The coordination challenge in tourism destinations: value creation, enhancement, and retention

This chapter investigates the tourism destination from the economics perspective. Theoretically, the destination can be interpreted like any other economic agent, with a goal function to maximize and subject to one or more constraints. This approach allows to identify two stages in its decisional process: a long-term strategic choice related to the planning of the tourism product, based on the endowment of local resources, and a short-term choice related to the pricing strategy and to the coordination policy among stakeholders. This way, it is possible to show that coordination in tourism, that can be provided either by the destination management or by the tour operator, is always welfare improving, but with different consequences for local development. Moreover, this approach has more explaining power than more popular but simpler models, such as TALC, thus enabling to capture the diversity of evolution in real-world destinations, differing for the type of intra-destination coordination, the specialization of the product and their positioning in the tourism market.