Strategic Management of Tourism Destinations: A Dynamic Capabilities Perspective

Managing tourism destinations is a multifaceted phenomenon due to the fragmented nature of the industry, where stakeholders such as private enterprises, public agencies and community groups operate in a relatively autonomous way. These diverse stakeholder groups generally collaborate through marketing initiatives to promote the tourism destination offering. However, there is a growing consensus that the Destination Management Organisation (DMO) has assumed a broader management mandate. Tourism destinations are reliant on the availability of natural and human resources; success from a management perspective is therefore dependent on the DMO’s capability to deploy these resources effectively. However it is widely acknowledged in the literature, that managing this disjointed array of stakeholders is a complex process. Destination age adds to the complexity of the problem, as destinations may have varying management needs as they traverse through the different stages of destination lifecycle. Therefore, this study adopts a network lens, where the DMO is a managed strategic net, comprised of a number of key tourism actors, in addition to an official tourism support agency. The theoretical basis of this study is drawn from the Resource-Based View (RBV) of the firm, which acknowledges that the DMO must possess specific dynamic capabilities to deploy, modify and recreate destination resources. As such, this research study seeks to identify and explain the dynamic capabilities required by the DMO to manage a tourism destination effectively. Taking an interpretative philosophical position, this study adopts a multiple case study research methodology to identify and examine the dynamic capabilities present within the DMO in three tourism destinations at different stages of destination lifecycle. The findings demonstrate that the DMO possesses key management capabilities in the form of partnering, visioning and orchestration, which is a key contribution of this research. While the findings confirm that these capabilities are evident in the three case sites studied, their relative effectiveness in managing the destination is explained by the specific embeddedness of relationships within each destination. Based on the research conclusions, an integrated destination management capability model is presented which highlights the interplay between these dynamic capabilities, which drive operating routines in pursuit of sustained competitive advantage. This model provides a basis for future research