Organization Structures

As a Government Agency

In this model, the CVB is a department within local (city or county) government.  The agency reports directly to the political leadership (mayor, council, commission) or to a local government manager/administrator.  They often work with an appointed oversight or advisory committee made up of government representatives and tourism stakeholders.

Generally, the top administrative position serves in an appointed capacity and other staff members fall under whatever level of civil service protection the local government entity may practice.

Advantages

• Direct accountability to the funding source
• Direct line of administrative supervision (agency head reports to one person)
• Utilizes administrative, personnel and accounting systems already in place in local government
• Interaction and coordination with other departments; tourism development is perceived as an “equal interest” among the local government programs of work
• Some cost savings (office space rental, equipment, administrative costs, etc.)
• Overall long-term organizational stability
• Personnel benefits (insurance, retirement, time off, etc.) on par with local government employees

Disadvantages

• Possibility of political influence on program of work and/or staffing decisions
• If not involved in an advisory/oversight capacity, stakeholders may feel excluded from decision-making process

As an Independent Agency

In this model, the organization is free-standing, independent and most often not-for-profit 501(c)6 organizations with their own governing board of directors who hires the executive director, establishes and governs the policies and procedures of the organization and gives overall direction to the program of work.

Funding for these organizations and their programs of work comes primarily from local governments who enter into a contracted arrangement with the CVB/DMO to provide tourism development activities for the community and pay for such services through local lodging tax collections.  Independent CVB/DMOs also often have other revenue streams through special events, service fees, advertising sales in publications and on their website, package program sales, product/gift shop sales and, in some cases, membership fees.

A third type of agency, the Destination Management Company (DMC) or other for-profit corporation has been introduced and adopted in some communities.  The model is an outgrowth of the fact that the operation and marketing of many large convention centers, meeting facilities, sports venues and events had been successfully contracted out to private, for-profit companies.  This has led to some governments contracting with those companies to also manage and operate (for a fee) the overall tourism development services for the community that are traditionally provided by a CVB/DMO.

Advantages

• Independent organizations tend to be less bureaucratic in structure and are free to operate more on a business model
• Independent Board of Directors tend to be individuals who have experience in the tourism industry and who have a direct, vested interest in seeing the work of the organization being successful
• CVB/DMO administrative and staff direct accountability to a board of directors and to the agenda and program of work established by the board
• Salary and benefit programs in independent organizations tend to be closer to market equivalency, making it easier to attract and retain experienced and qualified professionals
• Since they are not government agencies, independent organizations have the freedom to develop non-lodging tax revenue streams

Disadvantages

• Local government may feel a sense of diminished control of a program of work
• If non-tax revenues become an overly important source of funding, a larger portion of management time and resources may have to be directed to that function rather than to the primary function of marketing the destination
• If a membership-based model is used, there can be a structural bias towards marketing and promoting members over non-members, often leading to dissatisfaction among non-members
• If a DMC model is used, some financial resources that would have been spent marketing the destination have to be reallocated to management fees
• In some cases, DMCs appear to be less responsive to the needs of smaller, less influential stakeholder sin the community.

Within a Chamber of Commerce

The program of work of tourism development for a community often functions as a division of department of a chamber of commerce or other economic development agency.  This is particularly true for start-up or small destinations, where the community has neither the resources nor staff to operate a separate tourism program.

In some cases, larger and more well-established destinations continue to operate their tourism programming through a chamber or EDA.  In these cases, the chamber/EDA usually acts on a contractual basis to perform the program of work of tourism development for the community, with funding for the program coming from lodging tax collections.  In some cases, the chamber also makes a financial commitment to the program, most often through personnel and/ or physical office costs.  Some chambers charge and receive a management fee for performing this function for a community.  In most cases, the CVB/DMO is governed by a board of directors independent of the chamber’s board.

Advantages

• If the chamber has a good standing and reputation in the community, that lends credibility to the CVB/DMO and the program of work of tourism development
• Chambers of commerce generally represent a very broad cross-section of a community’s business, government and civic leadership.  Those resources, skills and influence in the community can be made available to assist and enhance the work of the CVB/DMO.
• There can be cost-savings for both the chamber and the CVB/DMO through the sharing of administrative, personnel and operating expenses

Disadvantages

• Chambers of commerce and CVBs can have somewhat different missions and objectives
• Chamber boards of directors are not generally experienced in or focused on tourism development
• If the chamber does not have a good standing in the community, that can be detrimental to the program of work of tourism development
• In communities with multiple chambers of commerce, the placement of the CVB/DMO within any one chamber can lead to feelings of favoritism, exclusion or preferential treatment towards one community over another on the part of the CVB/DMO.