Improving the Management of Tourist Destinations: A New Approach to Strategic Management at the DMO Level by Integrating Lean Techniques

Abstract

Destination management organizations have a key role to play in the governance of tourism destinations, in managing destination networks and in ensuring good cooperation between stakeholders. Although, destination management organizations (DMOs) are atypical organizations, their operations are evaluated according to their organizational efficiency and effectiveness. This study aims to propose a framework to improve the management of the tourist destination through an innovative approach that interconnects strategic management and Lean techniques to increase efficiency and productivity in operational processes, organizational efficiency and effectiveness at the DMO level. The framework developed in this study interconnects the analysis of the internal environment through the Value Chain and the Lean Six Sigma methods identified to be suitable for application in the management of the tourist destination. Testing of the practical application of this framework was done for Association for the Promotion and Development of Tourism (APDT), which is the DMO that ensures the management of the tourist destination of Brasov, Romania. The research contributes to the optimization of the processes at the DMO’s level. The framework developed in this study can be implemented by practitioners to improve the management of the tourist destination. The paper also offers future research directions.

1. Introduction

Tourism and hospitality have been in recent years and still are in a process of profound transformation with increasing dynamics. In the context of increasing the diversity of services in the tourism industry and the requirements of tourists, continuous transformations are needed in the management of tourist destinations in order to increase their competitive advantage. Rapid changes in the production and consumption of tourism services, increased competitiveness and the emergence of new tourist destinations, together with all the implications of information technology development, require a new approach to implementing modern management strategies and tools to ensure efficient management and sustainable development at the level of tourist destinations.

The current market environment in tourism is characterized by increasing international competition and fast-changing, challenging customer demands [1]. Destination management and destination marketing have become “mainstream” topics in the tourism research literature since the year 2000. Today these two concepts are also integral to professional practice in tourism destinations; they now represent the platform for achieving excellence in tourism destinations. It is especially crucial that destination management organizations (DMOs) perform all of their roles with equal intensity [2]. The development of a tourist destination involves a few problems, given the need to manage and coordinate a significant number of elements within the tourist system of the destination [3].

Given the role of the destination management organization (DMO) in the efficient and quality management of a tourist destination, it is necessary to develop an integrated management framework, to support decisions by implementing Lean Management methods, to streamline the activity and operations from DMOs [4]. To fill this gap, we will continue in this research direction, through an innovative approach that interconnects strategic management tools and Lean tools.

In this context, the aim of this study is to propose a framework to improve the management of the tourist destination through an approach to strategic management and the integration of Lean management to increase organizational efficiency and effectiveness at the DMO level.

2. Literature Review

Tourism destinations can be regarded as strategic business units, which are, at least in the case of community orientation, characterized by numerous formally autonomous service providers [5]. Brunetti (2001) and Tamma (2001) define tourism destination as a supply system correlated with a specific area [6,7].

The tourist destination is a complex system consisting of a variety of organizations that offer tourist products and services (accommodation, food, transport, attractions, etc.), natural and anthropic resources, as well as other units providing tourists support services [8]. According to the theory of systems, the destination can be seen as a system where the various component subsystems are interconnected through material flows/exchanges, information flows, and energy flows. The goal is a system, a network of connections, and its leading role is particularly important. Destination management has an essential role in its development, given that in a constantly changing competitive environment, destinations must provide value for tourists.

In the current concept [9,10,11] the organization, which meets the requirements of the development of a tourist destination, is the Destination Management Organization (DMO). The Destination Management Organization is a public or private organization that can operate at different administrative levels and aims at planning, realization, and implementing the tourism development policy of the destination, coordinated management of the tourism destination’s components, and marketing policy implementation (ANT, 2017) [11].

To track the development and the activities of the destination management organizations, the World Tourism Organization (UNTWO) initiated a comprehensive study of these organizations [12]. UNWTO has defined DMOs as: “coordinated management of all the elements that make up a destination (attractions, access, marketing, human resources, image, and pricing). It takes a strategic approach to link up very separate entities for the better management of a destination” [13].

Some studies [1,9] show that tourism’s micro-enterprises have rather limited knowledge of their role in the global value chain and the significance of multiple connections that occur within it. Thus, there is a need for a well-defined and efficient destination management organization to develop strategies and to transmit market-related information. This can be achieved by integrating activities: promotion and marketing, understanding consumer requirements, access to more technologies and implementation of innovative practices, and training and increasing the expertise and quality of consulting for clients. By implementing modern management concepts such as Lean management within the DMO, direct implications will appear in the development of tourist destinations by increasing the number of tourists and implicitly increasing the added value at both local, regional and national level of the DMO.

A review of various scientific and other studies demonstrates a significant diversity in the understanding of DMOs (regardless of the fact whether this concerns the formulation of “marketing” or “management”) [14]. Presenza, Sheehan, and Ritchie (2005) in paper [15] give various views of DMOs as a Destination Marketing Organization and Destination Management Organization, through the analysis of the main functions, they examine both aspects and conclude with a model that describes the activities involved in the “external destination marketing” (EDM) function and the “internal destination development” (IDD) function.

Morrison (2013) defines destination management and destination marketing [2]. Destination management is the coordination and integration of all of the elements of the destination mix in a particular geographic area based upon a defined tourism strategy and plan. The destination mix elements are the attractions and events, facilities (hotels, restaurants, etc.), transportation, infrastructure, and hospitality resources [16]. In addition, destination management encompasses the image-making, branding, and marketing and communications of all that the place has to offer to tourists. Destination marketing is one of the most important DMO roles [2]. Pike and Page (2014) have achieved the distinction between destination marketing and destination management. They have structured the literature around the key themes that DMOs are involved in, in the pursuit of destination competitiveness, given that this is now a core objective of not only promoting the destination, but also in maintaining its long-term sustainability in terms of markets [17].

Destination marketing organizations act as the leading players for the successful marketing of a destination [18]. DMOs are defined by the World Tourism Organization (UNWTO) as “(…) those organizations which are responsible for the management and/or marketing of individual tourist destinations” [19]. The DMOs play a multitude of roles, with attributes related to both management and marketing. Regarding the role of a DMO, it is suggested that DMO activities may be organized into two significant functions: (1) External Destination Marketing; and (2) Internal Destination Development [20]. Destination management organizations play a major role in managing destination networks and in fostering cooperation between destination actors. DMOs are central figures in the governance of tourism destinations. However, being organizations, their operations are also judged according to their organizational efficiency and effectiveness [21].

Within the managerial approach, a DMO integrates, in specific forms, the general functions of management, namely: forecasting, organizing, training, and controlling. Planning represents the whole of the processes through which the main objectives of the DMO are determined, as well as the resources and means necessary to achieve them. The organization of the activities consists of establishing the duties and responsibilities of the DMO personnel and regulating the connections between the created posts and compartments. The training refers to the processes by which the DMO staff, the human resources, are attracted to the achievement of the organization’s objectives, taking into account the motivational factors. The control includes all the activities of monitoring the process and evaluating the results, in order to detect the inadvertence, to prevent their occurrence and to implement new objectives. “Destination management consists of the integrated management of those processes necessary in establishing an exchange between a destination and its visiting tourists. Therefore, on the one hand, it involves the management of services offered and tourist attraction factors, while, on the other hand, managing demand, dependent on tourist flow and customer satisfaction” [22]. For this reason, from a managerial point of view, we need a systemic approach to the processes carried out by the DMOs to play a role merely as initiators and mediators: they can bring about a flexible interface management system and promote self-responsibility, self-organization, and self-regulation of the destination network [23].

Looking at the marketing approach, a DMO integrates, in specific forms, the four classic functions: market research and consumer needs, connecting the organization to the economic–social environment, meeting consumer needs, and maximizing economic efficiency. Market research and consumption needs are aimed at obtaining information regarding the present and potential markets, the total consumption needs, the motivation of these consumption needs, and the behavior of the consumers, externally all of which is necessary to establish the objectives of the DMO. The connection of the organization to the economic–social environment consists in the operational adaptation of the DMO to the constantly changing external conditions, as well as in the functioning of the opportunities, and the development of the demand for certain products and services. It is that function that involves promoting the innovative spirit in the entire activity of the DMO. Satisfying consumer needs is the function that materializes in a set of measures that aim at producing those characteristic DMO products/services that are necessary and adapted to the market demand by distributing these products and services in optimal conditions and ensuring a wide variety of possible choices according to all tastes and preferences of tourists. Expanding the products/services range and informing tourists about the rational ways of using the products, while educating the tastes of tourism consumers by creating new needs and orienting the consumption demand are in accordance with the principles of sustainable tourism and the general interests of society. Maximizing the economic efficiency supposes the assurance of the foundation’s elements (information), evaluation, and attainment criteria. It also supposes the promotion of the techniques of rationalization of the activities, to streamline the process of allocating all the DMO resources (financial, material and networking, human, etc.), optimization of DMO structures and processes, in full accordance with set objectives.

DMO is perceived as the responsible organization of strategic management, as well as the mediation of relations between actors inside and outside the destination [24]. It is one of the reasons why networking is quite difficult to manage in this type of organization. Hristov et al. (2015) [25] based on a synthesis and critical analysis of the literature on destination management and governance, provide a model for conceptualizing contemporary DMOs that serve as leadership networks in destinations. The authors highlighted the collective dimension of leadership in DMOs.

Several papers are dedicated to exploring DMOs’ roles and activities. Ritchie and Crouch (2003) identify two essential competencies of successful DMOs: (1) marketing, which is related to external performance, and (2) coordinating destination stakeholders, which is related to the internal performance of DMOs [26]. Presenza (2005) identifies three fundamental activities of the DMOs [19]: (1) advertising, (2) coordinating destination stakeholders, and (3) crises management. Sainaghi (2006) classifies a DMO’s activities [27] in two processes: (1) primary processes/operative processes (management of resources, product development, and communication) and (2) support processes (internal marketing, training, and research). A study with practical implications in rural tourism development conducted by Arbogast et al. (2017) makes a major contribution in the field, by identifying the need for separate organizations to assume marketing and management roles [28].

We find the existence of a multitude of processes and activities, an aspect that involves a multitude of variables, which must be taken into account for the efficient and performance management of this type of organization, that is, for the success of the DMO.

Successful destinations result from successful and sustainable destination management [29], and, obviously, depend on the success of DMOs. Wray et al. (2010) [30], quoted by Klimek (2015) [31], characterizes effective DMOs; these should have: a long-term vision of destination development; the capacity to clearly designate responsibilities to stakeholders and to develop appropriate operational structures; and a transparent and responsible decision-making process, which involves all stakeholders [32]. Indeed, stakeholders play a vital role in achieving DMO success.

The critical role of DMOs for destination management is heavily due to the fragmented nature of tourism comprised of many stakeholders possessing different (and sometimes conflicting) interests. The destinations comprise different types of complementary and competing organizations, multiple sectors, infrastructure, and an array of public/private linkages that create diverse and highly fragmented supply structures [33]. The DMO needs to create a common goal and strategy with its stakeholders to try to develop the holistic destination image, which would allow it to succeed in the long run [34,35]. Stakeholders can be classified into different categories: government bodies, tourism and hospitality firms, tourists (the key pieces to the tourism industry) and local residents [18,36]; some of the most important stakeholders are the hoteliers, the local government, and the local community [37]. DMOs must identify the ways in which they can bring to the same table the interests of all stakeholders, whether they consider themselves friends or enemies.

The existing literature maintains that the involvement of key stakeholders is vital to tourism development and planning [38]. Pulido-Fernández (2019) developed a model for implementing the principles of good governance as a key tool for managing tourist destinations, and identified how governance should be applied, establishing an open and participatory model that must be transparent and efficient, able to attracts participation, coordination, and collaboration between stakeholders [39].

Involving all stakeholders is a rather difficult process to manage for the DMO. Destination managers, in general, have limited coercive power over the manifold number of entities making up the destination and determining the tourist experience [40]. This fact makes coordination and quality management by DMOs a challenging task [41].

An efficient management of processes of inclusion and involvement in decision making of all key stakeholders is still a gap in approaching research so far. Furthermore, Zehrer and Hallman (2015) revealed that co-operation among the stakeholder groups plays a pivotal role in the development of the destination. It might even increase the overall power of the destination and shape its future. In the end, it is the DMO that is supposed to coordinate and lead the destination strategically, to deliver a consistent tourism product to the customer and thus even generate joint innovations. To generate new products and services, all actors need to make use of their social capital and mutually exchange information and knowledge for mutual benefit [42].

We can say that co-operation among the stakeholder groups involves activities and processes in the network, as well as the rigorous management of such a system. Varghese and Paul (2014) highlight the need for the implication of Destination Management Organizations to bring in a body of control that oversees the destination and, at the same time, achieves visitor satisfaction. “A DMO will be the nerve center of the destination that holds crucial information pertaining to the market; it brings about a total management system and helps in coordinating and controlling the flow of tourists, tackles present trends and challenges and is that platform on which all stakeholders come in contact with the potential tourists” [43].

As a result, the organization (DMO) has the role of coordinating a series of activities: general destination management, governance and competencies of a tourist destination, stakeholder’s management, quality control, infrastructure development and marketing. All these lead to the establishment of quality standards for products and services offered to tourists, in order to meet customer demand [43]. In this context, DMO performance becomes paramount in the process of creating a successful destination. The issue of the destination management’s performance is broad. The predominant topic is cooperation/collaboration/partnership [44].

Several papers are dedicated to exploring the successful criteria for a destination’s competitiveness, and a few studies have investigated the DMO’s performance. A recent and detailed study in the field of measuring destination competitiveness and sustainability was conducted by Paunovic I. et al. (2020). Through their research [45], the authors propose a new reference model with two types of destination for which they identified the major predictors of destination competitiveness and sustainability, with implications for destination planning and governance arrangements. Dwyer and Kim (2003) highlighted the importance of the internal managerial function for destination competitiveness [46]. Bornhorst, Ritchie, and Sheehan (2010) notice that DMO managers need to be aware that DMOs’ success will be determined by how well these organizations are run, by the quality of the managerial processes [47]. Existing studies have focused on the challenges, activities and functions this organization type pursues [48], but they offer little insight into how DMOs may address the growth in the perceived value of the activities as well as the reduction of losses. These neglected issues are related to continuous improvement, implying the need for innovation in DMO.

Destination marketing organizations will soon no longer exist in their current form, and so now is an opportune time for tourism academics to engage in innovative thinking about the future of these entities. It is timely, therefore, for researchers to consider how innovation will shape DMOs in an increasingly uncertain future. In particular, three intertwined areas of research gaps related to DMOs stand out: politics, performance, and paradigm [49].

DMOs could create an organizational setting favoring innovation while simultaneously investing in partner collaboration to obtain more benefits from their innovation efforts. Furthermore, innovations need to be developed to better match organizational resources [50]. The innovation will have to lead to a better use of the DMO resources, which is to reduce the losses. This approach involves multiple ways of innovation: at the technological level, at the process level, at the system level, at the level of products/services, through continuous improvement. Innovation refers to technological improvements, process improvements, or new ways of implementing policies or practices that help organizations to achieve or maintain a competitive advantage [51,52].

Innovative hospitality and tourism industry studies are growing in importance and necessity, given the growing demand for this market and, at the same time, the increasing competition for the use of limited tourism, social, economic, and human resources [50,53,54]. Marketing process innovation plays an important role in the proper promotion of destinations in the contemporary period. Destination marketing organizations all over the world have to implement innovative and appropriate approaches and use adequate tools and techniques in order to improve their marketing activities’ effectiveness and efficiency [55]. Marketing innovations are related to the implementation of a new marketing concept or strategy, being the way which the DMOs can stay competitive in today’s environment through innovation [50,56].

To respond to the challenges of the future, an important role in the managerial approach is the innovation of processes and the system-level approach of the DMO. Several papers are dedicated to exploring collaboration and the re-organization of destination marketing organizations within the framework of innovation theory. Abelsen et al. (2014), formulates a response to a call from within the innovation field to undertake more innovative research related to the organizational level. Innovations can be facilitated and hampered due to structure or processes [57]. Zavattaro and Daspit (2016) found three broad influences upon the DMO’s innovation processes: (1) an innovation-centered organizational culture, (2) an external knowledge acquisition ability, and (3) an internal knowledge exploitation ability [58]. DMOs must have the ability to reinvent themselves in the face of the radical changes occurring in their external environment. Regarding the changes, the following three research areas were identified as particularly important given the challenges and possible solutions discussed by the DMO representatives: (1) building organizational capacity to change, (2) understanding tourism experiences, and (3) establishing appropriate performance measures and benchmarking methodologies [59]. Beritelli P., Bieger T., and Laesser C. (2014) challenge the way the research community has approached issues and implemented concepts in the field of destination management [60]. In this sense, they have identified the main problems of destination management and propose a new paradigm for destination management and DMOs. In the near future, there may be a change in how DMOs create and capture value, or different actors altogether will assume responsibility for activities that benefit coordination and destination development [49,61]. Scholars have but recently moved beyond a discussion of governance, activities, functions, and competencies to include how value is captured by DMOs. The literature is encouraging the embracing of the DMOs’ challenges as research opportunities [24]. Pike S. (2016) emphasizes in the paper [49] the importance and need for revolutionary changes in the structure and activity of the DMO, along with the evolution of technology, given the current uncertain development environment and their role in the future.

In this context, there is still a lack of research regarding the approach and analyzing the value usage without loss and the interdependencies between that and DMO value creation and value captured. The tourism literature provides little advice on how DMOs change and optimize their activities for the benefit of their destination-given contextual change.

A neglected aspect of performance measurement is management’s efficient use of the DMO’s organizational resources. Nevertheless, there is going to be increasing pressure in the future on DMOs to achieve more with fewer resources, and so more research is needed on innovative best practice [49]. This conceptual paper aims to contribute to filling this gap, in order to afford DMOs the possibility to achieve more with less resources, through the reduction of losses.

The research correlates strategic management tools: the analysis of the internal environment through the Value Chain and the Lean Six Sigma methods, identified to be suitable for application in the management of the tourist destination. By applying Lean methodological tools to ensure continuous information flow, the proposed strategic model contributes to the optimization of the main processes within the DMO and to the creation of added value in the entire tourism value chain.

3. Materials and Methods

The research methodology offered the possibility to rethink a new integrated management model of stakeholders in the development of the future DMO by implementing Lean Techniques. The processes and activities within a DMO were identified in order to continuously improve, as a business strategy on the competitive market, in the field of the tourist destination. Thus, the DMO management takes into consideration some essential elements in the management of the DMO activity: providing decision support on the structure of the global tourism chain, coordinating the movement of goods and the provision of services, and the exchange of information between the members of the organization and stakeholders. The model responds to global trends and current realities: consumer and competition expectations, globalization, IT—Information Technology, e-commerce, the Internet, EDI (Electronic Data Interchange), scanning, intranets, legal regulations—such as trade restrictions, environmental requirements—eliminating waste, and waste minimization.

This framework was designed using as a case study of a famous tourist destination in Romania, namely the Brasov tourist destination, and the respective organization that manages this destination—the Association for the Promotion and Development of Tourism in Brasov County (APDT Brasov) [62] founded in 2006, within a local development project and created in a public–private partnership format. The Association for the Promotion and Development of Tourism (APDT) Brasov has, as its main objective of activity, the management of the tourist destination and the unitary promotion of the representative tourist objectives of Brasov county on a national and international level (APDT Brasov). In this study data received from APDT, and statistical information from the National Institute of Statistics Brasov are used [63].

3.1. Analysis of the Internal Environment at the Level of the DMO

The study of the internal environment of the DMO aims to establish the necessary and available resources in the context of formulating a certain strategy. Studies on the organization’s resources generated a new concept of analysis in the 1990s: the study of the company based on resources [64].

For the analysis of different categories of resources, their classification according to their content (human, material, financial) or according to the functional use within the organization (production, finance, personnel, trade, research and informatics) is frequently used. The elements related to the organizational culture are, as a rule, analyzed separately, which has lately given them more and more attention (contingency management studies) [65].

An effective analysis of DMO competencies can be performed based on four characteristics grouped under the initials V.R.I.O. Ref. [66]: (a). Value—examines the extent to which a competency generates additional profit by increasing revenue, and/or reducing costs; (b). Rarity—analyzes the rarity of a competency compared to other organizations; (c). Inimitability—it is analyzed if a resource is inimitable, i.e., if its reproduction by a competitor is difficult or impossible. A distinctive competence exploited by the DMO can give it a long-term competitive advantage; (d). Organization—it is analyzed if a competence (resource) is exploited by the organization (DMO) through an appropriate strategy.

Value chain analysis. The connection between the competencies (resources) of the DMO and its competitive position is analyzed in the light of the way in which the organization’s activities generate added value. The theoretical substantiation of this connection is achieved by analyzing the value chain. Initially, the analysis method was based on accounting elements, trying to identify ways to reduce costs and increase profits. The production process was seen as a series of links, analyzed separately. The idea was taken over to achieve models for optimizing the allocation of resources in order to create a competitive advantage. These models are based on identifying the most efficient activity, in order to focus organizational efforts on it.

By applying the value chain model proposed by Michael Porter [51], the activities analyzed in a DMO can be divided into two broad categories: A. Primary activities: internal logistics—reception, storage and distribution of resources for production; production (operations)—transformations of inputs into finished product/services; external logistics—collection, storage and distribution of the finished product/service to consumers; marketing and sales-generates ways to communicate with the market; service—maintaining or improving the value of the product through after-sales services; B. Support activities: acquisition—the process of acquiring resources for primary activities; technology development—know-how related to the product/service, process or a particular resource; human resources management—recruitment, selection, training and motivation of the organization’s staff; infrastructure—planning, financing and quality control systems, as well as elements of organizational culture.

The value chain of the DMO and the way in which individual activities are carried out will be a reflection of the strategy implementation approach. This value chain can vary slightly for different services performed by the DMO or created together with different stakeholders or customers. Thus, DMOs will need efficient operations in terms of designing, creating/co-creating, marketing, providing and supporting its services.

3.2. Lean Techniques and Methods

The modern management methods can be summarized in three concepts: reducing waste/losses, maintaining product/service quality, and accelerating production. Lean is a management system, a philosophy or a set of tools, depending on the scale, strategy and level of development of the organization and culture in which it is applied [67,68]. This concept implemented and verified in production, is equally important for the efficient organization of the processes and activities in the tourism industry. The adaptation of the Lean methodology must take into account the particular characteristics of each sector. For example, any loss occurred is spread across the whole tourism industry chain, with unfavorable insights on customer service. Thus, the organization is required to take measures to eliminate/minimize losses and therefore to bring value to the customer, to provide better and more competitive services. Identifying solutions for competitiveness is one of the main concerns of the companies and organizations around the world, and implicitly for the Destination Management Organization.

By the study of the specialized literature and the practical experience of the various industrial companies, Lean management is currently applied, most frequently and successfully in the industry, making production more flexible, and companies more profitable. The industry has applied successfully methods and instruments to optimize productivity and efficiency and to increase the quality of services even further for many years [68,69,70]. Most articles on Lean Production [71,72,73,74] focus on the implementation of systems, such as Just-In-Time (JIT), Total Quality Management (TQM), Six Sigma, Total Preventive Maintenance (TPM), Value Stream Mapping (VSM), and vendor development, as well as their impact on operational performance.

Another tool currently used in the development of companies or organizations to create value and improve quality in the identified process chain is Lean Six Sigma. In [75], Lean Six Sigma is considered a model of operational strategy of excellence. Together, the management of Six Sigma and Lean can be solutions for adapting the business environment to changes in the market, changes with an upward dynamic. This technique has been successfully applied in various business sectors, in small and medium enterprises [76,77,78]. Analyzing the specialized literature [79,80,81,82,83,84] it can be found that Lean management tools have been used in the field of tourism, especially in the hotel sector, the results having a positive impact. Instead, the possibility of implementing Lean techniques in the field of DMO has been less studied. Current research in the direction of Lean process optimization in the hospitality industry and future research directions are presented in the scientific paper [85], which demonstrates that Lean manufacturing methods can be transferred to the hospitality industry, taking into account certain features (are introduced notions such as Lean hospitality, Lean hotel). The studies and analyses, performed in the works [86,87], refer to the evaluation of the performances of the sectors of the hospitality industry, by applying the Lean Six Sigma techniques. An extensive and recent study [88], investigates the existing literature on process improvement in production and service organizations by implementing the Lean Six Sigma (LSS) methodology and provides opportunities for future research by applying Big data analytics, in all phases of LSS.

However, it can be seen that the implementation of Lean techniques at the level of Destination Management Organizations is quite limited. Thus, the need and opportunity exists to research and apply these concepts in the field of development of DMO, a current field in the tourism industry, which currently requires special attention in the construction and reorientation of value chain processes. In this context, the analysis and case study conducted in this paper considers the Lean Six Sigma method, with the possibility of application in a DMO, by defining processes, in order to improve the quality of customer service and thus increase its competitiveness.

Lean Six Sigma is an improvement methodology consisting of the application of two philosophies (Lean management and Six Sigma), this management tool can be implemented as a process-oriented improvement method and within a DMO. Thus, the process will be defined and divided into several steps, to better understand the current state of the way it works and to eliminate the difficulties of customer service, waste elimination and inefficiency of activities in the development of the destination management organization.

The application of the Lean Six Sigma concept in Destination Management Organizations can offer various benefits, not only economic, but also in terms of changing the organizational culture, the attitude of stakeholders and how the DMO works. Among the benefits of implementing this Lean Six Sigma tool in a DMO can be mentioned:

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Development of DMO by adopting new concepts and management methods to increase employee performance, accountability and motivation;

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Increasing the value for the customer by improving the processes and increasing the quality in the DMO and implicitly by increasing the degree of satisfaction for the customer;

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Increasing profit by eliminating waste and improving the quality of processes in the DMO and achieving cost savings;

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Redefining processes by mapping the value stream within the DMO, eliminating waste, unnecessary steps and reducing errors in the process, resulting in simplified processes that will then be standardized.

For the elaboration of a Lean theoretical evaluation framework in order to reorganize and improve the DMO activity, SIPOC analysis was used, as a tool of the Six Sigma methodology. This instrument offers the opportunity to identify and make obvious the main processes that add value, as well as a more transparent presentation of the processes from entry to exit throughout the logistics chain suppliers–process–customers. The significance of SIPOC is: suppliers (S), inputs (I), process (P), outputs (O), customers (C). The methods and tools to be used in the field of expertise of the DMO are mainly based on the improvement of functions and activities. Thus, a useful tool in process analysis within a DMO is SIPOC analysis, [89]. This instrument offers the opportunity to identify and make obvious the main processes that add value, as well as a more transparent presentation of the processes from entry to exit throughout the logistics chain suppliers-process-customers.

To increase global competitiveness and the ability to respond to market requirements, it is necessary to apply the concepts of integrated management of tourism destinations. Some of these requirements cannot be fulfilled without the implementation of the Lean techniques proposed in this study to be adapted in the field of organizing tourist destinations. The correlation between the actions aimed at introducing Lean management and the performance (PFE—Performance Evaluation Framework) of a Destination Management Organization is shown in Figure 1.

Within the presented methodology, through the analysis of the internal environment at the DMO level, the necessary and available resources for the development of the management strategy were established. A key outcome of the Destination Management Organization is the strategic value that contributes to the development of the destination, as well as the satisfaction of stakeholders. On the other hand, implementing Lean management techniques can achieve considerable advantages in increasing customer satisfaction by adding value to the products/services while simultaneously increasing the competitiveness of the organization.

The SIPOC analysis as part of the Lean Six Sigma technique led to the detailed study of the processes and activities in a DMO Brașov in Romania, in order to improve the quality and to apply the concept of organizational learning and the analyzed innovation processes. Thus, the processes will be analyzed from the perspective of operational excellence (activities, functions, organizational structure). Therefore, we can talk about an integration of a preliminary DMO performance evaluation framework with the application of the Lean Management concept.

In this context, the efficiency of Destination Management Organization can be assessed by five key factors: inputs, capacities, processes, results and outputs. These determinants of the integrated development of a DMO contribute to achieving high levels of performance in terms of DMO processes and promote the sustainable development of the organization.

4. Results

The SIPOC diagram as part of Lean Six Sigma, can be used as a useful tool in establishing the limits of the process. According to [90] it helps to define a complex project that may not be well defined and is usually used in the measurement phase of the Six Sigma Define, Measure, Analyze, Improve, Control (DMAIC) methodology. The SIPOC diagram aims to map the processes, providing additional information regarding: the supplier, and its contributions to the process; the system inputs, and the specifications of them; the process clients and their requirements.

4.1. Process Flow in DMO. SIPOC Analysis

The SIPOC diagram is a useful visual representation tool used in process management. It can also be applied in the analysis of the process flow within a Destination Management Organization, having as main objective the identification of the relevant elements of the process, of the key indicators of the DMO, to improve the areas of the process that most affect the customer satisfaction.

Thus, a model for the definition of a process can be developed before its improvement. The common elements of the SIPOC diagram refer to:

• S—Suppliers—suppliers;
• I—Inputs—the inputs offered by the suppliers;
• P—Process—the most important steps;
• O—Outputs—process outputs;
• C—Customers—process clients.

In completing the SIPOC diagram, the flow of the process for which the improvement is desired is considered, this completion being accomplished by following five specific steps:

Step 1: Listing the main elements of the process (Process—P)

This stage allowed the identification of the elements of the process (

Table 1. Identification of Process elements—P.

	Elements of the Process-P	Activities
1	Planning and research	- Developing a mission statement, preparing tourism policies and plans; - Developing a destination strategy; - Research on existing and potential target markets to guide future marketing and product development decisions studies to improve product development and marketing.
2	Product development and service supply	- Running an information base and desk; - Developing marketable product-development of the tourism product including physical products, people, packages, and programs; - Identifies new tourism product development opportunities; - Provides assistance in realizing projects and programs; - Developing and assuring quality-continuous product quality improvements; Ensuring complaint management; Ensuring reception and entertainment; - Organizing big events
3	Marketing and promotion	- Developing marketing strategy; - Prepares long-term and short-term marketing plans for tourism; - Doing market research, identifies the priority target markets and evaluating results; - Implementation of an effective branding approach, brand management; - Selects the most effective image or identity for the destination, image campaigns, sales, promotion and PR (Public Relations); - Integrated marketing communications method combining online and traditional promotions; - Developing a pricing strategy for own products; Selling products and services; - Running reservation system; - Providing incoming services.
4	Leadership and coordination	- Leadership role in tourism within the destination; - Strategic direction and high level expertise; - Setting the overall direction for tourism in the future; - Acts as a coordinator of the efforts of stakeholders; - Arrange appropriate organisation structures and processes.
5	Partnership development and team building	- Builds alliances to achieve the destination’s product development and marketing goals; - Informing the stakeholders: travel agencies, tour operators, transportation providers, MICE (Meetings, Incentives, Conferences, and Exhibitions) planners, and others; - Political lobbying for special projects; - Training of staff and front office.
6	Managing the relationship with the community	- Acts as the main advocate for tourism within the destination; - Informing the community residents when making important decisions that will affect their lifestyles and living standard; - Promoting tourism consciousness.
7	Performance management	- Measure and reward performance; - Monitor governance; - Identify gaps and respond

), within a Destination Management Organization, based on the specialized literature [2,24].

Step 2: Identify deliverables (Deliverables–Outputs—O)

Ensuring delivery through the destination management chain is done taking into account the customer requirements [91,92]:

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Customer buys: advice, information, sales knowledge, ease of booking, price, etc.;

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Customer prepares for visit: visa, internet, information, etc.;

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Customer travels and arrives: airport, airline, immigration, forex, transport, etc.;

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Customer Experiences: attractions, service levels, shopping, accommodation, food, friendliness, roads, transportation, infrastructure, safety, environment, etc.;

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Customer Returns: airport, taxes, CRM (Customer Relationship Management), regular communication, etc.

Thus, the deliverables of a tourist destination can be grouped into four categories for the destination product [2]:

Physical products: These include physical items such as attractions, facilities, transportation, and infrastructure. The attractions play a pivotal role in drawing tourists to the destination. There must be convenient transportation access to the destination and good infrastructure (e.g., electrical power, sewerage, telephone communications, etc.) to support safe and enjoyable travel within the destination. There must be adequate hotels and restaurants to cater to the needs of tourists.

People:

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Local people provide hospitality resources as the hosts and providers of personal services;

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Local cultures and lifestyles are also often very appealing to tourists. Community residents should be made aware of the benefits of tourism.

Packages: All destinations have a set of packages and programs that can be purchased and used by tourists. Packages are assembled by travel agencies, tour operators, and others, and combine many elements of the total travel experience. They are organized either by themes or route itineraries, and often are based upon industry partnerships. Packages can be purchased through traditional retail channels, including at travel agencies, or be bought online.

Programs: Events, festivals, and activities are arranged or programmed for tourists. Well-designed and well-promoted festivals and events draw tourists to destinations, so they share this role with attractions. Programs of activities are also prearranged for tourists with specific interests.

Step 3: Defining Customers (Customers—C)

In defining the clients it is important to identify the organizations’ role in the management of the destination. Given the above suggestions of the role of a DMO, it is suggested that DMO activities may be organized into two significant functions [24]: External Destination Marketing (EDM) and Internal Destination Development (IDM), according to

Table 2. Defining Customers—C.

Defining Customers—C
External Destination Marketing	B. Internal Destination Development
- Visitors—tourists. - Consumer advertising utilizes print, television, radio, outdoor and now Internet media, while trade advertising occurs in specific travel trade magazines and newspapers. “word of mouth” advertising that is spontaneously generated by previous visitors to the destination and E-commerce. - DMOs manage the selling of destinations and of their tourist products, carrying out activities such as [32,91]: web-marketing; advertising, both classic and based on new media; familiarization tours; sales blitzes; direct sales; direct mail; cooperative programs; events, festivals, conferences, fairs, etc.	- Stakeholders. 32 tourism stakeholders were identified [15], the most important ones according to DMO executives were: hotels, government (at different levels), attractions, the board of directors (of the DMO), convention centers, DMO members, residents, restaurants, universities and colleges, the local chamber of commerce, and sponsors. - Public sector; Local business; NGOs; Activity providers; Hospitality industry; Local residents. - DMOs undertake all other types of activities for the maintenance and development of the destination, except for marketing [32]: visitor services, including visitor management; measuring and evaluating visitor satisfaction; information and market research, with the purpose of helping stakeholders better understand: market demands, industry supply, and the existing gaps between the two parts; ensure high-quality development of human resources; resource stewardship for sustainable destination management and development; contribute to the attraction and raising of financial resources, including venture capital; - Overall Destination Management: coordination of stakeholders; management of crises.

.

Step 4: Determining the required materials (Contributions–Entries—I)

For the optimal development of processes within a Destination Management Organization (DMO), a number of materials are required, regarding: persons, information, necessary conditions and resources. According to [92,93] tourism development needs a human capital base that meets the requirements of: very high availability and qualification, with the right type and level of education, training and experience at all levels of qualification and in all subsectors of tourism; highly motivated human capital with the right attitude; human capital capable of reaping the economic benefits of tourism, with clear and visible career opportunities in this sector.

Resources and information regarding the marketing activity of the management destination organization [94], are:

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A direct marketing sample with the role of managing information on marketing campaigns, taxes, agencies, personnel;

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Print medium has information on circulation, periodicity and fees for posting an advertisement (for example: Limited Skateboard Magazine, Skateboard, Lodown, Slap, Transworld Skateboarding or Trasher [94]);

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Website; broadcast (radio transmissions or telecasts and data about their airtime, periodicity, audience rating, and costs for one advertising spot);

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Market analysis report—contains information about the publisher of the report, about the population, the date of the survey, and the price for buying it;

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Events (conferences, meetings, parties, parades, etc. for creating and meeting the affinity group);

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Documents—contain files that are considered important for skateboarding knowledge, such as lifestyle reports, audience analysis, and event documentation.

Step 5: Presentation of suppliers (Suppliers—S)

In the management of tourist destinations, the suppliers offer the inputs in the process and can be the suppliers of materials and service providers. The basic elements for the tourist destinations, according to the literature [92], are summarized in

Table 3. Suppliers—S for a DMO.

(Suppliers—S)
Stakeholders: National and provincial/regional government; Economic development agencies; Town centre management organisations; Local authorities.
Attractions, events, cultural organizations that also provide the motivation for visitors: for example, buildings—cathedrals/monuments, museums and cultural attractions.
Facilities/services offered: basic infrastructure, such as utilities and roads + direct services—accommodation, visitor, information, catering and shopping facilities; accessibility; image; price: the cost of transport to and from the destination, accommodation, attractions, food tourism services.
Accommodation providers; Restaurant, leisure and retail operators.
Intermediaries (for example tour operators and conference organisers).
Business support agencies; Skills development organisations.

.

The methodology of developing the SIPOC diagram (Figure 2) consists of establishing the following elements:

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process identification/finding a name for the process;

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clarifying the limits of the process (beginning and ending);

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listing the main outputs of customers; listing of key inputs and suppliers;

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identifying and noting the important steps (5–7) and establishing their order over time.

The SIPOC analysis is based on the identification of the main elements of the processes, as well as the areas that will be improved and which can most affect the satisfaction of the clients, within a DMO. The presented strategic framework methodology, using Lean Six Sigma techniques, contributes to the optimal development of tourist destinations, presenting a complete current picture of the processes and interdependencies between them, within a DMO.

4.2. Case Study—Improving the Management of the Brasov Tourist Destination

4.2.1. Brasov Tourist Destination

In the overall tourist movement in Romania, Brasov County ranks second (after Constanța County), as the most important and frequented area in terms of mountain tourism, while concentrating a wide variety of tourist attractions, according to data provided by the National Institute of Statistics [95].

The special magnitude of the tourist activity was determined here by many factors. It is primarily about the natural tourism potential, a spectacularism and diversity, as well as the cultural–historical heritage, made up of various objectives that also have a certain tourist value. Another factor was the fact that Brasov county is part of a vast territory of tourist interest in the immediate vicinity of other areas with an important tourist flow: Prahova Valley, Bran–Rucar corridor, Sibiu–Olt Valley, Upper Olt basin with frequent balneo-climatic resorts (Covasna, Tusnad, Malnas etc).

Brasov County has concentrated within its limits imposing mountains, protected plants and animals—bison, bears, nature reserves of trees and meadows, gorges, spas, conditions for winter sports, etc. Rivers, lakes, and swamps enrich the tourist attraction of the natural environment, diversifying the offer for tourism (leisure, fishing, specific vegetation, hunting interest). The forested massifs (Fagaras, Piatra Craiului, Postavarul, Piatra Mare), the valleys (Timis, Tarlung, Olt) also absorb an important tourist flow [96].

According to official data from the County Directorate of Statistics, Brasov attracts almost three million tourists annually, but less than half of them are registered, staying at hotels and guesthouses accredited by the Ministry of Tourism. Instead, apartments rented by hotels or part of those listed on Booking or Airbnb, are in a “gray” area of legality.

In 2019, 1.402 million tourists stayed in hotels and boarding houses in Brasov, an increase of 40,000 people compared to the previous year. However, the number of foreign tourists decreased in 2019 compared to the previous year, from 206,033 to 189,237 people, most of them from countries such as Israel, Germany, Spain, USA, Great Britain and Italy. The number of overnight stays registered in 2019 was also increasing compared to 2018, the increase being over 90,000 overnight stays (from 2.673 to 2.763 million overnight stays). Tourists preferred to stay in 3-star accommodation structures (47.8%), then in descending order: 4 stars (34.8%), 2 stars (9.3%), 5 stars (5.3%), 1 star (2.3%), unclassified (0.5%). Of the total tourist accommodation capacity in operation, the hotels held a share of 44.3%, the agritourism pensions 20.9%, the tourist pensions 17.9%, the tourist villas 5.5%, the tourist chalets 3.9%, the hostels 3%, 1%, motels 2.0% and other types of accommodation structures 2.4%. Accommodation units classified with 3 stars represent 50.8% of the accommodation capacity in operation, followed in descending order by those with 4 stars (24.3%), 2 stars (14.2%), one star (5.2%), 5 stars (4.6%), and unclassified (0.8%) [63].

The basic characteristic from a managerial point of view is the lack of a coherent development strategy at local level, the lack of cohesion, fragmentation of property and individualism, and competition is considered as a harmful, destructive process. Paradoxically, in a culture characterized by a high level of collectivism, Romanians do not know how to work as a team.

4.2.2. Improving the Management of the Tourist Destination

In the following we will propose a strategy to improve the management of the tourist destination Brașov—which aims to become the capital of Romanian tourism in the next ten years—using the models presented above. For this we will use: Internal environment analysis through the Value Chain correlated with the SIPOC diagram as part of Lean Six Sigma and using systematic DMAIC. The general development strategy of Brașov County for the next 10 years, to which the tourism strategy subscribes the general strategic objective of “efficient use of all existing physical and human resources, respecting the principles of sustainable development, in order to achieve economic and social development that will lead in the long run an increase in quality of life of the county” [97]. At the same time, the possibility of reducing tariffs and aligning them with those of the competition is considered, Brasov being one of the most expensive destinations in the country.

Supply—S

Due to the fact that the supply is made individually by each economic agent, with general expenses assumed by each, it is proposed as a model for the DMO to set up its own supply department for all actors in tourism, one of the solutions being the action model of the German Economic Club Brașov, which brings together production companies in the area, and which has set up its own supply unit for all member companies [98].

In this way, lower purchase prices are obtained by negotiating large quantities of goods supplied and the transport costs of these goods are optimized.

For the Brașov Tourist Destination the following supply centers are proposed: Brașov Municipality—for business tourism and cultural tourism, Poiana Brașov—mountain tourism, Predeal—mountain tourism, Bran-Moeciu—rural tourism and agrotourism.

Input—I

The tourist destination Brașov [63] has known constant increases in the number of tourists from year to year and an increase and diversification of accommodation capacity, but registers a high degree of seasonality: mountain and rural tourism with seasonal increases in winter and summer, business tourism—during the working week, and cultural tourism—on weekends.

In order to mitigate the seasonality, the units in rural tourism and those in mountain tourism have added facilities for conferences and training tourism or spa and wellness facilities. Business and cultural tourism are trying to mitigate seasonality through price policies.

By acting as a tourist destination, combining and completing the offers and promoting them accordingly, the seasons are attenuated until they disappear.

The infrastructure exists—tourist information centers and associations of owners of tourist units, and their correlation can be achieved through DMO.

Processes—P

The processes are diversified, given the diversity of production processes specific to the hospitality industry, tourism, entertainment and culture. The offers are also diversified but are small in size. By achieving management of the tourist destination, the offers can be diversified, completed and can increase in complexity and scope. Through the management units, large events can be organized such as festivals, fairs, exhibitions, conferences, involving as many economic actors as possible, to attract as many tourists as possible, following the example of Sibiu and Cluj-Napoca.

Step 1—Identify the Main Elements of the Process

Within this step, the main actors that must realize the development strategy of the tourist destination were identified, respectively: the County Council, the City Halls, the University of Transylvania, the professional and employers’ associations in tourism, coordinated by DMO. They are actively working on the development strategy for the next 10 years of tourism in the region.

The data are those provided by official statistics at national and regional level, as well as data resulting from quantitative research conducted by local specialists.

The tourist product is a complex one, bringing together elements of mountain, rural, ecological, cultural, sports and health tourism, in which a multitude of actors are involved: travel agencies, accommodation units, restaurants, local community, media, authority local public in a contractual or freely agreed system. Through proper marketing, the tourism product must be properly positioned in the targeted markets.

The management at the level of the tourist destination must be a unitary one and fully accepted by those involved through a Board of Directors and a professional leadership.

Step 2—Identification of Deliverables

Deliverables refer to what tourists should receive, respectively: information about the tourist products offered, related services—internet, transport, transfer, taxes, shopping, safety, etc. these must be taken into account when designing the integrated tourism destination strategy. Designed at the overall level in terms of DMO, their costs will be greatly reduced compared to the situation in which each economic agent ensures its own deliverables, and the impact at a higher level.

Step 3—Defining Customers, Respectively the Targeted Market Segments

Both the internal market and the external markets are targeted. For each of these, promotional strategies must be defined so as to ensure maximum efficiency at minimum costs, respectively, the appropriate promotional methods must be identified and used—media, social media, public relations, sales promotion, personal sales.

Step 4—Human Resources, Informational, Financial Resources

Optimizing the use of resources is in fact the main goal of tourist destination management, by obtaining synergistic effects. In addition, from a financial point of view, access to financial resources from government or European funds is ensured, some of which are inaccessible to individual economic agents.

Outputs—O

Correlated with the elements presented above, the unitary, complex and diversified offer will lead both to the decrease in the general expenses and to the increase in the incomes and profits of all those involved. The offer of competition at regional, national and European levels must also be taken into account (competition from Austria, Bulgaria and Serbia in the field of mountain tourism).

Customers—C

In all the segments in which Brasov tourism operates, the competition is fierce and the fight for customers is getting tougher. As an element of differentiation, we emphasize Dracula, with the castle of Bran, which attracts more and more customers, being one of the most visited castles in Europe.

By establishing and promoting a distinct local brand, linked to the Myth of Dracula, the effects will be synergistic for tourism and the local community.

5. Conclusions

Given the role of the DMOs in the efficient and quality management of a tourist destination, it is necessary to develop an integrated management framework by creating partnerships between all stakeholders: public institutions, private sectors, and the local population. In the current international context of the developing of tourism with rising dynamics and knowing the implications of tourism in the socio–economic and cultural environment, changes are required in the way of thinking and applying modern strategies, involving Lean Six Sigma methods in a strategic management approach. Lean Management practices contribute to the sustainable development of the economy in general and applied in the field of tourism destinations management can be rethought, by developing strategies for efficient development and optimization of processes and activities. The economic sustainability is related to the strategies of managing their resources, by eliminating waste and continuous improvement, in a way that results in financial benefits for a long time. Thus, the Lean concept can be considered a business strategy, with the primary objective of increasing customer satisfaction through better use of resources, within a DMO, to increase the degree of competitiveness and flexibility of the processes.

Through the strategic approach developed in this paper, and the interconnection with Lean models, we aimed to achieve an integrated management model of stakeholders in the development of DMO in the future and to create value in the entire value chain of tourism. Thus, it is possible to develop an interactive decision support framework, used to streamline the activity and operations of travel management organizations, aspects that highlight the theoretical implications of this study and that may arouse the interest of researchers in the field of management and strategic management connected to each other, we considered throughout the research to determine in all distinct phases of the value chain for DMO applied to the tourist destination Brasov, one of the most important ways in Romania to reduce costs and increase economic efficiency using Lean principles.

Our research confirms and develops the direction of research opened by Foris et al. (2020) [4] regarding the implementation of Lean techniques in Destination Management Organizations. The model developed in this study offers solutions to streamline coordination and collaboration between stakeholders in the management of the tourist destination, our research confirming and continuing the research direction offered by Pulido-Fernández [39].

The research results also have practical implications, they can be useful and can be used by DMO managers and local public administration leaders, who will be able to implement such a strategy to improve management at the level of tourist destinations.

As limitations of the research, because only the aggregate statistical data available at the end of 2019 were studied, we emphasize that the effects of the COVID-19 pandemic which started in March 2020 on tourism and hospitality were not taken into account, which in Romania were devastating, the Government deciding to completely stop tourism during the two-month state of emergency, and after, during the state of alert that lasts today, all restaurants and bars that operated only with indoor spaces were closed and those with terraces worked only at approx. one third capacity. These aspects will be topics for analysis for future research.

With the DMO development framework at national level, future studies of the author will be directed towards analyzing, researching and evaluating the implementation of Lean specific DMO management tools at regional and local level with a positive impact on the growth and competitiveness of the tourism industry and hospitality, by focusing on continuously improving the value delivered to the customer through the strategic approach of intelligent management at the level of the tourist destination, and the development of innovative IT systems of decisional support to support the participatory management of the development of the tourism within the destination. So, it is possible to create diversified and competitive tourism offers, viable by supporting the quality of tourism services, in which the business environment is directly involved with the local public authorities.