Resort-oriented tourism development and local tourism networks – a case study from Northern Finland
OUTI KULUSJÄRVI
Kulusjärvi, Outi (2016). Resort-oriented tourism development and local tourism networks – a case study from Northern Finland. Fennia 194: 1, 3–17. ISSN 1798- 5617.
In tourism studies, it has been widely recognized that resort-oriented tourism development creates challenges for regional development, mainly due to its enclave nature and lack of regional economic linkages. However, there have been relatively few studies on the destination-scale cooperative networks, al- though, they are vital in increasing the positive regional economic impacts of tourism development. This paper is an empirical qualitative study exploring the connections between resort-oriented tourism development and tourism business cooperation in the case study area of the Ruka-Kuusamo tourism destination in Northeast Finland. The interest is on how the local cooperative networks of the Ruka tourist resort are spatially constructed within the Ruka-Kuusamo tourism destination. The research data consists of semi-structured interviews conducted for ten tourism actors located in the Ruka resort. The results show that the busi- nesses located in the Ruka resort cooperate at the regional scale mainly in mar- keting, while their partners in production cooperation are located mostly within the resort, particularly in its very core area. The resort appears to function as a basis for spatial identification for tourism actors, which, in turn, affects entrepre- neurs’ motivation to cooperate at the local and regional scale. Tourism entrepre- neurs operating in the very core of the resort perceive the area as the principal area for their operations, and therefore, they do not particularly engage with the surrounding areas and businesses or with other actors located there. Thus, for smaller enterprises outside the core, it can be difficult to benefit from the resort’s core’s growth via network relations. This contributes mainly to the development of the core areas alone, creates challenges for sustainable regional economic development in the destination region, and hinders the resort’s tourism growth in the long run.
Keywords: tourism destination development, cooperation, enclave resorts, sus- tainable regional development, qualitative study, Finland
Outi Kulusjärvi, Department of Geography, University of Oulu, PO Box 3000, FI-90014 Oulu , Finland. E-mail [email protected]
Introduction attractiveness of the natural environment has been used as a basis for developing tourism into Experiencing the tranquility of the natural envi- a significant new branch of industry. Neverthe- ronment is a frequent need for many individuals. less, typically tourist flows largely concentrate The characteristics of the periphery offer counter- there in core areas. For example, in Northern Fin- point to the everyday environment of the citizens land, the tourism industry has been developed of urban core areas, as a result of which rural around winter sport activities, and hence, tourist areas are often regarded as attractive tourism flows largely concentrate on tourist resorts locat- destinations (Montanari & Williams 1995: 6). For ed near fells. In other words, tourism develop- instance, in the peripheries of Scandinavia, the ment is resort-oriented.
© 2016 by the author. This open access ar- URN:NBN:fi:tsv-oa41450 ticle is licensed under a Creative Com- DOI: 10.11143/41450 mons Attribution 4.0 International License. 4 Outi Kulusjärvi FENNIA 194: 1 (2016)
In Finland, at all spatial scales, from local to na- pected to contribute to the well-being of the local tional, tourism is developed by supporting resorts community. and their enterprises. Tourism growth is sought by In order to distribute the benefits of resort-ori- increasing particularly international tourism de- ented tourism development equitably within a mand (Työ- ja elinkeinoministeriö 2010: 15, 19). wider region than the resort alone, cooperation As mentioned by Müller and Brouder (2014), tour- between the core and the surrounding periphery is ism businesses in the peripheries of Scandinavia vital. In Finnish tourism planning (Työ- ja have had to pool their resources due to the de- elinkeinoministeriö 2010; Lapin liitto 2011; Poh- mands of globalization, i.e. in order to gain inter- jois-Pohjanmaan liitto 2011), it is expected that national visibility. As tourism grows and becomes resorts and other functional cores (such as munici- more international, tourism enterprises in the re- pality centers) work as engines within which enter- sorts are typically also increasingly national or in- prises located in the surrounding peripheral areas ternational operators. In consequence, destina- can network and thereby benefit from the resorts’ tions tend to become spaces homogenous with tourism growth. It is presumed that core-periphery each other. For instance, skiing destinations in cooperation can effectively distribute the positive Northern Finland are transforming towards the re- impacts from the resorts to a wider region. How- sort structures similar to Central European alpine ever, the ways in which the cooperation ought to destinations. At the same time, they weaken their happen have not been specified in the strategies. linkages with the local communities in their sur- Furthermore, there have been relatively few stud- roundings (Saarinen 2004: 161, 169–171). In these ies on destination-scale cooperation networks in circumstances, the positive economic impacts of tourism research. tourism typically remain mainly within the areas In the current study, new insights on the role of occupied by tourists and do not spread beyond the local-scale tourism cooperation in rural tourism resort into the surrounding peripheral areas (Brit- areas of resort-oriented development will be ton 1982; Walpole & Goodwin 2000: 572). The searched for. The case study area is the municipal- described development in Northern Finland is ity of Kuusamo in Northeast Finland (Fig. 1). In the similar to the more extreme enclave development study, the focus is on the Ruka tourist resort, which of tourist resorts in the developing world. draws most of the tourists travelling to Kuusamo. Even though tourism is commonly considered Ruka is best known as a winter tourism destination as one of the only industries with positive future and, measured by its ski ticket revenue, it is the prospects and potential to revitalize declining ru- second largest ski resort in Finland. Still, as Kaup- ral regional economies, tourism growth does not pila (2011: 28) has pointed out, the development automatically lead to rural development (Saarinen of tourism in Ruka has not been able to save the 2008: 101). As Ribeiro and Marques (2002: 212) municipality of Kuusamo from high unemploy- have noted, there is often a gap between the ex- ment and population loss. pected and realized socio-economic benefits of The aim of the present paper is to critically en- tourism development for a regional economy. For gage with the interrelations between the resort- this reason, it is also necessary to look at the devel- oriented tourism development and attendant con- opment of tourist resorts from the perspective of struction of the local cooperation networks of sustainability in a wider tourism region and in lo- tourism enterprises. The state of networking of cal communities. Resort-oriented tourism devel- tourism businesses located in tourist resorts in ru- opment can be appropriate and successful in terms ral areas will be examined. The paper asks: How of business growth, at least in the short-term. Also, are the local tourism business cooperative net- a resort’s growth can create tax income for the mu- works of a tourist resort spatially constructed nicipality and, at least to some extent, business op- within the regional tourism destination? In the portunities and employment for local people. In current preliminary study, the topic is studied the regions of resort-oriented tourism develop- from the viewpoint of the enterprises located in ment, there are challenges related to the socio- the Ruka tourist resort. That is, the focus is on the economic impacts of tourism. This paper argues linkages that enterprises located in Ruka have that the positive employment and economic ben- within and beyond the resort. Hence, all the inter- efits of tourism should impact to the greatest pos- viewed tourism actors are located in the resort. sible extent the residents of the destination region. The interest here is not necessarily in the coopera- Where this holds true, these matters can be ex- tion between the resort and the surrounding pe- FENNIA 194: 1 (2016) Resort-oriented tourism development and local tourism 5
Fig. 1. Case study area Kuusamo munici- pality and tourist resort Ruka in north-east- ern Finland.
riphery, but in examining what the core area of tion concentrating to the resort. In the discussion tourism is and how it is (re)produced by way of and conclusions, the paper will consider the cur- tourism business networking. rent state of networking as regards to sustainable The theoretical background of this study is tourism and regional development. Also, needs for based on the research literature of regional devel- future research will be presented. opment studies in tourism geography and on the research of relational economic geography, which will be introduced in the following section. After Tourism and peripheral development this, the case study area of Ruka-Kuusamo and its recent tourism developments will be briefly intro- duced. Afterwards, there will be an overview of Tourism for regional development the research materials and analysis. The results chapter will be divided into two subsections, the The positive economic impacts of tourism on re- first covering cooperation taking place at the re- gional development are often the major motivator gional scale, and the second concerning coopera- for developing tourism, which is viewed as a way 6 Outi Kulusjärvi FENNIA 194: 1 (2016) to generate income and employment for local market polarization is linked with the spatial po- people residing in declining rural areas (Williams larization of tourism development due to the inter- & Shaw 1998: 11). However, as has been recog- dependence of economic and spatial dynamics. nized, tourism is not a self-evident tool for region- Nature-based tourism, in particular, is a strongly al development (e.g. Oppermann 1996; Ribeiro & place-based branch of economy and, thus, tourism Marques 2002). Thus, the goals of tourism devel- businesses are typically located around tourist pull opment should not be set before the needs of oth- factors and form business clusters (Huybers & Ben- er local livelihoods and tourism should be devel- nett 2003: 572; Braun 2005: 5). That is, tourism oped as one industry alongside others. Burns and its impacts commonly spread unevenly in (1999) has underlined that the main target in tour- space (Williams & Shaw 1998: 12; Hall & Page ism planning should not be tourism growth but 1999: 1). This can be considered challenging for improvement of social well-being. In his view, the requirement of regional sustainability. instead of a tourism-first approach, tourism plan- The spatial concentration of tourism develop- ning should be carried out from a development- ment occurs at all spatial scales from local to first approach. That is, tourism should be used global (Papatheodorou 2004: 225). Thus, core and only as one of many possible development tools. periphery are relative concepts (Friedmann 1966). Saarinen (2006: 47) has similarly emphasized that Britton’s (1982) core-periphery model in tourism traditional local industries should be valued presents core-periphery relations on a global lev- equally alongside tourism. el. According to the model, tourist flows are ori- Burns (2004) has later paid close attention to the entated from the core, developed countries, to the challenges of carrying out tourism planning and peripheries, developing countries. Nevertheless, policies from the perspective of sustainable re- the power in tourism development remains in the gional development. Commonly, tourism planning core as the main tourism operators are located is conducted from the perspective of tourism in- there. Tourist flows then concentrate in certain dustry only, which can lead to neglecting the places in the peripheral areas in the destination needs of other livelihoods. In addition, planning is countries which become enclave resorts. The out- limited to the scale of administrative units and side areas cannot equally benefit from a resort’s connections across those entities are rarely taken development. Gradually, these enclave resorts be- into consideration. Burns states that in order for come core areas more prosperous in comparison tourism to contribute to sustainable growth and with the surrounding periphery (Getz 1981; wider societal development, the multiple sectors Weaver 1998; Walpole & Goodwin 2000: 572; of the tourism industry and the various local indus- Kauppila 2011: 20, 22). tries should be involved together and cooperate in Such enclave tourist resort development is more tourism planning. Similarly Müller (2011: 253) extreme in the developing world. However, as states that tourism has to be integrated into broad- Saarinen (2004: 171) notes, tourist resort develop- er community development in order for it to be ment in the peripheries of the western countries sustainable. clearly has similar challenges. Tourism-induced income and employment, public and private ser- Challenges of spatial concentration of tourism vices and other facilities are often developing and development maintained in tourism destinations, while sur- rounding spatial structures can decline socio-eco- nomically and politically. As a result, tourist resorts Nelson and Winter (1982, as cited in Papatheo- typically differentiate from their surrounding areas dorou 2004: 222) have noted that typically tourist which then cannot equally benefit from the re- flows concentrate only in a small number of enter- sorts’ development. Although there are economic prises. This is because it is relatively easy to enter leakages outside tourist resorts (see Murphy 1985: the tourism industry due to the low investment 91), it is crucial to recognize the extent to which needs, but only a few businesses manage to they fall on to the surrounding rural areas. Tourism achieve a reputation of expertise and a stable posi- operators in a resort can purchase products and tion in tourism markets. Strong tourism enterprises services and hire employees from outside the re- have a key role in triggering tourism development gion. According to Saarinen (2006: 49), in the cur- and starting to build up a destination (Pearce 1981: rent mode of development in Northern Finland, 16–19). As Papatheodorou (2004: 225–226) notes, the links of tourism development to the local and FENNIA 194: 1 (2016) Resort-oriented tourism development and local tourism 7 regional traditional economies and production are both tourism business networks (Novelli et al. not strong enough in regard to regional 2006; Lagos & Courtis 2008) and the connections development. of tourism businesses to other local livelihoods As Kauppila (2004: 93) notes, in addition to (Telfer & Wall 2000; Saarinen 2006; Agarwal economic impacts, innovativeness, the level of in- 2012; Graci 2013) have been considered vital. frastructure and the possibilities for decision-mak- Network cooperation in tourism development can ing are typically greater at resorts. Caballos-Lascu- happen, for instance, in the process of marketing a rain (1996: 13) has pointed out that enclave tour- tourism region. Typically, relatively small tourism ism development does not typically take into ac- enterprises can benefit from the economies of count the needs of the communities surrounding a scale as they together create a critical mass of tour- resort. In the Whistler resort in Canada, a pro- ism enterprises and attractions which they then growth model of tourism development has led to promote collectively to create a regional well- the rise of no-growth interests among local resi- known tourism brand (Meyer-Cech 2005: 146; dents. There has been a call for more affordable Wang & Fesenmaier 2007: 865). housing and schools, and a better consideration of The geographical proximity of firms in a busi- environmental conditions affecting the residents’ ness cluster has not been regarded as a sufficient quality of life. Locals have wanted Whistler to be condition to enhance knowledge transfer. Further- seen not only as a tourist resort but also as a com- more, cognitive, organizational, social, and insti- munity (Gill & Williams 2011: 636, 638). Arell tutional proximity impact how effortless interac- (2000: 125) has noted in the rural Scandinavian tive learning is (Boschma 2005: 71). Therefore, the context that the spatial concentration of tourism joint actions of tourism actors, i.e. intentional co- development has had downsides to small-scale operation, have a central role in fostering growth tourism enterprises located outside the resort. and competitiveness in rural tourism areas Also, in the Finnish Lapland, local villagers have (Schmitz 1999: 468–469; Williams & Copus 2005: experienced the resort-oriented tourism strategies 307, 317). As Koster (2007) describes, “develop- as more beneficial to tourist resorts than to them ment of tourism at a regional level means the vari- (Hakkarainen & Tuulentie 2008: 11). ous communities, which comprise a region, will In conclusion, tourism concentrates on certain cooperate and integrate their collective attractions, areas because both natural characteristics of a re- capital, infrastructure, and natural and human re- gion and its socioeconomic factors vary between sources in such a way to promote the region as a different localities. As conceptualized by Brouder destination to potential tourists”. Similarly Brouder and Eriksson (2013: 378–379), regional socioeco- and Eriksson (2013: 379–383) state that the eco- nomic structures offer distinct preconditions for a nomic success in rural communities is dependent tourism sector to develop. The growth or the de- on the capabilities of individuals and firms to ex- cline of the tourism industry in a certain region is ploit and recombine existing local human capital affected by the economic development history of and create new knowledge. Intensified knowledge the region, i.e. previous events and choices made transfer is regarded to result in an increase in the in the past. It is noteworthy, however, that in prin- adaptability of the enterprises, which then raises ciple regional actors have the capability to alter the innovativeness and competitiveness of a tour- the course of development, i.e. break the path de- ism region (Weidenfeld et al. 2010: 607, 617). Al- pendence of development. Networking practices though the link between knowledge transfer and can be regarded as an example of such intentional the growth in competitiveness has been difficult to actions. prove empirically in the context of different fields of businesses and different spatial scales, the con- A call for network cooperation nection has been widely used as a theoretical starting point in network studies, also in tourism The wider regional economy could benefit from research (see Weidenfeld et al. 2010: 604). resort tourism development if tourism enterprises Despite its importance, cooperation at a region- are capable of taking advantage of their close al level has its challenges. As Carson et al. (2013: proximity and, at the same time, let positive in- 13–14) note, tourism actors can have a low en- come and employment impacts spread to sur- gagement to cooperate within an externally de- rounding areas (Agarwal 2012: 1473). In this pro- fined tourism region. This is due to the local cul- cess of tourism and community development, ture of operating in isolation because of not know- 8 Outi Kulusjärvi FENNIA 194: 1 (2016) ing the possible benefits of the cooperation activi- nesses active in Kuusamo are located in Ruka. For ties, as well as to the reliance on public sector instance, 23,000 out of the total 40,000 beds and leadership. Tourism actors can have general lack 28 out of 64 restaurants are located in the resort of capacity to develop networking and coopera- (Ruka-Kuusamo Matkailuyhdistys 2013). This is tion practices, even locally. Weidenfeld et al. partly explained by the strategic choices made in (2010: 617) have explained the lack of regional tourism planning: since the 1970s, substantial cooperation by tourism actors’ unwillingness to public investments have been aimed at developing learn from geographically proximate enterprises tourism in Ruka. From the 1980s onwards, tourism offering similar products due to their competitive in Ruka was institutionalized, and it attracted es- relations. The distance, due to which competition pecially mass tourism. After the economic depres- grows too intense, is case-specific depending on, sion of the 1990s, a new phase of development for example, tourist amounts. As Joshi et al. (2009: started. The city of Kuusamo took part in the plan- 241) note, a sense of solidarity would motivate en- ning and a new tourism strategy was created trepreneurs to cooperate. (Kauppila 2009: 227–229). In 2000, the number of Despite the challenges in cooperation at a re- tourism overnight stays in Kuusamo was 260,000, gional level, even short-term and externally-man- and by the year 2010, the number had increased aged cooperation networks aiming to increase to 430,000 (Kauppila 2012: 28). Measured by tourism in rural areas can have significant long- growth in visitor numbers, tourism development term benefits for the community. Cooperation has been successful during this period. can increase tourism actors’ knowledge on the The aim of the Ruka tourism strategy created by benefits of sustainability for tourism and also for the town of Kuusamo in 2000 was to develop Ruka communal development. Moreover, they can into an international, year-round, diverse tourist give rise to the formation of new bottom up born resort that is connected with the wider tourism re- cooperation in future (Conway & Cawley 2012). gion (Kuusamon kaupunki 2000: 5–6). In the vi- As Brouder (2012) has pointed out, when tourism sion for Ruka, the following was outlined: development is endogenous and local tourism “- - - . Businesses and societies will cooperate in networks exist, tourism can enhance geographi- producing leisure activities and services for busi- cally bounded social capital giving rise to further ness travel. In all practices, the principles of sus- rural development. tainable development will be followed and envi- ronmental values will be taken into account. Lo- cal cultural history and diversity and pristine wil- Case study area: Ruka resort in derness and fell environments and waterways will be the pull factors of tourism products. - - -“ Kuusamo As one part of the strategy, the town hired Eco- The case study area, the Kuusamo municipality of sign Mountain Resort Planners Ltd. to make a tour- Finland, is a peripheral region at the national ist resort plan for Ruka between 2001–2003. The scale. It is sparsely populated and its natural envi- plan was to contribute to the strategic aims set ronment is characterized by wilderness. Hence, (Kuusamon kaupunki 2000: 5). The starting point tourism in Kuusamo is based on its pristine and for the planning work was the idea of a tourist re- topographically diverse natural environment. An sort as a compact, “humanly pleasing” pedestrian important nature tourism attraction in the area is village. Accommodation facilities were to be situ- the PAN Park certified Oulanka National Park, ated within a walking distance of the services. with visitor numbers of 171,500 in 2011 (Metsähal- Compact planning was said to contribute to sus- litus 2012). Other pull factors are nature-based tainable development, which in this case referred activities and accommodation, catering and trans- to its ecological aspects. Another principle goal of portation services (Kauppila 1997). the planning was fostering regional cooperation, Clearly, however, the Ruka tourist resort (Fig. 2) which meant marketing, trail maintenance, and still attracts most tourists travelling to Kuusamo. other development work was to be done by a col- During the peak season, the resort can be consid- lective organization to which membership was to ered a population center comparable to the mu- be compulsory (Leikoski 2005: 116–117). Today, nicipality core when measured by the number of the Ruka pedestrian village (see Fig. 2) hosts over residents. A significant number of the tourism busi- 1000 beds, 15 restaurants, ten shops, and an un- FENNIA 194: 1 (2016) Resort-oriented tourism development and local tourism 9
Fig. 2. Map of the Ruka resort and the Ruka pedestrian village.
derground parking hall right next to the slopes faces the common challenges of the so-called less (Ruka-Kuusamo Matkailuyhdistys 2014a). In addi- favored areas: the population of 16,000 residents tion, there are tourism businesses located outside decreases and the unemployment rate of 14.7% the village. (2013) is higher than the national average Tourism development has evidently created in- (Kuusamon kaupunki 2011; Pohjois-Pohjanmaan come and employment in Kuusamo. Compared ELY-keskus 2013). According to Kauppila (2011: with other local industries, tourism offers the most 27–28), due to this polarization process, Ruka has employment opportunities. The direct employ- become a core located in a periphery in a northern ment impact of tourism industry was 674 full-time periphery. There seems to be a need to reassess the equivalent jobs in 2010, 7.9% of which fell to extent to which tourism development in its current non-local seasonal workers (Kauppila 2012: 22, mode is capable of fostering the socio-economic 32). However, as Kauppila (2004, 2011: 25–26, well-being of local communities in Kuusamo. 28) has noted, the socio-economic benefits are un- evenly distributed spatially within the region. Ac- cording to him, the number and structure of the Research method enterprises, jobs and permanent population have increased in the resort as the surrounding areas in In this preliminary study, the research data consists the municipality have declined. For instance, the of semi-structured interviews conducted by the permanent population of Ruka has increased from author with ten tourism actors in Ruka in Novem- 175 to 347 during 1970–2007. If seasonal resi- ber 2012. Interviews were chosen as the data col- dents (workers, telecommuters and second home lection method since the interest was to look at not owners) were included in the numbers, the growth only the spatial form of local tourism networks but would be even higher. Kuusamo, as a whole, still also to see how the actual networking practices 10 Outi Kulusjärvi FENNIA 194: 1 (2016) are interconnected to the interviewees’ concep- their views on the sensitive topic by telling about tions on tourism business networking and the des- their experiences and expressing their personal tination. Lynch et al. (2000) state that by studying opinions. However, a clear minority did not read- human behavior it is possible to map the structure ily discuss the negative experiences of coopera- of networks and, at the same time, gain more in- tion, especially if those were connected to a spe- depth knowledge about the attitudes and values cific enterprise. Also, whether the interviewees that impact behavior. It is possible to picture the expressed their personal opinions or those that fit networks both from the actors’ perspective and the official stance of the company varied between, from ‘above’ (Tinsley & Lynch 2001: 370). The but also within, the interviews. chosen research method connects with the theory On the whole, however, results do not represent of structuration by Giddens (1979: 69) which sees the ‘airbrushed’ state of networking but include structure and agency in a dialectical relationship. the sensitive issues impacting the spatial construc- That is, structures impact the behavior of actors tion of the cooperative networks. That was the but, at the same time, their action (re)produces main goal in using interviews as the data collec- these structures. For instance, a business environ- tion method. The collected data was analyzed by ment can affect how tourism actors view the im- qualitative content analysis. The aim was to dis- portance of networking and are then willing to cover how the conceptions of networking differed cooperate. Then, their actions impact the kind of according to the company’s location within the cooperation environment that is built. resort. Attention was also given to the ways how The interviewees were selected based on pur- the interviewees perceive their enterprises’ spatial poseful sampling from the contacts obtained in a sphere of operations, as well as to Ruka and previously conducted research in the area. Nine of Kuusamo as spatial entities. Although the current the interviewees are either management-level em- interview data is not representative enough for a ployees or entrepreneurs in local tourism business- detailed quantitative analysis on the spatiality of es and one was the executive manager of the Ru- tourism business cooperative relations, the col- ka-Kuusamo Tourism Organization at the time. lected data proved to be sufficient for answering Measured by the employment capacity, six of the the research question: “How are the local tourism enterprises are small (1–10 full-time equivalent business cooperative networks of the Ruka tourist jobs) and three are large (21 or more full-time resort spatially constructed within the Ruka- equivalent jobs) in the Kuusamo context. The inter- Kuusamo tourism destination?” viewed actors represent the fields of businesses in tourism which get direct tourism income and which are expected to cooperate on tourism ser- Types and scales of cooperation vice production. These include three program pro- viders, two accommodation agencies, one accom- The tourism actors in Ruka acknowledge that their modation and catering service, one ski lift com- enterprises can benefit from tourism business co- pany, one maintenance company, one taxi com- operation. Most often improving the enterprise’s pany, and one regional tourism organization. Al- reputation – usually the international reputation – most all the enterprises produce services in other was seen as the main benefit. In addition, the pos- fields of businesses as well. For instance, five en- sibility of using the services and resources of other terprises provide accommodation and catering enterprises to complement one’s own products services. Due to the geographical focus of the cur- and services was considered important. Although rent preliminary study, all the enterprises are lo- the interviewees noted that they do not always cated in the Ruka resort. have enough resources to cooperate, they under- The interviewees were asked about their lined the significance of the cooperation practices thoughts on networking: the current state of coop- in Ruka-Kuusamo. Cooperation was described as eration, its importance and benefits, challenges “the only way to success”, “the lifeline of every- and hoped-for future prospects. By including the thing” and “the cornerstone of operations”. How- spatial dimension in the conversation, it was pos- ever, the tourism actors had diverging opinions sible not only to illustrate the spatial construction about which kinds of cooperation were the best for of the networks but also to understand the social achieving the desired benefits as well as within factors that impact the networking. In the inter- which areas to cooperate. These issues will be views, most informants candidly related about considered next. FENNIA 194: 1 (2016) Resort-oriented tourism development and local tourism 11
Joint marketing at the regional scale want to be involved in joint marketing. Further- more, they wish to ensure that all cooperating en- When asking the interviewees about whether the terprises get their share of the tourist flows and in- enterprises in Ruka cooperate with businesses lo- come. There is a call for joint sales in which the cated outside the resort, i.e. elsewhere in Kuusa- practice of allocating the income is agreed upon in mo, the interviewees answered in the affirmative. advance. In this way, enterprises would cooperate Evidently, however, tourism businesses cooperate not only in attracting customers to the region but at a regional scale mainly in joint marketing. They also in sharing the “business pie” created (cf. agree on its importance in regard to tourism desti- Brandenburger & Nalebuff 1998: 14). nation competitiveness. Increasing the promi- As the results show, it is mainly marketing coop- nence of the tourist destination was hoped to re- eration that happens at a regional scale. It is worth sult in increased numbers of tourists in the region, noting that although the member companies co- which was regarded as a benefit by both small and operate on marketing activities, this does not nec- large businesses. It seems that even the largest essarily mean that they cooperate in practice or companies do not have enough resources to gain are in contact with each other. Formal joint mar- an international reputation on their own. keting relations, at their narrowest, can be based In Kuusamo, destination-scale joint marketing is solely on belonging to the same organization, i.e. coordinated by the Ruka-Kuusamo Tourism Or- paying the membership fee. ganization, which was founded in 2002 by the largest tourism businesses in the region and by the Spatial concentration of cooperative town of Kuusamo (Ruka-Kuusamo Matkailuyh- production networks distys 2014b). Today, the organization is com- prised of 160 member companies (Rytkönen 2012) who represent 90% of all the tourism revenue re- Unlike in joint marketing, production cooperation ceived by the tourism enterprises in the municipal- requires of an enterprise at least some knowledge ity. The organization is responsible for marketing of other businesses and their services, actual con- the tourism region both in Finland and internation- tact with them, or joint actions. In this paper, the ally (Ruka-Kuusamo Matkailuyhdistys ry 2014c). concept “production cooperation” refers to those However, in some enterprises, joint marketing at activities that enterprises do together in order to the municipality scale may not be considered a pri- produce tourism services (e.g. accommodation, ority in their marketing cooperation practices. One programs, catering) for their customers. This oc- of the interviewed entrepreneurs (from a large com- curs, for instance, when an enterprise buys prod- pany operating in the Ruka pedestrian village) noted ucts or services from another company. If a coop- that in order to achieve an international reputation, erating partner operates as a subcontractor, the joint marketing should be done in a larger area than product is offered to the customers under the name just the municipality. He described this as follows: of the main supplier. Alternatively, businesses can work as more equal partners, in which case prod- “Of course we try to push the regional coopera- tion forward all the time, to expand it. And I see ucts may also be developed in cooperation. Pro- that in international tourism the whole Northern duction cooperation can be planned, for example, Finland is this area. When the aim is to go to the in the long-term joint production of program pro- international markets, there Kuusamo is such a viders, or it can happen on an ad hoc basis, as in small region that its money is definitely not event production. enough to make itself visible. If the whole North- The need to cooperate in service production ern Finland is there, its money is in a league of its own. Then it is possible to even achieve some- emerges because businesses tend to specialize only thing visible.” in some tourism services, and few enterprises are capable of offering all the services customers need According to the interviewee, the more busi- during their stay. Production cooperation can occur nesses participating in marketing cooperation, the between the fields of tourism business (e.g. accom- better. However, he did not believe that it was es- modation service buying program services), within sential to have the small enterprises located out- a field of business (e.g. larger program providers side the resort involved in the joint marketing. buying services from smaller enterprises such as From the perspective of the interviewed small en- reindeer or husky farms or fishing program provid- terprises, this issue was somewhat different. They ers) or even between businesses offering similar 12 Outi Kulusjärvi FENNIA 194: 1 (2016) products (e.g. when a program provider hires extra The member businesses of the RPVO are mainly staff or equipment from a similar business). located in the pedestrian village, which the inter- In the Ruka resort, enterprises cooperate in pro- viewees considered understandable. The inter- ducing tourism services, and businesses have last- viewee justified the sphere of the organization’s ing and well-functioning cooperation partner- actions by the constitution of the village that he ships. Nevertheless, it is noteworthy that coopera- presented as neutral, as if defined by an outsider. tive production networks appear to concentrate Thus, the interviews show that tourism actors in geographically. The majority of cooperative net- the pedestrian village perceive the operational en- works are clustered in the Ruka pedestrian village vironment of their businesses as being concentrat- which is the very core area of the Ruka resort, al- ed in the pedestrian village. The interviewed entre- though, some businesses utilize services outside preneurs located in the pedestrian village see the the pedestrian village as well as outside the resort. benefits of production cooperation to be best That is, the area of most cooperation in production achieved by cooperating at the village scale. This is yet smaller than the resort and seems to exclude was evident in the comments of one interviewee: the enterprises located outside the very core. “Absolutely, it is important that the tourism entre- According to the interviewees operating in the preneurs cooperate in Ruka. Otherwise we would pedestrian village, cooperation functions well not have founded this kind of Ruka Pedestrian Vil- there. Enterprises located in the village have coop- lage Organization in the area. Around 90 percent erated for years, and interviewees claimed that of all the businesses in the village are now mem- there was a good spirit among the oldest compa- bers. The only way to succeed is to cooperate.” nies. The interviewed tourism actors distinguish the pedestrian village, built at the foot of the front From the perspective of the interviewed busi- slopes, from the other parts of the resort. The tour- nesses located outside the pedestrian village else- ism actors in the village, as well as those operating where in Ruka, the current scale of production outside of it, refer to the very core area as “the cooperation perceived differently. Many of the in- Ruka village”, “the upper village” or “the center of terviewed actors see the business connections Ruka”. The village borders namely refer to the pe- with the Ruka pedestrian village as beneficial, and destrian village, which the interviewees described hence, consider it problematic that the coopera- as being situated “high up” and “on top”. For in- tive production networks of the village are mainly stance, the upper village is clearly marked as sepa- concentrated in that area. An entrepreneur from rate from the business area located away from the outside the village illustrated his experience of co- slopes further downhill, which is referred to as operation with the village as follows: ‘down’ in comparison to the pedestrian village. “They are so big and strong companies and they The main body organizing the business cooper- cooperate with each other. It is very difficult to get ation in the village is the Ruka Pedestrian Village in. I have tried it, with very bad results, though. Organization (hereafter RPVO). Its aim is to put the With such results that I will not go there again.” village on the map, improve its attractiveness, in- crease customer numbers, and make the opera- One possible way to enter the village cooperative tional preconditions better for the tourism actors in networks was said to be to open a new office for the village (Rukan kävelykyläyhdistys ry 2014). In one’s enterprise in the village. However, the high principle, businesses located outside the village rents were considered as hindering small business- are also allowed to join the association. However, es from operating at the very core of Ruka. Another one interviewee mentioned: possibility of gaining access was to cooperate with an enterprise that is located elsewhere in Kuusamo “Joining the association actually gets an enterprise nowhere as such if it is located further away. In the but also has an office in the pedestrian village. constitution of the organization it is outlined that Consequently, the pedestrian village was found the actions are tethered to the upper village to be a space where it is hard for tourism actors here. The aim of all the association’s operations is located outside to go and do business. Further- to increase the revenue of the member compa- more, the interviewees indicated that the use of nies. If an event is organized, it is organized here; public spaces is governed rather by the businesses we never go down there, close to the grocery store, to do it. Then it does not really benefit them in the village than the town of Kuusamo, which [the companies located outside the pedestrian vil- owns the land. For instance, some of the business lage] at all.” actors operating outside the very core felt that they FENNIA 194: 1 (2016) Resort-oriented tourism development and local tourism 13 are not allowed to bring promotional material to tourism, cooperation in marketing should not be the pedestrian village. It seems that to the tourism regarded as a sufficient way to cooperate. actors located outside the village, the area is seen This paper has demonstrated that, for smaller as more of a private than a public space. enterprises outside the core, it can be difficult to Based on the study results, the tourism enterpris- benefit from the growth of the resort’s core and its es in Ruka are interested in cooperating with such tourist flows through network relations. This is be- tourism areas that have better visibility and attract cause the role of the businesses located outside more tourists than their own. Commonly, the enter- the resort may be regarded as inconsequential by prises located outside the pedestrian village hope some tourism actors. The experiences of small en- to cooperate with the village, whereas the busi- terprises indicate their lack of power in networks. nesses at the very core wish to get connections to This is due to the fact that production cooperation the higher regional level. At the same time, the aim with the surrounding areas is not essential to the of the businesses to keep their customers within the large enterprises in the very core. Therefore, they range of their company in order to get as large a are able to exclude the smaller enterprises located share as possible of tourists’ spending seems to re- outside the core from the cooperative production duce the willingness to cooperate. To the business- networks. For the businesses in the Ruka pedestri- es in the pedestrian village, cooperation in produc- an village, resort-centered cooperation in tourism tion with the enterprises outside the core does not production seems justified in terms of tourism always seem essential since they are able to capi- growth. As noted by Koster (2007: 140), a short- talize on the natural environment of the surround- sighted interest in developing an individual com- ing areas without cooperation, for instance, by hav- munity only creates resistance to cooperate within ing their own accommodation and safaris in the the scope of the wider tourism region. surrounding areas. Furthermore, as most tourist Spatial concentration of the cooperative net- flows concentrate in the core area of the resort, works can have, in the long run, negative effects there does not seem to be a strong need for produc- also on the growth and development of the busi- tion cooperation with the surrounding areas. nesses in the core. In a case where local SMEs in the surrounding areas are left out of the networks, it is axiomatic that their knowledge of and connec- Discussion and conclusions tions to the local community and natural environ- ment are also excluded from tourism services. As This paper has given an account of the local-scale Arell (2000: 131) has pointed out, when enterpris- tourism networking in the rural areas of resort-ori- es network effectively within a large area and uti- ented tourism development. As the study results lize the local traditions and know-how of older have demonstrated, resort-oriented tourism devel- generations for the tourism development of today, opment seems to make cooperative networks simi- the tourism region can become creative and suc- larly resort-centered. The businesses located in the cessful. Similarly Brouder and Eriksson (2013: Ruka resort cooperate at the Ruka-Kuusamo desti- 138) note that the access to and the invocation of nation scale mainly in marketing while their part- local knowledge contributes to the survival of new ners in production cooperation are located mostly micro-firms in the rural tourism industry. In terms within the resort. The cooperative production net- of tourism supply, by way of core-periphery coop- works, the ones that require actual contact and eration, it would be possible to diversify the supply joint actions with other businesses, concentrate of services of the destination and attract a wider particularly in the very core area of the resort. This range of market segments (Viken & Aarsaether contributes mainly to the development of the core 2013: 38). In the case of the Finnish Lapland, the areas alone and hinders the surrounding rural areas local characteristics could be utilized for profiling from benefitting from the positive impacts of tour- the relatively similar tourist resorts (Lapin liitto ism development, since it is production coopera- 2007: 31). Based on the aforementioned notions tion that could channel tourism income spatially. of long-term business success and sustainable re- Currently, production cooperation is likely to be gional development, a move towards a destination insufficient distributing the benefits of tourism -de region-based tourism should be made. Then, tour- velopment in the way whereby the Finnish tourism ism development would better contribute to socio- strategies intend them to do. In regard to strengthen economic development and well-being in local the sustainable regional development impacts of communities. 14 Outi Kulusjärvi FENNIA 194: 1 (2016)
Spatial identification and destination ate in the global-local nexus, they are also locally- development based and historically contingent (see Paasi 1991, 2009, 2011). As the current study has indicated, Based on the results of the current study, there is a the spatial identification of tourism actors is con- social division and lack of networking between the nected to the construction of local tourism net- core and the surrounding areas in Kuusamo. The works. In tourism research, attention should be tourism actors in the Ruka resort typically associ- paid to this co-constitution of territorial structures ate themselves primarily with the closest sphere of and relational agency in tourism destination trans- operations. For actors who are located in the very formation, as Saarinen (2014: 51) has argued. core of the resort, this area can be very small, the Thus, it will be central to study local tourism stake- Ruka pedestrian village. The pedestrian village lo- holder’s views and agency related to tourism net- cated ‘up’ appears to be higher not only in altitude working and destination change. Pro-sustainable but also in the tourism actors’ perceptions of val- tourism research and policies should recognize ue. That is, resort-oriented tourism development and encourage local tourism actors’ possibilities to has created a space in a resort weakly connected take part in local tourism networks, reproduce to the local small-scale tourism development out- them, and, in this way, affect the course of destina- side the core via networking relations. Thus, the tion’s future development. core is a differentiated area not only measured by its economic and demographic characteristics but also in a sociocultural sense. This attests to the en- ACKNOWLEDGEMENTS clave nature of resort-oriented tourism develop- ment also in the Scandinavian context. I highly appreciate the anonymous Reviewers for their The tourist resort appears to function as a basis comments that improved the manuscript. I am also for spatial identification for tourism actors. How- grateful to the colleagues at the department of geography for their advice, especially to Mikko Kesälä for making ever, there is not necessarily one clear or a collec- the maps. I would like to acknowledge the Academy of tively shared identity. The tourism actors within the Finland for research funding (RELATE CoE, 272168). resort are not an internally homogeneous group. The heterogeneity of the local actors creates chal- lenges for the destination development. The spatial REFERENCES scale of identification seems to be significant in determining which area is conceived as the area Agarwal S 2012. Resort economy and direct economic link- for tourism growth and development. When entre- ages. 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