The Future of Tourism: How to Embrace Sustainable Growth for Travel Destinations?

Destination readiness is at the heart of the World Economic Forum's Travel & Tourism Development Index.‍‍‍‍

Image source:Unsplash/Bernie Almanzar

Dan Fenton

Managing Director, JLL

Mark Wynne-Smith

Global Head of Valuation and Risk Consulting at JLL

To maximize tourism potential, government officials must assess the destination’s readiness through planning, infrastructure development, policy implementation, and socio-economic growth.
The World Economic Forum's "Tourism Development Index" highlights the strengths and gaps among different tourism economies.
Tourism development requires cross-sector collaboration, extending beyond feasibility studies to include inclusive participation and strategic planning.

With the lifting of travel restrictions, combined with long-suppressed strong demand for tourism and travelers regaining confidence, the global tourism industry is now on a path to recovery and growth.

In the post-pandemic era, assessing destination readiness is crucial for both tourism planners and investors.

It is also an integral part of the World Economic Forum’s Tourism Development Index, which measures a range of tourism and travel-related indicators and policies across 117 economies—and aligns with Cushman & Wakefield, the real estate firm, in its research on destination readiness.

Destination readiness refers to whether a city or country is prepared to effectively manage tourism growth and capitalize on tourism opportunities. This is also crucial for destinations focused on ensuring sustainable future development. When making significant investment decisions, investors need to understand more than just market demand.

"Readiness" involves strategic, comprehensive planning, infrastructure development, policy adjustments, and proactive sustainable initiatives—initiatives and measures that are supported by the community, enabling it to benefit from a thriving tourism economy.

The Tourism Development Index serves as a benchmark, enabling policymakers and investors to identify the strengths of various tourism economies as well as areas for improvement, thereby fostering sustainable growth in the tourism sector.

Resilience and Recovery Power

According to data from the World Trade Organization, international inbound tourist arrivals (overnight visitors) in the first quarter of 2024 reached 97% of 2019 levels, reflecting an almost complete recovery to pre-pandemic numbers.

In the first three months of 2024, an estimated 285 million tourists are expected to travel abroad—about a 20% increase compared to the same period in 2023. This robust growth has been driven by sustained strong demand, the reopening of Asian markets, improved air connectivity, and greater visa facilitation efforts.

The Middle East has recorded the highest recovery rate, while Europe has demonstrated remarkable resilience through robust intra-regional tourism.

While the tourism industry is steadily recovering, challenges such as labor shortages and imbalances between supply and demand persist. High-income economies in Europe and the Asia-Pacific region, equipped with advanced infrastructure and abundant resources, are well-positioned for robust tourism growth—yet developing countries are grappling with unprecedented obstacles.

Additionally, the report underscores the importance of leveraging travel and tourism to address global challenges, such as economic inequality, environmental threats, technological innovation, and global connectivity. As a result, the industry must become resilient, inclusive, and sustainable.

Given the ongoing challenges of climate change and other risk factors, engaging in preparedness efforts is crucial. Staying informed about the latest developments in both current and emerging risk areas is essential for developing effective risk-mitigation strategies—and for positioning tourism as a powerful advocate in this critical arena.

The Mastercard Global Destination Cities Index's research and readiness metrics support these goals, underscoring the importance of a comprehensive readiness assessment to ensure destinations are well-prepared for the future.

Collaboration among the public, private, and community sectors is essential for successfully positioning a destination. Traditional feasibility studies and market practices must be complemented by inclusive engagement and strategic planning.

This approach appears to be a dynamic, multifaceted process that brings together diverse stakeholders to create a unified vision for the destination’s future. Through inclusive participation and strategic planning, the destination can uncover unique opportunities while addressing challenges that might otherwise remain hidden through conventional methods alone.

For example, a coastal town might initially focus on expanding its beach tourism industry, but through discussions involving multiple stakeholders, they could uncover untapped potential in areas like ecotourism or cultural heritage experiences. These conversations may also highlight local environmental concerns or cultural sensitivities that traditional market analyses might have overlooked.

By fostering extensive collaboration between tourism and other industries, travel destinations can fully unlock their potential and effectively adapt to the growth of the tourism sector.

Strategic Readiness

The forum index identifies key dimensions of readiness, including:

Infrastructure Development
Policy Adjustment
Environmental Sustainability
Socioeconomic Impact

Further research supports these findings, highlighting the critical role of both physical and digital infrastructure, the importance of policy frameworks that foster industry growth, sustainable management of natural resources, and the vital contributions of workforce development and community engagement to long-term success.

Tourism leaders from the public sector and private-sector investors can refer to these pillars to gain insights and position the tourism industry as an active player that positively impacts the future.

The forum's robust index has created an environment where readiness is emerging as a transformative strategy for both tourism and investment.

By leveraging their respective strengths, destination officials and investors can chart a promising, sustainable, and growth-oriented path for the future—because readiness depends not only on current conditions but also on the direction taken.

San Francisco Bay Area Preparedness Index Results.‍‍‍‍

Image source:Zhonglian Real Estate

Unlocking growth potential

Destination readiness plays a critical role in the evolving global tourism landscape. Understanding and leveraging these research findings can guide destination tourism leaders and investors in adopting forward-thinking strategies. A comprehensive readiness assessment helps unlock a destination's full potential.

The image above shows the results of the San Francisco Bay Area's Tourism Readiness Index, comparing them to California's statewide average.

The San Francisco Bay Area outperforms the state in terms of size, leisure activities, commerce, security, and policy frameworks—its solid lines consistently surpassing the dashed lines that represent the state average.

However, the "Urban Readiness" pillar presents opportunities for regional improvement. The analysis shown in the figure highlights the Bay Area's strengths and growth areas in tourism, underscoring the need to prioritize tourism management, infrastructure upgrades, and considerations around carrying capacity.

For example, workforce development in San Francisco was identified as a significant challenge by the index, a finding confirmed through extensive stakeholder engagement.

To address this issue, we’ve partnered with a specialized nonprofit organization dedicated to developing transitional workforce programs and proactively recruiting talent—specifically to identify and nurture the next generation of hospitality industry leaders and professionals.

Tourism will greatly benefit from this initiative. Addressing this challenge can help the San Francisco Bay Area improve its ranking in the index, moving toward a more balanced tourism model.

This example highlights the value of the Tourism Readiness Index, which not only identifies areas for improvement but also guides the development of targeted solutions aimed at enhancing a destination's overall tourism readiness and competitiveness.

The Tourism Development Index aligns with the findings of the JLL research, highlighting that destination readiness is critical for boosting tourism and unlocking its potential economic benefits. While the Development Index provides a collective assessment and ranking of countries, JLL’s Readiness Index offers an even broader perspective, laying the groundwork for future priorities and strategic planning.

Both tools provide nearly 100 data points to assess a country’s current and future conditions. While this may seem daunting, both indices feature carefully designed weighting methods that effectively aggregate the data and yield meaningful insights.

Our recommendation to all stakeholders is to embrace "readiness" and thoroughly and continuously assess the factors influencing destination readiness, thereby fully unlocking its growth potential.

The above content solely represents the author's personal views.This article is translated from the World Economic Forum's Agenda blog; the Chinese version is for reference purposes only.Feel free to share this in your WeChat Moments; please leave a comment at the end of the post or on our official account if you’d like to republish.

Editor: Wang Can

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