Introduction: Travel and tourism (T&T) at a crossroads The socioeconomic significance of travel and tourism The travel and tourism (T&T) sector is a vital growth engine with far-reaching socioeconomic impact. In 2023, the sector accounted for approximately 10% of global GDP and supported more than 330 million jobs worldwide.1 During 2024, the sector’s global spend exceeded $7 trillion.2 This economic influence extends beyond airlines and hospitality companies into local economies through extensive supply chains supporting agricultural producers, food service providers, retail establishments, financial institutions and countless small businesses. Indeed, more than two-thirds of the sector’s economic contribution flows through indirect or induced channels,3 including supply chain effects, government spending and capital investment.4 T&T’s economic significance varies dramatically among countries at different stages of development and economic diversification. Figure 1 illustrates the range of the sector’s importance and expected growth. Tourism-centric economies: T&T represents a significant portion of GDP . Nations such as Bahamas, Saint Lucia and Seychelles depend heavily on tourism as their primary economic driver. These destinations often have a favourable climate and exceptional natural assets but face greater vulnerability to natural disasters or economic downturns. Emerging tourism destinations: Economies such as Sri Lanka, Azerbaijan, Indonesia and Saudi Arabia are expected to grow significantly and are investing heavily in their tourism sector, resulting in an increase in international arrivals, tourism- related business activity and overall sector visibility. The challenges these countries are facing include workforce development and infrastructure pressures. Diversified economies with strong tourism sectors: Nations such as Türkiye, France, Japan or the United States have robust tourism sectors with varied attractions and established infrastructure, but T&T’s contribution to GDP is balanced within their diversified economies. Even within these countries, however, tourism benefits are concentrated in specific destinations (e.g. Istanbul, Beijing, Paris). Strategies to distribute tourism more evenly could be explored by governments to continue growing T&T direct contribution without adding pressure to already much-visited destinations.T&T is navigating post-pandemic recovery, emerging challenges and unprecedented growth opportunities in an evolving world. Caption: Sangenjaya, Tokyo, Japan Travel and Tourism at a Turning Point: Principles for Transformative Growth 5

Travel and Tourism at a Turning Point 2025