Is sustainable development reasonable for tourism destinations? An empirical study of the relationship between environmental competitiveness and tourism growth

Sustainable development is an important strategy promoted by the United Nations World Tourism Organization (UNWTO) and governments of many destinations. However, the seeming contradiction about the environment vis‐à‐vis business interests may result in noncompliant responses to the environmental policies and regulations and hinder implementation of strategies for improved sustainability. Using resource‐based theory, we empirically test the influence of environmental competitiveness on tourism growth. Using a biennial dataset from 130 destinations between 2009 and 2017, the current work applies the fixed effect (FE) and threshold models to identify a strong link for developed destinations but a weak link for less developed regions. Several indicators of environmental competitiveness significantly affect tourism demand for destinations with high GDP per capita; the effects are not significant, however, for low GDP per capita destinations. These findings demonstrate that environmental factors are important influencers of destination competitiveness and are positively linked to economic performance of developed destinations. The connection between environmental competitiveness and tourism growth in less developed destinations seems weak and insignificant. A possible reason could be that such destinations lack the capital guarantee to translate environmental competitiveness into tourism demand. This article extends the resource‐based theory from the corporate level into the destination level and theoretically contributes to the sustainable tourism literature. Our findings provide the UNWTO and destination governments with empirical evidence to support their sustainable strategies and with suggestions concerning how to strengthen the environment‐performance link for less developed destinations.