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Monday, February 18, 2013

The (sky is the) limits of Tourism arrivals growth

Dear readers,

After a period of pause Caribbean2World is active again and looking to stir things up. for the past 2 years there have been quite some changes for me on a professional level. In my new role I have experienced and learned a lot of new things. It is with this new luggage, that I want to get back in touch with you and show the Caribbean to the World


"Growth",...It has become the mantra of most organisations in the world. Sustainability, which is also trending....is kinda catchinig up on "Growth".

Working for a destination Marketing Organization (DMO), often means that one of your main responsabilities is generating growth: increase in the arrival statistics for your destination. Even though nowadays more and more destinations tend to look more at abstract marketing goals such as brand and "value for money" perception. It is still the statistical arrivals results at the end of a year everyone looks at and you get credit for.

Most times DMO's set goals at the beginning of a marketing year such as: generate x-amount of growth % in your market. Most of the time it is a general global goal which counts for all regional offices part of one team. The problem with this is that if all offices are successful it creates an internal competition.  This situation is often misunderstood and under performing markets get pushed into the corner where the punches fall. All offices should be part of one team, and should support each other. Therefore the point a lot of DMO's are missing is: What is the limit of growth.

When organisations forget to take into account the size of their capacity, it seems that the sky is the limit for growth. But what happpens if one regional marketing office grows disprortioinally quicker than it's other offices? Less capacity available for growth for that market. For the destination in question this is no problem at all. At the end of the day, if the destination can show great overall worldwide results, all is well. I am all for the "free market" and "supply and demand" approach. However, if destinations have or want a risk-spreading or diversification strategy, this could pose a problem for the long-term success of the destination.

Therefore in my opinion it is critical for a DMO to know the capacity it has to serve the markets its active in. In order to do this you need to take the following into consideration:
  • Available rooms/accommodation
  • Persons per room/capacity
  • Average length of stay per market
  • Average revenue per room per market
It seems to simple to be true, but it is. However, that is just the first step. Second step is to determine your markets and their potential. Plus something you cant learn in any course or academy: the human element in marketing. Will a market grant you their business after a period of neglect based on higher revenue somewhere else? Will they care about your "Growth Target"?




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