Understanding the differences between DMOs and DMCs
We are definitely not the first to say that tourism is filled with similar sounding and confusing acronyms, but we are happy to put our hands up and help you make sense of a few. Instead of leaving you to feel on the outer circle of an exclusive club, we would like to lift the curtain on key tourism terminology that will undoubtedly make you feel a whole lot more comfortable with your knowledge of the industry.
You would be forgiven for mistaking Destination Management Organisations (DMOs) and Destination Management Companies (DMCs) for being one and the same, but as this blog highlights, each is very distinctive in their own right. Although both share extensive knowledge of a particular destination, the way in which they work, their overall objectives and how they interact with travellers is what earns them their own separate titles.
Before we leap into the definitions of DMOs and DMCs, it is first important to properly define what a destination is. We know for some it may seem obvious what constitutes a destination but there is a set of crucial characteristics that defines one.
Seen as hubs that drive tourism activity and engagement, destinations are a “physical space in which a visitor spends at least one overnight.” Other specifics regarding destinations include:
- The presence of attractions, tourism support services, tourism and non-tourism related activities
- Management is clearly defined by both physical and administrative boundaries
- A range of stakeholders are involved
Destinations can of course be grouped in different ways. For example, some tourists may see a whole country as the destination, for others it might narrow down to a regional destination or a specific town/city.
The main thing to associate with the definition of Destination Management Organisations (DMOs) is that they have the bigger picture in mind and work towards a common goal. Tasked with coordinating all elements of a tourist destination, from attractions, marketing, accommodation to amenities, DMOs strive to build the competitiveness of the whole destination while keeping sustainability front of mind.
Depending on the governance structure of an area, a DMO may be broadly responsible for a country, often referred to as a National Tourism Organisation (NTO), or they might have a regional focus and receive the title of Regional Tourism Organisation (RTO). Whatever their scope, the efforts of DMOs are underpinned by the desire to spread the benefits of tourism across their community and establish strong brand identity for the destination.
In order to drive the competitiveness and sustainability of their destination, DMOs often create destination management models that guide and shape their decision making. Looking at short, medium and long term prospects, considerations are made towards funding allocations, crisis management responses, marketing efforts, business development, training and sustainability. The beauty of these organisations is that they take a holistic look at the industry and closely consult with various stakeholders before establishing a set direction.
While DMOs essentially oversee the development of tourism in a destination, they are mindful not to control the efforts of independent businesses and are very impartial in their position. Careful not to demand particular actions be taken by tour operators, DMOs take on more of a guiding, facilitating role and want to see local businesses succeed. These organisations offer a huge amount of support to local businesses through the likes of networking, stakeholder engagement, knowledge sharing and training, yet have no say in how their suppliers do business.
When it comes to marketing, DMOs are huge champions for sharing the amazing things that are going on in their destination and offering suggestions on what tourists should see, try, taste and get amongst. Rather than trying to stimulate direct purchase off their platforms, DMOs act as an intermediary for local businesses and try to guide tourists towards the efforts of individual suppliers. DMOs achieve this through ‘above-the-line’ marketing activities such as highly visible campaigns, outdoor media, radio and television.
In the same breath, DMOs often spend time focusing on B2B marketing where they seek the interest of inbound tour operators to bring travellers to the destination. One way to capture the attention of these operators is to invite them on trade familiarisations (famils) where they personally get to enjoy activities and experiences that would be well suited to their clientele. Considered to be ‘below-the-line’ marketing, this kind of promotion establishes close working relationships with highly connected agents who can relay their personal experiences to travellers in the hopes of generating greater visitation to the destination. DMOs need to think strategically about what aspects of their destination they are going to show tour operators, travel agents and trade personnel; with thought going into the appearance, content and aesthetic of their itineraries. They also need to get the all important buy-in from suppliers to provide their services or experiences on a complimentary basis thus requiring their financial investment in the famils.
Serving up platefuls of inspiration, these destination specialists live for the greater good and to build a better future for their local tourism industry.
Comparatively, Destination Management Companies (DMCs) are more focussed on planning and booking trips for travellers, and all of the finer details that this entails. While they want to drive visitation to their local destination, they are largely responsible for the organisation of corporate meetings, incentive trips, conferences and events – also known as MICE (yes, yet another travel acronym for you!).
We all know the saying ‘you can’t be everything for everyone,’ and this is the exact approach that DMCs take with their daily operations. What gives DMCs an added edge over a business or individual corporate traveller booking their trip independently, is that they are widely regarded as experts on the ins and outs of the destination. While those who are needing to organise a meeting or event in their current location may be comfortable with coordinating all of the details, those that are planning trips to another destination can employ the use of a DMC for added confidence and security. Often seen as specialised consultants, DMCs use their expert knowledge of their area’s local customs, language, culture and nuances to craft trips or events that their clients so greatly desire. From considering what operator should meet and greet the travellers upon their arrival and what accommodation provider would best suit their needs, to deciding what dining experiences and activities should be booked, DMCs save their clients hours of time and unnecessary stress.
Essentially acting as a third party, connecting local businesses with potential travellers, the presence of a DMC means that their clients only have to deal with one point of contact rather than multiple different suppliers. Although DMCs are focussed on pairing the right experiences with the right traveller or group of travellers, they do not operate with impartiality in mind like a DMO. For this reason, these companies usually choose to promote and sell the products of suppliers that they have the best relationships or deals with. By leveraging off their preferred partners/suppliers, DMCs are able to capitalise on the preferential rates and negotiated discounts that consortia and substantial buyer power offers – ultimately passing this on to their clients.
Looking through the lens of a local business, the establishment of a partnership or working relationship with a DMC is a valuable avenue for tapping into new client bases. While a DMO tries to stimulate greater demand for the local area, the marketing and expertise of DMCs bring local businesses in direct contact with tourists that are looking to spend money.
Similar to the debate around the relevance of travel agents in the digital world, there have been discussions in recent times about the future of DMCs. It may be true that people are able to more confidently research and book trips on their accord with the help of the internet, but the due diligence, creative ideas, risk management, up to date information and quality assurance that DMCs offer is invaluable. Aiming to take the stress away from travel planning, DMCs create highly personalised, bespoke itineraries and packages.