OTHM LEVEL 7 DIPLOMA IN

TOURISM & HOSPITALITY MANAGEMENT

DESTINATION
MANAGEMENT

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By Dhanushka Wijeyekoon
THE ROLE OF DESTINATION
MANAGEMENT COMPANIES
(DMC)

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 ROLE OF A TOUR OPERATOR

Tour Operators are better known as “The Dream Merchants”

who make fantasies a reality.

Responsible for delivering competitive price, learning

experience, companionship, safety,
lodging/accommodation, Air & land transportation, Guide
services & all in all a lifetime experience to remember.

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CLARIFICATION OF TOUR OPERATOR
TERMINOLOGY

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CLARIFICATION OF TOUR OPERATOR
TERMINOLOGY
1. Travel Agent
Specialized in or main business is Airline ticketing`

2. DMC - Destination Management company

Mainly in to Inbound travel. Specialized in selected destination(s)

3. Tour Operator
Deals with Airlines / Sell multiple destinations / Focus on Leisure FIT,
groups, Business travel
4. MICE operator / Incentive house
Only focus on Corporate business travel
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 DIFFERENT TYPES OF TOUR
OPERATION
1. Domestic tour operator

2. Inbound tour operator

3. Outbound tour operator

4. Multiples / Miniples / Independent

5. Specialized tour operators

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MULTIPLES / MANIPLES / INDEPENDENT

- Multiple travel agents

are companies which operate a chain of retail outlets through out the
country under a single brand name. These type of companies are usually
found on the high street.

- Miniple travel agents

are companies that have between 5-50 branches.

- Independent travel agents

are companies that cater for the needs of residents in a small towns.

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 WHAT IS A
DESTINATION MANAGEMENT COMPANY ?

A destination management company is a professional

services company with local knowledge, expertise and
resources, working in the design and implementation
of events, activities, tours, recreation, transportation
and program logistics management.

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 TOUR-REALISM &
DESTINATION MANAGEMENT

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 TOUR-REALISM &
DESTINATION MANAGEMENT
Tour-realism (T.R.) is a new trend in alternative tourism. It differs
from both mass tourism and "independent tourism", a type of
tourism involving absolutely no mediators in the tour organization.

T.R. operators usually represent the country they live and work in.
T.R. operators are known for having advanced knowledge of the
culture and history of their country, as well as for having tight and
constant connections with local population. Because they are
residents of the country, T.R. operators are capable of providing
unique services for foreign guests.

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 KEY SERVICE FUNCTIONS OF DMCS

• Program Design

• Logistics Management

• Supplier Management

• Accounting

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 KEY SERVICE FUNCTIONS OF DMCS

• Program Design:
These services include venue selection and booking, the organization of
event activities, and even event decor.

• Logistics Management:
These services include making an event timeline and schedule, booking
transportation, and even coordination of guest arrivals and departures.

• Supplier Management:
These services include vendor selection and supplier price negotiation.

• Accounting:
These services include auditing and payment of vendor invoices,
financial negotiations, and providing a detailed accounting to a client.

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 TARGET TOURISM SEGMENT OF
DMCS
• Luxury
• Interactive holidays
• Senior citizen
• Adventure
• LGBT
• Honeymoon
• Culinary
• Jalo tourism
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CUSTOMER (TOURIST) CATEGORIZATION

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CUSTOMER (TOURIST) CATEGORIZATION

1.Domestic tourist
(residents of a given country travelling only within that country)

2. Regional tourist

3. International tourist

3.1 Inbound
(non-residents travelling in a given country)

3.2 Outbound
(residents of one country travelling in another country)
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 CUSTOMER (TOURIST) CATEGORIZATION

1. Leisure tourist

Ex – SOLO, Eco, Wildlife, Adventure, Honeymoon, LGBT,

Gambling & adult entertainment, Shopping, Cultural explorer,

2. Business tourist

Ex – MICE (Meetings, Incentives, Conferences, Events & Exhibitions)

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CUSTOMER (TOURIST) CATEGORIZATION

1. FIT

2. GIT

3. AFFENITY GROUP

4. VFR

5. SMERF group – Social, military, educational, religious,

fraternal

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CUSTOMER (TOURIST) CATEGORIZATION
1. FIT
Free independent / individual tourist

2. GIT
Group inclusive tourist

3. AFFENITY GROUP
Set of people traveling together for a common motive
(Macca/Buddha Gaya pilgrimage)

4. VFR
Visiting family & Friends

5. SMERF group
Social, military, educational, religious, fraternal 19
MAIN COMPONENTS OF A DMC PRODUCT
OFFER

1. Food and Beverages

2. Travel and Tourism

3. Lodging

4. Recreation

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MAIN COMPONENTS OF A DMC PRODUCT
OFFER
1. Food and Beverages
The food and beverage sector which is professionally known by its initials as F&B is the largest
segment of the hospitality industry.

2. Travel and Tourism

Travel and tourism deal with services related to moving people from place to place. Buses, cabs,
planes, ships, trains and so on are all part of the travel industry.

3. Lodging
Lodging means accommodation for a period or a place to sleep for one or more nights. Fancy
hotels, youth hostels, elder hostels, campgrounds, motels and other businesses that provide a
place for people to sleep overnight are all in the lodging industry.

4. Recreation
Recreation is any activity that people do for rest, relaxation, and enjoyment. The goal of recreation
is to refresh a person's body and mind. Any business that provides activities for rest, relaxation and
enjoyment, to refresh a person's body and mind is in the recreation business
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PRINCIPLES OF DESTINATION PRODUCT
DEVELOPMENT

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 PRINCIPLES OF DESTINATION PRODUCT
DEVELOPMENT
• Be authentic and should reflect the unique attributes of the destination.

• Have the support of the host community.

• Respect the natural and cultural environments.

• Be different from the competitors, avoiding copying developments

blindly.

• Be of sufficient scale to make a significant economic contribution, but

not very large to create high economic leakage.

• Sustainable & responsible business activities

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COMPONENTS OF MEMORABLE
TOURISM EXPERIENCE

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COMPONENTS OF MEMORABLE TOURISM
EXPERIENCE

1. Physical environment where the experience is

provided

2. Involve tourists

3. Facilitate personal growth

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COMPONENTS OF MEMORABLE TOURISM
EXPERIENCE

1. Physical environment where the experience is provided

• Theming the experience and setting the stage

• Defining the mix of memorabilia

• Engaging the tourists’ five senses

• Respecting the authenticity and singularity of the place when designing

activities

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COMPONENTS OF MEMORABLE TOURISM
EXPERIENCE
2. Involve tourists

• Offering the possibility to choose between a wide range of

alternatives

• Managing each touch point and service encounter to enhance the

experience

• Surprising tourists with amazing moments, exceeding their

expectations

• Facilitating a safe environment so tourists perceive control over

the situation and low risk 27
COMPONENTS OF MEMORABLE TOURISM
EXPERIENCE
3. Facilitate personal growth

• Aligning the experience with positive cues that match tourists’ values

• Offering freedom for self-discovery and time to interact with local

communities

• Planning activities to connect tourists with local communities and their

singular resources

• Proposing challenges that match tourists’ skills, so self-growth, self-

expression, and self-actualization will be fostered
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POST COVID CHALLENGES FOR DMCS

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 POST COVID CHALLENGES FOR DMCS
• Country borders may not be open to all for some time. The movement of people
across borders has come to a standstill in much of the world as countries have
closed their borders to visitors.

• Some geographies may become no-no for a while. Countries like Italy and Spain,
even Germany and UK, and of course the US, that have recorded large number
of corona deaths may not have too many takers for tourism in the near future.

• Business travel will decrease significantly. Already Zoom meetings have become
the norm.

• MICE market will go into coma for a while. Most big global events, conferences,
launches, festivals, seminars, symposiums, conventions started to get cancelled.

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 POST COVID CHALLENGES FOR DMCS

• Mega events will become less attractive. The flagship events of 2020 were surely
the Olympics in Tokyo and the Expo in Dubai. Both have been pushed by a year.

• Group travel will shrink.

• Leisure travel too will drop for some time. With so much uncertainty … shut
borders, grounded flights, shuttered establishments, job losses, recessionary
economy, uncertain school terms.

• Religious tourism will drop. With administrative directions on mass gatherings

being issued across nations.

• Destination weddings may suffer a serious setback.

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 POST COVID CHALLENGES FOR DMCS
• Air travel will become more expensive.

• Staycation** will increase

• Airports will be less crowded. Which is not such good news for many brands in
F&B, lifestyle, electronics and more which were getting reasonably large
volumes from retailing at airports.

• Road-trips may find greater favor. Families and youngsters are likely to opt for
more of drive-outs, especially on long weekends and for short vacations. So,
near-city travel is likely to see an uptick.

• ‘Hometown’ tripping will a big segment. It may not make much money for the
travel trade.

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POST COVID OPERATIONAL
CHALLENGES FOR DMCS

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POST COVID OPERATIONAL CHALLENGES
FOR DMCS
• Last minute cancellations, changes & refund processing

• Delayering, downsizing & pay cuts

• Work from home performance monitoring

• Including mandatory health related activities in the offers

• Credit facility cancellations by the suppliers & partners

• On arrival payment making requests by the customers

• Health & Safety certifications & license renewals

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POST COVID DEMANDS OF
TOURISTS

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POST COVID DEMANDS OF TOURISTS

1. Safety

2. Health

3. Hygiene

4. Brands

5. Value

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POST COVID DEMANDS OF TOURISTS

1. Safety : both perception and reality will matter

2. Health : government may introduce mandatory checks

3. Hygiene : There will be no compromise on this

4. Brands : Those that will stand for quality will win

5. Value : Good value for good money will be the new mantra

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SUSTAINABILITY FOR DESTINATION
MANAGEMENT COMPANIES

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 SOCIAL LICENSE TO OPERATE

The social license to operate (SLO), or simply social license,

refers to the ongoing acceptance of a company or industry's
standard business practices and operating procedures by its
employees, stakeholders, and the general public

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 TRIPLE BOTTOM LINE
3 Ps
The triple bottom line (TBL) is a framework or
theory that recommends that companies
commit to focus on social and environmental
concerns just as they do on profits.

The TBL posits that instead of one bottom line,

there should be three: profit, people, and the
planet.

A TBL seeks to gauge a corporation's level of

commitment to corporate social responsibility

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 QUADRUPLE BOTTOM LINE

The conventional three bottom lines

(people, planet, profit) are said to be
“transparent”- they can be seen and seen
through. The fourth bottom line, called
purpose, is often expressed as spirituality
or culture.

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 SUSTAINABLE STRATEGIC
IMPLEMENTATION ACROSS VALUE
CHAIN

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 SUSTAINABLE STRATEGIC
IMPLEMENTATION ACROSS VALUE CHAIN
Map the value chain to identify impact areas This considers the
whole supply chain involved in the production and delivery of
products/ services to the end user

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 SUSTAINABLE STRATEGIC
IMPLEMENTATION ACROSS VALUE CHAIN
Support activities & sustainability standards

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 Firm • Firm infrastructure consists of a number of activities including general
management, planning, finance, accounting, legal, government affairs
and quality management
infrastructure

Human resource • Human Resource Management is the strategic approach to the effective
management of people in a company or organization such that they help
their business gain a competitive advantage. It is designed to maximize
management employee performance in service of an employer's strategic objectives

Technological • Technological change or technological development, is the overall

process of invention, innovation and diffusion of technology
development
• Procurement is the process of finding and agreeing to terms, and
Procurement acquiring goods, services, or works from an external source, often via a
tendering or competitive bidding process. Procurement generally
involves making buying decisions under conditions of scarcity.
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 • Virtue ethic of the BOD / Transparent decision making
Firm / CSR initiatives / Corporate governance / Abide by the
infrastructure law / pay tax on time

Human resource • No discrimination / Equal opportunities / Training &

development / Fair pay /
management

Technological • Green technology / Paper less offices / Telecommuting

/ virtual servers / systematic intellectual property
development management with ICT support

Procurement •Ethical purchasing / quality raw material / Eco friendly

raw material / No bribery

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 SUSTAINABLE STRATEGIC
IMPLEMENTATION ACROSS VALUE CHAIN
Primary activities & sustainability standards

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 Primary activities & sustainability standards

Inbound • Supplier selection process & sustainability / Local community

involvement / On time payments
logistics
• No child labor & slavery / Safe work env’ / Eco friendly processes /
Minimum wastage / Proper waste disposal / Just in time supply / Safe
Operations warehousing / quality storage / recycling & reusing / Biodegradable
packaging

Outbound • Emission free transportation / Safe transportation / Eliminate delays /

Distributor selection & Sustainability / On time payments
logistics

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 Primary activities & sustainability standards

Marketing & • Ethical marketing / Informative trade dress / Fair price

/ Legitimate advertising /
Sales

• Proper service agreements / Valid guarantees &

After sale warrantees / Key account management in place / 24x7
services Customer service / free training on usage

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PRICING STRATEGIES OF DMCS

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 PRICE DETERMINING FACTORS

• Cost / Fixed cost

• Competitor pricing
• Government regulations
• Seasonality (Peak – off peak / Winter - Summer)
• Nationality of the traveler
• Desired profit margins
• Salary scales of the staff
• Events
• Ancillary offers
• Raw materials
• VAS (Value added services)
• CSR contribution
• Brand value

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 PRICING STRATEGIES OF DMCS
• Penetration pricing • Early bird offers

• Skimming pricing • Net rate based pricing / commission

based pricing
• Fluid pricing
• Cost plus pricing
• Marginal pricing
• Premium pricing
• Psychological pricing
• Optional / supplement pricing
• Market led pricing
• Niche pricing
• Price discrimination
• Bundle pricing
• Geographic pricing
• Freemium Pricing
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 COMPETITION CATEGORIES OF DMCS

• Regional competition
Competition from the neabouring countries
Ex – Competition to SL by India / Thailand / Malaysia /

• Local Competition
Competition with in the country
Ex - Industry competitors (Between DMCs

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THANK YOU !

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