Destination Development and

Institutionalization Strategies

In the OIC Member Countries

161

DMOs require legislation to be issued to govern setting up the DMO, define its authority,

accountability and source of funding.

Geographic Scope:

The geographic scope of a DMO depends on the size of the

country and the distinct destinations within the country. Large

countries with distinct destinations should have a national

tourism organization (NTO), regional tourism organizations

(RTO)s, in addition to city- or town-level DMOs.

It is not advised that destinations rely only on NTO’s without

having regional or local DMOs as regional and local DMOs are

better able to work closely with stakeholders and focus on the

unique characteristics of their destination.

Azerbaijan relies on its NTO for product development and promotion. It is advised that it also

develop regional and local DMOs to better address the unique needs of each of its destinations.

However, the challenge is that, apart from hotels and airline office, the tourism industry is

concentrate in Baku, the capital.

427

To establish regional and local DMOs in Azerbaijan, the following steps need to be taken: changes

to legislation need to be introduced that allow the establishment of public-private DMOs. The

allocation of public funds need to be stipulated in these laws, in addition to laws related to local

funding source (such as a hotel room tax). The responsibilities and authority of the DMOs, in

addition to organizational structure need to be clearly identified. One challenge will be sourcing

qualified staff for the DMOs as there are a limited number of tourism professionals outside of

Baku.

428

Possible solutions include hiring managerial staff from Baku, while providing training to

local staff. To succeed, these DMOs need to be given the authority and budget to develop projects

at their destinations. There also needs to be a high level of coordination between the NTO and

regional/local DMOs.

Governance Models

Governance models can be either highly centralized, in which

one entity creates a network of relationships with other

stakeholders but manages the destination by itself; or

decentralized, in which all tourism providers are on equal

footing and follow their own strategies.

For new destinations that are in the Discovery/Exploration –

Involvement phases, it is best to follow a corporate model,

where the DMO makes sure all the interests of stakeholders are

represented and establishes clear processes for the industry

and ensures regulations are in place. The rationale is that

industry players in new destinations are usually small and fragmented and need a strong industry

427

Azerbaijan case study

428

Ibid.

Operating

Parameters

LegalForm

(Public–Private–Public-Private

Partnership)

GeographicScope

(National–Regional–Local)

Governance

Models

(Highcentralization–LowCentralization)

Stakeholders

Local tourism industry

Public tourism institutions(attractions,

recreation facilities, transportservices)

Governmentbodies

Universities

Professionalassociations

DMO

Activities

Marketing

Operational

Strategic

Funding

Operating

Parameters

Legal Form

(Public – Private – Public-Private

Partnership)

Geographic Scope

(National – Regional – Local)

Governance

Models

(High centralization – Low Centralization)

Stakeholders

Local tourism industry

Public tourism institutions (attractions,

recreation facilities, transport services)

Government bodies