DMO services to hotels: How valuable are they?
Wednesday, January 24, 2018
Destination marketing organizations (DMOs) are responsible for the management and marketing of a tourist destination. As a means to promote a destination, DMOs provide a variety of services to the tourists as well as other hospitality and tourism businesses in the area.
While DMOs usually operate in different geographical and administrative levels — namely in the national, regional/provincial/state or local level — current research suggests that DMOs generally provide the following services:
- Membership management, such as routine, ongoing programs (e.g., regular meetings and networking sessions), special area programming (e.g., guest speaker and strategic-planning sessions) and membership development programs (e.g., workshops and seminars)
- Training and education, such as workshops on special topics
- Data and research, providing useful data for a better comprehension of a market
- MICE (meetings, incentives, conventions and exhibitions) business creation
- Publications, ranging from marketing materials to regular periodicals and newsletters
Yet relatively little research reported the specific services provided by DMOs to hotels. Moreover, as suggested in the stakeholder theory, hoteliers and DMO operators — who represent two key stakeholders of a tourist market — might perceive different values regarding the same services available.
I worked with Tiziana Oggionni, a recent graduate of the master's program in the Collins College of Hospitality Management at Cal Poly Pomona, on a qualitative study. The results were published earlier this month in the Journal of Destination Marketing & Management.
We aimed to answer the following research questions:
- What DMO services do hotels use?
- How valuable and helpful do hotels perceive the services provided by DMOs?
- What are the desirable new services that DMOs could provide to hotels?
The data and analysis
We adopted a qualitative approach, where the primary data were collected with two-phase, semistructured interviews with 14 industry practitioners. The first phase began with in-depth interviews with five DMO representatives working in a national, state/regional or local level about the DMO services provided to hotels.
We used the interview protocol developed from a review of literature, of which the results were used to advance an improved protocol for the next phase of the study.
Using the improved protocol during the second phase, we further interviewed nine hotel informants who managed properties in a wide range of market segments (from economy to luxury hotels). The focus of this phase was to assess hoteliers' evaluations of the DMO services received, as well as their suggestions on the areas that may need improvement.
In terms of data analysis, we firstly analyzed each data set collected in two different phases separately, both with content analysis methods. Afterwards, we further triangulated the results from two data sets before reporting the final findings.
Our triangulation analysis revealed some intriguing insights. We were able to identify at least seven (instead of five) services provided by DMOs for all stakeholders of a tourist destination (not specifically to hotels). Yet there were also some discrepancies regarding the perceived values on those services among DMOs and hotels.
- Membership management: DMO informants wanted to ensure that their hotel partners fully appreciate the benefits coming with the membership, but this service was not reported as relevant or highly valued by hoteliers.
- Training and education: DMO informants valued this service, and hoteliers also recognized its value, even though they did not perceive it as the most valuable service received.
- Data and research: DMO informants wanted to further strengthen this service, and hotel informants also valued it as a somewhat important service.
- Lead generation: This is a new term that emerged from the data (as a replacement of the old term of "MICE business creation"). In general, both sides valued this service to some degree, but some hoteliers showed concerns of duplicated leads.
- Publications: DMO informants recognized the trend of publishing relevant information online. Some hoteliers agreed with DMO informants, but others felt travelers were not ready to surrender paper.
- Networking opportunities: Several DMO informants emphasized this service in the interviews, even though it was not reported in our literature review. Mixed feelings were found among hoteliers.
- Cost sharing: DMO informants often mentioned cost sharing at trade shows as an available service, which was also highly valued by hoteliers.
- Other existing DMO services: The services mentioned by one or two informants but not by most include online exposure, advertising, promotional service, transportation services and financial incentives for groups.
- Desired services: It seemed in general hoteliers were happy with the current services provided by DMOs.
Theoretically, our in-depth analysis revealed two emerging services that were not often discussed in previously literature: networking opportunities and cost sharing. The triangulation analysis also helped us advance the two-dimensional classification of DMO services by DMOs' and hotels' perceptions.
Practically, we made the following recommendations to DMOs:
- As far as membership management is concerned, DMOs should maintain open, constant and two-way communication about all services offered.
- Increase the awareness of the value about educational programs and consider alternative content delivery methods.
- Boost the perceived value regarding the service of data and research by sharing something unique and not available in other sources.
- Enhance the value of lead generation but, at the same time, reduce the risk of duplicated leads by focusing on the markets that hotels cannot reach easily.
- Allocate some effort from printed materials to publishing more information on digital media.
- Be mindful of the scarce time availability of hotel partners when planning the networking events.
- Maintain the benefits deriving from cost-sharing activities and keep offering such opportunities to hotel partners.
Do you use any services provided by DMOs? How do you value those services? Additionally, what new services do you want see from DMOs?
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