This paper begins by describing typical resource and sustainability issues provoked by the small and medium-sized tourism enterprise structure in European mountain areas. It then suggests that because of the labour intensive character of tourism, sustained competitive gains for alpine businesses and their communities can be obtained by focusing management energies on improving the productivity of local tourism service production processes or value chains. Tourism services produced along a destination value chain may be seen from two viewpoints:. The paper suggests that core destination management activities should involve the regular benchmarking of visitor satisfaction as well as effective resource stewardship. In turn, management in sustainable destinations should focus their efforts on improving the quality perceived by the customer, whilst making the corresponding conversion of inputs into outputs more efficiently . The paper proposes that an indicator system be established as one tool for benchmarking alpine tourism destination efficiency in both quantitative and qualitative ways. Using an European Alps case study as an example, it demonstrates the applicability of the Data Envelopment Analysis framework as a method for combining several key destination productivity factors into one comprehensive productivity index. .