1.3 Vulnerability and risk transmission The same interconnections that multiply benefits also magnify risks, enabling shocks to spread quickly throughout the ecosystem. When growth is unmanaged, it can overwhelm infrastructure, create congestion and inflate housing markets. Rising visitor numbers increase waste, energy use and water demand, straining already limited resources. Destinations highly dependent on tourism are especially vulnerable. The collapse of global travel in 2020 exposed this fragility: some tourism-reliant economies suffered GDP contractions exceeding 50%, demonstrating how disruption to visitor flows can trigger deep system-wide consequences.28 Risks also emerge when the benefits of tourism are distributed unevenly. Forum consultations revealed consistent concern that small businesses and artisans are too often excluded from high- value visitor spending, increasing vulnerability for community enterprises, informal workers and marginalized groups without safety nets. Social friction can escalate rapidly when growth is not managed inclusively. Rising living costs, limited access to housing and the commodification of cultural practices can erode resident support, fuelling policy backlash, new regulations and reputational damage that affect all stakeholders. Climate change amplifies these vulnerabilities. Coastal destinations face rising sea levels, while extreme weather increasingly disrupts transport and damages critical infrastructure. Shifts in precipitation affect water availability, rising temperatures reshape seasonal patterns of demand and energy systems face additional strain. Economic and geopolitical shocks further destabilize the sector. Tourism relies heavily on discretionary spending and cross-border mobility, making it highly sensitive to crises. Financial shocks, security threats or new health emergencies can halt visitor flows within days. Small enterprises operating on narrow margins collapse first, but the impacts ripple through supply chains, destabilizing employment and undermining community resilience. 1.4 Why ecosystem understanding matters Recognizing tourism as an ecosystem rather than a collection of industries fundamentally changes how stakeholders approach opportunities and challenges. Narrow solutions, such as hotel investment strategies that ignore transport and community infrastructure, or environmental policies focused solely on visitor sites that overlook supply chains, fail to capture the full picture. Similarly, labour planning focused only on hospitality roles misses the broader skills required across retail, cultural preservation and entertainment. Ecosystem thinking enables decision-makers to account for interdependencies and design coordinated responses. It makes clear that long- term success depends on aligned investment, inclusive governance and integrated regulation. It also highlights how tourism’s benefits extend far beyond immediate sector boundaries when managed well, stimulating entrepreneurship, preserving heritage, regenerating ecosystems and creating cross-cultural exchange. These dynamics are not abstract. They crystallize into the 10 growth areas and tension points identified in Travel and Tourism at a Turning Point: Principles for Transformative Growth, which continue to define the trajectory of the sector. Growth will be driven by evolving traveller profiles, specialized segments and technological innovation, but systemic risks demand urgent attention. Global disruptions, resident–tourist friction, environmental pressures, workforce shortages, challenges to the resilience of SMEs, infrastructure gaps and cultural degradation problems all require coordinated ecosystem management. The evidence confirms it: to unlock inclusive growth while building resilience against future shocks requires ecosystem thinking. Tourism relies heavily on discretionary spending and cross-border mobility, making it highly sensitive to crises. Beyond Tourism: Coordinated Pathways to Inclusive Prosperity 12

Beyond Tourism Coordinated Pathways to Inclusive Prosperity 2025