Making Partnerships Work in Tourism

Partnership defined

Modern business theory stresses the importance of partnerships, cooperation between organisations with mutual interests, as well as emphasising the importance of networking for individuals and organisations.

It is in this context that we have seen a growth, albeit in varying forms, of the concept of partnership in the business world. For example, there is the fashionable technique of relationship marketing which is really about partnerships between companies and their customers, at least in theory. At the same time, there is an increasing interest in supply chains, with a growing emphasis on links between producers and their suppliers to ensure the quality of the final product.

In today’s highly competitive tourism industry, we have also seen the application of the idea of partnership and cooperation amongst former competitors in relation to strategic alliances in the airline sector, for instance.

Meanwhile, in the hotel sector, franchises and management contracts represent another version of the concept of partnerships.

In the UK tourism industry, however, we have seen two main types of partnerships developing, namely:

• marketing consortia of visitor attractions in a particular geographical location or in a similar market,
• the growth of joint public-private sector partnership destination marketing agencies, based on the model which has been in existence for decades in the USA.

In this paper we will focus on destination partnership organisations in the UK, beginning with a brief discussion of the types of such organisations that exist and the rationale behind them.

Models of destination marketing partnerships in the UK

There are many different models of destination marketing partnerships in the UK, including the following:

• the destination marketing agency which is wholly controlled and funded by the public sector, with the private sector simply being consulted;
• the agency which is controlled and largely funded by the public sector but the private sector can ‘buy into’ particular marketing activities on a one-off basis;
• the agency which is controlled and funded jointly by the public and private sectors;
• the agency which is mainly controlled by private sector interests, but most of the funding may well come from the public sector.

However, we need to make a number of general points about these destination partnerships in the UK, as follows:

• Some are highly-formalised legal entities while others are more informal, loose consortia.
• They tend to focus just on marketing issues rather than the broader matter of destination management.
• They exist at different geographical levels from individual towns or cities to counties and even regions, and some times their areas of influence can overlap.
• Some agencies focus on a small number of large private sector players, while others try to embrace the whole local business community.
• The partnerships seem to be more highly developed in the newer city destinations than in traditional seaside resorts.
• In many places, destination marketing is still largely a public sector activity with little real private sector involvement.
• The growing role of regional development agencies in destination marketing is creating links between tourism and other industries in destinations.
• The role of the private sector and the level of funding for destination marketing agencies is much less in the UK than in the USA.
• The concept of partnership in UK destination marketing is more highly developed than in many other European countries.

In the marketing of the UK as a whole, the concept of partnership between government and the private sector has long been an aim of the national tourist boards, the ETC, the BTA and now VisitBritain.

The rationale for public-private sector partnership agencies in destination marketing

Before deciding why partnership agencies in destinations succeed or fail, we need to be clear about the rationale which underpins them.

Traditionally, destination marketing in the UK, as in other countries, was a government activity, and largely that of central government. Then, local authorities became involved, particularly in the 1980s and 1990s when it seemed as if every council was trying to put its area on the tourist map.

Slowly, particularly in the more recently developed destinations, the public sector recognised that its ability to market its area as a destination was hampered by its:

• limited budgets and the fact that tourism marketing was often one of the first budgets to be cut when things got tough;
• lack of specialist, trained staff;
• lack of control over product, price and distribution in relation to the marketing of the destination;
• slow, complex decision-making processes.

At the same time, local government, in particular, found itself being criticised by key stakeholders in terms of its destination marketing role as follows:

• local people were often concerned that general tax income from the whole community was being used to promote tourism for the benefit of a small number of private sector enterprises;
• the local tourism industry complained about the ineffectiveness of public sector destination marketing.

The public sector has, therefore, sought to involve the private sector more and more in destination marketing, primarily to attract extra sources of funding for destination marketing.

In return, of course, the private sector demanded a voice on how the budgets were spent and the marketing priorities.

At its theoretical best, the partnership tries to bring together and harmonise the often very different approaches of the public and private sectors, including the following.

Let us now look at the factors that limit our ability in the UK to create such ideal destination marketing partnership agencies.

Key issues in the success or failure of destination partnerships

Many factors influence the success or otherwise of partnership organisations in destinations, including the following.

1. Adequate funding

Destination marketing agencies need money for both their organisation and their marketing activities. There is a need for continuity in funding, too, or the agency can look like a roller-coaster, going up and down depending on funding levels, which does not create confidence in the marketplace. Partners need to be willing to commit funding over a period of years. However, it is difficult for private sector organisations to justify continued funding if the agency does not bring the company short-term tangible financial benefits.

It is often more difficult to find funding for the payment of staff, upkeep of offices, and so on, because while the private sector is happy to contribute to marketing campaigns which bring extra business, it is often less happy to fund what it may see as a ‘mini-bureaucracy’ and its overheads.

One solution to this can be for the public sector to fund the staffing and offices and for the private sector to fund the marketing activities from which they benefit. However, to justify this the public sector has to be seen to receive direct benefits from this arrangement, otherwise it can be seen as an unacceptable use of public money.

2. Dependence on project funding

Many destination partnership agencies in the UK were created with one-off funding, perhaps from the European Commission or government sources as part of broader tourism and economic development or regeneration programmes.

This can help get initiatives off the ground but the risk is always that once the funding runs out the partnership collapses because:

• The local public and private sectors are unable or unwilling to fund the agency, perhaps due to the fact that they may not have been involved in the original programme which may have been created by an external body with no real local foothold in the community, and for which locals feel no real sense of ownership.
• The original agency was too ambitious in scale for the destination because money was available and had to be spent, but can no longer be sustained by the local community.

Membership-based partnerships

To ensure a feeling of ‘ownership’ in agencies and to give them a sound financial base, many partnerships have membership schemes. However, these schemes, while attractive, have some drawbacks as follows:

• managing a membership scheme is administratively time-consuming and costly;
• fees often have to be low to ensure as many people as possible join, which can limit the income potential of a membership scheme;
• new and emerging destinations may have few established tourism enterprises which may be considered as potential members for an agency;
• members usually want a voice in the running of the agency of which they are members, which makes decision-making complicated and slow;
• every member will demand tangible benefits from their membership, which may mean the agency has to neglect strategic longer-term developments in favour of short-term tactical marketing to deliver short-term business benefits to members.

4. Trading activities

One way in which partnership agencies can create a stable funding base is to engage in trading activities. These may involve operating an accommodation booking service for a fee, running their own package holidays, selling souvenirs and tickets, and so on. However, this is often seen as unfair competition, and opposed by local businesses, many of whom could be members, or potential members, of the agency.

5. Participation in the partnership

A major issue is always how many organisations can and should be involved in the partnership and what form their participation should take. Often partnerships opt to focus on major commercial concerns in a destination, most of which tend to be hotels, as well as representative bodies, such as hotel associations. However, this approach is open to the accusation that the interests of small and medium enterprises [SMEs] are not properly reflected in such an approach, given that SMEs are the heart of the tourism industry in most UK destinations.

At the same time, the dominance of hotels in many partnerships can lead to the role of other sectors, such as visitor attractions and transport, being under-represented and under-valued. On the other hand, the focus on a small number of leading players undoubtedly makes the partnership easier to manage. The smaller the destination, the easier it is, perhaps, to involve a larger proportion of the tourism industry in the work of the partnership.

6. Management structure and decision making

The desire to be fully democratic is natural, given that these agencies usually operate on behalf of the whole destination community. However, this is not easy to put into practice, without creating an unwieldy bureaucracy. The main issues are:

• balancing the role of the public and private sectors;
• the extent to which influence in decision-making reflects the scale of financial contribution made by an organisation;
• ensuring the decision-making structure is streamlined and capable of responding quickly to changes in the market.

Sometimes local authorities are accused of dominating the management of partnership agencies and making them over-bureaucratic. However, it can be difficult to involve entrepreneurs fully, as they are often unable to devote the time to helping manage the organisation because of their commitment to running their own business. Another problem can be that representative bodies, such as Chambers of Commerce and Hotel Associations, may nominate people to serve on the boards of management of partnership organisations who may not be that interested in its work and/or may not be able to make an effective contribution.

An often overlooked aspect of managing agencies is the need to involve people who can work well together and where a real bond and creative ‘chemistry’ can be developed, with people feeling passionate about the organisation.

7. The ‘demonstration effect’ and entrepreneurs

It is often difficult to persuade entrepreneurs to give time and money to help create a partnership agency. Often the most effective strategy may be to identify the most innovative, dynamic, visionary entrepreneurs in a destination and persuade them to participate. Effort should then be made to work with these people to develop tangible initiatives that are seen to bring in concrete new business to the entrepreneur.

Once less adventurous entrepreneurs see their neighbour/competitor getting something out of the partnership, many of them will want to participate. This phenomenon could be termed a ‘demonstration effect’.

8. Communication, transparency and fairness

Another factor which influences the performance of partnerships is the question of communication, transparency and fairness. Partnerships have to tell stakeholders – members, founders, local residents, the tourism industry nationally and internationally, the media and so on – what it is doing. Its activities, particularly its financial management and activities, have to be transparent as they are often being paid for partly by public money, and on behalf of the whole destination community.

Where there is a membership scheme, it is also vital that the partnership treats all members fairly rather than favouring any particular member, in terms of the placing of accommodation bookings via tourist information centres, for example.

9. Delivering benefits to all partners

To create a sense of ownership and loyalty to the partnership organisation, each partner has to receive benefits. For businesses this tends to mean revenue which would not have been forthcoming without the actions of the partnership. It is not always easy to identify such new business, and there is always a danger that it could simply be a matter of business moving from one local enterprise to another. However, it is important to recognise that not every partner can, or will, measure success purely in terms of revenue.

Local government may be impressed by the amount of media coverage the partnership gains for the destination and by awards and peer group recognition received by the partnership. Politicians may be particularly sensitive to the opinions of local voters, even those not directly involved in the tourism industry.

The importance of perception and image should not be overstated; the agency has to be seen to be successful and dynamic, even if the marketing is a little less impressive, in terms of real, tangible results.

10. Reputation in the industry

To be effective, destination marketing agencies have to have credibility with the wider tourism industry outside the destination, including tour operators, airlines, hotel chains, travel journalists and so on. This means having qualified, experienced staff who can speak the ‘language of tourism’ convincingly. They must also be able to provide professional services which are of interest to these external players. Their external reputation in turn also greatly influences their ability to lobby the government and the European Commission to provide support for the partnerships.

11. Links with other industries

This is a controversial issue in the UK now as many destination marketing agencies find themselves increasingly linked in to agencies with a wider economic development/regeneration agenda in the regions. Those in favour of this trend believe it is right to do this, as tourism is just one strand of the economic development of any destination, and some general regional development techniques, such as ‘clustering’, are as valid in tourism as in any other economic development activity.

They may also argue that tourism promotion improves the image of an area so that it also becomes more attractive for potential inward investors from a wide range of industries. Opponents argue that tourism is different, maybe even unique, and the success of the destination marketing agency depends on them being highly specialised and focused on tourism alone.

More than just promotion

To effectively market a destination, the agency obviously has to go beyond just promotion through trade exhibition attendance, glossy brochures, joint advertising campaigns and so on. They also need to influence the other three Ps of the marketing mix, even if this is only through voluntary action with the private sector. For example, successful agencies should aim to:

• improve product quality in hotels, attractions, and in destination transport systems,
• ensure visitors receive value for money and that prices are competitive,
• play an active role in the distribution of the product of the destination which may involve packaging and marketing through intermediaries, such as travel agents, group trip organisers and tour operators.

It is difficult to market anything effectively when one can only influence a single element of the marketing mix, but in the UK this is currently the reality.

13. The geographical boundaries of destinations

It is probably important that destination partnerships and their areas of influence should reflect tourists’ perceptions of the destination, and its geographical boundaries, rather than being constrained by local government boundaries which are largely irrelevant to tourists.

At the same time, it seems that some agencies cover areas which are too small for sustaining a viable organisation, so there may be scope for a rationalisation and consolidation of agencies, while not becoming too large for local enterprises to feel they are relevant to their businesses. There is also a need to look at how local partnerships relate to VisitBritain as an organisation.

14. Clear objectives

Like many marketing organisations, clear objectives are an important pre-requisite for success, and they also need to be realistic given the size and nature of the destination, and the scale of its budget. Some partnerships seem to set themselves unrealistic, over-ambitious aims, partly because of the need to impress potential funders. This may lead to disappointment and a withdrawal of support when these targets are not achieved.

Towards more successful destination partnerships

The UK has some very successful destination marketing partnerships at the local level, and, in general, the concept of partnership in destination marketing is more highly developed in the UK than in many other countries around the world. However, the author believes that UK destination marketing partnerships could be even stronger and more successful if they were to develop the concept of partnership in the following ways.

1. Broadening the scope of destination partnerships so their role extends well beyond traditional marketing activities. They could for example:
   • Play a greater role in the collection and dissemination of marketing research data to their partners.
   • Spearhead area-wide education and training initiatives providing continuous professional development [CPD] for workers and managers.
   • Take a larger role in trying to enhance quality control and customer satisfaction.
   • Act as a single voice, lobbying for the interests of the tourism industry in the destination with national government and the European Commission.
   • Set up a buying service by which members can obtain better prices for the goods and services they need through bulk purchase of these at discount prices by the partnership as a whole.
   • Work on a ‘hearts and mind’ campaign to convince the local community of the value of tourism for the area.
2. Developing other types of partnerships rather than just those within the public and private sector tourism interests within a particular destination. These other types of partnerships could include:
   • The development of long-term formal partnerships between the destination and external tourism organisations, such as inbound tour operators, through which the latter would be viewed as ‘preferred partners’.
   • Formal links between the tourism industry in a destination and education institutions which are involved in tourism, so that the destination could benefit from what education institutions can offer, from student placement to consultancy and research. Furthermore, in this way the importance of colleges and universities in bringing ‘visiting friends and relations’ tourists into a destination could be recognised.
   • Trying to build bridges in the destination between tourism interests and other sectors of the local economy.
   • Relationships between different destinations which offer complementary products, and where cooperation could allow both destinations to target particular markets more effectively.
3. Partnerships could reinforce their role in the destination, and increase recognition of their value, by doing more to promote social inclusion in tourism, through schemes to encourage participation in the tourism industry by women, young people, those from disadvantaged backgrounds, and people with disabilities.
4. They could also play a valuable role in the community by helping stimulate the growth of entrepreneurship and the creation of SMEs in the area, so that the needs of the local industry could be met locally, thus reducing the need to source supplies from outside the community. Interestingly, both of these initiatives could well attract funding for the partnership from the UK government or the European Commission.
5. There is a need to recognise that partnership development and management is a skilled business that requires people with specific skills. To be effective, partnership meetings also need to be chaired by someone who is a good facilitator.

Otherwise it is mainly a question of managing the issues raised earlier in the paper.

There is already much good practice in the UK but there is huge scope for the further development of the partnership concept in the UK tourism industry. However, there is also the threat that if the concept does not develop in the ways suggested in this paper, then partnerships may stagnate and fail. If this happens it is much more difficult to persuade people to become involved in any future partnership, on the grounds that ‘once bitten, twice shy’.

Two key challenges for UK tourism partnerships

The author feels there are two clear challenges facing UK tourism partnerships today, one internal, the other more external, as follows

1. There is too much confusion and uncertainty within the UK, in general, in the field of destination marketing, which needs to be resolved if partnerships are to flourish, including the following issues:
   • The role of VisitBritain, given the need for a strong central organisation to provide the strategic vision for the future marketing of the UK as a destination. The recent reorganisation and the creation of VisitBritain, while probably sensible, has created confusion at a generally difficult time for the tourism industry.
   • The continuing dichotomy between the marketing of the UK as a whole and the marketing of Northern Ireland, Wales, Scotland and England; and the perceived weakness of the marketing of the latter as a destination in its own right continues to cause difficulties.
   • The UK situation is further complicated by the fact that the Mayor of London has a statutory duty to promote the city overseas.
   • Though reduced, there is still complexity in the UK system through the continued separation of inbound and domestic tourism marketing.
   • The Regional Tourist Boards in England have gone through, and continue to go through, a period of change in their role in parallel with the growing involvement of the regional development agencies in tourism marketing. This trend clearly puts tourism at the heart of economic strategy in the regions. However, people in the tourism industry believe tourism is very different to other industries, rightly or wrongly, and are not always happy that tourism should be subsumed into the broader economic development agenda. If regional tourism partnerships are to be developed successfully, this perception could become an obstacle.
   • A number of local, informal, loose destination marketing partnerships or associations seem to be finding it difficult to develop further or even to continue at their present level of activity, due to funding problems. It is ironic that when millions of pounds are continuing to be invested in new tourism projects using National Lottery and European Union money, less money appears to be available to help create sustainable partnerships to market the destinations in which these projects are located.
2. While the UK is ahead of most European countries in the development of destination marketing partnerships, it is still in a relatively weak position, in terms of competition in the international tourism market with other countries, in some ways:
   • Ireland and France, two of our closest neighbours and main competitors in the international tourism market, both have particularly effective approaches to marketing their countries as destinations.
   • The partnership agencies in cities in the USA, for instance, are much better funded than those in the UK. The Las Vegas Convention and Visitor Authority in 2003 was able to spend US$147,496,265 (around £95 million, at the time of writing) on marketing their resort city. By contrast, in 2003-2004, VisitBritain has only around £50 million to promote the whole of Britain overseas. It is also noted that the total budget for marketing England was £14.1 million, just a third more than the budget of the New York Convention and Visitors Bureau. While it is always difficult to compare statistics, these figures tell a clear story that destination marketing in the UK is under-funded.
   • In many European countries where there is little or no partnership in destination marketing, governments spend a lot of money themselves on destination marketing.
   • More and more destinations around the world are developing very efficient and effective destination partnership agencies that help them compete with the UK. The excellent Hong Kong Tourist Association is an example of one such organisation.

Conclusions

The concept of partnership is a pre-requisite to successful destination marketing and management today. The idea of partnership in the UK, particularly between the public and private sector, while not as highly developed as in the USA, is, nevertheless, much stronger than in most other countries in Europe. However, the idea of partnership is slowly developing in these other countries so we need to make our partnerships in the UK more effective or we will lose this ‘competitive advantage’.

However, we must always be careful to ensure that cooperation and partnership does not go too far, to the point where it reduces healthy competition. Instead, partnerships should be about encouraging competition where appropriate but cooperating where it makes sense in terms of helping attract tourists to the destination in the first place.

It will increasingly also be about cooperation to help effectively manage tourism within the destination. Thus, it is clear that effective partnerships could help the UK achieve even greater success in the global tourism market. But for this to happen, VisitBritain will need to lead from the front, working in partnership with the UK tourism industry, and encouraging local destination partnerships.

About the author

John Swarbrooke is Head of Tourism and Hospitality at Sheffield Hallam University. He has been involved in the setting up and running of destination marketing partnership agencies in the UK and Greece. He has also written, widely, in books and journals on destination marketing and has been an invited keynote speaker at major international conferences on destination marketing in more than a dozen countries in recent years.