It's a win-win for the island's destination marketing group and for its in-destination clients — but how many other tourism boards are ready to follow suit at this time?
When Covid hit and destination marketing organizations saw their budgets tumble overnight, they were faced with a major funding and existential crisis. Skift has since covered the multiple ways in which tourism marketing offices have reimagined their roles and how they’ve sought to create new income streams.
Ideas were floated then that in the distant future, to diversify revenue, the DMO could morph into a full service agency of sorts, providing creative services and branding to outside businesses and organizations, whether in tourism or in other industries.
Now just over a year later, that future creative agency role for DMOs appears to have arrived sooner than anyone predicted.
Discover Puerto Rico, the island’s private and non profit destination marketing organization, announced this month that is opening up its creative studio services for sale to third-party brands, businesses and organizations.
“Our goal is to diversify revenue, while at the same time, elevating the destination’s image as a whole to key off-island audiences, including consumers, meeting planners, travel advisors, etc.,” said Jean Paul Polo, director of creative strategy at Discover Puerto Rico, in a statement.
Under Discover Puerto Rico’s founding laws, the DMO must pursue additional revenue streams aside from public funding, Polo said, and Discover Puerto Rico Studios is an opportunity to do that.
The focus is on providing video and production services, in the form of digital series, TV ads, and virtual reality from pre to post production. Polo said that Discover Puerto Rico has been strategically building up its in-house multimedia team and services dating back to the creation of the DMO in 2018.
Businesses Promoting Puerto Rico
The criteria for outside brands to be taken on as clients is that they must be promoting Puerto Rico and have aligned strategic values and objectives. This presents a unique opportunity to uplift the quality of the content and messaging of tourism-aligned businesses around the island, in turn boosting Puerto Rico’s brand as a destination.
“We praise Discover Puerto Rico for their continuous efforts in strengthening the destination’s presence through local and affiliate partners,” said Don Welsh, CEO at Destinations International, a global trade association of nearly 6,000 members and partners. “Discover Puerto Rico Studios is undoubtedly a smart business investment for a destination, as it both provides a creative new funding stream and helps elevate the overall image of the destination.”
This approach to expanding the DMO’s revenue and reach by selling content creation services to outside companies follows what has been a record tourism recovery year for Puerto Rico in spite of a number of cataclysmic challenges in recent years.
It’s a success that largely attributed to Discover Puerto Rico’s strategic marketing messaging and campaigns since 2019, which have garnered a numbered of awards.
In spite of Covid, Discover Puerto Rico “influenced $257.8 million in direct economic impact, generated $18 million in tax revenues, and delivered $365 million in publicity,” according to the DMO’s 2020-2021 annual report. Puerto Rico’s tourism recovery has outpaced the rest of the Caribbean region, with projections that it will bounce back to 2019 levels this year and surpass them by at least three percent in 2022.
And the island’s tourism businesses are paying attention. A number of them have already hired Discover Puerto Rico Studios, undoubtedly hoping for the DMO’s marketing magic to rub off — golf brand First Call, entertainment complex Distrito T-Mobile, Casa BACARDÍ, Foundation for Puerto Rico, and Palacio Provincial boutique hotel.
A Future Independent Agency?
Discover Puerto Rico’s Polo did not disclose the fee range for the DMO’s creative services, but said that the fees are estimated on a per-project basis or long-term agreement to meet content needs. “We offer day rates as well as negotiations for a longer term,” said Polo.
Discover Puerto Rico’s projection is to reach $1 million in annual revenue from its studio sales, and Polo said he expects to reach at least half that in the current fiscal year.
But it doesn’t mean the DMO will brand itself as an agency.
“While we are not an agency and do not plan to become one, we see opportunities to continuing building our content creation offerings to meet the needs of our tourism-focused businesses while simultaneously building Puerto Rico’s destination brand.”
Yet could this DMO creative services for hire concept catch on this quickly elsewhere as an alternative revenue stream?
“Whether other destination organizations emulate, will depend on their business strategy and making this model scalable to their destination,” said Destinations International’s Welsh.
Discover Puerto Rico’s approach is likely to resonate as a viable future revenue option among destination marketing organizations, and it might even chart a new role for DMOs as they continue to expand and reimagine their capabilities.
“We see this as a moment to pioneer a new model to promote the Island and its local businesses,” said Discover Puerto Rico’s Polo. “We would be proud to see others follow suit.”
Disclosure: Skift founder and CEO Rafat Ali serves on the 25-member advisory board to Destination Puerto Rico, as part of Skift Foundation‘s commitment to helping Puerto Rico in its tourism recovery.
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Photo credit: Discover Puerto Rico selling its creative services to third parties will diversify revenue and strengthen the destination's brand. Courtesy of Discover Puerto Rico Studios / Discover Puerto Rico