What Makes a Tourism Destination Truly Competitive?

Why are some tourism destinations successful in the long term, while others eventually begin to struggle—with overcrowding, dissatisfied residents, or a loss of attractiveness? The answer is often sought in individual factors such as service quality, marketing, or the number of visitors. However, new research suggests that this perspective may be insufficient.

The question of tourism destination competitiveness has been discussed for more than thirty years, yet there is still no unified definition. Over time, the perspective has shifted from a purely economic view to a broader understanding that also includes impacts on local residents and the environment. Nevertheless, most research agrees on one thing: competitiveness is a complex phenomenon that fundamentally influences tourism development and a destination’s success in the market.

But how should competitiveness be understood in practice?

There are many models that attempt to explain competitiveness. They typically work with factors such as destination attractiveness, service quality, accessibility, safety, awareness, or destination marketing and management. This makes it possible to break down this complex concept into individual components and work with them more easily. While this helps with orientation and understanding, it does not fully reflect reality. These factors do not operate in isolation or in a straightforward way. They influence each other—often simultaneously and in different ways. And this is precisely where the traditional linear perspective reaches its limits.

A Need for Systems Thinking

Although the study builds on classical models of competitiveness, it views them through the lens of systems thinking. This approach seeks a “top-down” perspective, allowing the problem to be seen as a whole, including its interconnections. Using the principles of system dynamics, the study presents competitiveness as a system of interrelated factors that influence one another and jointly shape overall competitiveness.

Even in its simplest form, the model includes 38 causal loops—that is, various interactions between factors. “Put simply, the model shows that a change in one factor does not affect only the ‘closest’ factor but influences a whole range of interconnected elements—sometimes positively, sometimes negatively. In this way, the model better reflects reality,” explains co-author Martin Luštický from the Faculty of Management at the Prague University of Economics and Business.

The model challenges the simple linear logic of “more tourists lead to more money, more services, more tourists, and thus greater competitiveness.” In reality, the same process can have the opposite effect, as commonly observed in practice. A higher number of tourists can lead to overcrowding, a decline in the quality of the visitor experience, and frustration among local residents. The result may be a decrease in competitiveness and, ultimately, a gradual decline in visitor numbers. One only needs to look at Mallorca, Barcelona, Venice, or even destinations closer to home, such as Třeboň in South Bohemia.

The article thus shows that competitiveness is not something a destination simply “has.” It cannot be easily divided into separate components or increased through a single measure, such as stronger marketing. Instead, it emerges from the relationships between different parts of the system—in other words, it is the result of their interactions. In practice, this means that even well-intentioned interventions may have unexpected consequences.

How Can Such a Complex System Be Managed?

Based on three main loops reflecting different levels of complexity, the study discusses three possible management approaches:

• Resource-Oriented Approach
  This is the most basic approach, with the lowest level of complexity. It is relatively simple, easy to understand, and practical to implement. However, it does not take into account the long-term perspective associated with sustainability, nor the dynamic nature of the tourism environment, particularly external factors. Essentially, it is a reactive style that seeks to balance destination resources (supply) with visitor demands.
• Sustainability-Oriented Approach
  This is currently the most common approach. It increases complexity by incorporating elements and relationships related to sustainability, particularly the impacts of tourism on local communities. It requires a more sophisticated management style—so-called integrative management—which connects the interests of local residents, businesses, public administration, and tourists to ensure the destination’s prosperity. However, it remains focused “inward” and does not fully consider the external environment.
• Systems Approach
  Only this approach fully acknowledges that a destination operates in a changing and partly unpredictable environment. Instead of trying to control everything, it emphasizes the ability to adapt, learn, and collaborate—key elements of adaptive management. The focus shifts to understanding relationships and actively influencing them according to changing conditions, rather than merely optimizing individual components.

The research thus challenges the still widespread notion that tourism is an easy-to-manage industry. It is not enough to “have a nice place” and expect tourists to come. Tourism is a complex system that presents a range of managerial challenges—and managing destinations in a way that strengthens their long-term competitiveness is undoubtedly one of them.

Source:
Luštický, M., & Stumpf, P. (2026). Understanding tourism destination competitiveness complexity. Tourism Review, ahead-of-print. https://doi.org/10.1108/TR-08-2025-1022