Early studies on residents’ attitudes to tourism were criticized for being atheoretical. As a result, it was not clear to researchers how, why, and in what conditions residents of a destination react to the impacts of tourism. To address these shortcomings, researchers started making use of a number of theories, among which, the Social Exchange Theory (SET) is considered to have made the most important theoretical contribution to studies on residents’ perceptions of tourism. This paper critically analyzes the different elements involved in the social exchange process between residents of a destination and the tourism industry. It analyzes the core constructs of the SET and in particular, focuses on power and trust between the actors in the exchange process. The arguments suggest that researchers have failed to integrate these core concepts in a single study to investigate their influence on residents’ perceptions of tourism and their support for development. The paper suggests that the power and trust concepts have significant potential in explaining community acceptance of tourism and if this field of study is to be advanced theoretically, then researchers should empirically test these concepts in an integrative framework.