Beyond the Resort Life Cycle: The Micro-Dynamics of Destination Tourism

The model described in this paper combines a set of discrete investment and policy choices to explain a continuing process of resort-level change in response to competition through globalization. It shows how the stages of growth, as defined by Butler’s resort life-cycle model, are the result of a combination of elements, the public policy and investor mindset, the scale of investment and transnational involvement. Four elements come to-gether in the formal model; lumpiness of investment, delays in marketing and construction, distribution of expenditures between the local and overseas components of tourism, and scale-related economies and constraints. Despite the relative simplicity of the model equa-tions the range of results is wide, varying from slow to very rapid take-off, to continuing long-run growth to early overshoot and decline. The model exhibits a variety of growth cha-racteristics that reflect the growth stages of the life cycle model, as well as other phenomena, such as stepped growth and cycles. The paper uses the historic growth paths of Aruba and Barbados, both small open island tourism-based economies in the Caribbean – but exhibit-ing contrasting tourist accommodation and tourism policy – as stylized examples. The paper explains how other exogenous and endogenous variables, such as global competition and carrying capacity, enter into the basic equations and concludes with a summary of the de-terminants of characteristic pathologies of tourist destinations.