Tourists seldom experience a destination with just one company, yet they often encounter a destination as a coherent entity. This results from the effort of different stakeholders who work together to develop a destination, despite often being competitors. These efforts make the tourism industry fertile for coopetitive relationships.  The high presence of coopetition has inspired researchers to study this phenomenon in the tourism sector. There is a solid academic understanding of the rationales behind coopetition and the factors influencing the level of coopetition within a destination. However, despite the academic interest, there is only limited research dedicated to the impacts of coopetition on destination development. This study responds to this shortcoming and investigates the impacts of coopetition between accommodation companies on the destination development of Saaremaa, Estonia. Given the exploratory nature of this study, a qualitative case study approach focusing on collecting original data required from primary sources has been used as the research method. The qualitative research is carried out via semi-structured interviews with two sources of data. The interviews were conducted with six representatives of accommodation companies and one representative of the local DMO. The study results provide supporting evidence that coopetitive relationships between accommodation companies have several impacts on the destination development of Saaremaa. Namely, these relations are impacting the economic development and strengthening the image of Saaremaa. Furthermore, the results show that coopetition increases the diversity and the quality of offered products and services. However, given the case study approach and the size of the research, caution is required in interpreting the study's results, especially when applying the results to other destinations.