Agglomerations around natural resources in the hospitality industry: Balancing growth with the Sustainable Development Goals

Abstract

Many tourism agglomerations are situated near natural resources, which implies a need to balance business growth with environmental preservation. Our analysis of the location decisions of 295 luxury beach hotels in Spain between 1960 and 2015 reveals two main findings. First, we confirm the positive relationship between the existence of demand-related urbanization services around natural resources and the attractiveness of agglomerations to new entrants. Second, we find that an agglomeration’s attractiveness negatively affects the density of firms in the agglomeration if that attractiveness hinders firms’ access to the same natural resources. Our results contribute to the strategy literature on agglomerations and provide a better understanding of how the tourism industry can work toward achieving the sustainable development goals (SDGs). JEL CLASSIFICATION: L83, M13, M14, Q50, Q26, R30.