27th International Conference on Organizational Science Development
KNOWLEDGE FOR SUSTAINABLE DEVELOPMENT
March 19 – 21, 2008, Portorož, Slovenia
Tourist destination competitiveness: market challenges and
evaluation systems*1
Ines Milohnić, Ph.D., Assistant Professor
Faculty of Tourism and Hospitality management Opatija, Croatia
ines.milohnic@fthm.hr
Dora Smolčić Jurdana, Ph.D., Assistant Professor
Faculty of Tourism and Hospitality management Opatija, Croatia
dora.smolcic@fthm.hr
Abstract
Quality in tourism as a key factor of competitiveness and market competition implies continuous
monitoring of market trends. Therefore, a need for constant comparison with the best competitors
in tourist market occurs.
Prosperous relation 'Value for Money’ is implied, moreover, tourist expect 'Experience for
Money' i.e. 'Emotion for Money'. All destinations which intend to keep and increase their market
share, i.e. to remain competitive in the demanding tourism market, need to direct themselves
towards that aim.
This paper proposes integrated approach towards strategic management as the most appropriate
concept for Croatian tourism and hospitality development. New form of development is based on
integrated approach, horizontal and vertical integrating of all subsystem elements of the entire
controlling system, along with the quality partnership relations establishment at the level of
tourist destination.
Quality of each particular segment of tourist offer is indisputable, yet in the end, the guest
attributes quality to the destination as a whole. Only cooperation of all participants and joined
efforts within the destination can result in a quality and consistent offer and positive destination
image.
Benchmarking as a modern method of comparison with the best competitors, 'Interactive
Destination Evaluation System (IDES)' diagnosis system as a tool for internal and external
benchmarking and Balanced score Card (BSC) will be elaborated according to the paper subject.
Key words: tourist destination, competitiveness, quality, partnership
* This article is the result of the scientific project ''Quality Models and Public – Private Sector Partnerships in
Croatian Tourism'' (project nr.116-1162459-2456), suported by Croatian Ministry of Science Education and Sports
1 Introduction
Contemporary tourists are more experienced and demanding than ever before. Tourist market, by
its dynamics, makes the offer and demand interact, condition and change accordingly. Many
destinations raise their standards and tourists' expectation level by improving their tourist offer.
Guest today usually does not differentiate according to various offer carriers, but according to
offer and ascribes its quality to the destination level. Precisely this makes the destinations
develop process orientation for all carriers of destination tourism product (Magaš, 2003.).
Prosperous relationship Value for Money is more and more implied and mere characteristics of
successful and good relaxation are not good enough. Tourists expect Experience for Money, that
is, Emotion for Money (Strategija razvoja ..., 2004.).
2 Tourist destination competitiveness
Balanced development of tourism implies creation of developmental model, i.e. strategies which
have been adapted to guests’ needs and expectations, all in favor of local community progress.
Developmental model includes defining:
 General aim
 Future scenarios development.
General aim of tourist destination competitiveness strategy is the increase of life quality.
Development and competitiveness are stressed as the most important parameters of economy
progress improvement.
Development includes the increase of employment rate, production, property value and new
investments, while competitiveness includes salaries increase, investments cost effectiveness,
sustainability, and above all, productivity.
Prosperity feeling is accomplished through physical and psychical prosperity of population;
physical prosperity includes, above all, physical security, environment quality and everyday
amenities. Accordingly, psychical prosperity takes into account the following parameters: local
identity, security, local population feeling of pride etc.
Future scenarios development should be based on prominent examples of tourism development
model in the Mediterranean area, and also in other parts of the world, on stands and initiatives of
tourism development carriers.
2
Destination competitiveness depends on (Ritchie & Crouch, 2003.) :
 capabilities to increase the tourism incomes,
 capabilities of constant attraction of tourists
 providing pleasure and experience/adventure to cherish
 profitability
 ensuring life quality for locals and
 natural environment protection.
Tourist destination development evaluation has so far been mostly based on using the
information of arrivals and overnight stays in the destination, which is absolutely inadequate for
creating accurate estimations.
First step in grading the competitiveness is the evaluation of present state in tourist destination,
which demands vast analysis with the aim of locating weaknesses, but as well creating the
possibilities for shaping the propositions of destination competitiveness.
Magaš describes competitive advantages of tourist destinations as capabilities of a tourist
destination management to develop and optimally combine derived and natural elements of
tourist offer at all levels (Magaš, 2003).
Every natural or cultural attraction is a potential tourist attraction which adds to tourism
development in a specific destination. It is possible to achieve tourist competitive destinations in
all areas of Croatia using a quality approach and marketing, together with creation of “stories” or
“experience”. Every region should be focused on development of the specific offer which will be
based on the specifics of the area.
It is clear that the accent is put on the need of forming the indicators’ system in order to enable
the evaluation of every tourist destination competitiveness.
It is possible to estimate the offer quality, as an element of competitiveness capability of a certain
destination, with the help of objective (offer structure, income, expenditures etc.) and subjective
information (grading guest’s satisfaction, price competitiveness-value for money). Important
element of destination quality evaluation is also the relation of tourists’ expectations and tourists’
satisfaction during the visit to the destination.
It is necessary to ensure monitoring a specific destination competitiveness result using a special
indicators’ system (score) (information, presentation, reports). Continuous research needs to
ensure the advancement of methodology with a gradual introduction of benchmarking system to
verify record and maintain tourist destination competitiveness.
3 Relevance of benchmarking method and tourist destination
evaluation system
3
Quality in tourism as a key factor of competitiveness and market competition implies continuous
evaluation of market trends. Therefore, a need for continuous comparison with the best-practice
competitors in the market arises.
3.1. Tourist destination benchmarking
Benchmarking provides gradation and measuring results and sets up norms and standards. In
those way service users, buyers are given valuable information on accommodation types of
destinations in overall.
Benchmarking is one of modern, effective methods of adaptation to market changes and needs.
Aim of tourist destination benchmarking lies in the possibility of comparison, evaluation and
better results’ achievement when contrasted to its competitors.
Qualitative
Qualitative measures
Measures
Management
Management
strategies
strategies
Internal
Benchmarking
Performance
Effectiveness
Measurement
Internal
benchmarking
External
External
benchmarking
Benchmarking
(information
(Data
exchange)
exchange)
measurement
Generic
Generic
Benchmarking
benchmarking
(Externalquality,
quality
(external
standardsand
&
standards
awards)
rewards)
Taking
Action
Action
(politics,
(devising
policies
strategy
and &
strategies
and taking
steps
action)
undertaking)
Management
Marketing
strategies
strategies
Quantitative
Measures
Quantitative
measures
Figure 1: Benchmarking elements in tourism (a model)
Source: Kozak, 2004.
The following figure shows basic characteristics of destination benchmarking. It is mostly based
on quantitative measurement, but also respects quantitative indicators.
It implies continuous cooperation between public and private sector at the level of destination, as
well as the vertical and horizontal integration between different stakeholders.
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CHARACTERISTICS
Compulsory legal acts
Context
Number of characteristics
Period of implementation
Repetition
Distribution method
Management
Results’ measurement
DESTINATION BENCHMARKING
No
Rather vast
Many
Longer
Little
Short
Aims more towards partnership of central and local
authorities, private sector and international organizations
Mostly based on qualitative measurements
Table 1: Basic characteristics of destination benchmarking
Source: Kozak, 2004., p.78.
When evaluating a specific tourist destination, besides the mentioned standards which are used in
destination benchmarking, ‘evaluation systems’, with the aim of an early discovery of
‘destination deterioration’ are more and more used in practice.
3.2. Systems of destination evaluation
Althought there are different systems for a specific destination evaluation, this paper will tackle
two systems: «IDES» i «BSC» (Milohnić, 2006.).
 IDES (Interactive Destination Evaluation System), is a holistic diagnostic system which can
also be used to simulate different scenarios. This system can be used as a measuring tool for
internal and external benchmarking, which enables certain destination dynamics’ monitoring
and provides a comparison between different destinations, and after all, it can be used as a
warning system.
From a set of selected indicators, a dynamic and user-friendly decision-making tool which
summarizes the following three functions can be built:
1. gives destination managers strategic information about current situation and risk of
decline that can be easily interpreted
2. in an effective way shows (by means of a series of snapshots) the evolution of the
destination over time
3. simulated by means of images (created with a simple interface) the effect of changes in
variables
Using the tools’ assistance, variables have been identified as adequate in order to achieve a
successful implementation of IDES:
A. Tourists/Residents
B. Excursionist share
C. Economic role of tourism
D. Gini seasonality index
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E. Gini demand structure index
Two other variables have been added to this list in order to acquire more comprehensive insight
into the destination:
F. Co-operation. This variables can be expressed by “Degree of co-operation”, which is
measured by the percentage of operators and organizations involved in all partnerships.
G. Environmental impact. This variable represents the physical pressure which affects the
destination as a consequence of tourism, and can be expressed most easily by means of
use intensity indicators (i.e. number of visitors / surface).
Other indicators which could prove useful to express environmental impact are represented by
waste levels, water consumption and air pollution.
In practice, most frequently used display for tourist destination evaluation are: spider plots, lifecycle and tourist flow seasonality.

Characteristics of a Spider plot are: a “Static image” (like a photo) of the destination, in
contrast to a “Dynamic description”, when a chronological sequence is available.
Urban Size
Service sector
Tourists/Residents
Same-day
visitor share
Innovation
Impact on local
mobility
Economic role
of tourism
Significance of tourist
mobility for total mobility
Figure 2: Spider plot of a tourist destination 'X'
Source: European Commission, 2002.
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
Destination life cycle. Tourist destination passes through different stages of development,
which are referred to as destination life cycle. According to a general model in a tourist
theory, it passes through the following phases: research, engagement, development,
consolidation, stagnation, and after that, the options of total decline or rejuvenation. Of
course, the aim is to ensure its rejuvenation and maintain the competitiveness in a tourist
market.

Tourist flow seasonality. The Lorenz curve and Gini index are tools for measuring
seasonality. This is an important strategic variable since excessive tourist peaks in a
destination can have adverse social and environmental impacts. Larger seasonality is the most
typical for coastal destinations, and tourist flows are mostly concentrated in the summer.
«BSC» - Balanced Score Card is a “tool for regional development”, and is used as an early
warning system, to control or prevent the decline of a tourist destination (Kaplan. & Norton,
1996.).
The foundations of a BSC were given by Kaplan and Norton: “What cannot be measured, cannot
be controlled” (Kaplan. & Norton, 1992.).
BSC approach tries to contribute the management through a set of combined measures in order to
see the overall picture. Ritchie warned in 2004 that the future of benchmarking in tourism has
become a necessary reality (Ritchie, 2004.).
Benchmarking method is not used enough in tourism practice, weather talking about tourist
organizations or tourist destinations; it has not been explored nor exploited enough as learningfrom-the best-practice tool.
The aim of the evaluation is determining the direction of a future destination development
system, i.e. ensuring its sustainability in a long run. In those aims, a great support could be
provided by benchmark standards, as well as the systems for tourist destination evaluation.
4 Integrated approach towards strategic management in tourism
Complexity of relationships in an international tourism market, exceptional competitiveness and
a constant rise of new tourist destinations set new challenges for tourist destination management.
Complex nature of tourism demands an integrated approach towards strategic management and
cooperation (formal and informal) between the offer carrier, local community and other
stakeholders at the destination level.
Concept of strategic management includes a variety of management decisions and actions, which,
in a long run, have a job of determining business of subjects within the managerial system of
tourist destination.
Strategic management also takes into account leadership of business subjects, together with key
influence from the surroundings and all intern factors (Stacey, 1997; Wheelen & Hunger, 1995).
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Strategic management of tourism and as a sector needs an integrated approach at all management
levels taking into account all their interests, with a constant striving to reach optimum balance of
interests in a long run.
Management matrix of the tourism consists of following levels (Milohnić, Perić, Cetinski, 2006):
 National (macro level)

Regional and destination (mezzo level) and

Hospitality companies (micro level).
Coherence of strategic management process has central place in the umbrella management
strategy on national level, though this work focuses on strategic management on destination
level.
Integrated approach to strategic management represents the best concept for Croatian model since
it is possible to get permanent and positive results only by horizontal and vertical connecting of
elements in all subsystems of overall management system. The results will be measurable in both
market and financial sense and refer to all business’ subjects that are included in the strategic
management process in tourist destination on three basic management levels.
Efficient system management will determine the rhythm and potential tourist destination growth,
its capability of attracting confident investments and prosperity between local population and
visitors, which includes implicit system sustainability in a long run.
Strategic management in tourism destination represents a platform for vertical integration of a
tourist destination on regional and national level, but also a framework for development of tourist
destination on micro level, i.e. in hospitality companies (Cetinski, 2005).
Outlining competitive offer of each tourism destination in Croatia should be based on perception
of strategically defined business entirety. Therefore, tourist destination should be conceived as a
business system that would recognize all the relevant demands present in system of globalization,
but, at the same time, be recognizable by its specific offer.
Demands of tourist destination are based on previously mentioned starting points; destination
becomes a business unit of tourism offer and should be managed on new bases and create basic
presumptions for converting comparative into competitive advantages as starting points of its
better positioning in the world tourism market.
5 Conclusion
Quality becomes a key element of tourist destination competitiveness. Therefore, all elements of
tourist offer should offer the highest possible level of quality in the segment of the tourist product
specificity which they have offered in the market.
New and changed standard of development is based on an integrated approach, horizontal and
vertical connecting of the all sub-system elements of a total management system, together with
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the establishment of quality partnership relationships, which enable reaching the results
measurable in market and financial sense.
Tourist destination state evaluation demands vast analyses with the aim of locating the
weaknesses, as well as the creation of possibilities for shaping propositions for increasing the
destination competitiveness. Benchmarking method implementation will ensure grading and
measuring results, together with establishing norms and standards.
There is a wide range of reasons why benchmarking will gain on importance in development and
effort of achieving better competitiveness of a tourist destination.




constant government policy tries to create a more competitive surrounding
there are clear market advantages in the global market; reputation, high standards and
exploration of world-class results should be maintained
new regime of quality guarantee will become an important factor in fast development and
implementation of new approaches toward benchmarking
benchmarking is a powerful method for exploration and learning about a good and effective
practice.
Along with benchmarking, other systems of tourist destination evaluation have been developed.
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