This article examines some of the tourism indicators and the contribution of tourism to the Nepalese economy. The number of tourists inflow through bus and air services and their percentages are discussed. Since 1985 to 2016 the contribution of tourism sector indicators such as the percentage of total foreign exchange earning and its share in GDP, average expenditure per visitor and average expenditure per visitor per day are discussed with annual data for the period 20001 - 2015/16. Further, the duration of tourist's stay and annual growth rate of tourist, and percentage change of foreign exchange earnings in the yearly basis are discussed. The data on the number of tourist arrival, their duration of stay and the growth rate in percentage, from 1985 to 2016 and the contribution of tourism sector to national economy is presented from 2000/01. The significance is tested using t-test. Further, this articles examines the prospects, and review of literature, review of tourism sector in periodic plan, and some problems facing tourism sector and some suggestion for the development of tourism sector. Nepal still is unable to recover its structures damaged by the earthquake of 2015, which has affected the tourist arrival in the country. Furthermore, the article describes the prospects for tourism industry in Nepal with reference to its biodiversity and natural beauty.