The Rise and Fall of a Destination

If you’ve ever taken a marketing class, you are probably aware that every product, be it a toothpaste brand or a dog-walking service, goes through a life cycle: introduction, growth, maturity, and decline. The goal of the decision maker is to make the most of the growth and maturity phases to maximize revenue. Tourism destinations also follow this widely recognized lifecycle: investors, developers, communities, end-users, and policy makers must be aware of how their destination is performing within this paradigm.

Before we examine Panama and the Gulf of Chiriqui, it is important to understand the research and a little how the model applies to tourist destinations. In 1974, Stanley Plog was the first to recognize the fact that destinations experience a cycle like those of consumer products, warning against developing carelessly and without respect for the things that made it popular in the first place. He theorized that the type of visitor a place was attracting defined what phase the place was experiencing. Four years later, R.W. Butler expounded on this idea, developing the widely-accepted model Tourism Area Life Cycle (TALC). It is still used throughout academia and industry today, although many academics fault it for not taking into full consideration the full complexity and dynamic nature of the industry. The TALC is described below:

In the Exploration phase (areas of Columbia), a small, inconsistent number of adventurous visitors attracted to natural and cultural features will make use of local facilities. The visitor numbers increase during the Involvement phase (Panama) and the local people begin providing facilities specifically for tourists. A season emerges, advertising may start, and governments begin to get involved in developing infrastructure. During the Development phase (Costa Rica), larger and more elaborate facilities (frequently built by non-local organizations) will be created and the tourist market will be well-defined. Stagnation (many beach destinations of Mexico) happens as the capacity of an area is reached and the place falls out of fashion as organized mass tourists are the primary customers and artificial facilities supplant authentic experiences. The destination can either transition into a phase of Decline (Niagara Falls) or change its attractions to reach a phase of Rejuvenation (Atlantic City after adding gambling).

How does this relate to Panama and the Gulf of Chiriqui and why should we care? I believe that the Gulf is currently in the Involvement phase. And as investors in the hospitality sector, we are looking at the long-term picture and want to catch the curve on the bottom of the upswing, ensuring that there are many years left to reap the rewards of our efforts and investments. At this early stage, we will also be able to appreciate the natural and cultural amenities of the place before the area becomes discovered by mainstream tourists who may threaten its innate beauty. Finally, it gives us the opportunity to set the tone of development and have a hand in creating its future, hopefully extending the Development phase and creating facilities that are environmentally, socially, and economically responsible so that we never have to experience a Decline phase.

In summary, according to Butler and my interpretation, Panama is just emerging as a destination. As long as we are joined by others in our commitment to sustainable development, it will likely enjoy many years of increased investment and interest as the popularity of the currently in-vogue destinations declines. We are in the right place at the right time.

TAGS: Business Chiriqui Panama Sustainability

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