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Coordination of tourism

19 January, 2016 - 17:57

A community's tourism industry requires a diversified organizational structure capable of handling many responsibilities. Promotion, budget and finance, training and education, research and data collection, and communications are also responsibilities of the tourism organization. Coordination of this organization is not a process which just happens, it has to be planned; each element in the organization should contribute to the success of the master plan. Whoever leads the program must be responsible for coordination—the tourism council, a tourism committee in the Chamber of Commerce (COC), a tourism committee in the city council, or a hired director of tourism.

One aspect of coordination is flexibility (the ability to change objectives as needed). Close coordination between organization elements helps avoid duplication of efforts. Clearly defined objectives and assignment of responsibilities will also be beneficial to the coordination process.

The problem faced in overall coordination is to see that each goal established fits into the master plan and that committees work toward goals at the proper pace. Usually, the overall plan will call for certain priorities. To avoid bottlenecks certain actions have to happen before other things can happen. The coordinator must be aware of this process and organize the plan of action so it is done in the proper sequence.

In its simplest form coordination is a communications issue concerned with the two-way sharing of information at each level of development (initiating, developing, implementing, evaluating) and by each component of the tourism industry. These components will be discussed in the section that follows.

Communications

Coordination requires efficient ways of communicating. Channels should be as direct and simple as possible; they must be well-defined and understood by everyone involved in the organization. Each person in the program should know how word about each activity is to be spread to those who need to know.

Channels need to be established; within the community; between the community and the tourist; between the community and external segments of tourism such as other organizations, travel agencies, and tourism organizations; and among the various interests that make up the tourism industry.

Some of the most common methods for constructing an effective communications function follow.

  • The tourist center is most effective for welcoming tourists, providing information about all attractions in the area, local customs, and laws. Community attractions literature and fliers for special events can be distributed here.   The visitor center can provide a communications vehicle between tourist and community. Compliments and complaints should be handled with equal ease. Complaints should be given special attention, however, because poor handling indicates a disregard for the tourist.
  • Well-trained service people. In many communities service personnel will interact with more tourists than the visitors' center. It is most important that they know the community and current events.
  • Good signing on the streets and highways. This is a basic type of communication. It says to the tourist: "We are concerned that you do not waste your time finding our attractions."
  • Meeting, forums, discussion groups, board and committee meetings open to the public, and special planning or problem solving meetings. These are especially important in communicating with people in the community.
  • Organized dissemination of information through newsletters, special reports, local newspaper editorials, radio and television news reports. Publicity (non-paid advertising), though generally administered through the promotion committee or department, may also emanate from local government and political sources, private business, and other organization sources. When they are issued by other organizations, it is important that the tourism organization be informed beforehand so that potential conflicts do not occur.

Obviously, communications and coordination must go hand in hand if the organization's efforts are to succeed. Good communications require good coordination and good coordination demands good communications. Therefore, in planning the communications and coordination functions, one must be careful to select those persons who can create the environment in which these functions may effectively occur.

Research and data collection

The process of determining what is happening and what is most likely to happen is a continuous one and basic to good organization and management. Managers also need to know what their best alternatives are for each decision. Supplying these types of information is the responsibility of the research arm of the organization.

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Figure 9.3 Tourists like a warm welcome. 
(Courtesy Hong Kong Tourist Association.) 

Size and degree of sophistication of this arm depends upon the amount of resources the organization feels it can, or wants, to devote to it. Small communities can use fairly simple ways of collecting information, but should keep in mind that the results are likely to have some errors. The study of the section on data collection will reveal a number of basic rules which can be employed to cut error in the results.

Likewise, the amount of analysis to be expected from the research arm depends upon the quality of personnel working there. For many uses, the analysis can be quite simple. For others, this may not be true. Information is basic to good decision making and every possible effort should be made to get the best information available and have it delivered in the most usable form.

The following are illustrations of problems where good information is important to the solution:

  • Promotion: the kinds of promotion, geographic areas in which it is done, and timing depend upon a knowledge of the potential market for a community's attractions. It would not do much good to advertise in a magazine having only national circulation, if your only chance to draw customers was from within 800 kilometers of your community. You do not usually advertise a ski area in the spring. Certain kinds of attractions appeal to older people, so promotion of these in media they read gives you the best return on advertising dollars.
  • Visitor satisfaction: You always want to know if you are sending away satisfied customers. The only way you can really find out is to devise some way of asking them or of keeping track of repeats and referrals.
  • Changes in numbers of tourists: Season to season comparisons enable managers to determine how much change to expect in the present year and when to increase promotion efforts. Expenditures by tourists for various goods and services combined with some knowledge of size of the local multiplier would enable administrators to communicate the importance of tourism to the local economy. This will help to gain community support.
  • Knowing types of people visiting your community could be of help in planning for future operations, understanding some of the problems you are facing, and improving your communications. Knowing changes in the supply of tourism attractions and facilities in your region, state, and nation could help you gauge plans for expansion in your community. This may not now be a problem in your area, but it would be well to know when it might be.

Each community has to decide how much importance to attach to research. The general inclination seems to be to do too little of it. Making decisions based on inadequate or erroneous information leads to waste. Many communities never know whether their operations are getting results or not since their research is inadequate to tell them.

Education and training

Since tourism is a hosting industry, methods of training those who come into contact with tourists are very important. The development plan should examine ways of doing this most efficiently and lay out a blueprint for its accomplishment.

A major problem in training employees of service stations, cafes, motels, and retail stores is reluctance of employers to give them time (with pay) for such training. Even though most of these firms are regarded as part of the industry, they sometimes fail to identify their welfare with that of tourism. The tourism organization needs good communication on this point with employers.

In addition there should be methods developed to have a well-informed public. Both of these functions should be allowed for in the organizational structure.

Data collected on the number of tourists visiting the area, what they do, how much money they spend in the community, and where the money goes, should be explained to the general public. This assures that the public will be aware of the importance of tourism to the local economy and that their contacts with tourists could also affect its success.

For the tourism organization to be effective, it must not only communicate the information the community wants, but also communicate with the community itself. Here, residents as well as special interest groups must have a mechanism available for communicating complaints, ideas, and opportunities, and for reporting on changes that should be made in some aspect of the tourism program. A good mechanism would be periodic public meetings of the tourism council. Having the tourism director or an associate available for discussion at regular times could also help.

Promotion

Although promotion is really a part of the overall communications concept, its importance in most tourism programs indicates that it should be viewed in the organizational structure as a separate and specialized function requiring professional expertise. It includes:

  • advertising
  • publicity and public relations
  • sales promotion
  • personal selling

The manner in which these are integrated is called the promotional mix.

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Figure 9.4 Know the types of people who visit your community. 
(Courtesy Hong Kong Tourist Association.)  

Advertising involves developing a campaign theme, selecting those media that best reach target market audiences, and preparing or ordering the necessary art work, copy, printing, and other production materials to meet media schedules.

The publicity function manages all matter relating to the issuance of news releases to local and national media; staging publicity events; and performing supportive services for the other functions comprising the promotional mix.

When a community commemorates a special day, occasion, or historical event, it uses the vehicle of publicity to promote interest in it. The main purpose of publicity is to focus immediate attention on the subject. If the event is well staged, the news releases are well written and placed with appropriate editors, and are of real news value, they will be published or presented by the media. If it is a gimmick of little news value, and is an obvious attempt to focus attention on a minor event, it will be ignored.

Many communities hire publicity agents to create and publicize various events such as beauty pageants, contests, auto shows, and Easter parades. A good publicity agent can get a great deal of experience out of a well- presented event. He can also get a lot of bad publicity for the community if the event is a flop or if something unfortunate happens as a result of the event. Some events have been so well publicized that they attracted too many people to the area, and this resulted in fighting, drunkenness, and considerable police action which turned a good event into a bad one. Several "rock music shows" and some state fairs have had such negative experiences.

While publicity and public relations are usually considered simultaneously, they tend to have different perspectives and responsibilities in contributing to a successful promotional mix. Whereas publicity is generally designed to focus attention on special events and communication of specific information, public relations is designed to be an ongoing function that performs a supportive service for the entire tourism organization as well as the community.

In public relations (PR), the concern is with the various "publics" whom the organization has identified as being important to the accomplishment of its mission. Those publics that usually require special relationships and programs are:

  • general public
  • media
  • governmental agencies
  • employees of the tourism organization and support facilities
  • special interest groups (historical societies, attractions and amusement operators; hotel, motel, restaurant groups, and others)

The PR function may also be a troubleshooting function in problem-solving situations, or it may be a function that helps spread community good will, and provides the "grease" in implementing the decision process.

Sales promotion is the sub-function responsible for strengthening the advertising and personal selling function. This function is also described as the "enhancer" or the "extender" of the advertising and selling of the community's satisfactions at special shows, such as recreational vehicle shows, boat shows, hotel, motel and restaurant association shows. It also develops exhibits, displays, and other materials that encourage tour directors and travel agencies to include the community in their patrons' travel plans. It provides for concessionaires and the distribution of promotional items such as t-shirts, maps, directories, souvenirs, and other special promotional devices that add to the overall program.

The personal selling part of the promotional mix addresses its efforts to the personal contact work that must be done with tour directors, travel agents, and private organizations that may want to vacation in a community. The selling function is also utilized along with public relations' efforts and trade shows and other activities where it is advisable to have personal community representation available to provide added sales pressure in selling the community to others.

Budget and finance

The organization structure must have a sound system of fiscal management. This system will include provisions for generating or receiving funds as well as sound policies and practices for expenditures and accounting.

All organization structures require operating funds. The funds for salary and wage, office space and equipment, supplies, postage and funds necessary for accomplishing special responsibilities such as promotion and advertising, education and training, research and data collection, are a part of the normal operating expenses of the organization. The amount of funds needed will depend upon the size and scope of the organization and its responsibilities. Inadequate funding can kill a good program.

A good accounting system will identify where money is spent, how much, and for what purposes. The system needs to include features and procedures which demand honesty and periodic accurate reporting.

Initial planning for the organization's responsibilities and objectives must consider the method of financing the program. You waste time planning something for which adequate funds are not available. Careful consideration should be given to the conditions and procedures through which funds are collected and allocated to the tourism organization.

An example of how this issue could be a concern may be found in the collection of the lodging tax by a city with allocations made to the tourism organization by the city council. From year to year the attitude about tourism may fluctuate and funds may be directed to streets, sewers, and other municipal concerns. Although these projects may be deserving, the problem is that the tourism budget remains uncertain and dependent upon the whims of individuals with other interests.

Methods of funding fall into two major groups: funding of operations and promotion and funding for capital improvements or development. These probably represent 75 per cent to 80 per cent of the ways in which communities support tourism development and promotion. The list is by no means exhaustive and continued investigation turns up many unique and creative methods of funding Chamber of Commerce and tourism associations.

Several of the methods to be discussed will require state, regional, or local legislation or ordinances. Some of these methods may not be legal in some areas because of lack of state "enabling authority". Investigation will be required in each specific locality to determine whether or not some of the alternatives suggested are available. This is not to say, however, that groups local, regional or statewide could not together promote such efforts in the future.

Funding of tourism operations and promotion

Communities vary widely in how they organize to provide ongoing and sustaining emphasis for tourism both internally and externally. In many communities, the Chamber of Commerce provides the vehicle, in others it is a committee of that group, a separate visitors and convention bureau, a department of the city for tourism development, or in other cases a privately organized group representing tourism related business. Some of the options listed below will not be available or appropriate for each group, others may apply more directly to some groups than others. For example, allocations from the general fund would be more likely to fund a city organized department than a private group.

The transient guest tax is gaining popularity as the desired method of financing operation and promotion. It goes by many names including bedroom tax, lodger's tax, hospitality tax or resort tax, but basically it levies a tax, generally from 2 per cent to 5 per cent on hotel rooms, in some areas on apartments rented less than a year, or on restaurants or bars. This can raise considerable sums of money. In many smaller areas from USD 50,000 to USD

300,000 per year can be raised. In almost all cases, this requires passage of an ordinance by the city which may require a local public vote, and in many cases, requires state legislation authorizing such a tax. Communities are advised to check the state authorization before preparing campaigns on the local level.

In some cases, these funds are earmarked. This method of financing is usually resisted by local motel and restaurant groups as unfair taxation and imposing an extra burden on their business, while the larger chains usually see the benefit of it. The local residents usually will support such a tax since it is paid by visitors.

Mill levy on real estate property. This is not a commonly found method of financing local tourism operation and promotion. This method of financing, like the previous method, gives a consistent, permanent source of revenue.

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Figure 9.5 Taxes on meals can help fund tourist projects. 
(Courtesy New Zealand Tourist & Publicity Office.) 

This method tends not to reflect inflation as would general fund allocations or a per cent of the room cost, but stays at the same relative level except when new real estate property or new hotels, etc., are constructed.

General revenue funds from city, county, or region. This source of funding is probably used more widely than might be expected. A number of local tourism promotion agencies, whether they be Chamber of Commerce or other, receive allocations from the general funds of the city or the county, or in some cases, the state. Cities have excellent opportunity to expand the general revenue funds through statutes. The advantage of a general allocation is that the allocation can increase in size as the amount of funds coming into the city increases.

Some forms of the specifically earmarked general revenue funds in US states include:

  • earmarking of funds, such as, in Rapid City, South Dakota where the state gasoline rebate funds go directly to the tourism promotion agency;
  • Nashville, Indiana, which has merchant's license tax of USD 50, which goes directly for tourism purposes.

Limitations of this type of financing would be that the city is normally reluctant to allocate general revenue funds to agencies outside the city government framework over which they have little or no control. In some areas this may not be legal.

Matching funds. A number of states have programs where local funds can be matched by state or regional departments of tourism primarily for outside marketing and promotional efforts. Several states allocate funds to regions, which in turn match funds with local tourism promotion agencies.

In those states where matching funds are not now available, it is sometimes extremely difficult to get the legislature to pass legislation authorizing this arrangement, or to get them to fund the state department of tourism at sufficient levels to allow funds to be available for this purpose. However, this provides an excellent incentive and seems to provide a good deal of cooperation in the marketing area in those states which have it.

Membership dues and assessments. The most common method of financing the local tourism promotion agency or visitors' bureau is through membership dues, the method the Chambers of Commerce have used for years. In many locations, the visitors' bureau is a function of the Chamber of Commerce and a portion of the membership dues is allocated for that purpose. In other locations, the visitors' bureau is a separate agency, and is made up primarily of resort owners and/or other businesses that receive a major portion of their income from the tourist dollar. Their membership dues operate the center. In addition, there may be assessments for specific programs, activities, or projects.

Many times the membership dues are on a sliding scale depending upon the size of the business, the number of employees, and the benefits derived from tourism. The amount of funds received, of course, depends upon the size of the community and, to some degree, the success of the director of the bureau or center in convincing the secondary businesses that they are receiving benefits from the tourist dollar. Many communities have less than 50 per cent of their businesses as members of the Chamber of Commerce which presents a problem of limitation on the membership dues' method of financing.

The number of tourism businesses, resorts, or enterprises that are members of the local tourism organization will depend upon how high a priority the tourism industry has within the group in which it is organized. If the primary purpose of the Chamber is tourism promotion, more tourism-related industries will be members. If it is a secondary function, the number will be consistently less. The number of members also depends a great deal upon the ability of the executive director or secretary to educate the businessmen as to the value of the organization, its purposes, and the extent to which the businesses and enterprises benefit from the tourist dollar.

Special events and other "direct income producers". A number of communities use special events to provide or supplement their budgets for tourism operation and promotion. Asbury Park, New Jersey (US), has an annual Grant Prix Race by the local Chamber of Commerce primarily for fund-raising purposes. Hermann, Missouri (US), has an annual Maifest as well as periodic antique auctions sponsored by the local tourism and visitors' bureau to help fund the operations and provide funds for promotion. Numerous examples could be used to illustrate how events of a festival or special event nature can be used for these purposes. Cheyenne, Wyoming (US), has a tourism program financed by the receipts from "Frontier Days".

Festivals USA, a bulletin from the United States Travel Service, lists numbers of these by state which are organized by the local bureaus for the purpose of raising funds for tourism.

The disadvantage of this method of financing is that it requires an exceptional amount of work to organize and promote, as well as requiring the cooperation and support of a majority of businesses and organizations in the city. The amount of funds raised may fluctuate depending upon the weather, the interest of people in the activities, and such things as the availability of energy.

Advantages, however, include the fact that it does provide a focal point for community cooperation. Other direct income producers would include such things as the following:

  • Many communities have visitors' bureaus with souvenirs and other items for sale.
  • Frankenmuth, Michigan (US), has guided tours for a fee.
  • Several communities contact local commercial tour businesses to arrange for tours to stop in the community and have handled all of the lodging, food, and sightseeing arrangements for a standard fee.

These few ideas are samples of the potential in this area. Local creativity could add many more.

Funding of capital improvements or development

Sources of funds for capital development differ somewhat from those available for operation and promotion.

Local resort tax. A number of communities earmark a certain percentage of the local resort tax to be spent for capital development projects related to tourism. This insures a balance between internal expenses to upgrade the product to be sold as well as external expenses for marketing to bring the public to the facilities.

City capital improvement budgets. Another related form of capital funding is the inclusion of some building projects on the capital improvements development list of the city. While some facilities, such as historic redevelopment of homes, and for the most part of direct benefit to tourists, other capital developments such as golf courses, tennis courts, and restroom facilities, while primarily for the local public, can be of equal value to the tourist. The local park and recreation department may have a number of capital project needs which could be related to tourism development and their cooperation should be sought. Tourism concerns should be included in all planning of community facilities, particularly park and recreation areas, but also construction of other schools, buildings, and community facilities which might indirectly lend themselves to tourism appeal.

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Figure 9.6 Some resorts earmark a percentage of the local resort tax for capital projects. 
(Courtesy New Zealand Tourist & Publicity Office.) 

Voluntary contributions. Traditionally, voluntary contributions are more available and easier to generate for capital projects than for operation and promotion expenditures. In some communities asking for contributions is not considered at all, while in other communities, such as New Harmony, Indiana (US), over USD 21 million has been generated through various kinds of grants, contributions, and solicitations. Contributions are usually more substantial and consistent when a local historic foundation s involved, which can be the recipient of these contributions for tax deduction purposes.

Disadvantages of this method of financing capital improvements are the inconsistency of funds over a long period of time and the effort required to generate them.

Foundations. A very significant source of funds for capital projects and tourism development is the historic or museum foundation. Several communities visited had foundations that had as their primary purpose the acquiring and restoration of historic places, or the development and operation of a museum or both. Historical Savannah (Georgia) Foundation, Historic New Harmony (Indiana) Foundation, Historic Williamsburg (Virginia) Foundation, Greater Memphis (Tennessee) Foundation, Historic Lexington (Kentucky) Foundation, and Historic Fredericksburg (Virginia) Foundation are examples of foundations in the United States working in close association with local tourism councils to develop tourist attractions. One of the advantages of such a foundation is that it usually has a program of fund solicitation which is independent from the tourism council or the city. It is attractive to those who want to leave part of their estate to the foundation, or as a tax advantage for contributions. The independence of the foundation gives the donors additional assurances that their donated funds will be used to the best advantage of the community, and will be cared for in years to come.

Other types of foundations may also be of help. The Blandin Foundation in Grand Rapids, Minnesota, has USD 4 million of annual income which has to be spent on projects to enhance the local community. Much of this goes for projects which have tourism potential.

New Harmony, Indiana, received a grant from the Lilly Foundation of USD 25,000 for planning Historic New Harmony. Several years later, as they were progressing in their plan, this foundation contributed an additional USD 3.5 million.

Miscellaneous sources of funding for capital development. Sources under this heading may be for both operation and/or capital projects and are from a variety of sources. For example:

  • USTS provided a grant of USD 10,000 to Fall River, Massachusetts, to promote Bristol County to foreign tourists.
  • Bishop Hill, Illinois, received a National Endowment for the Humanities Grant to develop an orientation film.
  • Bishop Hill also received a federal community redevelopment grant from the Historic Preservation Act of 1956, National Park Service.
  • Several agencies have received Comprehensive Employment and Training Act funds for personnel salaries, consumer research programs, and evaluation of agency activities.
  • One community received a Housing and Urban Development 701 Grant to establish a new master plan for tourism.
  • Another community received 50 per cent matching funds for a water system from the Farmers Home Administration.

Once tourism has been established, funded, and coordinated and public facilities have been provided, you have something to sell the tourist.