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A CONCEPTUAL MODEL OF TOURISM DESTINATION

COMPETITIVENESS AND ATTRACTIVENESS


Sebastian Vengesayi
Monash University
Track: Conceptual Papers / Marketing Theory
Abstract
This conceptual paper proposes that the popularity of tourism destinations can be
enhanced by a combination of the factors of competitiveness and attractiveness. The
competitiveness elements are derived from the supply side and the attractiveness from
the demand side of tourism. The purpose of combining these perspectives is to come
up with a holistic understanding of the destination popularity dynamics. The input of
both tourists and tourist facility operators is necessary for any destination to manage
and enhance its competitive advantage. Tourism researchers have investigated
destination attractiveness and destination competitiveness as separate and unrelated
concepts. This paper proposes that the evaluation of tourism destinations can be
approached by symmetrically conceptualising destination attractiveness and
destination competitiveness as related and complementary dimensions. This approach
allows comparisons to be made about the congruency between what the destination
invest in and what customers are looking for in a destination.
Introduction
Traditionally, destinations have responded to a decline in visitor numbers by
increasing their marketing expenditure (Buhalis 2000; Ritchie and Crouch 1993). This
strategy seems not to be working as more and more destinations are spending more on
marketing, with limited results. In the new millennium, tourism has become the most
important economic activity on a worldwide scale (World Tourism Organisation
2003a). International arrivals have, in 2002, for the first time in history reached the
700 million mark (World Tourism Organisation 2003a). The contribution of the travel
and tourism industry to the world economy is significant. Although the growth in
global tourism appears to continue at rates comparable to other industries, tourism is
in a mature stage leading to increasing competition among destinations (Buhalis 2000;
Morgan et al. 2002b).
Morgan et.al. point out that 70% of all tourists visit the ten major world tourist
destinations, leaving the rest of the world sharing the remaining 30% of tourists
(2002b). This indicates the intensity of competition for the other less known
destinations. For the tourism industry to be profitable industry now and in the long
term, its development and management should be according to a new competitiveness
paradigm(Ritchie and Crouch 1993). Competitiveness is now widely accepted as the
most important factor determining the long term success of organisations, industries,
regions and countries (Kozak and Rimmington 1999).
In the past destinations believed that it was enough to have only the tourists and
destination resources and low salaries, attractive exchange rates etc. for them to
compete and be successful in the international tourism industry (Bordas 1994). This
approach gave rise to the formulation and implementation of strategies and policies

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that aimed mainly at stimulating tourist volumes. In most cases results have not been
as expected, leading to questioning of this strategy. Empirical evidence has shown
that to secure long-term profits and continued patronage, it is essential to have
competitive advantages (Poon 1993).
A destination, according to the New Shorter Oxford Dictionary is defined as the
place to which a person or thing is going, the intended end of a journey. However
when applied to the tourism context, authors have offered different perspectives of
what constitutes a tourism destination. For example, Buhalis, (2000) defines
destinations as places that offer an amalgam of tourism products and services, which
are consumed under a brand name of the destination. He argues that they are well
defined geographical regions, understood by visitors as unique entities with a core of
six main provisions, i.e. attractions, accessibility, available packages activities and
ancillary services. Other definitions have also been proposed by Leiper (1990; 1995)
and Hu and Ritchie (1993). The World Tourism Organisation recently defined a
destination as ..a physical space in which visitors spend at least one night and is
made up of tourism products such as support services and attractions, and tourism
resources with physical and administrative boundaries that define its management,
images/ perceptions of market competitiveness (World Tourism Organisation
2003b).
Destination Attractiveness

The attractiveness of a destination reflects the feelings and opinions of its visitors
about the destinations perceived ability to satisfy their needs. The more a destination
is able to meet the needs of the tourists, the more it is perceived to be attractive and
the more the destination is likely to be chosen. Mayo and Jarvis (1980), define
attractiveness as, the perceived ability of the destination to deliver individual
benefits. This ability is enhanced by the attributes of a destination, i.e. those
components that makeup a destination. This is a demand side perspective of the
destination. The importance of these attributes help people to evaluate the
attractiveness of a destination and make relevant choices.
The attractiveness of a tourist destination encourages people to visit and spend time at
the destination. Therefore the major value of destination attractiveness is the pulling
effect it has on tourists. Without the attractiveness, tourism does not exist and there
could be little or no need for tourist facilities and services. It is only when people are
attracted to a destination that facilities and services follow (Ferrario 1979b).
Destination competitiveness
Competitive strategy is the search for a favourable competitive position in an
industry. It aims to establish a profitable and sustainable position against the forces
that determine industry competition (Porter 1985). The search for the forces and
factors that determine the competitiveness of the tourism industry is an area that has
not been fully explored (Dwyer et al. 2003a). In tourism context, the concept of
competitiveness has been applied to different settings. Various authors have linked
competitiveness to economics, marketing and strategic perspectives, price, quality and
satisfaction.
A destination can be said to be competitive if its market share, measured by visitor
numbers and financial returns are increasing (Hassan 2000). This approach supports
the widely held view that competitiveness should be linked to high visitor numbers
and increasing destination income. Recent studies have shown that growth in tourism

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often crowds out other economic activities, hence tourism simply replaces the
industries that have been there before, to other researchers (Buhalis 2000), destination
competitiveness is linked to the economic prosperity of the residents of the country.
Because of the multifaceted nature of the tourism industry and the diversity of the
industries that are involved in making destinations competitive, it is important to look
beyond inter firm rivalry (Hassan 2000). Destination competitiveness could be
associated with the ability to deliver an experience that is more satisfying than that
offered by other destinations.
Pearce (1997) posit destination competitiveness as the techniques and methods that
can be used to analyse and compare the diverse attributes of destinations in the
context of planning. The evaluation of the major destination components can provide
a better understanding of the competitiveness of such destinations. Competitiveness in
tourism destinations has also been discussed from an environmental perspective
(Mihalic 2000).
Destination Attractiveness/Competitiveness link
Competitiveness and attractiveness view destinations from two different perspectives
(Buhalis 2001), one from the tourist perspective (attractiveness), and the other from
the destination perspective (competitiveness). Dual analyses of these two concepts
provide a holistic perspective of the Tourist Destination Competitiveness and
Attractiveness (TDCA) dynamics. TDCA is defined as the ability of a destination to
provide social, physical and economic benefits to the destination population as well as
a satisfying experience to the tourist. Studies of destination attractiveness have
centred on the needs of the tourists and what attracts them to various destinations
(Formica 2001; Hu and Ritchie 1993) while those on destination competitiveness
have focused on the ability of organisations to produce products that are accepted
internationally (Kozak and Rimmington 1999; Newall 1992). These two concepts
have not been analysed together and empirically tested. This conceptual paper
attempts to address this link between tourism demand and supply. The proposed
model is shown in Figure 1. The TDCA model proposes that destination supply
factors and tourist demand factors help in creating an environment in which tourism
flourish and can be consumed satisfactorily. The destination experience
environment is proposed to be positively related to and as the most important factor
in determining TDCA, enhanced by (a) availability of attractions and mix of activities
and (b) the supporting factors. Reputation, branding and the trip cost are proposed to
moderate the relationship.
In the following sections a discussion of the salient features of the proposed model
and the hypothesised relationships is provided.
Attractions and Mix of Activities
Attractions are the primary elements of destination appeal. They are the key
motivators for visitation to a destination (Crouch and Ritchie 1999). They are the
fundamental reasons why prospective visitors choose one destination over another.
Researchers have grouped, classified and categorised attractions differently. Goeldner
et al (2000) categorised attractions into five main groups; cultural, natural, events,
recreation and entertainment (page 217). The range of activities within a destination is
an important pull factor and represents some of the most critical aspects of destination
appeal. Moreover destination managers have significant control and influence over
the mix of activities. The mix of activities is a result of initiatives and creativities by
the destination. The activities are important as tourists increasingly seek experiences

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that go beyond the more passive visitation practices of the past (Crouch and Ritchie
1999). The variety of the attractions and the mix of activities offer the tourist a wide
choice and ultimately they stay longer. This leads to Proposition 1:
P1. The destinations mix of tourist activities and attractions is related to its
attractiveness and competitiveness
Supporting Facilities
These are the facilities that exert a secondary effect on the motivation to travel eg.
Accommodation transport infrastructure and services, energy etc. Facilities provide
the foundation upon which a tourist industry is based (Crouch and Ritchie 1999). The
attractiveness of a destination is enhanced by its ability to provide facilities that
tourists can use at the destination. Competitiveness of a destination is achieved when
the provision of services and facilities are competitive against alternative destinations.
Tourism support services are varied and depend on the type of destination and the
objectives of the Destination Management Organisation (DMO). The DMO
contributes to the attractiveness and competitiveness of a destination through the
strategic decisions like the type of destination they want to be the level and range of
facilities that should be available and the regulation of operators. This leads to
Proposition 2:
P2. The range and level of destination supporting facilities and the management
abilities of the DMO is associated with its attractiveness and competitiveness.

Figure 1: The proposed conceptual model of TDCA

Intrinsic destination resources &


Mix of Activities

Destination image
Competitiveness

Experience Environment:
Physical and Social;

Crowding, Safety and


Security,

Human

Unique destination
Brand
Attractiveness

Tourist satisfaction
Organisational
performance

resources, competition,
Supporting Services: Venues,
Accommodation, Transport, Energy

cooperation

Communication/Promotion
Reputation, Branding,
Pricing,

Experience Environment
The place in which the experience is enjoyed has been defined as the environment in
which the service is assembled and the firm and customer interact (Baker et al. 1992).
Both the physical and social environments are important for the acceptability and

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satisfaction of the consumer. The environment in which a service is provided in terms


of both the physical and the social element has been termed the servicescape (Bitner
1992). The experience (service) environment (Clarke and Schmidt 1995) consists of
four elements: the physical facility, the location, ambience and interpersonal
conditions. The service environment is postulated to impact on the behaviour of an
individual in three ways: cognitively, physiologically and affectively. Kotler (1973)
defined atmospherics (experience environment) as the designing of buying and
consumption environments to produce specific emotional effects in the consumer that
enhance and maintain purchase probability. Atmospherics are perceived through our
five senses.
TDCA the experience environment
Consumer behaviour and tourism literature suggest that the environment, both
physical and social, is an integral part of the tourism experience and plays an
important role in the attractiveness, satisfaction and competitiveness of a given
destination. Further literature searches reveal that the destination environment is made
up of various elements. The major elements that shape the destination environment
include crowding, safety and security, human resources development, competition
and cooperation.
Crowding is an environmental characteristic that has a significant effect on human
behaviour and social interaction. It reduces the freedom of movement and goal
achievement. Crowding affects consumers in both psychological and physiological
ways. In tourism both the physical and social environment play a major role in the
attractiveness and competitiveness of a destination, culminating in tourist satisfaction.
Human resources development has been identified as the most single-important issue
facing world tourism in the 2000s, (Esichaikul and Baum 1998). The availability of
adequately and professionally trained staff is an essential component of todays
destinations. Well-trained personnel are required in all service establishments at a
destination (Briguglio and Vella 1995). However, because the quality of customer
experience in tourism is human resource based, a destinations ability to develop
sufficient human resources should be seen as a competitive advantage (Baum 1994a;
Conlin and Titcombe 1995).
Tourism and the physical environment are inseparable companions, as most
destinations are based on the natural attractions. The management of the environment
is one of the most important issues facing the world at the moment (Middleton and
Hawkins 1998). Though some scholars have criticised this relationship, (Butler 2000)
there is no doubt that tourism and the environment are in a complex relationship. The
quality of the environment is related to the attractiveness of a destination. Mihalic
(2000) posits that a well-managed destination environment is the best destination
advertiser.
Peace, safety, and security are primary requirements for growth, attractiveness and
competitiveness of tourism destinations. Without safety destinations cannot
successfully compete on the generating markets as potential tourists do not want to
visit a place that they perceive as unsafe, (Cavlek 2002). Safety and security has been
identified as one of the five global forces that would drive the tourism industry in the
new millennium (Chiang 2000), and is an important consideration in tourist
destination choice (Sonmez and Graefe 1998b). Recent acts of terrorism and crimes in
the USA, Indonesia and Saudi Arabia are examples of how sensitive the tourism
industry is to any form of violence.

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Political violence has affected tourism the world over, for example Egypt, Israel, and
Peru where political instability adversely affected tourist perceptions of these
destinations. Safety concerns causes a decline in tourist arrivals, reduce tourists
expenditures and can cause a downturn in local travel. The safety and security of a
destination therefore plays a role in determining the level of attractiveness.
The competitive advantage and collaborative advantage paradigms have dominated
management and marketing theory, research and practice as alternatives. The
competitive advantage enables a firm to compete and perform better than competition
(Day and Wensley 1988; Porter 1985). The alternative model, the
collaborative/cooperative model enables firms to enhance their performance through
strategic collaboration (Contractor and Lorange 1988; Neilsen 1987).
Various actions have been debated about how firms can compete and corresponding
strategies put forward. For instance product/service innovations, entry barriers,
marketing and promotion campaigns and competitive rivalry among others, have been
identified as drivers of competition in an industry. Early economists suggested that
competition in an industry is ruinous (Jones 1920) especially if it is solely based on
price. Extending this view, competition within a destination can be ruinous if it is
solely based on price-cutting.
The advantages that cooperative agreements provide for organisations have been well
documented. Close relationships with suppliers and customers can provide firms with
a very important source of innovation, costs reduction (Hagen and Soonkyoo 1998;
Ring and Van de ven 1992). Lado, Boyd and Hanlon (1997) suggest that
organisations can enhance their performance through competition and cooperation
simultaneously. They argue that for firms to enhance their competitiveness they need
to adopt a repertoires of behaviour that support cooperation and trust (pg 111).
Thus cooperation can enhance the competitiveness of an organisation, for example
Toyotas cooperation with its suppliers and the cooperation between Ford and Mazda.
In their Syncretic Model, Lado, Boyd and Hanlon (1997) proposed that organisations
could generate long-term performance by simultaneously competing and cooperation.
Striking a balance between competition and cooperation is vital to the performance
and survival of organisations (Jorde and Teece 1989). Firms within a destination need
to cooperate and compete against other destination.
The destination environment is the most important factor in TDCA. The components
of the destination environment can either enhance or destroy the destination. As an
experience product, tourists requires an environment that is safe, with employees that
are customer and service focussed, enhanced by close cooperation by businesses
within the destination. A conducive destination environment is vital for visitors to
enjoy and be satisfied with the tourist experience. This leads us to Propositions 3 and
4:
P3. The destination environment composed of crowding, safety, skilled human
resources and the level of cooperation and competition within the destination.
P4. The environment in which tourist product is experienced, is related to the
attractiveness and competitiveness of destinations.
Communication and Promotion
Branding of destinations enable tourists to identify a destination and differentiate it
from competitive offerings. Destination branding also acts as a cue for the
communication of benefits to the tourist. The brand acts as a shorthand device for
communicating functional and emotional benefits (de Chernatony and McDonald
1998). As such, it can quicken the destination choice decision process. Branding

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signals the level and performance of tourism destination quality to the tourist
(D'Hauteserre 2001). Reputable brands provide reassurance or a guarantee' of
performance delivery.
Until recently there has been little study on the concept of corporate reputation.
Reputation has been looked at from various and different theoretical perspectives;
strategic management, marketing, sociology and economics (Ashforth and Mael 1989;
Keller 1993; Rindova and Fombrun 1999; Sabate and Puente 2003; Weigelt and
Camerer 1988). An understanding of the concept of reputation is important to both
destination organisations and consumers in that reputation not only gives information
as to the past behaviour of the firm, but also guarantees it (Sabate and Puente 2003).
Fombrun (1996) emphasises that reputation represents the emotional reaction and
involves the overall estimation in which stakeholders hold an organisation, the extant
to which the organisation is known; good or bad, reliable, trustworthy, reputable and
believable (Caruana and Chircop 2000), while Weigelt and Camerer (1988) emphasis
that reputation is a result of past actions. Reputation is defined as a set of economic
and non-economic attributes ascribed to an organisation and inferred from the
organisations past behaviour. Therefore reputation can be viewed as a global
perception of the extant to which the organisation is held in high esteem or regard and
has serious ramifications for destination visitation choice. Reputation has been
scarcely applied to the tourism industry but has an important role to play in
moderating the relationship between tourists and the travel destinations. To tourists
visiting a reputable destination guarantees the quality of experience that they would
enjoy, from the past performance of the destination. Tourists value their associations
with high reputation organisations. To the destination, owning a positive reputation
could mean increased visitation and longer length of stay for the visitors. Positive
reputation is a source of competitive advantage (Roberts and Dowling 2002), and help
to fight competition. Reputation is also related to the financial performance of a firm
(Whetten 1999).
The costs involved in holidaying are a determinant of how well the destination
performs in world markets and thus determine the competitiveness of the destination.
Travelling cost money and tourists are only keen to pay for an experience that they
believe is worthwhile
The cost of the tourism experience to the visitor includes the cost of transport services
to and from the destination and the cost of the ground component i.e. accommodation
food, beverages, tour services. It is accepted that travellers are price sensitive (Crouch
1992). Price competitiveness has been defined as the destination price differentials
coupled with exchange rate movements, productivity levels of various components of
the tourist industry and qualitative factors affecting the attractiveness of a destination
(Dwyer et al. 2000).
Various studies have been sought to explain the effect of prices on tourism demand
(Crouch 1992), but little on the role of prices on the competitiveness of destinations.
The competitiveness of destinations have been said to be determined by the exchange
rates, thus attempting to determine costs by the exchange rate of two countries,
(Dwyer et al. 2000). The price competitiveness of the touristic products purchased by
visitors is exchange rate determined (Dwyer et al. 2002a), the weaker the destination
countrys exchange rate against the source market the more competitive the
destination becomes. The seasonality nature of the tourism industry affects the price
competitiveness of a destination. Tourist taxes charged by the host government also
impact on the prices paid by the tourists.

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Nevertheless the price tourists pay to visit and enjoy a destination experience has a
role to play in determining the choice travellers make. TDCA is determined by both
price and non-price factors. Given the evidence of price sensitivity of the travel
demand, destinations need to monitor their price competitiveness relative to
alternative destinations. Proposition 5 is derived, hence.
P5. The ability of a destination to attract visitors and compete internationally is
associated with its reputation and image and is moderated by the perceived cost of
the experience.
Outcomes of TDCA
Pizam, Neumann and Reichel (1978) defined tourist satisfaction as the result of the
interaction between a tourists experience at the destination area and the expectations
he had about the destination based on the Expectations-disconfirmation paradigm.
Tourist satisfaction is central in destinations as it determines tourists intention to
revisit and recommend the destination to friends and relatives. Pizam and Ellis
(1999), argue that tourist satisfaction can be used to measure competitive strengths
and weaknesses by determining tourist perceptions of competitive choices.
Destination attractiveness is related to perceived satisfaction (Ferrario 1979a; Pizam
et al. 1978).
Tourist destination images (TDI) importance is universally acknowledged as it affect
peoples subjective perception, behaviour and the choice of a destination (Walmsley
and Young 1998). Destination image is related to destination selection intention and
tourist satisfaction. As such, image refers to the perceptions of tourists at a destination
and these correspond to the perceived contribution of the different tourism services
available, and consequently the destination experience. TDI is also related to
destination positioning, competitive and strategic image (Ahmed and Krohn 1990)
and is thus a concept that can help to explain competitiveness in tourism.
Strategic management literature abounds with organisational performance measures
like profitability, return on investment, return on assets, productivity of human
resources, there has been a limited success in the attempt to come up with the
measures of destination performance. For the overall destination performance, various
statistical measures have been proposed. For example, total arrivals and the associated
measures like the visitors (a) growth rate, average length of stay; (b) total destination
and (c) employment created as measures of TDCA. More meaningful measures like
net tourism receipts and the per capita net tourism receipts have also been proposed
(Jayawardema and Ramajeesingh 2003).
Conclusion
Though there have been advances in modelling competitiveness in tourism there is
little empirical evidence to support the models proposed by researchers. More
importantly the dual perspective of TDCA has not been explored. The symmetrical
approach to tourism destination evaluation should be a starting point in harmonising
the interests of the destination as well as those of the tourists. The results of such an
approach could be used to sell the destination interests to visitors as well as the
interests of visitors to the destination operators. Researchers now need to move from
conceptual to empirical validation of the proposed models. Initially the challenge
should be to investigate the relationship between the identified variables and how
strongly they influence the attractiveness and competitiveness of tourism destinations.
The proposed model, as shown in Figure 1 can be tested using Structural Equation

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Modelling or Path Modelling to allow for the identification of both direct and indirect
effects.

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