Worldwide governments have recognized tourism as a sector with immense potential for economic development and employment generation. Various international agencies like World Tourism Organization (WTO) have pointed out the vast development potential of tourism particularly with reference to developing countries like India. Kerala tourism is one of the most popular tourist destinations in the world. It is famous especially for its eco-tourism initiatives and beautiful backwaters. Growing at a rate of 13.31%, the Kerala tourism industry is one of the major contributors to the economic development of the state. The paper analyses the trend of tourist arrival to Kerala over the past few years and evaluate the revenue generation trend and growth prospects of the industry. Secondary data published by the Kerala tourism department has been analyzed using tools like trend analysis and simple percentage analysis. The published records of Kerala tourism statistics have also been used in the study. The study may throw light on the future prospects of the Kerala tourism industry with respect to tourist arrival and revenue generation.