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Tourism Management 21 (2000) 97}116
Marketing the competitive destination of the future
Dr Dimitrios Buhalis*
Department of Tourism, University of Westminster, 35 Marylebone Road, London, NW1 5LS, UK
Received 5 January 1999; accepted 21 July 1999
Destination marketing is increasingly becoming extremely competitive worldwide. This paper explains the destination concept and
attempts to synthesise several models for strategic marketing and management of destinations. It provides an overview of severaltechniques widely used and illustrates examples from around the world. The paper also explains that marketing of destinations shouldbalance the strategic objectives of all stakeholders as well the sustainability of local resources. Destinations need to di!erentiate theirproducts and develop partnerships between the public and private sector locally in order to co-ordinate delivery. Taking advantage ofnew technologies and the Internet also enables destinations to enhance their competitiveness by increasing their visibility, reducingcosts and enhancing local co-operation. Destination marketing must lead to the optimisation of tourism impacts and the achievementof the strategic objectives for all stakeholders. ( 1999 Elsevier Science Ltd. All rights reserved.
1. Introducing destinations and des tination marketing
and implement their strategic plan and marketing pol-icies. The contribution of the paper is therefore in syn-
Destination marketing facilitates the achievement of
thesising well-developed techniques and to provide
tourism policy, which should be co-ordinated with the
a comprehensive framework for destination marketing
regional development strategic plan. Marketing of desti-
rather than to introduce original research outcomes.
nations should also guide the tourism impacts optimisa-tion and the maximisation of bene"ts for the region. Inorder to appreciate the complexity of destination market-
2. Destination as an amalgam of tourism services
ing this paper explains the destination concept and
attempts to synthesise several models for strategicmarketing and management of destinations.
Destinations are amalgams of tourism products, o!er-
The analysis illustrates numerous frameworks for the
ing an integrated experience to consumers. Traditionally,
development of a destination marketing strategy and
destinations are regarded as well-de"ned geographical
a comprehensive marketing mix. The paper also illus-
areas, such as a country, an island or a town (Hall, 2000;
trates the relationship between marketing and planning
Davidson & Maitland, 1997). However, it is increasingly
of destinations and their con#icting and symbiotic rela-
recognised that a destination can also a perceptual con-
tionship. This paper is based on research and consul-
cept, which can be interpreted subjectively by consumers,
tancy on destination marketing around the world, where
depending on their travel itinerary, cultural background,
several frameworks have been tested and implemented. It
purpose of visit, educational level and past experience.
discusses a wide spectrum of destination marketing tools
For example, London can be a destination for a German
and provides plentiful references for researchers who
business traveller, whilst Europe may be the destination
would like to study in-depth each technique. Although
for a leisure Japanese tourist who packs six European
the suggestions and conclusions presented here are inevi-
countries in a two week tour. Some travellers will con-
tably generalised, destination managers and marketers
sider a cruise ship to be their destination, while others on
can use the suggested methodology in order to develop
the same cruise may perceive the ports visited during thetrip as their destination. Often destinations are arti"ciallydivided by geographical and political barriers, which fail
to take into consideration consumer preferences or
#44-207-911-5000: ext 3112; fax: #44-207-911-5171.
email@example.com (D. Buhalis)
tourism industry functions. An example of that is the
0261-5177/99/$ - see front matter ( 1999 Elsevier Science Ltd. All rights reserved.
PII: S 0 2 6 1 - 5 1 7 7 ( 9 9 ) 0 0 0 9 5 - 3
/ Tourism Management 21 (2000) 97
Alps shared by France, Austria, Switzerland, Italy by
ment and marketing of destinations is often left to indus-
often perceived and consumed as part of the same prod-
try people and consultants and it is not frequently
uct by skiers. For the purpose of this paper destinations
discussed in the literature or in academic debates. The
are considered to be a de"ned geographical region which
competitive nature of destination marketing also pre-
is understood by its visitors as a unique entity, with
vents involved parties from publishing their strategies
a political and legislative framework for tourism market-
and marketing plans. In addition, there is an apparent
ing and planning. This de"nition enables Destination
di!erence between the marketing and planning tourism
Management Organisations (DMOs) to be accountable
for the planning and marketing of the region and to have
Traditionally, marketing concentrates on increasing
the power and resources to undertake action towards
visitation and treats tourism like any other commodity.
achieving its strategic objectives.
This approach fails to recognise the unique needs and
Destinations o!er an amalgam of tourism products
limitations of each destination as well as their particular
and services, which are consumed under the brand name
geographical, environmental and socio-cultural charac-
of the destination. Leiper (1995, p.87) explains that desti-
teristics. In contrast, planning literature concentrates
nations are places towards which people travel and
more on the impacts of tourism and on limiting tourism
where they choose to stay for a while in order to experi-
development, often ignoring the market dynamics and
ence certain features or characteristics-a perceived attrac-
the requirements of entrepreneurs at the destination and
tion of some sort. Cooper, Fletcher, Gilbert, Shepherd
the place of origin (Ryan, 1991b; Burns, 1999). Ryan
and Wanhill (1998) de"ne destinations as the focus of
(1991b) explains that companies and governments have
facilities and services designed to meet the needs of the
applied only part of the marketing mix to tourism (i.e.,
tourists. Most destinations comprise a core of the follow-
promotion), with little attention being paid to the other
ing components, which can be characterised as the six As
components of marketing. However, if tourism is to sur-
framework as illustrated in Table 1. Therefore, a destina-
vive by generating satisfaction among interacting tourists
tion can be regarded as a combination (or even as
and hosts, it must adopt societal marketing strategies.
a brand) of all products, services and ultimately experien-
This involves carefully monitoring tourist satisfaction
ces provided locally. It also enables us to assess the
levels and using these as part of the criteria for success,
impact of tourism regionally, as well as manage demand
rather than increasing numbers of tourists; continually
and supply in order to maximise bene"ts for all stake-
monitoring host reactions to tourists, for host-tourist
interaction is an important component of the tourist
Although there is plenty of literature on destination
experience; and being aware that infrastructure develop-
ment of tourism resort areas has implications for the
1991,1994; Pearce, 1989; Gunn, 1994; Davidson & Mait-
types of tourists that will be attracted (Ryan, 1991b).
land, 1997), there are few textbooks examining destina-tion marketing (Heath & Wall, 1992; Goodall &Ashworth, 1988) and even fewer illustrate destinations as
3. The strategic purpose of destinations and their
an experience provider for tourists and locals (Ryan,
management and marketing
1997,1991a). This is also re#ected in the academic litera-ture published in journals and other scienti"c publica-
Destinations are some of the most di$cult entities to
tions. The inadequacy of destination marketing literature
manage and market, due to the complexity of the rela-
probably illustrates the interest of researchers in the
tionships of local stakeholders (Sautter & Leisen, 1999).
impacts of tourism on destinations. Hence, the manage-
Managing and marketing destinations is also challengingbecause of the variety of stakeholders involved in thedevelopment and production of tourism products. The
destination experience is essentially comprised of regions,
Six As framework for the analysis of tourism destinations
resources and amalgams of tourism facilities and services,
Attractions (natural, man-made, arti
which often do not belong to individuals. Instead they
"cial, purpose built, heritage,
represent a collection of both professional and personal
Accessibility (entire transportation system comprising of routes,
interests of all the people who live and work in the area.
terminals and vehicles)
Managing often con#icting stakeholders' interests makes
Amenities (accommodation and catering facilities, retailing, other
controlling and marketing destinations as a whole ex-
Available packages (pre-arranged packages by intermediaries and
tremely challenging. Hence, strategies and actions should
take into account the wishes of all stakeholders, namely
Activities (all activities available at the destination and what consumers
indigenous people, businesses and investors, tourists,
will do during their visit)
tour operators and intermediaries, and interest groups.
Ancillary services (services used by tourists such as banks, tele-
Perhaps, the most di
communications, post, newsagents, hospitals, etc.)
problem is ensuring the
rational use of zero-priced public goods, such as
/ Tourism Management 21 (2000) 97
landscapes, mountains, and the sea for the bene"t of all
to satisfy the needs and wants of stakeholders. Four key
stakeholders and at the same time preserving the re-
generic strategic objectives should be addressed by
sources for future generations. Con#icts can easily devel-
DMOs, as illustrated in Table 2. Fig. 1 demonstrates the
op, especially when some (perhaps greedy) stakeholders
dynamic wheel of tourism stakeholders. The develop-
exploit resources for short-term bene"ts. A compromise
ment and implementation of strategic objectives at desti-
encompassing all these interests is extremely di$cult if
nations depends on relationships between stakeholders
not impossible, but is the key to long-term success
and thus the implementation of the key generic strategic
(Buhalis, 1999a; Buhalis & Fletcher, 1995; Jamal & Getz,
objectives illustrated in Table 2 will be determined by the
1996; Yuksel, Bramwell & Yuksel, 1999; Palmer & Bejou,
dynamics of the actors on this wheel. Naturally, each
stakeholder aims to maximise the bene"ts emerging for
And yet tourists perceive the destination as a brand
themselves. Inevitably, the interests of some stakeholders
comprising of a collection of suppliers and services.
may be con#icting with others and thus some of the four
Before visiting they develop an image about destinations
key strategic objectives may be jeopardised. This is often
as well as a set of expectations based on previous experi-
a result of some stakeholder trying to enhance its bene"t
ence, word of mouth, press reports, advertising, and com-
at the expense of others. For example, a tour operator
mon beliefs (Chon, 1991,1992; Baloglu & Brinberg, 1997).
may try to reduce the prices paid to local suppliers in
During their holiday, they consumea destinations as
order to increase its pro"t margin and remain competi-
a comprehensive experience, without often realising that
tive in the marketplace. It is imperative, therefore, for
each element of the product are produced and managed
DMOs to use legislative and management tools during
by individual players. Most service providers are small
planning and management of destinations in order to
and medium-sized tourism enterprises which have a wide
ensure that the bene"ts of tourism activity is shared fairly
range of strengths and weaknesses whilst are also charac-
between all stakeholders and that sustainable practices
terised by their independent nature (Buhalis & Cooper,
safeguard the regeneration of resources utilised for the
1998; Cooper & Buhalis, 1992). Tourists' overall experi-
production of tourism (Buhalis, 1995; Buhalis & Fletcher,
ence is composed of numerous small encounters with
1995; Sautter & Leisen, 1999). Failure to ensure and
a variety of tourism principals, such as taxi drivers, hotel-
maintain a balance e!ectively jeopardises relationships
iers, waiters, as well as with elements of the local attrac-
between stakeholders, and threatens the achievement of
tions such as museums, theatres, beaches, theme parks,
the strategic objectives and the long-term competitive-
etc. Their overall impression develops their image of
ness and prosperity of destinations.
a destination after their visitation. As a consequence
Hence, tourism marketing should not only be regarded
there is much overlapping between strategic marketing of
as a tool for attracting more visitors to a region, as it has
the destination as a whole and of each individual supplier
been the case for most destinations. Instead, tourism
at the region. Hence, the competitiveness of each player isoften interrelated and almost indistinguishable from oneanother.
As consumers increasingly value environmental re-
sources they are prepared to pay for them premiumprices (Pigram, 1996; Archer, 1996; Thomas, 1992; Gar-rod & Willis, 1992; Laarman & Gregersen, 1996). Hence,local resources become a central asset for destinationsand tourism suppliers and their sustainability a corefunction of tourism marketing. Middleton and Hawkins(1998, p. 8) state that a marketing perspective is essen-tially an overall management orientation re#ecting cor-porate attitudes that, in the case of travel and tourism,must balance the interests of shareholders/owners withthe long-run environmental interests of a destination andat the same time meet the demands and expectations ofcustomersa.
DMOs tend to be part of the local, regional or national
government and have political and legislative power aswell as the "nancial means to manage resources ra-tionally and to ensure that all stakeholders can bene"t inthe long term. Destination management and marketingshould act as tools and facilitators to achieve a complex
Fig. 1. The dynamic wheel of tourism stakeholders. Source: Adapted
range of strategic objectives, which will ultimately need
from Buhalis and Fletcher (1995).
/ Tourism Management 21 (2000) 97
markets they can attract. It can then develop a product
Strategic management and marketing objectives for destinations
portfolio, which will enable the optimisation of bene"tsand adapt their marketing mix to their target markets
Enhance the long-term prosperity of local people
(McKercher, 1995; Tribe, 1997). Consumer behaviour
Delight visitors by maximising their satisfactionMaximise pro
studies indicate that a wide range of criteria is used to
"tability of local enterprises and maximise
select tourism products. These criteria are altered accord-
Optimise tourism impacts by ensuring a sustainable balance between
ing to the purpose and features of the trip, elements of the
economic bene"ts and socio-cultural and environmental costs
external environment, the characteristics of the travellerand the particularities and attributes of destinations. Sev-eral analysts have examined tourism consumer behaviour
marketing should operate as a mechanism to facilitate
in detail (Gilbert, 1991,1993; Swarbrooke & Horner, 1999;
regional development objectives and to rationalise the
Goodall, 1988,1991; Kent, 1991; Mansfeld, 1995; Mayo
provision of tourism in order to ensure that the strategic
& Jarvis, 1981; Sirakya, McLellan & Uysal, 1996;
objectives of destinations are achieved. Tourism market-
Mazanec, 1989; Mazanec & Zins, 1994; Moutinho, 1987;
ing should also ensure equitable returns-on-resources-
Ryan, 1997; Woodside & Lysonski, 1989).
utilised for the production and delivery of tourism
Classifying travel behaviour and segmentation be-
products, as well as the regeneration of these resources. It
comes increasingly more di$cult as modern travellers
should also provide suitable gains to all stakeholders
combine pleasure with business, in order to achieve time
involved in the tourism system. Hence, marketing should
and cost advantage. There are therefore endless vari-
be used as a strategic mechanism in co-ordination with
ations between the two principle classi"cations of travel
planning and management rather than a sales tool.
activities, i.e. business and leisure trips. However, leisure
Destinations may also involve de-marketing
, i.e., the
trips may include elements, characteristics and motiva-
discouragement of certain market segments from visiting
tions of business travel and vice versa. Incentive travel-
the destination during certain periods, through a range of
ling, extended conference stays and business meetings
prohibitive measures or by charging premium prices.
during leisure travel makes the distinction between the
Examples of these techniques include:
two categories increasingly blurred. Nevertheless, thetwo principle categories are fairly identi"able and they
f visitor management techniques in theme parks which
are treated di!erently in this text for simplifying the
divert people from congested attractions to less busy
concepts and marketing responses.
ones by using a leading story/attraction;
are fairly in#exible and it is often di$cult
f towns like Cambridge, which aims to attract only
for travellers to select their destinations. Business travel,
visitors who stay overnight and to discourage excur-
often referred to as meetings}incentives}conferences}ex-
sionists who contribute little to the local economy by
hibitions (MICE), is normally determined by business
controlling their parking processes;
opportunities and involvement of the traveller with or-
f Mauritius which provides high-quality resort accom-
ganisations at the destination. Perhaps, more #exibility
modation and does not allow charter #ights, therefore
can be exercised by travelers attending optional meet-
promoting high expenditure tourism; or
ings, which provide bene"ts but are not strictly essential
f Venice, which deters more visitors by charging pre-
to their business such as conferences, exhibitions, incen-
mium prices for all services o!ered and recently in-
tives, familiarisation trips, etc. (Davidson, 1994). Even
itiated negative advertisement to reduce mass tourism.
though business tourism is much more restricted in termsof choice, destinations providing a high-degree of e$-
In this way marketing is used as a mechanism to achieve
ciency and safety, as well as elegance and leisure oppor-
strategic objectives of destination regions and thus, should
tunities tend to be preferred for conferences and incentive
be guided by the policies for regional development.
travel. Business travel is seasonal, as people do not gener-ally travel less during the holiday seasons, i.e., summermonths and public holidays. Nevertheless, business
4. Main markets and destination choice
tourism provide much higher revenue for enterprises asconsumers are willing to pay more for their in#exible
Understanding destination types and characteristics is
schedules and also destinations can increase their multi-
of paramount importance for its marketing. Each desti-
plier e!ects as some particular forms of business tourism
nation can only match certain types of demand and
use a much greater spectrum of local services than leisure
hence tourism marketers need to appreciate travel mo-
tourism. Convenient transportation connections with
tivations in order to develop appropriate o!erings and
major cities around the world, smooth arrangements
brand destinations for the right target markets. In addi-
at the destination and adequate provision of busi-
tion, destinations should be aware not only of the needs
ness related amenities are therefore very important.
and wants of the active demand but also of the potential
Urban destinations in developed countries with strong
/ Tourism Management 21 (2000) 97
economic activity and vibrant markets tend to receive the
muneration for them. This will also enable destinations
majority of business tra$c, as a result of the business
to manage their resources accordingly and attract the
meetings taking place locally. The location of meeting
right market segments in order to optimise their impacts.
partners, host organisations, as well as company policy
Nevertheless, for both leisure and business markets,
may determine the selection of destinations for business
perhaps the most important criterion for selecting to visit
travel. In addition, corporate rates, membership of
or not to visit a destination is its image
. Image is the set of
loyalty clubs (i.e., frequent #yer or frequent guest) as well
expectations and perceptions a prospective traveller has
as the availability of service providers are some addi-
of a destination. Past experience of the destination or the
tional criteria used to identify suitable destinations and
companies involved (i.e., airlines, hotels, tour operators);
service providers for the MICE market (O'Brien, 1998;
descriptions by friends and relatives; general information;
BTA, 1999; Vlitos-Rowe, 1994).
and marketing campaigns develop these expectations
, on the other hand, use a much more
and perception which may be true or imaginary repres-
complex set of criteria in selecting their destination. They
entations. (Baloglu & Brinberg, 1997; Chon, 1991,1992;
have a much higher price elasticity and therefore, price
Chacko, 1997). Interestingly, the sustainability of local
is a key element in the decision making process
resources becomes one of the most important elements of
(Gilbert, 1991,1993; Swarbrooke & Horner, 1999; Good-
destination image, as a growing section of the market is
all, 1988,1991; Mayo & Jarvis, 1981). In addition, leisure
not prepared to tolerate over-developed tourism destina-
travellers are often time sensitive as families with children
tions and diverts to more environmentally advanced re-
cannot travel during school time, creating the seasonality
gions. The degree of consumer satisfaction will depend
problem for the industry. However, di!erent market seg-
on the assessment of the perceived overall experience of
ments have dissimilar seasonality patterns. For example,
the destination versus anticipated expectations and per-
pensioners and elderly people tend to travel during the
ceptions. Developing the right image for destinations will
low season to bene"t from discounts, whilst Scandina-
therefore determine their ability to satisfy visitors as it
vian tourists tend to stay home during the summer
will allow them to develop realistic and ful"l-able expec-
months in order to enjoy the whether. School children
tations (Morgan & Pritchard, 1998; Seaton, 1997; Pearce,
and University students go on "eld research trips or
excursions during the low season. Therefore, destinationshave to identify the seasonality patterns of their variousmarkets and attract compatible segments, which will
5. Types of destinations, target markets and marketing
enable them to maximise their total yield (both average
expenditure and occupancy levels) (O'Brien, 1996). It isalso important to understand other factors that in#uence
Developing a destination typology is a di$cult task, as
the decision of consumers to purchase. The social status
di!erent visitors use destinations for di!erent purposes.
and peer groups of consumers often in#uence what is
Nevertheless, most destinations can be classi"ed in sev-
acceptable and desirable as a destination. Travel inter-
eral categories which represent their principle attractive-
mediaries also play a signi"cant role in determining the
ness, as illustrated in Table 3. Understanding and
destination decision of consumers by using a wide range
appreciating the type of destination enables marketers
of promotional techniques and often channelling travel-
to develop a suitable destination marketing mixes and
lers to destinations and principals who o!er higher re-
deliver them to the appropriate target markets.
Table 3Types of destinations * main target markets and activities undertaken
Type of Destination
Authentic third World
Exploring business opportunities}incentives
/ Tourism Management 21 (2000) 97
have been involved in tourism since
ces. The globalisation experienced reduces distances and
the early years of the civilisation. People used to travel to
enables people to travel further a"eld. Examples include
cities and towns to meet politicians and business associ-
destinations such as Goa and Bali which take advantage
ates. Sports organisations, such as the Olympic Games in
of developments in transportation and attract travellers.
ancient Greece also generated tourism activity in main
Examples of seaside destinations and resorts can be iden-
cities. People also travelled to cities on pilgrimage for
ti"ed globally (see for example Jenner & Smith, 1993;
religious purposes, as this is where all major cathedrals,
Gayle & Goodrich, 1993; Lockhart & Drakakis-Smith,
mosques and temples were usually located. Urban desti-
1997; Morgan, 1995; Brigulio, Archer, Jafari & Wall,
nations have also been attracting business travellers at-
1996; Briguglio, Butler, Harrison & Filho, 1996; Shaw &
tending meetings, conferences and exhibitions. Most
Williams, 1997; Conlin & Baum, 1995; Towner & Newton,
urban destinations are well equipped with conference
and exhibition halls and transportation and accommo-
attract leisure travellers for winter
dation infrastructure to facilitate the organisation of lar-
sports, such as skiing, as well as holidaymakers who
ger events. Urban destinations also attract leisure
appreciate natural attractions in all seasons. They also
travellers, especially during periods of low business
attract activity holidaymakers such as naturalists, moun-
travelling activity, such as weekends and school holidays.
tain cyclists, walkers, etc. Although, the majority of al-
Suppliers and facilities aim to reduce seasonality by de-
pine sports are for recreational purposes a wide range of
veloping the number of leisure visitors, despite the fact
expeditions and challenges are organised for mountains
that they can only charge a fraction of the price they
such as the Everest or the Alps. Lakes may also o!er
charge business travellers. On the other hand, leisure
facilities for sea sports such as sur"ng and skiing. Al-
travellers can take advantage of some of the unique
though the majority of alpine resorts are in near proxim-
facilities and services of urban destinations to enjoy
ity to urban centres and thus can easily be accessed by
short-breaks or extended weekends. London for example
private car, several are still unexplored and o!er auth-
provides a wide range of heritage attractions as well as
entic experiences for travellers. Lakes and scenic land-
entertainment opportunities such as theatre, concerts,
scapes make alpine resorts increasingly more popular for
bars, theme restaurants, discos, etc. Barcelona o!ers ex-
conference and incentive tourists and thus a certain busi-
cellent conference facilities, combined with a culturally
ness travelling activity can be observed in the last few
interesting and relaxed atmosphere. New York is highly
years. The development of important business, political
regarded for shopping, sight seeing and theatre going.
and economic meetings, such as the Davos Forum, at-
Urban destinations also attract education and health
tract a new market segment and expand the season for
tourists, as they are generally equipped with good educa-
winter resorts. As a result a wide range of marketing and
tional establishments and hospitals. Increasingly, urban
planning implications emerge to allow alpine areas to
resorts take advantage of their industrial heritage and use
bene"t from tourism and yet to ensure the sustainability
obsolete industrial sites as educational experiences and
of their resources (Johnston & Edwards, 1994; Weier-
leisure facilities. The Docklands in Liverpool and coal
mair, 1993; Khan, 1994).
mines in Skipton are good examples of these facilities
is also developing rapidly. Farmers and
(Berg, Borg & Meer, 1995; Law, 1996,1993; Page, 1994;
rural populations take advantage of the desire of travel-
lers to go back to nature and experience some authentic
Seaside destinations and resorts
agricultural processes. Hence agricultural facilities are
tourists on holidays. Travellers from Northern regions
often transformed to leisure activities. Tourism is re-
and climates tend to spend a proportion of their annual
garded as a development tool for several regions where
holiday in the South where they can enjoy sunshine as
their agriculture declines steadily or where people would
well as sea sports. Seaside resorts nearby the place of
like to diversify their living and working patterns. Tour-
residence were replaced by international destinations as
ists can stay in rural areas and contribute to agricultural
a result of the emergence of mass tourism since the 1970s.
activities taking place or assume a more passive role.
For example, in the U.K. traditional resorts such Black-
There is an educational element to this activity parti-
pool, Scarborough, Bournemouth and Brighton were
cularly for children from urban centres who may have
replaced by the Spanish Costas through the development
never experienced agricultural life. Rural tourism can
of package holidays. Typically, European leisure travel-
also be themed according to the activities undertaken,
lers will take their annual holiday at Mediterranean
such as cooking or bee-keeping schools organised in
seaside resorts, whilst Northern Americans visit South-
rural regions. Examples of this form of tourism can be
ern regions such as Florida, California and the Cari-
identi"ed globally (Page & Getz, 1997; Sharpley
bbean. As the product in traditional seaside resorts
& Sharpley, 1997; Oppermann, 1996).
matures, new long haul and exotic destinations, often in
Destinations in authentic
(often Third World
less-developed countries attract sophisticated travellers
are often o! the beaten track. Tourists enjoy authentic
who are looking for authentic and o!-the-track experien-
experiences in places which have experienced limited
/ Tourism Management 21 (2000) 97
tourism development. Emerging destinations in Asia,
Table 4Contribution of marketing research to destination marketing
South America and Africa attract a small number of
adventurous tourists who are prepared to forego their
Identi"cation of the main attributes anticipated by each market
comfort in order to interact with local communities and
unspoiled surroundings. Although these regions may de-
Design and attributes required for tourism products and services
velop at a later stage to mass tourism destinations, they
Evaluation and development of destination imageSegmentation of market and development of corresponding
need to be planned properly in order to sustain their
resources. They often lack the required infrastructure
Opening new markets and reducing dependency on existing ones
to deliver tourism services (Silver, 1993; Hughes, 1995;
Evaluation of the elasticity of demand for each market segment
Reduction of seasonality by matching market segments
Finally, certain destinations are branded unique-
Examination of reasons deterring people (suppressed demand) from
as they are regarded to o!er a unique
Assessment of compatibility with other target markets
and precious experience. As a result, these destinations
Examination of alternative distribution channels
are promoted as one-in-a-life-timea experience and
Assessment of tourism impacts to the destination and selecting the
they are charged at premium prices. Examples include
Bhutan, Mauritius, and Seychelles. In some destina-
Evaluation of marketing e!ectiveness and selection of media for
tions, there are several mechanisms controlling thenumber of visitors, often through managing their trans-
!Source: Adapted from Baker et al. (1994); Ritchie (1996) and Calan-
portation and accommodating capacity or immigration
tone and Mazanec (1991).
procedures and visa allowances. These destinationsfocus on the non-charter and non-mass traveller reducingtheir visitation but maximising their income per visitor.
They often epitomise the dream of the average traveller
Marketing research should not be limited to before
and thus are packaged and priced as prestigious special
visitation investigations. As tourism demand is extremely
products, for instance for weddings, honeymoons,
dynamic, marketing research needs to follow constant
anniversaries or a special occasion trip, or for incentive
developments to ensure that all elements of the destina-
tion marketing mix evolve continuously. Surveys duringand after visitation enable destinations to identify weak-nesses and concentrate their corrective action. Data is
6. Marketing research: identifying market segments
often collected by frontier controls, airports and trans-
for destination products
port authorities, national statistics o$ces, local councils,tax o$ces as well as principals such as hotels, travel
Marketing research is used extensively by destination
agencies, etc. The e!ectiveness of marketing research in
marketers to identify the types of customers that can be
destinations will depend on their ability to co-ordinate
attracted (active demand), as well as the prospective
the research activities undertaken by the entire range of
visitors (suppressed demand) who do not visit for a var-
local authorities and organisations. It is therefore very
iety of reasons (Athiyaman, 1997). Approaching the right
important to co-ordinate all these surveys and data in
target market and providing the most appropriate com-
order to produce meaningful inferences to inform and
bination of local tourism products and services is the
guide tourism policy and marketing strategies (March,
secret for successful destinations. Product design and
1994; Hawes, Taylor & Hampe, 1991).
formulation should therefore be based on research(Baker, Hozier & Rogers, 1994; Ritchie, 1996; Calantone& Mazanec, 1991; Hu & Ritchie, 1993). As tourism
7. Marketing destinations: strategies and practices
bundles are formulated ad-hoc to satisfy speci"c con-sumer requests, a dynamic marketing research process
Developing a marketing strategy and mix for destina-
will enable destinations to provide unique products by
tions is a complex process, mainly because there are
initiating local partnerships between all suppliers to ad-
many independent stakeholders and principals involved.
dress the needs of demand. Destination image is also
Destinations cannot be managed or marketed as enter-
developed through marketing research, which guides
prises, due to the dynamics of interests and bene"ts
promotional activities towards branding and amending
sought by stakeholders. In addition, most destinations
the brand values of the region. The e!ectiveness of pro-
are amalgams of independent SMTEs, which already
motional campaigns can be assessed so that the most
follow their own marketing strategies. Although DMOs
cost-e!ective media is used to approach and persuade
have traditionally taken marketing responsibility for the
target markets to visit the destination (Woodside, 1990).
destination product, they fail to control marketing
Table 4 illustrates the contribution of marketing research
activities and mixes of individual players and hence can
to destination marketing.
only co-ordinate and guide, rather than undertake
/ Tourism Management 21 (2000) 97
a comprehensive marketing strategy. Perhaps the most
their life cycle and illustrates how that e!ects their
important challenge for destination marketing therefore
tourism impacts. This also illustrates that di!erent stages
is to bring all individual partners together to cooperate
of the life cycle require di!erent marketing strategies and
rather than compete and to pool resources towards de-
planning actions. This is largely due to the di!erences
veloping an integrated marketing mix and delivery sys-
between demand and supply experienced at di!erent
tem (Buhalis & Cooper, 1998; Fayos-Sola, 1996).
levels. In the early stages demand exceeds supply whilst
The international tourist industry is becoming an
this relationship is reversed in the maturity and consolida-
increasingly competitive marketplace where only the
tion stages. As a result, marketing strategies should focus
best-managed destinations are likely to prosper. Com-
on building awareness and promoting the destination
prehensive strategic business plans therefore need to ad-
product on the early stages of the circle while they prob-
dress all factors that have an impact on the product.
ably have to deal with image alteration and re-design and
Tourism strategies should not only concentrate on visita-
re-launch the product at the later stages. The entire mar-
tion, but also include the entire range of impacts such as
keting mix therefore will need to be di!erentiated to ac-
overcrowding, environmental problems, visitor safety
commodate the needs of destinations at each stage of their
and security, seasonality problems, and sensitivity to
life cycle. In addition, Fig. 2 highlights that destinations
local culture (Evans, Fox & Johnson, 1995). This will
experience di!erent environmental and socio-cultural im-
enable destinations to develop comprehensive strategies
pacts during their di!erent development stages. As a result
to ful"l all strategic objectives illustrated in Table 2.
they need to use marketing to encourage sustainable prac-tices for both consumers and industry as well as to com-
7.1. The position of destinations and their marketing
municate their environmental and socio-cultural policies.
It is evident, therefore, that di!erent destinations are
Perhaps one additional complication to tourism mar-
a!ected in a dissimilar pattern on each stage of their life
keting is that in most cases destinations have already
cycle and as a consequence they require speci"c market-
a rich history, image and legacy development which need
ing action. For example Northern European coastal re-
to be taken into consideration when developing tourism
sorts have experienced declining visitor numbers and
marketing strategies. Not only consumers develop cer-
decay which has resulted to alteration of main use of
tain images and views about places, but also previous
facilities as well as a concentration on few expanding
development often provides several limits for marketing
markets (e.g. senior citizens, conferences and language
to address as well as stakeholders who need to be respect-
schools). In contrast, the majority of coastal regions in
ed and consulted. Understanding therefore the stage and
Southern Europe face a decline of tourism bene"ts,
roots of tourism development is critical for development
rather than numbers of visitors as a result of their pro-
a strategy. One of the most widely used tools for under-
gression from one stage of the cycle to the next one.
taking this task is the destination life cycle
Paradoxically, in most cases the number of visitors
The main utility of the destination life cycle is to facilitate
increase, mainly due to the price reductions used to
the understanding the evolution of tourist products and
stimulate demand. Established mass tourism destina-
destinations and it to provide guidance for strategic deci-
tions, such as Benidorm, use a high-volume low-pro"t
sion taking. Cooper (1989,1992,1994) suggests that the
margin strategy to ensure their pro"tability and they are
life cycle concept illustrates that destinations experience
successful in increasing their visitors. They also reinvest
a birth to deatha cycle and that the life cycle model has
on their facilities and introduce quality standards mecha-
gained attention in tourism and hospitality as an ex-
nisms. However unless carefully managed any increase of
planatory tool. Although in tourism, life cycle analysis is
visitors may deteriorate local resources further and push
often seen as a useful conceptualisation tool for destina-
destinations in greater decline, which can force to further
tion area development, in hospitality management it is
price reductions and further quality decrease. This is
beginning to be used as a guide for strategic planning.
a vicious circle which eventually makes the purpose and
However, the main problems relate to identifying turning
bene"t of the entire tourism activity at the destination
points, stages, length of stages and level of aggregation.
questionable. Clearly, therefore resorts will need to take
Despite the many criticisms of the life cycle concept, it is
into consideration the phase of development there are in
quite critical for marketers to appreciate the stage of
as well as the patterns of destination life cycle experi-
development of resort areas (Haywood, 1986). A number
enced in competing destinations and adopt their strategic
of researchers have used the cycle as a framework for
analysing changing destinations (Agarwal, 1997; Shaw& Williams, 1997; Formica & Uysal, 1996; Tooman,
7.2. Strategic marketing for destinations and
1997; Douglas, 1997; Choy, 1992; Getz, 1992; Ahmed
strengthening their competitiveness
& Krohn, 1990; Cooper & Jackson, 1989).
Based on the above literature, Fig. 2 synthesises the
Competitive strategy is the search for a favourable
di!erent stages destinations are going through during
competitive position in an industrya. This is a function of
/ Tourism Management 21 (2000) 97
Fig. 2. Destination life cycle and tourism impacts.
/ Tourism Management 21 (2000) 97
both the attractiveness of the industry and the relative
Ultimately, the competitiveness of destinations depends
competitive position within that particular industry,
on their ability to maximise their performance for each
as well as alternative activities that an organisation
individual element assessed.
can undertake. Competitive strategy aims to establisha pro"table and sustainable position against the forces
7.3. Strategy formulation for destinations
that determine industry competitiona (Porter, 1985).
Competitiveness is, therefore, de"ned here as the e!ort
This paper reviews three strategy models, namely Por-
and achievement of long term pro"tability, above the
ter's generic strategies, Gilbert's proposition for di!er-
average of the particular industry within which they
entiation of the destinationa and Poon's analysis for
operate as well as above alternative investment oppor-
#exible specialisationa. The paper then synthesises their
tunities in other industries. This de"nition includes the
propositions in order to propose a generic strategy and
concept of opportunity cost and illustrates that successful
illustrate how destinations should develop their o!erings.
organisations should not only compete within theirparticular industry but also against other investment
's generic strategies
opportunities. When referring to tourism destinations
Porter (1980) proposed three main strategies (see the
competitiveness should also include the sustainability of
Generic Strategies Graph in Porter, 1980), aimed to out-
local resources for ensuring the maintenance of long-
perform other "rms in an industrya, i.e.:
term success as well as the achievement of equitable
f overall cost leadership
, where organisations are
returns-on-resources utilised to satisfy all stakeholders.
required to minimise their costs, based on mass pro-
There is little written about the competitiveness of
duction and strict cost control of the main business
tourism destinations. Bordas (1994a,b) has developed
several frameworks which determine destination com-
petitiveness. They are based on demand and supply as
of products or services o!ered by cre-
ating something that is perceived industry-wide as
well as a wide range of factors in#uenced by the external
environment of the destination. Ritchie and Crouch
on a particular buyer group, segment of the
(1993) have developed a comprehensive model for
product line or geographical marketa and achieve
tourism organisations (see "gure in Goeldner, Ritchie
either cost leadership or product di
& MacIntosh, 2000, p. 26), which can be analysed further
to include the entire range of factors a!ecting the com-
This is well-developed generic model, which is widely
petitiveness of destinations.
used to all industries. It provides clear guidance for
The framework explains that the prosperity of destina-
decision makers to position their products in order to
tion depends on the competitiveness of all economic
maximise pro"tability and improve their competitive-
sectors as well as the competitiveness of tourism. A fur-
ness. However, this model fails to address the speci"c
ther analysis illustrates the competitiveness of tourism is
needs of tourism and in particular the scarcity of re-
a function of several factors related to destination admin-
sources at the destination level. Therefore, similarly with
istration. A wide range of elements are included in the
commodities this model suggests unlimited resources are
model illustrating that tourism is a!ected by an endless
available to reproduce endless number of products. This
number of factors in its internal and external environ-
is particularly the case for the cost leadership strategy
ment. Although the model fails to rate the importance of
where organisations are urged to increase their volume
each of the elements examined, it is suggested that a dis-
and to reduce their pro"t margin. Unfortunately, envir-
similar rating should be adopted by di!erent destinations
onmental resources, both natural (e.g. coral reefs or
depending on the types of markets they attract, their life
mountain landscapes) and man-made (e.g. archaeological
cycle stage and speci"c characteristics. Nevertheless, the
sites or architectural structures) have a limited capacity
contribution of the Ritchie and Crouch lies on the com-
which they can accommodate. Resources in tourism are
prehensiveness and wideness of the elements taken into
irreplaceable once destroyed and therefore a strategy
consideration. The model highlights that it is the combi-
should ensure that their use is limited to the degree that
nation of all factors comprising the competitiveness of
does not threat their sustainability in the long term. Once
destinations as well as synergies between these elements
this is understood and appreciated, Porter's model en-
that determine the attractiveness of a region. Perhaps
ables tourism marketers to focus on di!erentiation strat-
future research will attach ratings to each factor for
egies and to develop their mix accordingly. However,
speci"c types of destination and also illustrate potential
several destinations, which are on the consolidation
tradeo!s that consumers may consider. Consumers may
phase of their life cycle, have exceeded the maximum
be willing to compromise some elements for some others,
capacity which would have enabled them to sustain their
for example overcrowdness for cheaper price in some
resources. Their ability to promote di!erentiated tourism
Spanish Costas. Understanding the values and prime
products has also been jeopardised, as over-development
aims would be critical for developing the module further.
has exploited and damaged their resources. This is
D. Buhalis / Tourism Management 21 (2000) 97} 116
experienced in some mass tourism destinations, such as
tourists, who appreciate the uniqueness of their resources
Benidorm and Costa Brava in Spain, or Faliraki and
and o!erings. Although the model clearly di!erentiates
Malia in Greece. Once destinations have reached that
destinations to distinctive categories it fails to recognise
stage there is limited choice. The majority try to attract
that the majority of destinations lay between the two
more mass tourism so they can increase their pro"tability
ends of the continuum. It also fails to relate to the
through volume. Increasingly, however, some regions
di!erent stages of the life cycle and to the inevitability
aim to renovate their properties and facilities and re-
experienced in several regions where destinations are
launch their o!erings. The Calvia example in Mallorca,
launched as status areas and gradually slip to commodity
which decided to demolish three hotels in order to im-
status (Buhalis, 1999a). Nevertheless, the model clearly
prove public areas and to enhance the quality of its
contributes to tourism marketing by correlating product
products set new best practices which may be followed by
attributes with willingness to pay and also by illustrating
clearly that destinations should decide on what directionthey should plan and manage their resources and facilities.
7.3.2. Gilbert's strategic framework
Based on the above rational the second strategic
7.3.3. Poon's yexible specialisation
framework introduced by Gilbert (1984,1990) argues that
A third strategic approach for tourism is proposed by
destinations can be classi"ed on a continuum between
Poon (1989,1993), based on the concept of #exible
a statusa and a commoditya area, as illustrated in
specialisationa of the tourism business. Poon examines
Fig. 3. Status areasa achieve intentional demand as
the tourism industry processes and proposes a strategy to
a result of the unique product attributes perceived by the
enable tourism organisations to improve their com-
tourism market. These unique attributes may be genuine
petitiveness. Poon argues that #exible specialisationa is
or imaginative and thus, a destination is regarded as
a strategy of permanent innovationa and ceaseless
irreplaceable, which increases consumers' loyalty and
changea which provides for new tourisma. New tourism
willingness to pay. In the commodity statusa case, desti-
is #exible, segmented, customised to the tourist's needs
nations are substitutable, very sensitive to price and
and diagonally integrated. In contrast, old tourism can
economic changes, while consumers have a low aware-
be characterised as mass, standardised and rigidly
ness of any unique bene"ts or attributes. Thus, travellers
packageda. The main sources of #exibility for service
base their decision to visit the area merely on price, while
in the organisation, management, marketing,
the demand for the destination is incidental and destina-
distribution and other forms of interaction and interre-
tions are unable to attract high spenders. Despite the fact
lationships among guests, hotels, suppliers, distributors.
that the sustainability of resources is not discussed ex-
What is important however is not each of these stand-
plicitly by the model, it is quite evident that status
alone aspects but how they are coupled to create com-
areasa manage their resources as product attributes and
petitive advantages and hence, capabilities to move with
therefore are appreciated by consumers who are willing
the marketa (Poon, 1993). This is a timely model, which
to pay more.
predicted the impact of information technology on the
Gilbert (1990) asserts that destinations should attempt
both decision making and consumer behaviour. Industry
to become status areasa, rather than a commodity
innovation is critical in this strategy and the utilisation of
areaa one, in order to improve their image, loyalty and
new technology provides the opportunity to customise
economic bene"ts. It is suggested that destinations
products according to customers' speci"c requirements.
should di!erentiate their tourism products in order to
Hence destinations can organise their assets and
achieve a unique tourist product bene"ta. This will
attributes in such a way which will enable them to
enable them to establish their position in the interna-
specialise their tourism product according to particular
tional market, and attract both high spenders and loyal
Fig. 3. Gilbert's di!erentiation strategy. Source: Adapted from Gilbert (1990, p. 25).
D. Buhalis / Tourism Management 21 (2000) 97} 116
Although Poon's model revolutionised tourism think-
ness to pay, and are against demand trends. In addition,
ing it is still di$cult to implement at the destination level.
the high-volume-low-pro"t marginsa strategy has cata-
The majority of infrastructure and superstructure is
strophic social and environmental impacts on destina-
based on "xed assets, which cannot be altered easily and
tions. As a result, not only their sustainability may be
therefore they have a limited degree of #exibility. This is
jeopardised but also the competitiveness of the region as
more evident at destinations at the consolidation stages,
a whole. E!ectively, these strategies push destinations
which are unable to reinvent themselves and approach
through their life cycle stages and force them to reach
new markets. Nevertheless, the model clearly contributes
their consolidation stage. Destinations therefore should
to the "eld by encouraging tourism organisations and
de"ne and not exceed their carrying capacities in order to
destinations to challenge existing strategies and practices
sustain their resources and at the same avoid jeopardis-
and to forcing them to approach new tourism with new
ing consumers satisfaction.
tools introduced by technology. Concentrating on core
This is re#ected on both Gilbert and Poon's strategies
functions and outsourcing all peripheral activities to net-
which agree that destinations should aim to achieve
works of virtual co-operations should enable destina-
a status areaa or nichea orientation through di!erenti-
tions and enterprises to innovate and to adapt to the
ation, in order to increase consumer satisfaction as well
needs of consumers constantly.
as to maximise the bene"ts for tourism regions. Thisstrategy is already adopted in several resort areas, such as
7.3.4. Synthesis of strategic frameworks and lessons
Valencia in Spain, where it is recognised that the need for
for strategic destination marketing
diversi"cation and di!erentiation has now become es-
The discussion of the three models provides several
sential owing to the level of competitiveness that has
interesting lessons. A close examination of strategies re-
been attained (and can be foreseen) in the world tourist
veals that they share a similar base. Porter's di!erenti-
marketa (Fayos-Sola, 1992). It is also particularly useful
ationa, Gilbert's status areaa and Poon's #exible
for insular, peripheral and remote destinations, where
specialisationa describe how "rms and destinations can
a limited number of economic and "nancial resources are
achieve value-competitive advantages. Consumers ap-
available. However, this strategy should not serve as an
preciate special attributes and values and as a result they
excuse for principals at destinations for not improving
are inclined to visit areas more regularly, to increase their
their e$ciency and minimising their production costs.
loyalty and to pay higher prices. In contrast, cost leader-
Although providing unique service to satisfy tourist
shipa, commodity areaa and standardisationa or the
needs should be their priority, o!ering perceived value
Fordism production modela describe the e!orts of "rms
for money would determine their competitiveness in the
or destinations to achieve cost competitive advantagea
marketplace (Murphy & Pritchard, 1997). As most desti-
by o!ering their products for less than their competitors.
nations consist of networks of tourism suppliers and
This is achieved through economies of scale, standardisa-
principals, there is much overlapping between the stra-
tion and mass production. Destinations and tourism
tegic orientation followed at the macro and micro level.
products are treated as commodities and decisions are
Hence a close collaboration between the private and
merely based on price. Hence the underlying concept of
public sector is required. Destinations and enterprises
the two alternative strategies is the relationship between
following a status areaa strategy would probably en-
volume and price. The "rst set of strategies supports
hance tourists' satisfaction, as well as their competitive-
a low-volume-high-pro"t margina approach, where
ness. The formulation of unique and customised products
each consumer is paying premium prices for unique
by using #exibility and co-operation will also increase
products, whilst the second set of strategies follows
tourists' willingness to pay and their loyalty, while
a high-volume-low-pro"t margina approach.
responding to new tourism demand trends.
Tourism destinations should avoid the cost advantage
Unfortunately, some destinations can no longer be
strategies as they are based on mass production and
positioned as irreplaceable unique products, due to
consumption and assume unlimited production capacity
over-development and degradation of their resources.
and resources. The inseparability of the tourism product
Tourism supply has exceeded their carrying capacity and
determines that consumers should be present at the time
they have reached the saturation or decline phases of
of product delivery. Therefore, the interaction of con-
their life cycle. For example several Mediterranean cos-
sumers with socio-cultural and environmental scarce re-
tasa have been overdeveloped to such an extent that only
sources can decay the very reasons, which attract people
a high-volume, low-pro"t margin orientation is feasible.
to places. Seasonality also generates demand peaks and
When resorts reach their saturation level only a cost
in#ates the problem during certain periods every year.
leadershipa or mass productiona strategy can be em-
Although economic bene"ts can also be achieved by
ployed, as they are unable to provide any speci"c tourist
using the commodity areaa or the standard product
product bene"ta. The attraction of the lower end of the
modela, it is argued that on the long term these ap-
market is inevitable and as a consequence, there are no
proaches reduce tourist satisfaction, consumer willing-
alternative strategies. In this case, the minimisation of
D. Buhalis / Tourism Management 21 (2000) 97} 116
further social and environmental damages as well as
goods. Understanding the core product as well as the
attempts to improve the surrounding environment
facilitating, supportive and augmented products for each
should also be the primary objective.
target market is of paramount importance for destination
In addition, a re-positioning of the product can also be
marketing. The augmented environment will include
attempted although it is quite di$cult to alter the image
intangible elements such as interaction and customer
of destinations. For example the Calvia Municipality in
participation as well as accessibility and physical envi-
Mallorca has implemented a dynamic plan for enhancing
ronment (Kotler, Bowen & Makens, 1996, p. 276).
the quality of the tourism o!ering through the enhance-
DMOs have an overall responsibility for the entire
ment of the landscape and the regeneration of environ-
destination product and through incentives and policies
mental resources. As a result, intentional demand has
facilitate the development of products, which is desirable
increased and a higher willingness to pay is experienced,
from the demand side, and at the same time does not
enhancing the pro"tability of the private sector and
jeopardise local resources. DMOs should therefore be
boosting the economic impacts of tourism. Another suc-
the guardians of the image and resources of destinations.
cessful example of destination management and market-
However, throughout the world tourism services are of-
ing is also Las Vegas. Although it is not yet on the
fered by small and medium tourism enterprises (SMTEs)
maturity level, the local industry constantly undertakes
which tend to be family managed. The challenge for
initiatives to reinvent and reposition itself. They diversi"-
destination management organisations is therefore to
ed their target markets by developing theme parks within
provide leadership in the development of innovative
major hotels in order to attract families and young chil-
products and create local partnerships for the delivery of
dren. Several new hotels open every year while older
seamless experiences. These partnerships should bring
properties are being renovated, often by demolishing and
together both private and public sector and should en-
rebuilding them. The old stripa was also relaunched to
sure that the long-term competitiveness of the tourism
attract visitors from the new hotels and casinos by cover-
product prevails all decision making processes (Buhalis
ing the street and projecting a lazer show.
& Cooper, 1998).
DMOs also need to enhance and diwerentiate their
products by emphasising their uniqueness. Destination
8. Destination marketing mix
marketers often adopt a mass tourism orientation, be-cause they falsely believe that tourism products can grow
Once a tourism management and marketing strategy
inde"nitely. Hence, generic characteristics of destinations
has been decided destinations will have to develop their
are frequently emphasised in all marketing campaigns as
marketing mix. This will enable them to approach each
they attempt to attract too many target markets. Sun and
target market with a comprehensive range of o!erings
sea dominate the promotion of Mediterranean destina-
and to propose an integrated solution to consumer needs
tions; exotic surroundings are emphasised for long haul
and wants. Developing a marketing mix for destinations
destinations and skiing is o!ered by Alpine resorts. How-
will depend on each destination, the types of target mar-
ever, it is increasingly evident that new-sophisticated
kets and a whole range of issues on the external environ-
consumers seek authentic and unique experiences. They
ment. Nevertheless, some principles need to be addressed
are also willing to pay a premium, but only if the product
and the following text illustrates examples and frame-
is signi"cantly better than that of competitors. Hence,
works which can assist destination marketers to decide
destinations will need to re-assess the entire range of their
on the most appropriate marketing mixes.
resources and identify suitable tourism products for eachparticular target market segment.
8.1. Formulating the destination product
Themed or alternative tourism enables destinations to
provide unique experiences and achieve their status area.
Destinations are amalgams of individually produced
For example, Greece could concentrate on its heritage
tourism amenities and services (accommodation, trans-
and history and o!er ancient/mythology experiences;
portation, catering, entertainment, etc.) and a wide range
of public goods (such as landscape, scenery, sea, lakes,
themes; Romania should explore the Dracula myth; and
socio-cultural surroundings, atmosphere, etc.). All these
Bali should concentrate on the unique religious rituals
elements are branded together under the name of the
and cultural traditions. Natural, agricultural, cultural,
destination. The ubiquity of the destination concept ef-
artistic, heritage, resources of destinations can be used
fectively means that the tourism product for each pro-
accordingly. Tourism should also contribute to the pres-
spective traveller is very subjective and depends heavily
ervation of these resources by increasing the awareness of
on his/her image and expectations of the place. Neverthe-
both locals and visitors and by providing funds for the
less, the tourism product for a region consists of the
conservation and regeneration of resources. Attracting
entire range of facilities and services o!ered locally, plus
appropriate target market segments should also assist
all socio-cultural, environmental resources and public
the reduction of seasonality, as special theme o!erings, as
D. Buhalis / Tourism Management 21 (2000) 97} 116
well as festivals and events should enable destinations
In several leisure destinations tour operators also play
to increase their demand during the low season. For
a critical role in determining the price consumers pay for
example, the renovation of physical features and natural
products locally. This has signi"cant implications for
resources on Mallorca, or the development of innovative
regions which depend on intermediaries (tour operators)
new products such as Festivals and themed experiences
for their clientele, and in particular for destinations which
(e.g. Edinburgh New Year's Eve and summer festivals)
have an oversupply of facilities. Tour operators in
also enable destinations to manage their product life
Europe and especially the larger/mass/integrated oper-
cycle e!ectively. The aim is to maintain the destination
ators, such as Airtours, Thomson, TUI, and Neckerman,
to the maturity/consolidation stages and to avoid the
exercise bargaining and coercive power because of the
stagnation, saturation and decline stages in their life
large volume of tourists they represent and reduce the
prices of principals at destinations. This enables them too!er competitively priced products at their marketplace.
8.2. Pricing the destination
However, as local suppliers may not be able to gainenough pro"t from the basic product (i.e., accommoda-
A wide range of pricing techniques are applicable to
tion and transfers) they may need to overprice other
tourism destinations (Meidan, 1995; Kotler et al., 1996).
element of the product (i.e., catering, entertainment, local
However, pricing is a di$cult process for destinations as
excursions) in order to boost their pro"tability (Buhalis,
it is often determined by the pricing and marketing pol-
icies of individual enterprises both at the destination and
The higher the expenditure of tourists locally, the bet-
distributors at the place of origin. Local suppliers can
ter it is for destinations, as it increases the pro"tability of
have their own policy and thus co-ordinating and estab-
local enterprises and enhances the economic bene"ts.
lishing a destination wide pricing strategy is almost
Consumers take into consideration the total cost of
unachievable. Furthermore, national economic policies
a trip, i.e., before, during and after their visit. In most
and economic conditions in the international market-
cases they have not visited the destination before they
place also in#uence pricing. Therefore, both macro-
purchase their travel product. Hence, pricing plays an
and microeconomics determine the pricing function of
important role in determining the image of destinations.
tourism organisations locally and destinations. The cost
Perhaps the biggest travel expenditure is transport to
of living and employment, as well as in#ation, exchange
and from the destination, especially for long haul trips,
rates and local e$ciency and competition all contribute
and thus can determine the willingness and ability of
to the pricing equation. Tourism in Japan is inevitably
travellers to visit destinations.
much more expensive than tourism in Indonesia due to
Destinations can only charge premium prices if they
the di!erences between the two economies. Macroeco-
o!er a unique experience. Venice for example pro"ts
nomic changes have great in#uence on the pricing of
from its unique product attributes and charges substan-
destination and the attraction of consumers. For in-
tially higher prices than other Italian destinations. How-
stance, the depreciation of the Spanish Peseta and the
ever, increasingly consumers are unimpressed by tourism
Greek Drachma as well as the high in#ation rate of the
facilities and products, as they have travelled extensively
Turkish Lira have all determined the pricing of their
and have acquired a wealth of experiences. Global com-
destinations and have in#uenced their competitiveness
petition and oversupply, as well as the emergence of new
destinations in third world countries with lower labour
Pricing the destination and all the individual elements
costs, generate frequent price wars especially for con-
of the local tourism product is a very complex process.
strained capacity at the last minute. As a result, con-
Principals tend to have their own pricing mix and pol-
sumers are increasingly prepared to pay less for getting
icies. DMOs can control elements of pricing through
more. Nevertheless, it is important for consumers to
regulation, advice and through partnerships with the
perceive prices as fair and good value for money, because
private sector. However, DMOs often provide guidelines
dissatisfaction damages the competitiveness of the desti-
by suggesting minimum prices to protect small suppliers
from "erce competition and maximum prices to protectconsumers from overcharging. For example, in several
8.3. Distributing tourism destinations
destinations the public sector determines the lowest priceper category for accommodation, advises on the retail
Distribution or marketing channels are de"ned as sets
price of consumer goods and foods, set the maximum
of interdependent organisations involved in the process
prices for transportation or taxi services. Although en-
of making a product or service available for use or
forcing pricing policies is extremely di$cult, destination
consumption. The ultimate objective of distribution
managers should formulate partnerships with principals
channel can be summarised as: delivering the right qual-
and train them on the importance of maintaining a fairly
ity and quantity of a product, in the right place, at the
standardised pricing structure and policy.
right time, at the right cost, to the right customer. Several
D. Buhalis / Tourism Management 21 (2000) 97} 116
important distribution and marketing functions per-
destinations need to provide travel agencies with in-
formed by channel members, such as: carrying of inven-
formation and promotional material, as well as to or-
tory; demand generation through promotion; market
ganise educational trips and provide incentives for their
information collection and analysis; negotiation between
sta! in order to promote the destination to consumers.
channel members and consumers; physical possession
Workshops and road shows may also increase awareness
and distribution; risk taking; payment and "nancial
and provide positive impressions. Travel trade manuals
arrangements; and after-sale service. Distribution is
serve as reference books for intermediaries o!ering com-
emerging as a critical element of strategic management
prehensive information about destination regions. Devel-
and as one of the few remaining sources of real competi-
oping long-term partnerships with tour operators and
tive advantage. Apart from in#uencing costs, increasingly
leisure travel agencies is therefore extremely signi"cant
distribution channels also support and enable product
for the success of leisure destinations.
di!erentiation by adding value on the product and by
The concentration of the European tourism industry
contributing to the total brand experience and projecting
increases the power of certain integrated travel organisa-
tions. As a result, they increasingly control more than 70
The entire range of players that bring together tourism
per cent of the market and can use a wide range of
demand and supply for a region formulate its distribu-
marketing techniques to determine consumer choice.
tion channel. Distribution of destinations becomes in-
Table 5 illustrates the penetration of the largest tour
creasingly more important, not only because it is
operating groups in the European market and clearly
estimate to cost 20}30 per cent of the product price but
demonstrates that leisure movement in Europe is di-
also because it determines whether and under what con-
rected to a large extent by a small number of integrated
ditions suppliers can meet their target markets. This is
tour operators (O'Brien, 1996; Bywater, 1992,1997). Since
the case especially in the European leisure market con-
then more concentration is experienced daily as oper-
text as concentration has led four major companies to
ators merge to develop their volume and take advantage
dominate the market. Business travellers have strict
from economies of scale and negotiation power. In addi-
schedules and use intermediaries to organise their itiner-
tion, a wide range of smaller specialised tour operators
aries. In contrast, leisure travellers tend to have much
exists in each market promoting specialised products.
greater #exibility and price elasticity. As a consequence,
Although, there is a concentration on leisure distribu-
intermediaries can in#uence their decision and choice of
tion channels, consumers become more independent and
sophisticated and use the entire range of tools to arrange
Business travellers can be in#uenced indirectly by
their travel. The availability of information on the Inter-
people who are responsible for arranging business meet-
net and the emergence of electronic intermediaries revol-
ings and conferences. These include corporate travel o$-
utionise distribution. Destinations that appreciate the
cers and administrative sta! in organisations who choose
new developments and build comprehensive tools for
the location of meetings, as well as services suppliers. For
their local suppliers increasingly improve their ability to
destinations to attract business travellers they need to
reach their strategic objectives. IT enables consumers to
develop strong links with the local business and aca-
seek for information as well as construct and purchase
demic communities as well as with various types of asso-
individual itineraries on-line, and thus it revolutionised
ciations. This will enable DMOs to appreciate the needsof business travellers and to provide convenient andadequate products. Often local associations, chambers,
businesses or academics need to be closely involved in
Penetration of the largest tour operator groups in the European leisuremarket in 1994/5
order to attract and arrange meetings, incentives, con-
ferences, and exhibitions (MICE) at the destination. Con-
sequently, relationships with business travel agencies as
well as conference and exhibition organisers are impor-tant to attract and satisfy the MICE markets.
United Kingdom Thomson/Airtours/
Leisure travellers have a much wider choice and #exib-
ility and therefore a di!erent distribution strategy and
mix are required. Domestic tourists usually make direct
arrangements and often use their own transport, whereas
Airtours (Spies, Tjaereborg)
international leisure travellers tend to be more in#uenced
Budget/JWT (First Choice)
by intermediaries. Representation of destinations in tour
operators' brochures determines their ability to attract
the appropriate volume and quality of consumers.
Nouvelles Frontie res/Club Med 25
Leisure travellers often require travel agencies advice onselecting appropriate destinations and products. Hence,
!Source: Adapted from O'Brien (1996) and Bywater (1997,1992).
D. Buhalis / Tourism Management 21 (2000) 97} 116
destination marketing. Not only do they provide oppor-
ness (Woodside, 1990; Faulkner, 1997; McWilliams &
tunities for reducing dependency on traditional inter-
Crompton, 1997; Schoenbachler, Benedetto, Gordon
mediaries for remote, peripheral and insular destinations
& Kaminski, 1995). Advertisements use slogans, which
but they also provide a mechanism to develop and pro-
change frequently in order to follow tourism demand
mote specialised products for mini market segments
trends and to update the image of destinations (Morgan
& Pritchard, 1998). For example, Spain recently changed
Electronic distribution also o!ers opportunities for
its slogan from everything under the suna to passion
closer interaction and co-operation at the local level. In
for lifea. This change re#ected the refocus of its product
several places where IT has been used extensively, such as
away from the traditional sun and seaa product to
Tyrol, Ireland and Singapore, an integration of local
a much more sophisticated o!ering based on socio-
resources and organisations enables suppliers at the des-
cultural diversity and the life-style of local people
tination level to develop and deliver seamless tourism
products to consumers. Destination Management Sys-
In addition, DMOs often use below the line promo-
tems will need to be developed in order to enable the
tional techniques. They participate in major annual
networking of all local tourism providers as well as
tourism and travel fairs in Berlin, London, Milan, Mad-
a comprehensive and innovative interface between the
rid, Paris and elsewhere. There they have the opportunity
destinations and their prospective and current clients
to meet intermediaries and members of the public to
promote their o!erings. They produce brochures, whichthey distribute to all their partners in the industry and to
8.4. Promoting the destination
prospective consumers who require information on thedestination. Brochures normally show local attractions
Promoting destinations essentially implies the devel-
and activities, whilst they also feature a number of local
opment of communicating channels with clientele and
suppliers such as hotels, entertainment and catering es-
other stakeholders to increase awareness and persuade to
tablishments (Wicks & Schuett, 1991,1993). In addition,
purchase products. Destination promotion requires
travel trade manuals o!er information about the destina-
a co-ordinated campaign and message for all local princi-
tion to the travel trade and provide a reference guide.
pals and suppliers. Designing a cost-e!ective promo-
Although DMOs often operate information o$ces
tional mix is di$cult because of the diversity of tourism
where they provide information about local suppliers
suppliers at destinations and the spread of consumers
they tend to refrain from selling direct, as they regard
throughout the world. Achieving a consensus on the
themselves as facilitators rather than intermediaries and
marketing campaign as well as raising adequate funds to
also avoid to be seen as promoters of individual products
develop and implement it is one of the most challenging
and services against other local suppliers. Instead, when
tasks for destination marketing. Traditionally, DMOs
asked by prospective customers they provide contact
lead promotional campaigns, whilst suppliers participate
details of local suppliers and advise consumers on the
and contribute. A wide range of techniques are used, both
ones that are likely to satisfy their demand. However,
above and below the line (Kotler et al., 1996; Horner
increasingly DMOs are forced to play a more active
& Swarbrooke, 1996; Millington & Cleverdon, 1999).
selling role as consumers appreciate an one-stop-service.
Above the line promotional activity includes advert-
In many destinations they are also required to justify
ising on television, radio, and press as well as using poster
their income or to contribute towards their expenses and
campaigns. Targeting the right market with the right
hence they charge commissions for local bookings and
message at the right time is always di$cult, especially for
sell maps, local guidebooks and souvenirs to generate
destinations, which attract consumers from several geo-
income. Direct marketing is also used as destinations can
graphical regions as well as cultural and linguistic back-
identify prospective customers and promote elements of
grounds. Although very expensive, above the line
the local o!erings that satisfy the speci"c demand. Devel-
advertisement can assist the development of the destina-
oping relationship marketing and loyalty clubs enables
tion brand as well as in#uence a large number to visitors
repeat visitors to be recognised and appreciated. Dis-
to travel to the destination or to extend their visit (Bon-
count schemes and other add-ones are currently develop-
ham & Mak, 1996). Crouch (1994) has illustrated that
ing for several destinations to reward and maintain their
although many countries have substantially increased
their spending on tourism promotions there is little evid-
Finally, public relations are extensively used for most
ence of their e!ectiveness as studies which have attem-
tourism destinations. Destination representatives at na-
pted to evaluate the promotional impact empirically
tional level establish tourism o$ces in their major mar-
have generally produced inconclusive and varied results.
kets to distribute promotional material and information
Nevertheless, DMOs are increasingly being held ac-
as well as through their embassies. In addition, public
countable for generating adequate results through
relations are used to generate news stories, articles and
advertising and for measuring advertising e!ective-
publicity in order to develop the awareness of consumers
D. Buhalis / Tourism Management 21 (2000) 97} 116
and persuade them to purchase the products. Often host-
and public sectors can improve the tourism product by
ing a journalist or a celebrity in the destination can
investment in resources, as well as the implementation of
generate more interest than any other forms of promo-
a comprehensive marketing strategy and mix which sup-
tion because consumers are more passive receivers than
ports the competitiveness of the destination. This is parti-
with advertising. Public relations are also critical for the
cularly important for small and medium-sized tourism
development and updating of the right image (Morgan
enterprises, which traditionally dominate local supply
& Pritchard, 1998; Kotler et al., 1996; Middleton, 1992).
but lack management and marketing expertise to operatetheir business professionally and "nancial resources toapproach their target markets.
9. Marketing competitive destinations for the future
Taking advantage of new technologies and the Internet
can also enable destinations to enhance their com-
Destination marketing is increasingly becoming ex-
petitiveness. Technology can improve the e$ciency of all
tremely competitive worldwide. Providing innovative
local suppliers and also provide tools for the develop-
and well co-ordinated tourism products is therefore ex-
ment and delivery of di!erentiated tourism products.
ceedingly important for tourism regions. Consumers as-
Provision of information on local facilities and attrac-
sess their travel experience as a whole and they associate
tions and the ability to reserve the whole range of
destinations with the entire range of local producers and
tourism products determines the ability to attract the
suppliers. Producing innovative and specialised tourism
new and sophisticated types of tourism demand. The
products will enable destinations to attract intentional
recent evolution of destination management systems
demand and to di!erentiate their products. Flexible
(DMSs) enables destinations to co-ordinate the entire
specialisation will also support local suppliers and the
range of products and services o!ered locally and to
region as a whole to evolve with consumer trends and
promote them globally. The provision of di!erentiated
support the requirements of the emerging sophisticated
and tailor-made products becomes much easier as con-
clientele as well as compete globally. Destinations, which
sumers can assemble specialised products and construct
appreciate these principles, can develop and maintain
their own itinerary. The availability of information on
competitive advantage and as a result achieve their stra-
local resources and services reduces the cost of individual
travel and enables destinations to o!er mass-customised
Partnerships between the public and private sector and
close co-operation between all local suppliers is key to
More importantly the new IT tools enable even small-
the ability of destinations to o!er quality products. Ex-
er and peripheral players to compete on equal footage
ceeding consumers' expectations is instrumental for the
with larger and more central ones and therefore provide
ability of both suppliers and destinations to attract visi-
an unprecedented opportunity to enhance their com-
tors in the long term. Hence the competitiveness of each
petitiveness. One of the major bene"ts is the reduction of
supplier locally as well as their distributors determines
dependency on intermediaries for the distribution of
the competitiveness of destinations. Local suppliers
tourism products. As a consequence, tourism suppliers
should co-operate rather than compete. Buhalis and
are able to improve their negotiation power with power-
Cooper (1998) argue that tourism suppliers at destina-
ful tour operators and can develop a healthier distribu-
tions need to mature and understand that they should
tion mix. This is particularly signi"cant for remote,
not compete with each other at the destination level.
peripheral and insular destinations where local principals
Instead they should join forces and pool resources to
and authorities have a great dependency on tourism for
develop and implement comprehensive marketing strat-
their lifehood but lack expertise and resources to under-
egies which enable them to compete with other destina-
take comprehensive marketing campaigns. Partnerships
tions. The rapid development of new destinations,
marketing through loyalty/fun clubs enabling destina-
especially in third-world countries generates an unprece-
tions to develop long-term relationships with consumers
dented level of competition. They can o!er unspoiled
bene"t both destinations and suppliers. DMSs should
natural landscapes and authentic socio-cultural re-
also be utilised to optimise tourism impacts by providing
sources inexpensively. In contrast, most traditional desti-
an e!ective mechanism to bridge the expectations of both
nations su!er from their own success and the lack of
consumers and local residents with their experiences
a strict rational planning and management system. Hav-
from tourism (Buhalis, 1993,1994,1997,1998).
ing gone through most of the stages of their life cycle they
Finally, tourism destinations should learn from past
have reached maturity or saturation and this has forced
mistakes and appreciate that their strategic management
them to rely mass tourism for their operations. Often
and marketing must lead to the optimisation of tourism
facilities require urgent renovation, but lack of "nancial
impacts and the achievement of their strategic objectives for
resources and the unwillingness of consumers to pay
all stakeholders. Hitherto, destinations have su!ered
jeopardise the competitiveness of destinations further.
because they wrongly assumed that the higher the vol-
Initiatives at the local level facilitated by both private
ume of tourists, the more bene"ts they can achieve.
D. Buhalis / Tourism Management 21 (2000) 97} 116
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