1C: Engaging the Industry

Introduction

One of the main problems facing a destination manager is that much of the product that makes up a destination and shapes the visitor experience is not in their direct control. An effective, two-way working relationship with the industry is therefore vital in delivering a destination’s strategic objectives.

What is the "industry"?

"Industry" is a generic term that encompasses the individually owned and managed elements of a destination provided for visitors. It is also referred to as the tourism "supply-side" (as opposed to the tourism "demand-side" which describes the volume and value of visitors to a destination). It includes the following.

• Serviced and non-serviced accommodation – hotels, B&Bs, self-catering establishments, holiday caravan and camping parks, hostels.
• Attractions – visitor attractions, museums, galleries, countryside sites, boat trips, walking tours, etc.
• Food outlets – restaurants, pubs, cafes.
• Retail outlets – speciality and independent shops, outlet shops, shopping centres.
• Transport operators – train, bus and taxi service providers.

Most, but not all, of these businesses will be in private ownership. In some cases a local authority or charitable trust will own the business, and in the case of informal recreation sites (parks, nature reserves, popular countryside sites) these are mainly in public ownership. However, for the purposes of this article the "industry" is taken to mean all the elements referred to above.

Across these different sectors of the visitor industry there will be a range of business sizes and operations. The tourism industry is overwhelmingly made up of small and medium sized businesses (SMEs), particularly in the B&B, self catering and caravan and campsite sectors. This makes effective engagement with business not only more complex due to the spread of individual owners, but also more necessary to support them in the delivery of strategic initiatives they may not be able to implement themselves.

Large hotels and holiday parks may be owned and managed by national or international chains although there are still a significant number of independently-run large accommodation businesses often working together in marketing consortia (eg Great Western).

Why engage with the industry?

Many elements of a destination's development and marketing strategy will rely heavily on the active involvement and co-operation of the industry to be adopted or implemented successfully. These will include:

• quality assurance, training, and skills development programmes
• "green" business development programmes
• visitor information provision and visitor management plans
• development and adoption of destination core brand values
• ensuring the visitor welcome is consistently good and reinforces brand quality
• support for marketing programmes.

Effective industry engagement allows destination managers to promote these programmes and manage their implementation.

Very importantly, it also allows the industry, on whose behalf the destination manager is working, to inform the strategic planning of the area and influence the content and delivery of development and marketing programmes. This creates a virtuous circle whereby the industry buys into destination management programmes because they feel an ownership of them, which in turn makes their promotion and implementation easier across the destination.

Strong industry support for programmes is important in establishing good take up of initiatives in all sectors through peer group recommendation. Industry pressure to conform to destination standards is also a key factor in bringing hard-to-reach sectors of the industry into programmes.

Strong industry involvement in the destination management process can also create a strong sense of local pride, creating industry ambassadors for the destination and its product.

How to engage with the industry

General principles

There are certain issues that should always be borne in mind when setting up engagement structures.

• Style and tone. The aim is to create an active two-way dialogue with the industry members to make them feel initiatives are as much theirs as they are the destination manager's. Structures that are clearly led and dominated by the local authority or public agency will have much less chance of generating a shared approach and may see the industry drop away from what they see as an overly bureaucratic or "political" structure. There is a strong argument for creating structures that are industry-led in that agendas are drawn up, meetings are chaired, and programmes are designed by the private sector, with assistance from the destination manager.
• Industry champions: Most successful industry networks or partnerships are led by a small number of key industry champions: business leaders who are willing to work with a destination manager to build effective engagement structures. They may go on to lead any resulting partnership structure and act as the mouthpiece for the industry. Initially they are crucial in assisting a destination manager to galvanise the industry and to advise on the engagement programme to maximise its effect. Industry leaders are likely to emerge in the early stages of setting up an engagement structure, but it may require a direct approach from a destination manager to ask an individual to take on the role.
• Seasonality. The industry is less likely to be actively involved in destination management issues during those periods of the year when they are busy running their own businesses. Meetings, forums, training programmes, etc should be planned accordingly.
• Time commitment. Businesses do not have a great deal of spare time to get closely involved in detailed destination management work. A balance needs to be struck so that the industry feels they have an active involvement in developing and marketing a destination, but are not consulted at every turn, or asked to take on the delivery responsibilities of programmes over and above managing their own business. The role of the destination manager is to facilitate and deliver the detail of programmes agreed with the industry. This is very much easier in an atmosphere of mutual trust and support.
• Actions not words. Many businesses will be deterred from engaging with destination managers if they feel that the structure created is simply a talking shop that does not directly influence or take specific actions. This is related to the style and tone of the engagement process and also the need to link it closely and transparently to decision-making processes to ensure that there is a clear link between decisions agreed with the industry and actions taken by the destination management.

Level of engagement

There are a wide variety of ways that engagement with the industry can be carried out, from once-a-year meetings to fully-formed partnership structures. Much will depend on the resources available to the destination manager to develop and administer the process.

Generally speaking, the more developed an engagement structure, the better the working relationship between the destination management and the industry – assuming the general principles are followed.

The range of engagement can include setting up and managing a system of regular communications to the industry – e-newsletters, business opinion surveys, marketing opportunities, annual reports, etc. This allows information to be passed out, but is not effective in creating a two-way dialogue. Whilst these are important tools in an industry engagement programme, they should be run in conjunction with structures that are designed for the industry's views to be heard.

E-networks and Internet forums as a means of generating debate within the private sector have not been a conspicuous success, demanding too much of a business’s scarce time. This essentially means that effective two-way communication needs face-to-face engagement. The options include the following.

• Annual visits by destination staff (often TIC staff) to businesses. This is resource intensive and very useful in creating a working relationship between staff and businesses, but can be difficult to use as a structured feedback system.
• An annual forum – at the simplest level, an event to which all the destinations businesses are invited to hear about and comment on destination management plans. This has a low resource input but engagement with the industry is slight. Breaking into workshops to discuss particular issues in more depth can help add detailed feedback. The forum can be linked to an annual awards or social event.
• Topic-specific workshops – held when necessary to discuss key issues. Useful in getting feedback on specific subjects but penetration in industry as a whole may be limited to those interested in the topic.
• Regular meetings with businesses (monthly, quarterly, bi-annually) – this is very likely to require a more formal structure of industry representation with the appointment of individuals to represent the industry and speak on their behalf to avoid it becoming unmanageable.
• Working with individual businesses – the establishment of an effective engagement structure may still require a destination manager to work directly with large individual businesses where they are the cornerstone of the local visitor economy. An example is where a large corporately-owned visitor attraction (eg a theme park or iconic heritage property) makes up a significant part of the destination offer and has a large impact on the destination's overall brand. Ideally they will be active in any engagement structure, but may also require a direct working relationship to ensure strong links between the business and the destination.

Going down the industry representation route leads inevitably to questions about the format and status of the structure.

Format of engagement structure

The type of structure developed to facilitate engagement with the industry will depend on:

• the scale of the destination
• the range of tourism sector businesses
• the existing industry-led organisations.

Scale

There are broadly two options, a destination-wide structure or a multi-area approach. A destination-wide approach will be easier in terms of management and focus. However, a large destination with more than one town or tourism area may chose to establish more than one structure to help maximise engagement with as wide a section of the industry as possible. There are advantages and disadvantages to both approaches. As well as ease of management a single destination-wide approach can generate:

• links and synergies across business sectors
• a stronger identification with the overall destination – helpful in building a "brand" and an industry awareness of the wider tourism product
• easier involvement of destination-wide businesses or organisations such as transport operators and countryside managers.

However, a single large structure may reduce the opportunity to engage directly with a wide range of businesses, having to rely instead on working with a relatively small number of area or sector representatives. It can also increase the bureaucracy and remove transparency in decision making. A multi-area approach, as well as offering engagement with a broader number of businesses can also:

• generate greater interest from business who identify with their local town or area
• allow greater transparency in decision making.

Its disadvantages lie in an increased number of networks and meetings to manage and the dangers of parochial interests disrupting decision making on destination-wide programmes.

A compromise solution for a destination facing the issue of which approach to adopt, assuming it has the capacity and resources to manage it, can be to set up a destination-wide structure with sub-groups for individual areas made up of businesses local to that area. Decisions taken at local level can be fed up to the bigger group, and any destination-wide issues can be passed to area groups for consultation. Representation on the larger group could be made up of nominated individuals from area groups.

For the destination manager this may mean an increased workload in managing the network, but the benefits of effective industry engagement can make the extra effort worthwhile.

Range of businesses

There are some benefits to engaging with specific tourism sectors within a destination to deliver particular programmes, for example working with the food sector to encourage the take up of local produce. Whilst it is possible to engage with the industry on this piecemeal basis, there are many advantages to working collectively with all businesses across a destination, not least the development of cross-sectoral synergies and links, and an affirmation of all representing and working together on behalf of the destination as a whole.

The most effective approach is to recognise where certain programmes involve specific sectors, and to directly engage those sectors where relevant after consultation and agreement with the wider engagement body.

Existing industry organisations

Clearly, where there are existing industry-led structures already in place the first step should be to engage with them rather than set up a parallel system. If the existing organisation is destination and sector-wide then simply getting alongside and working with them is the aim.

However, it may be that existing groups are sector or area specific. In this case the aim should be to discuss with them their active involvement in setting up a wider group to represent the whole destination and including them as an important part of the wider group.

In some cases the tourism industry may be part of a broader business support organisation such as a chamber of commerce. If possible discussions with them should focus on developing a strong tourism industry sub-group of the wider organisation to deliver the necessary engagement required by the destination manager.

Status of engagement structure

Setting up a formal structure for industry representation will mean decisions need to be taken about the nature and status of the network. There is more detail on setting up partnerships in 1B: Developing Tourism Partnerships. There are a range of possible structural models. These include the following.

• Informal partnerships – generally administered by the destination manager with industry engagement on the basis of collectively agreed procedures. There is no formal election procedure for representatives and the Chair and no recognised links to local authority or public agency structures. These are easy to establish and manage with little administration required but rely heavily on the destination manager to succeed and may not have significant influence or voice in management decision making.
• Formal partnerships – similar to an informal partnership but with a terms of reference and constitution to regulate their business. This is still likely to require considerable input from the destination manager, but does put the partnership on a more solid business foundation that may add credibility in the eyes of the private sector and allow more formal links to other bodies.
• Partnership companies – setting up Limited or Community Interest Companies (social enterprise) to run a partnership is a significant step that is covered in more detail in 1B: Developing Tourism Partnerships. There are advantages in terms of perceived status, the ability to attract funding and employ staff, and the independence of the structure, but there can be disadvantages in terms of increased administrative responsibilities and costs and a loss of broader business and public agency involvement as power concentrates on the board of directors.

Partnerships will develop over time and may graduate from an informal partnership to company status. This is not pre-ordained however, depending on which level the group feels most comfortable at and operates most effectively. Before deciding on any structure to take forward industry engagement, it is important to get legal advice on the requirements and duties of partners.

Membership schemes

One method of formalising industry engagement is through the establishment of membership schemes. There are advantages to this in:

• confirming industry involvement and commitment literally through "buy-in"
• creating an income stream for the partnership
• providing clarity about voting rights and influence within a structure
• allowing minimum standards to be established for working relations, eg quality standards.

But there are also disadvantages in that a membership scheme:

• requires significant administration to operate and service members enquiries and requests
• demands regular proactive communication with members
• excludes non-members from the decision-making process
• can create conflict and confusion with other membership organisations
• can create pressure to demonstrate value for money.

Before going down the membership route the industry should be consulted and the cost of administration clearly assessed. It is important to take the idea up only if there is a commitment to provide a quality membership service. It should not be seen only as a way for local authorities to draw in private sector funding to supplement their budgets.