Amongst other things, there was considerable interest on one of IBM’s recommendation related to DMO(Destination Management Organisation) approach to Huizhou. The media interest was around the proven nature of DMO on a global basis and how would this specifically solve Huizhou’s tourism problem. My thoughts went back to the root of the problem, as put out by the Executive Delegate of the Huizhou city Mayor. Huizhou was a tier three city in South China and had dropped almost three percentage points since 2013 in terms of tourist inflow. Huizhou was less popular vis a vis other competing destinations and was a similar destination as some other cities in South China. How on earth, would you create a differentiated and successful model, which would bring growth back into tourism and make up for lost time???
Huizhou was indeed an ecologically rich city, with sea turtle Xunlao Bay, Luofu mountain, Drifting river(river rafting) and a few other attractions. I was challenged and worked with my IBM SCC team on how could we make a difference and help Huizhou bounce back. Improved online presence, Interactive omni-channel Tour planning capability, more effective promotions, CRM and open up to International market were some of the ideas. But, it was hard to tag any of the above as mind blowing stuff or game changers. I even doubted if, there was a game changer for Huizhou at all!
Pic : A media representative from a Chinese business newspaper querying on the smart tourism approach
As luck would have it, a fellow IBMer pointed me in the right direction. Steve, a member of IBM Institute of Business Value, is a renowned Industry Analyst, has many white papers and research blogs to his credit. He mentioned about the emergence of Destination Management Organisation, as the new Industry pivot, for making Tourism Smarter. I had to admit, this indeed was the physical manifestation of the solution to a fragmented and unorganized Industry. Tour operators such as Thomas Cook or TUI were indeed offering end to end experience to their customers, but this was not about promoting and managing a city as a tourism brand.
Destination Management Organization(DMO) is an organization built to unify all stake holders for the purpose of developing and promoting Tourism. DMO is an all inclusive organization, with members drawn from all representative elements of tourism ecosystem of the city, For example, what DMO does is enroll Hotels, Transport providers, Tour operators, Scenic Spot Operators, Hotels and Retail outlets as members. DMO also helps bring together service providers into associations, so that agreements could be formalized for data sharing and for the members to receive sales leads, intelligent insights and be informed of change in tour plans, if a tourist makes a change. So what we now see is that in addition to the DMO as a physical entity, one also needs a platform on which the tourism ecosystem could seamless integrate, creating a superior end to end experience for the tourist.
Pic: IBM SCC@Huizhou team from the right Joe Hong, Susan Schreitmueller, Kaaren Koomlen, Caludia Poscoe and Ravi Ss Nanjund(blog author) at the famous Xunlao Bay
While I was excited about the mind blowing potential this idea had, I was troubled in a corner of my mind, “Is this too good to be true?” So I started to search for the nagging unknown question. After a couple of days, it dawned on me that the doubt was on viability of this model for a Tier three tourist city. I got to work with the team and we started sketching financial models and breakeven points, on a Cloud based Solution as a Service(CaaS) model. In no time, very fundamental questions came to the surface.
- Would a fragmented tourism ecosystem of private entrepreneurs trust a DMO organisation, which was Not for Profit, with Government participation, maybe a Joint sector kind of organisation to bring back prosperity to all members?
- The IT platform(front office and back office) was a critical enabling factor, could the DMO afford it? Who would take the risk and invest before members signed up to leverage this integrated platform? Who is the elusive but critical sponsor, putting in seed capital?
- Have Tourism boards been successful with DMO approach? Is this a passing fad or sustainable?
- Can we recommend to Huizhou a well thought of DMO based business model?
As you can see, one potential game changing idea and four very fundamental killer questions. Will share with you on how we went over these and emerged out of the woods. Coming back to the media question ‘Is DMO a proven business model and how would it specifically solve Huizhou’s tourism problem?’ The IBM team had to produce fact based, expertise backed solid answers. I will begin my next blog with answers to these questions
Ravi Shankar S N, Global Leader Travel & Transportation Centre of Competence, IBM
These are the views of the Blog author and not of IBM