The competitiveness of the tourism industry at the regional level is directly influenced by physical structures and the quality of urban infrastructure. Sarein, as one of the major tourism centres of Ardabil Province, benefits from hot springs, natural resources, and diverse service facilities, playing a significant role in promoting tourism in the region. This study was conducted with the aim of identifying and analysing the physical structures that affect the regional competitiveness of the tourism industry in the city of Sarein. The research is applied in terms of purpose and qualitative in nature. Data were collected through 15 semi-structured interviews with experts and stakeholders in the fields of urban planning, architecture, and tourism, selected through purposive sampling. Using the grounded theory approach and MAXQDA software, the data was analysed through open, axial, and selective coding. The analysis resulted in the extraction of a paradigmatic model consisting of four main dimensions of influential physical structures, prioritised as follows: service-related physical structures (including transportation, parking, welfare facilities, and recreational amenities) with the strongest relationship (correlation coefficient 0.86); economic physical structures (including tourism infrastructure and investment); environmental physical structures (including natural resource management and green spaces); and socio-cultural physical structures (including cultural spaces and community participation). A comparative analysis of the current and desired conditions indicated that Sarein suffers from significant gaps in service-related and socio-cultural dimensions. The findings reveal that although Sarein possesses the natural advantage of hot springs, its tourism competitiveness depends on balanced and integrated development across all four dimensions of physical structure, particularly through addressing infrastructural and service-related deficiencies.