Ask a DMO CEO how their organization is funded and you’ll almost always get the same structural answer: a percentage of the transient occupancy tax, a line item in the city budget, maybe a small grant from the state tourism office, and in forward-looking destinations, a Tourism Improvement District. The funding gets explained as a grant. The organization operates like a grant recipient. And that, more than any other single thing, is what’s holding most DMOs back.

A grant-recipient mindset produces a very specific kind of organization. It optimizes for compliance with the funding source, avoids risk, underinvests in revenue-generating capabilities, and spends most of its board meetings defending last year’s budget instead of building next year’s economic story. It also produces a leadership posture that’s uncomfortable with commercial language — “customers,” “products,” “revenue” — because those words feel out of scope.

They’re not. They’re the only words that matter.

DMOs already have revenue — they just don’t treat it like revenue

Every DMO has three real revenue sources today. The first is its public funding — bed tax, TID assessment, general fund allocation. That funding exists because the destination generates economic activity, and the DMO’s job is to grow the economic activity that feeds the funding. That’s a revenue loop, not a grant.

The second is partner revenue — co-op advertising, sponsorships, booth fees, marketing packages sold to hotels, attractions, and vendors. Most DMOs treat this as a nice-to-have. A revenue-oriented DMO treats it as a product line with quarterly targets and a dedicated commercial lead.

The third is earned media and owned audience — the newsletter lists, the social followings, the attendee databases from tourism events. This is sitting on most DMO balance sheets as an unrecognized asset. The 2026 State of Destination Marketing Report found that first-party data is the single most underdeveloped capability across the industry. Revenue-oriented DMOs turn that asset into partner revenue, attribution fuel, and campaign performance.

What changes when a DMO starts thinking like a revenue organization

Three things change, and all of them are uncomfortable at first.

Budget conversations shift from “how much funding did we get” to “how much visitor economic impact did each dollar of spend produce.” That’s the framing Destinations International’s DestinationNEXT Futures Study has been pushing for years. Most DMOs still haven’t made the switch.

Hiring shifts. Revenue-oriented DMOs hire commercial talent — people with media sales, partner sales, or revenue operations backgrounds. They stop trying to turn every senior hire into a former DMO staffer from another market.

Stakeholder conversations shift. Hotel partners, attraction operators, and TID committees get pulled into revenue conversations — “what performed, what didn’t, here’s what we’d change” — instead of the once-a-year annual plan presentation. The relationship turns from defensive to operational.

The case for moving now

The DMO funding landscape is not getting easier. The U.S. has seen a 5.5% decline in international visitors in 2025, according to U.S. Travel Association’s forecasts, and the political environment for tourism funding has become more volatile than at any point in the last two decades. Destinations whose funding case rests on “we’re a grant recipient doing good work” are exposed in ways destinations making a revenue argument are not.

The TID movement is a preview of where this is heading. Every successful Tourism Improvement District — from Chicago’s newly approved TID to the decade-old California districts — requires the DMO to demonstrate return on assessment, every year, in measurable commercial terms. That’s not a grant. That’s a contract with paying customers.

Start with the language

The fastest way to shift an organization is to change how it talks about itself. For the next quarter, replace “funding” with “revenue.” Replace “stakeholders” with “customers and partners.” Replace “outputs” with “outcomes.” Watch what happens to the conversations in your leadership meetings. If the discomfort doesn’t go away in two weeks, you’ve found the real problem — and the thing that most needs to change.

Photo by Daniel Sturley on Unsplash