Innovation, Competitiveness, and Sustainability in Tourism Clusters: An Empirical Model of Caribbean Destinations

This chapter explains and estimates a model of accommodation clusters in tourist destinations. The model variables describe a destination’s intrinsic attraction, synergies between tourism activities, increasing congestion and capacity, and competition-driven technical changes. The model engages technology parameters at four physical scales, global markets for capital and visitors, regional destinations and innovations, destination-level clustering, and characteristic accommodation size. Parameters are estimated across 20 Caribbean destinations from 1986 to 1996. Combined with island-specific tourism policies, the model plausibly backcasts earlier tourism development for Aruba reproduces overshoot in accommodations in the late-1980s, and the following decade of disruptive fluctuations. Although the model over-estimates current hotel accommodation, the excess matches emergent uncontrolled growth of “alternative” accommodation, primarily condominiums, and vacation rentals. This case study illustrates how the cluster model’s components and parameters influence critical junctures in the growth trajectory of destinations.