Performance evaluation framework for destination management organisations: managers' perspectives.

Abstract

This study aims to develop a performance evaluation framework for Destination Management Organisations (DMOs). Although tourism researchers (Ritchie and Crouch 2005; Pike 2005; Bornhorst et al. 2010; Morrison 2013; Pike and Page 2014) acknowledge that the organisational performance of a DMO is a key determinant of destination development and competitiveness, existing studies in this area are scarce. Therefore, the major contribution of this study is towards the advancement of knowledge and understanding of the construct of DMO effectiveness, and ultimately the development of a robust DMO performance evaluation framework (PEF). A stronger focus on evaluation of DMO effectiveness is particularly relevant in light of the recent public sector funding cuts in England that have significantly affected DMOs. The thesis is informed by a critical review of the existing tourism destination development and performance management literature. The discussion focuses on the strategic and operational roles of DMOs as key development agents within the contemporary context of destinations in England. Moreover, the study is informed by relevant performance management theories applied in wider private, public and non-profit organisational contexts. The principles of organisational effectiveness in this study are examined by a synthesis of multiple theoretical lenses: goal theory, stakeholder theory and competing values approach. Particular emphasis is placed on existing theory and practice of evaluating organisational effectiveness in the context of small and medium organisations, as well as development agencies, as they are pertinent to the organisational nature of DMOs. The study’s research design is underpinned by an interpretive social sciences paradigm and employs a qualitative methodology. A total of twenty semi-structured interviews were conducted with senior DMO managers across England. Emphasis is on identifying senior DMO managers’ perspectives on the concept of effectiveness and organisational performance. Furthermore, the interviews focus on exploring the key determinants of DMO performance evaluation. The thematic analysis and critical discussion of DMO managers’ views with the relevant literature has led to relevant conclusions that informed the performance evaluation framework as presented in the final chapter of the thesis. The theoretical contributions of the study include the identification of key performance perspectives that enable the comprehensive evaluation of operational effectiveness and strategic impact of DMOs. The findings of this study suggest that DMO effectiveness is defined by the organisation’s rationale for existence and non-profit strategic impetus, which includes supporting the visitor economy by means of strategic value creation and co-creation, strategic leadership for tourism development, and advancing the collaborative governance structures for tourism development. The study ascertains that several features of the specific destination context determine the complexity of destination development and ultimately the emphasis of DMOs in particular performance evaluation perspectives. Nevertheless, it was found that a holistic approach to DMO performance evaluation requires a focus on two key interrelated perspectives: outward-looking and internal. From an outward-looking perspective, DMO performance evaluation primarily focuses on the achievement of strategic tourism development results that the DMO creates or co-creates with its stakeholders. These strategic results (or value) is underpinned by the DMO’s rationale for existence, and is associated with its supporting and leadership role in four destination development areas: identifying the rationale for intervention; designing action plans for the strategic support of tourism; administering the implementation of destination development activity; and, monitoring the impact of development interventions. Internal performance perspectives focus on internal value creation within a DMO in terms of business planning and organisational capability. The former relates to evaluation of business objectives and functions, as well as structures and processes; while, the latter relates to evaluation of resources, skills and competences. Importantly, the interface between outward-looking and internal perspectives of DMO effectiveness is elusive, as internal and external stakeholders co-create value with various levels of contribution at different stages of the process of development. The study specifies the nature and mechanisms of value creation and co-creation across outward-looking and internal perspectives of DMO performance; therefore, it supports an advanced understanding of the dynamics that determine the elusiveness between DMO and destination success. The study has several practical applications for DMO managers and policy makers. The study can help DMO managers conduct systematic and robust performance evaluations of their organisation by combining both outward-looking and internal perspectives of DMO effectiveness. This can help them identify areas for improvement of economy, efficiency, capacity and effectiveness in achieving strategic and operational results. Ultimately, this can lead to improvements in return on investment for DMOs and their resource providers (e.g. funders). The study can help DMO managers and stakeholders determine each other’s contribution to the value creation and value co-creation in destination development activities. This can assist DMOs evaluate their added value or additionality in destination development initiatives, which in turn can support or clarify the rationale for the DMO’s existence. Moreover, the study supports improvements in destination development initiatives by promoting the need for DMO managers to work in partnership with stakeholders and advance unified theories of change and impact chain models for destination development. This way, DMO managers can improve effectiveness in monitoring and controlling the processes of project and programme implementation. The study also helps DMO managers identify gaps in skills and competences for performance monitoring and evaluation. Demonstrating commitment in developing performance evaluation capability, as well being able to demonstrate return on investment can be valuable for DMOs. It enables them to gain credibility, trust and legitimacy, which can lead to improved capacity to develop successful partnerships with key stakeholders. This is then particularly important in the contemporary context of DMOs in England, where they work as key partners within LEPs. In addition, it is valuable in times of scarce public sector funding as strengthening partnerships with key stakeholders can lead to opportunities for revenue generation. Finally, the study can enable policy makers to evaluate DMO performance and rationalise their existence and their roles in the context of sustainable destination development.