When Growth Impedes Resort Renewal: A Path Dependence Perspective on the Impact of Scarce Resources on Product Innovation in Atami, Japan

The Tourism Area Life Cycle shaped tourism research for decades, but its concepts Product Life Cycle and Carrying Capacity remain problematic. We apply a Path Dependence frame under an Urban Growth Machine Theory lens to explore the effects of growth pressure and resource undersupply on the decline and rejuvenation of Japan’s former premier hot spring resort Atami. We conduct structured data collection utilizing sampling and coding methods to collect quantitative and qualitative data from primary and secondary sources, reconstructing Atami’s development paths. Findings suggest that growth pressure conflicted with local supply such as land, water, labor and created negative externalities, most notably high prices. Decision makers’ uncompromising focus on growth aggravated displacement of key actors, disrupting local communities and undermining the human agency needed for small-scale product innovation; empowered associations obstructing promotion and diversification efforts; encouraged extreme specialization depriving Atami of new independent businesses; and drove local opposition to major new projects, thereby stalling product renewal. The framework helped recontextualize Atami’s recovery and demonstrated the value of directly incorporating factors of capacity into analysis. Results link displacement to long-term sustainability risks affecting ‘replaceable’ resorts reliant on innovation. Unencumbered access to local resources for residents (housing, training) is proposed as mitigation.