Constrained by remoteness and underdevelopment, rural areas have limited options for economic development. In Portugal, this affects more or less severely all the inland and mountain areas, where demographic erosion has already led to the partial (and, in some cases, to the complete) depopulation of several villages and small towns. The recognition of this trend has been generating growing concern over these territories, as manifested in communitarian, national and regional programmes and plans to promote alternative ways of development. To stimulate rural economies, it has become inevitable for rural regions to seek alternative uses for local resources. The two main driving forces are grounded in the diversification of these economies and in the enlargement of new territorial functions. Despite the top down orientation of the public policies, rural communities have a determinant role in the management of local resources. Although they approach it with a strong cooperative and entrepreneurial mind, this is usually insufficient in these territories.

The reversal of this strongly rooted path is perhaps the biggest challenge that these vulnerable territories have to face, in order to establish internal networks and new patterns of governance and collective mobilization. With comparatively advantageous effects in income and employment generation, tourism is an option for enhancing rural lifestyles and for inducing positive changes in the distribution of income in underprivileged regions (Liu, 2006). In fact, tourism has been presented as a key activity to achieve the economic diversification and the social regeneration of less-favoured territories. In particular, tourism has been widely promoted as an effective source of income and employment, particularly in peripheral rural areas where traditional agrarian industries and activities have declined (Sharpley, 2002). The integration of such alternative sources may help to equilibrate local economies and to encourage local development. On the other hand, more and more tourists are seeking rural destinations which are able to offer pleasant experiences combining heritage, nature, landscape, authenticity and quietness. This may explain the enthusiasm around the potential of tourism to stimulate the economy of the less favoured territories.

Similarly to what is happening in Europe and overseas, in Portugal rural tourism (RT) has become a recurrent and strategic subject in a wide range of public speeches, written documents and policies, often aimied at sustaining the economy of peripheral territories. The purpose of this chapter is to investigate the extent to which this role for RT represents a realistic tourism development strategy. Based upon research on the development of RT in the Portuguese rural municipality of Almeida, it highlights the challenges and problems encountered by RT entrepreneurs. At the same time, this chapter identifies a number of issues, which oppose the success of RT development, and analyses the true impact of RT in this border municipality. The selection of Almeida as a case study for this research is supported by four main reasons: (i) the chapter extends previous research undertaken by the authors in this municipality (Fonseca, 2006; Fonseca and Ramos, 2007; Fonseca and Ramos, 2008b); (ii) Almeida is located in peripheral and underprivileged region and shows a cycle of demographic and economic decline; (iii) the municipality has several important attractions to reinforce its position in the RT segment; and (iv) local actors classify tourism as the most promising activity to reverse Almeida’s economic, social and cultural decline. These findings are supported by a survey from 2008 carried out with the owners of RT establishments located in Almeida.

In order to reach the aims outlined above, the chapter is organized as follows. In Section 12.2 we revisit the relevant literature about tourism benefits and constraints in the socio-economic regeneration of peripheral territories. Then, we trace the origins and evolution of RT, focusing the analysis on the Portuguese context. Finally, in Section 12.3 we present and discuss the results of the Almeida case study, comparing the findings extracted from RT entrepreneur’s surveys with the principles derived in Section 12.2. Section 12.4 concludes.