Does sustainability enhance tourism destination competitiveness? Evidence from Italian Destinations of Excellence

Journal of Cleaner Production xxx (2015) 1e13

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Does sustainability enhance tourism destination competitiveness? Evidence from Italian Destinations of Excellence Marco Cucculelli a, *, Gianluca Goffi b, 1 a b

 Politecnica delle Marche, Piazzale Martelli, 8, 60100 Ancona, Italy Department of Economics and Social Sciences, Universita  Politecnica delle Marche, Piazzale Martelli, 8, 60100 Ancona, Italy Universita

a r t i c l e i n f o

a b s t r a c t

Article history: Received 30 November 2013 Received in revised form 8 November 2014 Accepted 21 December 2014 Available online xxx

This paper extends the Richie, Crouch (2000) model on destination competitiveness by introducing a set of sustainability indicators and testing their role in explaining the competitiveness of a tourism destination. The model is tested on a unique dataset of small Italian “Destinations of Excellence”, i.e., outstanding tourist destinations recognized by prestigious national and international awards. Both a principal component analysis and a regression analysis are applied to test the empirical validity of the model. Empirical results show that factors directly referring to sustainability have a positive impact on all the competitiveness indicators used as dependent variables. Furthermore, the impact of sustainability variables is larger in value than other variables, thus confirming the role of sustainability as a crucial determinant of the competitiveness of a tourist destination. © 2014 Elsevier Ltd. All rights reserved.

Keywords: Sustainability Tourism Destination competitiveness Italy

1. Introduction Tourism is one of the fastest-growing industries in many countries around the world, and the main source of foreign income for a significant number of developing countries. Therefore, the study of tourism destination competitiveness (TDC) has attracted the attention of policy makers, public and private organizations, and tourism researchers (Pearce, 1997; Crouch, Ritchie, 1999; Kozak, Rimmington, 1999; Buhalis, 2000; Hassan, 2000; Dwyer et al., 2003; Enright, Newton, 2004). After the milestone study by Ritchie, Crouch (2000, 2003), a number of theoretical models have been developed to explain destination competitiveness (De Keyser, Vanhove, 1994; Hassan, 2000; Heath, 2002; Dwyer et al., 2003), as well as to analyze the competitive positions of tourism destinations (Sirse, Mihali c, 1999; Dwyer et al., 2003; Enright, Newton, 2004; Gomezelj, Mihali c, 2008). Many authors have highlighted the relationship between sustainability and the competitiveness of a tourism destination and suggested, with different emphases, that sustainability can improve competitiveness (among others, Ritchie, Crouch, 2003; Hassan, 2000).

* Corresponding author. Tel.: þ39 071 2207162. E-mail addresses: [email protected] (M. Cucculelli), g.goffi@univpm.it (G. Goffi). 1 Tel.: þ39 071 2207057.

However, the large debate on the role of sustainable development has partly overlooked the call for a deeper empirical test, and there is still no clear empirical evidence of sustainability's role in explaining the competitiveness of a destination. The empirical models developed in the TDC literature (e.g., De Keyser, Vanhove, 1994; Sirse, Mihalic, 1999; Dwyer et al., 2003; Enright, Newton, 2004; Gomezelj, Mihali c, 2008) provide very useful insights into destination competitiveness, but partly neglect the role of sustainability factors. This study aims at contributing to this literature by integrating a basic model of TDC (Ritchie and Crouch, 2000) with features related to sustainability. To test the relationship between factors of sustainability and TDC, we operationalize the conceptual approach by analyzing a number of indicators we have found to be important in defining sustainability. The study also has the potential to offer a more comprehensive assessment of the factors that influence TDC. We follow the Dwyer et al. (2003) approach in identifying a list of indicators derived from previous empirical models of TDC and from the literature in sustainable tourism and tourism planning and management. Furthermore, little empirical work has focused on small tourism destinations, and practically no research on TDC has been applied to small destinations such as villages or small towns. The existing literature has mostly dealt with countries or large geographical areas, whereas the issue of TDC has been assessed by considering the prevalent role of large tourist destinations. However, there are a

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Please cite this article in press as: Cucculelli, M., Goffi, G., Does sustainability enhance tourism destination competitiveness? Evidence from Italian Destinations of Excellence, Journal of Cleaner Production (2015), http://dx.doi.org/10.1016/j.jclepro.2014.12.069

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M. Cucculelli, G. Goffi / Journal of Cleaner Production xxx (2015) 1e13

number of countries where a significant part of the tourist competiveness actually relies on small places because of the highly fragmented cultural heritage, or the inherent nature of the tourist sites. Italy is a paradigmatic example of this pattern: the four major destination cities (Rome, Milan, Florence, and Venice) account only for a part of the tourism flows (24.7% in terms of total international bed nights), whereas a great number of minor destinations constitute the largest remaining part. Surprisingly, the empirical literature neglects the role of these small centers almost entirely: these destinations need attention not only because they account for a sizable share of the total arrivals, but also because they represent a tourism model that is common to many other tourism countries. Therefore, our result could be of interest for a larger audience. We selected small Italian “destinations of excellence” as those that have been awarded important international (“Blue Flag”) and national certifications (“Orange Flag,” “Most Beautiful Villages in Italy,” “Blue Sail”). To test the role played by sustainability factors on the competitiveness of a tourist destination, we studied the relationship between TDC, measured by four dependent variables (environmental impacts, socio-cultural impacts, economic impacts and tourists' satisfaction), and some explanatory variables that can be identified in terms of sustainability. To reduce the large set of independent variables to a smaller set, we performed a Principal Component Analysis (PCA), as in Dwyer et al. (2004), and used these results in the subsequent OLS estimates of the model. As opposed to previous indicators of TDC such as arrivals, bed-nights, revenues, or market share, the TDC measures we use in the paper acknowledge the view of Müller (1994), Hunter (1995), Buhalis (2000), Ritchie and Crouch (2000), and others who recognize that a competitive destination pursues and establishes the right balance on the following different objectives: optimum satisfaction of guest requirement, subjective well-being of the residents (economic health), unspoiled nature, and healthy culture. The paper is structured as follows. Section 2 sets the theoretical framework. Section 3 gives details about the empirical analysis (variables, case study, data and methodology). Section 4 provides a discussion of the main findings. Conclusions are drawn in the last section of the paper.

2. Sustainability and competitiveness in small tourism destinations Many studies and models have identified destination competitiveness by using the lens of high visitor numbers and market share as contributing factors to a competitive destination. This view has a major limitation in that it ignores the sustainable perspective of not overloading the carrying capacity of a destination, or preserving its environmental integrity (Croes, 2010). Many authors seem to agree that the competitive destination is the one that preserves natural and cultural resources and increases long-term well-being for its residents by delivering an experience that is more satisfying compared to similar destinations (Hassan, 2000; Heath, 2002; Ritchie, Crouch, 2003; Bahar, Kozak, 2007). The concept of sustainability was introduced to tourism from the notion of sustainable development, following the publication of the World Commission on Environment and Development Report, known as the Bruntland Report (WCED, 1987). Even though after a quarter-century the world is an enormously different place (Sneddon et al., 2006), and the Report has been criticized for its central approach (Adam, 1990) and the lack of attention given to le , 1991), it reppower relations among local-to-global actors (Le resented an important starting point for the formulation of sustainable policies. In Sharpley's view (2000), sustainable tourism development does not appear to be entirely consistent with the

developmental aspects of sustainable development, but has a larger inward and product-centered perspective. Tourism researchers have been trying to define sustainable tourism development (STD) for many years. Despite the fact that it is widely accepted that STD is a long-term goal (WTO, 1992), or a concept that is constantly evolving (Inskeep, 1991) and intrinsically dynamic (Liu, 2003), there is no standard definition for “sustainable tourism destinations” (Tepelus and Cordoba, 2005). Lee (2001, p. 314) observes that, “Since destinations are unique, so are sustainable development issues in these destinations.” However, there is an emerging consensus that STD aims to minimize environmentally negative impacts, preserve cultural heritage, while at the same time provide learning opportunities, including positive benefits for the local economy and contributing to the enhancement of local community structures (Weaver, 2005). Practical evidence shows that STD can not only stop further deterioration, but it can also contribute towards the appreciation of  et al., 2005). Various mass tourism destithe destination (Aguilo nations are trying to move toward a more sustainable approach for the tourism development model (Fortuny et al., 2008; Rodríguez, 2008). Mass tourism was initially considered incompatible with the notion of sustainability (Krippendorf, 1987; Butler, 1991; Valentine, 1993), as they were seen as polar opposites by Pearce (1992). This idea was followed by the position of the “movement,” resulting in the demand to change mass tourism into more sustainable forms (Cohen, 1987; Butler, 1990), and finally to the idea of “convergence” between the two types (Inskeep, 1991). Inskeep (1991), Hunter, Green (1995), Clarke (1997), Swarbrooke (1999), Budeanu (2005), Tepelus (2005) highlight that all types of tourism can aim to be sustainable. Budeanu (2005, p. 90) asserts that, “Sustainable tourism cannot be achieved if mass tourism practices are not adjusted to integrate sustainability.” Hence, economic benefits for locals and the minimization of environmental and social repercussions could be complementary aims in every kind of destination: the key factor could be managing and controlling the tourism activity. That is the main reason why we aim to demonstrate that a more sustainable tourism policy and destination management could have a positive impact on destination competitiveness. Furthermore, two other aspects of sustainability need to be considered. Firstly, Liu (2003) and Kastenholz (2004) observe that sustainable tourism cannot be achieved without proper management of tourism demand. Notwithstanding, demand issues have often been neglected in the sustainable tourism debate. This may be due to the fact that the concept of sustainability was simply transposed from the broader concept of sustainable development, where the nature of demand is considered as a given condition. This is not the case for tourism e which is both supply and demand driven erequiring consideration of the demand factor in the explanation of TDC (Dwyer et al., 2003), and also in the case of small tourist destination competitiveness. Secondly, many authors agree that the competitive destination is the one that increases well-being for its residents in the long term (Crouch, Ritchie, 1999; Bahar, Kozak, 2007; Dwyer et al., 2003; Heath, 2002). In this sense, Bramwell, (1996) observed that “locals” need to be empowered in order to move towards sustainable tourism development: if tourism is an income-generating sector for local communities, and it can have a multiplier effect, then the host population has to feel empowered, fully participating in the development process, which could be even easier in a small community. Based on the previous analysis, sustainability is initially regarded here in the sense of sustainable tourism policy and management, but also in the senses of both empowerment of locals and

Please cite this article in press as: Cucculelli, M., Goffi, G., Does sustainability enhance tourism destination competitiveness? Evidence from Italian Destinations of Excellence, Journal of Cleaner Production (2015), http://dx.doi.org/10.1016/j.jclepro.2014.12.069

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responsible tourist demand. Consequently, we propose the following hypothesis: Hyp.1: In small-scale tourism destinations, there is a positive relationship between sustainability and tourism destination competitiveness (TDC).

3. Empirical analysis 3.1. The model Many models have been developed to explain destination competitiveness. Among the theoretical approaches, the model developed by Crouch and Ritchie (1999) and further refined (Ritchie, Crouch, 2000, 2003) is the best-known conceptual model of TDC. The model draws on a series of elements and distinguishes 36 attributes that play a decisive role in the TDC, which are then classified into 5 key factors. Dwyer and Kim (2003) translate the model of Ritchie and Crouch (2000) into specific indicators, identifying new key determinants as both demand conditions and situational conditions contribute to determine destination competitiveness. Our model extends the Richie, Crouch model (2000) and identifies seven key determinants of destination competitiveness that we use as a benchmark for our PC analysis. There are two primary resources that transfer the value directly to the tourist: 1. core resources and key attractors, and 2. tourism services. There are four resources that support their performances: 3. general infrastructures; 4. conditioning and supporting factors; 5. destination policy, planning, and development; and 6. destination management; e Finally, there is a seventh determinant: the demand factor. This separation between primary and supporting resources is based on the Flagestad and Hope (2001) configuration, which takes as a reference Porter (1985) value chain model and Stabell, Fjelstad (1996, 1998) studies.2 The set of indicators that are considered in the analysis of the competitiveness of a tourism destination are reported in the Appendix in Table A1, Column 2, under the headings “original model determinants.” The indicators have been derived from major empirical models of destination competitiveness (Sirse, Mihali c, 1999; Dwyer et al., 2003; Enright, Newton, 2004; Gomezelj, Mihali c, 2008), and extended utilizing insights from sustainable tourism literature and other conceptual models of destination competitiveness. We selected the indicators according to their political relevance as suggested by Miller (2001); furthermore, they are tailored to fit the group of small Italian tourism destinations, as there is no universal set of competitiveness indicators that are always applicable to all destinations (Enright, Newton, 2004; Gomezelj, Mihali c, 2008). From a sustainability perspective, the indicators included in previous empirical models of destination competitiveness do not appear to be entirely relevant. This is particularly evident for the set of indicators in the Sirse, Mihali c's and Enright, Newton's models, which do not seem to place enough emphasis on the social, cultural, and economic dimensions of sustainability. For this reason, almost half of the proposed indicators refer directly to sustainability issues (see Column 3 of Table A1 in the Appendix).

2 Ritchie and Crouch (2000) lump together two subcomponents under the label “supporting factors and resources”: “hospitality” and “infrastructure.” In this model, they are regarded as separate determinants from the “conditioning and supporting factors,” as many authors (Pearce, 1981; Murphy, 1985; Inskeep, 1991; Gunn, Var, 2002) underscore the importance of these components, regarding them as separate main elements. Moreover, as in Dwyer and Kim (2003), the model contains a separate box for the “demand” factor.

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3.2. Measuring competitiveness: the dependent variable Various approaches explaining TDC can be distinguished in the literature. Indicators of destination competitiveness can be classified as either objective or subjective. Concerning the first category, studies such as Gooroochurn, Sugiyarto (2005), Cracolici, Nijkamp (2006), Zhang, Jensen (2007), Mazanec et al. (2007), Cracolici, Cuffaro, Nijkamp (2008a), (2008b), Craigwell, Worrel (2008), Croes (2010), Zhang et al. (2011), Pestana et al. (2011) make use of published secondary data in order to explain TDC. Quantitative data have often been used because it is perceived as more precise and accurate. However, Crouch (2010) points out that using quantitative data could present some risks. First, the volume of indicators could be massive and discouraging. Second, finding available data for each dimension of destination competitiveness would be very problematic. Third, many of the feature measures are multidimensional, abstract, or inaccurate. Fourth, indicators are not always quantifiable and may be necessarily subjective. Concerning the second categorydqualitative datadtwo approaches are found in tourism literature. In the first approach, competitiveness is explained using survey data of tourists' opinions and perceptions (Haahti, Yavas, 1983; Haahti, 1986; Javalgi et al., 1992; Driscoll et al., 1994; Kozac, Rimmington, 1998, 1999; Botha et al., 1999; Kozak, 2002; Bahar, Kozac, 2007; Cracolici, Nijkamp, 2008; Mechida et al., 2010). A second approach is based on the empirical evaluation of several subjective indicators of tourism competitiveness, surveyed on key tourism stakeholders (Sirse, Mihali c, 1999; Faulkner et al., 1999; Dwyer et al., 2003, 2004; Kim, Dwyer, 2003; Enright, Newton, 2004, 2005; Gomezelj, 2006; Kaynak, Marandu, 2007; Gomezelj, Mihali c, 2008; Lee, King, 2009; Lee, Chen, 2010; Bornhorst et al., 2010; Crouch, 2010; Dwyer et al., 2012). Enright and Newton (2004) and Gomezelj and Mihalic (2008) assert that the understanding of people who have significant knowledge of what makes a tourism destination competitive can supply helpful information for analyses such as this. In this paper, we follow this methodological approach. As for the measure of competitiveness, TDC has been initially measured by indicators such as arrivals, bed-nights, revenues, or market share, as competitiveness was defined as, “the ability of a destination to maintain its market position and share and/or to improve upon them through time” (D'Harteserre, 2000, p. 23). However, Ritchie and Crouch (2000, p. 5) claim that, “Competitiveness is illusory without sustainability. To be competitive, a destination's tourism development must be sustainable, not just economically and ecologically, but socially, culturally, and politically as well.” They define TDC as, “The ability to increase tourism expenditure, to increasingly attract visitors while providing them with satisfying, memorable experiences, and to do so in a profitable way, while enhancing the well-being of destination residents and preserving the natural capital of the destination for future generations” (Ritchie and Crouch, 2003, p. 2). This is in line with Buhalis (2000), who identifies four main objectives for a competitive destination: enhance the long-term prosperity of local people; maximize visitors' satisfaction; maximize profitability of local businesses and generate multiplier effects; and, optimize tourism impacts. This also acknowledges the view of Müller (1994), Hunter (1995) and others who recognize that a competitive destination pursues and establishes the right balance on the following different objectives: optimum satisfaction of guest requirement, subjective well-being of the residents, economic health, unspoilt nature, and healthy culture. We follow this approach in measuring TDC of small-tourism Italian destinations as we think that these views better capture

Please cite this article in press as: Cucculelli, M., Goffi, G., Does sustainability enhance tourism destination competitiveness? Evidence from Italian Destinations of Excellence, Journal of Cleaner Production (2015), http://dx.doi.org/10.1016/j.jclepro.2014.12.069

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the essence of sustainability of the tourist destinations. This is why we measure TDC using the following indicators: - tourism has resulted in positive environmental impacts for the destination; - tourism has resulted in positive socio-cultural impacts for the local community; - tourism has resulted in positive economic impacts for the local community; - tourists were satisfied with their overall travel experience in the destination. Details on the procedure we followed to define the dependent variable(s) are provided in Section 3.5 below. 3.3. The case study Despite its relevance in the global tourism industry, Italy appeared very rarely as a case study in international tourism literature (Formica, Uysal, 1996; Mazzocchi, Montini, 2001). Italy is one of the world's leading tourism destinations, with more UNESCO World Heritage Sites (47) than any other country on the planet. In terms of performance, Italy ranks fifth worldwide by the number of international tourist arrivals and also fifth by the amount of international tourism receipts (UNWTO, 2012). Furthermore, Italy ranks second worldwide for accommodation capacity, after the United States. It was only recently that a few research studies started to concentrate on Italian destinations (Cracolici, Nijkamp, 2008; Cracolici et al., 2008a; Guizzardi Mazzocchi, 2010; Massidda, Etzo, 2012); however, almost all of these studies have focused on a regional or country level, leaving the town level of the analysis totally unexplored. The international literature shows very little empirical work done on small tourism destinations, and TDC research applied to small towns or villages is almost non-existent. The majority of studies look at competitiveness for a single country or a group of countries (e.g., Ahmed, Khron, 1990; Bahar, Kozak, 2007; Dwyer et al., 2003, 2004, 2012; Gooroochum, Sugiyarto, 2005; Haahti, 1986; Haahti, Yavas, 1983; Kaynak, Marandu, 2007; Kim, Dwyer, 2003; Kozak, Rimmington, 1999; Lee, Chen, 2010; Mazanec et al., 2007; Miller et al., 2008; Gomezelj, Mihalic, 2008; Sirse, Mihalic, 1999; Zhang, Jensen, 2007). Other empirical studies concentrate on islands (Croes, 2010; Mechinda et al., 2010), big cities (Enright, Newton, 2004, 2005; Minghetti, Montaguti, 2010), particular types of destinations (Botha et al., 1999; d’Hautserre, 2000; Lee, King, 2009), famous resort destinations (Kozak, 2002), and regions/provinces (Faulkner et al., 1999; Cracolici, Nijkamp, 2008; Zhang et al., 2011; Pestana et al., 2011). Italy has thousands of touristic sites, hundreds of medieval villages and historic churches, and a great number of museums and archaeological sites, which are spread all over the country. The small destinationsdlocated on the mainland and at the seasidedperform quite well and have high-growth potential. They are rich in history and culture, with a well-developed tourism industry. However, they are also dependent on poor management and marketing support, with a lack of policy and regulation, infrastructures, and often low quality accommodation facilities (WEF, 2013; OECD, 2011). This is why we have created a unique dataset of Italian small “destinations of excellence”dboth from the mainland and from the coastdto study the role of sustainability on supporting tourist competitiveness in small tourist destinations. Our choice of small destinations aims at evaluating a typically neglected part of a country's tourist competitiveness, i.e., the role of small destinations

of excellence in the tourist industry. Even though Italy is known worldwide for its major cultural destinations and historical cities (e.g., Rome, Florence, Venice, Milan), a large share of total tourism flows is actually directed towards “minor” destinations, which account for a great part of the country's tourism structure (67.7% of international tourist arrivals and 75.3% of international bed nights).3

3.4. Data The data were collected by a web survey. The web survey required respondents to rate their own tourism destination's competitiveness on a 5-point Likert scale, on each one of the TDC indicators. Following Dwyer et al. (2003), respondents were asked to rate their destination against a reference group of destinations. Dwyer and Kim, (2003, p. 63) state, “It would be meaningless to ask respondents to give absolute ratings for any destination on any given attribute of competitiveness.” This is motivated by the fact that a given location is not competitive in a vacuum, but only when viewed against competing destinations (Kozak and Rimmington, 1999; Enright and Newton, 2004; Enright, Newton, 2005; Bahar, Kozac, 2007; Gomezelj, Mihali c, 2008). As a consequence, the web survey began by asking respondents to identify the main competitive locations (maximum 5). The questionnaire was pre-tested on 5 hotel managers, 5 tourism researchers, and 5 heads of public tourism offices. On the basis of the pre-test, some indicators were simplified and/or rewritten. Then, the final draft of the model was screened by a panel of both academics and practitioners. For each destination, two stakeholders were chosen: (one from the public sector and one from the private sector): the head of the tourism office and the head of the local hotel association. In small tourism destinations, in the absence of a hotel association, a hotel manager was contacted. They were first contacted by phone to explain the objective of the study, and afterwards a link to the webbased survey was sent to them. The sample selection was done by including the Italian “destinations of excellence;” specifically, small tourism destinations that have been awarded important international and national certifications. These destinations are clustered in four groups:  “Blue Flag” (117 municipalities in the sample), awarded by the Foundation for Environmental Education (FEE);  “Blue Sail” (295 municipalities), awarded by Legambiente;  “Orange Flag” (181 municipalities), awarded by the Italian Touring Club;  “The Most Beautiful Villages in Italy” (199 municipalities), awarded by the National Association of Italian Municipalities (ANCI). “Blue Flag” is an internationally recognized voluntary eco-label run by the Foundation for Environmental Education, which is awarded to beaches and marinas that satisfy environmental quality standards and management (3850 beaches awarded worldwide). In Italy, a similar award named the “Blue Sail” was introduced by Legambiente (the main environmental organization in the country) to recognize the most beautiful maritime locations. The “Orange Flag” and admission to “The Most Beautiful Villages in Italy”

3 Among the group of largest Italian destinations, the number of arrivals in 2009 ranged from about 2.5 mln for Florence to more than 8 mln for Rome. Conversely, in our sample the average number of arrivals in 2009 ranged from 11,960 for the “Most Beautiful Villages” to 121,019 for the “Blue Flags,”devidence that describes a totally different model of tourism.

Please cite this article in press as: Cucculelli, M., Goffi, G., Does sustainability enhance tourism destination competitiveness? Evidence from Italian Destinations of Excellence, Journal of Cleaner Production (2015), http://dx.doi.org/10.1016/j.jclepro.2014.12.069

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certification are awarded to municipalities on the mainland with a population under 15,000 people. They require satisfying a number of prerequisites, both structural (such as the quality of public and private building heritage), and general such as regarding the quality of life in the village in terms of activities and services provided for the people. It is important to note that all these destinations are characterized by the supply of high-quality tourism services based on factors of excellence that are also related to sustainability issues. In that sense, the destinations sampled are mostly representative of those destinations that have already decided to compete through quality services and sustainability, as opposed to price, mass marketing, or distribution channels. A total of 550 usable surveys were received from 370 municipalities. A reliability analysis (Cronbach's alpha) was performed to test the trustworthiness and internal consistency of the survey instrument. The scale is internally reliable (alpha ¼ 0.89) and meets the minimum standard suggested by Nunnally (1978) and Pallant (2001). The number of respondents for each type of municipality is shown in the first row in Table 1 (Table 2). The sum of the number of respondents in the first row is greater than the total number of respondents (550) because some municipalities were awarded 2e3 concurrent certifications.4 The number of tourist arrivals has grown from 2004 to 2009 for each category, except for “Beautiful Villages.” Coastal municipalities (awarded with “Blue Flags” and “Blue Sails”) had a higher mean number of tourist arrivals in 2009: the mean is 121,000 tourists for the “Blue Flags” and 76,000 for the “Blue Sails,” while in the inland destinations (“Orange Flags” and “Beautiful Villages”) the average is fewer than 20,000 tourists. They also have a significantly higher number of bed places. For each group, the mean number of national and international tourist arrivals is much higher than the median number, as there are some municipalities with anomalies or extreme values (unusually high values of visitors). The average length of stay is greater in the coastal destinations (approximately 6 days) as compared to inland destinations (less than 4 days). International tourist arrivals make up about 35 percent of the total number of visitors in coastal municipalities, compared to 42% in the “Orange Flags” and 29% in the “Beautiful Villages”. A major problem is that these destinations have not been able to attract a significantly higher number of international tourists who may have great interest in small inland destinations that are culturally and historically rich; from 2004 to 2009 the percentage of international tourists decreased for all groups except the “Beautiful Villages” (where there were no significant changes). The average number of international tourist arrivals even went down slightly from 2004 to 2009 in the “Beautiful Villages” and “Blue Sails.”

3.5. Methodology To reduce the large set of variables to a smaller set, a Principal Component Analysis (PCA) was performed using STATA version 11.0 on the responses to the 64 questionnaire items measuring destination competitiveness. The PCA is a useful technique for multivariate statistics, and it was also used in the TDC research (Dwyer

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Specifically, 54 municipalities have been awarded both “Blue Flag” and “Blue Sails;” 20 municipalities with both “Orange Flag” and “Beautiful Village.. In some cases, the municipalities have an inland historic center but the territory extends to the sea: 2 municipalities have been awarded “Blue Flag” and “Beautiful Village;; 10 municipalities received “Blue Sail” and “Beautiful Village;” and 4 municipalities received “Blue Flag,” “Blue Sail,” and “Beautiful Village”.

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Table 1 Italian “destinations of excellence”. Small tourism destinations that have been awarded important international and national certifications. Descriptive statistics. 2004e2009.

No. of respondents Population 2009. Area (sq km) Elevation (m) Bed places 2004 e Mean no. Bed places 2009 e Mean no. Arrivals 2004 e Mean no. Arrivals 2009 e Mean no. Average length of stay 2009 e Mean no. of days National arrivals 2004 e Mean no. National arrivals 2009 e Mean no. National arrivals 2009 e Median no. International arrivals 2004 e Mean no. International arrivals 2009 e Mean no. International arrivals 2009 e Median no.

Orange Flags

Beautiful villages

Blue Flags

Blue Sails

131 4680 63.86 413 953 1012 13,515 15,507 3.65

156 4251 49.03 410 731 813 12,366 11,960 3.84

106 17,995 60.50 72 10,187 10,601 107,225 121,019 6.10

235 13,686 70.26 94 6315 6515 72,004 76,467 5.52

7634 9009 3361

8853 8462 3788

67,445 78,006 43,985

45,730 50,342 22,369

5880

3513

39,780

26,275

6498

3497

43,013

26,124

1153

675

10,641

6462

Source: Elaboration on data obtained from Istat.

et al., 2004; Cracolici, Nijkamp, 2008). We have followed the Dwyer et al. (2004) approach. Principal component analysis produced 13 components, which explain 69.6% of the total variance. The list of items included in each component is reported in Table A1 in the Appendix. Dwyer et al. (2004) obtained similar results after applying a PCA to a similar set of indicators. Two statistics are used to test if the factor analysis is appropriate for this study (Hair et al., 1995). First, the KaiserMeyer-Olkin (KMO) statistic is calculated as 0.78 which is statistically significant. Second, Barlett's test of sphericity is conducted, yielding a significant Chi-Square value in order to test the significance of the correlation matrix (c ¼ 91.3, Sig. < 0.001). Findings of both tests suggested that the factor analysis was appropriate for this study. Finally, Cronbach's Alpha was also computed for the items that formed each component. All the coefficients indicate that these multiple measures are reliable for measuring each

Table 2 Principal component analysis. Component solution

Amount of variance explained

Refers directly to sustainability

Component 1: Sustainable Tourism Policy and Destination Management Component 2: General Infrastructures Component 3: Events and Activities Component 4: Responsible Tourist Behaviour Component 5: Local empowerment in the tourism sector Component 6: Destination Marketing Component 7: Quality of environmental and natural resources Component 8: Gastronomy Component 9: Historical and Artistic Features Component 10: Price e Quality relationship Component 11: Tourist Accommodations Component 12: Emphasis on maximising local economic development

35.94

Sust.

5.06 3.56 3.56

Sust.

3.28

Sust.

2.99 2.73

Sust.

2.29 1.93 1.88 1.69 1.65

Sust.

Source: Elaboration on survey data.

Please cite this article in press as: Cucculelli, M., Goffi, G., Does sustainability enhance tourism destination competitiveness? Evidence from Italian Destinations of Excellence, Journal of Cleaner Production (2015), http://dx.doi.org/10.1016/j.jclepro.2014.12.069

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construct. To study whether, and to what extent, explanatory variables identifying the components of destination competitiveness from the PCA affect TDC indicators, we estimate the following model by ordinary least square (OLS):

Yi;201109 ¼ a0 þ a1 Componentsi;200409 þ a2 Controlsi þ yi;t where the dependent variable Y, which measures competitiveness, is given by the four indicators listed below: i) environmental impacts (“tourism has resulted in positive environmental impacts”); ii) socio-cultural impacts (“tourism has resulted in positive socio-cultural impacts”); iii) economic impacts (“tourism has resulted in positive economic impacts”); iv) tourists' satisfaction (“tourists were satisfied with their overall travel experience”). Respondents were asked to indicate their agreement with these four items via 5-point Likert-type scales, ranging from 1 being “Strongly Disagree” to 5 being “Strongly Agree”. The answers to these questions were used as dependent variables in the regression model. We used the population, elevation, area size, zone type, municipality type (as classified by Istat, The Italian National Institute for Statistics) and the location (coastal or inland) as controls in the estimates. Data on the population, elevation, area, municipality type, and type of zone type were obtained from Istat. The model has a dependent variable measured as average values for the period 2009e2011, and the vectors of explanatory factors measured as average values for the period 2004e2009.

4. Results 4.1. Results of the Principal Component Analysis (PCA) The results of the PCA as shown in Table 1 display a coherent structure of the interrelations among the competitiveness indicators. The amount of variance explained by each component is specified in Column 1. Column 2 shows which component refers directly to sustainability. A total of 13 components can be extracted from the variables defined above, which explain 69.6% of the total variance. The component composed of “visitor satisfaction management” and “level of repeat visitors” is dropped from consideration, as factors defined by only two observed variables are considered to be conceptually weak factors and not desirable (Mulaik, 2010). As is common in PCA, the first component comprises a large number of variables and is fairly general. The list of indicators included in the components are shown in the Appendix in Table A1. The results produced by the PCA are briefly discussed below. Component 1: Sustainable Tourism Policy and Destination Management (35.9%). As is frequently encountered in PCA, the first component consists of many variables / 17 in this case, accounting for a high percentage of the variance (35.9%). This mixed grouping encompasses the notion of sustainable tourism policy and destination management. It is interesting to note that respondents do not clearly perceive a distinction between destination management and tourism policy, but they distinguish between sustainable attributes of tourism policy/management and attributes linked to marketing and general issues. Tourism policy and destination management are related concepts: tourism policy sets a framework within which a competitive destination can be developed long term, while destination management has a shorter time horizon. There is extensive literature on

tourism planning (Gunn, Var, 2002; Murphy, 1985; Hall, 2000; Inskeep, 1991) and destination management (Laws, 1995; Ritchie, Crouch, 2003; Weaver, Lawton, 2006; Buhalis, Costa, 2006; Wang, Pizam, 2011). The great majority of the basic indicators here refer directly to sustainability issues, such as the integrated approach to tourism planning, the collaboration and the community participatory process, the stewardship of the natural environment, the monitoring and minimizing of the negative tourism impacts, and the public commitment to tourism and to tourism education. Many authors recognize these elements as closely related to sustainability (Godfrey, 1998; Ritchie, Crouch, 2003) and the key role a coordinated approach plays to the planning and management of a sustainable destination. Murphy (1985), Godfrey (1998), Bramwell (1996), Bramwell, Sharman (1999) underscored the need for a community participatory process in sustainable tourism planning. Many authors (among others, Mieczkowski, 1995; Mihali c, 2000; Hassan, 2000), organizations, and international conferences (as an example, the Lanzarote Charter, from the World Conference on Sustainable Tourism, 1995; Agenda 21 from WTTC, WTO, Earth Council, (1995)) recognize that STD must be ecologically sustainable in the long term. This is a problem particularly relevant to the Italian destinations, as stressed by the WEF's Travel & Tourism Competitiveness Report ranking national tourism competitiveness through a global index and a number of sub-indexes (WEF, 2013). Although various limitations have been identified by Crouch (2007) in the reliability of these indexes, it can provide a starting point from which to identify the main problems and weaknesses of the Italian tourism system. These include policy rules and regulations, where Italy ranks 100th out of 140 countries, and an insufficient focus on developing the sector in an environmentally sustainable way: Italy ranks 119th in the sustainability of tourism industry development. An OECD study on Italian tourism systems emphasized the need for a long-term, integrated, coherent and efficient national tourism strategy in Italy, in partnership with all private- and public-sector stakeholders (OECD, 2011a). Another OECD Study on sustainable tourism and local development at the regional level in Italy underscores the need for a better-developed evaluation framework on tourism and local development policy, and a more focused training and educational framework on the tourism sector (OECD, 2011b). In the context of this general lack of coordinated planning and scant attention devoted to issues related to sustainability, it is even more difficult for small destinations to pursue integrated policies aimed at sustainability. Component 2: General Infrastructures (5.06%). The second component comprises 8 items, 6 of which lend themselves to the infrastructure label (road system and transportation, communication system, and medical care facilities), a critical component of successful tourism development (Kaul, 1985; Prideaux, 2000; Khadaroo, Seetanah, 2007). Compared to some of the main tourism competitors in Europe, Italy is lagging behind in terms of recent infrastructure development (OECD, 2011a). WEF ranks its quality of air transport infrastructure 67th and international air transport network 81st out of 140 countries; Italy is ranked 57th in road quality and 110th in ground transportation network (WEF, 2013). Italy has an abundance of small tourism destinations spread all over the territory, particularly in hilly and mountainous areas. Due to this geographical dispersion, infrastructures are vitally important for the development of tourism in small inland locations. It should be noted that tourist visitation generates additional demands on communication infrastructure and physical infrastructure such as water supply, sanitation, and waste systems. More broadly, tourist

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visitation also increases demand for public services such as health facilities. Component 3: Events and Activities (3.56%). The third component contains four items, and has been titled “events and activities.” Events, leisure activities, nightlife, and shopping are often the primary motivations for visiting a destination (Ritchie and Crouch, 2003). This explains the high academic interest in events management, and the publishing of several books on this subject (Getz, 1997; Shone, Parry, 2001; Van der Wagen, 2002; Yeoman et al., 2003; Raj et al., 2008; Allen et al., 2008; Bowdin et al., 2010; Robinson et al., 2010). The assortment of events and activities is of rising significance due to visitors' ever-increasing search for the ‘real’ and ‘authentic,’ seeking experiences that overtake the more inactive tourism of the past (Poon, 1993). Events could extend the seasonal life especially in tourism destinations with an inbuilt seasonality (Getz, 1989, 1991; Hall, 1987; Faulkner, 2003), and this is the case with small coastal destinations in Italy. Small tourism Italian centers abound with historical and cultural events, pageants, festivals, craft fairs, and culinary festivals year round. Nonetheless, they are not exploited for tourism purposes; they are usually unknown and inaccessible for tourists (only attended by residents of nearby villages). They could generate high levels of interest for visitors and several advantages. Small Italian communities are very rich in handicraft products in the fields of textiles, wood, ceramics, precious metals, and others. Notwithstanding, many handicraft shops are closing due to the depopulation of historic centers. Shopping tourism can be seen as a vehicle to revitalize both traditional urban centers and rural areas (JansenVerbeke, 1991). Component 4: Responsible Tourist Behavior (3.56%). “Tourists' interest in local heritage,” “tourists' respect for local culture,” and “environmental awareness” are the indicators included in this component. These three characteristics refer to the notion of responsible tourist behavior and are directly connected with the sustainable tourism concept (Swarbrooke, 1999). Sharpley (1994: 84) gives a description of the responsible tourist as the person who “seeks quality rather than value, is more adventurous, more flexible, more sensitive to the environment and searches for greater authenticity than the traditional, mass tourist.” Budeanu (2005) claims that travellers need to be educated in order to increase their awareness about the environmental and socio-cultural sensitivities of the destination, and the potential impacts of their consumption. These issues need to be especially considered in small Italian destinations where interactions between tourists and local communities can be particularly high, and thus so can the social, cultural, and environmental impacts of tourism. Tourism can change small local communities, and so tourism policy must be encouraged to carefully examine the social and environmental implications of tourism development in such destinations. Component 5: Local empowerment in the tourism sector (3.28%). This component is represented by four variables comprising the management capabilities and professional skills of the business operators, the use of IT, and the presence of local tourism firms. Choy (1995) observes that the prevalence of hotels, restaurants, and bars in tourism may induce us to think that the tourism industry is relatively low skilled. The great changes that have happened in tourism have made organizations more competitive and customers more demanding. Bramwell (1996) state that all stakeholders need to be empowered in order to move towards sustainable tourism development. Local empowerment “is an important way of affecting impacts in ways that are benign to destination communities” (Wall and Mathieson, 2006: 307). The Italian tourism supply is dominated by family-owned companies (OECD, 2010), especially in small tourism centers like

7

the sample surveyed for this study; it is for this reason that it is essential to increase the capacity and capability of people working in the tourism industry. Baum (1995) argues that skill levels and human resource management play a strategic role in the challenge to improve the quality of the tourism product, enhancing the market position of tourism destinations. Component 6: Destination Marketing (2.99%). The three indicators referring to the destination marketing components are: “effectiveness of destination positioning,” “market segmentation,” and “awareness of the destination.” OECD (2001a, p. 109) claims that, “Italian tourism promotion is not sufficiently performance-oriented” and that, “Regional structures for developing and promoting tourism products are often too dispersed and they sometimes lack the capacity to operate effectively on foreign markets. (…)” Evidence indicates that there is a lack of clarity and coordination on promotional activities between the government, regions, provinces, and municipalities” (OECD, 2011a, p. 17). Italy is ranked 116th out of 140 countries in terms of marketing effectiveness attracting tourists, by the WEF (WEF, 2013). One of the main problem with Italian tourism is the fragmentation of promotional activities abroad, between the twenty Italian regions and a multiplicity of actors; this often leads to a dispersion of resources and overlapping roles and responsibilities (Club The European House-Ambrosetti, 2008). The lack of a clear tourism marketing strategy at the national level has resulted in uncoordinated strategy in the country's territories. In this context, it is difficult to implement successful marketing campaigns in small locations such as those in our sample. Component 7: Quality of environmental and natural resources (2.73%). “Natural resources” and “environmental quality” comprise this component. Natural resources can be considered among the most important resources for a tourism destination (Ritchie, Crouch, 2003; Dwyer et al., 2003). The quality of the environment is related to the attractiveness of the destination. Tourism and the environment are in a very complex relationship (Butler, 2000). Mihalic (2000) points out that a well-managed destination environment is not only good for STD but is also the best destination advertisement. Italy is one of the world's leading tourism destinations, with outstanding natural resources. Italy's natural beauty offers magnificent beaches with 7458 km of coastline, and 6701 km of ski runs in the Alps and in the Apennine mountains. Many small inland destinations, and also hundreds of small seaside destinations where tourism is well-developed but highly seasonal, have high growth potential in Italy. Formica & Uysal, examining the Italian tourism system in 1996, observed an important trend towards a ‘high-qualitative learning’ type of tourism with a growing interest in green, rural, and appealing places. Italy's small realities are in an excellent position to benefit from this trend. The attribute “safety” is also included in this component. A probable explanation is that this element was interpreted as the absence of natural calamities. This is most likely related to the fact that security is not a problem in the small destinations surveyed. Conversely, landslides, earthquakes, floods, and other natural disasters occur with increasing frequency in Italy, as an high percentage of small Italian municipalities was estimated to be at risk of landslides and floods.5 This makes safety a crucial issue for the group of small destinations of excellence.

5 The recent natural disaster occurred in the touristic town of Senigallia, one of the most known small Italian “destinations of excellence”, witnesses the risk faced by many small tourist destinations in the country. See http://www.neurope.eu/ article/italys-senigallia-mourns-victims-flooding.

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Component 8: Gastronomy (2.29%). “Gastronomy and typical products” (first determinant) and “food services quality” (second determinant) are 2 of the 3 variables incorporated in this component. The third variable, “local supply of goods” (fourth determinant), highlights the association between authenticity of a tourism destination and local products and producers. Systematic research on gastronomy and tourism has been neglected until recently. Gastronomy is one of the most important elements affecting the authenticity of a tourism destination. (Sedmak and Mihali c, 2008). Hjalager and Richards (2002) explore the role of gastronomy as a source of regional identity, and also a source of economic development related to tourism. Tourists are increasingly interested in consuming dishes and food products that are characteristic of the area they are visiting. Italy is known worldwide for the richness and variety of its gastronomy. Small Italian destinations have much to offer in this regard. An example of a sustainable and attractive form of tourism that perfectly fits these realities is wine tourism (Zanni, 2004). In a study about the importance of destination images held by U.S.-based travel intermediaries, the most frequent response for Italy was “food, cuisine, pasta, wine,” followed by “historic, ancient ruins, archeology, old” (Baloglu and Mangaloglu, 2001). Gastronomy is recognized worldwide as an important part of the local Italian culture that the tourist can experience. This can be a crucial element in the promotion of tourism in small places such as those surveyed, as well as a means of local economic development. Component 9: Historical and Artistic Features (1.93%). This component is associated with 3 variables: “historical and archaeological sites,” “artistic and architectural features,” and “cultural attractors.” “Culture, broadly defined, is a second very powerful dimension of destination attractiveness” (Ritchie and Crouch, 2003:115). In the last two decades, many texts were published about this subject of increasing interest (Richards, 1996, 2007; Richards, Munsters, 2010; Boniface, 1995; Walle, 1998; McKercher, du Cros, 2002; Sigala, Leslie, 2005; Smith, 2003, 2009; Smith, Robinson, 2006). A destination's cultural and heritage attractors provide a significant force for the potential visitor (Ritchie, Zins, 1978; Cohen, 1988; Prentice, 1993; Murphy et al., 2000). A high proportion of international travellers are now considered cultural tourists (Richards, 1996). This has led to excessive pressure on Italy's vulnerable heritage cities, menacing not only the vitality of the local economies, but also the integrity of the heritage and the residents' quality of life (Van der Borg et al., 1996). Italy has more UNESCO World Heritage sites (47) than any other country. Italy also boasts thousands of touristic historical sites, 4739 museums, 393 archaeological sites, hundreds of medieval villages, and historic churches, which are distributed all over the country (FareAmbiente, 2011). This is the reason why small Italian realities with an abundance of highquality cultural and natural heritage are in a very strong competitive position. Component 10: Price-quality relationship (1.88%). This component is composed of three indicators. The first two relate to the value for money of accommodations and in the entire tourism experience at the destination; the third one is about the destination's links with the major origin market. Quality orientation is particularly important in the destinations surveyed, which often focus on niche tourism. Italian destinations are usually perceived offering a good-quality experience (Baloglu and Mangaloglu, 2001). A major element of attractiveness for a tourism destination is also the cost of using tourist facilities and services, compared to the costs at similar destinations (Inskeep, 1991). The price tourists pay to visit and enjoy a destination experience plays

a key role in determining the destination choice travellers make (Crouch, 1992). This seems to be one of the major problems faced by Italian tourism: WEF ranks its price competitiveness in travel and tourism industry 134th out of 140 countries in the world (WEF, 2013). Component 11: Tourist Accommodations (1.69%). This component includes “quality,” “quantity,” and “environmental friendliness” of tourist accommodations. Even if a destination possesses a great quantity of resources and attractors, it requires the support of other elements in order to be adequate for receiving tourists (Gunn and Var, 2002). Accommodation is probably the most important component of a good holiday. Hospitality has been defined as “the very essence” of tourism (Page, 2003: 254) and has a very important role in the generation of economic benefits for the community (Cooper et al., 1998). According to Go et al. (1994), there is a mutual influence between a destination's economic growth and the hotels' performance. The Italian hotel market is the second biggest in the world; nevertheless, it appears extremely fragmented and relatively low quality: 32% of the hotels are one or two stars (Istat, 2011). Chain penetration is minimal in Italy accounting for just 6% of the room stock (Mintel, 2004). The Italian tourism supply is dominated by family-owned companies. This occurs even more frequently in smaller destinations. Italy's hotel industry has one of the highest proportion of micro (1-9 employees) and small companies (<50 employees) in the EU: 62.3% have fewer than 20 employees, compared to 54.8% in France, 24.7% in Spain, and 20.4% in the UK (OECD, 2010). There are advantages to such an industrial structure such as market niche advantages, flexibility, and personalized services,; however, on the negative side, small family-owned and -managed hotels often suffer from limited marketing skills, lack of planning, gaps in human resource management, and financing difficulties (Buhalis, 1994; Buhalis and Main, 1998; Weiermair, 2000). These results are also confirmed by empirical studies on Italian small destinations that show that most family-owned hotel businesses have limited marketing skills and are operated with little capital and weak management (Goffi, 2010). Component 12: Emphasis on maximizing local economic development (1.65%). This component refers to three variables concerning the public sector's commitment to maximizing tourism's economic impact on local communities. They are linked to the sustainable concept of raising the long-term well-being of tourist destinations' residents (Crouch, Ritchie, 1999; Bahar, Kozak, 2007; Dwyer et al., 2003; Heath, 2002). Hunter (1995), Buhalis (2000), Ritchie, Crouch (2000) identify the enhancement of long-term prosperity in local communities as one of the main objectives for a competitive destination. Tourism could sustain the long-term economic development of small, inland Italian tourism realities becoming an important source of job opportunities and revenues, especially considering this long period of economic crisis. It is eloquent, in this regard, that one of the world's leading international leisure travel groups purchased an entire village in the heart of Tuscany for revitalization and restoration in a 250million Euro investment.6 This is the first project of its kind, and reveals the economic potential of the small tourism destinations in Italy.

6 The German tourist brand TUI AG purchased the village of Castelfalfi in order to build a unique resort development comprised of luxury hotels, residential and resort real estate, restaurants, retail boutiques, meeting facilities, golf, a winery, olive oil production, and recreational facilities (http://www.tui-group.com/en/ media/press_releases/archiv/2011/20110606_tuscany_castelfalfi).

Please cite this article in press as: Cucculelli, M., Goffi, G., Does sustainability enhance tourism destination competitiveness? Evidence from Italian Destinations of Excellence, Journal of Cleaner Production (2015), http://dx.doi.org/10.1016/j.jclepro.2014.12.069

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Table 3 Regression results e Dependent variable: i) Environmental Impact, ii) Social Impact, iii) Economic Impact, iv) Tourist Satisfaction e OLS estimates. Environmental impact

Social impact

Economic impact

Tourist satisfaction

Environmental impact

Social impact

Economic impact

Tourist satisfaction

0.077 (0.074) 0.223*** (0.075) 0.064 (0.072) 0.040 (0.072) 0.098 (0.073) 0.095 (0.076) 0.033 (0.073)

0.081 (0.058) 0.224*** (0.059) 0.300*** (0.056) 0.086 (0.056) 0.069 (0.057) 0.006 (0.059) 0.202*** (0.057)

0.133*** (0.052) 0.135*** (0.052) 0.258*** (0.050) 0.026 (0.050) 0.019 (0.051) 0.048 (0.053) 0.122** (0.051)

0.089** (0.036) 0.023 (0.037) 0.051 (0.035) 0.166*** (0.035) 0.044 (0.036) 0.203*** (0.037) 0.086** (0.035)

0.046 (0.041) 0.165*** (0.042) 0.046 (0.040) 0.044 (0.040) 0.107*** (0.040) 0.125*** (0.042) 0.021 (0.040)

0.054 (0.038) 0.212*** (0.038) 0.293*** (0.036) 0.087** (0.036) 0.057 (0.037) 0.007 (0.038) 0.197*** (0.037)

0.120*** (0.039) 0.104*** (0.040) 0.248*** (0.038) 0.034 (0.038) 0.029 (0.039) 0.068* (0.040) 0.108*** (0.038)

0.873*** (0.035) 0.177*** (0.037) 0.059* (0.035) 0.184*** (0.037) 0.022 (0.035) 3.338*** (0.250) 550 0.818 157.22 0.000

0.768*** (0.040) 0.143*** (0.041) 0.106*** (0.040) 0.199*** (0.041) 0.141*** (0.040) 3.771*** (0.283) 550 0.700 85.57 0.000

0.328*** (0.037) 0.023 (0.038) 0.108*** (0.037) 0.318*** (0.038) 0.374*** (0.036) 3.928*** (0.259) 550 0.490 21.75 0.000

0.253*** (0.038) 0.288*** (0.040) 0.166*** (0.038) 0.181*** (0.040) 0.005 (0.038) 3.808*** (0.271) 550 0.599 40.24 0.000

Factors not directly related to sustainability Component 2 Component 3 Component 6 Component 8 Component 9 Component 10 Component 11

0.120 (0.077) 0.096 (0.078) 0.029 (0.075) 0.161** (0.075) 0.059 (0.076) 0.163** (0.079) 0.100 (0.076)

Sustainability factors Component 1 Component 4 Component 5 Component 7 Component 12 _cons Number obs. Adjusted R2 F(5, 531) Prob > F Legenda:

3.451*** (0.529) 550 0.051

3.793*** (0.509) 550 0.014

3.773*** (0.400) 550 0.204

3.993*** (0.354) 550 0.174

Factors not directly related to sustainability

Sustainability factors

Component Component Component Component Component Component Component

Component Component Component Component Component

2 3 6 8 9 10 11

General Infrastructures Events and Activities Destination marketing Gastronomy Historical and artistic features Price-quality relationship Tourist accommodation

1 4 5 7 12

Sustainable tourist policy and destination management Responsible tourist behaviour Local empowerment in the tourism sector Quality of environmental and natural resources Emphasis on maximising local economic development

Note: ***p < 0.01, **p < 0.05, *p < 0.1. Controls included in the estimates: location (coastal/not coastal), type of municipality, touristic zone, elevation, population.

4.2. Regression results Table 3 reports estimated results of the relationship between the TDC indicators (environmental, social, economic impacts, and tourists' satisfaction) and the components of destination competitiveness resulting from the PCA. The results show that the factors directly referring to sustainability (F1: Sustainable Tourism Policy and Destination Management; F4: Responsible Tourism Behavior; F5: Local Empowerment in Tourism Industry; F7: Quality of Environmental and Natural Resources; F12: Emphasis on Maximizing Local Economic Development) have a positive role in all the TDC indicators, and that their impact is larger in value than other components that are not related to sustainability. This result strongly supports the relevance of sustainability as a crucial determinant of the competitiveness of small tourist destinations. The F-tests at the end of Table 3 demonstrate the improvement in the model's validity from the inclusion of the set of sustainability factors (the null is that all the variables added have a zero coefficient). It is evident that the inclusion of variables/factors related to sustainability not only

increases the overall validity of the estimated relationship, but also permits to identify which is the individual contribution of the single variable/factor to the competitiveness dependent variables. This evidence supports our hypothesis that sustainability plays a crucial role in explaining the competitiveness in small tourist destinations. The first PCA component, “sustainable tourism policy and destination management”, is by far the variable with the highest impact on the model, regardless of the dependent variable used. This result supports the hypothesis that a sustainable tourism policy has great relevance in improving the competitiveness of a small tourism destination. In small Italian destinations, the focus on developing the sector in a sustainable way (with a more coordinated approach among public sector units and public and private stakeholders) could lead to a more competitive tourism system. Other factors that relate directly to sustainability also play a positive role, thus corroborating the results we got from the first component. In the model with the environmental impacts as dependent variables, only the emphasis on maximizing local economic development is irrelevant. This was an expected result, given

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the weak association of this indicator with the environmental issue. Similarly, the components named “responsible tourist behavior” and “emphasis on maximizing local economic development” are irrelevant when the dependent variables are, respectively, the economic impact and the tourists' satisfaction. In all other cases, each of the major indicators show a significant relationship with the dependent variable, a result that is in line with the hypothesis that sustainability is a crucial determinant of TDC in small destinations. As far as factors that not related to sustainability are concerned, results are mixed and in line with ex-ante expectation in some cases: destination marketing positively affects economic impact and tourists' satisfaction; tourist accommodations positively affects almost all the dependent variables except for the social impacts; general infrastructures only help tourists' satisfaction and, to a lesser extent, the environmental impacts; finally, events and activities are mainly good for social and economic impacts. 5. Conclusions The aim of the paper was to analyze the impact of sustainability on tourist destination competitiveness in small destinations. We extended the Ritchie and Crouch (2000) model by including a list of sustainability indicators and we applied the model to a unique dataset of small Italian “destinations of excellence”, e.g., destinations that have been awarded important international and national certifications. To reduce the large set of dependent variables to a smaller set we performed a Principal Component Analysis (PCA); factor components were used as main independent regressors in the subsequent regression analysis. The empirical results show: i) a positive relationship between factors related to sustainability and TDC indicators; and, ii) the impact of the factors that closely refer to sustainability is larger in value than other components not directly related to sustainability. This evidence supports the hypothesis that sustainable tourism development is not only good for preserving the ecologic balance of a tourism destination, but also for improving its competitiveness. “Sustainable tourism policy and destination management” is by far the variable with the highest impact in the model. This result is likely to help tourism policy makers and destination managers adopt competitive strategies based not only on business-related factors, and to make the sustainability issue a priority in their agenda. The variable “emphasis on maximizing local economic development” also has a positive role in all the TDC indicators, corroborating the idea that a competitive and sustainable destination is not only the one that meets the needs of tourists preserving the natural and cultural local resources, but also increases the residents' well-being. Additionally, there is a positive relationship between the responsible tourist behavior and the enhancement of destination competitiveness. Even if there has been a lack of attention to tourist demand in the sustainable tourism debate, these findings show that sustainable tourism cannot be achieved without appropriate management of tourist demand. The results also revealed the local community's empowerment on TDC as a positive impact. Local communities are part of the tourism product, and the findings support the idea that local empowerment affects impacts in ways that are benign to destination communities and destination competitiveness. These research findings may help tourism planners and developers to understand that sustainable tourism development is necessary not only for preserving the ecologic balance of a tourism destination, but also as a crucial determinant of its competitiveness.

Appendix

Table A1 Component Solution for Destination Competitiveness Indicators Component solution

Component 1: Sustainable Tourism Policy and Destination Management (35.94%) Public sector commitment to minimizing negative environmental impacts of tourism Integrated approach to tourism planning Political commitment to tourism Public sector commitment to minimizing negative social impacts of tourism on local community Environmentally compatible approach to tourism development planning Emphasis on community participatory process in tourism planning Cooperation between public and private sector for local tourism development Collaboration among public sector units for local tourism development Stewardship of the natural environment Promotion of partnerships between public and private stakeholders Tourist destination communication Effectiveness of destination management structure Public sector commitment to tourism/hospitality education and training Effectiveness in crafting tourism experiences Tourism impacts management and monitoring Tourist guidance and information Promotion of partnerships among local tourist businesses Component 4: Responsible Tourist Behaviour (3.56%) Tourists' interests in natural and cultural local heritage Tourists' respect for local traditions and values Tourists' environmental awareness Component 5: Local empowerment in tourism industry (3.28%) Use of IT by local tourism firms Management capabilities of local tourism firms Level of professional skills in tourism Presence of local businesses Component 7: Quality of environmental and natural resources (2.73%) Safety Environmental quality Natural resources Component 12: Emphasis on maximising local economic development (1.65%)

Component loadings

Original model determinant

Refers directly to sustainability Sust

0.8173

5

Sust

0.8022

5

Sust

0.7606 0.7529

5 5

Sust

0.7391

5

Sust

0.7299

5

Sust

0.7264

5

Sust

0.7118

5

Sust

0.6484

6

Sust

0.6475

6

Sust

0.6245

6

0.6107

6

Sust

0.6019

5

Sust

0.6002

6

0.5928

6

Sust

0.5739 0.5642

6 6

Sust Sust

0.8539

7

Sust

0.8224

7

Sust

0.7919

7

Sust Sust

0.7194 0.7027

4 4

Sust Sust

0.5899

4

Sust

0,5500

4

Sust Sust

0.7231 0.7077 0.6359

4 4 1

Sust Sust Sust Sust

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References

Table A1 (continued ) Component solution

Component loadings

Original model determinant

Refers directly to sustainability

Emphasis on community empowerment Clear policies in creating formal employment opportunities Public sector commitment to maximising economic impacts of tourism on local community Component 2: General Infrastructures (5.06%) Quality of road system Accessibility of destination Communication system Accessibility of facilities by disabled persons Medical care facilities Quality of transportation services Proximity to other tourist destinations Sanitation, sewage and solid waste disposal Component 3: Events and Activities (3.56%) Evening entertainment and nightlife Leisure activities Events Shopping opportunities Cultural attractors Tourist oriented services Component 6: Destination Marketing (2.99%) Awareness of destination Effectiveness of destination positioning Effective market segmentation Component 8: Gastronomy (2.29%) Gastronomy Food services quality Local supply of goods Component 9: Historical and Artistic Features (1.93%) Historical and archaeological sites Artistic and architectural features Cultural attractors Component 10: Price-Quality relationship (1.88%) Value for money in accommodations Value for money in destination tourism experience Destination links with major origin markets Component 11: Tourist Accommodations (1.69%) Quantity of accommodations Quality of accommodations Environmental friendliness of accommodations Original Model Determinant: 1) Core resources and key attractors 2) Tourism services 3) General infrastructures 4) Conditioning and supporting factors 5) Tourism policy, planning and development 6) Destination management 7) Demand factor

0.4693

5

Sust

0.4648

5

Sust

0.4144

5

Sust

0.6896 0.6442 0.6298 0.6029

3 4 3 3

Sust

0.6019 0.5877

3 3

0.5107

4

0.4245

3

0.7406

1

0.7062 0.6528 0.5586 0.4289 0.4215

1 1 1 1 2

0.6784 0.6701

7 6

0.5495

6

0.6498 0.6108 0.5165

1 2 4

0.8079 0.7133 0.5023

1 1 1

0.7778

4

0.6655

4

0.4639

4

0.6326 0.4869 0.4406

2 2 2

Source: Elaboration on survey data.

11

1 2 3 4 5 6 7

Sust

Sust

Sust

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