The contribution of foreign direct investments to the development and competitiveness of the tourism industry: Toward a sustainable growth

Foreign direct investments (FDI) today are one of the major engines of growth and competitiveness in tourism (World Travel and Tourism Council [WTTC], 2024; Bhatt et al., 2024). The current study addresses the multifaceted contribution of FDI to this sector, delineating its potential role in transforming infrastructure development, enhancement in the quality of services, and integrating newer innovative practices within the sector. This paper will draw from empirical studies and theoretical perspectives on the contribution of FDI to the development and competitiveness of the tourism industry. The paper also investigates the varied relationship that is developed between FDI and local economies, identifying both the opportunities that come with, and the challenges posed by FDI. Among others, the following questions will be explored: what effect FDI has on tourism development, tourism challenges and opportunities faced by FDI, and what role policy plays in facilitating tourism-based FDI. The findings show the importance for integrated policy approaches in aligning FDI inflows with sustainable tourism development goals and ensuring a balanced and inclusive growth path and put forward recommendations for how stakeholders can optimize the benefits of FDI while addressing its adverse impacts and develop strategies that enhance the resilience and sustainability of tourism in a highly competitive global environment.