Destination Development and
Institutionalization Strategies
In the OIC Member Countries
36
convention bureau in the region to move to an equal 5% assessment/tax on the cost of overnight lodging
stays to create the regional DMO.126
Beyond the regulations pertaining to the legal form that DMOs can adopt, destination’s entry visa
requirements and taxation regulations have a significant effect on DMO capabilities and activities. Visa
regulations can have a significant effect on the accessibility of the destination, which is one of the
supporting factors for the determination of a destination’s potential discussed earlier in chapter one.
Concerns for safety and security have led many countries to increase visa restrictions, which affect
destination competitiveness andmake DMOs job to encourage demandmore difficult.Many countries have
recognized the impact of visa facilitation on tourism and have instituted changes to their visa requirements
and visa processing systems, as in the case of Australia introducing online visa application system. 127
In some destinations, tourist taxes on hotel stay, face opposition from tourism stakeholders, since they can
make the destinations expensive and less competitive, especially if the revenue is not directed towards
supporting the tourism sector. In destinations where the tax revenue is spent to improve tourism-related
products and services, stakeholders have positive views of tourist taxation.128 Some governments have
abolished or limited tourist taxes, as in the case of the UK which abolished the airport departure tax on
children in 2015. While taxing tourism has been a widely used tool by governments to generate revenue
and alleviate its budgetary pressures, taxing local communities to support destination marketing activities
has become more difficult for governments to justify especially with the fact that many companies
operating in the sector are multinationals. 129 The local community and those who are not operating in the
tourism industry generally object to tax revenue used for tourism especially when they are unaware of the
indirect economic benefits of tourism on the economy as a whole.130 It is important to note that many
destinations are using tourism taxes, as mentioned in the funding section, as a revenue stream for
destination management activities. In Italy, the South Tyrol government initially adopted a
“voluntary” approach for funding DMOs through membership fees. However, a lodging tax, paid by
tourists, was introduced recently to fund the activities of destination management organizations
since membership in the local tourism organizations is not mandatory and revenue frommembership
fees would not ensure sustainable funding of DMOs. 131
Accountability of DMOs
DMO accountability to both private and public entities is critical as it receives funding from various sources
leading to need for scrutiny, which means that DMOs face “multiple accountability”. Besides being
accountable to their own board of directors where applicable, DMOs may be held accountable to
government funding entities, tourism businesses, and tax payers. In some instances, the process of
reporting to multiple funding agencies can become a burden on DMO administrative capabilities. 132 DMOs
need to be transparent in terms of how they use the funding they receive and how they allocate their
resources. To ensure transparency, DMOs can hold public meetings where they report on their plans and
activities. DMOs also need to make their financial data, plans and strategies available whether through
their websites or in annual reports. The Las Vegas Convention and Visitor Authority provides a good
126 Go Great Lakes Bay (2017). Destination NEXT Strategic Roadmap 2016-2017.
127 Governing National Tourism Policy (Rep.) (2015). World Travel & Tourism Council.
128 European Commission Public Consultation (2014). EU Level Regulatory and Administrative Framework Affecting Tourism
[Presentation].
129 Governing National Tourism Policy (Rep.). World Travel & Tourism Council. Retrieved from
research/governing-national-tourism-policy/
130 Pike, S. (2016). Destination Marketing: Essentials. London: Routledge..
131 Pechlaner, H., Beritelli, P., Pichler, S., Peters, M., & Scott, N. (2015). Contemporary Destination Governance: A Case Study Approach.
Bridging Tourism Theory and Practice, 6, iii. doi:10.1108/s2042-144320140000006045
132 Pike, Steven. (2015) Destination Marketing Essentials. Routledge.