That’s what Padraic Gilligan was left wondering after reading our sister publication Special Events’ annual “Top 25 DMCs” list, which included some reporting on what destination management companies view as their sector’s main trends and challenges today. Gilligan, who is vice president, Ovation Global , agreed with the top three (an improving economy overall, tight lead times, flat budgets). But he left off reading the article feeling uneasy, as if a dark cloud was looming just off stage.
That cloud is technology—specifically, online guide sites like Viator, Vayable, and Localers. These sites offer up “insider” information, “VIP” access, “customized” itineraries, and “authentic experiences” with locals. As Gilligan pointed out in a post at his blog, Padraicino, it’s all the language of the DMC, plus an easy browse-and-click interface and straightforward pricing listed right at the site.
So what kind of competition does this represent for the destination management establishment? We asked him to speculate a bit more.
Q: Do you think an incentive planner could actually use one of these sites to book a day’s activity for a high-end group?
It goes back one step further than that: The actual [incentive program] attendees are going online, finding these activities, and booking them outside of the official roster of experiences and activities offered by the corporation. This is happening particularly in situations where attendees have a combination of hosted and non-hosted activities, with registration and payment collected from the attendee via the program’s online platform. When payment is required, they shop online and they find these sites offering experiences that are sometimes more exciting and often better priced than what’s offered via the official platform. This causes credibility problems for the corporation and its official suppliers.
Q: Is there also the possibility that planners might request a specific activity they’ve spotted online—and at the same price?
This happens too and causes issues around trust and credibility in the relationship between the planner and the DMC. The planner expects the DMC to be the local expert resource. If the planner discovers cool stuff online that the DMC hasn’t shared or offered then this can reflect negatively on the DMC. The trust issue becomes even more accentuated if the price offered for a similar style activity via the DMC is substantially higher. While the DMC might justify his price point with reference to different cost bases etc., this, ultimately, will not wash in an apples vs. apples comparison. I may accept that a High Street retail outlet will charge more than an online business, but that doesn’t mean that I’ll buy from the store!
Q: Do you see DMCs changing their value proposition in response to these types of Web sites? Or emphasizing different elements of that proposition?
DMCs will definitely have to refine and, perhaps, re-define their value proposition. In the future I see DMCs as destination consultants whose expertise will be sought based on their unique ability to connect corporate objectives and destination assets. Thus DMCs will trade either on intellectual property alone—i.e., offering consultancy on their destination—or by owning outright an entire portfolio of unique destination experiences that will be distributed via multiple channels, including online. So DMCs will create cool destination experiences that they will “white label” for multiple channels and distribute online and off line.
Q: Will DMCs create à la carte online divisions to go head to head with some of these sites?
Why not? It’s an unexplored opportunity that plays to the DMC sweet spot! DMCs have been creating one-off bespoke activities for years and now digital platforms offer additional channels for distribution. The Gen-Y zeitgeist is becoming increasingly more mainstream and now millions of travelers are specifically seeking “behind the scenes,” “off the beaten track,” “inside the velvet ropes,” experiences. They want authenticity not luxury, knowledge not information, hands-on learning not arms-length gazing. DMCs have been offering this type of product and service for years but only to a very niche and limited audience. The digital revolution offers DMCs the chance to do this for a much wider audience.