The four phases of tourism destinations.

An emerging destination must secure a critical mass to be recognized as a “must-visit” destination. The diagram below illustrates the four phases of such tourism destinations. This evolution represents the ideal growth pathway; while not all destinations are able to reach the advanced phases, this should be their objective.

To achieve this growth trajectory, tourism boards must develop “intelligent” strategies to attract new visitors at every stage, focusing on four key interdependent areas: building the brand, stimulating tourism demand, enhancing the tourism experience, and attracting tourism investments and offerings.

The destination is newly introduced and both international and domestic visitors are rare. The focus is on building the destination’s value proposition in order to start developing the marketing strategy for increasing visitation rates and attracting tourists. The aim in this early phase is to capture domestic visitors, therefore marketing efforts should be focused on this tourist segment.

It is equally important in this stage to capitalize on the destination’s natural assets in order to create a basic tourism offering. Successful case studies highlight a low-investment “minimum viable offer” approach, where the tourism board or destination authority conducts in-destination events to promote specific natural sites, and develops sustainable, construction-light accommodation options, while offering indulgent experiences in the destination’s natural ecosystem to attract early travel-savvy visitors (“adventurers’’). Government investment will also be required to develop essential infrastructure (e.g., transport, utilities, etc.) for tourists to be able to access the destination with ease and have basic amenities at their disposal.

Once these initiatives are underway, tourism boards or destination authorities should start engaging with tourism operators (TOs), travel agencies (TAs), and destination management companies (DMCs) to create travel packages within the destination, since tourists would not be prepared to make direct bookings. At the very least, efforts should be made to encourage TOs, TAs and DMCs to include the destination as part of their wider packages (e.g., as a day trip or overnight stay on the way to an “established” destination).

In parallel, it is crucial for the tourism boards or destination authorities to start systematically gathering data to understand the tourist experience. Best practices in this stage include conducting surveys to capture satisfaction and pain points, and likelihood of endorsement from early visitors; these metrics should be benchmarked against experience pain points and delights from competing destinations to identify priority areas for improvement.

The destination now attracts “trend-setters”, tourists who are responsive to marketing efforts, willing to engage and intrigued by the experiences of the “adventurers”, and want to follow suit. In this stage,marketing efforts should be focused on crystalizing the destination’s value proposition in order to start attracting international visitors.

The tourism boards or destination authorities should now take measures to stimulate private domestic investment by engaging large local players. These should be incentivized to invest in expanding the tourism offerings in the destination, from building better accommodation options to creating new attractions and experiences. At the same time, government initiatives should continue to expand existing infrastructure.

There will still be a reliance on TAs, TOs and DMCs to create travel packages and drive tourism demand, however these can now be aimed at international visitors. Additionally, it should be noted that efforts to build a presence on well-known online travel aggregators (OTAs, e.g., Booking.com, Tripadvisor, etc.) should start in this phase, as it takes time to build visibility on such platforms.

Data collection for measuring tourism experience should continue and expand through launching surveys for international visitors as well. Sufficient volumes of social media reviews and engagements should also now be available, making it possible to run social media analytics and use them to enhance benchmarking exercises. In addition, available data should be prepared for publishing as public datasets, and be leveraged to provide extensive support for accurate ROI modeling in order to gain investor confidence.

At this stage, the destination has secured the critical mass required to organically attract tourists through word of mouth and visitor recommendations. Marketing should therefore focus on promoting specific attractions and experiences, and target selected tourist segments by leveraging precision marketing analytics to increase conversion rates and marketing ROI.

The tourism board or destination authority should actively encourage foreign direct investment by pursuing partnerships with major global industry players; these will expand the tourism offering built by domestic players, bringing more accommodation options and more diverse experiences. Furthermore, as tourists become more familiar with the destination and start making direct bookings, partnerships with global OTAs should be strengthened, and TO/TAs should tailor their offers to provide packages for specific experiences and attractions.

Advanced social media analytics should be leveraged to prioritize tourist experience pain points and delights, and other available data should be capitalized on, and now made publicly available to generate business insights for investors.

The destination’s brand equity should now be high enough such that marketing efforts can be directed primarily to the promotion of new experiences and attractions. The tourism board or destination authority should focus on policies and measures to increase tourist spend, offer high-quality visitor experiences, and maintain a strong net promoter score.

Overall, at this stage there should be little intervention from government authorities when it comes to tourism supply creation, as the destination would be appealing from an investment point of view for private sector players who seek an attractive ROI. On the demand side, the majority of bookings would be made directly by tourists, significantly reducing the reliance on TO/TAs.

The tourist experience data should also now be rich enough to allow for advanced analytics to personalize the tourist experience, such as AI-based personalized recommendation engines for itinerary and experiences planning.

ARTEFACT CONTRIBUTORS:
Anthony Cassab, Anthony Hanna, Hemanth Mandava, Faisal Najmuddin and Andrei Dogaru