By Dripto Mukhopadhyay
In my last blog, Measuring Attractiveness of a Destination – An Important Tool for Stakeholders, I discussed the usefulness of understanding the strength of attraction of a destination compared to other. In this blog I have discussed how we can compare attractiveness across destinations through constructing an Index that represents attractiveness of the destinations. Precisely, this is related to how to construct an Index of Attractiveness for the destinations. This is applicable at all different level, i.e., across countries, across regions within a country as well as across micro-destinations or tourist resorts within a region. Therefore, this is a concept that can be used by the central governments, provincial governments and destination managers. However, it is needless to mention that the parameters and data to be used for the purpose would be different from for different levels.
How do we define a destination index? In simple and non-technical words a destination index captures all characteristics of a destination that plays a role in attracting tourists to that particular destination into single index number. In other words it is an index which is constructed combining each pull factor in a meaningful way that promotes the destination to tourists. This involves two crucial processes. The first one is to identify factors that attract tourists to the destination and converting them into a measurable unit. The second is to combine them through a technique that maximizes the utility of the index and represent the destination in best possible manner.
Identification of the pull factors and converting them into a measureable unit is far more difficult than it sounds like. This is especially a crucial challenge for those factors that are non-tangible or abstract in nature. For instance, serenity or natural beauty of a destination is crucial as a pull factor but difficult to measure. Measures need to be derived for these parameters either through proxy variable or constructing the variable in a manner that expresses the phenomenon the best. These factors or parameters need to be identified at different levels. There will be a set of broad parameters. Each of the broad parameter will be further divided into a number of sub-parameters. These sub-parameters may be further divided into sub-sub parameters depending on the requirement as well as nature of the parameters.
Combining all the pull factors in a meaningful way to represent the destination the best in a comparable scale is more of a technical problem in nature which involves knowledge of statistical or econometric tools. The simplest mathematical form of a composite index can be expressed as:
Cij = Σ Wi Xj,
Where Cij is the Index of Attraction, Wi is the assigned weight to ith variable and Xj is the value of the jth observation. Why do we need to assign weights to different variables? This is crucial since each of the pull factors has different power to attract tourists to that destination. As an example, presence of immense natural beauty is able to pull tourists to a much larger extent than presence of a cheap food joint. Therefore, if we treat these two with equal importance while constructing the index of attraction, it would be a misrepresented analysis. Though there are several other methods of assigning weights, Multi-Stage Factor Analytic Models would be the best suited statistical model for this purpose.
Each destination will be represented by a single index number if we construct the destination Attractive Index in the following manner which is comparable across destinations easily. This also helps in identifying the relative strength of each of the sub-parameters and help the decision making process through prioritizing the areas of concerns.
In the next blog I will discuss on the likely parameters and their measures to construct Destination Attractiveness Index.