Place Branding: A Competitive Advantage in a Time of Crisis
By Philia Tounta General Manager, Apokoros Club Hotel & Villas | June 14, 2020
Tourism has grown into one of the world's largest industries. In total, Travel & Tourism generated US$7.6 trillion (10.2% of global GDP) and 292 million jobs in 2016, equivalent to 1 in 10 jobs in the global economy. The sector accounted for 6.6% of total global exports and almost 30% of total global service exports (destinationsinternational.org).
Established destinations worldwide that may have initially experienced a heavy growth in tourism may now be facing the prospect of decline. Reasons for decline are plenty from economic crisis to natural catastrophes and pandemics. Empirical evidence showed that at the time of the crisis, a nation's emphasis on a large service sector became a disadvantage (Shostya 2014).
Countries that derived a considerable portion of their GDP from tourism (like Bulgaria, Czech Republic, and the Baltic Countries) were affected by a decrease in both domestic and foreign demand (Steiner et al. 2012). In addition, some studies indicated those countries that had more developed financial sectors were affected by the financial crisis via traditional transmission mechanisms.
There has been an increase in the application of branding theories to the branding of tourism places. An increasing number of cities, countries, and regions have adopted marketing and branding practices during the past few decades (Gertner, 2011). Place branding is so important obviously. It is not a short and easy journey to get a place branded. After a long journey with quality practice a place, region, city or country becomes sensation in its line of products in the world market or specific area. Place branding is vital in the tourism sector for a place; in terms of generating attraction in the tourists' as the place is fit for them (target groups) for their entertainment or recreation as well.
More than ever, nowadays the progress of people, capital and ideas are more fluid. Ultimately, a well-built and innovative place brand is more important than any other time. Tourism is highly vulnerable to internal and external shocks as diverse as economic downturns, natural disasters, epidemic diseases, terror attacks and political conflicts. Such negative developments often interrupt tourism industry operations resulting in a drop in tourist arrivals.
A tourism crisis occurs when circumstances in a destination pose a change which is potentially destructive to the destination and to the tourism industry's viability. Destination branding is a recent trend in place marketing and a very powerful tool. Unfortunately, the use of branding in tourism is still in its infancy. A destination brand is used in destination marketing primarily to project a positive image of tourism at a destination. Also, destination branding plays a significant role in positioning a destination.