Destination

Management Plan
for the
Inlay Lake Region:
Options for a Destination
Management Organisation

Discussion Paper

02/10/2014 15:44

MINISTRY OF HOTELS AND TOURISM

THE REPUBLIC O F THE UNION OF
MYANMAR

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NOTE: ALL FIGURES ARE IN US$

This document has been produced for the Myanmar Ministry of Hotels and Tourism by the Myanmar Institute
for Integrated Development and the International Centre for Integrated Mountain Development under the
Rural Support to Rural Livelihoods and Climate Change Adaptation Programme (Himalica) with funding from
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Co-funded
by the
European Union

Ministry of Hotels and Tourism
Building No. 33
Nay Pyi Taw
The Republic of the Union of Myanmar
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2014 Ministry of Hotels and Tourism, The Republic of the Union of Myanmar
DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

Contents

1. A Destination Management Organisation for the Inlay Lake Region .............................................. 4
2. DMO Advisory Committee .............................................................................................................. 4
3. Model 1: Coordination DMO ........................................................................................................... 4
Funding Model 1: ............................................................................................................................... 6
Model 1 Start-Up Costs ................................................................................................................... 6
Model 1 Annual Income & Expenditure .......................................................................................... 7
4. Model 2: Destination Marketing DMO ............................................................................................ 9
Funding Model 2 .............................................................................................................................. 10
Model 1 Start-Up Costs ................................................................................................................. 10
Model 1 Annual Income & Expenditure ........................................................................................ 11
5. Evaluation of Models .................................................................................................................... 12
6. Next Steps ..................................................................................................................................... 13
Appendix: Destination Management ................................................................................................... 14

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

1.

A Destination Management Organisation for the Inlay Lake Region

All major, well managed destinations globally benefit from some type of DMO, and there are many
types in existence ranging from Unitary Planning Authorities taking full responsibility for all aspects
of management to Chamber of Commerce style organisations that provide a coordination role.
DMOs are a key recommendation under the Myanmar Tourism Master Plan.

The type of DMO appropriate and suitable for the context of Myanmar and the Inlay Lake Region
must be discussed thoroughly by stakeholders: this document provides two options, the first a
Coordination focused DMO, the second a lightweight Destination Marketing focused DMO which
can eventually extend its tasks and take over as a coordinating role. Both have been designed with
the prospect of a start up project to commence activities.

A DMO would require a comprehensive and detailed training and development plan for staff. It
would likely be set up as a project with donor funding as seed money before being sustainably
financed operationally.

2.

DMO Advisory Committee

Under the Regional Tourism Destination Management Plan for the Wider Inlay Lake Area Project, a
Project Advisory Committee (PAC) was set up specifically for the purpose of guiding project activities
to develop a DMP. It is a natural progression for the PAC to become the Destination Management
Organisation Advisory Committee (DMOAC) for the region, utilizing existing members. Structure and
membership at time of writing is shown in Appendix 1.

3.

Model 1: Coordination DMO

Model 1 provides an example for an autonomous DMO that primarily has a coordinating function to
the various management agencies involved with tourism management within the Inlay Lake Region.

It would also act as a Chamber of Commerce organisation, providing paying business members a
service and the right to use an Inlay Lake Region Brand.

The model is funded from a variety of sources, however core funding will be from a contribution of
Inlay Lake Zone Fees. Other funds will come from business activities under the chamber of
Commerce type of activities.

A DMO would require a high level of staff capacity, thus salaries under this model are considerably
higher than typical public sector wages. This is so as to attract the best talent regionally and to
encourage regional returnees where possible.

Key functions of Model 1 DMO would include:

1. Coordinate visitor economy related development activities between Union, State and
District Government departments, NGOs, Civil Society Organisations, Tourist Police,
businesses and local communities
2. Provide input advice into infrastructure development planning
3. Marketing and promotion for the region
4. Maintaining a high quality regional website that links businesses and responsibility for the
brand management of the Inlay Lake Regions
DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

5. Providing (paid for) business services such as trainings and support to business, CSO and the
local NGO community, such as business plan development, financial management and so on
6. Provide a (paid for) marketing service to individual businesses
7. Coordinate NGOs/donor organisations delivering training under the DMP in the region
8. Be directly involved in the implementation of visitor economy related projects as detailed
within the DMP
9. Have an advisory role and input (through the DMO Advisory Committee) into planned future
developments in the region, new business ideas, buildings and so on
10. Overseeing the publishing of the regional tourism map/booklet
11. Providing input into an Inlay Lake Regional Visitor Centre and Heritage Centre
12. Publishing and encouraging the implementation of tourism related guidelines and codes of
practice, as well as the promotion of the Myanmar Responsible Tourism Strategy and
Community Involvement in Tourism Policy
13. Input into DMP related Management Plans
14. Be responsible for the gathering and compilation of tourism data and developing into
reliable tourism forecasts, specifically monitoring visitor profiles
15. Conducting an annual visitor survey based upon the version developed under the DMP
16. Coordinating the implementation of the strategies developed within the main Destination
Management Plan document, and providing annual DMP review and public feedback.
17. Maintain a small trust fund for DMO long-term financial sustainability
18. Identify tourism and visitor economy related issues and seek donor funding project support
as required.

This model requires a start up project in order to commence operation financial, details are provided
below. It is envisioned that a project would initiate the recruitment, training and professional
development of staff as well as institutional development. This would require full time support for
the first year, followed up by regular support over following years as the financing model is
activated. A comprehensive business plan should be developed as part of the project design.

A key function of this model is the provision of Chamber of Commerce business support, thus
requiring membership fees: these have three purposes: firstly a paid service is considered more
valuable than a free service (a range of membership fees have been selected that are minimal for
smaller enterprises); secondly membership would allow businesses to use the (to be developed)
"Inlay Lake Region Brand" that would be managed by the DMO, and thirdly, provide a contribution
to the DMO's sustainable financing.

Surplus income should be collected in a DMO Trust fund to provide security of funding for times
when operating budget is not covered, for example due to a downturn in arrivals, perhaps relating
to external effects.

Legality and implementation criteria would need to be discussed in detail with relevant
stakeholders.

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region


Proposed structure:


DMO Advisory
Local Action Group

Committee
Committees



DMO Start Up
Logistics & Financial
DMO Unit Manager
Support
Project

Officer


Senior Project

Resource Officer
DMP Projects
Coordinator




Business Support
Government
Marketing
Community Dev.

Officer
Liaison Officer
Officer
Officer



Website & IT

Officer



DMO Model 1will be an innovative enterprise where staff collaborate together with a mixing of roles
as required, utilizing a matrix type structure.

Funding Model 1:
A DMO will need to be self-funding after an initial start up project phase. Funding and detail for this
is provided below, followed by a long-term financing plan based on income and expenditure.

The bulk of funding comes from zone fees under the assumption of 100,000 international and
100,000 domestic visitors per year as indicated below. This may require the increase of zone fees to
$12: changing fee distribution would require renegotiation of the current zone fee franchise.

A mix of additional funding options are included, including business membership fees and income
from business services. As a Chamber of Commerce type organisation, the DMO should provide
valuable marketing and business services to local business and Civil Society, and be flexible to
change.

Model 1 Start-Up Costs
Destination Management Organisation Model 1 DMO Start Up Support Project

Location
Inlay Lake Region
Total
$530,000
budget
Time frame 2 years (with sustainable financing model to develop in year 2)

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

Project
description

Objectives
Activities

Implementation

Financial
Budget
information

Additional
Alignment with
information Union policies and

To develop a world-class Destination Management Organisation for the

Inlay Lake Region
Locate and fit out suitable premises for DMO
Recruit DMO staff
Develop detailed DMO Business Plan
Train Staff as per requirements to achieve functions in this
document and DMP
Develop detailed workplan for DMP implementation
Launch events
Development of detailed sustainable financing plan
Commence implementation of initial project activities

Implementation to be carried out with the support of suitable
development organisation: project to be carried out primarily over one
year as start up support, with continued development support in year
two, and options to continue long term support thereafter

Project Leader 1.5 years
$60,000
Training Officer/Coordinator 2 years
$60,000
DMO Staff first year salaries
$113,000
Property Rental
$12,000
Training Programmes
$50,000
Transport (inc. project car)
$100,000
IT & Web development
$20,000
Marketing
$50,000
Miscellaneous
$25,000
Administration
$40,000
Total
$530,000

Linked to both the Myanmar Tourism Master Plan and the Myanmar
Community Involvement in Tourism Strategy

strategies

Model 1 Annual Income & Expenditure

Income
Source
Zone Fees
Contribution from Inlay Lake Zone fees

Business Membership Fees:

Branding Membership Micro business

Branding Membership Small business
Branding Membership Medium business
Branding Membership Large business

USD

250,000

100
500
5000
10,000

Comments/Assumptions

100,000 international visitors taking $2 from the
fee total, 100,000 domestic visitors paying $0.5,
total $250,000
Business size definition will be required in detail:
the aim is to involve all businesses in a branding
programme and the right to use an Inlay Lake
Regional Brand and access services offered by the
DMO
100 businesses paying $1 per year
100 businesses paying $5 per year
100 businesses paying $50 per year
10 large businesses paying $500 per year for
branding and marketing

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

Income from Business Services

Website design consultancy
Business skills training

Corporate Sponsorship
Target
Management fees from Project
Implementation
Target, including external hire of staff

Total

5,000 Estimate assistance with 50 websites in first year at
$100 per website
3,000 Delivering training courses to establishments,
estimated 4 relevant courses per year with 30
attendees each at $25 per attendee


10,000 To be sought from leading national and regional
enterprises


17,500 Estimated at 3.5% of project value as contribution
from NGO/Donor funders utilising management
assistance from DMO in implementing projects
(funding may be by direct admin fee/day
consultant rates for external hire of staff etc):
project value estimated per year at 500,000

301,100

Expenditure
Fixed Costs:
Building Rent
Annual Communications
Office Supplies
Computer and Communications
Services
Insurance

Staff Salaries:
Unit Manager
Senior Project Coordinator
Government Liaison Officer
Community Development Officer
Marketing Officer
Website & IT Officer
Business Support Officer
Resource Officer
Logistics & Financial Officer
Cleaning & Maintenance Staff
Transportation:
Annual Transportation Budget
Project Vehicle depreciation & maintenance
Project Boat depreciation & maintenance

Project Activities:
Funds available

Subtotal
Contingency Expenditure

Appropriate accommodation should be found in
the Nyaungshwe Town Area. There are many
options for inclusion in Visitor / Heritage Centre
etc. It is intended an office will be fitted out with
the use of Donor funding.

12,000
10,000
10,000
10,000
8,000
5,000


18,000 Estimates for total costs of salaries including
15,000 administrative fees, insurance, allowances, training
12,000 and government taxes: salaries are to reflect the
12,000 level of commitment and skill required
10,000
10,000
10,000
10,000
10,000
6,000

30,000
5,000
3,000


50,000

256,000
12,800

5% of subtotal

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

Trust Fund Contribution:

Small Business Grant/Training Fund:

Total

4.

12,300 A trust fund should be established to act as a buffer

for years where income is lower than expected
20,000 A small fund should be available for small business
activities

301,100

Model 2: Destination Marketing DMO

Creating a DMO carries a certain amount of financial risk: issues such as private sector support, trust
and a complex operating environment (with many different departments responsible for different
management activities and under an unclear regulatory environment) may have an impact on the
sustainability of the model. The Destination Marketing DMO provides a model that is lightweight
(with a small number of staff) that initially focuses upon destination marketing and is funded by
business membership fees and the provision of marketing related consultation activities, events,
conferences and so on.

This has the benefit of starting with a small organisation that builds trust, and has the option of
growing into a more complex management organisation with time, it would also function to support
a wider Lake Conservation Authority.

This DMO would be a focal point for regional information, for individuals, academic and non-
academic organisations, provide a business network, provide and channel support to the private
sector and look to provide business consultancy services in the long term. It would provide support
to locate and support short term experts as required and provide input into the strategies and
actions provided under the DMP. An international DMO management specialist would provide 4
months support for the first two years.


Key roles would include:

1. Responsibility for marketing and promotion of the region, specifically focused upon member
businesses.
2. Maintaining a high quality regional website that links businesses and responsibility for the
brand management of the Inlay Lake Regions
3. Provide a (paid for) marketing service to individual businesses and advertisement support
4. Create new events and festivals (and potentially MICE services)
5. Providing (paid for) business services such as trainings and support to business, CSO and the
local NGO community, such as business plan development, financial management and so on
6. Have an advisory role and input (through the DMO Advisory Committee) into planned future
developments in the region, new business ideas, buildings and so on
7. Overseeing the publishing of the regional tourism map/booklet (potentially commercially)
8. Publishing and encouraging the implementation of tourism related guidelines and codes of
practice, as well as the promotion of the Myanmar Responsible Tourism Strategy and
Community Involvement in Tourism Policy

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

9. Be responsible for the gathering and compilation of tourism data and developing into
reliable tourism forecasts, specifically monitoring visitor profiles
10. Conducting an annual visitor survey based upon a similar version developed under the DMP,
specifically targeted for local business


Proposed Structure:

DMO Advisory
Committee

Local Action Group

Committees

DMO Start Up
Support Project

Marketing and
Website Officer

DMO Support Specialist

(International - 4
months over 2 years)

DMO Unit Manager

The DMO has a

core staff of 2 + 1
office support
staff

Funding Model 2
The model would be funded through business membership, , contracted business services and
revenue from sponsorship. There would be no core funding from government or the Inlay Lake Zone
Fee.

As this is a private sector model, businesses will expect and deserve a service for contributions, and
must be able to see value in contributing to a DMO: A DMO must therefore represent business
interests and provide a high quality marketing and website service. It would also be funded from
corporate sponsorship and contract services both to regional businesses and development projects
on a small scale.

Like model 1, model 2 is designed around first year start up costs supported by donor funding. An
outline cost of this is provided below, followed by estimated annual income and expenditure:
Model 1 Start-Up Costs
Destination Management Organisation Model 2 DMO Start Up Support Project

Location
Inlay Lake Region
Total
$417,500
budget
Time frame 2 years (with sustainable financing model to develop in year 2)

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

10

Project
description

Objectives
Activities

Implementation

Financial
Budget
information

Additional
Alignment with
information Union policies and

To develop a world-class Destination Management Organisation for the

Inlay Lake Region
Locate and fit out suitable premises for DMO
Recruit DMO staff
Develop detailed DMO Business Plan
Train Staff as per requirements to achieve functions in this
document and DMP
Launch events
Commence implementation of initial business support and
marketing activities

Implementation to be carried out with the support of suitable
development organisation: project to be carried out primarily over one
year as start up support, with continued development support in year
two, and options to continue long term support thereafter

Project Leader (DMO Support Specialist), 2 years, 4 months
$40,000
per year

DMO Staff salaries (2x staff for 3 years)
$72,000
Property Rental for 3 years
$36,000
Training Programmes
$12,000
Transport (inc. project car)
$50,000
IT & Web development & maintenance
$20,000
Marketing
$40,000
Events, conferences etc
$20,000
Operational costs
$50,000
Miscellaneous
$50,000
Administration
$27,000
Total
$417,500

Linked to both the Myanmar Tourism Master Plan and the Myanmar
Community Involvement in Tourism Strategy

strategies

Model 1 Annual Income & Expenditure

Income
Source
Business Membership Fees:

Branding Membership Micro business
Branding Membership Small business
Branding Membership Medium business

Income from Business Services
Website design consultancy

USD


2,500
7,500
25,000


5,000

Business skills training

Corporate Sponsorship

Comments/Assumptions


100 businesses paying $25 per year
75 businesses paying $100 per year
50 businesses paying $500 per year


Estimate assistance with 50 websites in first year at
$100 per website

3,000 Delivering training courses to establishments,

estimated 4 relevant courses per year with 30
attendees each at $25 per attendee

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

11

Target
Management fees from Project
Implementation

30,000 To be sought from leading national and regional

enterprises

Target, including external hire of staff

7,500 Estimate 100 days per year contracted to

development organisations at $75 on-costs per day

Total

Expenditure
Fixed Costs:
Building Rent
Annual Communications
Office Supplies
Computer and Communications
Services
Insurance

Staff Salaries:
DMO Manager
Marketing & IT Officer
Cleaning & Maintenance Staff

Transportation:
Annual Transportation Budget

Subtotal
Contingency Expenditure

Total

5.

80,500

12,000 Figures for fixed costs are to cover depreciation, start
8,000 up to be provided under DMO start up project
5,000
3,000
3,000
4,000




12,000
12,000
4,000




12,000


75,000
5,500


80,500

Evaluation of Models

Model 1
Critical:
Acceptance of tourism Stakeholders
Funding through a proportion of lake fees
Official mandate from MoHT
Trust building among key players

Pros:
Provides a wide-remit of tourism
development related coordination

Cons:
Risks of unsustainability if limited stakeholder
buy-in
Risks becoming another level of government,
repeating functions

Model 2
Critical:
Willingness of stakeholders to pay for services

Pros:

Cons:

Lightweight
Opportunity for growth of the model
Builds trust of stakeholders first
Limited role in coordination

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

12

6.

Next Steps

The next steps will be for stakeholders, lead by the Project Advisory Committee from the Destination
Management Plan for the Inlay Lake Region to discuss and ratify appropriate options presented
within this document. The structures and funding are for guideline only and of course may be
altered as required.

Following agreement, a detailed project brief and business plan can be developed to facilitate the
development of the Destination Management Organisation for the Inlay Lake Region and
appropriate funding sought.

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

13

Appendix: Destination Management

Destination management is a holistic approach to the development, management and marketing of
tourist destinations. Of utmost importance is the need for different "stakeholders" to work
together. Stakeholders would include anyone from Union government to a local resident in the Inlay
Lake Region.

The purpose of destination management is to ensure tourism develops sustainably and in the
interests of local communities, ensure that tourism is resilient to external shocks and responsive to
change in the marketplace and business environment: ever so relevant now during Myanmar's rapid
development.

Destination Management is a process of leading, influencing and coordinating the management of
all the aspects of a destination that contribute to a visitor's experience, taking account of the needs
of visitors, local residents, businesses and the environment.

A Destination Management Plan (DMP) is a shared statement of intent to manage a destination
over a stated period of time, articulating the roles of different stakeholders and identifying clear
actions that they will take and the apportionment of resources.

A Destination Management Organisation (DMO) should coordinate the different agencies involved
with tourism management, for example Hotels, Transport Infrastructure, Tourism Businesses and so
on, to provide input into strategic management. It should also provide regional promotion and
marketing, tourism guidelines, a focus for training and development and business support.

The Destination Management Plan for the Inlay Lake Region is a tool that identifies product,
infrastructure and social needs to allow growth in tourism numbers, the value of products, provide a
strategic direction for growth and to manage areas sensitive to tourism, highlight conservation and
development issues and needs and to provide a framework for development support.

DRAFT Options for a Destination Management Organisation for the Inlay Lake Region

14