Tourism Management

Chapter 3

Tourism Management Lidia Andrades Caldito, Fre´de´ric Dimanche, Olga Vapnyarskaya and Tatiana Kharitonova

LEARNING OUTCOMES As a result of this chapter, the students will • Understand the tourism system, its components and its stakeholders • Realise the various costs and benefits of tourism • Appreciate how sustainability should be addressed by tourism management • Recognise distribution channels as the link between supply and demand • Identify the factors that determine tourism destination competitiveness

CHAPTER OVERVIEW This chapter discusses some key concepts for destination and tourism managers. It first describes the tourism system and its components or stakeholders. The chapter then defines and discusses tourism destination competitiveness. Being competitive on the marketplace should be the main concern for tourism managers. A discussion of tourism destination planning, management and marketing follows. Finally the chapter ends with a presentation of tourism management in Russia.

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Lidia Andrades Caldito et al.

Chapter Outline 3.1. Introduction to Destination Management 3.1.1. The Relevance of the Tourism Sector and Objectives of the Chapter 3.1.2. Key Definitions 3.2. The Tourism System 3.2.1. The Tourism Product and the Tourism Sector 3.2.2. The Tourism System Components 3.2.2.1. The tourist 3.2.2.2. DMOs 3.2.2.3. Where supply and demand meet — communication and distribution 3.2.2.4. Transportation 3.2.2.5. Hospitality and related services 3.2.2.6. Attractions, entertainment, etc. 3.2.2.7. Events and mega events 3.3. Tourism Destination Competitiveness 3.3.1. The Starting Point: What Is Competitiveness for a Tourism Destination? 3.3.2. Brief Overview of the Academic Literature on TDC 3.3.3. Managing TDC: Tourism Destinations as a Service Delivery System 3.4. Destination Planning, Development and Management 3.4.1. Tourism Destinations as a Value System 3.4.2. Destination Planning and Policy 3.4.3. Sustainable Destination Management and Intra-Destination Cooperation 3.4.3.1. Sustainability 3.4.3.2. Cooperation 3.4.4. Marketing Management 3.4.4.1. The Marketing plan 3.5. Russia as a Tourism Destination 3.5.1. Tourism in Russia — How Is It Organised? 3.5.2. Tourism Management in Russia: Challenges and Opportunities 3.5.2.1. Product design and resource management 3.6. Conclusions Discussion Questions References and Bibliography

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3.1.

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Introduction to Destination Management

3.1.1. The Relevance of the Tourism Sector and Objectives of the Chapter According to the World Tourism Organization [UNWTO], the tourism sector covers travel services related to recreational, leisure or business purposes. During the past decades, the tourism sector has experienced continuous growth and diversification, becoming one of the most dynamic sectors of the global economy. Nowadays, tourism represents worldwide a significant driver for economic growth, accounting for about 10% of the global economic activity. Tourism receipts represent over 5% of the world exports (WTO, 2013). Increasing tourist arrivals worldwide have also translated into a larger contribution of tourism to countries’ Gross Domestic Product (GDP) (WTO, Jansen, 2013) and as a consequence, tourism has become one of the leading service sectors in many countries. Tourism, as a global economic activity, favours socio-economic progress within those territories where it is developed. There are multiple positive effects derived from tourism such as the creation of jobs, its capability to fix the population to the territory, or its ability to diversify agricultural production in certain areas (Castan˜eda, 2010). For an increasing number of countries, tourism represents a strategic sector that is to be supported and protected through adequate legislation and infrastructure investments. In Russia, the Target Programme on Internal and Inbound Tourism Development in Russia (2011 2018) promotes tourism development in the country as a means to achieve socio-economic prosperity. According to figures published by the World Economic Forum in their Travel and Tourism Competitiveness Report (2013), the tourism sector represents 1.5% of the Russian GDP, or 5.9% when considering other sectors that are related to the tourism activity. Tourism can serve as a tool towards increasing government revenues through taxes and improving residents’ quality of life in a destination. There are, however, potential negative environmental and social impacts that must be managed for tourism to fulfil its promises.

3.1.2. Key Definitions Destination management aims to involve and put to work together all the stakeholders at the destination towards a common goal: to plan and develop the destination product in an efficient and sustainable way, that is,

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favouring socio-economic progress, ensuring environmental preservation, and satisfying tourists’ needs and expectations when they visit the destination. Destination management is generally the responsibility of Destination Management Organizations (DMOs) that are in charge of leading and coordinating activities at the destination under a coherent strategy. Although they do not control directly all activities implemented by the various agents within the destination, they bring together resources and expertise and a degree of independence and objectivity to lead the way forward (UNWTO, 2007, p. 2). As it will be discussed next, destination management takes place at tourism destinations that are a complex system of actors who work within the same tourism space with a common objective: the competitive and sustainable development of the destination. Destination managers should optimise destination performance by minimising the negative impacts of the tourism activity while maximising positive ones. According to Bornhorst, Ritchie, and Sheeman (2010), there are a number of success factors for a DMO: • Results as measured by tourism and economic growth (visitor numbers, hospitality metrics, etc.) • Effective marketing strategies (quality and awareness of the destination image and brand, media exposure, etc.) • Providing and promoting quality destination attractions • Creating quality tourist experiences (as measured by tourist satisfaction, repeat visits, word of mouth and social media impact, etc.) • Good community relations (local residents’ support of tourism and their attitudes and behaviours towards tourists). These factors must be taken into consideration and must be managed effectively by DMOs for destination to become successful. It is, however, difficult for any tourism organisation to control and manage tourism. Indeed, tourism is multifaceted and is a complex system of private and public stakeholders. Government, because of their legislative and policy-making power, often have a strong impact on tourism development and strategic management. As a result, the focus in destination management has often been on marketing. In fact, DMO is often referring to Destination Marketing Organisation. Such organisations are responsible for making strategic marketing choices and implementing marketing action plans designed to attract and satisfy tourists.

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This chapter describes how the tourism sector is structured, its main components as well as the relationships between them. The main objective of the chapter is for the reader to understand the fundamental determinants of tourism destination competitiveness (TDC), in order to adequately manage towards this goal. The reader will have the opportunity to consider and reflect on the various costs and benefits of tourism and to assess how destination management should optimise positive impacts while minimising the negative impacts of tourism. Accordingly, the sustainability of the destination should be a key concern when planning and managing tourism.

3.2.

The Tourism System

3.2.1. The Tourism Product and the Tourism Sector The tourism development of a territory is based on designing, developing, and promoting a number of attractions for tourists as well as providing the services that are needed for tourists to access and sojourn in a destination. Tourism attractions are normally based upon the resources available at the destination. Undoubtedly, those territories whose endowed resources have a high value will have a comparative advantage over others who do not have them. For example, a destination that benefits from an extraordinary natural setting (e.g. the French Riviera on the Mediterranean Sea) or cultural resources (e.g. St Petersburg with its museum and classic architecture) has strong comparative advantages that favour the development of tourism. However through tourism infrastructure investments, such as those made in Sochi in preparation for the 2014 Winter Olympics Games, territories can create tourism resources, achieving competitive advantages that lead them to get a better positioning at global markets. Thereby, resources or attractions at the destination, created ex nihilo or already existing, are the basis upon which private and public agents plan and develop the tourism products that represent the unique value proposition of the destination to be communicated. From a holistic point of view, every tourism destination may be considered as a complete tourism product. That is why there is a wide consensus about considering the tourism destination as the unit of analysis when studying the tourism sector (WTO, 2002). Thus, the destination becomes the basic geographic unit where tourism activities are planned, managed and sold. Accordingly, for many

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authors, destinations are the most relevant brands within the tourism sector (Morgan, Pritchard, & Pride, 2004, 2011). Figure 3.1 describes all the stakeholders that interact within a destination, and that cooperate to define and supply the value proposition of the tourism destination. As can be observed, the destination represents a complex social system, a so-called destination system, composed by three basic subsystems: tourists, tourism supply providers, and state and other organisations and institutions.

Figure 3.1:

Box 3.1:

The main components of the tourism destination.

The Destination System

The destination system is confined by the scope of a specific spatial unit, whose boundaries are determined by tourism demand, regardless of administrative borders. Because of these characteristics, a destination system requires integrated management to achieve the synergistic effect of coordinated horizontal management (territorial management) and vertical management (branch or sector management). (Continued )

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Development planning is a fundamental function of tourist destination management, and it is the primary function to which all other destination management functions are connected. The importance of proper destination development planning is evident in the need for minimising potential flaws in a destination’s line and concept of development. Organising is the next function in destination management. It must be derived from, and aligned with, a previously established destination plan, and it must focus on efficiently accomplishing the planned goals and strategies. This function identifies the most appropriate organisational structure for destination management, which essentially requires the interaction of the public and private sectors (Boskˇovic´, Saftic´, & Trostˇ, 2010, p. 794).

Accordingly, the supply of tourism products at the destination depends mainly upon private and public agents’ cooperation, but also upon other agents who indirectly contribute in the global service delivered to tourists at the destination, such as the host community and other stakeholders such as environmental associations that work to preserve natural resources at the destination. Consequently, destination attractiveness will be determined by those agents’ capacity to coordinate their work, to complement each other’s propositions, and to cooperate in designing, planning and implementing a destination strategy aimed at proposing a differentiated and competitive value proposition. To go further, one can suggest that tourism at a destination is made of a network that includes at the same time three components: actors, non-human entities (such as equipment and infrastructure) and interactions (Paget, Dimanche, & Mounet, 2010; Van Der Duim, 2007).

Box 3.2:

Tourism Destination — A Definition

A Tourism destination is a geographical area in which tourists spend at least one overnight. It consists of all the services and infrastructure necessary for the stay of a specific tourist or tourism segment. It has a physical and administrative frontiers defining its management, its image and positioning which determines its market competitiveness (UNWTO, 2007; WTO, 2002).

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Various destination levels may be distinguished according to the scope of the territory that is defined as the tourism destination. Macro-products destinations and micro-products destinations can be differentiated. Likewise, it is possible to talk about ‘macro-destinations’ when addressing countries or territorial units. For instance, the ‘Russian Federation’ or ‘The Alps’, which comprises Austrian, Italian, Swiss and French territories, among others. Within these so-called ‘macro-destinations’, multiple microdestinations can be identified, such as, for instance, cities (e.g. Moscow, St. Petersburg or Sochi within Russia), natural parks (e.g. Chavash Varmane or Valdaysky National Park in Russia) or ski resorts (St Anton, St Moritz or Courchevel in the Alps). Therefore, a ‘macro-destination’ comprises ‘micro-destinations’ which in turn are the result of the aggregation of the various tourism products packaged and commercialised within that territorial unit. The description of the different levels that can be considered when defining a tourism product demonstrates how intricate a system of resources and actors at the level of a ‘macro-destination’ or ‘micro-destination’ can be. Obviously, the managerial implications for destination brands such as ‘Europe’ or ‘the Alps’ are more complex and require more coordination efforts by all stakeholders within the territory, than the management of smaller areas such as a city. While the distinction between different tourism products/destinations levels is useful when defining the scope and complexity of destination management, from a demand approach, destinations are understood as ‘amalgams of tourism products, providing a unified experience to consumers’. Consequently, while destinations were traditionally viewed as well-defined geographical areas, nowadays it is widely accepted that a destination has become a perceptual notion, which is interpreted subjectively by consumers (Buhalis, 2000, p. 97). From a supply perspective, Figure 3.2 describes how tourism destinations are resulting from the coordinated efforts of many different actors. Transport infrastructure provides accessibility to destination resources, attractions, accommodation, catering services and to leisure activities or business meeting providers. Tourists become the centre for whom the destination value proposition is designed. Accordingly, the different agents interact with tourists and DMOs may contribute to coordinate those actions. Consequently, DMOs play an essential role at the destination. They assemble the functions of all actors responsible for tourism; they encourage cooperation between them to design and complement the global offer of the destination, as well as to build together the destination image. They organise communication towards target markets, reinforce

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Host community

Communication and Branding Attractions, Natural and Cultural attractions, entertainment

Hospitality and related services

THE TOURIST

Tourists information and guiding services Destination Management Organizations

Events and mega events Tour operators and Travel Agencies

Transportation

Figure 3.2:

The tourism system.

destination positioning and ensure the sustainability of the destination. Additionally, DMOs may facilitate distribution efforts, linking supply with tourist demand. Finally, DMOs may contribute to manage the host community by encouraging it to welcome tourists. Figure 3.2 only shows those aspects that are directly related to the tourism sector. Accordingly, direct effects reflect direct tourist spending on tourism services. But the great power of the tourism sector is to induce socio-economic growth across the territories where it is developed, through indirect effects. Indirect effects appear when the tourism activity leads to providing benefits to non-tourism sectors in the local economy such as construction, furniture making or agriculture (see Figure 3.3). Moreover, the tourism activity has ‘induced effects’ resulting from the increased income of wage-earners who are active in the tourism economy. Consequently, the tourism sector is described as ‘a complex sector, which has direct, indirect

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Figure 3.3:

Backward linkages in the tourism sector. Source: Adapted from Honeck (2012), Bolwell and Weinz (2008).

and induced effects over the economy of the areas where it is developed, and subsequently, has multiple backward and forward linkages into diverse sectors of the economy’ (Jansen, WTO, 2013, p. 18). Figure 3.3 shows how tourism brings together many actors who propose services at the destination. They are directly or indirectly related to tourism, but all contribute to the tourism destination.

3.2.2. The Tourism System Components 3.2.2.1. The tourist The tourist has the central role in the tourism system. Tourists and their needs stand as the main driving force behind destination planning, development and management. Tourism demand at the destination is composed of national and international tourists. National demand normally represents a more stable flow of visitors, based upon which tourism can be planned and developed. International arrivals are more often subject to ups and downs due to exchange rate fluctuations, geopolitical issues, and changing destination image. When national demand reaches a critical mass, government will

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often provide public services to support the tourism activity that are not provided by the private sector. A qualitative analysis of the local demand may explain the shape and character of the tourism sector at the destination. The more sophisticated and demanding local tourists will be the more pressure on tourism companies to become more innovative and competitive. Given the importance of tourists as part of the tourism system, the next chapter will focus on tourists and their needs and behaviours. 3.2.2.2. DMOs Destination marketing and management organisations (DMOs), at the supra-national, national, regional, or city levels, are key actors in the development of tourism. DMOs’ main objective is to help achieve the common objectives of the destination, by bringing together locals’ and the tourism sector’s interests. It follows that DMOs must develop a high level of competence in promoting and supporting partnerships among stakeholders. Destination tourism offices were initially agents undertaking promotional activities for the destination. This is why they have been called Destination Marketing Organisations. Their role is now becoming wider, and many DMOs are now the strategic leader in destination development and management. According to Ritchie and Crouch (2003), there are some internal and external activities that are essential to an effective, productive and smoothly operating DMO. Internal activities are related to the definition of organisational by-laws, the agreement of committee structures, the funding system, the determination of the operational procedures, membership management, etc. External activities refer to marketing, tourist management, human resources management, service design, resources stewardship, etc. There is a now a strong recognition of the importance of the role of DMOs for destinations to effectively compete at the international level. 3.2.2.3. Where supply and demand meet — communication and distribution Tourism service providers are connected to tourists through tourism marketing channels consisting in intermediaries and facilitators, such as travel agencies and tour operators. These intermediaries accomplish a number of key functions to facilitate the development of tourism (Middleton, 1994, cited in Ritchie & Crouch, 2003, p. 101): Buying in bulk and sorting and assembling tourism services into packaged tourism products

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Lidia Andrades Caldito et al. Providing a network that more effectively reaches into the target markets Communicating the tourism product information; branding to enhance awareness and customer trust Proposing a point of contact for consumers: advising and purchasing assistance; offering possibilities for immediate purchase or for booking in advance; receiving and assisting with customer complaints Financing part of the transfer of services to customers by purchasing services and reservation in advance; receiving and transmitting sales revenue to service providers Making available marketing intelligence for service providers and destinations Sharing risks with regards to demand fluctuations and uncertainty.

Distribution channels for a destination are retail travel agents; wholesale travel agents; tour operators; online retailers and distributors; booking agencies (e.g. for accommodations); incentive travel organisers; conference organisers. At the destination, tourists can also buy services directly from the service provider, or from local operators and even from DMOs who are sometimes selling tourism services such as accommodation and tours. The internet is increasingly used by travellers as a source of information and as a channel of distribution. Travellers buy services online from their home or office computers, but they also buy from a tablet or from their mobile phones when they are in the destination. 3.2.2.4. Transportation Transportation services make it possible for tourists to access the destination and to travel within the destination. Commercial transportation links between source/generating regions and destinations are essential to tourism development: The destination must be made conveniently accessible at a competitive price. Airlines, bus and coach services, railway services, car hire services, ferry services and local public transportation systems all contribute to provide mobility services to and at the destination. Such services must be made available to tourists, either locally or in their region/country of origin, through adequate distribution channels. 3.2.2.5. Hospitality and related services Once arrived in a destination, tourists are ‘hosted’ in a hospitable manner. A destination and its hosts provide a number of hospitality

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services to the visitors. They need hotels and other accommodations to spend the night, food and beverage services in restaurant, bars or cafeterias. Business travellers will use exhibition and conference centres for their meetings, as well as catering services. The hotel sector is usually one of the key players in a destination. The success of a destination is often measured by hotel management metrics such as occupancy rates, average daily rate (ADR) or revenue per available room (REVPAR). Recently the sharing economy has led to the development of new hospitality concepts such as airbnb (founded in 2008 as Airbedandbreakfast. com) or couch surfing (founded in 2004 as an association; it became a commercial entity in 2011). Such hospitality alternatives propose a booking platform where tourists can rent a room, an apartment, or a house from private individuals. 3.2.2.6. Attractions, entertainment, etc. Theme parks, national and state nature or cultural parks, museums and art galleries, gardens, heritage and historical sites, recreational sports facilities, entertainment centres, or casinos are all attractions that may be the primary reason why tourists visit a destination or that are used for entertainment while visiting friends or family or attending a conference. Tourists need to be provided with meaningful activities that they may not do at home. Such activities can be managed privately (e.g. theme park or golf courses) or by the public sector (e.g. nature parks or museums). Tourists can be segmented based on the main reason why they visit a destination. For example, they may be cultural tourists, nature tourists, or health and wellness tourists. 3.2.2.7. Events and mega events Events and festivals can be proposed as an additional product alternative for tourists in a destination. For example, while holidaying at the beach, tourists may benefit from food festivals or concerts. They are designed to dynamise the destination and to create additional value for tourists. Events can also be planned to be the main attraction and the main reason why tourist may visit a destination. For example, tourists may visit a city just to attend the concert of a touring pop singer, or they may sojourn in a specific destination because of a renowned music festival (e.g. the annual Jazz Festival in Antibes Juan les Pins, on the French Riviera), a specific sports event (e.g. the 2014 Olympic Games in Sochi) or a World’s fair (e.g. the 2010 World Expo in Shanghai or the 2015 Expo in Milano).


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Box 3.3:

Expo 2015

Held in Milan, Italy, Expo 2015 explored the theme ‘Feeding the Planet, Energy for Life’ for six months. The exposition site covered 110 hectares and was expected to attract 29 million visitors from May through October 2015. Visit www.expo2015.org

3.3.

Tourism Destination Competitiveness

After reading about the main actors of the tourism system in the previous section, the reader should understand (1) the multiple linkages that exist between the various stakeholders involved in the tourism industry, and (2) the relevance of setting the right environment where the tourism activity can be successfully developed. The emergence of new tourism destinations has intensified the competition between destinations to attract tourists and to reap economic benefits from tourism. In this section, the main factors that determine TDC are discussed, with the aim of providing a global understanding of how destination planning policies and destination marketing strategies should be implemented. The ultimate goal is for a destination to be attractive, competitive and sustainable. 3.3.1. The Starting Point: What Is Competitiveness for a Tourism Destination? In general, there is consensus about the fact that a tourism destination is competitive when it has a robust capacity to attract visitors and to provide them with satisfying and memorable experiences, in a cost-effective way, while enhancing the well-being of the host populations and preserving the natural and cultural resources (Ritchie & Crouch, 2003). But what are the factors and conditions that lead a destination to evolve through a sustainable and competitive tourism model? From an empirical perspective, the Travel and Tourism Competitiveness Index (TTCI), which measures the TDC of 140 countries when attracting international tourists, suggests that the main determinants of TDC are (1) the cultural and natural destination resources; (2) the availability of

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adequate infrastructure which makes destination resources available and satisfying for tourists and (3) a healthy and favourable travel and tourism regulatory framework (UNWTO, 2011; World Economic Forum (WEF), 2013). Some of these features make destinations attractive for tourists, allowing them to achieve a differentiated position (such as natural resources or cultural heritage) in tourism markets, while others, however, allow destinations to get competitive advantages in the long term (such as working towards a market economy). Figure 3.4 shows that the three main components of the TTCI according to World Economic Forum are shown with their corresponding indicators.

Figure 3.4: The three sub-indexes of the Travel and Tourism Competitiveness Index. Source: Adapted from ‘The Travel & Tourism Competitiveness Report 2013’, World Economic Forum (2013, p. 8). This figure suggests that governments and public administrations at destinations play a strategic role when establishing the appropriate conditions and the needed environment for tourism to grow. Accordingly, two decisive tasks to be accomplished in order to assure destination competitiveness are establishing a suitable travel and tourism regulatory framework and providing basic infrastructure. The best competitiveness indicator for a tourism destination is that the destination observes a steady growth over the time measured through the tourists flows to the destination (Ringbeck & Pietsch, 2013). These authors proposed the TTSGPS index (Travel & Tourism Stable Growth Performance Score) to measure competitiveness. They concluded that

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the main predictors of a stable growth performance at destinations were (1) affinity for travel and tourism; (2) guaranteeing safety at the destination; (3) the existence of a favourable regulatory framework for tourism; (4) environmental sustainability and (5) price competitiveness.

3.3.2. Brief Overview of the Academic Literature on TDC The aim of this section is to identify the fundamental variables that should be considered by destination managers in order to reinforce TDC. Following the review of TDC literature conducted by Andrades-Caldito, Sanchez-Rivero, and Pulido-Fernandez (2013), the interpretation of tourism TDC was traditionally focused on price levels and its influence on the volume of demand (Dwyer, Forsyth, & Rao, 2000, 2001; Song & Witt, 2000). Notwithstanding, beyond price competitiveness, there are some other relevant competitiveness attributes that can be considered. Buhalis (2000) analysed the destination concept, and how the destination strategic marketing and management must be developed to enhance TDC. He concluded that the challenge for destinations will be to supply unique and customised tourism products by using flexibility and intra-destination co-operation. Destination should be able to provide tourists with memorable experiences, assuring tourists’ satisfaction, and encouraging tourists’ loyalty. This should all contribute to fostering TDC. Moreover, Buhalis proposed the ‘six As framework for the analysis of tourism destination’ as a tool for improving TDC. Accordingly, TDC is completed when an efficient management of the different core components of the destination — attractions, accessibility, amenities, available packages, activities and ancillary services — is performed. Another important contribution to explaining TDC was formulated by Enright, Scott, and Dodwell (1997), who identified two types of factors that affect the competitiveness of firms and other organisations involved in producing the tourism product: generic factors of destination attractiveness and generic factors of competitiveness. Examples of generic factors of destination attractiveness are climate, landscape, accommodation and catering services, communication and transportation facilities or major attractions (Kim, 1998). Examples of generic factors of competitiveness are connected to destination management practices and include a range of factors such as inputs, inter-firm cooperation, industrial and regional clustering or internal organisation and strategy of firms and institutions.

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One of the most complete frameworks for studying TDC is Crouch & Ritchie’s contribution (1999), which resulted from several studies (Crouch & Ritchie, 1994, 1995; Ritchie & Crouch, 1993). Their rationale is known as the Calgary Model. Largely, the main strength of their proposed model lies in its ability to integrate all important factors that may characterize the competitiveness of a tourism destination. According to their model, four major components determine TDC: • • • •

Core resources and attractors, Supporting factors and resources, Destination management, Qualifying determinants.

‘Core resources and attractors’ include the major elements of destination appeal, which constitute the fundamental reasons why tourists choose to visit one destination over another. That is, for instance, the case of factors such as the climate, physiography, culture, history, singular events, types of entertainment and variety of activities that tourists may choose to do at the destination, or factors involving hosts’ relationships with the guests. Of particular importance to this component is the tourism equipment at the destination, mostly composed of accommodation facilities, food services, transportation facilities and major attractions. The other three components are essential for tourism destinations’ success and sustainability, since they favour development based on the core resources and attractors. ‘Supporting factors and resources’ provide a solid foundation upon which a prosperous tourism industry can grow. This dimension comprises accessibility to tourism resources, other infrastructure, facilitating resources such as financial, educational, or research institutions and entrepreneurship culture. ‘Qualifying determinants’ represent factors that could limit a destination’s capacity to appeal to and satisfy potential tourists and consequently affect its competitiveness. These factors are, for instance, the destination physical location, the overall costs, or health and safety. These factors are beyond the control of a DMO or the tourism sector, but they play a key role in TDC. Lastly, ‘Destination management’ refers to all the activities that may affect the other components: A wide range of actions that can expand the appeal of the core resources and attractions, strengthen the effectiveness and quality of the supporting factors and resources, and best adjust to the restrictions imposed by the qualifying determinants. Destination management involves activities such as destination marketing actions, services management, and organisation and

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maintenance of the major tourism resources and attractions (AndradesCaldito et al., 2013). Ritchie and Crouch added later a fifth competitiveness determinant to the conceptual model: ‘Destination policy, planner and development’ (DPPD). Although there may appear to be overlap and/or duplication between this fifth component and the ‘Destination Management’ component (both components seek to manage the competitiveness and sustainability of the destination), ‘they differ fundamentally in that DPPD is essentially an intellectual process that uses information, judgment and monitoring to make macro-level decisions regarding the kind of destination that is desirable, the degree to which ongoing performance and related changes in the nature of visitation and the physical character of the destination are contributing to the achievement of the kind of destination that stakeholders want’. This is the overall strategy of the destination, whereas in contrast, ‘Destination Management’ is ‘more of a micro-level activity in which all the many residents and industry stakeholders carry out their individual and organizational responsibilities on a daily basis in efforts to realize the macro-level vision contained in policy, planning and development’ (Ritchie & Crouch, 2003, p. 147). As a result, for a destination to be a success, both DPPD and ‘Destination Management’ must be properly done and coordinated. Dwyer and Kim (2003) categorised 81 indicators that characterise TDC into the following groups: Resources; Supporting Factors; Destination Management; Situational Conditions; Demand Factors and Market Performance Indicators. Dwyer, Mellor, Livaic, Edwards, and Kim (2004) went on to identify the principal elements that cause TDC: Endowed resources and the destination management. Both elements interact with tourism demand and situational conditions to influence destination competitiveness as well as socio-economic prosperity. Among the endowed resources one can distinguish between natural (e.g. coast or lakes), heritage (e.g. handicrafts, cuisine or language), and created resources (e.g. tourism infrastructure, special events or shopping); and supporting resources, such as general infrastructure or accessibility. Another empirical proof of the relevance of destination resources and their management to enhance TDC was provided by Enright and Newton (2004), who involved a sample of practitioners in the tourism industry to analyse the relative importance of 15 tourism attractors and 37 business factors over international destinations competitiveness. Their results

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provided strong support for the Crouch and Ritchie’s combined approach to TDC, and warned about the fact that some of the business-related factors were viewed by industry participants as being far more important than some of the tourism attractions. This suggests that endowed resources could be less relevant than destination management for improving TDC, and consequently comparative advantages may be surpassed by competitive advantages obtained through efficient destination management. Moreover, Gooroochurn and Sugiyarto (2005) used the World Travel and Tourism Council (WTTC) competitiveness indicators to appraise TDC and classify destinations according to their competitive strengths. Those indicators were price competitiveness; human tourism; infrastructure; environment; technology; human resources; openness and social competitiveness. More recently, Crouch (2011) postulated a new insight into the magnitude and impact of attributes which have an effect on TDC. Based upon the gathering and analysis of expert judgments, he demonstrated that between the five major destination competitiveness factors from the Calgary Model, the Core Resources and Attractor category stands visibly above the other four, in terms of the relevance of this set of attributes. Besides, within each of the five major factors, the study showed that the sub factors presenting the highest significance were Physiographic and Climate, Accessibility, Positioning/Branding, Quality of Service/ Experience, and Safety and Security. Crouch highlighted the importance of managing destination image and reputation in the tourism market, assigning a special value to marketing activities oriented to positioning the destination. As a result, he advised to consider the suitability of monitoring and assessing all competitiveness attributes, with the aim of supporting destination management. All research efforts come together to highlight two key issues determining TDC: (1) the quality of a destination’s resources and (2) the need for an effective management to meet tourists’ expectations. Custodio-Santos, Ferreira, and Costa (2014) pointed out another important issue to be considered when managing destination competitiveness: the destination life cycle. Mature destinations tend to be more cooperative and agile when facing changes, showing an adaptive learning capability greater than emerging destinations (McLennan, Brent, Ruhanen, & Moyle, 2014). Consequently, a destination’s capacity to adapt to its changing environment varies along its life cycle.

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3.3.3. Managing TDC: Tourism Destinations as a Service Delivery System After reviewing the most significant contributions that explain TDC determinants, we need to address the competitive environment where destinations perform their activity. Figure 3.5 summarises the main factors that determine destination attractiveness together with the competitive environment where destinations deliver services to tourists. On the left-hand side of Figure 3.5, the different competing destinations are represented. So competitors X, Y, and Z compete with the destination that is represented at the centre left of the figure. Tourism destinations have been represented as a service delivery system. Accordingly, from a tourist point of view, there are a number of activities that are performed at the destination, some of which are visible while others remain invisible. Tourists experience directly the ‘visible side’ of the destination’s management. Since destination managers control the unanimated environment, composed by the main resources and attractors of the destination as well as other supporting resources, they have an impact on how the experience will be perceived by tourists. Tourists may feel more or less satisfied, depending on how managers perform their tasks. Other aspects that are under destination managers’ influence may affect directly tourists’ impressions of the destination: For example, the quality of the services provided by contact personnel in hotels, restaurants, and other care and treatment services. Although individual businesses will manage quality, it is up to the destination managers to encourage and provide tools for the pursuit of quality in the destination. Again, tourists’ experiences will depend on the effectiveness of such management initiatives. Behind the visible stage where tourism staff provides services to visitors, the organisation of the destination takes place. Core activities like Destination Planning Policy and Development, in the long term, as well as Destination Marketing, in the short term, are accomplished to provide the right framework for the sustainable development of the tourism activity at the destination. This part of destination management is what we call the ‘invisible side’ because tourists may only experience the management of these factors in an indirect way. On this ‘invisible side’ of the destination organisation, qualifying and amplifying determinants of TDC, for instance destination carrying capacity, are controlled. Although tourists only interact directly with the visible side of the destination, they do experience the whole place, and as a consequence, they

VISIBLE

Perceived value per money

Care and treatment

Accommodations and Restaurants

Contact personnel

Supporting factors and resources

Core resources and Attractors

Figure 3.5:

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un m

om

n

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o

-S

TOURISM MARKETS

ia

ed

lm

cia

Tourists’ expectations

Set of destination advantages/ benefits perceived by the tourist C

Tourist C

Post-consumption

Tourist B

Situational Conditions

During consumption

Tourist A

Pre-consumption

DEMAND CONDITIONS Tourists’ experiences

Communication - Social media

Tourism destinations and tourism markets: A service delivery system approach.

Set of destination advantages/ benefits perceived by the tourist A

Tourism Destination as a service delivery system

INVISIBLE

Destination Management

Qualifying and amplifying Determinants

Destination policy, Planning and Development

Comparative advantages

Competitor Z

Unanimated environment

Competitor Y

Organization

Competitive advantages

Competitor X

TOURISM DESTINATION

Tourism destinations perceived images Tourism destination perceived image

ALTERNATIVE TOURISM DESTINATIONS

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indirectly perceive the effects of the destination managers’ decisions about the ‘hidden elements’ of the destination. So tourists will elaborate in their minds a destination image, based upon previous knowledge, expectations, and experience at the destination. As an outcome of the left-hand side of the figure, destinations project an image to various markets and tourists perceive that image as compared with other destination images that are projected by competing destinations. Competitive and comparative advantages are taken into consideration when potential visitors compare destinations, and as a result, some destinations are better positioned than others in the minds of tourists. Finally, on the right-hand side of the figure, the tourist experience at the destination is described. This will be discussed further in the next chapter, which addresses tourists’ experiences and behaviours. We can already state that tourism demand for a destination will be very sensitive to destination branding and promotion efforts as well as to word of mouth and peer evaluation of the destination. This is particularly true now that destination digital marketing strategies increasingly rely upon social media to communicate with potential visitors. Again, cooperation between all destination stakeholders becomes essential in order to broadcast a unified and attractive image of the destination.

3.4.

Destination Planning, Development and Management

After describing in previous sections the importance of coordinated tourism management to develop competitive and sustainable tourism destinations, the following section addresses a global vision of tourism destination management and presents a value chain management approach. This approach was selected because sustainability becomes a compulsory element to be considered when managing destinations. A value chain management approach offers an integrative vision of the tourism destination as a tourism system and helps when identifying the essential aspects to be considered when planning the destination development strategy. Consequently, the section finalises with the description of the phases to implement in order to design a strategic plan for tourism destinations development. 3.4.1. Tourism Destinations as a Value System Many activities need to be implemented in the destination to produce the services that tourists expect (see Figure 3.6). The objective is to support tourists

PRIMARY

Operative, logistic and marketing processes

Consumption

Destination Promotion and communication (Destination image and Branding)

Activities towards human resources empowerment

Customer service

Tourism services delivery

Activities towards Product development

Activities towards cooperation with related industries

Postexperience

• Post-experience evaluation and Sharing the experience: • Communication • Advocacy of the destination

Destination Distribution (Tour operators, travel agencies, OTAs)

• Service delivery at the destination: • Hospitality • Leisure and other activities • Mobility within the destination

Tourism Infrastructure

Tourism Product design

Tourism destinations as a value system, a value chain approach.

Destination Policy and Planning

Figure 3.6:

ACTIVITIES:

SUPPORTING

Preconsumption

• Access to the destination: • Destination commercialization • Transportation

(by public and private agents)

ACTIVITIES:


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throughout their customer journey, from the time they plan a trip, choose a destination, consume the tourism product, to the time when they return home and evaluate their experience, share their feedback to other potential customers, and contribute to reinforce or alter the image of the destination. As the figure suggests, the activities that are performed at the destination to ensure satisfying tourist experiences are numerous and varied. The upper part of the figure presents all the marketing activities developed to promote and supply the tourism product. The bottom chain presents supporting activities, which, according to Figure 3.5, take place at the back stage of the destination and that are only indirectly experienced by tourists. Those activities are in general related to destination policy and planning: They address the provision of needed infrastructure, the development of human resources, the development of tourism products, etc. 3.4.2. Destination Planning and Policy According to Ritchie and Crouch (2003, p. 147), Destination planning and policy is ‘essentially an intellectual process that uses information judgment and monitoring to make macro-level decisions regarding the kind of destination that is desirable, the degree to which ongoing performance and related changes in the nature of visitation and the physical character of the destination are contributing to the achievement of the kind of destination that the stakeholders want.’ There are several tasks to be implemented when planning: On the one hand, those that relate to the definition of the common long-term vision of the destination and the agreement of the goals to be pursued in the long, mid and short term. On the other hand, there are tasks to be conducted about analysing the external (economic, social and environmental assessment, market analysis, scenarios) and internal (stakeholders analysis, infrastructure and resource assessment, feasibility analysis) environment of the destination in order to appraise whether the objectives agreed upon are feasible and appropriate. Finally, the draft plan must be consulted before being implemented and finally, after implementation, a monitoring process must be followed to assess and review the outcomes (Hall, 2008). 3.4.3. Sustainable Destination Management and Intra-Destination Cooperation Two essential transversal aspects must be considered when planning destination policy and strategy: sustainability and cooperation between all agents involved in destination development.

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3.4.3.1. Sustainability Destinations must address and minimise the negative impacts on society and the environment that result from tourism activities. Consequently, sustainable management deals with ensuring the viability and competitiveness of tourism destinations and organisations while assuring that natural resources, culture and heritage are preserved. Also, sustainable management means increasing quality of life for host communities, optimising the contribution of tourism to their economies, supporting local employment and local products and services. To summarise, sustainable management is about favouring the community well-being without being detrimental to its environment. In addition, promoting social equity should be another objective to achieve for those destinations aiming to be sustainable. An important related issue is to pursue the efficient use of resources, trying to minimise consumption of scarce and non-renewable resources, minimising the generation of waste and land, water, and air pollution. To achieve all these objectives, from a sustainable perspective, it is essential that destination managers seek locals’ involvement when planning the future of destination, and empower them in the decision making process towards a desired and agreed upon future. Lastly, from a tourist perspective, sustainable destinations must meet tourists’ expectations by providing a safe and welcoming environment where tourists can enjoy the activities proposed by the destination. Destinations should make sure that they will welcome and respect all tourists and protect them from discrimination based on gender, ethnic origin, sexual orientation, disability or nationality. 3.4.3.2. Cooperation A collaborative approach for destination management must be emphasised. In a very competitive environment where new destinations appear each year in the marketplace, competitive advantages can be achieved through collaboration between all the destination stakeholders. To facilitate this intra-destination cooperation, the DMO should play a decisive role and provide the context where the various agents interested in the growth of the destination will participate and share their vision about the destination. A DMO will have (1) to identify all stakeholders and their degree of commitment towards tourism; (2) to agree and share with the stakeholders a common vision of the destination; and (3) to promote stakeholders’ commitment to collaborate in destination planning and development. Figure 3.7 synthetises the destination planning and policy process where government, citizens, and tourism enterprises work together to enhance the

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DESTINATION TARGET MARKETS Tourists

Investors

FACTORS SUPPORTING THE DESTINATION MARKETING

Attractions and resources

DESTINATION PLANNING AND POLICY Business community

Tourism New residents Infrastructure

PLANNING GROUP (DMO)

Locals Host Community

Exporters

Government

Image and Quality of life

Manufacturers Corporate headquarters

Figure 3.7:

The destination planning and policy context. Source: Adapted from Kotler, Hamlin, Rein, and Haider (2002, p. 46).

destination. All elements that need to be considered will serve as the basis upon which destination marketing objectives and strategies will be developed. A wide range of target markets may be considered when planning the destination and designing its marketing strategies. The target markets for territorial marketing are not only tourists; they are also potential investors and developers, new residents, manufacturers, etc., but the tourist infrastructure and the destination appeal certainly contribute to attract economic activity. 3.4.4. Marketing Management Marketing is customer-centred. Service and product design and marketing strategies are based on consumers’ needs and wants. A marketing orientation assumes that destinations must consider tourists’ expectations and desires when planning the tourism destination. Thereby, tourism marketing can be defined as a managerial function oriented towards organising and selling the destination and its services according to the needs of the markets targeted by the destination. Consequently, marketing deals on the one hand with market segmentation and targeting, to select those tourist

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segments which are most attractive, appropriate, and profitable for the destination, and on the other hand with the design and development of tourist services. When a segmentation strategy and a product development strategy have been determined, the destination is then positioned in the mind of targeted tourists. Adopting a marketing approach in destination management means that specific tourism products are going to be designed to meet the needs of those tourists targeted by the destination. Moreover, marketing deals also with the destination communication and promotion, destination image management and branding. Tourism marketing must make the destination and its supply accessible for tourists, placing the services for sale at the right place and at the right price for tourists to buy. To summarise, marketing refers to all activities that are developed at the destination to satisfy tourists’ needs and to meet the destination objectives. From a sustainable point of view, these objectives will be related to achieving an advantageous position in the market, being profitable while preserving singular resources, and safeguarding the interests of the host community. Since supplying tourism products consists in delivering services to tourists, tourism marketing becomes more complex than merely managing the traditional marketing mix: product, pricing, distribution and promotion. Tourism marketing, as service marketing, should also pay attention to the environment or physical context where the tourism service is delivered, and to the interactions between staff and customers and to customer-tocustomer interactions. Effective marketing requires a total effort from all delivering services in the destination. It is important to facilitate and stimulate tourist involvement and participation in the service delivery to optimise the tourists’ experiences (Andrades & Dimanche, 2014). Tourism firms should introduce mechanisms that allow tourists to express themselves and to co-create the experience with the service provider. This will enhance the tourist experience and make it unique and memorable. 3.4.4.1. The Marketing plan All marketing actions should be identified in the destination marketing plan. The marketing plan is a document that reflects the shared vision of the destination. This plan first includes an analysis of the current business environment: • The competitive environment (who are the competitors? What are they doing? How successful are they?);

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• The external environment (an analysis of the external factors that affect tourism, the destination, and its businesses political, economic, social, technological, legal, and environmental). Such external analysis allows managers to identify opportunities and threats. In addition, an internal analysis should be conducted to identify the strengths and weaknesses of the destination. Factors to consider may relate to finance and investment capabilities, training and education levels of tourism workers, overall quality of the tourism products, accessibility to the destination, profitability of target markets, destination image, or the various components of the marketing mix: product, price, distribution and communication. Such SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) can be used to match strengths and opportunities in order to find competitive advantages. Another way is to convert weaknesses or threats into strengths or opportunities. In all cases, the results of the SWOT analysis should help evaluate the objectives of the destination or the business. Based upon the external and internal environmental evaluation, destination stakeholders agree with the objectives to be pursued and the subsequent strategies and actions to be implemented. Finally, the marketing plan specifies the monitoring plan, with the possible corrective actions in case of deviations, as well as the forecast marketing budget. The strategies and actions outlined in the plan will address decisions related to the marketing mix of the destination: tourism products to be developed, brands to be promoted, standards of service quality, pricing, distribution channels and methods to reach the targets, promotion campaigns, online positioning of the destination, etc.

3.5.

Russia as a Tourism Destination

3.5.1. Tourism in Russia — How Is It Organised? As previously discussed in the section devoted to TDC, Figure 3.4 illustrates the roles that governments and public authorities have when establishing the context that will allow for the development of a competitive tourism sector. Figure 3.8 addresses the organisation of tourism in the Russian Federation. The main body responsible at the national level for

Figure 3.8:

Subordination

Collaboration and reporting

Universities in tourism

Tourism-informational centres

The public organisation of tourism in Russia.

Public organizations (associations, tourist clusters managing organizations)

Regional tourism administrations (ministries, departments, comities)

Federal Agency for Tourism (including Federal register of tour operators)

Private tourism sector: tourism industry, infrastructure, and hospitality

Regional State Statistic services

Federal State Statistic service

Ministry of Culture of the Russian Federation (Department of tourism and regional politic)


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tourism is the Ministry of Culture, of which the Federal Agency of Tourism depends. Additionally, there is a Federal Agency that provides information and statistics to support tourism planning and policy-making. Given the geographic scope of the country, public bodies at the regional level implement tourism policies. Regional tourism administrations organise tourism development in each Russian region. They rely on regional Tourism Information Centres and Tourism Clusters. In addition, regional state statistical services and universities involved in tourism studies support the regional government as well as the private tourism sector. The figure shows the relationships between the private and public sector, and how universities and tourism clusters represent the link between the private and the public tourism stakeholders. In the Russian tourism destination management system, the key role is played by the regional tourist administrations and by the tourist information centres. In this regard, the object of management is not only the tourist destination itself but the whole region (a subject of Russian Federation). After 2010, Russia has been actively using a cluster approach to tourism development. Some of those clusters have been created as free economic areas for tourism and recreation. Usually, the management company is responsible for cluster planning, designing, implementation, development and promotion. Regarding financial support for tourism development, federal and regional tourism administrations in Russia have the possibility to favour a steady tourism development with the support of public financial instruments. With this aim, the Federal Target Programme on Internal and Inbound Tourism Development in Russia (2011 2018) was approved. The budget for this programme includes direct financial support for the regional cluster initiatives that are compliant with efficiency and sustainability requirements. Usually, financial support through this programme is provided to major tourism projects. This is of great significance for economic and social development in the Russian Federation. Since the Russian Federation now considers tourism as one of the highpriority sectors for the country, the regional administrations usually design Regional Target Programmes on Tourism Development. Such programmes also include financial instruments for top-priority tourist projects. Usually, federal or regional support is focused on financing the infrastructure component of the projects — modernisation and construction of roads, housing, public utility infrastructure, etc. Besides that, the regional tourism administrations favour public private partnership agreements for sustainable tourism development projects.

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3.5.2. Tourism Management in Russia: Challenges and Opportunities A tourism destination may be defined as a geographical territory located within specific limits with various amenities and services to attract and satisfy the needs of tourists. Tourism destinations should be considered as open systems, constantly interacting with the external environment. The following discussion describes Russia’s external environment. As long as external environmental factors may not be directly influenced by tourism policy-makers, the management process is usually limited to considering their influence, and identifying the potential threats and opportunities. In general, the evolution of the country’s economy affects tourism sector growth, since tourism demand depends upon income per capita. In 2012, the WEF forecasted that the travel and tourism sector represented 1.5% of the Russian GDP and 1.4% of global employment. Furthermore, it is expected that the contribution of tourism in the economy will grow for the next decade, to reach 3.9% of the GDP in 2022. According to the most recent statistics published by the WEF, real GDP growth of the Russian economy in 2011 was 4.3%. This figure is positive, because it supports the existence of a stable internal tourism demand. This internal tourism demand becomes essential since it forces the destination to provide basic services and infrastructure for tourists. Those investments will help the country establish a basic tourism supply that will allow Russia to increase international visits. In addition, in order to appraise the stability of internal tourism demand, it is relevant to analyse income per capita, which affects demand for tourist services. When income per capita grows, people are more willing to spend money on services, including travel services. According to the WEF in 2011, the Russian GDP per capita was 16735.8$. Russian official statistics state that for 2011 2013, Russians’ consumer expenses in recreation have increased moderately, from 1.86% to 2.05%. Although internal demand for tourism services has not grown significantly, the number of tourism-related firms in Russia has doubled from 2005 to 2013. In the post-Soviet period, low quality of tourist services determined the necessity to concentrate all management efforts on improving the tourism sector and its services. First, efforts focused on transportation and accommodation facilities. The current basis for tourist accommodation comprises various types of hotels: deluxe hotels, hostels, motels, business hotels, boarding houses and others, which were developed across all regions of the Russian Federation.

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According to Travel and Tourism Competiveness Report of the World Economic Forum, the Russian Federation ranks 63rd out of 140 countries in the Travel and Tourism Competitiveness Index, with a 4.2 score on a 1 to 7 point scale. Although this score has kept almost constant since 2009, the country has lost competitiveness as a tourism destination over last years when comparing with other countries. Although the country is ranked 37th and 39th respectively, on cultural and natural resources, it is relegated to 92nd when appraising human resources, mainly because of the lack of qualified workers. In addition, when evaluating the affinity of the country for travel and tourism, Russia ranks at a disturbing 138th position out of the 140 countries in the analysis. Issues such as host community attitudes towards international visitors, or the lack of customer orientation at tourism companies hinder the development of Russia as a tourism destination.

Box 3.4:

Tourism Labour Qualification in Russia

Russia has a large number of colleges and professional higher education institutions that deliver bachelor programmes in the area of tourism; more than 30 also propose master programmes. In Russia, universities specializing in tourism often offer programmes in the area of service management. The Moscow region has 150 universities, institutes, and academies with curricula in tourism and services. At the college level similar specialties are present at 105 institutions. In addition, there are 72 vocational establishments. Other subsystems of the Moscow regional educational cluster include: (a) regional and municipal education authorities; (b) institutions of secondary and pre-school education with career guidance activities; (c) resource centres for life-long education in the field of tourism and service; (d) companies with their own training programs; (e) NGOs and not-for-profit organisations and (f) industrial associations with educational and seminar programs. This variety of different sources of education, skills and competencies provide a good platform for the cluster’s sustainable development. Source: Fedulin, Sakharchuk, and Ilkevich (2014).

Regarding the business environment sub-index, which is needed to develop a robust tourism industry, Russia has good air transport and tourism infrastructure (ranked 33rd and 40th, respectively) but not very good

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ground infrastructure (ranked 93rd), making it difficult for tourists to move across the country. Another negative factor for tourism development is the price competitiveness of the tourism sector compared with other countries (ranked 72nd). Nonetheless, without doubt, the main challenges to be faced by the country are related to the travel and tourism regulatory framework. In this sub-index Russia ranks 92nd. In general, policies and tourism regulations, environmental sustainability, safety and security and the prioritisation of the sector by the Government need to be improved. Particularly relevant to tourism development are policies that limit tourists’ access to the country, such as the barriers to obtaining a visa. Another important area of improvement is the implementation and effectiveness of marketing strategies to attract tourists: Russia ranks only 123rd. Aspects such as destination image and branding are nevertheless essential when trying to attract international visitors. Following the official statistics of the Russian Federation Statistical Service (2014), Table 3.1 below presents the factors that are perceived as barriers to the reinforcement of the business activity in the service sector in 2014. The factors are ranked from the most to the least significant. Table 3.1: 1 2 3 4 5 6 7 8 9 10 11

Barriers to a service industry development in Russia. Lack of financial resources Insufficient (uneven) demand for a specific kind of services Current level of taxation Large reporting load Unfair competition from other organisations Lack of qualified staff High rent High price for commercial credit Lack of equipment and premises Insufficient regulatory framework for specific activities Governmental authority corruption

Again, the regulatory framework for the service industry becomes a key area for improvement before allowing a healthy growth of the tourism sector. When considering tourism, the main challenges to be faced in the future are (1) to increase effectiveness of tourism product development based upon unique Russian resources; (2) to develop successful branding and communication strategies for the country; (3) to provide an appealing hospitality atmosphere to host tourists and make them feel

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comfortable and safe; (4) to improve service quality by increasing value for money and consequently boosting price competitiveness; and (5) easing accessibility to the destination. 3.5.2.1. Product design and resource management Destination product design is one of the most controversial issues in Russian tourism. It is based on the combination of tourist firms supplying services and public tourism infrastructure. Conventional Russian practice in tourism product development implied designing of a rigid sightseeing programme for tourist groups. Today, we witness a shift towards another approach, where tourists may choose excursions, animation programmes, food outlets, and other services, that they want to experience. Consequently, the tourism sector in Russia is evolving from a mass and controlled tourism offer, mainly supplied by tour operators who selected the most attractive sights to be proposed to visitors, to a customization of tourism services. Nowadays, online platforms like www.visitcity.com provide information and help tourists who want to organise their own visit to the destination.

Box 3.5:

Online Information for Visitors

Destination product development for tourists who prefer to organise their own tour is generally performed using the tourist navigation systems. The most general overview of the Russian destination is provided on the tourist information centre website. Usually the address of such website starts with www.visit, adding the name of the place for which the information is required. In fact, this is the multilanguage portal of general tourist information. For example, Tourism Development Center Red Izba is one such tourist office and its multi-language internet portal www.visitnovgorod.ru is dedicated to the one of the oldest Russian cities — Velikiy Novgorod. The portal offers various information regarding the history, geography, sights, and transport system of the city. On this website, a current event guide is also available with city maps and description of various alternatives such as children recreation, excursions, shopping, entertainment, food and beverage, and accommodation. It is possible as well to download an audioguide for Velikiy Novgorod Kremlin. Such portals usually provide opportunities for online communication and phone numbers for the 24/7 reference call centre.

Tourism Management

Box 3.6: ICT in the Russian Federation: Live Map of Russia and My Museum In the past five years, a number of innovative Russian projects in the area of tourism and ICT have been developed. LIVING MAP OF RUSSIA is an innovative project for the creation of a unified information system consisting of an interactive tourist map of Russia and its regions. This project creates the service and navigation environment for tourists to move freely across the territory. It allows tourist companies and tourists to meet on a common platform. Also, it has become a new tool to study and analyse tourist behaviour. The project is implemented under the LIVING MAP OF RUSSIA portal: http://www.2r.ru/. The National Tourism Association, http://mytourism-rf.ru, implements another project called MY MUSEUM (http://mymuseumportal. com), a community whose purpose is to bring together collectors and museum workers to help them disseminate information for art professionals and tourists. The project is implemented as an instrument of culture object integration into the tourism industry. The following information is posted about a museum: • Name and concept of the culture and art institution; • Location (accurate address with geolocalisation and possibility to generate public transportation routes); • Creative description and visual representation of the main artifacts; • List of available tourist services; • Event schedule; • User feedback (tourist blog); • The ‘best sights of the week’ rating. This communication project is first of all orientated to individual tourists who can design their own tour. Another important aspect of product development is stewardship of the resources available at the destination, since those resources represent the core attractors and serve as a basis for tourism product development. The availability of tourism resource registries has been addressed in Russia in the past few years, although too few exist today. Volume and structure of available resources at a destination can be consulted.

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92

Box 3.7:

A Registry of Tourism Resources

The Hanty-Mansiysk Yugra Autonomous Okrug has a unified Yugra Tourist Resource and Tourist Industry Organisation Registry divided into two sections dedicated to tourist resources and tourist industry organisations, respectively. Tourist resources are classified into several categories: natural territories under special protection, historic monuments, architectural monuments and ensembles, and archaeological monuments. The tourist industry organisations are divided into: • • • • • • • • • • • • •

Museums and exhibition halls; Theatres and concert halls; Houses and palaces of culture; Other social and cultural facilities; Organisations providing accommodation services; Recreation bases; Sanatoria and health resorts; Public food supply organisations; Entertainment facilities; Sport facilities; Tourist agencies; Tourist operators; Tourist industry organisations rendering the services on provision of excursion guides, guiding interpreter and guiding instructors; • Tourist industry organisations that sell souvenirs. Regarding service quality management, an essential issue for Russia to become a competitive tourism destination, there is a national regulatory framework, which complements international ISO standards. Consequently, the standardisation practice is well developed to facilitate quality service management, and Russia has national standards (GOST and GOST R) that establish the mandatory common requirements for the tourist service in order to ensure safety, health, environmental protection, complex, accurate, and timely performance, as well as optional requirements. The number of provisions in the tourist service field is regulated by the Russian Federation technical regulations system (GOST system). Nowadays, the following documents are available online at http:// standartgost.ru for those who want to consulting them. A relatively new

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practice is the development of a Hospitality Standard Complex, which is defined as the document determining the characteristics of hospitality and rules of tourist servicing within the territory of destination for the purpose of voluntary repeated use. The objective of tourist destination hospitality standard development is to create a favourable tourist environment within the destination and ensure a proper level of hospitality, informational support and safety (see Figure 3.9).

Directions of the tourist destination hospitality standard complex development

Product information availability

Destination tourism product information availability standard

Tourist safety

Tourist destination visitor safety standard

Development of a comfortable tourist environment

Tourist destination comfortable visitor environment standard

Hospitality code standard

Improvement of tourist and excursion service quality

Figure 3.9:

Box 3.8: Tourism

Tourist and excursion service standard

Tourist destination hospitality standards.

Description of the GOST Regulatory Framework for

GOST 28681.0-90 Tourist and Excursion Service Standardisation. This standard establishes the target, tasks, standardisation objects and standard complex structure for other documents regulating tourist and excursion services. GOST 28681.1-95 Tourist and Excursion Services. Tourist Service Design. The standard establishes the procedure for preparing documentation related to tourist service design and is intended for various (Continued )

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organisations and enterprises and for individual entrepreneurs providing tourist services. This document determines the basic requirements in the area of tourist design. GOST 28681.3-95 Tourist and Excursion Services. Requirements for Ensuring Safety of Tourists and Excursionists. The standard contains the requirements for tourist and excursion services in order to ensure the safety of visitors and methods for compliance control. It is intended to be mandatory tourist service certification. GOST 28681.4-95 Tourist and Excursion Services. Hotel Classification. The standard classifies various hotels and motels with accommodation capacity not less than 10 rooms. Classification does not cover houses and premises leased out for accommodation. GOST R 50644-2009 Tourist Services. Requirements for Tourist Safety. The standard determines the requirements for ensuring the safety of tourist health and property during the travel. The standard covers legal entities regardless of their incorporation and ownership form, and individual entrepreneurs providing tourist services. GOST R 50646-2012 Services Rendered to Citizens. Terms and Definitions. This standard gives the definitions for terms in the area of standardisation, service quality management and compliance verification in the area of services rendered to citizens. GOST R 50681-2010 Tourist Services. Tourist Service Design. This standard determines the procedure and rules for tourist service designing, including those being a part of the tourist product. The standard is applied to legal entities regardless of their incorporation and ownership form, and to individual entrepreneurs rendering tourist services and/or services on designing the technical documentation in the tourism field. GOST R 50690-2000 Tourist Services. General Requirements. This standard determines the general requirements for tourist services, tourist health and property safety, and environmental protection. The standard covers legal entities regardless of their incorporation and ownership form, and to individual entrepreneurs rendering the tourist services. (Continued )

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GOST R 52113-2003 Services Rendered to Citizens. Quality Indices Nomenclature. The standard determines the procedure for choosing the nomenclature for service quality indices in compliance with quality management goals, nomenclature, and classification of the quality index evaluation and control. Provisions of standards cover services rendered by entrepreneurs of various incorporation forms and to individual entrepreneurs. GOST R 53522-2009 Tourist and Excursion Services. Basic Provisions. The standard covers tourist and excursion services and is applied to legal entities regardless of their incorporation and ownership form, and to individual entrepreneurs. GOST Р 53997-2010 Tourist Services. Consumer Information. General and Other Requirements. The standard determines the requirements for information provided to the tourists.

3.6.

Conclusions

The tourism sector has the potential to dynamise a country’s economy and to provide many positive effects on society. However, negative impacts are also linked to tourism development. This is why a sustainable tourism planning and management approach is needed to make sure that the interests of the host community and its environment are preserved. Destination policy-making and planning are essential. The basis for a competitive and sustainable tourism development is the core endowed and created resources of a destination, together with efficient destination management. The Russian Federation as a tourism destination must face various challenges in order to enhance its competitiveness and improve its international image as a tourism destination. In general, in an emerging destination, the first things to be done are related to establishing an adequate travel and tourism regulatory framework. At this stage, the public sector should take the lead to create a favourable environment for tourism development. Russia has taken some preliminary steps but needs to continue efforts to improve the diversity and the quality of its tourism product as well as accessibility for international travellers.

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DISCUSSION QUESTIONS 1. Discuss the main benefits that tourism may bring to a territory. 2. For a territory to become a tourism destination, several conditions should be met. Identify a set of conditions that are necessary for the sustainable development of tourism. 3. Conduct a SWOT analysis for your city or region as a tourism destination. What are your recommendations for tourism development? 4. A tourism destination is a complex system. What are the main parts of this system? How are stakeholders interacting with each other? 5. What makes a destination sustainable and competitive? Can a destination be sustainable and competitive? Explain.

References and Bibliography Andrades, L., & Dimanche, F. (2014). Co-creation of experience value: A tourist behavior approach. In N. Prebensen, J. Chen, & M. Uysal (Eds.), Creating experience value in tourism (pp. 95 112). London: CABI. Andrades-Caldito, L., Sanchez-Rivero, M., & Pulido-Fernandez, J. I. (2013). Differentiating in competitiveness through tourism image assessment: An application to Andalusia. Journal of Travel Research, 52(1), 68 81. Bolwell, D., & Weinz, W. (2008). Reducing poverty through tourism. Working Paper No. 424657. International Labour Office, Geneva. Bornhorst, T., Ritchie, J. R. B., & Sheehan, L. (2010). Determinants of tourism success for DMOs & destinations: An empirical examination of stakeholders’ perspectives. Tourism Management, 31(5), 572 589. Bosˇ kovic´, D., Saftic´, D., & Trosˇ t, K. (2010). Planning and organising tourist destinations — The example of the rural Istria cluster. Tourism & Hospitality Management, conference proceedings (pp. 794 807). Buhalis, D. (2000). Marketing the competitive destination of the future. Tourism Management, 21, 97 116. Castan˜eda, C. (2010). Excellence in destinations, the application of the system of measures for excellence in destinations. Polytechnical Studies Review, 14, 45 54.

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Websites www.gstcouncil.org The Global Sustainable Tourism Council (GSTC) is an independent International organisation that works towards establishing and managing standards for sustainable tourism. www.wttc.com The World Travel and Tourism Council is an association comprising the largest tourism companies in the World. It ‘campaigns for governments to implement policies that ensure the business environment is conducive to the growth of Travel & Tourism’.