By: Dr. Hassan Daud
The global tourism sector, including key regions in Asia, plays a vital role in driving economic growth, creating employment, and fostering cross-cultural exchange. In the post-COVID-19 era, tourism has the potential to be a catalyst for recovery, offering significant opportunities for revitalizing economies and supporting sustainable development. However, this resurgence faces critical threats such as climate change, environmental degradation, and the need for resilient infrastructure. The tourism sector, particularly in Asia, is highly vulnerable to the impacts of climate change, from extreme weather events to the loss of natural and cultural heritage sites. Addressing these challenges requires an integrated approach that aligns with the United Nations Sustainable Development Goals (SDGs), particularly SDG 8 (Decent Work and Economic Growth), SDG 13 (Climate Action), and SDG 17 (Partnerships for the Goals). A collaborative, international effort is essential to promote sustainable tourism practices, build climate resilience, and ensure the sector contributes positively to economic development.
According to the 2024 World Economic Forum’s Tourism Development Index, global international tourist arrivals are projected to return to pre-pandemic levels by 2024, driven by the lifting of pandemic-related restrictions and strong pent-up demand. In 2023, the global tourism sector experienced a significant rebound, with foreign direct investment (FDI) project numbers increasing by 23%, reaching a total of 352 projects compared to 286 in 2022. This surge in investments translated into approximately 44,800 new jobs created within the tourism sector, reflecting a 23% increase from 36,400 jobs in the previous year. The Asia Pacific region captured 105,662 Jobs and 517b new tourism sector Investment projects.
This positive trend underscores the tourism industry’s resilience and its ability to attract investment even amidst challenges. With growing consumer confidence and a renewed interest in travel, destinations worldwide are enhancing their offerings to draw in tourists and investors alike. The ongoing focus on sustainable practices and innovative solutions within the tourism sector further supports this upward trajectory
This highlights the resilience of the Travel and Tourism (T&T) sector and the enduring desire for travel. Regional and market-segment recoveries have been uneven, and the industry has grappled with labor shortages and imbalances between supply and demand. Additionally, macroeconomic, geopolitical, and environmental pressures, such as rising global inflation, high interest rates, conflicts in Europe and the Middle East, and melting glaciers like in Pakistan due to climate change, have added strain to the sector. Looking ahead, the challenges posed by climate change, geopolitical tensions, economic uncertainty, and emerging digital technologies like artificial intelligence (AI) will further shape the future of T&T.
The tourism sector holds immense potential for Pakistan’s economic growth, especially in the post-COVID-19 era, where global travel trends are shifting towards more sustainable and experience-driven tourism. Regions like Gilgit-Baltistan (GB) are poised to benefit significantly from this trend, as adventure, eco-tourism, and cultural experiences become increasingly popular. Tourism can generate employment, attract foreign investment, and uplift local economies, particularly in underdeveloped areas. However, the sector also faces numerous challenges, including a slow recovery from pandemic-induced disruptions, infrastructure gaps, security concerns, and the threat of environmental degradation. To address these opportunities and threats effectively, there is an urgent need for comprehensive strategies that prioritize sustainability, inclusivity, and resilience. A conference of this nature provides a timely platform for stakeholders—ranging from international experts to local policymakers—to collaborate on crafting policies that will shape the future of Pakistan’s tourism industry, ensuring it thrives in a rapidly evolving global landscape. In 2024, the tourism and hospitality sector in Gilgit-Baltistan alone contributed an estimated PKR 3 billion to the provincial economy, accounting for approximately 9.1% of GB’s total GDP. This marks a strong recovery from the sector’s setbacks during the COVID-19 pandemic.
While the major stake holders in tourism sector prefer foreign tourists over domestic tourists as foreign tourists tend to spend more on accommodation, dining, and leisure activities, resulting in higher revenues for hotels. Additionally, catering to international guests can enhance a hotel’s global reputation, attract repeat visitors, and increase its appeal to foreign markets. Conversely, domestic tourism provides a stabilizing effect on the tourism sector. Foreign tourism, is seasonal, domestic tourism spreads demand more evenly throughout the year, allowing hotels to maintain occupancy levels during off-peak seasons. This consistent demand ensures steady income for hotels and creates job stability for workers, especially in regions heavily dependent on tourism. Moreover, domestic tourists are more resilient to global travel disruptions, such as pandemics or political tensions, making them a reliable market for long-term sustainability in the hospitality industry. Focusing on domestic tourism can also help diversify a hotel’s revenue streams and reduce over-reliance on foreign markets. Furthermore, domestic travelers often have more familiarity with the region’s culture and expectations, which may lead to fewer challenges in terms of service provision.
Local tourism is a vital engine for Pakistan’s economic activity and cultural preservation, but it poses challenges in terms of environmental sustainability. In 2023, Pakistan saw approximately 6.6 million domestic tourists exploring popular destinations such as Murree, Naran Kaghan, Swat, and Gilgit-Baltistan, boosting the local economy by driving revenues in accommodation, food services, and transport. Local tourists contribute to maintaining cultural identity by visiting heritage sites and participating in traditional festivals. However, the sheer volume of domestic tourism often results in overcrowding and environmental degradation, particularly in ecologically sensitive areas. Issues like waste mismanagement, water overuse, and deforestation are growing concerns in regions like Hunza Valley and Skardu, where tourism demand is high but infrastructure and regulations are not sufficient to cope with the influx.
On the other hand, foreign tourism contributed around 1.3 million international visitors in 2023, bringing in valuable foreign exchange and elevating Pakistan’s image on the global stage. While foreign tourists make a smaller overall contribution to tourism numbers, their per capita spending is often higher, especially on premium services such as adventure tourism, luxury accommodations, and guided tours. Notably, international visitors tend to be more environmentally conscious, often adhering to sustainable practices and seeking out eco-friendly lodging or activities. This awareness among foreign tourists encourages the adoption of responsible tourism practices, setting higher standards for local tourism services and prompting the industry to align with global environmental expectations.
The disparity between domestic and foreign tourists, in terms of numbers and environmental impact, underscores the need for a balanced and sustainable tourism strategy. Encouraging local tourists to adopt responsible tourism practices similar to foreign visitors—such as waste reduction, energy efficiency, and respect for natural habitats—can mitigate environmental degradation. Moreover, promoting sustainable tourism initiatives, such as eco-friendly hotels, regulated trekking routes, and community-led conservation projects, will help Pakistan capitalize on both domestic and international tourism while protecting its natural and cultural resources. By promoting sustainability across both segments, Pakistan can not only maximize the economic benefits from tourism but also preserve its ecological and cultural assets for future generations. The implementation of stricter regulations, awareness campaigns, and green certifications for businesses could be instrumental in this regard.
To fully capitalize on this potential, a comprehensive and sustainable strategy is needed. Key areas for strategic investment include infrastructure development, skill-building initiatives, and effective promotion of the region’s diverse attractions. Improved infrastructure, such as better roads, air links, and eco-friendly lodging facilities, is crucial to facilitate a seamless travel experience for both domestic and international tourists. Moreover, developing the local workforce to meet the increasing demand for hospitality services can boost employment and enhance the quality of tourist experiences. A robust promotion strategy that highlights unique selling points—its natural wonders, cultural richness, and adventure opportunities—can further attract high-value tourists, which, in turn, would spur sustainable economic growth. With its rich history, diverse landscapes, and cultural heritage, the country is poised to become a major tourist destination. However, to fully harness this potential, Pakistan must address several challenges, from infrastructure deficiencies to the impacts of climate change.
Pakistan’s unique geography, rich cultural heritage, and breathtaking natural beauty make tourism not only a sector with significant macroeconomic potential but also a key driver of sustainable development. Beyond its contributions to GDP, the tourism industry employs thousands of individuals across various skill levels, providing livelihoods and stimulating local economies. There is a strong positive correlation between an increase in tourist arrivals and growth in revenue, as well as a reduction in poverty. However, the sector remains highly vulnerable to the impacts of climate change. To fully realize both the current and future benefits of tourism, it is essential to implement effective policies and measures that support sustainable tourism development as part of the country’s broader growth strategy. As shown in the 2024 Travel and Tourism Development Index (TTDI), the abilities of the tourism sector to both rebound and grow are mixed globally. Same as in other developing countries, Pakistan, has various issues described in TTDI rankings. Similarly, though Pakistan only ranks 101 with a score of 3.41 out of seven. Key focus areas for leveraging tourism and travel (T&T) include:
- Environmental Sustainability
- Socioeconomic Prosperity
- Climate resilient infrastructure & Connectivity
- Embracing Technology
Investment in the tourism and hospitality sector in Pakistan also needs to be diversified to focus on several key areas to effectively navigate the nuances of tourism recovery. Given the diverse landscapes and cultural richness of the country, these areas can drive sustainable growth and enhance the overall tourism experience. By focusing on these areas, Pakistan can leverage its tourism sector to support environmental conservation, foster socioeconomic development, enhance global connectivity, and drive innovation, ensuring the sector contributes positively to the country’s long-term growth and sustainability goals. Unlocking Pakistan’s tourism sector requires a coordinated approach that emphasizes sustainability, infrastructure development, and workforce capacity building. By addressing the challenges and leveraging opportunities.
The latest data on Travel and Tourism (T&T) enabling environments in South Asia present significant insights for Pakistan, underscoring the importance of prioritizing the development of the tourism sector due to its potential for substantial macroeconomic impact. India leads the region with a T&T score of 5.80, indicating its strong framework for supporting tourism, while Bangladesh trails behind with a score of 2.14. However, Pakistan surpasses Sri Lanka in Safety and Security, with a score of 6.04 compared to Sri Lanka’s 5.69. These figures highlight the need for Pakistan to develop its tourism sector as a priority, given its potential to drive economic growth, create jobs, and reduce poverty at the microeconomic level. Pakistan’s relatively high Safety and Security score can serve as a key asset in promoting adventure tourism and attracting international tourists. However, the country’s lagging ICT infrastructure and healthcare services present critical gaps that must be addressed to enhance its competitiveness in the global tourism market.
Source: WEF Travel and Tourism Development Index 2024
By investing in digital connectivity, healthcare, and environmental sustainability, Pakistan can not only improve the tourist experience but also stimulate long-term economic benefits, including increased foreign exchange earnings, greater employment opportunities, and more inclusive economic growth. This strategy would align tourism development with national priorities, turning it into a powerful driver of Pakistan’s economic transformation. A focus on eco-tourism, public-private partnerships, and global collaborations will help the sector contribute to economic growth while preserving the country’s natural and cultural heritage. We need to tailor our strategies to target millennial and Gen Z travelers. For that to happen, a comprehensive SWOT analysis is required including Key Challenges focusing on the deficiencies, environmental Sustainability, EoDB, inclusivity, and Community Engagement:
Challenges Facing Pakistan’s Tourism Sector
- Infrastructure Deficiencies:
Many tourist destinations in Pakistan lack adequate infrastructure, including roads, hotels, airports, and connectivity. This limits accessibility, particularly to remote and scenic areas like GB - Security Perceptions:
Although the security situation in Pakistan has improved, negative perceptions persist in international markets. This impacts Pakistan’s ability to attract high volumes of foreign tourists, requiring consistent efforts to change global perceptions. - Environmental Degradation and Climate Change:
Unregulated tourism has led to environmental degradation in several areas, including deforestation, pollution, and damage to fragile ecosystems. Climate change, in the form of glacial melt and extreme weather events, poses a significant risk to Pakistan’s natural landscapes and tourism sites. - Lack of Skilled Workforce:
The tourism sector suffers from a lack of trained personnel in hospitality, tour management, and related services. This affects the overall quality of the tourist experience. - Regulatory and Policy Framework Gaps:
Inconsistent regulatory policies and bureaucratic hurdles make it difficult for businesses to invest in tourism. The lack of clear guidelines on environmental sustainability, land use, and infrastructure development further complicates efforts to scale the sector.
After conducting a comprehensive SWOT analysis of Pakistan’s tourism sector, the next step is to formulate an actionable strategy that leverages the sector’s strengths, addresses its weaknesses, capitalizes on emerging opportunities, and mitigates potential threats. This strategy should focus on key priority areas like infrastructure development, regulatory reform, and sustainable tourism practices. It should also aim to promote public-private partnerships (PPP), enhance marketing and branding efforts, and build the capacity of local communities to manage tourism services. Crucially, the strategy must align with Pakistan’s long-term economic goals, integrating green tourism initiatives and cultural preservation, while ensuring measurable outcomes for investment attraction, job creation, and environmental sustainability. Periodic evaluations will be necessary to fine-tune efforts and respond to evolving market conditions and global tourism trends.
Recommendations:
To address these challenges, the following key recommendations are proposed:
- Infrastructure Investment: Prioritize the development of eco-friendly infrastructure to improve accessibility, particularly in remote regions. This includes sustainable hotels, upgraded roadways, and renewable energy solutions for tourist facilities to support growth without compromising the environment.
- Sustainability Initiatives: Implement stringent environmental regulations and promote eco-tourism practices. This can include creating protected areas, encouraging responsible tourism, and incentivizing businesses that adopt green certifications.
- Climate-Resilient Tourism Policies: Develop climate-adaptive strategies for tourism, such as promoting off-season travel to balance the impact of unpredictable weather and investing in projects that mitigate the effects of climate change, particularly in vulnerable areas like Gilgit-Baltistan.
- Strengthen Public-Private Partnerships (PPPs):
Encourage investment in Integrated Tourism Zones (ITZs) by offering incentives to the private sector. PPPs can drive infrastructure development and improve tourist facilities while ensuring sustainable practices. - Skill Development and Capacity Building: Establish specialized training programs for tourism and hospitality workers to improve service standards. Investing in education and vocational training can bridge the skills gap and prepare the workforce to meet growing sector demands.
- Security and Global Perception Campaign: Launch a global branding and communication campaign to promote Pakistan as a safe, welcoming, and affordable tourist destination. Engaging international media, influencers, and foreign tourists in reshaping perceptions of the country will be critical.
Have a continued emphasis on improving the security situation is essential, but equally important is how this improvement is communicated globally. A consistent narrative change, supported by positive experiences shared by international travelers, can help shift perceptions. - Policy Reform and Regulatory Streamlining: Simplify and harmonize the regulatory framework across regions and sectors to encourage investment and ease of doing business. Clear, cohesive policies are essential for attracting both domestic and international investors.
- Community Engagement and Inclusivity: Place local communities, including women and marginalized groups, at the heart of tourism development efforts. This includes ensuring that tourism revenue flows back into local economies, promoting locally-owned businesses, and encouraging community-led tourism initiatives.
By addressing these challenges and implementing these recommendations, Pakistan’s tourism sector can grow sustainably, create economic opportunities, and build resilience against future risks. This multi-stakeholder approach ensures that the strategy is both inclusive and future-focused, setting the stage for the tourism industry to thrive in alignment with global sustainability goals and local development needs.
