In recent years, the Travel and Tourism (T&T) sector has faced multifaceted challenges, including the COVID-19 pandemic, geopolitical and economic uncertainty, inflation and extreme weather events such as wildfires, that reflect broader global risks and trends encompassing economics, the environment, society, geopolitics and technology. Within this context, policy-makers, consumers and other stakeholders have looked not only at how the sector is affected by these trends but also at how, conversely, it contributes to such trends through its economic, social and environmental impacts. Therefore, it is imperative that T&T decision-makers do more to comprehend how future risks affect the sector and take a more active role in developing it in a way that maximizes its potential to tackle global challenges. If managed thoughtfully, T&T can emerge as a potent driver of resilient and sustainable development, contributing to the collective well-being of communities around the world.

To help in this goal, the TTDI’s special focus section uses qualitative research and index results to provide an overview of the potential external risks landscape and some of the areas on which decision-makers can focus to unlock the T&T sector’s potential to address these challenges and maximize its positive economic, environmental and social impact.

Figure 15: Relative severity of risks over a two and 10-year period

To understand how T&T can contribute to future global prosperity, it is first important to better understand the risk landscape in which the sector will operate. The World Economic Forum’s recently published Global Risk Report 2024 highlights numerous challenges with short- and long-term impacts for populations, the economy or environmental resources on a global scale.³² As Figure 15 shows, over the next two years, pressing concerns encompass environmental, economic and societal challenges such as: extreme weather events and pollution; inequality and limited economic prospects for parts of society; inflation; social polarization; and involuntary migration. Safety and security concerns related to misinformation and disinformation, armed conflict and cybersecurity are also ranked among the 10 most severe risks facing the world in the next two years.

In contrast to short-term risks, those risks with a long-term impact on a global scale are predominantly environmental, ranging from biodiversity loss to a shortage of natural resources and extreme weather events. The adverse outcomes of AI technologies are also seen as a potential risk affecting the world in the next decade. Among the most severe risks with long-term global impact are challenges related to security such as cyber insecurity or misinformation and disinformation. Overall, perceptions for almost all tracked risks by the Global Risk Report are expected to accelerate in the next decade, with environmental, technological and societal risks accelerating the most, while economic risks such as inflation relatively decelerate.

In the next decade, environmental challenges are predicted to have the strongest impact globally, affecting populations, societies, economies and the world’s ecosystems. Challenges such as biodiversity loss, the rise in climate-related extreme weather events and increasing pollution all pose clear dangers to tourism-generating natural resources, sector infrastructure and visitor experiences. The T&T sector is, however, not only directly influenced by growing environmental risks, but also contributes substantially to environmental challenges and could play an important role in addressing these global challenges by mitigating its contributions to climate change and transitioning towards being a more sustainable and environmentally conscious sector.

Figure 16: 2024 subregional average scores for Natural Resources vs. Preservation of Natural Resources

The T&T sector can be employed to address the risks and challenges by focusing on areas such as:

Providing greater value for nature conservation efforts: Many destinations’ reliance on natural resources provides a strong incentive to protect the environment by creating economic value for preservation efforts. According to WTTC research, nature tourism generates more than $600 billion in revenue globally, with wildlife tourism alone creating close to 22 million jobs. In Africa, wildlife tourism generated around $142 million in entrance fees for protected areas alone.³³ However, TTDI analysis also reveals significant gaps in the preservation of natural resources in some of the most nature-rich regions of the world (Figure 16).

The Forum’s Global Future Council (GFC) on Sustainable Tourism recommends that tourism destinations prioritize nature conservation, using a regenerative model involving stakeholders such as destination managers, tour operators, local businesses and visitors. Governance based on science and traditional environmental knowledge develops climate resilience. Conservation, restoration and regeneration principles, taking into account habitat carrying capacity, are crucial. Funding protected area management, promoting visitor education and reinforcing the link between wildlife, conservation and local livelihoods are priorities. Stakeholder engagement ensures fair benefit-sharing, with business plans tied to conservation outcomes. Governments should integrate nature into planning, develop financing and ecotourism business proposals, establish visitor management strategies and ensure tourism concessions align with protection policies.³⁴

Leading on the energy transition: In recent years, the T&T sector’s substantial contributions to climate change in the form of GHG emissions have garnered increasing attention and raised concerns. The sector relies on transportation, particularly air travel, which is a highly energy- and emissions-intensive mode of travel that cannot be fully replaced, emitting substantial GHGs and contributing to 8% of global GHG emissions in 2019. Considering that T&T GHG emissions increased on average by 2.5% annually in the decade before the pandemic, it can be expected that similar growth rates may re-emerge in the post-pandemic stage of T&T.

On the other hand, the fact that the T&T sector’s GDP grew at a faster rate than did its emissions is promising and can be continued if appropriate actions are taken.³⁵ Sustainable aviation fuels (SAF) may offer one potential solution, a means of reducing aviation emissions if the challenges and risks associated with SAF such as land use for producing biomaterial or emissions from crop-derived SAFs in aircraft are resolved.³⁶ Additionally, rather than focusing only on direct emissions from T&T activities, the sector needs to take into account Scope 2 and Scope 3 emissions³⁷ produced in the value chain (Scope 2 and 3 emission account for the majority of non-transport sector emissions)³⁸ to ensure that all emissions are measured, and appropriate actions taken to reduce overall emissions. One important pathway towards reducing emissions could be related to waste reduction, in particular food waste, considering the high emission rates of food production.³⁹ New regulations on greenwashing and climate claim reporting in the European Union and other regions may aid in further driving the sector transition towards net zero by 2050 as it makes companies accountable for their emissions and could help better track and reduce indirect emissions within the supply chain. Improved environmental standards in building regulations and incorporating the latest technologies to minimize energy use will further spur this transition.⁴⁰

Driving responsible consumption: The rise in tourist numbers places strain on local resources, water supplies and waste management systems, exacerbating environmental degradation. For instance, the T&T sector accounted for 5.8% of global water use and 5–8% of global material extraction in 2019.⁴¹ Despite the growing awareness of the environmental impacts of consumer behaviour among governments and tourists, responsible consumption of resources in the T&T sector still lags behind compared to daily-life contexts. Both tourists’ consumption and the T&T industry’s resource management need to change to tackle this issue. Encouraging alterations in tourists’ behaviour towards more environmentally friendly forms of consumption can help address this challenge, including encouraging consumption of low-environmental-impact foods such as plant-based dishes,⁴² or the reduction of plastic usage, which is a key environmental challenge in many destinations.

Closing the gap between people’s positive attitudes about sustainable consumption and their often misaligned unsustainable behaviour is one of the major challenges for the T&T sector.⁴³ The Forum’s report on How to Create the Sustainable Travel Products Customers Want identifies limited availability, a price premium or low credibility among other factors as reasons for this “say-do-gap”. To address this, cross-industry and stakeholder collaboration and alignment is required to invest in and refine sustainable products, provide a frictionless experience, improve value propositions, recognize and reward customers, increase awareness and improve product transparency.⁴⁴

Lack of economic opportunity, unemployment and economic downturns are some of the most pressing risks facing the world. T&T can be used to address this global challenge as it is forecasted to continue to be a major source of economic growth and employment. In the next decade, the T&T sector’s contribution to global GDP is expected to increase from 9.1% in 2023 to 11.4% in 2034, helping to generate over 12% of jobs worldwide.⁴⁵ Considering that the T&T industry will remain relatively labour-intensive, despite increased automation, and given the large amount of low-entry and part-time employment within the sector, it provides ideal opportunities to tackle unemployment. It also plays a pivotal role in employing women, youth, migrants and informal workers. In particular, backed by emerging-market economic and middle-class growth, T&T will be an important driver of economic growth in developing countries and regions. Lastly, the sector’s potential for socioeconomic prosperity is magnified by the fact that it empowers small- and medium-sized enterprises, with more than 80% of T&T businesses falling under this category.⁴⁶

T&T stakeholders can use the sector to combat socioeconomic challenges by focusing on areas such as:

Investing in skilled, inclusive and resilient workforces: As mentioned in the dimensional analysis, by cultivating a skilled, inclusive and resilient labour force, the T&T sector will be able to better use technology, improve service quality, boost productivity and expand its labour pool, especially in the light of recent labour shortages. Moreover, with the sector being a significant global employer, there is an opportunity to lead global efforts to enhance labour conditions, especially in the 63 mostly low- to middle-income TTDI-ranked economies that score below average for the Labour Market Resilience and Equality subpillar and account for 54% of the T&T workforce. An ILO report on the Future of Work in the Tourism Sector presents an action plan for inclusive, safe, fair and sustainable tourism: it suggests focusing on women, youth and migrants for job creation, transitioning from job informality, and promoting green jobs linked to ecotourism and conservation. Social protection measures, including rolling out social security, improving occupational health and safety, and regulating working hours, are recommended.

Additionally, encouraging social dialogue, recognizing freedom of association and adhering to international labour standards regarding equality and non-discrimination are highlighted as essential for ensuring the sector’s resilience and sustainability.⁴⁷ These suggestions align with the already-mentioned WTTC proposals for addressing the ongoing labour shortage, which include facilitating labour mobility, flexible working arrangements, decent work and competitive benefits, skills-building and adaptation of digital solutions.

Putting local communities at the centre of T&T development: While the T&T sector is a major source of opportunity for communities, employers and SMEs around the world, its benefits do not always fully extend to local communities. UN Tourism recommends that the sector improve its social inclusion by supporting and involving vulnerable groups, focusing on the needs of SMEs and repurposing tourism as a supporter of the community.⁴⁸

Furthermore, the Forum’s GFC on Sustainable Tourism outlines several steps that governments, communities and industry can take to improve the sector’s community impact. Government leaders should prioritize creating an inclusive destination-planning framework that balances community well-being with the protection of natural and cultural resources and the financial health of travel service suppliers. Communities and the travel industry should engage in holistic destination management planning, investing in environmental, social and governance practices. They can also market sustainable experiences and educate travellers on responsible travel practices. Concrete steps include establishing tourism laws that create incentives for community well-being, endorsing global standards such as those of the GSTC, and creating resident satisfaction metrics. Building a network of leaders, developing community-driven planning and providing resources for capacity-building are crucial, along with establishing stakeholder consultation platforms and social safeguards for risk management and improved outcomes.⁴⁹

Strategically managing visitor behaviour and infrastructure development: As highlighted by TTDI results, historical demand sustainability challenges such as seasonality, short lengths of stay and overcrowding have worsened as the sector has recovered from the pandemic, increasing pressure on local infrastructure, housing and natural and cultural assets that attract visitors, negatively affecting the visitor experience and local liveability and fuelling uneven distribution of T&T benefits. However, various management policies and infrastructure investments can minimize these issues and help channel T&T flow and benefits more broadly. Investments and policies should focus on dispersing tourism to rural, nature and secondary destinations by improving infrastructure and access. This includes developing transport, tourism, health and ICT infrastructure in these areas to make them more attractive and increase their capacity to accommodate visitors.⁵⁰ UN Tourism has devised strategies and measures to mitigate overcrowding, promote sustainable tourism development and enhance the overall visitor experience in urban destinations. These include the promotion of attractions and events that disperse visitors, implementing dynamic pricing mechanisms, establishing pedestrian-only zones, defining carrying capacities for city areas, targeting low-impact visitor segments, ensuring local communities benefit from tourism, engaging with stakeholders, and using big data to monitor impacts (as will be discussed in Section 7.5 below).⁵¹

As risk perception data reveals, geo-economic confrontation, interstate conflict, societal polarization, misinformation and disinformation are ongoing global challenges that are likely to become even more pressing in the next decade. In this context, T&T will become an increasingly vital player in fostering global connectivity by facilitating economic interdependence, person-to-person interactions and cultural exchange. As people visit different countries, they build personal connections, promote mutual understanding and create networks that transcend political divides, while also stimulating economic growth and encouraging investment. Moreover, travel can help mitigate misinformation and social polarization by enabling first-hand experiences that challenge stereotypes, promote empathy and contribute to the dissemination of accurate information through shared experiences and dialogue, ultimately strengthening global connections and bridging societal divides. The sector’s ability to promote cultural exchange, tolerance and economic opportunity has also been shown to enhance resilience to violence and conflict.⁵²

T&T stakeholders can enhance the sector’s potential to drive global connectivity and peace by focusing on areas such as:

Increasing travel openness: Continuing progress already made in travel openness as reflected in increasing Openness to T&T pillar scores will be critical to maintaining the T&T sector’s ability to drive global connectivity. In particular, visa and airline liberalization have been shown to increase cross-border travel flows, with the former even helping internationalize the labour market,⁵³ while the latter helps reduce travel prices, increase aviation capacity and service quality, improve resilience and boost consumer choice.⁵⁴ As a result, related policies are critical to the T&T sector’s ability to create economic interdependence and person-to-person connections. The previously mentioned combination of visa policies and cultural heritage (e.g. South Korea’s K-pop visas) can be an especially effective way of leveraging T&T for mutual understanding and tolerance building.

Encouraging cultural exchange between visitors and the local community: T&T’s potential to promote peace, tolerance and connectivity can also be bolstered by destination management and other policies that encourage deeper local and cultural exchange. To employ tourism for cultural exchange and tolerance, destinations should focus on promoting authentic cultural experiences and interactions between visitors and local communities. This can be achieved through initiatives such as cultural heritage tours, homestays, community-based tourism projects and cultural festivals that celebrate diversity. As previously mentioned, to achieve this goal it is essential to involve local communities in tourism planning and development to ensure that their voices are heard and their cultural heritage is respected. More targeted marketing activities focused on authentic cultural experiences and protection are also recommended.⁵⁵

The introduction of new technologies often creates worries about the unintended and unknown consequences. The newest technology and the potential adverse outcomes of AI technology are together perceived to be one of the major risk factors to affect the world in the next decade. While these advances in technology need to be implemented with care to avoid negative consequences such as job displacement, privacy and data security issues or service quality, new technology is also poised to revolutionize the tourism industry, fundamentally altering how travellers explore destinations and interact with service providers. From personalized trip planning powered by AI algorithms to immersive virtual reality experiences, technology will increasingly offer travellers unprecedented convenience and customization, while digital technology and online platforms empower destinations and T&T businesses, by facilitating online bookings, use of sharing-economy platforms, digital payments and mobile access, enabling access to new markets, operational optimization, enhanced visitor engagement, and gathering of consumer insights and preferences. Simultaneously, as a major part of global and local economic ecosystems, with a multitude of private and governmental stakeholders, T&T will also serve as an important initiator for the adoption of new technology and digitalization beyond the T&T sector. The way in which technology is applied in T&T will have broader implications for communities and will influence aspects such as socioeconomic development and sustainability. Finally, as technology becomes increasingly intertwined with the sector, T&T stakeholders will have the opportunity to harness its potential for positive impact by focusing on the areas outlined below.

Figure 17: Factors of the digital divide, by income group average

Adopting technology-enabled sustainable and resilient T&T management: Technology will be a major enabler of sustainable T&T development in the coming years when smart destinations become the norm rather than best practice examples. For instance, the increasing use of digital platforms in T&T has generated vast amounts of data, enabling better measurement and management of sustainability. This data, including online bookings, digital payments and use of mobile devices, offers insights into visitor behaviour and any impacts, facilitating smarter destination management. Big-data analytics allows the processing of diverse data sources for precise tracking of factors such as visitor behaviour and environmental impacts in real time. This enables destination managers to optimize resource allocation, manage visitor flows and develop strategic plans, enhancing T&T sustainability and creating more responsive destinations.⁵⁶ AI could also assist in managing tourism flows and analysing environmental impacts to support sustainable practices (including digital nudging for responsible tourist behaviour, as suggested in the AI4GoodTourism framework).⁵⁷ With improved interoperability, AI also makes travel more accessible, breaking language barriers and offering tailored, more affordable experiences to diverse groups.

A recent Forum report on using big data for sustainable tourism development in Türkiye emphasizes the importance of aligning T&T sustainability policy with big-data opportunities and ecosystem capacity, developing governance frameworks, funding and destination institutional capacity and encouraging ICT investment in infrastructure such as sensors and data centres among other recommendations for the proper use of big data for sustainable tourism.⁵⁸

Bridging the digital divide and creating opportunities: T&T can be an important conduit for bridging the digital divide by promoting digital inclusion and providing opportunities for various destinations, local businesses and workers. As alluded to earlier, digital technologies and platforms provide SMEs with effective and relatively low-cost avenues to market, sell and promote their products and services to a global audience, encouraging entrepreneurship in local communities. For instance, sharing-economy platforms such as those hosting short-term rentals, and digital labour platforms such as ride-hailing apps, provide greater access to new business opportunities and flexible employment for workers.⁵⁹ Between 2017 and 2023 the number of short-term rentals on Airbnb and similar platforms among TTDI-ranked countries increased by more than 80%.⁶⁰

Technology also provides opportunities to work remotely while travelling and offers the possibility of new travel experiences in the form of virtual travel, allowing individuals the chance to explore destinations and engage in tourism activities without physically travelling. This can be particularly beneficial for those who face constraints such as mobility issues, financial limitations, or health concerns.⁶¹ Lastly, by leveraging social media as a way to showcase their cultural heritage, natural attractions and unique experiences, rural destinations can stimulate economic development and enhance their visibility on the global stage in a relatively cost-effective manner.⁶² However, as Figure 17 highlights, T&T stakeholders in developing countries will need to prioritize investment in ICT infrastructure, access and skill building.

Ensuring the responsible and safe adoption of technology: While the use of technology in T&T offers immense opportunities for sector stakeholders and beyond, its ability to drive positive impact will depend on responsible and safe implementation. Privacy concerns arise as the use of personal data could lead to unauthorized surveillance.⁶³ Over-reliance on technology increases vulnerability to technical failures and cyberattacks, risking financial and reputational damage. AI’s decision-making in T&T raises ethical concerns due to potential bias from flawed data or prejudices embedded in algorithms.⁶⁴ And while considered a potential solution to T&T’s chronic staff shortage issues, automation may displace jobs. Moreover, digital labour platforms may exacerbate income and job insecurity due to issues such as poor working conditions, in particular for migrant workers,⁶⁵ inadequate social protection and limited access to rights of freedom of association and collective bargaining,⁶⁶ while the rise of short-term rental platforms raises concerns about housing accessibility in areas where housing capacity is absorbed by T&T.⁶⁷ Further, market concentration among leading T&T digital platforms could lead to imbalances in bargaining power among stakeholders.⁶⁸

Addressing these challenges necessitates a balanced approach that includes robust privacy protections, cybersecurity investments, equitable access to technology and the preservation of human elements in travel experiences, protecting employment and decent work in the T&T sector⁶⁹ and engaging with local communities to ensure potential externalities such as housing challenges related to sharing economy platforms are appropriately tracked and addressed. Collaboration among industry stakeholders is essential to ensure technology acts as a positive force in sustainable tourism development.