This study draws on the Resource‐Based View to analyze the effects of distinctive competences in tourism firms and location in a tourism district on competitive position, and explores the moderating effects of the tourism destination. Multiple linear regression was used to test the research hypotheses on a sample of 1019 Spanish tourism firms. Results reveal that financial resources and dynamic and production capabilities favor a better competitive position for tourism firms in general; however, coordination and marketing capabilities are key factors for firms embedded in a tourism district, while dynamic capabilities have a negative effect in this case. Copyright © 2015 John Wiley & Sons, Ltd.