The Real Reason We Exist? Improving Resident Quality of Life

At first glance, the role of a destination marketing organization can appear to be an odd one. Have you ever asked yourself why, as a community, you would purposely invite strangers to come visit your beaches, hike on your trails, eat at your restaurants, or stroll your boardwalks? 

To take it a step further, why would you, as a community, funnel tax dollars to a destination organization for promotion of the destination when those tax revenues could otherwise be spent on funding police and fire services, improving educational programs or roads, or investing in a public art installation? 

The answer is a simple one: You would only do this if it improved your quality of life as a resident. 

This is the real reason destination organizations exist: to benefit their residents’ quality of life. 

Let’s break this statement down a level to see why this is true: 

• A tourism industry exists to entice visitors from outside the community to spend money at the businesses within the community. 
• This creates new business opportunities and growth that couldn’t be achieved through the resident population alone.*
• Those opportunities and that growth contribute jobs for the residents in the community — not only within the service industry, but across multiple sectors.**
  
• The visitor spending generates sales, restaurant, and lodging tax revenues, which expand the pool of available revenues elected officials can spend on services to the community and reduce the tax burden on local property owners. Employee wages and salaries paid for by the visitors increase the pool of tax revenues even further.

The role of the destination organization is to “balance the books” on the benefits of the visitor economy.

In order to welcome visitors and generate economic opportunity, destination organizations take on a wide variety of activities, such as: 

• conducting effective marketing campaigns
• building informative and compelling websites
• coordinating with airports, park managers, hoteliers and restaurateurs to facilitate an effective visitor experience

But these actions represent the means — not the ultimate ends the destination organization is after. 

A simple analogy may help here. If we think of a destination organization as a corporation and community residents as its shareholders, then a traditional definition would suggest that the destination organization’s job is to maximize the benefits to local residents. (Even a somewhat more updated understanding of the role of a corporation would prioritize the desires and values of the shareholders, while also acknowledging a destination leader’s shared responsibility to other stakeholders such as employees, local business owners, etc.)

Thinking of residents as the shareholders of a destination organization gives clarity to how leaders should hold themselves accountable. To carry the metaphor a step further, it creates a “profit and loss” statement of sorts for a destination — which could look something like this:

Considering a destination’s “ledger” provides leaders of Smart Destinations with a powerful tool to evaluate opportunities and challenges.

For many destination leaders this way of thinking represents a shift in mindset — away from a focus on activities (ad campaigns, sales efforts, website leads) and toward the actions leaders can take to align community (aka, shareholder) values with destination strategies.

Key takeaways for today’s destination leaders

• The destination organization ultimately serves to benefit the residents — enhancing the community and the resident quality of life. 
• The three critical measures for this are visitor spending, jobs created, and tax revenues. These should be the primary focus for your strategic planning and stakeholder communications. Everything else is secondary to these three. 
• Just as a business has to watch expenses and losses, a destination organization has to be thoughtful about the negative impacts of tourism, including degradation of place, crowding, and revenues being siphoned out of the community. 

Notes: 

* This is why tourism is classified as an export in economic literature — because these are goods and services sold to those outside the resident tax base. 

** Ideally these jobs are held by residents in the community. I know in reality this doesn’t always happen, and this is one of the negative aspects of tourism we as an industry we need to address.