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«Tourism & Hospitality Industry 2016, Congress Proceedings, pp. 144-157 J. Komšić, J. Dorčić: TOURISM DESTINATION COMPETITIVENESS AND ONLINE ...»

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Tourism & Hospitality Industry 2016, Congress Proceedings, pp. 144-157

J. Komšić, J. Dorčić: TOURISM DESTINATION COMPETITIVENESS AND ONLINE REPUTATION...

TOURISM DESTINATION COMPETITIVENESS AND

ONLINE REPUTATION: CONCEPTUALIZATION AND

LITERATURE FRAMEWORK ANALYSIS*

Jelena Komšić

Jelena Dorčić

Abstract

Purpose – Online public opinions, using various forms of social media, create huge challenges for the tourism industry. Significant theoretical findings are found concerning the impact of online reputation on tourism destination competitiveness. Theoretical and empirical studies have shown that online reviews and subjective experiences of travelers who have visited a specific tourist destination substantially affect visits to a destination. The purpose of this paper is to explore the concept of tourism destination competitiveness and online reputation.

Findings – Findings of this study are based on the development of the scientific thought of the concepts of online reputation and tourism destination competitiveness. An analysis of journals and articles published in leading tourism and hospitality journals searched by using the keywords “competitiveness” and “reputation” showed that only 14 full-length articles on “reputation” were found relevant to the review. In terms of “competitiveness”, a total of 87 full-length articles related to tourism and hospitality were found in the main academic search database.

Contribution – The paper contributes to the existing literature of tourism destination competitiveness and online reputation with its theoretical presentation. It is expected that this research will make an important contribution by identifying research gaps and providing challenging directions for future research.

Keywords: tourism destination competitiveness, online reputation, online reviews, tourism and hospitality, literature review

INTRODUCTION

The success of tourism destinations in world markets is influenced by their relative competitiveness. Their competitiveness is increasingly important to countries seeking to claim a growing slice of this expanding market and clearly this is of special interest to communities highly dependent on the prevailing state of the tourism sector and travel industry (dos Santos Estavão et al., 2015). As tourism has become the leading leisure activity in the 21st century, the UNWTO (United Nations World Tourism Organization) Tourism 2020 Vision forecasts that international arrivals are expected to reach nearly 1.6 billion by the year 2020. Of these worldwide arrivals in 2020, 378 million will be long-haul travellers and 1.2 billion will be intraregional (UNWTO, 2002). International tourism receipts reached US$ 1245 billion worldwide in 2014, up from US$ 1197 billion in 2013, corresponding to an increase of 3,7% in real terms (taking into account exchange rate fluctuations and inflation). International tourist * This paper is the result of the scientific project “Measuring online reputation impact on tourism destination competitiveness” (project no. ZP UNIRI 2/15), supported by the University of Rijeka.

Tourism & Hospitality Industry 2016, Congress Proceedings, pp. 144-157 J. Komšić, J. Dorčić: TOURISM DESTINATION COMPETITIVENESS AND ONLINE REPUTATION...

arrivals (overnight visitors) increased by 4,3% in 2014, reaching a total of 1133 million after topping the 1 billion mark in 2012 (UNWTO, 2015, 3).

Tourism destinations, in general, compete in attracting visitors, residents, and businesses. A tourism destination with a positive reputation finds it easier to vie for attention, resources, people, jobs, and money; a positive destination reputation builds destination competitiveness and cements a destination as somewhere worth visiting.

This means that destinations looking to build or maintain strong reputations must consider development, and a sense of destination – all of which opens up potentially controversial questions of destination authenticity, brand narratives, leadership and authorship, performativity, story-telling, and aesthetics (Morgan et al., 2011, 3).

The purpose of this paper is to explore the concept of tourism destination competitiveness and online reputation.

This paper aims: a) to define the concepts of competitiveness and reputation in the tourism and hospitality industry, b) to present a literature review of tourism destination competitiveness with developed indicators that affect tourism destination competitiveness, c) to identify an important literature gap, and d) to investigate the importance of online reputation in the tourism field applied to tourism destinations.

The focus of this study is explicitly on the tourism industry and consists of three parts.

The following section gives an overview of definitions of tourism destination competitiveness and reputation. The next section lays out the critical analysis of published papers and a literature review of destination competitiveness and online reputation. The last section discusses the main conclusions and provides future directions for research.

1. CONCEPTUALIZATION AND THEORETICAL BACKGROUND

1.1. Definition and concept of tourism destination competitiveness For many people, the concept of competitiveness implies a win/lose situation where one person, enterprise or nation outperforms the other (Garelli, 2006, 1).





Competitiveness is a multidimensional concept. The word “competitiveness” originated from the Latin word, competer, which means involvement in a business rivalry for markets (Ajitabh and Momaya, K., 2004, 46). The definitions of competitiveness could be divided into macro and micro perspectives.

From a macro perspective this concept includes social, cultural and economic indicators that impact the performance of a country in international markets (dos Santos Estevão, Garcia and de Brito Filipe, 2015, 263). The OECD defines competitiveness as “the degree to which a nation can, under free trade and fair market conditions, produce goods and services which meet the test of international markets, while simultaneously maintaining and expanding the real incomes of its people over the long-term” (OECD, 1992, 237).

Tourism & Hospitality Industry 2016, Congress Proceedings, pp. 144-157 J. Komšić, J. Dorčić: TOURISM DESTINATION COMPETITIVENESS AND ONLINE REPUTATION...

At a micro level, the understanding of competitiveness refers to a firm’s ability to compete, to grow and to be profitable (Anca, 2012, 42). Firm-level competitiveness is one of the key concerns of today’s business. Porter (1990, 33) says that the basic unit of analysis for understanding competition is the “industry”. He also says that firms, not nations, compete in international markets. According to Porter’s model a company should find better ways to compete by continually upgrading the firm’s products and processes in order to create a competitive advantage.

Overall, the literature demonstrates that the concept of competitiveness is very complex and there seems to be no generally accepted definition.

Over the last few decades the interest in studying the competitiveness of tourism destinations has grown. In the tourism context, competitiveness has been considered as the “destination’s ability to create and integrate value-added products that sustain its resources while maintaining market position relative to competitors” (Hassan, 2000, 239).

Dwyer, Forsyth and Rao (2000, 3) defined tourism competitiveness as “a general concept that encompasses price differentials coupled with exchange rate movements, productivity levels of various components of the tourist industry and qualitative factors affecting the attractiveness or otherwise of a destination”. This definition highlighted the importance of the economic dimension of tourism competitiveness. However, Ritchie and Crouch (2003, 327) claimed that destination competitiveness is more complex and could be defined as the “ability to increase tourism expenditure, to increasingly attract visitors while providing them with satisfying, memorable experiences, and to do so in a profitable way, while enhancing the well-being of destination residents and preserving the natural capital of the destination for future generations”. According to Dwyer and Kim (2003, 374) destination competitiveness is the “ability of a destination to deliver goods and services that perform better than other destinations on those aspects of the tourism experience considered to be important by tourists”.

The OECD Tourism Committee defines destination competitiveness as “the ability of the place to optimise its attractiveness for residents and non-residents, to deliver quality, innovative, and attractive (e.g. providing good value for money) tourism services to consumers and to gain market shares on the domestic and global market places, while ensuring that the available resources supporting tourism are used efficiently and in a sustainable way” (Dupeyras, A. and MacCallum, 2013, 14).

The existing literature indicates that the concept of competitiveness could be viewed from various perspectives. Most of the competitiveness literature in general includes three major groups of thought: comparative advantage and/or price competitiveness perspective, strategy and management perspective, and historical and socio-cultural perspective (Dwyer and Kim, 2003, 371). Researchers suggested different indicators to define and measure competitiveness of each perspective.

Tourism & Hospitality Industry 2016, Congress Proceedings, pp. 144-157 J. Komšić, J. Dorčić: TOURISM DESTINATION COMPETITIVENESS AND ONLINE REPUTATION...

Although there is a significant amount of research devoted to competitiveness, relatively few studies focus on evaluating competitiveness from the tourists’ perspective (Chen et al., 2016, 59).

1.2. Definition and concept of (online) reputation According to the Oxford Dictionary reputation is defined as “the beliefs or opinions that are generally held about someone or something” and “widespread belief that someone or something has a particular characteristic” (Online Oxford English dictionary). The word “reputation” comes from the Latin word “reputo” which consist of the prefix “re” and verb “puto”. “Puto” means having an opinion considering something in a specific way, at the same time acknowledging that others may have different opinions (Marchori and Cantoni, 2012, 142).

The concepts of identity, image and reputation are still very often used as almost synonymous. It is necessary to make a distinction between these three concepts. While identity represents the essence of a company and image what an individual think about a company, reputation could be viewed as the opinion shared among a group of stakeholders (Dowling, 2008, 5). Several studies tried to define and conceptualize reputation. Marchiori (2012, 1) started her dissertation with this thought: “Reputation is a complex construct which reflects the dynamics of a modern society, that is, people use reputation to simplify information processing when they are overwhelmed by information”. Marchiori and Lorenzo (2011) investigated the concept of reputation from psychological, sociological, economic, marketing and corporate communication perspectives. Their findings suggest that reputation is a social construct based on the stakeholders’ cognitive perception related to the object (e.g. person, company, organization) that represents one of the most important factors of success.

Reputation plays an important role in the tourism industry. With the progress of Information Communication Technologies (ICTs) in tourism the importance of online presence of destinations has become extremely relevant. The Internet has become the most important channel for promotional and selling activities of destination management organizations (DMO), while at the same time the Internet has become the primary channel for tourists of getting information about a destination and all other activities involved in holiday planning. Tourists nowadays have the opportunity to express their own opinions and experiences online. The contents they provide (usergenerated contents - UGC) can influence individuals in the process of choosing their holiday destination. Today, numerous platforms exist (blogs, virtual communities, wikis, social networks etc.) which offer consumer reviewing and rating products or services they consumed. Recent studies confirmed that consumers increasingly rely on electronic word of mouth (eWOM) to make a variety of decisions (De Ascaniis and Gretzel, 2013, 156). Compared to traditional WOM, thanks to the Internet, there are a lot of advantages to eWOM: speed and ease of access to information, availability for long periods of time and certain proximity.

The importance of online conversations, reviews and user- generated contents in managing destination reputation is highly important and there are many possibilities and challenges for future research in this promising research area.

Tourism & Hospitality Industry 2016, Congress Proceedings, pp. 144-157 J. Komšić, J. Dorčić: TOURISM DESTINATION COMPETITIVENESS AND ONLINE REPUTATION...

2. LITERATURE REVIEW ANALYSIS

2.1. Analysis of published articles Destination competitiveness has been described as “tourism’s holy grail” (Ritchie and Crouch, 2000, 5). An issue on tourism and travel competitiveness in Tourism (Volume 4, Issue 4, 1999) featured three papers at the destination level: price competitiveness, the role of Spanish public administrations, and the competitiveness of alpine destinations. Tourism Management then devoted a special issue to “The Competitive Destination” (Volume. 21, Issue 1, 2000). Tourism Economics published a special issue on tourism competitiveness, which was guest edited by Pashardes and Sinclair (2005).

Among the seven papers in this issue, two papers made a particularly substantive contribution to the mainstream of destination competitiveness research.

Table 1 summarizes articles published from 1995 to 2015 in leading tourism and hospitality journals dealing with the concepts of competitiveness and reputation.

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