1.Introduction.
    There are many wonderful places in the world. Various attractions  make
these places potential tourist destinations. Still, it is very  seldom  that
some destinations become popular among tourists without a  lot  of  planning
work behind it.  In  order  to  optimise  the  benefits  of  tourism  for  a
destination and prevent or at least mitigate  any  problems  that  might  be
generated, good planning and careful management of  tourism  are  essential.
(Inskeep 1991:16) To achieve success in destination  development  we  should
learn to analyse the situation. We should always think about what  stage  we
are on now, where we want to go and how we can get there.
    In this paper I  will  show  the  development  over  time  of  a  small
destination in Iceland. Myvatn area is a relatively new tourist  destination
but it has become successful due to the introduced innovations.
    In the first  chapter  I  will  review  the  theory  about  destination
development.
    In the next chapters I will talk about  the  planning  and  development
work which stood back Myvatn as a destination. I will also show  the  result
of this development.
2. Destination development.
2.1 Butler’s concept
    Several researchers have noticed that destinations go through  definite
phases in  their  development.  The  idea  that  destinations  experience  a
process analogous to birth, growth, maturation, and perhaps decline or  even
death is embodied in the concept of the destination  life  cycle,  suggested
by Butler in  1980.  Butler  sequence  is  a  S-shaped  cycle  model,  which
proposes that tourist destinations tend to experience five  distinct  stages
of  growth  under  free  market  and  sustained-demand  conditions   (Weaver
2002:309):
    . Exploration
    . Involvement
    . Development
    . Consolidation
    . Stagnation
					







           Figure 1. The Butler sequence. Source: Weaver 2002:309
    According to Butler, the exploration stage  is  characterised  by  very
small numbers of visitors. The tourism “industry” as such  is  non-existent,
no  specialised  services  and  facilities   are   established,   not   even
accommodation for tourists. The tourists themselves  are  adventurous  types
who are drawn by what they perceive to be  authentic  cultural  and  natural
attractions. These visitors arrive from a wide variety  of  sources,  remain
for an extended period of time and are not influenced significantly  by  any
consideration of seasonality. (Weaver2002:310)
    In the involvement stage the visitor numbers begin to increase  slowly.
The local  entrepreneurs  begin  to  provide  services  and  facilities  for
tourists.  They  usually  consist  of  small  accommodation  places,  eating
places, few  small  semi-commercial  attractions  and  some  simple  guiding
service. Still, at this stage the destination maintains local  control  over
the situation. The economic status  of  tourism  is  insignificant  for  the
destination. The impacts on the society and the environment are little.  The
area is just beginning to integrate into the tourism  system.   The  factors
that trigger  a  destination  into  the  involvement  stage  can  be  either
external or internal. Internal forces are the ideas and  enthusiasm  of  the
local entrepreneurs who realising the profit that tourists can  bring  start
building and advertising facilities and services.  External  forces  can  be
travel publications, recommendations of the tourists, who have been  to  the
place, or just the promotion by tour agencies that for some reason begin  to
work with this new destination.
    The development stage is characterised by  rapid  tourism  growing  and
dramatic changes in all aspects of the tourism sector in the region  over  a
short period of time. Local community  loses  control  over  the  situation;
larger, non-local  companies  gain  control  over  the  process,  attracting
tourists from all over  the  world.  Large-scale  accommodation  places  are
built, attractions oriented for tourists appear. The destination  is  losing
its authenticity and uniqueness.
    The consolidation stage is characterised by a decline in the growth  of
the visitor arrivals and other tourism-related activity. The  level  of  the
tourism development begins to exceed the environmental, social and  economic
carrying  capacities  of  the  destination.  The  non-authentic  attractions
dominate,  the  tourism  product  is  deteriorating.  Tourists  are   losing
interests for the destination.
    Stagnation is characterised  by  further  product  deterioration.  This
stage can theoretically persist for an indefinite period,  but  it  is  more
likely that the destination will experience either decline or  rejuvenation.
Decline happens when tourists are no longer satisfied with the  product  and
the destination stakeholders do not make attempts to attract new  groups  of
tourists or revitalise the product, or do not succeed in this. Besides,  new
competitors  appear  in  the  market.  Scenarios  of  rejuvenation  can   be
different. The most important is to change the  product  or  to  find  other
market segments for the existing product.  In this paper I will not  discuss
the relevance and applicability of this model but I will use it to show  the
development over time of the destination Myvatn.
2.2 Planning process
    Independent which stage the destination has reached, we  need  to  plan
thoroughly every next step. Tourism planning is necessary for the  following
reasons:
    . Tourism has both positive and negative impacts on the economy, society
      and the environment.
    . Tourism involves many other industries and planning  is  necessary  to
      insure that every industry gets profit of its development.
    . Tourism is still a new type of activity and many entrepreneurs have no
      experience in how to develop a destination.
    In fact, according to Haywood, the evolution  of  tourist  destinations
can perhaps be anticipated and through planning,  marketing  and  management
techniques not necessarily decline. (Inskeep 1991:17)
    The strategic planning is a complex process, which explains the steps a
company should undertake to gain the desirable position.  Here  is  a  model
illustrating it:
                       The strategic planning process
The Mission                               Aims of the organisation
                  What is it we want?
       External analysis
                                        Where
                                                        Gathering
information                                    are
        Internal analysis
                                         we now?
        Strategic analysis and choice                Decisions
         Where do we want to go?
         Short term operating strategies
                How do we get there?
           Implementing of strategies                         Action
                 Control and evaluation
                      Did we get there?
Figure 2. Source: Lecture notes from Nordplus course in tourism planning,
2003, Iceland.
    First of all we should formulate the aims  of  the  organisation  in  a
mission model. Then we should analyse the situation in the  market  and  the
product itself, or the resources we have if we don’t have any  product  yet.
The  following  techniques  are  usually  used  to  understand  the  present
situation( lecture notes from NordPlus course in tourism planning):
    .  PEST   analysis   —   political,   economical,   socio-cultural   and
      technological uncontrollable factors in the macro environment.
    . The analysis of the trends in the market
    . The analysis of our competitors
    . The product analysis with respect to the markets and the competition
    . Consumer analysis- characteristics and behaviour of the customers  and
      consumers.
    . SWOT analysis (strength, weakness, opportunities and threats) –sums up
      and present the information collected and processed in the  analytical
      process.
I will use these planning process models to show how the  Sel  Myvatn  Hotel
worked with the development of the destination Myvatn.
3. Development of the destination Myvatn
3.1 Presentation of the area
In my paper I want to study the development of the destination  lake  Myvatn
in the Northern Iceland. We distinguish between  point  destinations,  place
destinations and region destinations(Sletvold 2000:267). Myvatn is rather  a
region because there is a lot of unique about the lake as  well  as  in  the
surroundings. Lake Myvatn is the  country’s  fourth  largest  natural  lake,
36.6 kmІ (www.goiceland.org). It is renowned for  wildlife.   This  area  is
extremely volcanic, which explains the mountain formations around the  lake.
Nine eruptions took place there during the period 1975-1984; at that  period
there were a power station on the volcano. The lake area is  known  for  its
exceptionally many breeding duck species (15); it is thought  to  nest  more
species    of    duck    than    any    other    place    in    the    world
(www.nat.is/travelguideeng/myvatn).  The  lake’s  surroundings   show   such
variety in landscapes and amazing geological formations, that  the  visitors
have to spend several  days  to  enjoy  them  fully.   Bubbling  mud  flats,
lunaresque volcanic craters, newborn lava fields, and grassy shoals  teeming
with waterfowl; these are among the sights of Myvatn.  Dimmuborgir,  on  the
East side of the lake, is a badlands of lava pillars, some  of  which  reach
65 feet in  height.  Just  north  is  Hverfjall,  a  smooth,  stadium-shaped
volcanic cone that formed during eruptions 2,500 years ago. One of the  most
bizarre attractions in the region is the mud pits of Haverarond,  which  are
so hot that they actually boil. Far  cooler  are  the  waters  of  Viti,  an
explosion  crater  nearby,  which  was  formed  in  the  1724-1729.  Another
unforgettable sight near Myvatn is Eldhraun  (“fire  lava”),  an  absolutely
barren lava field where the Apollo 11 crew came in the late  60’s  to  train
for  their  impending   moonwalks.   There   are   also   numerous   bathing
possibilities in Myvatnsveit. The most  interesting  ones  are  the  Lagoon,
which is similar to the Blue Lagoon near Reykjavik, and for rinsing off  the
clay  afterwards   there   is   a   natural   steambath   in   Jarрbaрshуlar
(www.nat.is/travelguideeng/myvatn). It  is  an  old  site  where  hot  steam
rushes out from the core of the earth and has  been  used  for  bathing  for
ages.
    Myvatn has about 470 inhabitants, of which approximately  200  live  in
the village Reykjahliр. Before people used to live on the  proceeds  of  the
land farming and fishing for trout in the lake but it has changed  radically
in the last few decades. A diatomite factory was  established  in  the  late
sixties and soon became the biggest source of  employment  in  Myvatnssveit.
The geothermal  power  plant  at  Krafla  also  provides  for  quite  a  few
positions for the locals and tourism is a steadily growing business.
3.2 Development of the destination
    In 1974 the lake was declared a national conservation area,  and  since
then  Icelandic  tourists  has  begun  to  go  there.   The  period  of  the
exploration started then. The lake is very unique  and  there  are  lots  of
tourism resources. Still, at the beginning the region  was  not  known.  The
few visitors, drawn to  Myvatn  by  its  natural  attractions,  were  mostly
geologists, biologists and other scientists. A  number  of  Icelanders  also
came to the region to enjoy the nature. But the area was  not  adjusted  for
tourism. Accommodation could be only found in the  nearest  towns.  Tourists
had to arrange the trips on their own (from the interview  with  Sel  Myvatn
Hotel manager).
    In the 1990’s the  involvement  stage  began.  I  could  not  find  any
information about the outer trigger factors, like presentation of  the  area
in media in that period. But I hold to the opinion, that the  inner  trigger
factors were determinant. The local people saw the possibilities of  tourism
and started to build hotels, restaurants, camping  sites.  There  were  open
car rentals, grocery  shops,  petrol  stations  with  car  washes,  swimming
pools. Simple sightseeing possibilities appeared. These are the first  signs
of the involvement stage in the destination development,  according  to  the
Butler’s model.
    Although there are several companies offering  accommodation,  catering
and sightseeing tours around Myvatn, I am going to base my study on the Sel-
Myvatn Hotel. This company is the most responsible for  the  development  of
tourism in the region. I could say this company is the most  successful  one
in the region. Their activities allow getting to  know  the  whole  area  of
Myvatn.  So I believe the activity of  this  hotel  and  the  statistics  of
their tourist arrivals reflect the development of  the  destination  on  the
whole.
    In 1997 the future management of the Sel-Myvatn Hotel  in  co-operation
with Sport-Tours (Sportuр) in Akureyri, Northern Iceland, started  to  build
the hotel and work with the activities to attract tourists to Myvatn  region
(from the interview with the hotel manager).  From  marketing  we  know  the
following four strategies:
                               Ansoff’s model
|               |                     |                      |
|               |                     |                      |
|               |Existing markets     |New markets           |
|Existing       |                     |                      |
|products       |Penetration          |Market development    |
|New products   |Product              |                      |
|               |development          |Diversification       |
                      Figure 3. Source: Kotler 2003:88
    It is natural to start with product development  if  a  completely  new
product is to appear. The work of Myvatn  hotel  staff  is  a  part  of  the
destination  development  because  the  activities  they   have   introduced
attracted tourists to Myvatn. Their  mission  was  to  attract  tourists  to
Myvatn.
       Having  analysed  the  situation  the  company  saw  the   following
   resources:
      . Unique nature in the Myvatn area
      . Snow and ice in winter season
      . Northern Lights
      . A special race of horses, Icelandic horses, which look like pony
      . Spa resources like silica mud, clean air, hot springs.
      . Marimo, unique lake balls which can only be found  in  Lake  Myvatn
        and in   Japan where they are sacred
    As we see one can develop  several  tourist  products  based  on  these
resources. The company’s strategy is formulated in this slogan  “From  hotel
to activities”. They decided to become the best  company  offering  activity
tourism in Iceland. Since the year 1998  they  have  worked  with  different
activities on Myvatn. In 2000 the hotel was open.  The main focus  has  been
on the Arctic Garden. This is a project run jointly by Sel-Hotel Myvatn  and
Sport-Tours. The resources that the project is based on are  the  nature  of
the lake Myvatn as well as the lake itself in  wintertime.  The  aim  is  to
develop some products that are based on those elements in order  to  attract
tourists to  the  area  during  the  low-season.  The  Arctic  Garden  is  a
collective term which includes the various kinds of winter  recreation  that
Sel-Hotel Myvatn offers and  that  are  primarily  based  on  ice  and  snow
(www.myvatn.is). The main theme for the Arctic Garden is to work  with  Lake
Myvatn when frozen and therefore bowling, cricket,  golf  and  go-cart  have
been developed as ice-sports. The location for these activities is  a  creek
at Stakholstjorn which is related to  Lake  Myvatn.  This  winter,  2003,  a
restaurant seating  60  guests,  will  be  built,  using  snow  as  building
material. The restaurant will be built in cooperation with  Absolut  and  is
therefore called the  Absolute  Ice  Restaurant.  At  first  it  will  be  a
cocktail restaurant and a bar, but in  the  future  it  is  going  to  be  a
restaurant which offers a number of specially designed meals.[1]
    Myvatnssveit, the neighbourhood of Lake Myvatn, offers some of the most
spectacular scenery in Iceland which is  highlighted  even  further  by  its
snowy winter appearance.
    It is possible to rent ice-skates, skis and snowmobiles at  the  hotel,
where the headquarters of the Arctic  Garden  are.  Diverse  excursions  are
available either with  jeeps  or  busses.  All  the  security  equipment  is
available at the hotel.  The  main  emphasis  of  all  these  activities  is
recreation on the ice. Every winter weekend there  is  some  arrangement  on
Myvatn. The main idea is to make people love winter.
3.3 Situation today
    During the last 5 years the company has developed a number  of  tourist
products both for the  summer  and  winter  seasons.  (see  attachment)  The
number of arrivals has  increased  significantly.  The  mission  to  attract
tourists was fulfilled. The destination Myvatn is becoming popular.  85%  of
the hotel guests are foreign tourists, which is due  to  summer  guests.  In
low season it is mostly Icelandic tourists, although there are  coming  more
and more guests from France and the UK. The average length of staying  is  2
nights in summer season and 2.5 nights in winter  season.  The  company  has
been cooperating with Icelandic travel agencies  from  the  very  beginning.
They take also part in travel fairs abroad. Scandic Tours,  the  second  big
tour operator in France,  is  selling  Myvatn  tourist  products  in  France
||(from the interview with the hotel manager).
    I presume that destination Myvatn is  coming  through  the  involvement
stage, according to the Butler’s model. The following signs  of  this  stage
are obvious in the area:
        . The rate of growth in visitation is relatively low for the region.
          The destination is still not widely-known in the world
        . The attractions are mainly natural, authentic.
        . The local actors are controlling the situation
        . The tourism is a supplementary industry in the  region.  The  most
          important industry for the region’s economy is  still  the  silica
          fabric, producing silica algae.
I have also noticed some signs of the development stage,  which  means  that
the next stage is not far off.  Although the main emphasis  is  the  natural
attractions of the lake Myvatn, the  activity  attractions  are  commercial.
Myvatn is just used as arena for different sport activities and  games.  The
environmental stress is still low;  the  tourism  actors  do  not  have  any
environmental policy. But the concern for  the  environment  is  increasing.
The introduced activities  can  damage  the  nature  on  Myvatn,  e.g.  jeep
driving, snow mobiles, go kart.  In a  short  period  of  time  the  tourism
actors on Myvatn will have to take into account  the  carrying  capacity  of
the region.
To show the situation today I have made the SWOT analysis.
The strength of the destination:
    o Myvatn is a unique area because of its nature and geology.
    o There is a variety of tourism  products  in  the  area  for  different
      groups of people.
    o The area is safe, quiet and relaxing
    o The weather in summer is very mild
    o The local people have knowledge of the area
    o Myvatn is a new place for most people
    o The service quality is good
The weakness of the destination:
    o Accessibility: Myvatn is a far away  place  for  foreigners.  Lack  of
      efficient transportation to the lake.
    o Iceland is an expensive country
    o The activities on Myvatn are not for everyone, because of the weather.
      This is more tough- guys- holidays than family holidays.
    o The local actors are not well educated in tourism
    o Changing weather in winter
    o There is little cooperation between the local actors.
    o The marketing is left to the travel agencies, lack of  promotion  from
      the local actors.
    o There is no environmental policy in the region.
    o The activities depend on snow too much
The opportunities:
    o People today prefer activity tourism
    o Icelandair is lowing prices for transportation from abroad
    o Co-operation with the bus companies in the neighbouring Akureyri
    o Holidays for Icelanders who are getting  tired  of  the  resorts  near
      Reykjavik
    o Using Icelandic history as a resource for new activities/games
    o Japan is a potential new market. Marimo are valued a lot in Japan, but
      today there are few places in that country, where one  can  see  them,
      and those places are strictly protected.
The threats:
    o The policy of the Icelandair (cheap packages for foreigners  including
      the flight and staying at a hotel in Reykjavik)
    o Approaching the carrying capacity of the area, what will lead to extra
      protection in the region
    o Changing weather and global warming. Last winter  was  almost  without
      snow in the area. The winter activities were not possible.
    o Competition with the destinations in the south Iceland
This is the situation for today. How the region will develop in  the  future
is an open question.
4. Conclusion.
    I have shown the development of the destination Myvatn over  the  time.
The destination has come through definite changes, from a place  known  only
to specialists to  a  popular  tourist  destination,  especially  in  winter
season. Still, tourism in the region has some problems. The  competition  is
growing and the transportation to Myvatn is complicated. I  think  that  the
next step is to define market segments  and  offer  them  different  product
ranges. It will be another strategy according to the Ansoff’s model:  market
penetration. It is also possible to  promote  the  product  to  new  markets
(market development), like business people  or  schoolchildren.  Development
of new products is an alternative as well. I suppose such activities as ice-
hockey or curling in the open air would be popular. But how the  destination
will be developing depends on the tourism actors.
————————
[1] The restaurant was almost ready built last winter but all the snow
melted off in the region due to the mild weather in February-March.