Unit 2

Destination Development
Destination development is a continuous process of coordination and development of
amenities, facilities, products and services that support host communities to deliver quality
experiences for visitors and enhance resident’s well-being. Tourism provides a major economic
development opportunity for many countries and means of improving the livelihoods of its
residents. Both the public and private sectors involved in tourism depend on planning to
achieve sustainable tourism development that respects the local community, creates
appropriate employment, maintains the natural environment, and delivers a quality visitor
experience.
The expected continued growth is based on continually rising per capita incomes, lower travel
costs, increased leisure time, and changes in consumers’ tastes and preferences toward travel,
recreation, and leisure goods and services.
Tourism development must be guided by carefully planned policy, a policy not built on balance
sheets and loss statements alone, but on the ideals and principles of human welfare and
happiness. Social problems cannot be solved without a strong and growing economy that
tourism can help to create.

Goals of Tourism Development

 Providing a framework for raising the living standard of the people through the
economic benefits of tourism.
 Developing an infrastructure and providing recreation facilities for visitors and residents
alike
 Ensuring types of development within visitors centers and resorts that are appropriate
to the purposes of those areas.
 Establishing a development program consistent with the cultural, social, and economic
philosophy of the government and the people of the host country or area
 Optimizing visitor satisfaction. (source; Goeldner and Ritche)

Development has multifaceted role in the long-term, difficult process of the transformation of
the region’s economy acting as;
1. A means of gaining hard currency and improving balance of payments;
2. A catalyst of social change by permitting greater and closer interaction between host
population and those from the outside world, the tourists;
3. A means of improving local infrastructure by upgrading tourist facilities;
4. An integral part of economic restructuring; and
5. A complement to commercial development through the growth of tourism business.

1
In all, tourism development is largely a political concept, the pursuit by governments around
the world of various states of tourist development and perceived benefits of such development
raise questions about the economic, social and political dimensions of the development
process.

Elements of tourist destination

A tourist destination can mean a country, a region within a country, a city, village or resort. A
tourist destination implies a wide, integrated space that builds its own tourist identity on the
concept of cumulative attractions, which allows the experience, and with additional tourist
infrastructure, it represents an area where tourists gather.

Tourism destination is constituted by the following six elements.

1. Attractions: These are often the focus of visitor attention and may provide the initial
motivation for the tourist to visit the destination. These can be categorized as natural (e.g.
beaches, mountains, parks, weather), built (e.g. iconic buildings such as the Eiffel tower,
heritage monuments, religious buildings, conference and sports facilities), or cultural (e.g.
museums, theatres, art galleries, cultural events). They could be in the public realm such as a
nature park, cultural or historical sites or could be community attractions and services such as
culture, heritage or lifestyle. Other, less tangible factors, such as uniqueness and emotional or
experiential triggers are also attracting tourists to destinations.

2. Amenities: These are the wide range of services and facilities which support the visitors’ stay
and include basic infrastructure such as utilities, public transport, and roads as well as direct
services for the visitor, ‘Destination’, includes accommodation, visitor information, recreations
facilities, guides, operators and catering and shopping facilities

3. Accessibility: The destination should be accessible to a large population base via road, air
passenger services, and rail or cruise ships. Visitors should also be able to travel with relative
ease within the destination. Visa requirements, ports of entry, and specific entry conditions
should be considered as part of the accessibility of the destination.

4. Image: A unique character or image is crucial in attracting visitors to the destination. It is not
sufficient to have a good range of attractions and amenities if potential visitors are not aware of
this. Various means can be used to promote the destinations image (e.g. marketing and
branding, travel media, marketing). The image of the destination includes uniqueness, sights,
scenes, environmental quality, safety, service levels, and the friendliness of people.

5. Human Resources: Tourism is labor intensive and interaction with local communities is an
important aspect of the tourism experience. A well-trained tourism workforce and citizens who
are equipped and aware of the benefits and responsibilities associated with tourism growth are

2
indispensable elements of tourism destination delivery and need to be managed in accordance
with the destination strategy.

6. Price: Pricing is an important aspect of the destination’s competition with other destinations.
Price factors relate to the cost of transport to and from the destination as well as the cost on
the ground of accommodation, attractions, and food and tour services. A tourist’s decision may
also be based on other economic features such as currency exchange.

Characteristics of Destination
A destination is both a site and an event, and these two factors are the attractions. To become
a tourist destination the location, the region has to have the factors that determine the tourist
destinations. These factors are determinants in the bordering, determination of the core area
destination; their development is essential by the increase of the competitiveness of the
specific destinations.

According to Buhalis (2000) determinants of the destination are as follows:

 Tourist attractions, e.g. natural factors, factors made by human being, heritage, special
events, etc.;
 Approachability, e.g. the entire traffic system, including roads, traffic means, etc.;
 Tourist services, e.g. accommodation, host services, other tourist services, etc.;
 Product packages;
 All kind of activities that can be run by the tourists during their stay; public-utility
services, e.g. banks, telecommunication, hospitals, etc.
The characteristics of destination can be summarized as follows:
 Area target that is chosen by the tourist as the target of his travel
 Receiving area that is providing services for the tourist and people living on the spot
 It is defined from the point of view of the tourist
 A place/region that is confinable physically and geographically
 A place/region that is containing tourist attractions, products, services and other
background services being necessary for spending at least one day
 The tourist is spending at least one night here
 It is containing a lot of persons being concerned who are cooperating with each other
 It has an image
 It has perception (it means that each of the tourists can form an opinion about a
destination through his own “screen” subjectively)
 It is providing integrated experience for the tourist
 In a wider sense it is a tourist product that is competing with other tourist products
(destinations) on the market of tourism

3
  A kind of a complex and integrated system that is taking the existence of a modern
tourism controlling and management system to the successful operation for granted
 It is a system being built from below and supported from above

Not all locations, regions can become a tourist destination. There are such kind of basic
criterions that has to be met so that a location, region could become a tourist destination. The
above mentioned are only the most basic criterions. The determination and bordering of the
destinations or the core area destinations are supposing the development of a special system of
criterions that is made according to preferences, expectations, points’ of view of the tourist first
of all.

Features of destinations
Features of destinations include quality, authenticity, uniqueness, drawing power, and activity
options. It is the combination of these elements that sets destinations apart from one another.
High Quality is a key guiding value in tourism development. For any attraction this means
having a pleasing clean appearance, offering smooth customer oriented operations and
procedures, resource protection, friendly hospitality.
• Authenticity, being real, matters. It means letting the distinctive local flavor of a
community shine through in ways that create and produce a “sense of place”.
• Uniqueness is the “edge” that sets an attraction in your community apart from the
competition somewhere else.
• Drawing Power is measured in terms of the number of visitors who will travel a
specified distance to visit your community and whether they will return for repeat visits.
• Activity Options are important characteristics of destinations. The first impulse is to
concentrate on buildings, sites, facilities. But, it is important to remember the activities
that provide resident and visitors things to do.
From the above discussion we can understand the feature of tourism as;
 Satisfy the need for travelling
 Amalgam of products, facilities & services that comprise the ‘total tourism product’
 Bring together a number of tangible elements & attractions, intangible aspects &
facilities/services
 Planning, management & marketing are undertaken by public sector or partnerships
between stakeholders of the local tourism industry
 Need to disseminate information globally as destination-naive travellers require more
information

4
Destination Management system
Destination management can be defined as the process of creating, guiding and adjusting
factors that participate in the creation of a unique tourist product of a destination in which
individuals, by working together in groups, effectively realize set socio- economic goals.
Management of tourist destination must comply with the principles, courses and requirements
in the same way as the management of any other system that seeks profit.
Tourism can be an economic driver, generating jobs and contributing vibrant lifestyle benefits
to our communities. But equally tourism needs to be managed to ensure that it leaves a
positive legacy for current and future generations. Destination management is an ongoing
process in which tourism; industry; government and community leaders plan for the future and
manage a destination.
Destination is manageable through organizations that should join a tourist community:
agencies, hotels, restaurants, room renters, tradesman and all other service providers
(Bartoluci, 2013). Managing a destination is necessary first for its competitiveness and
sustainability. The main goal of the management of a tourist organization emphasizes long-
term insurance of competitive ability of the destination. Managing a tourist destination is a
long-term process that should ensure the competitiveness of the destination as well as achieve
a higher quality of life standard for the local population and the preservation of the cultural
identity of the whole tourist destination.
Such long-term goals contain components such as (Blažević, 2007):
 Optimal economic development of destination;
 higher quality of life standard for the local population;
 Preservation of necessary levels of ecology;
 cultural and historic heritage preservation and use of heritage in economic and general
growth
Destination management takes over the responsibility of defining long-term goals (where to
go), considering all activities that lead to the realization of these goals (what to do) and
achieving competitive advantages along the way (how to do it) (Ivanović in Blažević and Peršić,
2009).
Destination Management should be based on
 Organization of local resources
 Co-ordination and management of local tourist production
 Management and control of the relations among the stakeholders
 Market segmentation and product lines
 Creation and management of the value produced the system for all the actors involved;
public and private sector, tourist, the host community.

5
Characteristics of Tourist Destination Management
On the basis of some definitions summing up the point of the tourist destination management
organization
 The tourist destination management organization (Buhalis, 2000) takes the entire
responsibility for the tourist products of the whole destination, for their development
through controlling, encouraging and other means and for the development of a
partnership that is able to provide positive experience for the tourists;
 Its main role, function is the establishment of the cooperation and coordination
between the non-profit and private characters of tourism. Its purpose (Dr. Hilda Faragó,
2006) is to increase the tourism, the tourist income of the specific area and to
strengthen the image of the territory.

Destination Management System

According to UNWTO (2007), there are already clear signs that tomorrow’s successful
destination and other tourism industry stakeholders will be those that adapt to the new
operating environment and cater to all forms of distribution.
Information and Communication Technologies (ICTs) has become the key. Tourism destinations
emerge as umbrella brands and they will need to be promoted in the global marketplace as one
entity for each target market they try to attract.
A Destination Management System is a web based integrated information, destination
marketing and reservation systems. They may be referred elsewhere as Destination Databases
or Destination Marketing Systems. It is a combination of technological enablers and demand
drivers that has propelled the realization of destination management systems (Buhalis & Spada,
2000). Buhalis and Pringle described it as a collection of computerized information, interactively
accessible, about a destination. DMSs are usually managed by destination management
organizations which may be public such as state tourism offices or private organizations or a
combination of both (Pollock, 1998).

They must provide timely, appropriate and accurate information for tourism stakeholders.

DMS Fundamental Objectives

The overall objectives of a DMO are to increase the productivity of public and private tourism
professionals, and to improve the satisfaction of the international tourists through the use of
advanced information and communication technology, in order to create economic wealth and
jobs.
In particular, DMSs look after the followings:
 The availability of an Internet server offering information and primarily dissemination of
tourism marketing information and execution of electronic bookings and payments

6
  A critical mass of users/beneficiaries sufficient for the self-support of the system and its
organization
 The promotion of STMEs in the global market with low costs
 The exploration of new and niche markets.
 Forecasts and a better understanding of the evolution of the market.
 Increase of knowledge and capacity of the DMOs and SMTEs to answer to the market
trends.
The DMS aims to provide with all the information that a potential visitor might need to make
the decision to become an actual visitor, and to choose that destination out of all other
alternatives.

According to UNCTAD (2005), the two primary functions of a destination management system
are to:
 Provide consumers with comprehensive and accurate information for the preparation of
their vacations, and with booking facilities for tourism services and products,
 Provide tourism enterprises with the means to be better integrated into the tourism
supply chain by organizing and promoting personalized and enriched tourism
experiences.
System Operation
The primary goal of the system is to function as the main channel of distribution of information
and reservations on all major aspects of tourism in India.
The objectives of the system are:
 To make it easier for a tourist to choose as a destination;
 To improve visitor servicing while in destination.
The system is supposed to have two main functions:
 To make tourist information about India more available in the marketplace and
 To facilitate communication between the service providers and tourists

The DMS forms a large network, with the provincial tourism departments all participating in the
formulation of overall marketing strategy and policy.

Destination planning guidelines and selection process

Tourism provides a major economic development opportunity for many countries and a means
of improving the livelihoods of its residents. Both the public and private sectors involved in
tourism depend on planning to achieve sustainable tourism development that respects the local
community, creates appropriate employment, maintains the natural environment, and delivers
a quality visitor experience.

However, many tourism destinations have pursued development without proper planning and
without considering the many impacts such development will bring to the community. The

7
tourism plan is generally a formal document to guide both public sector and private sector
development activities.

Planning tourism
Planning tourism at all levels is essential for achieving successful tourism development and
management. The experience of many tourism areas in the world has demonstrated that, on a
long-term basis, the planned approach to developing tourism can bring benefits without
significant problems, and maintain satisfied tourist markets. Destination planning includes
many different forms of planning such as economic development planning, land use planning,
infrastructure planning, and social services planning and involves many groups with different
perspectives including governments, private investors and developers, and local communities.

Tourism Planning Process

Planning is about setting and meeting objectives. The outcomes of tourism planning was
restricted primarily to the measurement of the economic impacts for destination areas, due to
the ease with which economic impacts may be measured, compared to environmental and
social impacts. Planning is an essential activity to achieve the goals of tourism development.
Planning is concerned with anticipating and regulating change in a system to promote orderly
development so as to increase the social, economic and environmental benefits of the
development process. To do this, planning becomes ‘an ordered sequence of operations,
designed to lead to the achievement of either a single goal or to a balance between several
goals.

The Destination Selection Process

It has already been established that the image is an important determinant in tourists’
destination selection process. Research has demonstrated that there is a clear relationship
between a positive image of a destination and positive purchase decisions. Thus, one of the
biggest challenges facing destination marketers is that of creating and projecting a memorable
and positive image of the destination.
It is clear that if a tourism destination is to succeed, good planning must take place. Planning is
critical to the competitiveness and survival of a destination. Planning must take into
consideration not only the economic and financial interests of the public and private sectors,
but also the concerns of the residents of the resort destination and the visitors and their
preferences.
Destination planning involves a number of steps and activities that include designing, financing,
developing, and marketing of a destination to attract the visitors. It requires cooperation and
commitment of a number of different segments including government and community leaders,
architects, engineers, investors, economists, environmentalists, and others to ensure the
sustainability of a destination.

8
Criteria for the selection of tourism destination
According to Balmer and Crapo in their work they have suggested following criteria for tourism
destination management:
a. Natural Resource Base

• Except in urban dominated areas, zones should comprise areas with high potential for
intensive recreation, and particularly the activities and opportunities available
throughout the year. This can help in offsetting the seasonality characteristic of tourism
• Emphasis should be on areas having natural landscapes capable of providing aesthetic
appeal for tourism activities.

b. Population
• So far as possible, the areas should be in the near proximity of major markets, i.e., a
large population with the desire and ability to participate, or be at least easily by the
way of transport channels so such markets;
• It should be easy for the areas to approach the labor market necessary to service the
tourism industry.

c. Transport
 areas should be accessible from road routes;
 exploit a wide market to the extent possible, areas should be accessible by different
modes, train, bus and car as well;
 areas should hold an efficient internal circulation network capable of realizing
considerations like;
 The existence of attractive and efficient routes between attractions and service centers;
 The convenience of and the makings for developing a range of modes to facilitate the
tourists to travel with in the areas;
 The existence of and potential for developing tours capable of using specific modes of
transport in keeping with area’s development theme or image.
 attractions/events

d. Attractions/Events
Since attractions from constitute the primary element of a destination and are capable of
enticing visitors from different market segments, of course, depending upon the nature
characteristics of attractions, so they have their own weight in destination or area of
development. Thereby it becomes all the more imperative for the areas to possess the
following attraction characteristics:

• areas should have attractions/events of the scale and quality and rather to have
recourse to national as well as international market

9
 • areas should hold clusters of attractions/events;
• exhibiting range of appeal;
• amenable (agreeable) to be packaged to encourage (vacations) year-round

• requiring lesser degree or scale of auxiliary development which would otherwise needed
in case of a set disseminated individual attractions;

e. Image and Cohesiveness

Areas should hold conventional and popular features as basis for bringing up a regional identity
(natural/historical/manmade etc.) which can be easily and straightway identified and
harmonized with the geographic area.

f. Services and facilities

Being a service oriented industry
 the destination areas are expected to comprehend service centers capable of or holding
the potential to deliver quality service and transit facilities;

 it should be preferable if the service centers themselves can emerge as potential

attractions.

Tourism Value Chain

Understanding the economic Value of Tourism
Travel & Tourism’s impact on the economic and social development of a country can be
enormous; opening it up for business, trade and capital investment, creating jobs and
entrepreneurialism for the workforce and protecting heritage and cultural values. To fully
understand its impact, however, governments, policy makers and businesses around the world
require accurate and reliable data on the impact of the sector.
Data is needed to help assess policies that govern future industry development and to provide
knowledge to help guide successful and sustainable Travel & Tourism investment decisions. For
25 years, WTTC has been quantifying the economic impact of Travel & Tourism. This year, the
2015, Annual Economic Reports cover 184 countries and 25 regions of the world, including, for
the first time, the Pacific Alliance.
It is important for tourism organizations and businesses to be able to understand the value of
tourism, both at national level and within the destination or destinations they operate in.
However, consumer spending is only one measure of worth, and in talking about the value of
the sector, it is also useful to understand tourism’s contribution to the country economy.

Nepal’s travel and tourism sector pumped Rs177 billion into the economy and supported more
than 427,000 jobs last year, the World Travel and Tourism Council (WTTC) said.
According to its annual Economic Impact Research report for 2017, tourism accounts for 7.5

10
percent of Nepal’s GDP and is forecast to rise 4.3 percent annually to Rs287.6 billion, or 8.3
percent of the GDP in 2027. The GDP generated directly by the travel and tourism sector
includes its indirect and induced impacts. The report said that the direct contribution of travel
and tourism to the GDP in 2016 was Rs85.2 billion, or 3.6 percent. This is forecast to rise by 6.8
percent to Rs91 billion in 2017.
Nepal is ranked 37th in terms of travel and tourism direct contribution to GDP among 185
countries surveyed. Nepal trails behind India and Bangladesh, but is ahead of Sri Lanka in South
Asia in terms of direct contribution of tourism to the economy.
This primarily reflects the economic activity generated by industries such as hotels, travel
agencies, airlines and other passenger transportation services, excluding commuter services. It
also includes, for example, the activities of the restaurant and leisure industries directly
supported by tourists. The London-based council said that travel and tourism investment in
Nepal last year was Rs16.5 billion, 3 percent of the total investment.  In 2016, the industry
directly supported 427,000 jobs, or 2.9 percent of the total employment. This is expected to
rise by 2.9 percent per annum to 604,000 jobs in 2027.
Foreign tourist arrivals to Nepal jumped 39.71 percent to 753,002 in 2016. Visitor exports
generated Rs48.6 billion or 17.7 percent of total exports in 2016. In 2017, this is expected to
grow by 9 percent, and the country is expected to attract 801,000 international tourist arrivals.
By 2027, international tourist arrivals are forecast to total 1,384,000, generating expenditures
of Rs102.1 billion, an increase of 6.8 percent per annum, according to the report.
Leisure travel spending (inbound and domestic) generated 86.7 percent of direct travel and
tourism GDP in 2016, or Rs122.3 billion, compared to 13.3 percent for business travel spending
of Rs18.8 billion. Business travel spending is expected to grow by 8.2 percent in 2017 to Rs20.4
billion. Leisure travel spending is expected to grow by 6.9 percent this year to Rs130.8 billion.
Domestic travel spending generated 65.6 percent of the direct travel and tourism GDP in 2016
compared with 34.4 percent for visitor exports or foreign visitors. Domestic travel spending is
expected to grow by 6.1 percent in 2017 to Rs98.2 billion, while foreign visitor spending is
expected to grow 9 percent this year to Rs53 billion, according to the report
As a whole, the value of tourism would realized on the following components:
a. Tourism Spending: In calculating consumer spending on tourism, four basic components are
included
 Inbound visitor spending
 Domestic overnight visitor spending
 Domestic day visitor spending
 Domestic outbound visitor spending
b. Economic Contribution of Tourism:
c. Tourism Employment:

Need to Create Value for Destination

11
A brand is a name, symbol (logo, trademark, package design), or other marker that
distinguishes one product or service from those of competitors. Branding offers organizations a
means for differentiation which is a significant competitive strategy. The extension of the brand
concept from products to service industries such as tourism offers implications for resort and
travel destination management.
Branding helps cities attract tourists or funds in the increasingly competitive environment.
Brands also contribute to the creation of added value for customers and are correlated with
loyalty. Destination branding can be defined as a way to communicate a destination’s unique
identity by differentiating a destination from its competitors
Thus, similarly to general brands, destination brands exert two important functions:
identification and differentiation. Although a product in general terms represents a physical
offering that can be easily modified, a place as a product is a large entity that contains various
material and nonmaterial elements to represent it.

12