Contemporary Destination Governance: A Case Study

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Stubaital
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 Case 7

STUBAITAL

Abstract: Stubaital is among the top destinations in Austria, depending

heavily on winter tourism. Families and individual tourists who seek
hiking or skiing are the core target segments. After merging two
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DMOs that previously managed separate parts of the area, problems of

cooperation and coordination between actors from different regions
occurred. This was partly due to different interests rooted in different
resource endowments. The main goal of the DMO has been to strengthen
the summer season in order to reduce dependency on winter tourism.
Destination governance therefore must foster cooperation and joint
planning activities among the stakeholders. The Stubaital case illustrates
stakeholders’ perceptions of power constellations and patterns of commu-
nication among stakeholders and their influences on destination
development. Keywords: Stubaital, merger, communication, cooperation,
network, governance

INTRODUCTION

Communication is one of the major pillars of destination marketing and

includes all channels, instruments, and strategies used by DMOs to transfer
information between destination stakeholders. Communication patterns
including modes, sources, and channels can be diverse. Various communica-
tion patterns may be expected in different destinations (Wagner & Peters,
2009). How stakeholders communicate influences their perceptions of

Contemporary Destination Governance: A Case Study Approach

Bridging Tourism Theory and Practice, Volume 6, 81 92
Copyright r 2015 by Emerald Group Publishing Limited
All rights of reproduction in any form reserved
ISSN: 2042-1443/doi:10.1108/S2042-144320140000006022
 82 Contemporary Destination Governance

tourism development and the destination brand itself. Recent research high-
lights the relevance of communication for the perception of a destination
identity among stakeholders (Wagner, Peters, & Boksberger, 2011). The
case of Stubaital shows how important communication and destination
identity building is with respect to power constellations.
The case of Stubaital, Tyrol, is unusual, because its glacier provides a
guaranteed snow experience, while other winter destinations on mid-level
altitudes often suffer from a lack of snow. The cable car operator is a power-
ful actor in the network of tourism suppliers because glacier skiing is the
major tourism experience offered at the destination. The case illustrates sta-
keholder perceptions of power constellations. Decisionmaking processes at
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destinations are influenced by various strengths of power of actors within a

network (Marzano & Scott, 2009), but power can be expressed in various
forms, such as social or economic power. D’Angella, Carlo, and Sainaghi
(2010) point out that destination governance functions can be scattered,
concentrated or coordinated mechanisms in a strong or weak destination.
Along this continuum are four archetypes of destinations. They are the
normative type, which is characterized by concentrated governance
functions and strong coordination; the entrepreneurial type, with scattered
governance functions and strong coordination mechanisms; the leading firm
type, with strong governance functions but weak coordination mechanisms;
and finally the fragmented governance type, characterized by scattered gov-
ernance functions and weak coordination mechanisms (d’Angella et al.,
2010, p. 69). The case provides insights into the peculiarities of governance
functions and coordination mechanisms of alpine destinations.

COMMUNICATION AND RELATIONAL MANAGEMENT

Stubaital is located between Ötztal and Wipptal. It covers 317 km2 . The
highway to Italy passes its first village, Schönberg. Stubaital is easily acces-
sible, especially since the construction of the Brenner highway during the
1960s and 1970s and after the Bridge of Europe was opened in 1963.
Innsbruck, which is the capital city of the province Tyrol, is approximately
12 minutes away by car. Stubaital includes the five villages of Neustift,
Fulpmes, Telfes, Mieders, and Schönberg. Fulpmes is located at the lowest
altitude of 937 m. Schönberg is the highest village at 1,013 m (Figure 1).
Stubaital attracted approximately 1.74 million overnights from April
2011 until March 2012, with 1.04 million in winter months (Amt der Tiroler
 Stubaital 83
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Figure 1. Locating Stubaital

Landesregierung, 2012). Tourism is the most important industry of the area.

The Stubai Valley depends heavily on this economic sector. Approximately
90% of total income is derived from tourism. Nontourism-related businesses
are mainly located near the highway and close to the villages Schönberg and
Mieders. The destination offers products for various target segments, with
the main in winter being skiing, ice-skating, snow-shoe hiking, and glacier
hiking; and in summer, climbing, mountain biking, and hiking. Families are
a major target. The glacier ski resort was awarded the top family-friendly
ski destination in the Alps (ADAC SkiGuide, 2012). Overnights at the desti-
nation increased from 1.7 million in 2008 09 to 1.74 million in 2011 12.
Tourism arrivals increased during the same period from 349,449 to 379,338.
Of all these arrivals in 2011 12, 151,400 were summer tourists (Tirol
Werbung, 2012). Compared to the winter of 2011 12, there was a drop of
3,179 tourist arrivals and 9,296 overnights during winter 2012 13. Stubaital
attracted 222,759 tourists, yielding 1,084,349 overnights.
 84 Contemporary Destination Governance

Historical Background and Development

In the 19th century tourism was slowly growing in the Stubaital. Franz
Senn (1831 84) stimulated tourism development in all areas where he was
active as a priest. First, he developed Vent in the Ötztal. Later in the 1860s
he supported the creation of the tourism offering in Nauders and Neustift.
He was the founder of the German Alpine Association and became famous
for being a pioneer in tourism development in Tyrol. The Alpine
Association started to train locals to act as mountain guides who were also
responsible for maintaining mountain huts and tracking paths. Before the
rise of tourism, agriculture was the main industry in the Stubaital. In 1968
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Heinrich Klier established the Wintersport Tirol AG & CO Stubai Glacier

Company. Klier became the president of the board of the company that
had already constructed a number of cable ways in the lower Inn Valley. A
year later the company planned and constructed the Serles cable car close
to Mieders. Thus, Heinrich Klier is well known as a cable car pioneer. Born
in 1927, the novelist, alpinist, and entrepreneur remained the president of
the company’s board until 2011, when he handed it over to his son
Reinhard Klier. The legacy of Heinrich Klier is evident in the Stubaital,
because he set the foundation of the destination’s main tourism attraction
in summer and winter by making the glacier accessible. Today, the glacier
cable car company employs approximately 220 people.
Another milestone of winter tourism development in Tyrol was the con-
struction of the Stubai Glacier cable car in 1973. From then, winter tourism
sales exceeded those of summer. Within only a few years tourism became
the major source of income. In the winter season of 1973 74 the destina-
tion attracted 153,000 overnights. Only 13 years later it rose to 480,000. By
1999 the number of overnights increased to one million, representing a mas-
sive increase. Rapid expansion in bed capacity and the improvement of
road infrastructure stimulated these developments (Klier & Klier, 2000;
Töchterle & Töchterle, 2008). In 2012 the Stubai Glacier Company invested
more than US$20 million (h15 million) to improve and modernize cable
cars and to construct the new Daunjoch cable car. They also installed a free
ride checkpoint and developed eleven free ride routes branded as The
Powder Department. The ADAC Skiguide, published by the General
German Automobile Club (Allgemeiner Deutscher Automobilclub)
awarded the Stubai Glacier area the top family ski area in the Alps for the
fifth time.
Stubaital has a strong representation of local music and dance associa-
tions, as well as associations for traditional costumes. Young locals also
 Stubaital 85

support traditional culture and behavior. Local theater plays and music,
mainly brass bands, are still quite popular among locals and tourists.
Several museums provide information about former industries and local
handcrafts (e.g., the blacksmithing and the crib museums in Fulpmes and
the museum of local history in Neustift). Today, Stubaital, with its 13,039
inhabitants, can offer approximately 12,000 beds (Amt der Tiroler
Landesregierung, 2012). Neustift is the major tourism municipality with 1.2
million overnights, often found among the top-five destination villages in
Tyrol (Tirol Werbung, 2012). With 361,141 overnights in 2011 12,
Fulpmes is the second-strongest. The other overnights are spread more or
less evenly across the other four communities in the valley (Tirol Werbung,
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2012). The increased demand for tourism in the valley can be explained by
the importance of the glacier, especially for skiers. Neustift provides the
infrastructure to access the glacier region easily. Telfes, Mieders, and
Schönberg offer a few tourism attractions and mainly provide accommoda-
tion in the form of hotels, pensions, and apartments. In these communities,
other industries also play important roles. The trade and manufacturing
sectors provide employment in tool design, construction, and alpine sports
supplies.

Products, Services, and Market Situation

Stubaital offers approximately 12,000 beds during the winter and summer
season, of which 3,000 are provided by five- and four-star hotels. The occu-
pancy rate of the five- and four-star hotels is approximately 70% in winter
and 49% in summer; for the three-star hotels it is 55% in winter and 38%
in summer; and for the one- and two-star hotels/pensions it is 44% in win-
ter and 25% in summer (Tiroler Landesstatistik, 2012a). The Stubai
Glacier, composed of the Daunferner, Eisjochferner, Gaiskarferner,
Fernlauf, and Windachferner, is the third-largest glacier ski area in Austria.
Its altitude, between 1,750 and 3,210 m, provides all-year-round skiing,
while in summertime the area functions as an alpine hiking region for
advanced hikers. During winter, the Stubai Glacier area, with its 26 cable
cars and two lifts, offers a high variety of ski slopes for families, beginners,
and expert skiers. Furthermore, the destination offers a snow park and a
family ski camp at an altitude of over 3,200 m (Tourismusverband Stubai,
2013). However, since 2003, during the months of July to September, the
area does not always have enough snow for skiers. The ski resort Schlick
2000 is marketed as the companionable ski area offering Tyrolean après ski
experiences in ten huts, inns, and bars. Schlick 2000 offers 18 km of natural
 86 Contemporary Destination Governance

snow slopes. Beginners and families will find the right slope at the ski resort
Elfer Lifte, close to Neustift.
During winter, this mountain area is also popular because of the 8 km
long sled route. During summer the Elfer Lifte offers ideal conditions for
paragliding and hang gliding. The cable car Serlesbahnen, close to Mieders,
offers rides to the 1,800 m high cross-country skiing area (45 km of slopes).
The DMO covers all four ski areas (the Stubai Glacier, Schlick 2000,
Elfer Lifte, and Serlesbahnen) by offering the Stubai Super Skipass
(Tourismusverband Stubai, 2013). The core products of Stubaital in the
winter are skiing and snowboarding. In the summertime hiking and family
adventure are two important offerings. Summer has become more attractive
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for tourists lately. The Grawa waterfalls and the wild water park, as well as
a summer toboggan run, are important attractions for the valley. The desti-
nation is located close to Innsbruck, so that tourists can easily access a vari-
ety of indoor attractions such as museums and galleries in the province
capital. The area is therefore attractive for hybrid tourists with diverse
demands.
Regarding tourist nationality, a few differences are evident between sum-
mer and winter tourism. In summer 2012, of the 160,788 arrivals and
674,207 overnights Germans held the largest share, with 77,093 arrivals and
353,096 overnights. Others markets for Stubaital’s summer tourism are
Italy (12,642 arrivals) and domestic Austrians (13,654 arrivals), followed by
the Netherlands (11,556 arrivals), Switzerland (6,712 arrivals), France
(4,706 arrivals), and Belgium (3,636 arrivals). However, due to the eco-
nomic downturn, arrival numbers have dropped 4.05% from Germany,
16.55% from Italy, and 7.78% from Austria. Other markets helped com-
pensate for this downturn. They include the Netherlands (19.04% increase),
the United States of America (48.46% increase, with a total of 2,120 arri-
vals), and Eastern Europe including 172 arrivals from Slovenia (107.12%
increase) and 179 arrivals from Bulgaria (678% increase). All in all, the
share of Eastern European markets is still low, but arrivals from these mar-
kets are steadily growing, especially in summer. This also holds true for the
Polish and Czech markets in winter.
For the period from November 2012 to April 2013, 141,380 Germans
arrived and stayed 683,205 nights in Stubaital. The second-strongest incom-
ing nationality is the Czech Republic, with 13,279 arrivals and 49,884 over-
nights, while the third comprises Polish tourists, with 10,478 arrivals and
58,120 overnights. Other important nationalities are the Dutch (8,120 arri-
vals, 44,932 overnights), Austrians (9,584 arrivals, 32,259 overnights),
Italians (6,964 arrivals, 22,713 overnights), and Swiss (7,147 arrivals, 34,261
 Stubaital 87

overnights). The fastest-growing market is Russia, which showed a tremen-

dous increase from 1,866 to 2,687 arrivals (44% increase). However, the
strongest markets (including the German and Dutch) are still stagnating in
arrivals in comparison to the winter 2011 12 season, with 0.79% drop
from Germany, 0.57% rise from the Netherlands, and 12.86% drop from
Poland (Tourismusverband Stubai, 2013).

Governance

The following information is based on interviews undertaken with various

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stakeholders in the destination. Seven interviews were carried out, each last-
ing 30 60 minutes, in German. The DMO of Stubaital, with a staff of
approximately 30 employees, has an annual budget of approximately $5.3
million (h4 million) (Tyrolean Government, 2014). The DMOs in Tyrol act
in accordance with the Tyrolean provincial law (Land Tirol, 2011), which
states that all tourism-related enterprises are compulsory members. The
board of directors is elected by the plenary assembly and is composed of
four members representing the accommodation sector and the cable car
company (Figure 2). In 2012 a new CEO was appointed for the DMO. He
is mainly responsible for strategic destination marketing and is in the pro-
cess of reorganizing the functional units including product development,
information processing, and others.
The Stubaital DMO was launched on January 1, 2005, and is financed
through public funding and fees levied on the members of the tourism

Board

President
1. Vice president
2. Vice president

Plenary Assembly

Every member of the tourism association

Supervisory Board

Directors and other members

Director (CEO) of Stubai Tyrol

Figure 2. Structure of the Stubaital DMO

 88 Contemporary Destination Governance

association, which are all members of the plenary assembly. Supported by

the members of the supervisory board, the director is responsible for strate-
gic leadership of the DMO. Before 2005, the destination was managed by
two DMOs. They were dominated by the municipalities of Fulpmes and
Neustift, which were the strongest in the destination. Thus, the develop-
ment of the tourism sector in the destination Stubaital has been character-
ized by rivalry between actors from these two municipalities. Although the
DMOs have been merged, this is an ongoing problem. The interviewees saw
a strong need to foster communication and cooperation among the villages.
Furthermore, there is a scope for enhancing the density of the destination
network between actors from different villages.
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Communication and interconnectedness for solving upcoming

issues has by far not yet reached its maximum. There is a
great scope for development. I guess this is due to the fact
that the DMOs have been merged quite recently (DMO
member).
Neustift and Fulpmes are the main antipoles (cable way
manager).
It’s still the case that various interest groups only follow their
interest without any vision of the future. Especially interest
groups from different villages act against each other instead
of with each other (hotelier, Stubaital).

The DMO itself, a small number of leading tourism entrepreneurs in the

region, and the five municipalities constituting the destination are prominent
actors in Stubaital. However, some stakeholders believe that the glacier
cable car company is the most powerful actor in the destination. The com-
pany runs the cable car, which makes the greatest natural attraction in the
destination accessible. The company thus holds an important position in the
tourism value chain. The accomplishment is widely acknowledged in the des-
tination. One hospitality entrepreneur is also perceived as a driver of desti-
nation development by setting quality standards in the hospitality sector.
Furthermore, municipalities that attract the largest number of tourists seem
to influence decisions dealing with future development to a larger extent
than do others. Because building plots are rare in Stubaital, landowners are
another group of stakeholders affecting tourism investment decisions. “In
general, the influence of traditional land tenure going back 30 to 40 years is
important in destination development,” said a tourism entrepreneur.
 Stubaital 89

Actions in the destination are often initiated by an individual’s innova-

tive performance, as one interviewee explained. However, decisionmaking
behavior on boards, commissions, and councils is instead influenced by
groups due to organizational necessity. Individual interests are the main
drivers of action in the destination. Another member of the DMO said that
“interest groups only follow their own interests and therefore we cannot
find a long-term orientation in the region.” These interests are sometimes
bundled together in groups such as managers of cable car companies or
hoteliers. According to a cable car company, their interests are congruent
with the aims of the overall stakeholders in the destination, and therefore
they do not differentiate between their interests and the destination’s.
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So we are in a comfortable position because the people

visiting the destination usually also visit the glacier. So I
would say our interests are congruent with destination inter-
ests. More overnight stays in the destination automatically
lead to more visitors to the glacier (cable way manager).

Destination stakeholders have identified the need to improve both the

awareness of the importance of cooperation and skills needed to establish
joint action within the destination, especially between actors from different
villages in the destination. Concerning this issue, a lack of understanding
about overcoming the boundaries between different groups has been experi-
enced. Basically, the willingness to cooperate is not very high. Even after
the merger of the two DMOs, some actors still follow individual/local inter-
ests. In the hospitality sector companies compete against one another,
undermining efforts of strengthening cooperation and coordination.
Interviewees emphasized the problem of price dumping. However, joint
initiatives have been successful when common interests have been followed
and sufficient participation has been secured.

It is important that we do not make the mistake of following

price-dumping strategies: in the long term we will offer high
quality tourism and every guest is willing to pay more if we
really offer optimal quality. Here, we need to cooperate much
more (DMO member).

We had a joint brand development process and that would

have been a good thing. Unfortunately the interest of the
stakeholders was not very high. The number of participants
 90 Contemporary Destination Governance

was rather low and some of the people taking part missed
some meetings. But, for example, when it’s about impeding
something like a joint ski pass, coordinated behaviour is pos-
sible (cable way manager).

Joint marketing initiatives and stakeholder marketing task groups have

been used as important avenues of influence and coordination in recent
years. Communication flow is perceived as being quite strong. Personal
contact is particularly preferred among actors in Stubaital. However, some
local stakeholders miss the personal contact with the local stakeholders,
while others see advantages in using more media-supported information
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distribution channels:

Yes, we receive a lot of information, but I think it is also

important to bring people back to a table instead of only
using media and computers (hotelier, Stubaital).

Emails have the advantage that you can always print them
out and store them. Information from personal contact can
get lost, and people do not remember everything (cable car
operator, glaciers).

Aside from market mechanisms, hierarchical structures are determinants

in destination governance. Market power and financial strength, as well as
an entrepreneurial reputation, enhance actors’ influence on decisionmaking
processes. The cable car operator commented that “it is not the knowledge
that determines decisionmaking power, it is the money! Those who hold
money make the decisions!” The overall perception of the interviewees
underlines the assumption that destination governance lies in the hands of a
small number of individuals who attempt to influence development through
membership in various institutions. Decisionmaking is influenced by people
who join diverse steering committees and are board members of the destina-
tion’s organizations. One hotel owner noted that “those who are members
of the DMO, hotel association or other boards influence the decisions of
tourism development in the destination!” Generally, destination actors
report a high density of relationships.
Scope for expansion of network density is seen in a better connection of
stakeholders from the different municipalities. Actors with a special posi-
tion in the network are tourism entrepreneurs. They show a high density of
relationships between one another and especially with other crucial actors
 Stubaital 91

in the destination network. This enables the entrepreneurs to exert influence

on destination governance. Generally, the relationships constituting the des-
tination network are characterized by a satisfying level of frequency of con-
tact and trustworthiness. The role of the DMO in the destination network
is described as a provider of knowledge and information in the destination.
“It is all about information as a basis to govern,” said one hotelier.
However, governance functions are interpreted as concentrated, and are
vested in the hands of a few actors. Coordination mechanisms are mediocre
and occur as stakeholders’ participation in workshops and meetings,
although stakeholder participation is not obligatory. Regardless, the role of
the DMO is becoming more central. As one hotelier observed, “… the
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DMO can act as a leader, but that means other actors have to withdraw
from their leadership ambitions.”
The DMO seeks to bundle the interests of leading companies in the desti-
nation in order to secure a more concentrated governance function and cre-
ate better coordination within the destination. This is especially relevant for
implementing future goals. One challenge in this respect is to strengthen the
summer season by jointly investing in tourism infrastructure. Attractions
like a golf course and a swimming lake are under discussion. Also, further
adaptations and improvements of existing infrastructure need to be
managed.

The major goal for the summer season is a golf course … we

need to expand our ski resort. A link to Schlick and connec-
tion between Schlick and Axamer Lizum is under considera-
tion. We also established the “Stubaiweg” in order to manage
certain investments in infrastructure, like a swimming lake
for the summer season (tourism entrepreneur).

CONCLUSION

According to Bodega, Cioccarelli, and Denicolai (2004), Stubaital can be

characterized as a constellation model destination. Despite a large number
of diverse actors in the destination, only a small number of these influence
or make important development decisions. Central actors are embedded in
formal associations and thereby attempt to convince the community to sup-
port them. However, the destination also has some characteristics of the
governed model of destination governance (Flagestad & Hope, 2001). In
this respect, the cable car company shows strong influence patterns on local
 92 Contemporary Destination Governance

decisionmaking processes. A major issue is the establishment of a govern-

ance system balancing the interests of different stakeholders from different
regions in the destination. A few months after gathering the interview data
for this case, the DMO initiated a strategy development process in the desti-
nation inviting the key stakeholders. This iterative and ongoing process
already led to both internal cohesion and a coherent market positioning of
the Stubaital.

QUESTIONS
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1. What are the most important communication channels between stake-

holders in Stubaital?
2. What are the main advantages and disadvantages of these communica-
tion channels?
3. Apply the tourism area life cycle (Butler, 1980) to discuss the changing
role of DMOs when tourism development moves from the growth phase
to the consolidation phase.
4. Not all communities in the valley are undergoing the same tourism
development, and other industries offer jobs and employment. What are
some negative effects when destinations strongly depend on tourism?
5. Valleys such as the Stubaital suffer from the high volume of traffic
within the valley. How might one involve the stakeholders in the destina-
tion and initiate a development process?