Destination marketing organizations (DMOs) and Convention and Visitors’ Bureaus (CVBs) have long been the marketing engine for cities and regions (most destinations just have one of these organizations – the name CVB pre-dates DMO, but they’re essentially the same kind of entity). Primarily nonprofit, government organizations, they have been funded almost entirely by taxes collected on hotel stays. You know – that extra amount at the bottom of your bill when you go to checkout? This model has worked sufficiently in many markets…until COVID created a near-drought in hotel revenue. But the model also created a skewed approach to marketing, one that favored promoting lodging over the actual activities that many visitors to a region came to do in the first place. With hotel revenues dried up, DMOs and CVBs themselves are struggling. Many have had to make huge cuts in workforce, all at a time when so many of their local businesses need more support than ever. Now is a crucial time for DMOs and CVBs to problem-solve for the survival of their entire market, and one big way they can do so is by thinking differently and diversifying their revenue sources.
Redeam discussed these sentiments with the CEO of Bandwango, Mo Parikh. Bandwango is a Redeam partner company.The below Q&A is taken from an interview originally posted on Redeam.com. Check out that posting here.
In this crucial time, as travel-dependent businesses attempt to survive and recover, what should DMOs and CVBs be doing to help these businesses in a time of staycations, when fewer people are even staying in hotels?
Can you talk a little bit more about that consumer journey?
Mo: Yes. Largely, DMOs/CVBs have been focused on the top of the consumer funnel. They have fantastic websites, generate incredible content, and they’re generally viewed as the local domain authority in these cities. They have incredible power over potential visitors during the inspiration phase. What DMOs haven’t really taken ownership of is bottom of the funnel actions like conversion and its measurement, which they typically leave up to a third party, whether that’s an OTA or an activity provider.
But now, that mentality is shifting and with it comes more and more DMOs who are spearheading the development of unique experiences within their destinations. Right now, the primary goal of these experiences is to engage locals and encourage them to spend money with tourism-dependent businesses. For many of our clients, visiting friends and family are a top driver of tourism, so this strategy also has a positive long-term effect. Ideally, once the local enjoys one of these in-market experiences, when their friends or family do travel again to visit them, the local is much more likely to take their visitors back to these experiences. This a real shift in perspective: repeat business isn’t going to come from a one-time visitor to your destination, but it is going to come from your locals
In this digital age of ours, isn’t the notion of “turning your audience into your champion” one that’s been around a while already?
Mo: True, but look at where a significant amount of DMO/CVB funding comes from – from hotel tax, which is largely out-of-town visitors coming into the city. From my perspective, the limitation has mainly been political. I think that a lot of DMOs know that word-of-mouth is huge, but they need to satisfy their key stakeholders – largely the hoteliers – and if the DMO doesn’t deliver upon the promise behind that funding, in the back of their minds they’re always worrying, “Are we going to get cut off?” Now, we’re seeing local economies hurt, which is never good, but in some ways DMOs are finally getting to show that their expertise goes beyond just generating room nights. They’re being looked to as drivers of the local economy, which is what they’ve been this entire time. The difference being that for many organizations this is the first time those other KPIs are being given as much weight as room nights.
This going to be really valuable over the long term because in any market, the diversity of experiences to be had (and the impact on that market’s economy) come from all of the activity and attraction operators, not from the hotels. And now with mobile devices and prior to COVID, people don’t even use hotel concierges anymore. They just Google search, find what they want, get directions on how to get there, and go! So it behooves DMOs even more to provide value to these local businesses in order to provide more value to their own economy.
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