Size matters! - Increasing DMO effectiveness and extending tourist destination boundaries

In traditional community type of destinations, destination management organizations (DMOs) provide local services for visitors and fulfill destination marketing functions. On the demand side, they focus their activities on image and reputation building, product bundling and sales and distribution management. On the supply side they are involved in various functions like information services, coordination among the tourist SME's, infrastructure operation or support as well as destination planning functions. Traditionally these local DMOs, often to be found in mature tourist destinations, are organized as more or less public administrations and authorities or as public-private-partnerships, mostly covering the territory and being responsible for services in one or more municipalities.
As traditional community type of destinations have to compete with company type of destinations like resorts, theme parks or even cruise boats, the respective DMOs have to transform themselves into modern, market oriented service centers. The current challenges require a critical budget and product-oriented regions, with a rather centralized marketing and management. Therefore, the reach and boundaries of destination areas must be evaluated and in many cases redefined. With the aim of deepening the understanding of destinations economics and delivering a structure for analyzing and organizing destination functions, this paper analyses the criteria for defining the boundaries of destinations and consequently budgets for the respective DMOs by looking at the case of the Swiss canton of Grisons. The conceptual paper is based on a single case study and demonstrates the link between type of destination and its life cycle position with its DMOs tasks, activities and budgets.