DMOs are usually government or not-for-profit entities.
There are various potential sources of DMO revenue, the most common of which are…
- Local government. In the United States, this is often managed as a proportion of the lodging taxes levied on hotel stays. Lodging taxes, since they are almost always paid by non-residents, are a relatively uncontroversial form of taxation. Nevertheless, by increasing prices, they exert downward pressure on hotel demand; the potential unpopularity of the tax with the hotel community is thus handily offset by ring-fencing a proportion of the collections for destination marketing.
- Membership dues paid by local businesses who see themselves as stakeholders in the tourism economy.
- Service contracts from convention centers and similar venues for whom they act as sales brokers.
- Advertising fees for space provided for brochures in their visitor centers, or preferred placement on their websites or in their published maps, apps and guides.
- Commission on hotel bookings, tours or other services booked through their channels.
A DMO’s customers are thus usually some combination of local government, large-scale event facilities and visitor-facing businesses.
This is only a partial match with the recipients of their services, who are largely visitors and event planners, but might also be journalists, influencers, tour operators and b2b service providers.
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