Luxury tourist destinations

Sustainable luxury destinations

As of February 2023, Target Euro has been working in the Turks and Caicos Islands to design and implement a Tourism Carrying Capacity model. The model’s objective is to allow the TCI Government and tourism stakeholders to permanently monitor all impacts generated by the tourism industry and provide useful information to best define sustainable tourism policies and strategies.

The working methodology to design the Tourism Carrying Capacity model for TCI is based on i) Meetings with the Carrying Capacity Advisory Committee and other local tourism stakeholders; ii) Surveys with tourism businesses and population; iii) Analysis of international case studies; iv) Analysis and review of all available documents; v) Data collection; vi) On-site visits.

Development has been spearheaded by Mr Gilberto Zangari, a statistician with over 30 years’ experience in tourism impact assessments and carrying capacity models. This article highlights key areas of the case study analysis carried out by Gilberto and the project team. This analysis has identified key issues that luxury tourism destinations must address to maintain their status. Furthermore, these findings have broader implications for all tourism destinations, emphasising the importance of fostering a sustainable tourism industry which can contribute to enhancing residents’ quality of life.

The case studies were identified with the TCI Government, based on the main issues faced by local tourism stakeholders. Through the review of academic articles, other studies, and relevant documents, we identified 18 potential luxury tourist destinations to analyse.

Nassau and Oahu were discarded because of limited data which restricted the identification of the main problems they are facing as luxury destinations.

The remaining destinations were categorised as Best Practice and Poor Practice. This distinction is not a form of judgment. Its primary objective is to separate two categories: destinations that have consistently maintained their status in the luxury tourism market (best practices) and those destinations that, whether by choice or not, are no longer regarded as luxury tourist destinations (poor practices) [1].


In some cases, the decline of a destination’s status in the luxury tourism market was due to deliberate political decisions aimed at increasing the number of tourists, therefore increasing the demand but lowering spending capacity.

Some destinations have managed to reclaim their luxury status after initially losing it. These destinations are represented in yellow.


Main issues faced by luxury destinations

The analysis has identified three main causes for the decline of luxury tourism destinations. These primary causes are:

  1. Over-tourism
  2. Safety
  3. New tourism trends and the decline of existing ones

Each primary cause has several “breaking points” impacting the tourism industry and residents. The term “breaking point” is when a condition within a destination becomes a problem for the tourism industry and the quality of life of the local population.

Primary causes and breaking points


Each destination has one or more “breaking points” to deal with, but the most common are:

  • Deterioration of the landscape is the prevalent reason. This problem is often caused by uncontrolled building of tourism facilities and infrastructure, which ruins the landscape. There is another more subtle issue at play: people working in tourism often earn more than those in other sectors. Consequently, farmers leave their land to work in hospitality. This shift leads to a shortage in labour, causing areas like Bali’s terraced rice fields to deteriorate and disappear.
  • Waste management: Proper waste management is more complex than people think, especially if this function has to be adapted to a booming tourism industry and a growing population. The negative impacts of poor waste management have pushed Boracay and St Bart’s out of the luxury tourism market.
  • Inadequate infrastructure: This includes various services that can quickly face challenges if demand increases significantly. This can cause frustrated and unhappy tourists, something that is not appreciated by luxury clientele.
  • Crime: Tourists who use drugs can attract drug dealers, which, in turn, creates an environment for a range of criminal activity.


Good practices to follow

Out of the 16 analysed destinations, the Maldives, the Seychelles, French Polynesia and Maui (Hawaii) have effectively preserved and strengthened their position as luxury tourism destinations over time. The table below illustrates the main areas of governance that all 4 tourist destinations have managed successfully.



The comparison of best and poor practices shows that the destinations which have maintained and often strengthened their position in the luxury tourism market are those that have:

    • Maintained a constant focus on selling to the luxury market
    • Implemented stringent visitor management plans
    • Implemented strict environmental policies
    • Involved their community in decision-making processes
    • Made extensive use of their carrying capacity analysis


[1] In many cases this luxury demand continues to be present in the customer mix of these destinations.


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