The Smart DMO: A new step in the digital transformation of

destination management organizations

Ulrike Gretzel 1*
1University of Southern California, 3502 Watt Way, Los Angeles, CA 90089, USA. E-mail: [email protected]
*Corresponding author

Abstract
Smart tourism development has been adopted by destinations around the world to strengthen their long-term
competitiveness in light of rapid technological, societal and environmental change. Destination management
organizations (DMOs) are generally endowed with smart tourism governance at the destination-level and typically
see it as a great opportunity to prove their relevance. However, these organizations also face enormous challenges
and often lack the capacities and competencies needed to successfully govern smart destinations. While recent
literature highlights the importance of smart destination governance, it does not provide much guidance in terms
of the functions and roles of smart DMOs. This paper presents a preliminary conceptualization of six smart DMO
functions that support smart governance roles, namely mobilizing, match-making, managing, sensing,
shapeshifting and stewardship. As such, it presents practical guidance for DMOs trying to implement smart
destination governance and outlines the need for research on smart DMOs.

Key words: smart tourism; destination marketing organization; digital transformation; tourism marketing;
destination governance

Citation: Gretzel, U. (2022). The Smart DMO: A new step in the digital transformation of destination management
organizations. European Journal of Tourism Research 30, 3002.

© 2022 The Author(s)

This work is licensed under the Creative Commons Attribution 4.0 International (CC BY 4.0). To
view a copy of this license, visit https://creativecommons.org/licenses/by/4.0/

RESEARCH PAPER 1
 The Smart DMO: A new step in the digital transformation of destination management organizations

Introduction
Smart tourism refers to efforts aimed at integrating advanced technologies into the fabric of
destinations in order to enhance their innovation capacity, generate value creation opportunities, and
mitigate the negative effects of tourism while providing tourists with superior experiences (Gretzel et
al., 2015a). Destinations around the world have eagerly adopted the notion of smart tourism: China’s
smart destination initiative was one of the first attempts to strategically implement smart tourism in
destinations to address issues faced in the light of new waves of mass tourism (Wang et al., 2013). South
Korea’s tourism destinations were quick to adopt the concept of smart tourism to leverage the highly
developed technological infrastructure of the country and promote international tourism (Koo et al.,
2013). Other countries in Asia followed suit, with Vietnam’s National Administration of Tourism
organization in partnership with the national telecommunications group rolling out smart tourism
projects in multiple localities across the country since 2017 (Vietnamplus, 2019). Another example is
Thailand, where smart tourism development so far includes equipping airports with advanced
technologies and building data platforms that allow for visitor monitoring at destinations like Phuket
(Phocuswire, 2019).

Similar efforts to drive smart tourism agendas forward are undertaken in Europe. In Spain, smart
tourism was included in the National Integrated Tourism Plan 2012-2015 to boost innovation in tourism
and increase Spain’s competitiveness as a world-class tourism destination (De Avila Muñoz & Sánchez,
2015). In Europe overall, smart tourism was firmly anchored in the Europe 2014-2020 strategy for smart,
sustainable and inclusive growth. Initiatives like the European Capital of Smart Tourism
(https://smarttourismcapital.eu/) provide evidence that this has led to implementation of specific
efforts in various cities, with Helsinki and Lyon winning in 2019 and Ljubljana, Málaga, Copenhagen
and Linz receiving awards for projects that increase the sustainability, accessibility, digitalization and
creativity of their destinations. In 2020, Gothenburg, Málaga, Breda, Ljubljana and Karlsruhe were
recognized for their smart tourism development efforts. Smart tourism development has even reached
the farthest corners of Europe, with the Azores developing a number of smart tourism initiatives mostly
focused on mobilizing tourism stakeholders and enabling knowledge transfer (see
smarttourismhub.com).

But smart tourism has also spurred development in other regions of the world, for example the Middle
East. Tel Aviv, winner of the Best Smart City in the World title in 2014, initiated smart tourism to foster
collaboration between technology start-ups and tourism providers at the destination
(Destinationthink.com, 2016). In Africa, the Moroccan Agency for Tourism Development
(https://smit.gov.ma/en/) held an international conference called “Smart Tourism Africa” in
conjunction with COP22 in November 2016, mostly discussing barriers to smart tourism development
in the region. Smart development is specifically incentivized on Mauritius (Dabeedooal et al., 2019).
Smart tourism initiatives can also be found in South America, most notably in Brazil. The Brazilian
province of Paraná, for instance, has a strategic tourism plan that aims at achieving substantial progress
towards smart tourism development by 2026 (http://www.turismo.pr.gov.br/). Thus, while approaches,
motivations and levels of development might differ, it is clear that smart tourism development is a
global phenomenon that is not just a utopian vision of tourism destinations promoted by academia, but
is in fact already firmly rooted in the practices of many destinations around the world.

What these initiatives also illustrate is that smart tourism involves strong private-government
partnerships, as discussed by Gretzel et al. (2015a) and Jovicic (2019). Further, they emphasize the role
of smart tourism governance as highlighted by Ivars-Baidal et al. (2019). Similarly, Boes et al. (2016)
identify leadership at the destination level as a main driver of smart tourism competitiveness. Oates

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(2016) suggests that smart destinations require more wide-reaching destination management than
traditional destinations and therefore also strong destination management organizations (DMOs).
Similar arguments were brought forward by Gretzel and Scarpino-Johns (2018), who depicted smart
tourism as a wide-reaching opportunity for DMOs to strengthen their position within the tourism
ecosystem. However, what specifically such a smart DMO needs to be or do to realize smart tourism
development at their destination has not been holistically discussed in the current literature.
Consequently, this paper aims to conceptualize the characteristics and strategic priorities of the smart
DMO.

Literature Review
Smart tourism
Smart tourism describes a form of tourism development that takes advantage of advanced technologies
(notably sensors, wireless communication networks and big data analytics) to achieve sustainable
development goals. Recent reviews of the smart tourism literature illustrate its importance but also hint
at some definitional unclarity (Ye et al., 2020; Johnson & Samakovlis, 2019; Mehraliyev et al., 2020; 2019),
and they demonstrate a lack of uniform focus on sustainability outcomes (Shafiee et al., 2019).
Technological agendas dominate the smart tourism discourse in research and in practice (Kontogianni
& Alepis, 2020; Dorcic et al., 2019; Gretzel & Collier de Mendonça, 2019). While technology is a
significant driver of smart tourism development, it is not sufficient for smartness to be achieved at a
destination. Boes et al. (2016) distinguish between hard (technological infrastructure) and soft
(innovation, social capital, human capital and leadership) smartness factors that need to work together
to facilitate smart destination development. Similarly, Buhalis (2020) stresses that because of the
immense disruptive potential of smart tourism, strong leadership is required. Nam and Pardo (2011)
suggest that smartness has three dimensions, namely a technological, a human and an institutional one.
While smart tourism literature has mainly focused on the first two, the latter is currently widely
neglected, with some exceptions such as Jovicic (2019), Ivars-Baidal et al. (2019), Gretzel and Scarpino
Johns (2018), Gretzel and Jamal (2020), and the aforementioned paper by Boes et al. (2016).

Smartness at the tourism destination level continues to be mostly defined by the offerings provided that
might attract tourists, such as amenities and attractions (Huertas et al., 2019). Gretzel et al. (2018)
identify smart (aka technology-supported and data-fueled) tourism experiences as the top layer of the
smart tourism system. Similarly, Gretzel et al. (2015a) establish tourist experience enhancement as the
primary goal of all smart tourism efforts. Femenia-Serra et al. (2019) conceptualize the smart tourist as
the ultimate consumer of smart tourism. Personalization of touristic or hospitality experiences is seen
as a core aspect of smart tourism (Neuhofer, Buhalis, Ladkin, 2015), as is touristic mobility (Lamsfus et
al., 2015). In accordance with this focus on smart tourist experiences, Buonincontri and Micera (2016)
stress increased levels of experience co-creation as an important outcome of smart tourism initiatives,
and Cimbaljević, Stankov and Pavluković (2018) see smart experience co-creation as the central driver
of smart destination competitiveness.

In contrast, Lalicic and Önder (2018) adopt a multi-stakeholder view and state that smart tourism
encompasses a range of tourism stakeholders with diverse interests and involves the welfare of tourists
and residents alike. This notion of a multitude of agents and beneficiaries is further reflected in Gretzel
et al.’s (2015b) conceptualization of smart tourism from an ecosystem perspective and in Del Chiappa
and Baggio’s (2015) understanding of the networked nature of smart destinations. Similarly,
Eichelberger et al. (2020) highlight the importance of encouraging an entrepreneurship-focused climate
in smart destinations to foster value creation activities within the destination’s entrepreneurial
ecosystem. Gretzel (2018) also suggests that smart tourism is a much more comprehensive framework

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than what the literature on smart tourism experiences implies; it is not just consumption-focused but
has a broad range of goals that require careful governance. Ivars-Baidal et al. (2019) emphasize smart
tourism’s role in creating new opportunities and challenges for destination management, and Gretzel
(2020) discusses smart tourism as an important driver of and approach towards tourism development.

Indeed, smart tourism does not necessarily need smart tourists (as in tourists equipped with smart
phones that intentionally tap into the smart offerings at a destination or attraction to enhance their
experiences). Smart tourism can be integrated in the fabric of the smart destination or smart tourism
organization and remain invisible to those who consume tourism. For example, sensors or CCTV
cameras can measure tourist flows and inform policies as well as management strategies to counteract
overtourism in particular areas. No active input from tourists is needed and not only will tourists have
a better experience, residents will be less exposed to the negative effects of tourism, benefits and impacts
of tourism will be more equally spread across a destination, and the DMO can exploit the situation for
marketing purposes. Consequently, while delivering smart tourism experiences is an important goal for
smart destinations, developing smart tourism infrastructure and enabling smart tourism business
ecosystems form the fundamental drivers of smart tourism development. Both require planning,
coordination and implementation beyond individual tourism provider levels.

From a smart city perspective, Yigitcanlar et al. (2018) establish the following eight areas that smart
development seeks to improve: 1) Governance; 2) Planning; 3) Productivity; 4) Innovation; 5) Liveability;
6) Wellbeing; 7) Sustainability; and, 8) Accessibility. The goals formulated for smart tourism are
unfortunately more technology-centric and less holistic. SEGGITUR (2018) lists the following as crucial
areas of smart tourism development in Spain: 1) Technology; 2) Sustainability; 3) Innovation; and, 4)
Accessibility. The EU Capital of Smart Tourism initiative (European Commission, 2018) provides awards
for achievements related to technology, sustainability, accessibility, digitalization and cultural
heritage/creativity. However, smart tourism development should also not be seen as entirely outcome-
focused. Yigitcanlar et al. (2018) suggest that goals aiming at better governance, planning and
functioning imply that a main priority for smart tourism is the improvement of processes. In line with
this idea, Cimbaljević et al. (2019) acknowledge that destination policy, planning, development and
management are critical in supporting smart tourism efforts.

Smart destination governance

Smartness at the destination level emerges from the flexible interplay of different value creating entities.
Gretzel et al. (2015b) emphasize that these can be traditional tourism providers but also residents,
technology start-ups/platforms, media companies or government agencies. They can be physically or
just virtually linked to the destination. Their connectedness and resulting value (co-)creation activities
emerge from the technological infrastructure and data capabilities available in relation to the
destination. This is what Boes et al. (2016) refer to as “hard smartness”. As such, destinations become
smart when smart technologies are embedded in their physical and virtual infrastructures and data is
harnessed in smart ways to achieve smart tourism goals (Gomes et al., 2017). However, as mentioned
above, Boes et al. (2016) stress that such “hard smartness” needs to be complemented with “soft
smartness” in order to be effective. They describe “soft smartness” as requiring investments in
innovation, human capital (knowledge and skills) and social capital (collaboration). Most importantly,
they recognize that smart destination development requires a different kind of governance to facilitate
smart capacity building. Specifically, they define the leadership component of soft smartness as
developing an innovation-friendly environment through participatory governance, establishing and
communicating smart development-focused roles and regulations (so-called institutional logics), and
actively managing the transition towards smartness (change management).

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Destination governance per se is defined by Volgger et al. (2017:19) as the “coordination of collective
action in tourist destinations, encompassing domains such as strategic management, marketing and
planning/policy”. Beritelli et al. (2007) describe it as setting and developing rules and mechanisms, as
well as business strategies. Similarly, Gomes et al. (2017) describe destination governance as
encompassing strategy, planning and management. In terms of objectives, destination governance aims
at balancing the interests of different stakeholders (Dredge & Jamal, 2013) through shaping the
structural, strategic and motivational aspects of collective agency at the destination (Volgger et al.,
2017). While these overall goals remain relevant, smart development calls for a transformation of
traditional destination governance in terms of advanced use of technologies to facilitate governance
processes, as well as the adoption of more sustainable approaches, such as participatory governance
(Bolívar, 2018a; Lalicic & Önder, 2018).

La Rocca (2014) describes a number of smart destination governance elements, ranging from technology
implementation to infrastructure provision, activation of stakeholders and coordination of efforts.
Ivars-Baidal et al. (2019) present a multi-level model of smart destinations that places governance firmly
at the strategic-relational level. In practice, smart destination governance often involves championing
and communicating smart tourism ideas (Molinillo et al., 2019). This is typically done with the help of
smart destination brands; however, smart destination branding is not enough. Gretzel and Collier de
Mendonça (2019) draw attention to the often empty rhetoric of smart tourism initiatives and emphasize
the importance of mobilizing stakeholders through clear and expressive brands that approach smart
tourism development from a holistic rather than a narrow technological point of view. Beyond
activating the buy-in of stakeholders, there is also a great need to increase the “smartness” of
stakeholders through capacity building (Basbeth et al., 2018). This requires strong leadership (Boes et
al., 2016), which is assumed to be taken on by the DMO (Femenia-Serra & Ivars-Baidal, 2019; Gretzel et
al., 2018; Oates, 2016; Vargas-Sánchez, 2016).

Destination management organizations (DMOs)

DMOs are organizations that develop tourism-related strategies for destinations. Indeed, they are
typically seen as critical for the destination’s tourism system and have been astonishingly resilient as
institutions over the years (Hall & Veer, 2016), despite the tremendous changes tourism has undergone.
Dredge (2016) describes DMOs as policy tools that serve tourism industry interests by organizing and
coordinating tourism activity at the destination and by building industry capacity. While DMO
mandates can differ based on how they are organized/funded, they are traditionally in charge of
increasing visitor spend and attracting business development to the area. Bornhorst et al. (2010)
highlight their leadership and advocacy roles, while Pechlaner et al. (2012) emphasize their
coordination, communication, and networking functions. Čorak and Živoder (2017) describe DMOs as
facilitators of collaboration and catalysts for tourism development. More recent conceptualizations also
stress their role as destination stewards, drivers of community alignment, promoters of a shared vision
for the destination, and champions of digital conversion (Destinations International Foundation, 2019).

DMOs have experienced many challenges over the last decades and some have argued that they may
have outlived their usefulness (Dredge, 2016). Especially big waves of technological change have
challenged their modus operandi and have also exposed their lack of capacity to change (Gretzel et al.,
2006). Sheehan et al. (2016) point out that changes in the technological environment of the destination
and the resulting new stakeholder groups demand that the DMO becomes a boundary spanner and an
“intelligent agent” that facilitates knowledge management and strategic decision-making. Gretzel et al.
(2006) describe the required changes in DMOs in response to technological change as 1) increasing the

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capacity to identify and reflect on technological change and its implications; 2) adopting knowledge
network management aimed at creating new partnerships for knowledge creation and sharing; and, 3)
subscribing to master developer thinking that sees tourism as embedded in broader contexts.

Smart tourism constitutes a new technological tidal wave for DMOs, and because it directly calls for
new governance philosophies and mechanisms, it requires substantial change in DMOs. Femenia-Serra
and Ivars-Baidal (2019) report that DMOs see smart tourism development as both an opportunity and
a great challenge and recognize the need for new destination management approaches and capabilities.
While earlier work on smart tourism has hinted at the need for strategic reorientation (e.g. Gretzel et
al., 2015a highlight the shift toward public-private-consumer partnerships, a focus on technology-
mediated co-creation and the adoption of an ecosystem perspective while Gretzel and Scarpino-Johns,
2018 stress the importance of a “smart tourism mindset”), there has been little discussion on how DMOs
need to change in order to successfully govern and manage smart tourism development efforts at their
destinations and across larger regional areas (Gretzel, 2018).

Conceptual Framework
The conceptualization of the destination influences the destination management needed (Pearce, 2014),
suggesting that smart destinations not only require new technological capabilities but call for a shift in
the destination management paradigm. Even papers that specifically deal with smart tourism
development (e.g. Cavalheiro et al., 2020) remain very vague about the role of DMOs in this process.
Smart city literature is much more focused on envisioning new forms of governance to propel smart
development (Yigitcanlar et al., 2018). Transparency, openness, accountability, collaboration,
innovation and efficiency are common keywords used when smart governance is described (Bolívar,
2018b). Importantly, Meijer and Bolívar (2016) highlight that smart governance is not just about good
administration but involves a transformation of governing bodies and governance processes. This
section explores what such a transformation would require of DMOs.

Some hints can be found in the existing smart tourism literature. Jovicic (2019) very generally implies
that smart destinations require strong governance to facilitate the partnerships that form the core of
flexible value creation activities within the smart tourism ecosystem (Gretzel et al., 2015b). Ivars-Baidal
et al. (2019) conclude that smart destination management involves heightening those DMO capacities
that allow them to exploit data, embrace technology and elevate innovation pursuits. Del Chiappa &
Baggio (2015) stress networking capabilities to create and maintain knowledge flows among the various
stakeholders within a smart destination. Indeed, promoting the networking capability of a DMO
increases its authority and therefore its ability to successfully govern (Volgger & Pechlaner, 2014). Koo
et al. (2016) define the pillars of smart destination competitiveness as involving the implementation of
smart technologies and intelligent systems that support resource stewardship, effective marketing,
efficient organization, and superior service. Gretzel and Scarpino-Johns (2018) describe the kind of
governance needed to realize smart destination resilience as agile and permeable. Vargas-Sánchez
(2016) points to monitoring and coordination functions as essential aspects of DMOs in charge of smart
destinations. Della Corte et al. (2017) picture DMOs’ role within smart destinations as smart hubs;
tasked with supporting data openness, regulating data privacy and establishing private-public
partnerships.

Summarizing many of the aspects mentioned in relation to smart destination governance, Gretzel et al.
(2018) define the roles of smart DMOs as:

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“to lobby and maybe even partly sponsor the development of smart tourism infrastructure, to curate and
manage smart tourism data, to facilitate development and uptake of smart tourism-related applications
within the digital business ecosystem, to support tourists in learning about and consuming smart tourism
experiences, and, finally, to link smart tourism with overall quality of life and sustainability development
goals” (p. 201).

Therefore, current understandings of smart destination governance firmly place the DMO at the center
of smart tourism development, recognizing that someone must establish and maintain the conditions
under which the smart tourism ecosystem can strive. From this position within the smart tourism
ecosystem, six fundamental functions of smart DMOs can be derived: 1) Mobilizing; 2) Match-making;
3) Managing; 4) Sensing; 5) Shape-shifting; and, 6) Stewardship (Figure 1).

Figure 1. Smart DMO Functions

Mobilizing refers to resources, capacities and buy-in of internal and external stakeholders. It requires
lobbying as well as smart destination branding. Mobilizing also involves envisioning the smart tourism
ecosystem and the resulting smart destination to be created by various actors and consumed by
residents and tourists. Mobilizing further requires the identification and realization of critical smart
tourism infrastructure, such as destination data observatories. As mobilizers, smart DMOs need to
engage in master developer thinking (Gretzel et al., 2006) and explore new forms of fund-raising such
as crowdfunding or venture capital. Creating a strong smart destination brand is also part of the
mobilizing function (Gretzel & Collier de Mendonça, 2019; Molinillo et al., 2019).

Match-making describes DMO activities aimed at facilitating connections among the multitude of
actors within and beyond the permeable smart tourism ecosystem. DMOs as match-makers are
boundary-spanners and relationship brokers. They take advantage of new models of collaboration and
open innovation (Egger et al., 2016). Match-making in smart tourism specifically refers to creating new
opportunities for tourism to influence the “travel tech” sector and therefore the applications that drive
the digital transformation fostered by the smart development paradigm. Match-making also involves
matching smart tourism players with the data they need and matching data with data to create insights
that foster innovation. Match-making can also be broadly understood as facilitating the resource
integrations that lead to value co-creation.

Managing refers to facilitating and coordinating smart tourism activities at the destination and
therefore most closely matches what DMOs already do. However, given the convergence of residential
and touristic spaces within smart tourism, the smart DMO manages on a much grander scale, beyond
narrow tourism agendas. As such, management expands and becomes destination governance. This
requires new management capabilities, competencies and relationships that most DMOs have yet to
establish. The leap from managing the interests of a well-defined group of tourism industry stakeholders
to governing a destination seems to be especially drastic for DMOs that are currently not endowed with

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 The Smart DMO: A new step in the digital transformation of destination management organizations

political powers. They need to find ways to insert themselves into existing governance processes and
increase their political lobbying activities.

To support these basic functions, the smart DMO needs to become a sensing organization. In contrast
to the passive role as observers that many DMOs take, smart DMOs need to engage in extended, active,
and real-time monitoring of their internal processes and of the smart tourism ecosystem. They need
predictive capacities and authority to take corrective actions to keep smart tourism development on
track and to create a resilient smart destination (Gretzel & Scarpino-Johns, 2018). Sensing allows DMOs
to become stakeholder-centric and adopt a real-time service mentality (Buhalis & Sinarta, 2019).
Achieving this requires sensing in many directions and agility to identify and engage with emergent
smart tourism stakeholders. It also challenges the ways in which DMOs think about data and its use(s).

As shapeshifters, smart DMOs introduce liquidity into the smart tourism ecosystem. They need to
ensure that data and human capital flow freely and that partnerships can be formed easily so that the
smart tourism ecosystem remains agile as well as permeable. It also means that DMOs themselves need
to become liquid organizations. Sharma (2020) points out that liquid organizations deploy resources
fast, have needs-based infrastructure, have a highly flexible workforce assembled in project-based
teams, and use technology to operate anytime and from anywhere. As shapeshifters, smart DMOs can
plug themselves into specific positions in the smart tourism ecosystem when and where needed. They
play with notions of liquid governance, which is characterized by high levels of dynamism and is
typically driven by informality and institutional multiplicity (Krisch, 2017).

Last but not least, smart DMOs are stewards. Dredge (2016) argues that DMOs have lost credibility and
relevance because they mostly subscribe to neoliberal notions of destination governance that only
serves industry needs. This is especially dangerous in the smart tourism context that has explicit
sustainability goals and subscribes to value (co-)creation at multiple levels rather than traditional
notions of economic growth. Similarly, Coca-Stefaniak (2020) outlines the need for wise destinations
that adopt wider sustainability goals and understand their embeddedness in larger regions. Gretzel and
Jamal (2020) outline specific ethics and social justice principles that smart DMOs need to adopt to serve
as stewards for their destinations, including greater awareness of problems that emerge from the design
and implementation of technologies, greater accountability and greater care exercised in decision-
making. Destination stewardship also facilitates trust-building and therefore directly feeds back into
the smart DMO’s ability to mobilize smart tourism development efforts.

Conclusion
Smart tourism development requires smart governance. DMOs are uniquely positioned to take on this
governance role because they already operate across public-private boundaries and are versed in
stakeholder management. In many places, they also have regulatory functions or are at least actively
involved in policy-making. In addition, DMOs are eager to adopt smart tourism development agendas
because they recognize it as an opportunity to regain some of the relevance they have lost through
previous waves of digital transformations (Femenia-Serra & Ivars-Baidal, 2019; Dredge, 2016). However,
the smart tourism paradigm will also challenge their current approaches and require significant shifts
in destination management and governance practices. This paper identified six critical smart DMO
functions to realize smart tourism development at the destination level. These are meant to provide
initial guidance to DMOs and to spur research on necessary DMO capacities and strategies to not only
survive but to master this latest digital transformation of tourism.

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Received: 13/10/2020
Accepted: 19/04/2021
Coordinating editors: Maro Vlachopoulou and Konstantinos Fouskas

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