Coordination and growth in tourism: When self-interest does-not suffice

Private goods and common goods coexist in tourism. However, the nature of the latter means that self-interest alone cannot guarantee their optimal provision. Hence, coordination emerges as a necessary strategy to reconcile both. The analysis shows that, with coordination, a virtuous circle emerges between common goods (public incentive) and tourism (private incentive), becoming more intense and important with tourism-driven economic development. Coordination also allows a transition toward high-quality tourism (crowding out low-quality tourism), which is necessary to compensate for the lack of productivity in this sector. Without coordination, there is room for a tourism development trap or economic growth reversal . Finally, we identify a “ Quality Paradox ”: quality improvements might jeopardize economic growth by triggering a price hike, reducing overall competitiveness. • Coordination is central to tourism to avoid stagnation or decline. • Poor coordination can reverse or stick tourism development. • Later stages of development require increased levels of coordination to prosper. • Quality improvements policies may jeopardize economic growth. • Differentiation and quality policies in unison to prevent potential downsides • Tourism attributes are strong drivers for rejuvenation in mature destinations.