Oligopoly and the resort cycle in the Bahamas

Markusen's “profit cycle” and the influence of oligopoly are applied to Butler's notion of the resort cycle. The stagnation and decline associated with the latter stages of the resort cycle can be explained by industrial organization and the oligopolistic position of the major suppliers. The study area of Paradise Island (Bahamas) appears to be a clear example of how the corporate strategies of a major supplier can dramatically influence the resort cycle process. Resorts subjected to long-term oligopoly can experience eventual declines in the number of visitors because of an emphasis on market share and competitive stability, at the expense of innovation and diversification.