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Unlock This CourseImagine you're opening a hotel. You could build it anywhere – but would you build it in the middle of a motorway junction? Of course not! Where a tourism business is physically located is one of the most important decisions it will ever make. Get it right and visitors flood in. Get it wrong and the place sits empty.
In the iGCSE Travel & Tourism course, "Place" in the marketing mix isn't just about distribution channels (like travel agents or websites). It also covers the physical location of the tourism product itself – the actual spot on the map where the hotel, attraction, resort or airline hub sits.
Key Definitions:
When deciding where to physically locate a tourism business, planners and developers look at three main things: Cost, Character and Features. These three factors work together – a place might be cheap but have no character, or have brilliant features but be far too expensive to develop. The best locations tick all three boxes.
Think about Center Parcs in the UK. They deliberately chose woodland locations away from cities. The land cost less than city-centre sites, the forest setting gave it unique character and the natural features (trees, lakes, wildlife) were perfect for their outdoor activity brand. Smart location thinking!
Cost is often the first thing a business thinks about when choosing a location. Land, buildings, planning permission, construction and ongoing running costs all vary enormously depending on where you are. A beachfront plot in Marbella costs a fortune. A hillside plot in rural Wales costs a fraction of that. But cheaper isn't always better – it depends on what the business is trying to achieve.
There are several different types of cost that affect location decisions in tourism:
The price of buying or renting land varies hugely. City centres, coastal hotspots and famous tourist areas are expensive. Rural areas, less-visited regions and developing countries are much cheaper. Many large resort hotels in places like the Maldives or Bali were built because land was affordable compared to equivalent European locations.
Building on a flat, accessible site is cheaper than building on a cliff, in a jungle or on a remote island. Infrastructure costs – roads, water, electricity, sewage – can be enormous in remote areas. Dubai's Palm Jumeirah cost billions partly because it was built on reclaimed sea – but the prestige location justified the expense.
Once open, a business faces ongoing costs that vary by location: staff wages (higher in expensive cities), energy bills, local taxes and rates and transport costs for supplies. A ski resort in the Alps has massive heating and snow-grooming costs. A beach resort in Thailand benefits from a warm climate and lower labour costs.
Premier Inn is a great example of smart cost-based location thinking. Rather than paying premium prices for city-centre land, many Premier Inn hotels are located just outside city centres – near ring roads, business parks or retail zones. Land is cheaper, parking is easier and they can offer lower room prices. They still need to be close enough to the city for guests to visit easily, so they balance cost savings with accessibility. This strategy has helped Premier Inn become the UK's largest hotel brand with over 800 hotels.
Businesses must always weigh up whether the cost of a location is worth it. A shop on Oxford Street in London costs millions in rent – but the footfall (number of people passing by) is enormous. A travel agent in a quiet village is cheap to rent but may not get enough customers. The key question is always: will the location generate enough income to cover its costs?
Character is about the feel of a place – its personality, atmosphere and unique identity. It's what makes somewhere special and different from everywhere else. Tourists don't just buy a bed for the night; they buy an experience. The character of a location is a huge part of that experience.
Character comes from a mix of history, culture, architecture, local people, traditions and atmosphere. It's often the hardest thing to manufacture – you can build a hotel anywhere, but you can't easily create 500 years of history or a vibrant local culture from scratch.
Places like Bath, York, Edinburgh and Venice draw millions of tourists because of their historic character. Ancient buildings, cobbled streets, castles and cathedrals create an atmosphere that modern developments simply can't replicate. Tourism businesses in these areas benefit enormously from the existing character – a hotel in York's medieval centre sells itself partly on the surroundings, not just its own facilities.
Some places have strong cultural identities that attract tourists. New Orleans is famous for jazz and Creole food. Marrakech draws visitors with its souks, riads and Moroccan traditions. Notting Hill Carnival gives that part of London a unique cultural character every August. Tourism businesses in culturally rich areas can use that character as a selling point without having to create it themselves.
Whitby is a small fishing town on the Yorkshire coast, but it punches well above its weight as a tourist destination. Why? Character. It has a ruined clifftop abbey, connections to Bram Stoker's Dracula, a working fishing harbour, traditional fish and chip shops and a quirky Goth Festival twice a year. Hotels, B&Bs, fish restaurants and souvenir shops all benefit from this unique character. The town's identity is the product. Businesses that locate here are buying into that character – and visitors pay a premium to experience it.
Here's an important exam point: over-development can destroy character. If too many modern hotels, chain restaurants and souvenir shops replace historic buildings and local businesses, a place can lose the very character that made it attractive in the first place. This is called tourist saturation or the honeypot effect. Venice, Barcelona and Dubrovnik have all struggled with this problem in recent years.
Features are the specific physical and human characteristics of a location that make it suitable – or unsuitable – for tourism. Think of features as the raw ingredients that a tourism business needs to work with. Some features are natural (mountains, beaches, climate), others are human-made (airports, roads, theme parks).
Natural features are often the main reason tourists visit a place in the first place. Tourism businesses choose locations where natural features match their product:
Warm, sunny climates attract beach resorts and outdoor activity businesses. The Spanish Costas, the Canary Islands and the Caribbean all benefit from reliable sunshine. Ski resorts need reliable snowfall – hence the concentration of ski tourism in the Alps, Rockies and Scandinavian mountains. Climate is a feature businesses cannot change, so they must choose locations where the climate suits their product.
Dramatic landscapes attract tourists. The Scottish Highlands, the Norwegian fjords, the Grand Canyon and the Great Barrier Reef are all examples of natural scenery that drives tourism. Hotels, lodges and activity centres locate near these features to capitalise on the views and outdoor opportunities they provide. A safari lodge in Kenya's Masai Mara is only viable because of the wildlife and landscape around it.
Beaches, lakes, rivers and seas are hugely important tourism features. The UK's coastal resorts – Blackpool, Brighton, Bournemouth – grew up around their beaches. Water-based activities like surfing, diving, sailing and fishing all depend on suitable water features. The Maldives' entire tourism industry is built on its coral reefs and crystal-clear lagoons.
Not all important features are natural. Human-made features are just as important for many tourism businesses:
Dubai is a fascinating case study because it manufactured many of its own features. It had sunshine and a coastline, but little else in the 1970s. Over the following decades, Dubai built world-class airports (Dubai International is one of the busiest in the world), artificial islands (the Palm Jumeirah), iconic skyscrapers (Burj Khalifa), massive shopping malls, theme parks and a Formula 1 circuit. By investing heavily in human-made features, Dubai transformed itself from a small trading port into one of the world's top tourism destinations, welcoming over 17 million international visitors in 2023. The lesson? Natural features help, but human-made features can be just as powerful.
In real tourism planning, these three factors don't work in isolation – they interact with each other. A location might score brilliantly on features (stunning beach, great climate) but be too expensive to develop. Another might be cheap and have great character but lack the transport features to make it accessible. The best tourism locations balance all three.
Land prices, build costs, running costs, government incentives, labour costs, tax rates. Always ask: is the income potential worth the investment?
Historic identity, cultural richness, local atmosphere, uniqueness, authenticity. Character attracts visitors and justifies premium pricing – but can be damaged by over-development.
Natural features (climate, landscape, coast), human-made features (airports, attractions, infrastructure), safety and accessibility. Features are the raw material of the tourism product.
If an exam question asks you to evaluate a location decision, make sure you discuss all three factors – cost, character and features – and explain how they interact. For example: "Although the coastal location provides excellent natural features and strong character, the high land costs may reduce profitability unless the business can charge premium prices." That kind of balanced answer earns top marks!