Destination Development and
Institutionalization Strategies
In the OIC Member Countries
35
private membership DMOs getting revenues from a variety of other sources such as membership fees,
revenue from sponsorships and promotional activities, and commissions from commercial activities. 118
The reliance on government funding is perceived as a risk to DMO operations as there are no guarantees
of political commitment to tourism which can lead to extreme fluctuations in terms of revenue for DMOs.
There are a number of instances where withdrawal of government funding led to the complete closure or
scaling down the services of DMOs. In 1993 in Colorado, a referendum led to the cancellation of the tax
that funded the tourism board, which led to its closure and subsequent decline in Colorado’s share of
domestic leisure travel by 30% from 1993 to 1997. In addition to the challenge of sustainable government
funding, the fact that DMOs may be receiving funding from a number of different government sources
create a “multiple accountability” situation, where DMOs have to report and abide by regulations of
multiple entities which can be time consuming and resource draining.119 While governmental DMOs could
generally leverage public funding, they joined private DMOs in the efforts to generate revenues and seek
private funding in an effort to diversify their funding sources to ensure financial stability. 120
2.5. Legislative Frameworks and Accountability of DMOs
Legislative Frameworks
Governments' regulations in tourism are continuously evolving as governments continue to reconsider
their role in tourism management.121 Initially, governments were highly involved in developing tourism
with the creation of governmental entities to manage tourism-related activities. With the increasing
interest from the private sector in the tourism sector, governments started developing regulations to
ensure best practice. In the past decades, governments, especially in developed economies, became less
involved in regulating the tourism industry and have become more focused on tourism regulations related
to consumer protection and resources sustainability.122
The structure and mandate of DMOs are largely dependent on the legislative framework that they operate
within. In the case of governmental DMOs, they are generally established through legislation that specifies
their structure, mandate and activities, as in the case of the tourism board of Scotland, Wales and England
established based on the tourism act of 1969 in the UK. Public-private partnerships can also be established
by legislation as in the case of Tourism Tasmania established in 1996 in Australia. 123 In some destinations,
government regulations may limit the range of activities based on DMOs legal form, in terms of reserving
some operational and destination branding activities for governmental entities. 124 In Poland, the Act on
the Polish TourismOrganization (1999) sets the objectives and tasks of the tourism organization including
its responsibilities including branding, promotion, and running regional centers and tourist information
outlets.125 In the US, the Regional Convention & Tourism Promotional Act of 2010 allowed equalized
funding structure for the Go Great Lakes Bay regional DMO, essentially enabling each individual
118 Presenza, A., Sheehan, L., & Ritchie, J.R. Brent. (2004). Towards A Model of the Roles and Activities of Destination Management
Organizations. Retrieved from
119 Pike, S. (2008). Destination Marketing: an Integrated Marketing Communication Approach. London: Routledge.
120 Ibid.
121 Pike, S., & Page, S. J. (2014). Destination Marketing Organizations and destination marketing: A narrative analysis of the literature.
Tourism Management , 41, 202-227. doi:10.1016/j.tourman.2013.09.009
122 Governing National Tourism Policy (Rep.) (2015). World Travel & Tourism Council.
123 Pike, S. (2016). Destination Marketing: Essentials. London: Routledge.
124 Borzyszkowski, J. (2013). Legal Forms of Modern Destination Management Organizations and Their Influence on the Range of Tasks
and Responsibilities. UTMS Journal of Economics, 4 (3): 367–376.
125 Ibid.