Nearly half of destination marketing organisations worldwide report their funding is at risk over the next three years, according to new research by Destinations International. The 2025 DestinationNEXT Futures Study, published by Destinations International, found that 42% of destination organisations fear budget cuts or elimination – up from 37% in 2023. The findings come as these bodies evolve far beyond their traditional marketing remit into community development, policy advocacy and economic planning.
Why is DMO funding at risk?
The report indicates several reasons for funding being at risk:
- Public scrutiny and political vulnerability – governments are increasingly questioning tourism funding and diverting funds elsewhere
- Assumption that destinations can “fund themselves” – as destinations pursue diversified revenue (tourism improvement districts, visitor levies short-term rental taxes), some governments scale back investment assuming these replace public funding
- Fragmented funding sources – while diversification creates resilience, it also makes funding more complex and precarious
- Rising expectations without matching resources – destination organisations are taking on broader roles (community development, policy work) but funding hasn’t increased proportionally
“Destination organisations must evolve from passive recipients of funding to assertive advocates for the value they create,” the report states. The study surveyed 537 professionals across 36 countries.
What can DMOs do to protect their finances?
The report suggests several strategies for destination organisations to protect their funding:
1. Advocacy
- Strengthen government relations and position tourism as “community shared value” showing returns in jobs, tax revenue and community well-being
- Build resident and business support by demonstrating how tourism benefits locals through enhanced amenities and shared prosperity
2. Diversify revenue
- Safeguard existing revenue streams while exploring diverse funding sources
- Pursue tourism improvement districts, visitor levies, and short-term rental taxes
- Embrace a more “entrepreneurial mindset”
3. Demonstrate value clearly
- Use multi-dimensional KPIs that show social impact, not just visitor numbers
- Track resident sentiment, community benefits, environmental sustainability
- “Tell their story boldly, credibly and consistently”
4. Positioning
- Strengthen public-private collaboration
- Position themselves as essential public goods, not just marketing agencies
- Show they deliver broader community value beyond tourism promotion
The report emphasises that while funding diversity increases resilience, it doesn’t replace the need for government support. The key message is that “advocacy is no longer just a communications strategy, it is a core function of destination leadership.”
The research identifies eight key forces reshaping the sector, with funding vulnerability topping the list. Other major factors include alongside geopolitical instability, workforce shortages and the rise of artificial intelligence in marketing. Notably, 84% of destination organisations now engage in destination development – the enhancement of tourism infrastructure and experiences – marking a shift from pure promotion to “place-shaping”. The expanded mandate reflects growing expectations from governments and communities. Where destination organisations once managed 11 core functions, they now handle 24 distinct roles (spanning marketing, development, research, policy, community engagement and more).
“The scope of responsibility is broader”
“The scope of responsibility is broader. The list of stakeholders is longer. And the definition of success is being rewritten in real time,” the report notes. Success metrics are also changing. Traditional measures like visitor numbers and economic impact remain important, but organisations are increasingly tracking metrics like resident sentiment and environmental stewardship. This shift reflects tourism’s growing scrutiny over issues like housing affordability and overtourism. The business events sector features prominently in strategic priorities. Competition for conferences and exhibitions is intensifying, with destinations increasing incentives and subvention funds. Sports tourism and cultural events are also gaining focus as year-round visitor drivers.
“Multidimensional”
The report positions destination organisations as “multidimensional leaders” requiring a new focus on data analysis and community engagement.
