The Most Outstanding Practice of Sustainable Destination Management ~ The Case of Napa Valley, California, USA~
1. What is sustainability in tourism?
In general, most people may think of sustainability in tourism as "not destroying the environment." However, it does not only refer to environmental sustainability, but also economic and socio-cultural sustainability. Sharpley (2014, p438) mentioned that "Sustainability principles refer to the environmental, economic and socio-cultural aspects of tourism development, and a sustainable balance must be established between these three dimensions to guarantee its long-term sustainability."
Also, the sustainability of a tourist destination means maintaining its competitiveness to be chosen by consumers, while competing with other tourist destinations both domestically and internationally. According to the Tourism Area Life Cycle (TALC) model proposed by Butler (1980), a tourist destination experiences six life stages: exploration, involvement, development, consolidation, stagnation, and post-stagnation (decline or rejuvenation). In other words, if nothing upgrades timely, a tourist destination will surely fall into a decline. Therefore, it is essential to provide new value to customers and enter the rejuvenation trajectory in the consolidation and stagnation stage, which leads to maintaining the competitiveness and sustainability of the destination.
DMO (Destination Management Organization) is responsible for achieving these goals, renewing the value of the destination, maintaining its competitiveness, and ultimately enhancing the economic, environmental, and socio-cultural quality of the destination. According to Morrison (2019), DMOs play a role in the following seven dimensions are significant: planning and research, product development, marketing and promotion, community and stakeholder relationship and involvement, leadership, etc. Furthermore, Wang (2003) focuses on the more intrinsic functional aspects and provides nine roles: information provider, community brand builder, catalyst, fund agent, partner, team builder, etc.
2. The most outstanding DMO practice of sustainable destination management ~ Visit Napa Valley ~ 【Q1】
In that sense, Napa Valley is an excellent example. Napa Valley is a valley area in the mid-western part of California, USA. In 1976, Napa Valley's wine won first place in both the red and white wine categories at a tasting competition held in Paris, France, beating out the top French wineries. After this event, Napa Valley's fame quickly grew. In addition to wine tasting and shopping, Napa Valley also offers culinary experiences in 5-star restaurants, wedding events in the vast vineyards, and nature tourism such as air ballooning and biking.
The name of official DMO for Napa Valley is "Visit Napa Valley, inc." It is a public-private partnership with the board of directors from the private sectors in Napa Valley and the lodging tax usage under the Tourism Improvement District (TID) law. It employs several experts in marketing, destination management, guest experiences and so on, which leads to implementing practices that enables to improve the sustainability of Napa Valley. Below are some of their best examples.
3. The excellent practices of Visit Napa Valley 【Q2.3】
●Practice 1
~Research, appropriate USP setting and marketing~
The first practice for creating sustainable competitive advantages of Visit Napa Valley is building a strong branding based on research and identifying USPs (Unique Selling Propositions). According to Morrison (2019), competitiveness is what sets a destination apart from competing destinations, and DMOs must first identify or create the uniqueness of their destination. He also mentions that the first step in clarification is a careful situational analysis.
Visit Napa Valley has conducted visitor profile surveys every two years. The survey reveals behavioral characteristics such as the reasons for visiting, top activities in Napa Valley, average spending per capita, and the average length of stay for every segmentation (international/domestic and day trip/overnight). I believe these studies have been ensuring that Napa Valley's USP is its historically renowned wines and wineries, and its brand image should be "the perfect place for a weekend getaway." In reality, the campaign slogan "Explore your own backyard" presented around 2019-20 embodied the destination's personality and it seemed to be an excellent way to make people want to spend weekends in Napa Valley.
According to Visit Napa Valley's 2018 Visitor Profile, the average age of visitors is 46.0 years, the average household income is US$170,595, and 51.4% are repeat visitors. The keywords reported to be most liked are wine, scenery, atmosphere, weather, and food. Since the main product as selling point in Napa Valley is wine, which is an expensive commodity, I think it is very appropriate to attract middle-aged people with high incomes as the primary target. In fact, the repeat rate is very high, which indicates that the visitors are delighted with Napa Valley, so I can say that their branding is very successful.
This practice shows that Visit Napa Valley has defined its critical competitive strengths through proper research, setting up a solid branding and marketing plan, as described by Morrison (2019). It can also be said that Visit Napa Valley is properly fulfilling the roles of information provider and community brand builder as described by Wang (2003).
●Practice 2
~Community involvement and membership~
Distributing the economic benefits to the community and involving local businesses are other great practices in Napa Valley. Unfortunately, tourist destinations do not always make money from tourism, as tourists may not spend money on local businesses. Cruise ships are a typical example. They dock at tourist destinations along the coast with large and all-inclusive ships. When the tourists land at the tourist destination, they just see the town or stay at the all-inclusive foreign hotel. They tend not to spend any money at the local restaurants and stores, leading to tourism pollution in the region.
On the other hand, according to the Napa Valley Visitor Industry 2018 Economic Impact Report, the tourism industry in Napa County generates $2.23 billion in total visitor spending. In addition, Visit Napa Valley's 2018 Visitor Profile shows that the average length of stay is 1.9days, the average in-market visitor spend per day is $246.89, and the top activities include Wine tasting rooms at wineries (81.0%), dining at restaurants (65.2%), winery tours (45.3%), and shopping (39.8%). These numbers show that tourist dollars are going to local businesses and residents in Napa Valley.
In addition, Visit Napa Valley has a membership program for business enterprises in the region, primarily wineries, hotels and restaurants. Members have the opportunity to participate in trade shows and business meetings that Visit Napa Valley participates in and sponsors, priority participation in group sales, and the right to paid advertising. Therefore, Visit Napa Valley provides many opportunities for local companies to network and expand their business in this way.
These are examples of the community and stakeholder relationships and involvement mentioned by Morrison (2019) to make local businesses yield a profit. I also believe that these actions of Visit Napa Valley play a role of funding agents and destination marketing campaign organizers, as pointed out by Wang (2003). Encouraging local businesses to participate and generate revenue through tourism is very beneficial, and I think this aim should be recommended in other areas as well.
●Practice 3
~Product diversification and new brand building ~
Napa Valley seems to be doing very well without a hitch, but it faces a serious problem. In the past, Napa Valley has targeted couples who are in age of 40s. Recently, however, prices have continued to skyrocket as accommodations are fully booked during the top season from August to October and on weekends. Along with this, Napa Valley's life cycle stage has entered the stagnation phase in the TALC model proposed by Butler (1980). To address this issue, Napa Valley is focusing on young people in their 20s and 30s who are about to get married and promoting Napa Valley as the perfect place for a wedding with world-class resort hotels, a Michelin-starred culinary scene, and enchanting views.
As for product diversification, the excellence of Napa Valley is expressed in two points. The first point is to develop advertising slogans that matches multiple segments. The current slogan of Napa Valley, "Explore your own backyard," fits the primary segment of the 40s who want to spend a relaxing weekend in Napa Valley. Also, it attracts people in their 20s and 30s who want to have an elegant wedding in the vast nature of Napa Valley. Having an advertising slogan that can be applied to multiple segmentations is desirable from a cost perspective.
The second point is spreading via advertising media. Visit Napa Valley used a marketing budget of at least $30 million for six months in the second half of 2020 on Instagram, YouTube, and Google (Visit Napa Valley, 2020). Since the new target audience is Millennials and social media is the best market communication tool as they often gather information from their smartphones, this Napa Valley's advertising strategy is very appropriate.
According to Visit Napa Valley's 2018 Visitor Profile, the top reasons for visiting Napa Valley are Vacation (40.7%), Weekend getaway (31.1%), and Weddings and special events (11.3%), which shows that there is still a difference between the second and third place. However, I believe they're definitely starting to get the new market and this is exactly the role of DMOs as a convener and a facilitator who alerts the region to problems and acts to ensure the success of new product development, as Wang (2003) argues, when the region is in the stagnation phase.
4. The positive effects of consumers and the industry of Napa Valley 【Q4.5】
On the consumer side, what are the benefits of a trip to Napa Valley?
Considering consumers' travel motivations regarding Crompton's social-psychological motivations noted by Morrison (2019), Napa Valley wine tourism satisfies the experiential consumption needs of people who want to escape from their busy daily lives to enjoy culture, enhance intimacy and spend a fulfilling weekend. As mentioned earlier, the current traveler demographic consists of couples in their 40s, many of whom are still in executive positions or busy with their daily lives and are motivated largely by the need to relieve stress. In addition, Napa Valley wine and accommodations are very luxurious products, and a trip to Napa Valley matches the desire to show off one's social status. Event tourism for wedding parties in their 20s and 30s also matches the desire for solid friendships and kinship during the trip. From this perspective, it is clear that the popularity of Napa Valley is based on substantial consumer motivation.
According to the Napa Valley Visitor Industry 2018 Economic Impact Report, there is a number of 3.85 million annual visitors to Napa Valley, and the total visitor spending generated in Napa County is $2.23 billion. The industry is the second largest employer in Napa County after the wine industry, supporting an estimated 15,872 local residents with a total payroll of $492 million. The population of Napa County in 2018 was 138,789, so about a tenth of the population is involved in and benefits from the tourism industry. Therefore, protecting Napa Valley's wine industry and tourism industry is essential for the region. In this regard, the efforts of Visit Napa Valley to solve the stagnation of the number of tourists and diversify its products are very significant. And also, the Napa Valley's economically, environmentally and socio-culturally harmonious sustainability model should be encouraged all over the world.
5. Suggestions for expanding the knowledge of Visit Napa Valley 【Q6.7.8.9】
In order to spread the practices of Napa Valley to other DMOs, it would be great if international organizations such as World Tourism Organization (UNWTO) promote their practices as good benchmarks and practice with this kind of concept all over the world. At this point, UNWTO has recognized the importance of DMOs in managing tourist destinations and is conducting educational activities to encourage the formation of DMOs, issuing guidelines on standards for DMOs, and holding seminars. As a part of this, I think it would be desirable if the UNWTO compiles good practices of DMOs worldwide and disseminates them to the world. If I were a member of the UNWTO, I would like to be involved in the compilation of this report, survey the activities of DMOs around the world, and compile measures to deal with local conditions and problems.
On the other hand, what I can do now, as a member of a DMO in Japan, is to apply the practices of Napa Valley to my own DMO. I would like to identify UPS based on accurate surveys and conduct effective marketing. In addition, I will build a system to ensure that money is spent in the region. The region under my responsibility is still growing as a tourist destination, so the efforts to diversify products in the stagnation phase like Napa Valley are not applicable. However, I can use the TALC model as a reference and develop my own strategy. I learned from Napa Valley the importance of developing advanced strategies while sticking to the basics. I hope that this blog will provide some useful information for the management of tourist attractions around the world.
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References (without Hyper Links)
Butler, R. W. (1980). The concept of a tourist area cycle of evolution: implications for management of resources, Canadian Geographer, 24, 5-12. doi:10.1111/j.1541-0064.1980.tb00970.x
Morrison, A. M. (2019). Marketing and Managing Tourism Destinations (English Edition) (2nd ed.). Routledge.
Sharpley, R (2014). Sustainability: A Barrier to Tourism Development? In Sharpley, R. & Telfer, D. J (Eds.), Tourism and Development: Concepts and Issues (2nd ed.) (p428-452). Channel View Publications.
Wang, Y. (2003). Destination Marketing and Management: Scope, Definition and Structures. In Wang, Y. & Pizam, A. (Eds.), Destination Marketing and Management: Theories and Applications (p1-20). Wallingford, Oxfordshire: CABI.
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