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Abstract Tourism is one of most perspective and dynamic businesses in the world. It is of great significance to plan and develop tourism purposefully and sustainably though the search for compromises between environmental, economic and social aims of society. The sustainable tourism development management has to retain high satisfaction degree of tourists' needs, assure significant experience for consumers, increasing their consciousness under issues of sustainability, and propagating practices of sustainable tourism among them. The significance of sustainable tourism sector development ambition is analysed in this paper through the lens of strengthening its competitiveness. The paper analyses scientific literature and seeks to discover the main forms and factors for the strengthening of the tourism competitiveness by implementing economic, social and environmental targets of tourism destination territories development. The broad systematic literature review provided for some interesting findings: The business participants are interested in the implementation of new technologies in tourism services having positive impact on environment and local communities; however, a lot of challenges exist how to change environment, increase of consumers' motivations for sustainable tourism services and to change their behaviour towards more sustainable one. The current Covid 19 outbreak and high risks of future pandemics have risen new challenges for sustainable tourism development. In this paper the main sustainable tourist development challenges are addressed and new insights for the strengthening of competitiveness of sustainable tourism destination are provided. The future research guidelines are set based on analysis performed. Highlights The systematic review of literature on sustainable tourism The trade‐off between sustainability and competitiveness The main challenges of sustainable tourist development New insights for the strengthening of competitiveness of sustainable tourism The future research guidelines are set based on analysis performed