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The DMO Role in Today's Sharing Economy

Posted: November 13, 2013
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The economic paradigm shift- in which a sharing economy vies with a more traditional business model for a piece of the market - has hit the travel industry full force.  Companies that cultivate a cyber community as part of their business plan, such as Uber, Air B n B and Lyft, are providing consumers with an alternative to the traditional offerings that we, as “official” destination marketing organizations, have been promoting for years. And consumers are taking advantage of them and clamoring for more.

Recently, these new models have been causing consternation among regulators, bureaucrats and business groups in many destinations.  For example Air BNB’s well publicized battles in New York or UberX and Lyft’s latest challenge by the Taxi, Limousine and Paratransit Association.

Martha SheridanHow do we react to these new travel services and the controversy they can generate in our communities? What is our role in supporting, promoting or in some cases, disavowing their efforts? Here are some thoughts on how we, as destination marketers, should respond to this new reality. 

First and foremost, educate yourself on these new models and their impact on your community before jumping to any conclusions or taking a particular position.  Concurrently, study your local regulations that may have an impact on a particular delivery system or service. 

If at all possible, speak directly to regulators so you can get a handle on the origin of local laws and regulations.  In many cases, regulations are enacted to address previous concerns in the marketplace, but often have unintended impacts on these newer, innovative offerings.   

Examine how other communities are managing these situations.  Recently the Madison Convention and Visitors Bureau took a measured and strategic approach to addressing regulations related to short-term housing in their community. They engaged local government leaders and members of their own board in coming up with a workable solution to address this growing trend.  While Madison’s newly modified regulations make sense for their destination, it is important to bear in mind that no two communities are alike. While it’s helpful to survey the landscape and learn how other destinations are reacting to “sharing” business models in their own areas, nuances in each destination may alter how these entities can operate in your own locale. 

There is no doubt that the travel consumer has changed and is looking for new and unique ways to experience a destination. These offerings are here to stay and there will be many more following their lead.  Consider the possibility that these new models may not be competing with traditional models in your community, but are more likely luring new visitors and providing a more authentic and engaging means of experiencing a destination. I suspect that traditional industry sectors will find ways to respond to this new type of demand with more creative offerings of their own. 

Ultimately, new competition will enhance other more traditional businesses, such as taxi companies realizing that they need to adapt to meet the needs and demands of this new consumer or hotels creating new experiences that are more organic to the specific destination.