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Upgrading a tourism cluster: The case of Eilat

Benner, Maximilian and Dollinger, Michael and Gliesner, Elisa and Pelz, Rouven (2017): Upgrading a tourism cluster: The case of Eilat.

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Tourism clusters have attracted a good deal of attention in literature, probably due to the fact that (mass) tourism exhibits a strong tendency to agglomerate. A major challenge for many tourism clusters is how to upgrade their competitiveness in the wake of market change. While the 1950s and 1960s saw the rise of standardized mass tourism particularly in Mediterranean countries, driven by the Keynesian welfare state and Fordist paradigm as well as rising wealth in European markets, since the late 1970s a more differentiated and individualized pattern of tourism demand has emerged. Since then, tourists’ preferences have become much more diverse and led to a roll-back of the previously dominant form of standardized, deterritorialized mass (package) tourism. This diversity is somewhat reminiscent of the notion of flexible specialization known from the literature on industrial change. In the wake of these changes, tourism clusters that came into being during the age of Fordist mass tourism have to devise strategies to differentiate their offer and to adapt their product to new market demands. Eilat in Israel is one of those tourism clusters that exhibit salient features of Fordist mass tourism struggling to find their place in a more differentiated international tourism market. This study takes a look at the structure of the Eilat tourism cluster and suggests a trajectory towards differentiation and upgrading to enhance Eilat’s long-term competitiveness as an international tourist destination.

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