Ancient cities and towns are popular tourism destinations worldwide. In this paper, Guangfu Ancient City in Yongnian County, Hebei Province, China, is taken as the case study and the modified creative destruction model is applied as the analytical framework to evaluate the multiactor dynamics of heritage tourism development. A mixed method approach is adopted, including a local resident survey, in-depth interviews with staff of the Guangfu Ancient City tourism site and government officials responsible for the heritage conservation and tourism development of the site, and a review of online tourist reviews, relevant government documents and reports. Based on the modified creative destruction model, local residents’ attitudes towards tourism development, changes in tourist numbers, the level of business and government investments, and the motivations of different stakeholders in tourism development are assessed by synthesising on-site research, historical data and other materials. Then, the tourism development stages for Guangfu Ancient City are identified as the precommodification stage before 2006, the early commodification stage from 2006 to 2011 and the advanced commodification stage from 2012 to 2017. The findings indicate that with rapid increases in investments from both corporate and government sources and in the number of tourists, the attitude of local residents towards tourism development remained positive. The results show that instead of entering the initial destruction stage, Guangfu Ancient City is in the transition stage from advanced commodification to creative enhancement given the government’s dominant role in tourism development, the heritage conservation motives of tourism entrepreneurs, the benefits to residents from tourism development ensured by government policies, and the shift in tourist type to postmodern tourists with double demands. The applicability of the modified creative destruction model is further discussed, and policy and management recommendations are generated to support the sustainable development of Guangfu Ancient City after the COVID-19 pandemic.