Urban tourism has recorded unprecedented growth since the turn of the millennium and has been welcomed in destination cities as a source of economic development. But cities’ tourism economies have been among the hardest hit sectors by the Covid-19 crisis. To address the crisis, local authorities, national tourism offices and destination marketing organisations have focused on rebuilding and reactivating the tourism sector by reviving its value chain and economic interlinkages with other sectors. This brief explores the effects of the Covid-19-induced urban tourism crisis and possible policy responses. The first part provides general background on the evolution of urban tourism governance. Part two analyses the immediate policy responses and countermeasures taken by different scales of government in the face of the pandemic. Most of the public assistance efforts were of a fiscal nature and centred on the rescue of micro, small and medium-sized businesses (MSMEs). Building on the analysis of these short-term measures, the brief emphasises how the COVID-19 crisis has highlighted the urgent need to transition to new urban tourism economic models that are more self-sufficient, locally productive and inclusive. Finally, it offers policy recommendations for the development of longer-term strategies that can help interlink future tourism development and the low-carbon urban mobility transition; create local tourism economies with fair working conditions and support for MSMEs; and diversify local economies while transitioning towards more inclusive tourism governance that reduces the sectors’ negative social externalities.