Destination marketing organisations and other major providers of tourism services realised the need to understand both the Internet and the other emerging interactive technologies and how to capitalize on these new channels (WTO, 1999). Destinations are recognised as the raison d’être for the tourism as they satisfy the need for traveling and the attractions at the destination generate the visit. It is accepted that an amalgam of products, facilities and services at the destination level embraces the tourism product (Buhalis, 2000a). Although ICTs have not hitherto been regarded as an essential instrument for the development and management of destinations, destination management organizations increasingly use technology in order to improve their organizational function and performance (Buhalis, 2000b). As a result, several destinations are trying to develop DMSs, which will enable them to coordinate their operations and promote their products.

Defining destination management systems

A universally accepted definition of a DMS does not exist, and various countries have their own interpretation of what a DMS should offer. This is reflected in the number of synonyms by which such systems are commonly known: Destination Databases, Destination Marketing Systems- normally refer to by the acronym DMS, Visitor Information Systems and a variety of other names have been used when referring to the DMS concept over the past years (Frew and O’Connor, 1999). The difference in approach is further complicated by the fact that both public (government funded regional and/or national systems) and commercial (privately funded systems) systems are now on the market. Vlitos-Rowe (1992), suggests that DMSs intention is to provide complete and up to date information on a particular destination. These complete data ensure that smaller establishments, as opposed to international hotel chains, and other land services associated with travel are included.

Frew and O’Connor (1999), state that despite their deferring objectives, the basic theme and common dominator across each of these systems is the distribution of information about and processing of reservations for, all tourism operations and attractions in a given geographical area. For the purposes of this study, an agreed definition is crucial and is provided by Pollock (2001): ‘the IT infrastructure used by a destination organisation for the collection, storage, manipulation and distribution of information in all its forms, and for the transaction of reservations and other commercial activities’.

Recently, as these systems became more common, a formulate body of literature has been more critical and skeptical about some of the assumptions made previously (Frew and O’Connor, 1998). A high failure rate has been observed as several DMSs failed to attract the support and commitment required from both the private and public sectors. DMSs have also failed to develop viable products, which would be utilised from most the independent or institutional demand (Buhalis 2000b). Some DMS failures include: projects in England (Beaver, 1995) and Scotland (Frew and O’Connor, 1998). Acting at the destination or regional level, these systems should incorporate and coordinate the entire range and population of tourism providers. They should also be multi-integrated, i.e. utilise the entire range of available IT, coordinate local SMTEs and integrate them with the local economy (Buhalis, 2000a). Computerisation and networking of the entire population of enterprises at the destination has also been proved to be essential for establishing an online network and enhance the function of these systems. In order to achieve successful development of a DMS closer partnership and cooperation is required throughout the tourism industry (Martini et al., 2000). The need for cooperation emerges through the need to improve service and provide seamless travel experiences, as well as through the new realities imposed by contemporary economic developments, such as deregulation and globalization. The degree of standardization achieved in interfaces and processes will determine the compatibility among technologies, partners and users (Buhalis, 2000a).

Additionally, co-opetition would help to overcome the expertise problems noted earlier. SME’s weaknesses can be overcome through co-operating by pooling their resources and hiring expertise in strategic planning, finance, marketing and information technology. Technology should act as an enabling mechanism that facilitates interaction and communication between SMEs (O’Connor, 2002).

There has been considerable debate as to how a DMS should be initiated, set up and managed. Many feel that the involvement of the public sector, and in particular the national tourism organisations, is essential for:

• integrating DMS into the overall marketing, promotional and management strategy of the destination


• giving the high development cost, financial support from the public sector is vital
  
• ensuring the accuracy, fairness and completeness of the supplier data (O,Connor, 2002).

Others argue against the public sector involvement as:

• would act as publicity subsidised competitor to travel agents, tour operators and thus would be unfair competition.


• government agency structure is not well suited to running a system of this type, as public sector bodies are in general overly politicised and bureaucratic to successfully operate businesses in the digital world


• DMS should operate as commercial enterprises, with quantified performance measures, full accountability and streamlined organisational structure that facilitates responsiveness and innovation


• Staff should be motivated, empowered with the authority to take advantage of opportunities as they develop. Only private sector organisation is likely to have such a structure (O’Connor, 2002).

Although, one of the main DMSs purposes is the support of local SMTEs, some interesting issues have been raised regarding DMSs - SMTEs relations in the literature on the of DMSs failure. Various authors exposed that theories regarding the benefits accruing to SMTEs from DMS representation could be inaccurate (Pringle and Frew, 1994; Frew and O’Connor, 1998). As Blank and Sussmann (2000) state: “some of the assumptions made about SMTE support of these systems may not have accounted for the complexity involved in their operations nor considered the dynamics of these organisations and the characteristics of their owners/managers”.

Indeed, the evolution of DMS enables destinations to coordinate the entire range of products and services offered locally and to promote them globally (Buhalis 2000a). However, destinations at the same time are some of the most difficult entities to manage and market, due to the complexity of the relationships of local stakeholders (Sautter and Leisen, 1999). All the above are identified as reasons for having more DMS failures than successes in recent years (O’Connor and Frew, 1999).

While, future trends are unsure, DMS currently is considered critical for destinations. As consumers faced with difficulty in finding relevant information, they switch towards sourcing tourism information from destination’s NTO websites. Since, DMSs have the potential to improve distribution effectiveness, operational efficiency and regional development, those countries such as Greece without DMS will suffer competitive advantage by not using these systems.