Four Scenarios for the Future of Travel and Tourism 2025

Using scenarios to shape the future of T&T1 The key step in formulating future scenarios is to identify the most critical variables at play, showing the greatest sensitivity to change within the ecosystem. The global T&T sector and industry trajectory hinges on the interplay of structural variables that define its operational, economic and socioecological context. These variables – ranging from geopolitical stability to technological innovation – serve as foundational pillars for scenario forecasting. Drawing on insights from the World Economic Forum’s Travel & Tourism Development Index (TTDI) 2024 (a World Economic Forum proprietary index and benchmarking tool aiming to measure the enabling factors and policies for sustainable and resilient growth in the travel and tourism sector, reflecting its broader economic and social contributions to a given country) and Global Risks Report 2025, this section identifies and analyses four critical variables shaping the sector’s future, linking them to the TTDI 2024’s diagnostic pillars1 and global megatrends.2 Geopolitical cooperation vs. fragmentation This variable considers the degree to which international cooperation or conflict defines cross-border relations, trade policies and security frameworks: –Safety and security: Stability directly affects tourist confidence; for instance, Israel’s tourism industry suffered an 81.5% decline in tourist arrivals in the fourth quarter of 2023 compared to the previous year, dropping from 930,000 to 180,000 visitors after the outbreak of the Gaza conflict.3 Similarly, Ukraine experienced a 29% decrease in tourism tax revenues in the first quarter of 2023 versus the previous year, alongside a 34% drop in the number of tourism- related taxpayers, as ongoing conflict severely disrupted its travel sector.4 –Openness to T&T: Post-pandemic, 42 low- to middle-income economies relaxed visa requirements, boosting their Openness scores by 12% (2019–2024). However, geopolitical rivalries have increasingly led nations to impose stricter visa rules on adversarial countries, mirroring Cold War era-type restrictions. The potential implications include: –Regionalization of travel: In a receding globalization context, regional blocs such as the Association of Southeast Asian Nations (ASEAN) and the African Continental Free Trade Area (AfCFTA) dominate tourism flows. Intra-ASEAN travel now accounts for 68% of arrivals, up from 40% in 2019,5 driven by harmonized visa policies and air agreements. –Supply-chain vulnerabilities: Decoupling between major economies (e.g. US–China) could fragment aviation standards, disrupt airline alliances and raise operational costs. The World Trade Organization (WTO) reports a tripling of trade disputes since 2020, threatening cross- border tourism investments.6 –Conflict zones and tourism: Destinations such as Ukraine and Gaza have seen tourism gross domestic product (GDP)collapse by more than 80% since the start of the conflicts there, while neighbouring areas (e.g. Ukraine’s western border regions) benefit from redirected domestic demand.7 Economic growth trajectory This variable is concerned with global and regional GDP growth rates, income inequality dynamics and fiscal policies influencing disposable incomes and travel demand: –Infrastructure foundation: Enabling adequate infrastructure is an indispensable cornerstone for sustainable growth within the travel and tourism sector, underpinning the efficient movement of Four variables driving future scenarios 1.1 Four Scenarios for the Future of Travel and Tourism 5