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Tourism activities are considered to be one of the major sources of economic growth. It can be regarded as a mechanism of generating the employment as well as income in both formal and informal sectors. Tourism supplements the foreign exchange earnings derived from trade in commodities and sometimes finance the import of capital goods necessary for the growth of manufacturing sectors in the economy. On the other hand rapid economic growth in the developed economies attracts foreign travels (Business travels), which leads to an increase in the foreign reserve of the country.

Pakistan particularly has a lot of potential regarding tourism because of its diverse and well-preserved culture; from the ‘Do Darya’ in Karachi and Gwadar Port in Balochistan to the Badshahi Mosque in Lahore and beautiful valleys of the north like Hunza and Sust. Every part of Pakistan has its own culture and language which makes it even more interesting.

According to a report by World Economic Forum, the direct contribution of tourism industry in Pakistan in year 2015 was Rs328 million constituting to 2.8 percent of the total GDP. The government is making continuous efforts to promote tourism in Pakistan and they predict that by the year 2025 tourism will contribute Rs1 trillion to Pakistan’s economy.

Yet that’s not the best outcome because the government has not been able to take the tourism market seriously in Pakistan despite some work being done. There is still a lot of room for improvements in the tourism business. There is a need to maintain the tourism attraction and preserve the heritage. Putting the tourism industry at low priority has led to no development in tour industry and historical sites. It has been estimated that the public and private sectors have gradually earned less income from the tourism market causing less investment and innovation within the industry.
This has led to several historical sites and landmarks to depreciate over time and the lack of international standards have left many sites in poor states. The latest budget showed that less money was being spent on tourism industry and more on other less important markets.
Some tourist corporations have started working and encouraged the government to attract tourists to Pakistan by working on several projects in the tourist market: building and maintaining the road and air networks. The maturation of human and natural resources can also contribute to the development of the flabby industry.

Development of tourism industry in Pakistan can bring a great change to the economic status of the country. That’s because tourists have a wide range of budgets and tastes, and a wide variety of resorts and hotels can be developed to cater for them. For example, some people prefer simple vacations, while others want more specialized holidays, quieter locations, family-oriented holidays, or niche market-targeted destination hotels. So in contrast to that, we can develop a lot of different hotels or restaurants to meet everyone’s demands.
Now all of that cannot work out if people outside Pakistan don’t know about it. Advertising campaigns need to attract tourist by developing holiday packages especially designed to explore the greater regions of the country. In this era of technological advancement we can advertise anything pretty easily on the internet on a very high level and it can reach out to everyone in this way.

Visitor exports are a key component of the direct contribution of Travel & Tourism. In 2016, Pakistan generated PKR93.8bn in visitor exports. In 2017, this is expected to grow by 3.1%, and the country is expected to attract 1,179,000 international tourist arrivals. By 2027, international tourist arrivals are forecast to total 2,173,000, generating expenditure of PKR204.0bn, an increase of 7.7% pa.

  • The direct contribution of Travel & Tourism to GDP in 2016 was PKR793.0bn (2.7% of GDP). This is forecast to rise by 5.1% to PKR833.8bn in 2017.This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). But it also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists. The direct contribution of Travel & Tourism to GDP is expected to grow by 5.6% pa to PKR1,432.1bn (2.7% of GDP) by 2027.

The first Investment Policy by Board of Investment (BOI) was given in 1997 which opened services, social, infrastructure and agriculture sectors for foreign and local investors. It was a major step forward for integration of Pakistan’s economy into international markets as prior to this policy; foreign investment was restricted to manufacturing sector only. The 1997 Policy laid a solid foundation for the gains in FDI inflows experienced over the subsequent decade.

Foreign Direct Investment in Pakistan increased by 2761.10 USD Million in 2016. Foreign Direct Investment in Pakistan averaged 2651.26 USD Million from 2010 until 2016, reaching an all time high of 3184.30 USD Million in 2010 and a record low of 2099.10 USD Million in 2012.

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Pakistan has a fast-growing local produce and manufacturing sector tha accounts for major percentage of its exports.