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Cooperation and Competition During the Resort

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DOI: 10.1080/02508281.2012.11081684

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TOURISM RECREATION RESEARCH VOL. 37(1), 2012: 15-26

Cooperation and Competition During the Resort Lifecycle

RICHARD BUTLER and ADI WEIDENFELD
Abstract: The Tourism Area Life Cycle (TALC) model has been used on numerous occasions and situations to
describe the destination development process but has rarely been used to explore more sophisticated and causal
relationships between the development stages and other aspects of working relationships including cooperation and
competition between tourism businesses in destinations. These relationships are influenced by the spatial proximity
between individual firms at the local scale and agglomeration of tourism firms at the regional scale. Drawing on the
knowledge of working relationships between tourism firms, this paper suggests an underlying conceptual framework
for the study of the dynamic nature of the cooperation, competition, and spatial proximity between tourism firms and
the interrelationships between these aspects throughout the TALC.
Keywords: competition; cooperation; spatial proximity; agglomeration; TALC.

Introduction
The tourism area lifecycle model (Butler 1980) is one of
the most frequently cited conceptual models related to
tourism destination development, and despite the length of
time since its initial publication, is still being utilised in
contemporary research (e.g., Garay and Cnoves 2011). The
original model was focused on describing the process of
development through which tourism destinations proceeded
and did not explore in detail any causal relationships
between stages of development and processes such as
competition or cooperation between individual enterprises
or destinations. It did deal briefly with some spatial
implications, particularly with respect to the location of
subsequent proximal destinations, but not with aspects such
as proximity of businesses within a destination. The model
was particularly concerned with the development of
destinations rather than with tourism enterprises within
such destinations, yet it is reasonable to argue that just as
destinations as entities are dynamic and change over their
development cycle, so too could individual enterprises and
the relationships between these be expected to change
throughout that cycle.
The impact of spatial proximity and agglomeration
between tourism businesses on cooperation in tourism has
been studied particularly in the context of tourism clusters
(Brown and Geddes 2007; Erkus-ztrk 2009; Hall 2004;
Jackson and Murphy 2002; Michael 2003; Michael and Hall
2007; Mitchell and Schreiber 2007; Nordin 2003; Weidenfeld
et al. 2011), while other studies (Baum and Mezias 1992;

Tsang and Yip 2009) have addressed the impact of these

spatial parameters on competition between enterprises. In a
related vein, the original model of the TALC (Butler 1980)
was an attempt to describe the creation and evolution of
such tourism clusters or destinations and the physical,
environmental, social and economic changes that accrue
along the cycle. The TALC has been also applied to evaluate
networks, inter-organisation arrangements and their
dynamics in tourism destinations along different stages of
the development (Caffyn 2000; Zehrer and Raich 2010) but
without addressing the interrelationships between
cooperation and competition at different spatial scales. The
overall relationships between cooperation, competition, the
spatiality of tourism destinations in general, and
agglomeration of tourism firms over the development cycle
of destinations have been largely ignored, and it is this aspect
which is the specific focus of this paper.
The paper begins with a short review of the tourism
literature relating to cooperation, competition and coopetition between businesses, followed by a brief discussion
of the potential significance of the relative proximity or
density of businesses with respect to cooperation or
competition between businesses. Following this a conceptual
model is illustrated and discussed which illustrates the
potential behaviour, spatial proximity between and
agglomeration of tourism businesses with the stages of
destination development described in the TALC model.
Finally the implications for future research on the model are
discussed. Spatial clusters are constituted at different scales,

RICHARD BUTLER is Professor Emeritus at the Strathclyde Business School, 199 Cathedral Street, Glasgow G4 0QU, Scotland, UK.
e-mail: richard.butler@strath.ac.uk
ADI WEIDENFELD is a Marie Curie postdoctoral fellow at the Department of Marketing, Hanken Schhool of Economics, Vaasa, Finland.
e-mail: aweidenf@hanken.fi
Copyright 2012 Tourism Recreation Research

The Resort Lifecycle: Butler & Weidenfeld

ranging from the local neighbourhood through the subregional and regional, to the national and international
levels (Malmberg and Maskell 2002). In this paper, the
difference between the local and the regional scale needs to
be clarified; spatial proximity is taken as the geographic
distance between individual businesses at the local scale
while agglomeration is the ratio between the number of firms
and the geographic 'size' of a particular area at the regional
scale. Local scale refers to working relations (i.e., cooperation,
competition or co-opetition) between individual
neighbouring intra-cluster Small and Medium Size Tourism
Enterprises (SMTES) and regional scale refers to working
relations amongst several SMTEs at a larger geographic
scale, characterised by forming groups or associations aimed
at achieving external economies of scale at the regional scale.
Therefore, a working relationship at the local scale refers to
between individual tourism businesses within the same
destination region.
Cooperation, Competition and Coopetition
Cooperation
Cooperation is recognised as an important determinant
of the success and competitiveness of a tourism destination
(Baggio 2011) and research has mainly focused on the
marketing of a tourism product as a bundle of services
including accommodation, attractions, and transportation,
which are often purchased and assessed by consumers as a
service value chain (Fyall et al. 2001; Grngsj 2003; Michael
and Hall 2007; Zehrer and Raich 2010). Motivation for
cooperation lies in the recognition by a firm of the potential
to generate external economies of scale, reduce risks and
overcome the growth of complexity, fragmentation and
turbulence as tourism develops in an area (Fyall and Garrod
2005; Weidenfeld et al. 2011; Zehrer and Raich 2010).
Cooperation is perceived as a way to increase businesses'
competitive position, including incorporating measures to
improve productivity, new product development, building
relationships with local suppliers, cooperation with similar
businesses, participating in local tourism destinations (Lade
2010). In some cases, when entry barriers are difficult and
present an obstruction to a large number of small companies,
these might form a cabal to fix prices and eliminate
competition (Shaw and Williams 2004).
Cooperation in tourism can involve the development
of both informal and formal inter-organisational
collaborative mechanisms, including partnerships
(Bramwell and Lane, 2000; Hall and Page 1999), networks
(Baggio and Cooper 2010; Morrison and Mill 1992; Saxena
2005; Zehrer and Raich 2010), consortia and alliances
(Garnham 1996), to deliver the tourism product (Baggio and
16

Cooper 2010; Fyall and Garrod 2005). At the regional scale,

it is strongly influenced by strong local leadership who
coordinate of activities and encourage cooperative processes,
particularly with supporting and related industries (Lade
2010). Wang and Krakover (2008) suggest four forms of
business relationships to describe cooperative working
relationships among tourism businesses in a destination:
affiliation, coordination, collaboration, and strategic
networks, in a continuum defined by various degrees of
formalization, integration and structural complexity required
by the nature and mission of marketing projects as the
destination develops. When the continuum of the cooperative
marketing relationship moves from affiliation to strategic
network, it may also move from a low degree to a high degree
of organizational integration which requires a more formal
and complex relationship with each other (Wang and
Krakover 2008). However, a high degree of organizational
integration does not necessarily indicate a similar degree of
cooperation in terms of trust and interdependencies; e.g. two
businesses can have a low degree of organizational
integration, but close and trustworthy informal cooperative
relationships, and it could be argued that this will vary with
the development stages of the TALC.
Competition and Coopetition
Competition in tourism is primarily for the time and
money of the customers, as firms tend to be engaged in
horizontal and vertical product differentiation and compete
to increase their profit margin by maximising their final price
as well as their share of their total generated margin through
increasing their market share, cost reductions and pricing
(Buhalis 2006; Papatheodorou 2004). Tourism businesses
try to maximize their own interests and do not participate in
collective actions when different self-interests lead to
businesses competing against each other to best fulfil their
own self-interests (Wang and Krakover 2008). Their ability
to compete depends on the interaction of three elements:
market competition (competing for the same tourist profile),
development or adjustment of their products or production
processes (innovations) and existing forms of production
(competition between similar products) (Ioannides and
Petersen 2003).
A framework for studying competition among tourism
destinations (Buhalis 2006) and between organisations at
various spatial and organisational scales suggests five levels
and provides a useful but generalised framework for
studying competition between destinations. This scheme
refers to places and regions as based on pre-existing 'natural
and socio-cultural resources', and thus includes a spatial
aspect, which is not related to the spatiotemporal aspects of
destination development stages. In reality, tourism
Tourism Recreation Research Vol. 37, No. 1, 2012

The Resort Lifecycle: Butler & Weidenfeld

destinations and tourism organisations vary enormously in

size and spatial relationships and are far more complex than
implied by Buhalis (2006). Therefore, there is no reason that
this conceptualization would not be applicable to tourism
enterprises as implied below. Level one refers to competition
from proximal, similar product businesses and service
providers, for which businesses need to develop 'co-opetition'
(cooperative competition) strategies, whereby there is
cooperation and competition between individual businesses
and amongst groups of attractions at the destination regional
scale (Buhalis 2006). Cooperative competition or vertical and
horizontal 'co-petition' within destinations and within value
systems is increasingly important for the survival and
profitability of organisations sharing the same destiny, 'codestiny' (Buhalis 2006).
Competition from distant similar product businesses
(level two), drives regional cooperation amongst businesses
to establish their brand and develop collective differentiation;
it applies to competition from similar or undifferentiated
regions. Level three refers to competition in differentiated
regions with dissimilar product businesses, whose
distinctive natural and socio-cultural resources are not easily
substituted. Level four addresses competition with other
tourism businesses within the distribution channels, as each
member of the channel seeks enhanced profit margins and
level five relates to competition with recreational and leisure
facilities and activities, both at places of origin and in tourism
destinations. It would be reasonable to assume that the
relative importance of these levels is dynamic and responds
to and reflects the changing nature and level of development
of a destination, although this point is not pursued further
here.
Working Relations, Spatial Proximity and Agglomeration
There are indications that the spatial proximity between
tourism businesses at the local scale and the levels of
agglomeration among businesses at the regional scale
determine the working relations between tourism businesses
(Wang and Krakover 2008). It is clear that spatial proximity
and levels of agglomeration change throughout the TALC
as destinations grow and sometimes decline, and this paper
suggests that multiple and changing relations between
enterprises are influenced by these spatial factors.
Cooperation between tourism businesses at the local scale is
likely to involve more informal and personal relationships
and local initiatives e.g., joint investments in product
infrastructure (see Weidenfeld et al. 2011). At a larger
geographic scale, enterprises form groups or associations
aimed at achieving external economies of scale in order to
compete with other destination regions, and may involve
formal agreements and joint collaboration initiatives e.g.
Tourism Recreation Research Vol. 37, No. 1, 2012

marketing groups and policy formation.

In Weidenfeld et al (2011)'s study on cooperation
among tourism attractions, at a particular point in time,
spatial proximity and agglomeration are shown to be
positively related to cooperation at both the local scale and
regional scale. However, in less-agglomerated destinations,
regional cooperation in marketing and regional competition
for markets is higher (Wang and Krakover 2008). Other
inextricably linked influential features of SMTEs, including
product type, visit duration, market segments' type/size,
group size, frequency and durability of firm interactions
(Huybers and Bennett 2003; Weidenfeld et al. 2011) also
determine cooperation between tourism firms and clearly
can be expected to change over time. Tourism firms are likely
to compete more for local markets at the local scale, and less
for distant markets at the regional scale, as tourism
businesses tend to collaborate in joint marketing campaigns
in order to attract tourists to the destination and compete
with other destinations (Wang and Krakover 2008).
Agglomeration Economies and Tourism Clusters
Inherited local or regional resources create a
comparative advantage, particularly where there are
deficiencies in alternative/rival activities (Gordon and
Goodall 2000). When external economies of scale are a result
of co-location and are benefits a firm derives from being
located close to other economic actors, and caused by factors
beyond the actions or responsibilities of a firm, they are called
agglomeration economies, positive spatial spillovers, or thick
market effects, which generate more efficient or cost effective
production processes (Cohen and Morrison 2005; Neffke et
al. 2011). Each of the following agglomeration economies
carries positive and negative agglomeration externalities,
which may change throughout the lifecycle of a destination
along with lower or higher levels of agglomeration of tourism
businesses and have implications for the survival and
sustainability of tourism businesses along the TALC.
Transport, Infrastructure, Specialised Inputs and Services
Concentration of tourism attractions, activities and
complementarities between them encourage agglomeration
of tourism businesses and related businesses (Gordon and
Goodall 2000). Positive externalities of this aspect include
lower transport and freight of both inputs and outputs, cost
savings and various types of thick market effects, which are
solely and directly attributed to the physical dimension of
spatial agglomeration (Cohen and Morrison 2005; Gordon
and McCann 2000). Tourism demand and subsequent
development in a destination depend on both long and short
distance access networks and a transport system, particularly
17

The Resort Lifecycle: Butler & Weidenfeld

airport facilities (Clav 2007; Gordon and Goodall 2000) as

well as travel among businesses and between these and
services within destinations (Swarbrooke 2002). Transport
may generate opposite tendencies in spatial clusters; for
example, the development of different modes of transport
can facilitate concentration or accelerate dispersal across
tourism spaces (Shaw and Williams 2004; Masson and Petiot
2009). This can lead to some negative externalities such as
congestion, degradation and rising land prices.
A Local Pool of Workers and Flexible, Specialised and Mobile
Labour
A pool of labour is a pooled market for workers with
industry-specific skills, ensuring both a lower probability of
unemployment and of labour shortage (Krugman 1991) and
generally develops over time in specific locations. Every
agglomeration economy can have a pool of labour, especially
skilled workers, in a system which maximises the jobmatching opportunities between the individual worker and
the individual firm and minimises the search costs for both
(Gordon and McCann 2000). A pool of labour is
advantageous in overcoming seasonality, encouraging
innovations and information spillovers, as well as in
developing specialised niche products for niche markets
employing specialised labour, but also might lead to the
poaching of workers between businesses and to rising wages.
In the absence of a large pool of labour, businesses may find
more permanent long-term loyal workers but fail to benefit
from knowledge spillovers, innovations, specialised skills
and overcoming barriers to seasonality. A direct implication
of this aspect is a flexible division of labour between firms
within clusters, which also can be expected to change over
the development period. Flexible division or a fragmented
division of labour is characterised by a workers' and firms'
choice in selecting their workplace and workers (Hjalager
2000; Jackson and Murphy 2002; Shaw and Williams 2002)
and inter-firm necessary transactions in the production
process (Storper 2000).
This flexibility in the tourism and leisure labour
markets is attributed to both permanent and temporary (or
secondary) workers where the formalisation of dual labour
markets within companies occurs and " stems from the
particular nature of the demand for tourism and leisure
services" (Shaw and Williams 2002: 174). A flexible pool of
labour, particularly in case of seasonal workers like students
and immigrants, can encourage businesses such as hotels to
co-locate and incorporate with educational institutions
offering courses in tourism and hospitality in an attempt to
overcome labour shortage in high seasons (Hjalager 2000).
Such cooperation can also underlie other flexibilities such
as work time, wage and procedural (Rimmer and Zappala
18

1988 cited by Shaw and Williams 2004). Therefore, it is

assumed that businesses at high levels of agglomeration face
less difficulty in overcoming seasonality and temporal
variations in demand (e.g., weekday versus weekend,
unexpected peaks), common problems in tourism
destinations, but more poaching and high labour turnover
than those at lower agglomeration levels. More functional
and temporal flexibility in skilled workers and numerical
flexibility in semi- and un-skilled workers result in higher
competition for skilled labour but reduced competition for
unskilled labour. By contrast, low-agglomerated businesses
would enjoy a labour market dependency on a few employers
resulting in lower pressure on wages and lower turnover,
but would have less flexibility in labour and less selection of
skilled/unskilled workforce.
Diffusion of Knowledge, Innovations and Technology
Knowledge has a variety of overlapping forms (for
example, aesthetic, cognitive, scientific, discursive, digital,
information, tacit, explicit, emancipatory, embrained,
embodied, encultured, embedded and encoded) and is central
to the operation of contemporary advanced economies (Hall
and Williams 2008; Henry and Pinch 2000; Williams 2006).
In general, to create competitive advantage, there are always
strong systemic pressures to find 'new' ways of producing
'old' commodities, making existing products that reduce
costs by cutting the labour time needed in production
(Hudson 2005). The advantages of agglomeration could
entail more innovative production helping to sustain the
regional destination appeal, but greater similarity in the
production and less distinctiveness of the product as a result
of imitation between neighbouring firms can be
disadvantageous as well. This could result in more local
competition. At low levels of agglomeration, less diffusion
of innovation and the absence of change might decrease
tourism appeal and draw fewer tourists as products become
obsolete and vulnerable to competition as suggested in the
original TALC paper (Butler 1980). The outcome might be
higher levels of regional competition and cooperation.
Agglomeration Economies and Working Relationships
between SMTEs
High levels of agglomeration of businesses and services
are expected to allow more complementary relationships to
develop, and cost efficiency, and increase levels of local
cooperation. The abundance of service providers might
reduce costs and result in less collaboration amongst actors,
and the large number of tourists might decrease the need for
regional competition for tourists. Conversely, low
agglomerated businesses are less-accessible to tourists with
fewer opportunities for complementarities and variety in the
Tourism Recreation Research Vol. 37, No. 1, 2012

The Resort Lifecycle: Butler & Weidenfeld

tourism production chain. However, they can also gain from

less-intense provision of services, infrastructure and
transport thus sustaining a clean, natural and exclusive
environment and enjoy a more monopolistic and stable
business local environment with less local competition and
sustaining exclusiveness of their tourism products. By
contrast, cooperation and competition for tourists at the
regional scale are likely to be higher.
The relationships between agglomeration and local
and regional cooperation and competition for tourists can
be summarised as follows: High levels of agglomeration are
negatively related to competition between tourism firms for
infrastructure, services and labour but not necessarily for
skilled labour. By contrast, low levels of agglomeration are
likely to be positively related to regional competition and
cooperation for tourists as well as regional cooperation on
the basis of reducing costs and buying services. Higher levels
of agglomeration mean greater availability of more mobile
labour and enhanced public transport and accessibility for
tourists and labour, which eases local competition for labour
and regional competition for markets (Weidenfeld et al. 2011).
They are also likely to engender more knowledge transfer
and learning between firms and therefore innovation than
at lower levels of agglomeration. Forces counteracting the
economies of scale deriving from agglomeration include
congestion or greater input competition in high-density areas
which could cause firms to locate in less-congested areas
(Bale 1976; Butler 2006; Cohen and Morrison 2005). Negative
spillovers or externalities, such as rising land and wage
prices, environmental degradation, congestion, corrosive
competition and diseconomies of scale, particularly for small
firms (Cohen and Morrison 2005; Newlands 2003; Raco
1999) were all features noted in the earliest discussions of
the TALC and suggested as causes of redevelopment of
tourism in neighbouring undeveloped locations (Butler
2006).
Tourism Destination Clusters
The co-location of firms and agglomeration economies
is a necessary condition for effective clustering to occur.
However, the mere co-location of firms does not guarantee
the process of optimising gains from economies of-scale and
of-scope, i.e. gains attributed to the cluster's formation
captured as a result of reductions in the average costs of the
member firms, which is the rationale for clustering. Rather,
it is a process in the form of a continuum, by which firms
enhance their ability to cooperate. Clustering produces a
range of synergies which may enhance the growth of market
size, employment and product (Michael 2007). The definition
of a cluster can be used also to describe a destination
with its conglomeration of competing and collaborating
Tourism Recreation Research Vol. 37, No. 1, 2012

businesses, generally working together in associations and

through partnership marketing to put their location on the
map (Jackson and Murphy 2006: 1022). The definition of a
tourism cluster in this paper is an array of linked industries
and other entities in competition, which provide
complementary products and services as a holistic tourism
experience such as accommodation, attractions and retail
outlets (Wang and Fesenmaier 2007). These businesses
represent a range of different types of enterprise, meaning
that each has its own agenda and priorities (Jackson and
Murphy 2002).
The co-location of tourism businesses does not only
increase agglomeration economies, but also the process of
optimising gains from economies of-scale and of-scope as a
result of reductions in the average costs of constituent firms.
These may result in production linkages, which can be
categorised as horizontal, vertical and diagonal clustering,
although this classification is not rigid; clusters can fall into
more than one category in respect to their production links
and intra-cluster firms may be clustered diagonally with
other businesses, but vertically and horizontally with others.
Horizontal clustering refers to linkages between
complementary firms that produce similar goods but each
link adds value to the production chain of the tourism
experience product. They compete with one another but are
inter-linked through a network of suppliers, service and
customer relations, selling similar products and using similar
processes (Bathelt et al. 2004; Michael 2007). Vertical
clustering refers to the co-location of firms operating at
different stages in the value chain, which minimises
logistical and distributional costs and enhances
specialisation (Michael 2003). Finally, diagonal clustering
occurs where complementary firms create a bundle of
separate products and services into a single tourism product
and become 'symbiotic' e.g. firms with separate production
processes supply activities such as transport, hospitality and
accommodation (Michael 2003, 2007). Diagonal clustering
implies economies of scope internal to the firm, whereas
horizontal and vertical clustering are about external
economies of scale and the synergies between products. All
forms of clustering are dynamic and can be expected to evolve
during the lifecycle of any tourism destination.
A Spatial Perspective of Cooperation and Competition
Applied to the TALC
The working relationships between tourism businesses
in tourism destinations as spatial units of analysis with
regional economies and actors or stakeholders focus on the
relationship between co-operation and competition for
markets (Coles 2006). The destination product is perceived
by the tourism as a unified tourism product in relation to
19

The Resort Lifecycle: Butler & Weidenfeld

other destinations but within a destination there is

competition between the different businesses, providing the
elements of the tourism product. This co-existence between
cooperation and competition is dual, dynamic and can be
affected by the perspectives adopted by the actors
(individuals and organizations), based on desired benefits
and the nature of the projects (Wang and Krakover 2008).
Actors' norms and values towards one another and towards
the destination community are not static and shape their
interrelationships as rivals or collaborators throughout
destination development as well as political attitudes in the
destination (Brackenbury 2006; Grngsj 2003; Wang and
Krakover 2008; Zehrer and Raich 2010).
The spatial configuration of destinations is also
dynamic as resort popularity changes over time. At the first
stages of destination development, successful resorts cast
an agglomeration shadow on others as a concentration of
new resorts emerge around successful destinations as a
result of increasing returns. Out of these emerging
asymmetries, a core-periphery configuration and spatial
competition may then occur (Papatheodorou 2006). At this
point, centripetal forces of agglomeration always coexist with
centrifugal forces of deglomeration in spatial dualism: as
flows increase the pressure on natural and environmental
resources can prove detrimental. Moreover, land rents and
subsequently hotel and other supporting services in popular
resorts tend to be very high, discouraging additional tourists.
Therefore, it may be argued that an optimum size of resort
development may exist where the net gains from external
economies are maximized. Nonetheless, such an optimal
point is only attainable in the frictionless world of neoclassical economy. When the carrying capacity point is
surpassed, however, tourism flow auto-correlation becomes
negative resulting in deglomeration unless rejuvenation is
achieved (Butler 1980; Papatheodorou 2004).
The nature and impact of changing levels of
agglomeration on cooperation and competition throughout
the lifecycle of destinations have generally been ignored,
although other spatial aspects of tourism development have
been discussed in that context. Hall (2006: 83) elaborated on
the influences of spatial interaction and mobility in the
changing patterns of tourism and tourisn destinations,
arguing that ... destinations should be primarily
conceptualised as points in space that are subject to a range
of factors which influence location. Papatheodorou (2006)
adopted a similar approach in dealing with the spatial
implications of competition in the context of the destination
lifecycle, and the development of the core-periphery pattern
around many tourism destinations. His arguements about
the way interactions develop over time as agglomeration
takes place noted the need for strategies to enable destination
20

attractions to cooperate at the regional level and thus be able

to compete at the international level, particularly with multinational corporations. His conclusion that competition
among destinations and tourism producers can be healthy
and sustainable only if it is considered with the context of
their common future (Papatheodorou 2006: 82) places the
debate about cooperation and competition in the global
context as destinations are effectively always competing at
the global scale in modern tourism. Gordon's (1994) model
suggests that variations between tourism destinations in the
speed of the lifecycle and number of tourists reflect differences
in the capacity to manage or restrain processes of competition,
which could lead to crowding and environmental
degradation.
In the context of the TALC, Coles (2006) notes the
comparisons that can be made between models used in
retailing and destination development, particularly in the
context of the creation, marketing, selling and modification
of the product over its life-span. He argues, as does Russell
(2006a) also, whether the process is a cycle or a "wheel",
with developments such as agglomeration and
deglomeration, being responsive to entrepreneurial inputs
and innovations, and particularly reflective of price
considerations at specific periods. Tourism, particularly in
its mass form, is heavily price dependent in its markets, and
competition in mass tourism destinations, many of which
have become very similar to one another in terms of offerings
(attractions, climate, accessibility) as they reach the mature
stages of the TALC, often becomes heavily, if not almost
entirely, price-focused. Innovations and events which affect
the price of a destination can cause major changes in the
cost-effectiveness of that location and its appeal to the market
(Russell 2006a).
Surprisingly, there has been little focus on the role of
entrepreneurs in the development of tourism destinations,
yet their contributions can significantly change, often
abruptly, the relationships between a destination and its
markets and the nature of competition and cooperation
within a tourism cluster (Butler and Russell 2010). As well
as the impact of entrepreneurs and innovators in changing
the path of the TALC and the relationships affecting this,
increasingly the impact of events and chance are being felt
in many destinations. Catastrophes such as conflict,
earthquakes, tsunamis and disease all change the path of
development of destinations, sometimes resulting in the
disappearance of destinations and their replacement with
new developments in other locations (Butler and Suntikul
2010; Russell 2006b), sometimes stimulating cooperation for
survival of a destination, in other cases shifting the balance
of competition to favour one location or one type of
development over another.
Tourism Recreation Research Vol. 37, No. 1, 2012

The Resort Lifecycle: Butler & Weidenfeld

Irrespective of the direction of such change, the

occurrence of changes in the relationship between
competition and cooperation can result from the intervention
of both endogenous and exogenous forces as illustrated by
Weaver and Oppermann (2000). They argue that the evolution
of tourism destinations is subject to a number of triggers
which can be summarised as intentional or unintentional
and internal (endogenous) or external (exogenous) to the
destination itself. In this context an intentional endogenous
trigger might be destination infrastructure upgrading, while
an exogenous intentional one could be legislation changes
such as visa requirements by a higher level government. An
endogenous unintentional trigger could be local conflict or
violence, while an exogenous unintentional one might be
currency revaluation (Weaver and Opperman 2000). They
argue that a movement from intentional and endogenous
implies a loss of control by a destination over its development
cycle, a situation which could be reflected in changes in
alliances (e.g., for marketing) and viability of organisations
(e.g., for tourism promotion).

growth, prime, deceleration and several options of the after

life phase. It also describes their characteristics in terms of
how individual partnerships change over time and whether
there are commonalities in their dynamics of evolution (e.g.
decision making, leadership, commitment) in relation to
deliberately undefined scale of success. A TALC perspective
to explain tourism network development consisting of 5
stages: foundation, configuration, implementation,
stabilisation and transformation has been proposed by
Zehrer and Reich (2010). These stages are parallel to the
original stages of the model i.e., exploration involvement,
development, consolidation, stagnation, and post-stagnation
(decline, rejuvenation, or stabilisation). Zehrer's and Reich's
model refers more to the levels of cooperation in terms of size
of the network and engagement in network activities than
the nature of cooperation in Caffyn's model.

Two models for cooperation between tourism

businesses throughout a destination's lifecycle have been
suggested more recently. A tentative tourism partnership life
cycle model from an organisational evolution perspective
(Caffyn 2000) describes 6 phases: pre-partnership, take-off,

A conceptual model for predicting the likely extent and

nature of cooperation and competition between businesses
at changing levels of agglomeration at the regional scale and
spatial proximity at the local scale in each stage of the TALC
model has been suggested (Figure 1). The first curve from

Application of the TALC model to the relationships between

cooperation, competition and agglomeration at the local and
regional scale

*between neighbouring individual businesses

Figure 1. Relationships between Agglomeration,Ccooperation, and Competition for Tourists between Businesses
Throughout the TALC.
(1) Agglomeration; (2) Regional (cluster) Cooperation/Competition; (3) Local cooperation/competition between individual
neighbouring businesses
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21

The Resort Lifecycle: Butler & Weidenfeld

the left (Line one) in the figures indicates the levels of

agglomeration of tourism firms. The two other lines (Lines
two, three) illustrate the differing levels of cooperation/
competition in relation to increasing agglomeration of
businesses. The bell-shaped line (Line two) illustrates the
levels of regional cooperation or regional competition
between businesses. Line three outlines the levels of local
cooperation or local competition between intra-destination
individual businesses. In the discussion below, each stage
of Zehrer and Raich's (2010) model is related to differing
levels of agglomeration of businesses and other facilities and
impacts on their importance on cooperation and competition
throughout the stages of the TALC. At the Exploration
(foundation) stage, there is usually a small growing number
of operating businesses at low levels of agglomeration
(Haywood 2006; Papatheodorou 2004).
Tourism actors must perceive that the benefits of
optimising gains from economies of-scale will exceed the
costs in order for them to collaborate and define ground rules
regarding interaction and communication. Actors become
network-promoters themselves and might be supported by
regional institutions (Zehrer and Raich 2010). Local and
regional cooperation is likely to evolve but competition will
be almost non-existent as business activity would still be at
its preliminary stage where the numbers of tourists and
businesses are few and continued and regular visitation is
not established. At the Involvement (configuration) stage,
local and regional cooperation and competition begin to grow
and some forms of vertical clustering are likely to emerge as
the destination experience and identity is built from various
complementary products and services. Tourism businesses
may still be in the process of building initial trust with their
neighbours and establishing regional collaborative
mechanisms, where detailed design of symmetric
collaborative relationships, including controlling
mechanisms, communication are set (Zehrer and Raich
2010). Their limited resources for cooperation can be expected
to reconcile the allocation of resources between regional and
local cooperation, and are likely to prioritise regional over
local cooperation due to the need to increase tourist numbers.
As a destination grows rapidly in the Development
(implementation) stage, daily tourism activities of network
partners emerge and critical tasks are systematically
monitored (Zehrer and Raich 2010). Agglomeration and the
levels of regional and local cooperation and competition
increase (lines one, two), and trust between managers/
owners is built. These are characterised by an increase of
vertical clustering, and more trust between neighbours which
encourage businesses to cluster horizontally. Managers
perceive regional cooperation as essential for attracting more
tourists to the area and establishing a regional identity and
22

appeal that will be vital for their business growth. More

cooperation increases and some forms of horizontal
clustering are likely to emerge. As the TALC continues
through Consolidation (stabilisation) stage, the number of
firms and tourists increases, although at a slower rate, and
business operators are likely to direct their resources at
competition with other intra-cluster businesses at the
expense of marketing through membership in regional
alliances (regional cooperation) (Figure 1, lines one, three).
There will be more complexity in the system due to the
larger number of actors and a risk of competition in the
network. These issues, including the realised outcomes of,
and unfulfiled expectations from, collaboration, will be
discussed through negotiations and compromises (Zehrer
and Raich 2010). This stage will continue up to the point of
stagnation where agglomeration levels off and regional
cooperation is no longer perceived a top priority. The growth
in local and regional cooperation can be expected to decrease
but local cooperation and competition continue to grow as
the number of tourists still increases. Both vertical and
horizontal clustering are likely to continue. The final stage
of Zehrer and Raich's transformation, the Stagnation stage
reflects a changing market and an individual assessment by
each partner which determines the continuation of the
network. The emergence of inter-sectoral collaboration of
tourism with other sectors and competencies is common in
order to maintain the authenticity and competitiveness of
the tourism destination experience (Zehrer and Raich 2010).
Here, diagonal clustering and collaboration are likely to
emerge as businesses with trust-based relationships may try
to minimize costs, protect themselves from risks and survive
as one integrated production unit.
If businesses close down, relocate or lose their appeal,
so too will regional competition and cooperation decline, as
businesses will prioritise resources for their own survival
and more likely focus on competing with their similar
neighbours or maintaining existing forms of local
cooperation. Beyond this stage, there are two main options
as the traditional TALC process continues through the post
development stage. Decline may ensue and result in the
closing down of businesses, restructuring of the destination,
or the conversion of businesses to non-tourism outlets
(Agarwal 2002, 2006; Baum 2006). Moreover, forces
counteracting economies of scale deriving from
agglomeration may also exist (as noted earlier), such as
congestion costs and environmental degradation, while
greater competition in high-density areas could cause new
firms to locate, and existing firms to relocate, in alternative
less-developed areas (Butler 1980) where tourism businesses
may diversify into other activities pushing tourism into
peripheral areas (Gordon 1994) (Figure 1, Line one).
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The Resort Lifecycle: Butler & Weidenfeld

Beyond the point where any benefits of agglomeration

would be reached, de-glomeration would prevail. This will
reduce density as well as local cooperation between
neighbouring individual intra-destination businesses, at the
expense of redirecting resources back to regional cooperation
in an attempt to bring tourists back to the area, and to better
compete with other destinations and extra-destination
businesses (Line two). It is also possible that in the decline/
rejuvenation stages of the TALC, the intervention of
exogenous forces might result in cooperation between
individual neighbouring businesses remaining at the same
level as before or even increase as a result of possible
governmental incentives or the availability of other external
resources to stimulate regional cooperation (Line three).
Thus it is difficult to predict how the levels of cooperation at
the local or regional scales will be influenced by decline or
rejuvenation of the destination.
Summary
It is likely that in terms of local and regional
competition (Lines two, three) in the first stages of the TALC
(exploration, involvement and development stages) as a
destination develops the density of businesses increases and
local competition between co-located businesses also
intensifies. This would mean that tourists would
increasingly have more choice and businesses would have
to adjust to a more competitive business environment. When
destinations approach the 'consolidation stage', businesses
are more likely to direct their resources to competition with
other intra-destination cluster businesses (local
competition). This would be at the expense of marketing
through membership in regional alliances (regional
cooperation) for the purpose of competing with other
destinations (regional competition). Therefore, it can be
expected that regional competition would level off in the
stagnation phase and even begin to decrease. Beyond the
stagnation stage decline or rejuvenation may ensue in the
TALC, but cooperation between individual neighbouring
businesses (Line three) could remain at the same level as
earlier since some businesses may try to increase tourist
numbers by strengthening linkages and business cooperation
in marketing with their neighbours. In the case of decline,
agglomeration as well as local competition between intracluster individual businesses can be expected to decrease,
with businesses increasing resources in regional
cooperation, in order to bring tourists back to the area by
competing directly with other destinations and extra-cluster
businesses (regional competition).
Conclusions and Agenda for Future Research
The paper has suggested a conceptual model for
studying the relationships between the spatial variable of
Tourism Recreation Research Vol. 37, No. 1, 2012

proximity/density of tourism businesses in a destination

(cluster) and the degree of local versus regional competition
and cooperation between those businesses within the
destination (local) and outside the destination (region)
through the stages of the TALC. Some of the research on
which the model is based (Weidenfeld, et al. 2011) suggests
that agglomeration is positively related to local cooperation/
competition, and negatively related to regional cooperation/
competition between businesses in tourism clusters. It has
not been speculated on whether such relationships with the
stage of the TALC are in any way causal, i.e. whether the
stage of development of a destination affects the nature of
cooperation or competition between attractions within a
destination or region, although this would not seem to be
unreasonable.
The paper has also thrown light on the possible
relationship between the stages of the TALC and
agglomeration economies, which include the economic
utilities and benefits from costs reductions, efficiency gains,
a local pool of specialised and flexible labour, the provision
of shared inputs infrastructure and services (particularly
transport) and the maximisation of flows of information and
ideas that accrue from the geographical concentration of firms
(Gordon and McCann 2000). The model is based in part on
the identified relationships between cooperation,
competition, spatial proximity and spatial density
(agglomeration), the interrelationships between these aspects
and the levels of agglomeration of SMTEs (Weidenfeld et al.
2011) and on applications of the TALC to explain dynamic
cooperation between tourism firms (Caffyn 2000; Zehrer and
Raich 2010).
It is limited in that it ignores the role of local leadership
and political factors which may derive from destination
community objectives and other stakeholders' interests, as
well as external influences. Future studies should take into
account the interrelationships between social and business
relations between actors, and the possible influences of
potentially important in- and out- migration of new players
throughout the TALC, which may influence trust amongst
actors. When studying these issues, two questions need to
be considered; the first one relates to the possibility of
assessing the degree of collaboration or cooperation between
partners; the second concerns the identification of the
optimal conditions in which a significant pattern of
collaboration can exist and the actions/forces needed to
favour such conditions (Baggio 2011; Butler 2009). Further
study is necessary to determine both the nature of the
relationships suggested here and the influence of
endogenous and exogenous factors on the behaviour of
individual tourism enterprises during the TALC of a
destination.
23

The Resort Lifecycle: Butler & Weidenfeld

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Submitted: November 5, 2011

Accepted: February 9, 2012

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