<p>Tourism and hospitality businesses face strategic challenges managing destination competitiveness when popular sites experience capacity constraints threatening profitability while alternative destinations remain underutilised. This study investigates how demarketing approaches combined with digital technologies create competitive advantages through visitor redistribution, applying social comparison theory to consumer decision-making. Critically, we position demarketing not merely as a set of marketing communications tactics, but as a demand governance instrument that mediates competing stakeholder interests—balancing destination sustainability, community equity, and smart tourism objectives. The study addresses two under-explored questions: (a) how demarketing functions as a demand management counterpart to carrying capacity frameworks; and (b) how technology mediates—rather than simply enables—the activation of social comparison processes in shaping tourist redistribution behaviour. Multi-focus group interviews with Egypt’s tourism stakeholders—tourists, hospitality managers, and destination officials—besides empirical contextualisation of International Benchmarks and Digital Infrastructure for demarketing examined responses to overcrowding and technology-enabled demarketing effectiveness. Findings reveal upward social comparisons and FOMO mechanisms significantly influence destination choices when integrated with digital demarketing interventions. Technology-driven personalisation successfully shifted preferences toward alternative destinations through targeted messaging emphasising exclusive experiences, with mobile recommendations proving effective when positioned as insider knowledge.</p>