Destination Marketing 3.0: Less subsidization. More innovation.

When I developed the Destination Marketing 3.0 blueprint, this week’s blog posting was supposed to be about the role of advertising in the future of destination marketing. Its juicy…probably controversial…and will wait for another day.

Earlier this week I came across two separate news stories that showcased the waning legacy of Destination Marketing 2.0 and rising promise of its 3.0 successor.

The first story was about deliberations around a series of “tourism grant” applications submitted to the local destination marketing organization in a medium-sized US mid-western community. It has not gone unnoticed by a wide variety of community arts, sport, service, publishing groups and more that with travel industry revenues on the rise, their companion coffers from taxes and levies (e.g. bed tax, transient occupancy tax, destination marketing fees) are also lush with collections. And everyone is rushing for their share of the spoils in the name of “tourism partnership marketing”.

Having been in that role at a DMO, I can tell you that even being in a position that is empowered to hand out money in the name of tourism marketing – whether its called a grant, a sponsorship or a partnership investment – is a no-win situation. You are ALWAYS going to create enemies (because you can never have enough money to please everyone) and you’re never going to make something remarkable happen for your business because your ability to direct the investment evaporates once the check is signed.

Lets call it what it is shall we? It’s a direct subsidy and the local politics of managing subsidy programs, despite the most noble of intentions, distracts destination marketers away from their necessary customer-centric focus. Yet…as the news story confirmed, destination marketers remain caught in the politics and under-achievement of the subsidy quagmire. To many communities, those subsidies are the only value destination marketing organizations deliver for them. Just try to wean them off said subsidies. And you thought social security was the ultimate entitlement.

This legacy practice of a time gone-by needs to get added to the destination marketing 3.0 stop-doing list right away.

Directly underneath was a story from Singapore. It seems that this summer the Singapore Tourism Board created a $ING5 million “Kickstart Fund” that is described as an incentive scheme designed to support untested yet innovative lifestyle events and concepts with tourism potential.” The fund not only awards up to $75K per investment but will provide mentorship assistance from industry leaders to these local industry entrepreneurs and innovators to help them better understand the tourism industry opportunity to grow their business. The advisory panel of the fund also includes business innovators from outside the tourism industry to ensure venture investor disciplines are applied to support investment decisions.

Rather than handing out subsidies to build political capital in the community, the STB has chosen to leverage Singapore’s innovation capital and become a venture capital investor in its own tourism industry – helping support the grass-roots creation of innovative new tourism experiences and services to the benefit of its customers that ultimately add value to its destination brand and revenues to its tourism industry.

Which is what destination marketing has always been about.

Now…before anyone raises their hand to say: “Well…that’s Singapore…we’re not like them. It wouldn’t work here.” Really? People that say/think that are dismissing the spirit of innovation that exists in each and every community that has a tourism industry. The opportunity for destination marketing 3.0 is to look outward, beyond its traditional stakeholders and today’s transactional mindset, and connect the local innovators, the entrepreneurs, the dreamers to the potential that exists for them in the tourism industry in their own community. If that requires cash, great. If it needs mentorship, perfect. If it needs a tourism industry hackathon to be organized, awesome. At the very least it requires the courage to make a formal commitment, with the appropriate venture investor mindset and disciplines, to making investments in local tourism industry innovation a priority to drive destination business in the long-term.

NY Times columnist Tom Friedman says we live in a world that rewards imagination. If destination marketers are looking for a chance to show new community leadership and marketplace relevance, this is a gift-wrapped opportunity to rise above short-term transactional thinking for a bigger vision of the future of the destination.


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