Policy Brief

Building a Sustainable, Inclusive and Future-Ready Global Tourism Economy: The G20 Approach

Tourism is now one of the most active sectors that can drive global economic recovery, create jobs and encourage cultural exchanges. G20 has made tourism a key part of its development plans as the sector is seen as a source of economic growth, and it has the potential to promote social inclusion, regional development, and sustainability. The 2025 G20 Tourism Ministers' Mpumalanga Declaration highlights this new focus by featuring solidarity, equality, and sustainability as the main principles for future tourism growth.¹

The tourism industry holds immense promise. According to the World Travel & Tourism Council (WTTC), G20 nations are projected to channel nearly USD 12.5 trillion into tourism investments between 2025 and 2035, a move set to reinforce the sector's resilience and competitive edge.² The focus in the tourism industry is also shifting from attracting tourists to building sustainable, inclusive and higher-value tourism. Global tourism saw approximately 1.5 billion international arrivals in 2025, with export revenues from the sector exceeding USD 2.2 trillion.³ However, the policymakers are still struggling with the challenges like investments and financing tourism projects and connecting tourism growth with environment, communities and sustainability issues.

This commentary attempts to understand how G20 as a group of countries plans to address some of the challenges facing the tourism sector.

Financing: The G20 has made it a priority to boost tourism investment through new financing methods. It is acknowledged that public funding by itself is not enough to meet the needs of modern tourism infrastructure and sustainability. This prompted the G20 tourism ministers to focus on blended financing models at the Mpumalanga declaration. The blended financing model combines public resources with private investments. It is recognised that tools like risk-sharing, equity funding, and concessional finance through Official Development Assistance (ODA) can help lower barriers to investment, especially for tourism projects in rural and developing areas.

These financing models can play an important role in strengthening the micro, small, and medium enterprises (MSMEs), which are the backbone of tourism industry. Local business owners, community tourism projects, and cultural groups often struggle to get funding, even though they can create jobs and protect local heritage. By ensuring investments in these areas through blended financing models, tourism can better support inclusive growth.

Digital Transformation: Artificial Intelligence (AI), data platforms, and digital infrastructure are important tools in making tourism more competitive. The G20 framework notes that digital innovation can improve visitor experiences, help manage destinations better, and allow small businesses join global tourism networks. Investing in start-ups, digital skills, and access to technology can help rural and new destinations compete more successfully.

Sustainability: Climate change has made tourist destinations that rely on natural resources, coastlines, and cultural sites more vulnerable. The G20 emphasises on the need for climate-resilient infrastructure, nature-based tourism, and cleaner transport. Investing in Sustainable Aviation Fuel (SAF), low-carbon aviation, and better transport connections will be key to lowering tourism's environmental impact while keeping people connected worldwide.

Transportation: Good transport connections are crucial for tourism growth. Reports indicate that investment in tourism infrastructure should grow at a compound annual growth rate (CAGR) of 4.6 per cent each year from 2025 to 2035, which is faster than the expected 3.3 per cent annual growth in tourism demand.⁴ Still, some places may face short-term problems if infrastructure expansion is delayed. Investing wisely in airports, railways, digital networks, and sustainable city transport will help keep tourism growth steady and strong. Countries that invest early in tourism infrastructure are likely to move ahead. Reports point to Germany and Spain as examples of countries making significant investments to improve quality, connectivity, and long-term competitiveness in tourism. This also proves that tourism investment should be seen as a key part of economic policy, not just a sector-specific effort.

Investments: Tourism investment does more than boosting the economy; it also has social benefits. Tourism relies heavily on workers, therefore, investments in hospitality, culture, and local services can give jobs to people who might otherwise be left out of the formal economy. Tourism investment also brings wider benefits through better infrastructure. Building transport links, digital payment systems, utilities, and public services in tourism areas can help local communities take part in the economy. When these improvements are combined with education, skills training, and better access to finance, tourism investment can support broader human development.⁵

To sum up, multiple challenges still exist in the domain, including changing demographics and uneven development across regions. In some countries, an ageing population could mean fewer workers, so there will be a requirement of more investments in skills, automation, and jobs for everyone. Rather than concentrating solely on established destinations, tourism investment should be strategically directed toward rural, indigenous, and economically disadvantaged regions to promote widespread opportunity.

For the G20, tourism is a strong way to connect economic growth with sustainability and social progress. Over the next few years, governments, businesses, international organisations, and local communities will need to work together to make sure investments have a lasting impact. In the future, the success of tourism will be measured not just by numbers of the visitors, but by how well it creates shared prosperity, protects natural resources, and improves global connections.

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