Note: The first thing I notice when re-reading the old text which serves as a starting point (marked in light grey-bown colour) is that it takes a basically non-critical (i.e., a pragmatic and reformist) position towards tourism. The re-working of this text attempts to supplant a critical position. In archtectural terms, this is like re-building the basement after the house is half-way finished.
Before further analysis, I will use the term 'tourism' as a rough token for all aspects of the phenomenon, referring to
There is a prevalent assumption that the publicly owned destination marketing organisation (DMO) must respond to the erosion of one of its core activities, that of offering distribution for small service providers.
The evidence of rapid technological development seems to necessitate the step-by-step transformation of public utilities into cost centres that operate commercially. The threat stems from the capability of the internet to simulate and remodel, often at much lower cost, traditional services to the point where these, once the labour-intensive core business of DMOs, become basic commodities with prices plunging towards zero e.g., in the online reservations market for hotels.
The common argument is that DMOs will lose their market if they do not compete on equal terms with commercial operators. This means, for example, introducing and operating electronic booking and payment systems. As they sell services, they will be subject to EU business rules that do not allow subsidisation of operations that are performed also on a commercial basis by competitors. The alternatives for DMOs are twofold:
The latter conflict has been perceived as a problem that market advocates claim can be solved through the application of a complex system of checks and balances to demonstrate (or to put it more weakly, to convince the public) that abuses of market power and 'unethical practices' will be effectively punished, or better, that they will be prevented by threat of punishment. Instruments implemeting such checks and balances include detailed service level agreements with fines in case of violation; or the application of economic formulae such as price caps that allow limited increases in profits in exchange for efficiency gains and lower service prices. Such instruments were especially necessary where former public bodies had historically built up a significant competitive advantage over commercial competitors (witness the telecom sector) or controlled natural monopolies (witness airports).
The legitimation of the public service was grounded in a generalised quid pro quo, apparent in categories such as
It is difficult to prove the adherence to such principles, and if checks are effective, they may be prohibitively expensive. The cost argument has been used in arguments in favour of lax supervision coupled with the threat of court action in case of proven violation. However effective the checks, it remains clear that the nature of service provision os distinctly different in public scenario as opposed to the private scenario. If commercially operated services are sucessful to the extent that they can always optimise their services to realise maximum profits, this will be much more difficult for a formerly public business that hs to comply with a framework of rules that force it to operate according to quite a diferent set of imperatives. In the long run, privat service operating according to such rules will lose out to private competitors as they gradually loose the contacts and historically grown advantages built up during decades of quasi monopoly operation. A consequence that is likely to be given the appearance of being 'logical' and 'natural' is then that public DMOs should be abolished altogether since they cannot play the game as well as their commercial competitors.
If this depressing scenario is correct, one tentative conclusion is that public DMOs under pressure from commercial competition might better decide to use their current strong position to divest and devolve their power and expertise to the smaller local tourism businesses they used to serve centrally, providing technology transfer and enabling local businesses to form miniclusters that can learn to use the growing set of commoditised web services in order to act as their own tour operators and online travel distributors at the same time. Such clusters might realise a coherence and integration of the tourism product that can go far beyond the modular approach of the large tour operators. DMOs may have to turn themselves into business facilitators, advisors on tourism products and service quality, selling administratice financial and last not least technological support to Local Service Providers.