According to Friedman and Miles (2002), stakeholder theory suggests managers should consider the relationship with multiple parties such as governmental bodies, business enterprises and local communities. Freeman (1984) has defined stakeholder as any group or individual who can affect or is affected by the organization’s goals and objectives (in cited in Nicholas, Thapa and Yong, 2009).
The core key to successfully implement sustainable tourism development in a community is through the support from stakeholders. Without their support, it is impossible to develop tourism in a sustainable manner (Byrd, Bosley, Meghan and Dronberger, 2009). In the perspective of tourism, a stakeholder can be identified as “any group or individual who can affect or is affected by” tourism development. According to Byrd, Bosley, Meghan and Dronberger (2009), there are four main stakeholders group discover in the perspective of tourism including tourists, residents, entrepreneurs and government department. The role of non-governmental organizations (NGOs) is often neglected, but this stakeholder group is increasingly important in sustainable tourism development (Lyona, Hunter-Jonesb and Warnaby, 2017). According to Donaldson and Preston (1995), to be an identified stakeholder, the group or individual must have a legitimate interest (in cited in Byrd, 2007). Stakeholders can be divided into various categories that depend on the level of interest and their potential to influence the decision-making process (Tuohino and Konu, n.d).
The stakeholder is emphasizing on its ability to solve multiple perceived issues. The top-down tourism development decisions are taken to solve the issues. The experts are involved in making decisions and it is perceived by the local community but it is always not reflective on their interests or opinions. The success of the stakeholder involvement process is not depending on the outcome, but rather that the interests, perspectives and values of stakeholders are represented in decisions (Nicholas, Thapa and Yong, 2009). According to Healey (1998), the participation between stakeholders group can avoid the major conflicts (in cited in Byrd, 2007). The ability to handle or solve the perceived issues is stress on the participation of stakeholder (Byrd, 2007).