Impacts of a local community event on development of peripheral destination : Entrepreneurial perspective on Aldrei fór ég suður festival in Iceland

Remote communities stay vulnerable in the face of major socioeconomic challenges. Tourism is often seen as a way to stimulate local economies and increase attractiveness of peripheral destinations, while events are considered to be one of the tools to promote tourism. In this regard, local collaboration is deemed to be crucial for facilitating development in spatially remote areas, where social context plays an important role in formation of entrepreneurial networks. By using the case of a local community festival Aldrei fór ég suður (AFS) in Ísafjörður, Iceland, I investigate relationship between the festival and local tourism entrepreneurs and define opportunities that the festival might provide for sustainable development of the area. Based on data collected from 24 interviews, findings suggest that the impact of AFS on local businesses varies depending on the category of business, its location, seasonality and target group, whereas the festival also contributes to enhancement of destination image, extension of tourist season and attraction of new categories of visitors. Following theoretical framework of social capital and social embeddedness, the main role of the festival is found to be related to enhancement of community pride and contribution to social change within community. On the other hand, results demonstrate general lack of willingness to collaborate and suggest an increased risk of overembeddedness given the self-reliant nature of the festival and its reluctance to commercialization. Discussed suggestions for sustainable destination development include co-branding, packaging for extended stay, transportation options and usage of empty housing for temporary accommodation