Tourism`s positive and negative impacts are losing equilibrium. Sustainable tourism aims to regain an economic, social, cultural and environmental balance. The research pleads for a holistic, urban development, where tourism is one integral aspect. It is based on a review of relevant literature that focuses on the socio-spatial distance between tourists and locals and discusses the importance of human perception and cognition and collocal urban and touristic development. The social and spatial reality are, according to Lefebvre, intertwined, which is why the spatial practice of locals and tourists is shaped by the perception of everyday social activities and the physical properties of space. It is argued that the tourists` experience is, in contrast, more often characterized by exteriority, which results in a marginal understanding of the cultural, social and environmental context, a lack of mutual respect and a relationship far off a host and guest relation. The social and spatial distance intensifies, in addition, due to undesired consequences of tourism such as coastalization, urban sprawl and gentrification. The paper concludes that tourism development should be incorporated into an integrated, locally led, urban planning and management that addresses the socio-spatial dimension in all scales and across all user groups. This could potentially lead to a better place for permanent and temporary residents to live in through cross-cultural and social exchange, which promotes mutual understanding, respect and responsibility, whilst also providing a more immersive experience.