Sustainable Growth at the Destination Marketing Industry

  • Published by Vedat
Investment in official destination marketing organizations (DMOs, also known as convention & visitors bureaus or tourism offices) continues to grow at strong, sustainable levels.

It is according to a new study just released by Destination Marketing Association International (DMAI). The new 2013 DMO Organizational & Financial Profile Study shows the average DMO budget broke the US$3.0 million mark in 2013, a 3% increase over 2012. The study covers detailed findings from nearly 220 U.S and Canada-based DMOs.

"We've long believed in the power of destination marketing - creating incremental travel demand, visitor spending, supporting new jobs and new taxes for their communities," said Michael Gehrisch, DMAI's President & CEO. "The growth we're seeing in DMO budgets is due to successful marketing spurring travel and spending, improvements in the economy, and a combination of increased public investments and creativity in private sector partnerships."

A significant percentage of this growth can be attributed to an increase in public investment, which grew an average of 4% to US$2.4 million. More than three-fourths (79%) of destination marketing organizations receive public investment in the form of hotel taxes, averaging 75% of all DMO revenue. As travel demand increases, hotel demand follows suit; data from Smith Travel Research supports this story, indicating back-to-back years of record demand in 2011 and 2012 for the U.S. hotel industry.

However, not all of the increase in DMO budgets can be attributed to growth in hotel taxes. Increasingly, destinations are implementing new mechanisms to augment their investment in destination marketing and travel demand to reap greater returns for their communities. One out of seven destinations reported increased investment through a Tourism Improvement Districts (TID), Marketing District Assessment (MDA) or voluntary marketing fees.

Community leaders from a wide range of markets are recognizing the benefits of marketing their destinations and upping the ante in promotional efforts in places like Dallas, TX; Hilton Head, SC; Indiana Dunes, IN; Los Angeles, CA; Portland, OR; the State of Florida and Washington, DC.

In terms of private investment, 42% of DMOs generate revenue through membership dues while 35% report new partnership revenue streams. Destinations are rethinking their structures to better align member and partners goals with consumer needs. The San Francisco Travel Association, the official destination marketing organization for San Francisco, has completely redesigned its partnership structure, allowing partners to choose the level of services being provided and the markets they wish to target.

The bi-annual study from DMAI focuses on critical topics - revenue sources, program expenditures, organizational structure - and provides DMOs the opportunity to benchmark themselves with industry norms and other DMOs in their budget category, and identify opportunities for improving their performance.

The report is available for purchase at DMAI's Product Store. The 2013 edition of the study is being offered through a bundled package - including an online Searchable Results Program as well as the Full Report. The Searchable Results Program is an easy-to-use online program that allows the flexibility to customize unlimited data searches using criteria such as budget and individual respondents. The Online Searchable Results Program (and companion Full Report) is available to DMOs only, at a price of $450 for DMAI members and $650 for non-members. A consolidated version of the report can be purchased by non-DMO member organizations for $150, and $250 for non-member organizations.

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