Over the past two decades, rapid technological advancements and the growing development of computers, digital devices, and applications have been widely observed. These developments, particularly in hardware miniaturization and increased processing power, have enabled the creation of advanced devices that allow users to experience “new realities.” This study adopts a qualitative approach and employs thematic analysis of semi-structured interviews conducted with 13 participants. The findings indicate that the challenges of implementing augmented reality can be categorized into five main areas: economic and business challenges, technological and infrastructural challenges, challenges related to value proposition and customer experience, institutional and policy challenges, and socio-cultural challenges. Conversely, the identified opportunities fall into five key dimensions: creating emotional and engaging experiences, innovating in the design of tourism services and products, revitalizing heritage and narrating local culture, enhancing tourist interaction and co-creation, and enabling educational empowerment and learning at destinations. The results suggest that, despite existing challenges, augmented reality has the potential to become a key driver in transforming Iran’s tourism industry. Achieving this potential requires national commitment, smart investment, and cross-sector collaboration. As an initial step toward recognizing the capabilities of augmented reality in Iranian tourism, this study can provide a foundation for future research and macro-level policymaking in this field.