Global Pulse

In a Contested World, Let’s Build Bridges | Davos Edition

Greetings Travel South Partners, 

Growing up, I spent my summers at our family home on the Aegean Coast. People from all around the globe vacationed at the turquoise Turkish Coast. I made friends from all over. At the time, I did not make much of it because it was the only world I knew. To me, the world felt like a small village, and togetherness was the only thing I knew. 

Last month, traveling to the mountain top at Davos, Switzerland, I found myself instead removed from that feeling of connection. This year’s theme at the World Economic Forum (WEF) was “A Spirit of Dialogue,” with a focus on Cooperation in a contested world, deploying innovation responsibly, unlocking new sources of growth, building prosperity, and investing in people as key topics de jour. Certainly, geopolitics and Trump were front and center, and no one shied away from expressing their perspectives on business and politics. Afterall, it is Davos. Whether listening to global figures or talking to attendees, one thing was clear: globalization as we knew it is over, and a new world order is taking shape. So what is in store for 2026?

Despite geopolitical shocks, trade conflicts, financial sentiment, and both private and public debt, the world economy has been surprisingly resilient. WEF’s chief economists are less pessimistic (53%) about the global economy than they were a year ago (72%). Geopolitical confrontation and state-based armed conflict are the top risk factors mentioned. 

On the resilience side, international trade is at a record high of $35 trillion, with overall solid global stock market performance. Foundational technologies already contribute to GDP growth through capital expenditures and infrastructure investments, including data centers and energy. Such growth doesn’t mean risks don’t matter. In fact, media headlines portray 2026 as a year of volatility. From our perspective, uncertainty and risk have become permanent fixtures of economies, despite market dynamism and growth opportunities. In the private sector, CEOs should expect six to eight hot issues, sometimes up to ten, compared with only a few in the past. For travel and tourism professionals, this means dual leadership, making decisions for two paradigms. One for a fragmented, intra-regional tourism and another for a diversified, open world.   

For 2026, the World Bank Group estimates global output growth at 2.6%. While the fiscal impacts of trade policies have not been as devastating as anticipated, consumer demand is expected to soften. The average effective U.S. tariff rate was 17% in late 2025. This rate is the highest since the1930s. What it means is that free trade and free movement are closing a chapter. Expecting the world to continue to function as it was is unrealistic. Trade relationships, what they mean for power, and how nations will trade together will likely determine the new world order. 

We are still seeing this most clearly in inbound tourism. The U.S. was the only outlier among the 184 nations in seeing a drop in inbound international travel spending, according to the World Travel and Tourism Council. Canadian inbound tourism has declined, and the proposed social media screening for the U.S. ESTA (Electronic System for Travel Authorization) program could reduce visitor spending by $16 billion, as one in three travelers says they are less likely to visit the U.S. if such changes occur. 

These policy-driven decisions certainly pose risks, especially at a time of modest GDP growth. For 2026, several of Travel South’s target markets are anticipated to grow at rates below 2%, including the European Union at 1.4%, the U.K. at 1.3%, Canada at 1.5%, Brazil at 1.9%, Mexico at 1.5%, South Korea at 1.8%, and Japan at 0.6%. Some even called Japan the canary in the coal mine at Davos, as concerns about its fiscal health and bond market continue. Australia is at 2.1%, the same as the U.S. China is slowing to 4.2%, down from 7-8 percent before the pandemic, and India shines as the Asian miracle at 6.2%. Economic growth alone is not enough. Using tourism as soft power (we call it a superpower, actually) is more necessary than ever.

As uncertainty and risk have become the norm, we can’t afford to react to every shock or media post about proposed policies. Instead, reassess the situation and focus on things we can control. One line that was repeated in conversations and stayed with me during Davos was: “It’s better to be an optimist who’s wrong than a pessimist who’s right.” In this particularly fractured world order, we believe optimism will go a long way and encourage destinations to play the long game. Afterall, tourism is the only industry that brings people together at scale. At the individual level, people often want prosperity, peace of mind, well-being, and community (family and friends). With that, at a time when resilience, adaptability, and a learning mindset define success in this world order, tourism is indeed your superpower at both the individual and collective levels. Let’s keep building bridges!

With Gratitude, 

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