The 6 phases of a tourist destination’s life cycle

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Since the mid-20th century, thanks to factors such as the emergence of commercial flights, higher household incomes and the regularization of paid vacations, among others, tourism has become a mass phenomenon.

Until then, this was an activity that had been carried out empirically, causing some tourism projects to become unsustainable over time. In order to have a guide that would allow planners and developers to anticipate problems and create alternative or contingency plans, the need to create a model with the different stages of development of a tourist destination was considered.

The great beneficiaries of this model on the phases through which a tourist destination moves through are the tour operators or wholesalers, who determine how to sell a tourist package taking into account the specific phase of a destination’s development cycle.

There are many examples of wholesale travel agencies that analyze, research and apply these studies to increase the profitability of their products.

Understanding the tourism life cycle is crucial for stakeholders in the tourism industry. This concept not only helps in recognizing the current stage of a destination but also in strategizing for sustainable growth and development. As tourism evolves from a niche activity to a mass phenomenon, recognizing each phase within the tourism life cycle becomes a pivotal tool for effective management and planning.

What is the life cycle of a tourist destination according to Butler?

To answer this question, Richard Butler, Emeritus Professor at the Strathclyde Business School in Glasgow, created the Tourism Area Life Cycle (TALC) in 1980. In it, he essentially equates the evolution of destinations with that of products or services.

Butler seeks to demonstrate that tourism is not a static process, but that it evolves or declines according to factors such as destination discovery, visitor flow, support from authorities, the relationship between tourists and locals, infrastructure, etc.

To create his model, Butler used a number of theories related to other fields, such as sociology, biology and the life cycle of products in international commerce. The TALC has become a widely used tool as a theoretical foundation for research and analysis of the tourism sector.

Phases

According to Butler’s model, tourism destinations go through six evolutionary phases, although it is important to mention that not all destinations invariably go through each of them.

Exploration

In this first phase the destination receives few visitors, lured by natural attractions, such as pristine beaches; or by its culture, such as handicrafts or ethnic groups. It is precisely the lack of infrastructure that attracts the attention of the first tourists. The physical environment and its population are little affected by the presence of visitors, and the economic benefits are limited. There is usually a positive relationship between locals and tourists.

Involvement

In this phase, local people start businesses aimed at tourists, such as guesthouses, restaurants or tours. Investors show interest in developing future projects.

Governments are pressured by the need to develop tourism infrastructure. It begins with the promotion of the destination, which gives rise to the phenomenon of seasonality.

Development

The flow of visitors increases, as well as the digital promotion of the destination. Tour operators and tourism promoters take the opportunity to launch their promotional campaigns advertising the destination on travel agencies’ social networks in order to reach a larger target audience. At this stage, infrastructure grows, especially related to transportation. Natural and cultural attractions may become less important due to the emergence of new artificial attractions.

Occasionally, control of the tourism market passes from local hands to external companies. The standard of living of the inhabitants generally improves, however, the relationship they have with tourists can become strained.

The development phase in the tourism life cycle is a critical turning point, where effective management can significantly influence the future trajectory of a destination. At this juncture, understanding the intricacies of the tourism life cycle allows for the implementation of strategies that balance growth with sustainability. This ensures that the destination remains attractive and viable for future visitors while preserving its natural and cultural assets.

Consolidation

During this stage growth slows, but continues to rise. This may be intentional, to preserve the exclusivity of services, or not.

Tourism becomes fundamental for the economy of the area, generally being its main source of income. The aim is to increase the stay of visitors, their per capita expenditure and to deseasonalize visits.

Due to foreign companies setting up in the region, there is a drain of capital. Other negative effects may be felt, such as wear and tear on the infrastructure and dissatisfaction of the local population with tourism.

Stagnation

During this phase, tourism demand begins to decline and stagnate. The destination is no longer fashionable, so an alternative or conservative market is sought. Economic, environmental and social problems arise.

As destinations reach the stagnation phase and face challenges in attracting new visitors, harnessing the power of data and insights is essential.

Dive into our in-depth analysis on leveraging Google Travel Insights for strategic tourism growth and innovation, where we explore the transformative power of data in the tourism industry.

Decline or rejuvenation

In the last stage there are two scenarios: decline, where the destination loses affluence and cannot compete with other destinations that are in earlier stages. When this happens, the tourism infrastructure is usually put to another use.

This decline is usually gradual, but can also occur abruptly and unexpectedly due to external events (for example, the COVID-19 crisis in 2020, considered by the UNWTO as the worst year in history for tourism).

Another course that a destination can take after stagnation is rejuvenation, where efforts are combined to shift the destination’s focus, become more sustainable and target other markets.

Life cycle graph of a tourism destination

Butler’s graph is a linear model in which the different stages are plotted along X and Y axes, representing the number of visitors and time, respectively.

Example

A great number of tourist sites have been analyzed according to the Butler model, such is the case with a 2009 study carried out by Carlos Rogelio Virgen Aguilar on Puerto Vallarta. Broadly speaking, these were his conclusions:

Several factors influenced the discovery of Puerto Vallarta, undoubtedly an important one was that it became the location for the 1964 film “The Night of the Iguana”, directed by John Houston.

In the following years Puerto Vallarta experienced a boom from 2,687 hotel units in 1975 to 10,029 in 1992. An international airport was built in 1970 and the tourist infrastructure was improved.

After this stage, where the average annual rate was 15.2%, growth slowed down and even decreased, but showed a slight increase from 2001 to 2005, with condominiums being the predominant choice (non-hotel offering).

After 2005, no new attractions were created to attract a greater number of tourists, nor did they seek to increase per capita spending. Undoubtedly, the offer of condominiums affected the hotel sector, while the neighboring destination, Nuevo Vallarta, attracts a large part of the region’s tourism.

How trends affect tourist destinations at various life cycle stages

Every year, a huge percentage of tourist activity is allocated to so-called bucket-list destinations. The 10 most visited cities in 2023 were Istanbul, London, Dubai, Antalya, Paris, Hong Kong, Bangkok, New York City, Cancun, and Mecca. Seven of them were in the top 10 destinations in 2016. 

While the global tourism market and its central hotspots remain busy year after year, thousands of other destinations are waiting for their time in the spotlight. What puts them on the map? Trends. Many of them explode and burn out, left with unfinished developments on every corner. 

Travel trends propel the exploration of new tourist destinations and affect every stage that follows. Below, we examine how new and recurring trends dictate the fate of these destinations at various life cycle stages, fueled by digital marketing and the swing of the behavior pendulum. 

Going off-the-map

As if travel hasn’t always been experiential, the principal expectation of today’s travelers is to “make memories.” 77% of respondents say they care more about the right travel experience than about the cost of the trip”. Expedition, adventure, and wellness are the main travel buzzwords.  

In a word, modern travelers seek to explore. Both recurring trends, such as off-the-beaten-track travel and reconnecting with nature, and fledgling micro-trends, like eco-diving and silent travel, lure tourists to visit off-the-map destinations. National Geographic calls them “destination dupes”.

These places are especially interesting in the context of another anti-trend: crowdless destinations. While locals keep protesting over tourism in Barcelona, Mallorca, and Sevilla, savvy travelers are heading to more peaceful destinations: Ljubljana, Raja Ampat, Mostar, Himara, Mozambique, etc. 

Business is booming

The number of visitors doesn’t surge immediately after a destination is discovered. At this point, the destination is still pristine and relatively obscure. However, local businesses see an opportunity to drive more visits, so they make significant investments. What happens next? Promotion. 

Digital marketing is critical for the next three stages of a tourist destination’s life cycle. The destination is trending because it is yet unexplored. This is when social media involvement creates a tourism boom, as we have seen with Santorini, where visits increased by 308% over the last decade. 

Going out of style

When a destination reaches the last phase of its tourist life cycle, it is already at the mercy of the market 

demand and dynamics. Shifts in tourist behavior can be abrupt and bigger than predicted. This changing landscape compels businesses to navigate “from the new normal to the next normal.”

While established favorites see continued demand, new travel destinations are gaining traction. Seasonal tourists who are more likely to follow trends redirect their plans to someplace else. With decreased viral potential on social media, new hotspots begin to turn into yesterday’s destinations. 

One thing that can save them from decline and spark rejuvenation is regenerative tourism. A sub-trend of sustainable travel, this slow-burn concept incorporates all the authentic values that motivate travelers to explore new destinations: respect and admiration for foreign cultures and nature. 

The impact of technology on destination management and marketing

Technology is another disruptor that has a similar effect on shifting tourist behavior. The two are mutually intertwined, as well, so they often affect a destination’s life cycle together. OTAs are an obvious example of this: tourists who love convenient booking favor tried and familiar destinations. 

We will see more and more of this in the future, especially with the commercialization of AI technology. Travel AI will perfect the creation of super-personalized travel content for destination marketing, as well as tours and itineraries based on individual bucket lists, needs, and past behavior. 

Big data is becoming more prominent, too. Tech companies are using advanced analytics to help travel businesses boost their revenue, but that’s not all. Big data can help destinations predict tourist behavior with greater certainty and invest in their marketing and development accordingly. 

Future directions

So, where are the tourists headed next? According to McKinsey’s 2024 travel trend report, destinations that are waiting to be discovered by global travelers are nested in Eastern Europe, India, and Southeast Asia. Laos, Malaysia, Peru, Rwanda, and Vietnam are also gaining momentum. 

Inspired by their example, McKinsey & Co. is urging less-known destinations to:

• Collaborate across the tourism ecosystem – accommodation providers can seek partnerships with airlines to provide full-service packages around special events. 
•  Use infrastructure linkage to promote new destinations – Laos and Malaysia flourished due to their infrastructural and physical proximity to Bangkok and Thailand. 
• Deploy social media to reach different demographics -Social media offers unmatched targeting opportunities that can be used to reach audiences in specific regions. 
• Embrace unknown status – Saudi Arabia declared it felt comfortable with its place on the global tourism map when it started the viral #WhereInTheWorld campaign. 

Potential innovations in tourism management

Next in line are so-called smart destinations, which connect physical spaces and their infrastructure with technology to create a unique and innovative quality of life. While Smart cities certainly qualify for this upgrade, beware: tourists and locals differ in their purposes for using technology. 

Instead, we might start seeing hybrid cities with smart infrastructure accommodating more tourists than locals. The Internet of Things, AI, and big data analytics could be used together to “enhance visitor experiences and operational efficiency” and create responsive tourist spots. 

Smart initiatives like these should, by definition, be eco-friendly. Luckily, tourism doesn’t need advanced technology to incorporate sustainable practices into destination management. Rather, it is “about taking a more holistic, strategic view that captures the interest of locals and visitors.”

Multiple examples, like the one from Pokhara, Nepal, have shown that environmentally conscious tourist destinations have a healthier development cycle because they focus on preserving local communities and natural attractions as much as they are eager to accommodate travelers. 

How global issues affect destination life cycles

Side-by-side with health pandemics and political instability, climate change and economic shifts present the main challenges to tourist destinations. Coastal regions might be the first ones affected by scorching temperatures, although near-water bookings are jumping under the heat wave. 

This could end soon. Rising sea levels are projected to damage 49-60% of coastal resorts worldwide, and places like Martinique, Barbados, and Bonaire are already suffering a decline in popularity due to eroded beaches. For every 1% increase in temperature, Indonesia loses 1,37% of visits. 

Tourists behave differently in the summer heat – some explore new Mediterranean destinations to avoid busy beaches, while others flock to hotspots at the peak of their lifecycle. The third group (coolcationers) is re-exploring and rejuvenating northern destinations in pursuit of a cooler climate. 

Sadly, a number of winter-season destinations are already in decline because it’s too hot to snow. The Alps, where tourism is critical to the local economy, have received 8.4% less snow per decade in the past 50 years. In a similar example, Canada’s ski resorts are pivoting to snow-free activities. 

Meanwhile, US tourists are declaring travel budget bankruptcy ahead of summer. This April, it became clear that only 53% of Americans were planning a summer vacation, 36% of which were willing to go into debt to pay for it. Out of the remaining 47% of Americans, 65% say they can’t afford it. In 2024, the HICP (harmonized index of consumer prices) inflation rate for hotels and accommodations in the US, EU, and UK is 0.4%, 5.2%, and 6%, respectively. This affects not only the purchasing power of the average tourist but also the average destination’s power to grow and stay relevant.

Conclusion

Butler’s model is an important analysis tool that allows for the future planning of a tourist destination and the development of action plans that will allow it to reinvent itself once it goes beyond the consolidation phase.

As we wrap up our discussion on the life cycle of tourist destinations, understanding the crucial role of expert management in these phases is paramount. Delve into our dedicated exploration to grasp the full scope of the benefits of a travel management company, where we dissect their pivotal role and offer a comprehensive view of their operational strategies and advantages.