Typically, the image of a destination is studied by questioning a sample of tourists about their perceptions using a list of attributes and then condensing the data into average values for each individual destination. The city perception analysis (CPA) presented in this article, which is based on the perceptions-based market segmentation concept (PBMS, Dolnicar, Grabler & Mazanec, 1999; Mazanec & Strasser, 2000; Buchta, Dolnicar, & Reutterer, 2000), approaches the positioning task from a completely different perspective. The fundamental assumption is that different consumers harbor different perceptions of various destinations in their minds. Therefore, averaging the perceptions and ignoring inter-individual differences in city image perceptions dramatically distorts the results. The CPA approach uses a three-way data structure and identifies archetypal destination perceptions before revealing information on which cities they were associated with, thus avoiding the false assumption of homogeneous consumers. The information on which perception was classified with respect to which brand is disclosed afterwards, thus allowing specific destination image insights. On the basis of CPA results, destination management can analyze the destination images as perceived by the tourists, choose attractive image positions for the future and deduce strategic policies. For the final positioning strategy, segments underlying the single perceptual positions have to be studied in detail. The CPA approach is illustrated using an empirical image study of six European city destinations, followed by a discussion of the managerial implications and advantages over traditional methods.