The paper aims to detail the mechanisms through which collective capability (destination capability) is generated by a network of players, belonging to independent organizations, by means of integration and reconfiguration of individual resources and competences. To accomplish this goal, we set ourselves two questions: how do dynamic capabilities originate and then, consolidate at the destination level? How do destination capabilities affect performance of the destination? We try to answer these questions by analyzing the interaction among players of a destination within the context of a specific initiative: the development of a new tourism product. The concept of destination capabilities has recently been posited in the literature as the destination actors’ collective ability to integrate, reconfigure, gain and release distributed resources and competencies, and effectuate change. The paper highlights certain necessary pre-conditions for generating collective capabilities, some procedural elements essential to their development and, lastly, some necessary factors to ensure their embedding and future repeatability over time. Furthermore, by analyzing a thirty-year time series the study demonstrates the influence of developed and embedded collective capabilities on destination performance.