Sustainable cultural tourism, understood as heritage-based tourism, can support inclusive and sustainable development, especially in remote or peripheral areas. While participatory processes are mandatory, they are not sufficient to ensure sustainable cultural tourism planning. For the latter, cultural tourism must embrace the four pillars of sustainable development: focusing on economic, cultural, environmental, and social sustainability. Nevertheless, a comprehensive methodology that addresses all the aspects of sustainable planning at each stage of the process through inclusive and diverse participation of local communities is still missing. The paper introduces a specific participatory methodology for cultural tourism developed and tested in eight case studies across Europe and beyond and analyzes how the devised participatory process and tools guarantee proper incorporation of the different pillars for sustainable development at each stage. The methodology and tools presented are based on three replicable steps that aim to enhance cultural tourism in a sustainable, diverse, inclusive, and innovative way. The paper specifically focuses on three activities designed for the participatory workshops: the co-mapping exercise, the Action Co-creation, and an adapted Business Model Canvas, providing an analysis of how those contribute to an innovative participatory process, constantly considering the four pillars of sustainable development.