original scientific article
Development of regional tourism organizations: Conditions, expectations and contradictions
EMIL JUVAN
University of Primorska
Faculty of Tourism Studies Portorož - TURISTICA, Slovenia emil.juvan@turistica.si
Abstract
This paper discusses perceptions of quality of the destination management functions within different tourism organizations and companies in three Slovene regions. The main objective is to identify current conditions, expectations and contradictions which might slow or even stop the process of the formation of regional tourism organizations thus establishing an integrated model of destination management (DM). Two hundred-forty businesses were included in the survey, representing over half of all tourism related businesses within the area. Major conclusions are that the perceived quality of DM functions is low; expectations go for a more integrated model of DM with some contradictions. The latter are more likely related to personal (i.e. micro) characteristics of the respondents, rather than organizational (macro) characteristics.
Key words: destination management, regional tourism organizations, destination management functions, expectations, contradictions
Académica Turística, Year 4, No. 1, July 2011 | 35
Emil Juvan
Development of regional tourism organizations:
1 Introduction
Slovenia is at the turning point from one to another strategic period of tourism development. The Development Plan and Policies of Slovene Tourism 2007-2011 (DPPST) was introduced in 2006; its most difficult point according to the current implementation situation was Destination Management (DM), especially where the introduction of regional levels of tourism organizations failed. Just recently, (in July 2010) the Ministry of Economy announced a 4,2 million Euro fund for the implementation of the marketing function of DM in order to boost integrated marketing actions, thus making a step towards collaboration between tourism stakeholders at local and regional levels. Many activities (e.g. meetings, forums, investment incentives etc.) were in action during recent years to boost DM implementation but with very little or no success. A great deal of guess work and speculation was made as to whether the Public Private Partnership Bill of Law will help solve the issue. However, not many joint projects in the field of DM saw the light of day. It looks as though "tourism regionalization" and the development of Regional Destination Organizations (RDO) is subject of the next strategic period (2011-2015). During the last decade the Ministry of Economy, whose responsibility is also tourism, approved approximately 140 million Euro worth of EU funds for various investments in the tourism infrastructure (Balent, 2009). The last strategic period (2007-2011) in particular focused on soft elements1 of the destination management. Funds were granted for tourism promotion and a recent call for bids as well as for the integrated marketing of potential destinations, thus stimulating joint marketing efforts at the destination level. We believe this to be the right approach since several researchers suggested that DM implementation should be focusing on a bottom-up approach (Presenza et al., 2005; Juvan & Ovsenik, 2008; Pechlaner et al., 2009; Lema et al., 2010). However, no significant results have yet been accomplished.
The importance and role of the contemporary or integrated DM were observed by Ovsenik (2003), Howie (2003), Bieger (2005), Dwyer et al. (2009), Juvan, (2009), Molina-Azorin et al. (2010) and Zabkar et al.
1 Functions of DM.
(2009). They all came to the same conclusion, that destinations are complex systems of functions, operations, subjects and other social, economic and environmental variables, that each needs to be observed individually in order to develop a proper destination management model. As part of the national study on potential regional destinations and the establishment of DM functions at the regional level, Juvan (2009, 56) published a book on the systematic approach towards the conceptualization and importance of DM, where DM is being explained through the process and organizational approach. As per recent research in the field of tourism development and management, at the destination level DM should include: marketing function (Konecnik, 2003; Brezovec, 2007; Sheehan et al., 2007; Angella & Go, 2009; Pike, 2009), stakeholders organization and collaboration (Sheehan et al., 2007; Beritelli et al., 2007; Shalini, 2008; Juvan & Ovsenik, 2008; Molina-Azorin et al., 2010; Bornhorst et al., 2010; Dwyer et al., 2009), monitoring over services quality and safety (Go & Govers, 2000; Gretzel et al., 2006; Zabkar et al., 2009).
The complexity and diversity of research questions, approaches, methodologies and subjects of observations thus suggest that DM functions really are important and complex areas of tourism at the destination (i.e. local or regional) level. The question under discussion here is in what circumstances or at what stage of destination development an integral approach to destination development is to be implemented. RDOs which present an institutional approach towards integrated destination management imply certain costs which can be either a public or private burden but can local government or local businesses afford such model of destination development? Successful DM depends on numerous factors, those being traditional tourism resources or specific economic, political, environmental characteristics and last but not least also the psychological and sociological characteristics of a particular geographical area (e.g. destination) (Buhalis, 2000; Bramwell, 2001; Andriotis, 2002; Bieger, 2005; Juvan, 2009), hence destinations and destination management should be observed, analyzed and developed gradually and systematically (Lazanski & Kljajic, 2006).
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Development of regional tourism organizations:
This paper discusses potential conditions, expectations and contradictions (CEC) on the integrated development of tourism to a destination which is to be coordinated and supervised by the RDO's. There are a number of variables influencing a successful model of destinations organizations, thus CEC are to be explored at the applied level with a scientific approach helping the academic and professional community to understand the general approach towards DM development and implementation.
The organizational function of destination management involves the foundation of a supply community where all suppliers, irrespective of size, type of service or delivered experience, can successfully develop their business and thus contribute to the boost of the tourism industry at their destination (Juvan, 2009, 71). There are many forms of organizing tourism at the destination level and these are subject to private and public interests (Konečnik, 2003; Getz & Timur, 2005; Raich, 2006; Dredge, 2006; Pechlaner, 2009). Effective organization is the key to the development of successful and efficient DM functions and can be public, private or a private-public organization. The latter particularly has proven it very efficient throughout years as it acts as a mediator between public and private interests (Juvan, 2009). It is known that public organizations protect the interests of the public community; however, they lack business orientation and often face huge problems in financing their activities which in the long term affects tourism and indirectly also leisure opportunities as well as the economic sustainability of the community. On the other hand, private DMO's often neglect the public interest thus affecting the quality of life of the local population (e.g. free access to nature parks, beaches, parking space availability, etc.).
2 Methodology
This study was conducted in 15 municipalities of the Podravje and 14 municipalities of the Spodnjeposavska regions. Since Slovenia has not yet introduced administrative regions, we referred to statistical regions (Statistične Regije) instead. We further speak about destinations which can be divided into Spodnje
Podravje, Posavje and Zasavje. The research instrument was a traditional questionnaire with 46 variables about general attributes and opinions on destination management functions, 10 variables on perception of the actual destination management functions quality and 8 demographic variables. The test scored .934 using Cronbach's Alpha test for reliability. Without items related to financing regional destination organizations and expected benefits from co-financing, Alpha scored even higher (.95). Attributes towards and opinions on particular activities of destination management were measured on a 7 scale semantic differential, from completely individual to completely integrated. Participants were asked to decide whether a particular activity should be operated completely individually (i.e. by an individual stakeholder) or completely integrated (i.e. under regional destination organization).
Sampling data collection was done using databases of the National Chamber of Commerce, the National Chamber of Craft and Trade and web sites of each municipality (i.e. destination) where the survey was done. Sampling aimed to capture at least 51% of all tourism stakeholders which adds up to more than half. Sampling to identify the "half breakeven point" was done for each group of stakeholders, depending on organization legal status, core business activity and location, respectively. Further sampling was occasional, meaning that a hardcopy of the questionnaire was sent to 335 stakeholders identified, together with the request and instructions for participation in the survey. A self addressed, stamped envelope was enclosed in order to facilitate the return of the questionnaire. Data were collected in two rounds, first from April to June, with a 43% response rate and the second round from June till September 2010. The second round did not include sending a new questionnaire; we simply contacted respondents and asked if they would participate. Most of them replied that they had forgotten, but they would return questionnaires in next few days which they did. The final response rate reached 71% of all distributed questionnaires. Between the two rounds, some phone contact was established with potential participants to additionally explain the purpose of the survey in order to increase the response rate.
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Emil Juvan
Development of regional tourism organizations:
The methodological approach towards the analysis is based on identification of the quality of the DM functions, where a descriptive analysis was used. Anova test and regression analysis were used to identify contradictions in quality perception and RDO activities respectively. K-means cluster analysis was used to identify groups of stakeholders' attitudes towards destination management. For the purposes of this paper, only the quality of the DM and expectations on the role of regional destination organization is analyzed.
3 Results
Two hundred thirty-seven different tourism stakeholders were included in the survey and analysis. The majority of respondents operate in the catering field, followed by the accommodation and travel sectors. One fifth of the respondents represent small but important souvenir merchants, event organizers, and traditional food caterers which see tourism as a source of additional demand for their businesses. A little less than one fifth of the samples are civil associations whose interest is to provide and protect the natural and social environment. Considering
the type of organization, we noted that over two thirds of the respondents are entrepreneurs, meaning small businesses sometimes with only one or a few employees. Especially in the case of the latter, the integrated destination management provides an opportunity for business empowerment as well as motivation, maintaining and even expanding their businesses. Another piece of pertinent information regarding the demographic profile is that half of the respondents were directors or general managers, one fifth were administrators and operational cadre, respectively. Half of the respondents have up to five, one fifth from five to ten, and one third more than 10 years of working experience in tourism.
Table 2 shows the descriptive statistic on perceived quality of DM functions within all destinations. Mean values show a rather unsatisfactory level of quality. All tested regions are considered to be less developed tourism areas where the majority of municipalities host only up to 0.4 tourists per citizen (e.g. from 0 to several hundred). Standard deviations suggest we look closely into significant differences between perceptions regarding the different functions of destination management.
Table 1: Sample description
	Type of the organization/ COMPANY						Total
	EN	PA	PLC	JSC	ASS	PUC	
Catering	93	2	15	o	4	o	114
Accommodation	2l	i	5	o	o	o	27
Travel agency	5	3	5	o	6	o	19
Events	3	i	o	1	6	o	11
Sport, recreation, wellness, fitness	4	o	5	o	o	o	9
Transportation	7	o	1	o	1	o	9
Association	o	i	o	o	17	o	18
Craft	4	o	o	o	o	1	5
Catering & Accommodation	2	o	o	o	o	o	2
Other (e.g. vineyards, honey production, bee keeping, cheese production, etc.)	il	3	4	o	1	o	2o
Total	i5i	ii	35	i	35	i	234
EN-entrepreneur; PA-public agency; PLC-private limited company; JSC-joint stock company; ASS-association or club; PUC-private unlimited company
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Emil Juvan
Development of regional tourism organizations:
Table 2: Condition of the quality of DM
(1-very poor; 2-poor; 3-neitherpoor nor good 4-good; 5-very good)
N		Mean	Std. Deviation
Operations	222	2.72	1.08
Organization	222	2.68	1.13
Controlling	223	2.65	1.19
Marketing	223	2.59	1.07
Table 3 shows results of the Anova test for functions and confirms that there are significant differences in the perception of the quality of DM functions at observed destinations. Irrespective of the fact that observed destinations are developing in terms of tourism and are at the same stage of destinations lifecycle, their perceptions differ. However, two out of three regions run successful spas which might indicate that the level of tourism development is different. Regression analysis was done between tourism industry indicators (independent variable) and attitudes towards the perceived quality of DM functions (dependent variables). However, no significant impacts were confirmed.
Acknowledging regression analysis results, the tourism indicators (number of visitors, overnight stays, expenditure etc.) did not impact the perception of the quality of DM. Reasons for different perceptions are
hidden in other elements which might be related to the level of tourism expenditure and its distribution within the destination. Namely, we can argue that the destination Posavje creates the highest rate of tourism turnover (e.g. arrivals, overnight stays, expenditure); however the distribution of the turnover differentiates from the turnover of Zasavje and Podravje. The structure of the tourism industry of the destination Posavje is somewhat more centralized than in Podravje and significantly more centralized than in Zasavje. Posavje destination accommodates the country's largest health & spa resort which creates a good half of the overnight stays within the destination and is considered to be the biggest tourism company in the country. The Podravje region also promotes spa tourism and accommodates an important and successful spa resort. The Zasavje region is in exploration or an involvement destination cycle (Diedrich & Garcia-Buades, 2009, 513) with a
Table 3: Contradictions in perception of the quality of DM
		Sum of Squares	Df	Mean Square	F Sig.
Marketing	Between Groups	25.165	2	12.582	12.094 .000
	Within Groups	228.880	220	1.040	
	Total	254.045	222		
Operations	Between Groups	24.057	2	12.028	11.227 .000
	Within Groups	234.628	219	1.071	
	Total	258.685	221		
Organization	Between Groups	46.619	2	23.310	21.813 .000
	Within Groups	234.029	219	1.069	
	Total	280.649	221		
Controlling	Between Groups	25.897	2	12.948	9.942 .000
	Within Groups	286.516	220	1.302	
	Total	312.413	222		
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Development of regional tourism organizations:
Table 4: Expectations of RDO functions
	N	Mean	Std. deviation
Infrastructure and superstructure development (MAF)	237	2.88	0.38
Development of tourism services and products (for the entire destination) (MAF)	237	2.84	0.42
Organization and coordination of the destinations tourism branch (ORF)	234	2.81	0.46
Promotion of the region (MAF)	234	2.81	0.48
Distribution of services and products (MAF)	232	2.81	0.48
Operating and delivering tourism services and products (OPF)	235	2.81	0.45
Market and visitors behaviour research (MAF)	235	2.80	0.52
Quality control and improvements of the destination's tourism (COF)	232	2.72	0.56
Legend: ORF=organization-coordination function; MAF=marketing function; COF=control function
Items in Table 4 present functions of the destination management where mean values show that there is a need for a more integrated approach and considering the standard deviation values, it's quite homogenous.
Table 5 displays Anova test results for variances in expectations on DM functions between destinations. Considering that observed destinations have poorly developed rates of tourism and no regional tourism organization, there should be no significant differences on DM functions; however there are some in the area of how destination should be organized and coordinated, how tourism products and services (e.g. daily excursions) should be operated and executed and who should be responsible for the integral tourism services and product development (i.e. integral supply).
Table 5: Contradictions on expectations of RDO functions
		Sum of Squares	df	Mean Square	F	Sig.
Organization and coordination of the destinations tourism branch	Between Groups	1.457	2	.729	3.590	.029
	Within Groups	46.889	231	.203		
Operating and delivering tourism services and products	Between Groups	1.598	2	.799	4.139	.017
	Within Groups	44.785	232	.193		
Development of tourism services and products (for the entire destination)	Between Groups	2.023	2	1.012	5.836	.003
	Within Groups	40.559	234	.173		
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poor rate of tourism. According to the level of tourism development and the structure of tourism within the destination, we can identify significant differences in the perceptions of DM quality as per observed destination; hence this might be the reason for identified differences in perceptions of DM quality.
Further we display results of the descriptive analysis of expectations on DM function in the future which are the functions of the future RDO. Respondents were asked to decide how DM functions should be executed in the future by using a three point scale (1-more individually, 2 - the same as now, 3 - more integrated). As shown in Table 4, there is an obvious leaning towards a more integrated destination management which calls for the establishment of a regional destination organization.
Emil Juvan
Development of regional tourism organizations:
Table 6: DM functions expectation clusters
(1- more individually, 2 - the same as today, 3 - more integrated)
	Clusters		
DM VARIABLES	Ki	Ki	K3
Organization and coordination of destinations tourism branch (ORF)	2.49	2.97	l.93
Promotion of the region (MAF)	2.35	3.00	2.00
Distribution of services and products (MAF)	2.58	2.96	l.67
Operating and delivering tourism services and products (OPF)	2.49	2.96	2.00
Development of tourism services and products (for the entire destination) (MAF)	2.53	2.99	2.00
Quality control and improvements of the destination's tourism (COF)	2.49	2.87	l.80
Market and visitors' behaviour research (MAF & COF)	2.37	2.98	l.93
Infrastructure and superstructure development (MAF)	2.74	2.99	2.00
Legend: ORF=organization-coordination function; MAF=marketing function; COF=control function
An in-depth analysis of the impact of tourism organization characteristics (e.g. number of employees, revenues, type of organization, major branch, education, experiences, etc.) shows no significant impact on perceptions of DM functions and their implementation. The climate towards DM implementation (thus the establishment of RDOs) depends more on the tourism profile of the destination which was indicated by the results in Table 3. The initiating point of the analysis is that the current organizational structure of Slovene tourism and tourism of the observed destinations, follow characteristics of the contemporary integrated destination management. Nevertheless, the analysis showed that some companies are satisfied with the current situation. Cluster analysis initially looking into three clusters shows that there is a cluster of opponents to any changes (K-i) and a cluster of promoters of integrated DM functions (K-2), but there is also a cluster which inclines towards a more individual or further disintegrated model of DM (K-3).
4 Conclusions
This paper discusses conditions, expectations and contradictions related to the functions of the regional destination management organizations. The major issue with that is the nature of such organizations' activities and administration which impose an additional financial burden on the tourism industry and the public
budget. Underdeveloped tourist destinations with a disintegrated industry demand more integrated and coordinated actions, thus an RDO is needed. The expectations of developing and developed destinations are moderate. At destinations such as Posavje, Zasavje and Podravje, there is an existing need for a coordinated destination management which demands more than just coordination of marketing activities. The Slovene Ministry of Economy announced a major project related to co-financing destination marketing activities with the intention of boosting coordinated and integrated destination marketing activities and initiating the process of founding RDO's. There are obvious issues related to the establishment of RDO's because there are only a few examples of their successful development in Slovenia. Problems and challenges might be in the opposite perceptions of the need for such organizations and their activities and by tourism suppliers who happen to be users of the RDO's services.
Results show that destination marketing mix which falls under destination marketing function presents the most important element of the destination management under RDO's. A successful RDO provides high quality services for all functions of the DM, so if one function is not sufficient all should be of lower quality. Generally speaking, there is a low perception of the current quality of the DM functions at observed destinations with minor differences per destination. In general, the stakeholders demand a more integrated approach; however there are
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Emil Juvan
Development of regional tourism organizations:
some differences in the organization and coordination of the destination's tourism branch, operating, delivering tourism services and products and development of those (for the entire destination). There are three clusters of suppliers according to their support towards integrated destination management. Ki cluster suggests that things should be a little more integrated as they are now, whilst K2 suggests that things should be the same as they are now. K3 cluster demands improvements in terms of integrations.
Bornhorst et al. (2010, 572) found out that the success of a destination is considered differently than the success of the integrated destination management. In their survey among Canadian tourism managers they found that DMO's success depends on relations with suppliers, effective management, strategic planning, organizational focus and drive, whereas destinations success depends on tourism resources (e.g. location, accessibility, products and services etc.). The authors suggest that DMO's should focus on establishing good collaboration among tourism stakeholders and should operate their functions (marketing, development, and control) in an effective and strategic manner. Our survey used the same prerequisites and revealed that despite the somewhat equal destination effect, the need for a more integrated destination management, perceptions and views over activities of the DMO's differ among destinations, hence a customized DMO model should be implemented.
The major question which needs to be addressed is the roles of the destination stakeholders in the development of integrated DM. Small tourism areas in particular develop a rather disintegrated (unprofessional) approach towards tourism which results in ineffective marketing and management processes, thus consuming too much money and time. Slovenia implemented a model of integrated destination management in 1998 which resulted in a number of local destination organizations throughout the country; however being public agencies, thus operating on a limited public budget, they were neither productive nor effective. It might be that there is now a lack of trust among the private sector for integrated destination management and the role of RDO'S within. Every RDO is considered as
additional (redundant) mediator within marketing and management process which causes extra expenses for the private sector that must financially contribute to their operations. Public sector approach towards destination management is primarily sustainable (environment, economy, culture), hence the economic impacts are not their primary concern. The latter is not the case with the private sector which must observe financial (economic) objectives; hence contradictions on expectations might also appear here. The economic benefits of tourism focus on income and industry growth which might impose a negative impact on the quality of the local environment (i.e. social, natural, etc.), thus private-public approach for the RDO seems to be the right approach (Presenza et al., 2005; Bornhorts et. al., 2010).
The analysis revealed that the stakeholders' attitudes towards integrated destination management differ. Destinations are at different level of tourism development (destination lifecycle). However, the tourism indicators (e.g. arrivals, overnight stays and expenditure) showed no significant impact. So the impact might be the type of the distribution of tourism benefits and the tourism businesses structure. It is important to mention that none of the observed destinations have a modern destination organization (e.g. DMO, DMC, RDO) even though there is both a need and demand for it. The major contribution to the knowledge of this discipline is that there is evidence that the distribution of tourism income among destination's stakeholders and the initial organizational structure (depending on stakeholders' structure) of tourism influences opinions and attitudes of stakeholders towards integrated destination management.
Further research should look into the impacts of the management characteristics (e.g. education level, knowledge and experiences etc.) of a particular business within the destination on the perception of DM functions or on the other hand the impact of the destination success (determined through arrivals, income, overnight stays etc.) on the perception and satisfaction of stakeholders with the destination management under regional destination organizations.
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Emil Juvan
Development of regional tourism organizations:
Razvoj regionalnih turističnih organizacij: pogoji, pričakovanja, protislovja
Povzetek
Prispevek razpravlja o percepciji kakovosti funkcij destinacijskega menedžmenta (DM) v organizacijah in podjetjih s področja turizma v treh slovenskih regijah. Njegov glavni namen je analiza izhodiščnega stanja, pričakovanj in protislovij, ki otežujejo oblikovanje integrativnega modela DM. V raziskavo je bilo vključenih 240 podjetij, kar predstavlja dobro polovico vseh registriranih podjetij s področja turizma oziroma sorodnih panog v obravnavanem območju. Glavne ugotovitve analize nakazujejo, da je percepcija kakovosti funkcij DM slaba, pričakovanja so usmerjena bolj v integriran model DM, obstajajo pa tudi določena protislovja. Ta so povezana z osebnimi lastnostmi (mikroelementi) anketirancev, ki so v 60 odstotkih primerov vodilni kader podjetij. Ni pa povezave med identificiranimi nasprotji in značilnostmi organizacij oziroma podjetij (makroelementi).
Ključne besede: destinacijski menedžment, regionalne turistične organizacije, funkcije destinacijskega menedžmenta, pričakovanja, protislovja
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