Project: Destinationen ur ett tillväxt- och innovationsperspektiv. Report: A Network Perspective on Destination Development - The Case of Åre

Transcription

1 Project: Destinationen ur ett tillväxt- och innovationsperspektiv Report: A Network Perspective on Destination Development - The Case of Åre Sara Nordin, ETOUR/ Uppsala University,sara.nordin@etour.se Introduction Tourism is often identified as a future growth industry, and this has turned destination development into a key issue in local and regional development. Not least many governments recognize the industry s potential for fostering economic growth. Destination development is in this context understood as a process aiming at improving the attractiveness and functioning of places and regions as visiting areas. However, despite the general future optimism, today many destinations face a hard competition in their ambition to develop and grow. The tourist industry is commonly described as highly fragmented, both in terms of the many small independent businesses that are part of it, but also in terms of the destination comprising not just actors from various businesses, but from a range of sectors. This may explain why tourism has been described as a system where interdependencies are essential (Björk & Virtanen, 2005). Network relations both formal and informal can therefore play a significant role in helping to compensate for the fragmented nature in tourism (Scott et al., 2008) and tourist destinations can gain competitive advantages from gathering expertise, knowledge and other resources from their various stakeholders (Kotler et al., 1993). The central concept of a tourist destination is itself often looked upon as a complex network with several levels of interaction both networks of actors within the destination, but also networks linking it to its surrounding environment with potential and actual customers, other destinations, government bodies etc. The inter-organizational relationships in destinations and the frequently high degree of dependency between destination actors make tourism generally, and destinations more specifically well suited for network analysis (Scott el al., 2008). Network relationships have consequently received a central role in much contemporary discussion of local and regional tourism development. The Case in Point The Swedish Mountain Resort of Åre This study takes its empirical starting point in a case study of a destination that stands out from many others in a number of ways - the Swedish mountain resort of Åre. Particularly interesting is its strong growth and development over the last few decades. The point of departure in this study is, that the natural resources such as the altitude and shape of the mountain, the climate, and factors such as location and accessibility are necessary but not yet sufficient explanations to the growth in Åre. It could of course be argued that it is the unique combination of certain factors characterizing Åre today and throughout its history that make up a unique explanation to its growth. This is probably true to some extent - a number of different factors have contributed to the long-term success. However, the very essence of a destination implies that there is a multitude of services and products in a geographically limited area and these are both connected to one another and dependent upon each other.

2 The point of departure for the study is consequently that the relations between the stakeholders, the collaboration of the destination actors and the results of their efforts and ways of working together play an important rolein the successful development of Åre. This is also based on the assumption that the interdependencies in tourist destinations generally are very high, and that these are unique and hard to replicate. Research Aim, Conceptual and Theoretical Staring Points & Methodology By conducting a case study of the Swedish mountain resort of Åre, the role networks have played for the destination s growth and development has been analyzed. Consequently, the main issue dealt with is how growth and development can be explained and understood from a network perspective and the main question is: - How do various forms of destination cooperation and network organizationscontribute to destination growth and development? A number of central concepts and theories are introduced in the report and the choice of methodology presented. The empirical work is foremost based on qualitative interviews with various respondents with a clear connection to Åre. The study has been financed by The European Tourism Research Institute (ETOUR) and Stiftelsen för kunskapsfrämjande inom turism. The empirical work has been conducted independently by the author, but the analysis has benefited from cooperation with Professor Anders Malmberg, Professor Hans Westlund and Associate Professor Bo Svensson. Findings & Conclusions This report confirms the importance of destination cooperation and of well-working networks in a destination. Looking atåre s social capital, the study shows that it has in broad outlines developed and transformed in accordance with the stages of Butler s life cycle model 1. From a social capital dominated by local influences, new actors have emerged and new values and networks have been synthesized with the old. In more recent time, the new major actors, domestic and foreign, have brought partly new values of professional commercialization to the destination. These new actors have in many respects taken over the leading roles in Åre and hence changed the power balance in the destination through their dominant position. However, even though the social capital was further exposed to influence from the outside, it is clear that the past has had a great influence on the future and that new and partly old norms and values had to adjust to one another. The shared passion for skiing is, furthermore, still there, strongly adding its imprint on the ski resort, showing that some values have survived the transformation over time. This is also evident from the many life style companies that have established themselves in the destination in more recent time. The social capital has also been reproduced in new kinds of constellations of networks, such as the joint 1 Butler (1980) focuses on the growth and development of tourist destinations and suggests that the volume of tourists rises and falls over time and can be compared to the sales curve of the product life cycle. According to his framework a destination goes through six distinctive stages: exploration, involvement, development, consolidation, stagnation, decline or rejuvenation.

3 Vision 2011 group 2, where people of the past were meeting regularly with actors who have entered the destination more recently. It is also clear in this study that in order to achieve destination growth, it is not enough to have a professional, highly commercial actor enter the destination, bringing in their company values and doing things strictly their way. In order to reach long-term success, networks and values that have developed over a long time need to be merged with the new networks and values. In this respect, Åre seems to be an example of social capital transformation where local and external networks and values are adapted to each other, creating syntheses. This development can be compared with the two extremes where a) local actors stop a tourism destination from developing further by preventing external actors from establishing in the area, or b) places of mass tourism where external actors completely have taken over the destination and local networks and values languish or suppress. Åre seems to have been able to follow a middle way. The study of social capital in a destination, moreover, seems to imply that it is important to regard social capital as something that is found in all parts of society and analyze all three societal sectors the private, the public and the third sector. This study shows that actors in the three blocs influence each other and it is clear that there is a partial, mutual interdependence between them, which means that positive development of their own activities is connected to the development of the destination as a whole. It is also suggested that social capital may have been an important driver for the rejuvenation process in the destination of Åre, and that one important factor in the more recent success is the Vision 2011 work, which has been able to mediate between the local and external networks and values. This suggests that destination governance and its role in destination competitiveness and development might be a further and interesting field of research. The Vision 2011 group (now transformed into Vision 2020) can from one point of view be regarded as a part of Åre s social capital, being one of the more important networks of recent time. However, it can also be looked upon as a new and mainly successful destination governance solution. Focusing on the link between governance structure and destination growth, the solution with the Vision 2011 constellation has worked very well in Åre. Yet the organizational form is far from unproblematic. First of all, there is the dilemma that a destination in one respect is regarded as one united actor and in another respect consists of a large number of actors. This creates a need for a balance between centralization of joint decision making (which in the Åre study seems to be a more effective option) and more democratic procedures in which one actor has one vote. Even if it proves to be more effective, another question is for how long it can work? 2 In terms of destination governance and public-private cooperation - an informal destination strategy group called the Vision 2011 group - has been in place during most of the 21st Century. That was a manner for local public and private actors to meet continuously but also informally to discuss long-term destination-embracing strategies and issues. The work of the Vision 2011 group has been described as one of the major driving forces in the destination. It has resulted in several joint projects and initiatives, the allocation of resources and in general an increased growth and innovation.

4 Vision 2011 was a highly closed body for most destination actors, with its tight group of selfelected members. The present Vision 2020 has tried to engage destination actors on a much broader basis. How that works is still to be decided. However, it could be that this sort of informal, undemocratic form of governance is bound to a specific phase of a destination s development and to a limited period in order to remain successful. Vision 2011 definitely appears to have been a good solution for the phase Åre was in at the time, in terms of reaching growth and development. Secondly and closely related to this issue, is the question of whether the Vision 2011 group even can be regarded as a legitimate actor with its informal character. It was a self-appointed, closed network with no official records and no-one to claim accountability from. And yet it was one of the most important actors in terms of influencing the development in the destination. The informality creates some problems, at the same time as it probably offers some clues to the success behind the group. It clearly lacked a democratic mandate, at the same time as it delivered results that benefit the destination as a whole. How this was handled by destination actors not part of the constellation is hence an interesting issue, in particular if this governance solution is to be replicated in other destinations. Who the real power over the local development in Åre belongs to - that is also an interesting question. The two major private actors that were part of the Vision 2011 group have owners that are based outside the destination. This points to a shift from internal to external influence. At the same time there has been a shift from public to private actors over time, which can make us question how powerful the local government really is, keeping in mind that they also are keen on keeping major commercial actors in the municipality. Yet Vision 2011 has been an important meeting arena for public-private interplay, where a more or less shared view, trust and understanding have developed in due course. The form of destination governance found in Åre hence supports the general change from government to governance, and confirms the importance of public-private networks in policy-making and in forming destination strategies. More than anything this study shows that the informal public-private network and the informal meetings have been far more important and influential in terms of destination growth than formal procedures and structures. Porter diamond model (Porter, 1990) was, moreover, used to analyze the destination of Åre from a systems perspective and a cluster point of view, where business relations were central. This has offered some new perspectives on the structures in the destination on its weaknesses and its strengths. It is clear that the growth and development in Åre can be explained by some of the factors used to explain the strength and competitiveness of a cluster, and that the cluster perspective offers some advantages in trying to understand the destination development in Åre. In line with Porter s (2003) argument, firms locating within a cluster - or as in this case within Åre - benefit from an infrastructure with superior or lower-cost specialized inputs, such as business services, local suppliers and personnel. It gives them access to specialized knowledge and information, since the close proximity leads to an interaction and often close bonds built on trust. In terms of complementarities, Porter himself brings up an example from the tourism industry in relation to wine and points out that the quality of the visitor s experience depends not only on the primary attraction, but also on the comfort and serviceability of area hotels, restaurants, souvenir outlets, airport and other transportation facilities and so on. With this example Porter illustrates how mutually dependent the actors of a cluster are and this is definitely also the case in Åre. He, moreover, points out that firms in

5 a cluster may take advantage of employee training programs, specialized infrastructure and other benefits at a much lower cost because they are made into public goods. This is also visible in Åre with for instance hospitality training programs at reduced cost. Finally, Porter argues that the cluster environment improves the incentives to develop due to for instance competitive pressure and that clusters facilitate the measurement of the performance. Åre has in this sense created ways of measuring how the destination is developing in relation to their visions and also working with customer evaluations. The local competition is also a driving force of development, even though the external competition with other destinations is most likely an even bigger incentive. In addition to the above, Porter argues that clusters influence competition by increasing their capacity for innovation and thus productivity growth and finally, by stimulating new business formation that expands the cluster (Porter, 2003). These developments are also evident in Åre although it is hard to measure the level of innovation within the destination (which is a more general problem). Consequently, the location and the environment in which the firms are embedded seem to influence the growth and development in Åre to a large extent. The analysis of Åre showed that in the case of a well-developed destination it has been useful to apply Porter s diamond model and cluster theory and relate it to a tourism setting. Cluster theory often identifies a driver of development in successful clusters, the so called cluster animator. In Åre most establishments are located on or nearby the mountain; of which a majority related to the ski product are run by the large corporation Skistar. Skistar is a very important driver of development in the destination, in particularly during the winter season. It is nowadays widely recognized that large firms can play an important role in dynamic industry agglomeration such as clusters, not least in providing capital (Bunnell&Coe, 2001). Skistar is in line with this important from a development perspective with major resources to invest in product development and marketing. Their entrance in Åre has clearly added a new level of professionalism and industrialism to the tourism industry, and attracted other major actors to Åre through their networks. Both Skistar and other destination actors develop networks, such as the Vision 2011 group. The bigger firms also develop cooperative relations to suppliers. In the case of Skistar, these often constitute smaller companies for instance offering dog sledge rides, restaurants or other activities. There is an ongoing debate on the balance of power in Åre with the entrance of Skistar and lately also another big firm called Holiday Club. The uneven balanceposes both threats and opportunities. It is evident that Skistar with its dominant position is a concern for many residents and small businesses. Smaller actors feel that they have no or little influence in terms of setting the rules of the game. Another common perception is that Skistar only cares about their areas of interest and ultimately about their profits and results on the stock market, and not about the destination as such. There is, moreover, a fear that profits made in Åre may be reinvested in other destinations run by Skistar and that the power over the development to a large extent has left the destination. However, other actors also underline that Skistar s attitudes towards the destination have changed to include more of a destinationembracing strategy and that they too appear to realize their dependency on other actors to get satisfied customers. Over time several respondents describe a positive change in this regard.

6 Their support of the more recent summer campaigns with a mountain bike park is one example of how the company supported the vision in the destination, despite the fact that their business traditionally is focusing on the winter product. Hence it seems that on the one hand Skistar may be a driver of development and innovation, but on the other hand its strong position runs the risk of indirectly limiting other actors with its powerful position. Flagestad and Hope (2001) discuss the link between destination structure and strategic success and present a community and corporate model 3. In this context is clear that Åre over time has moved much closer to the corporate model and that growth and development has increased as this transformation has evolved. It is naturally hard to say how much this development is due to a different organizational form in the destination and what other factors that have contributed to this increased growth. It could also be that different stages of a destination sdevelopment are in need of different governance structures in order to reach a successful development. This, however, needs to be researched more thoroughly before any general conclusions can be drawn. To sum up: - We can identify a shift of power and influence from public to private stakeholders in Åre, which in more recent time has resulted in a greater trust in the private actors ability to generate growth and development. This has been accomplished with the support of local public actors, who have been willing to work in quite unconventional ways to facilitate this development. In terms of reaching development, the publicprivate interplay has been of great importance. - We can also identify a development where power and influence largely have shifted from local actors to individuals and organizations based outside the destination, both foreign and domestic. With this change a new level of professionalism has developed and financial resources, knowledge and information, and in general influences from the outside have increased, which also has facilitated growth and development. This, however, also means that decisions regarding the destination are made further away from the affected region, that there is a higher degree of commercialization characterizing the destination today and that it is harder for village residents and smaller businesses to affect the development. - More than anything this study confirms the importance of destination cooperation and of well-working networks in a destination. It shows that the merging of local particularities, networks, values and norms that have developed over time with new 3 The community model is described as an organizational structure without much substanceand with strong elements of politically driven management. The destination managementorganization is perceived as mainly marketing devices and policy domains in which planningand decisions are based on stakeholder collaboration and numerous compromises (Flagestad & Hope, 2001, p. 452). The corporate model, is on the other hand, based on a destination where a dominant businesscorporation is present that manage for profit a strategic selection of business units of serviceproviders incorporated by ownership and/or contracts. (ibid). These corporations oftenhave a dominant influence in terms of how the destination is operated and strong politicalpower in the community in regard to the development of the destination (ibid).

7 influences can be one of the more important and vital factors in order to reach longterm growth and development, and to avoid either a situation with mass tourism where local influences may be suppressed or a situation where local actors prevent the destination from developing by shutting out external actors. These results support theories claiming that interdependencies are essential in tourism generally, and in destinations more specifically. They show that studies of this kind may contribute with new insights on how to reach destination growth and development. The observations regarding power shifts may also be part of a general theory on destination development - that when it comes to destination growth private actors need to be entrusted, and that influences and resources from other areas may be critical, but that it is essential to find a middle way - to mediate between the local and external networks and values, between the old and the new. Summing up, this analysis has shown that Åre s successful development and growth is the result of a number of factors working side by side. The local environment has definitely mattered and its attraction and dynamics seem to be central in the destination s ability to develop important relations both internally but also to the surrounding world. The growth continues at a high pace and a lot of people politicians, policy makers, tourist managers, researchers and other destinations are wondering how this growth can be explained; what the success factors behind the development are. This network analysis contributes with some answers. References: Björk, P. & Virtanen, H. (2005) What tourism project managers need to know about cooperation facilitators.scandinavian Journal of Hospitality and Tourism, 5:3, pp Bunnell, T. G. & Coe, N. M.(2001) Spaces and scales of innovation, Progress in Human Geography, 25,pp Butler, R. (1980) The concept of a tourist area cycle of evolution. Canadian Geographer 24, pp Flagestad, A. & Hope, C.A. (2001) Strategic success in winter sportsdestinations: a sustainable value creation perspective, Tourism Management, 22, pp Kotler, P., Haider. H, D. & Rein, I. (1993) Marketing places. Attracting investment, industry, and tourism to cities, states and, nations. New York: Free press. Porter, M. (1990) The Competitive Advantage of Nations. New York: Basic Books. Porter, M. (2003) Determinants of regional economic performance, Harvard Business School, Harvard University. Scott, N, Baggio, R. & Cooper, C.,(2008) Network Analysis and Tourism, From Theory to Practice, Clevedon, Buffalo, Toronto: Channel View Publications.