, the office provides official governmental travel and tourism statistics for the public and coordinates efforts across federal agencies through the Tourism Policy Council (Brand USA, 2022).
Regional Tourism Organizations (RTOs)
Regional Tourism Organizations (RTOs) are state, county, city, and regional tourism offices. In some cases, these organizations are government-run, such as in the case of State of New York Division of Marketing, Advertising, and Tourism. Other RTOs are statutory bodies, quasi-governmental entities, or non-profit organizations. RTOs are also often referred to as Regional Tourism Associations (RTAs). RTOs include Convention and Visitors Bureaus (CVBs)
Since the 20th century, most of the organizations that initially emerged to promote destinations were known as Convention and Visitors Bureaus (CVBs). Like most destination marketing and management organizations, a CVB is responsible for promoting a destination to tourists. A CVB, however, will focus more intently on attracting conventions to a given destination. In turn, destinations with large convention centers not only attract convention organizers but also draw event attendees.
Convention business can be lucrative, bringing a lot of people into the destination who stay in hotels, eat at restaurants, and spend money. Convention Centers are built on the premise that, when filled with convention attendees, the city will receive an economic boost. Therefore, cities compete against one another to host conventions, and a CVB will have dedicated staff members focused on selling the convention center facility, as well as the destination, as an ideal convention location.
Destination Marketing Organizations (DMOs)
The post-WWII rise in mass tourism in the second half of the 20th century provided an opportunity for destinations to attract more leisure travelers (Kachroo-Levine, 2021), including international tourists. Because CVBs did not traditionally focus on attracting international tourists, the term Destination marketing organization (DMO) was coined. Some organizations found that the term DMO was better suited to designate a broader promotional strategy. A DMO exists to market and promote a destination to all potential visitors, including leisure travelers focused on enjoyment and business travelers attending meetings and conventions.
Destination Management Organizations (DMOs)
Until recently, DMOs typically based their strategic plans on increasing tourism to a destination. Their business goals emphasized growth in the number of tourists visiting a destination, in the number of ‘heads in beds’ at hotels (the number of people staying overnight at hotels), and in tourism dollars spent at the destination. These objectives were primarily accomplished through marketing and sales activities. However, some destinations have experienced overtourism, which is when too many visitors negatively impact a destination. As a result, DMOs have begun to manage tourism more effectively by shifting away from a goal of increasing tourism in order to prioritize stewardship of the destination. Such stewardship aims to manage the impact of tourism, to conserve the destination’s natural and historic sites, and to preserve its culture and heritage.
Most DMOs have taken on the responsibility of doing more for a destination than simply marketing it. They have integrated additional stewardship, development, and stakeholder engagement into their strategic planning. Therefore, some DMOs have elected to change the “M” in their name from the term ‘marketing’ to the term ‘management,’ to become Designated Management Organizations. To avoid confusion over the increasingly ambiguous use of the letter “M,” which might designate marketing or management, some organizations have chosen to incorporate both terms to call themselves Destination Marketing and Management Organizations (DMMOs).
History of Destination Promotion
Detroit and Seattle took the lead in destination promotion during the 19th century. In 1896, business leaders in Detroit recognized the economic benefit that large conventions brought to the city and formed an organization known as the Detroit Convention and Businessmen’s League, now known as the Detroit Metro Convention and Visitors Bureau (Ford & Peeper, 2007). The original mission of this organization was to market the City of Detroit as an ideal place for organizers to hold their conventions, bringing attendee dollars into the city. In 1898, the group published a fully illustrated book, Detroit, the Convention City (Bierce, 1898), to promote their destination.
<img src=”https://openwa.pressbooks.pub/app/uploads/sites/1515/2024/09/image38.png” alt=”Cover of fully illustrated book Detroit. The Convention City: Illustrated. This is an example of the branding of Detroit as a convention city.” width=”832″>Figure 3.3. Cover of Detroit. The Convention City: Illustrated / Photo Credit: Detroit: Detroit Convention and Business Men’s League, Ltd., 1898, PD
The Seattle Chamber of Commerce was one of the first organizations to recognize the potential of marketing to visitors. One of their target markets was those traveling to the Klondike Gold Rush in Alaska and Yukon Territory in Northwestern Canada (Mighetto & Montgomery, 1998). While Seattle had the advantage of proximity to Alaska and the Yukon, multiple West Coast cities competed for the opportunity to be the outfitting and departure point for the Yukon when gold was discovered on the Klondike River in 1896. The Chamber established a Bureau of Information in 1897 to promote Seattle as the “Gateway to the Gold Fields.” Led by a local journalist Erastus Brainerd, the organization devised a plan to fund an advertising campaign to promote the city by taxing Seattle merchants who would likely profit from the influx of visitors. As Brainerd explained in 1897, “We are taking advantage of the Klondike excitement to let the world know about Seattle” (as cited in Mighetto & Montgomery, 1998, p. 39).
Much like the direct marketing tactics utilized by modern DMOs, Brainerd placed advertisements in newspapers and popular journals offering the services of the Bureau of Information to Yukon-bound prospectors and declaring it “will always answer free of charge all questions as to Routes of Transportation, Cost of Outfitting, etc. for the Yukon, Copper River, Henia Peninsula and other Alaskan gold Fields; for which Seattle is the port of Departure” (as cited in Mighetto & Montgomery, 1998, p. 44). Brainerd wrote feature stories in publications across the nation praising Seattle, providing testimonials from others who experienced the city, and declaring that “everybody in the East says Seattle is an extraordinary place” (p. 44). He even developed a traveling exhibit of $6,000 of Klondike gold. The Great Northern Express Company carried the exhibit throughout the nation to excite prospective gold-rushers.
Similar to the common destination travel guides produced by DMOs today, a special Klondike edition was published by the Post-Intelligencer in October of 1897. The 1897 headline read “Seattle Opens the Gate to the Klondike Gold Fields,” (as cited in Mighetto & Montgomery, 1998, p. 42) and provided advice to prospectors on how to prepare for and travel to the gold fields. This special issue was distributed nationwide, with the following number of copies sent:
- 70,000 to postmasters
- 20,000 to newspaper editors
- 10,000 to librarians
- 10,000 to mayors and city councils
- 15,000 to railway operators
As a result of this positioning, 70% of gold-fevered visitors came through Seattle on their way to the Klondike Gold Fields, spending large amounts of money and often settling in the area, helping Seattle develop into the major U.S. city it is today (National Park Service, 2022). Seattle is still known as the “Gateway to Alaska” with airline company Alaska Airlines based in Seattle and many Alaskan cruises departing from Seattle ports.
Significance of DMOs
To the tourist, the act of traveling can fulfill their need for excitement, intellectual stimulation, exploration, relaxation, or reconnection. For those businesses operating in a destination, however, traveling has an economic impact.
Tourism brings outside money into an area. As a result, tourism is considered an export product, ranking globally as the third largest U.S. export in 2019 behind capital goods (used in producing other goods) and other industrial supplies (International Trade Administration, 2021). Totalling $239 billion, tourism accounted for 9% of total U.S. exports (U.S. Travel Association, 2023).
Tourism is an essential driver of economic vitality for many destinations, contributing to the growth of local businesses and encouraging the establishment of new business ventures. Yet the success of hospitality and tourism-related businesses is determined by many factors outside of a business-owner’s control. For example, a tourist does not decide to visit a destination simply to stay at a specific hotel (unless the hotel is a destination resort property). The tourist may choose to book a hotel because of its proximity to sites and entertainment, friends and family, or business opportunities. A tourist typically decides first on a destination to visit because of its reputation for pleasant weather, interesting sites, rich culture, or laid-back or luxurious lifestyle. The hotel is often booked according to its location in relation to other attractions. The same holds true for restaurants, smaller-sized attractions, and shops.
With so many hospitality and tourism-related businesses reliant on the reputation of a destination for their business success, the tourism industry is collaborative by necessity. Attractions, restaurants, and hotels can and do market their offerings to tourists, but a tourist does not usually decide to visit a destination based on one draw (unless the draw is significant, such as Disneyland). Instead a tourist has an impression of a destination that draws their interest. In turn, when a tourist returns home from a trip, the stories they bring back and tell others will showcase key features of the destination. A tourist will sleep, eat, and entertain themselves at various businesses, each of which contribute to the overall travel experience. A DMO will assess the destination as a whole alongside its tourism-related offerings when strategizing how to promote a destination.
The Destination Management Cycle
As we have discussed, a DMO exists to manage and promote a destination to potential visitors. And while this effort is focused on increasing the attractiveness of a destination for visitors, it also contributes to the overall vitality of a place for residents and businesses.
The Destination Management Cycle, developed by Maura Gast (2019), exemplifies the indirect results of tourism marketing, illustrated in the chart below. The process is self-renewing, meaning that there is not necessarily a starting point and each phase of the cycle flows into the next, which then flows back to the original phase. A DMO focused primarily on building a place where people want to visit can also contribute to the attractiveness of a destination for workers, businesses, and residents, which then increases the desirability of the place as a destination to visit.
If a place is attractive to visit, then the area becomes desirable as a place to live. With an influx of residents, opportunities arise for business development and employment, as both are required to provide suppliers and services to a growing local population. And with an increase in businesses, including restaurants and leisure-oriented services, the destination becomes more accessible to people who want to visit.
Attributions
- Figure 3.1: DMO Business Models by Destinations International is released under CC BY 4.0
- Figure 3.2: Seattle Convention Center Summit Building, Pine Plaza & Mowitch Man by Seattle Convention Center/Cory Parris Photography is released under CC BY-NC 4.0
- Figure 3.3: Cover of Detroit. The Convention City: Illustrated by Detroit: Detroit Convention and Business Men’s League, Ltd., 1898 in the Public Domain; This work is in the public domain in the United States because it was published (or registered with the U.S. Copyright Office) before January 1, 1929.
- Figure 3.4: Seattle Chamber of Commerce Advertisement by Erastus Brainerd in the Public Domain; This work is in the public domain in the United States because it was published (or registered with the U.S. Copyright Office) before January 1, 1929.
- Figure 3.5: The Destination Management Cycle © Maura Gast Used with permission.
an organization that promotes a city, region, county, state, nation, or area to potential visitors and/or manages multiple aspects of tourism within a destination.
those with an interest in tourism in a destination
Please look for related terms in the Glossary.
a local or regional business association that promotes economic development, commerce, and tourism within a community or area.
a charitable or mission-driven organization that operates for the public benefit rather than for profit, often involved in community development, advocacy, and social services.
The United States office that works to “enhance the international competitiveness of the U.S. travel and tourism industry and increase its exports, thereby creating U.S. employment and economic growth.”
a governmental advisory body or committee tasked with advising policymakers on tourism-related issues, strategies, and initiatives.
when too many visitors negatively impact a destination.
a good, service, or experience offered by a destination that attracts and generates revenue from international visitors and travelers.