TONY BLAcKwoOD AND GRAHAM MowL ARE both lecturers at the University of Northumbria, England. this paper aims to identify and account for patterns of success and failure among small, expatriate-owned businesses operating in the tourism service sector of the major resorts of the Costa del Sol in Southern Spain. This group of businesses is particularly interesting because they have acquired a reputation for economic instability and relatively high rates of business failure. Furthermore, the need has been argued for both area and industry specific research on small business failure in order to gain a more contextual understanding of their problems. To understand any patterns of business success and failure it is necessary to investigate not only the behaviour of business owners but also the more general economic and social processes affecting the industrial sector and the locality in which the firm operates. The paper assess the tourism industry and in particular the role of small businesses within the tourism-related sector. It also investigates the background, aims and business management practices of individual entrepreneurs and attempts to use these findings to generate possible explanations of the patterns of business success detected.