In Japan, tournaments are a staple. They base entire tours around them, and they are always used to elevate guys or set up money drawing matches.
New Japan has the G1 Climax, G1 Tag, Best of the Super Juniors, Junior Tag League, and now the J Cup is back.
NOAH has four yearly tournaments, All Japan still does the Carnival tournaments, even Dragon Gate does them now, and smaller groups like Zero-1 with the Fire Festival.
The formula is simple, do a big round robin with a point system, bring in some outsiders to spice things up, have someone pin the champ along the way (to set up a title match), let a young guy go further than expected to elevate him, boom, success.
I always thought these types of tournaments were highly underutilized in the U.S.