Until the early 1980s, Kerala was a relatively unknown destination. But in 1986 the government of Kerala declared tourism as an industry and it was the first state in India to do so.Aggressive marketing campaigns launched by the Kerala Tourism Development Corporation, the government agency that oversees tourism prospects of the state, laid the foundation for the growth of the tourism industry. In the decades that followed, Kerala's tourism industry was able to transform the state into one of the niche holiday destinations in India. Many innovative marketing strategies were used and the advertisements branded Kerala with a catchy tagline Kerala, God's Own Country. Today, Kerala tourism is a global brand and regarded as one of the destinations with highest recall. In 2006, Kerala attracted 8.5 million tourist arrivals, an increase of 23.68% over the previous year, making the state one of the fastest-growing destinations in the world. In 2011, tourist inflow to Kerala crossed the 10-million mark.

Kerala has also pioneered health and medical tourism in India and has attained international attention in this segment. Though the idea of health tourism in Kerala is heavily concentrated on Ayurveda, it is also a good destination for other forms of treatment, including allopathy and homeopathy. Ayurvedic tourism became very popular since the 1990s, and private agencies like Kottakkal Arya Vydyasala played a notable role in tandem with the initiatives of Tourism Department. Kerala is known for its ecotourism initiatives and in this segment it promotes mountaineering, trekking and bird-watching programmes in the Western Ghats as the major products.

The state's tourism industry is a major contributor to the state's economy, which is currently growing at a rate of 13.31%. The revenue from tourism increased fivefold between 2001 and 2011 and crossed the 190 billion mark in 2011. Moreover, the industry provides employment opportunity to 1.2 million people.

The most popular tourist attractions in the state are beaches, backwaters and hill stations. Major beaches are at Kovalam, Varkala, Kappad, Muzhappilangad and Bekal. Popular hill stations are at Munnar, Wayanad, Wagamon, Peermade, Nelliampathi and Ponmudi. Kerala's ecotourism destinations include 12 wildlife sanctuaries and two national parks: Periyar Tiger Reserve, Neyyar Wildlife Sanctuary, Chinnar Wildlife Sanctuary, Thattekad Bird Sanctuary, Wayanad Wildlife Sanctuary, Muthanga Wildlife Sanctuary, and Eravikulam National Park are the most popular among them. The "backwaters" are an extensive network of interlocking rivers (41 west-flowing rivers), lakes, and canals that center around Alleppey, Kumarakom, Kollam and Punnamada (where the annual Nehru Trophy Boat Race is held in August). Cities such as Thiruvananthapuram, Kochi and Kozhikode are popular centres for their shopping and traditional theatrical performances.

Kerala is also a center of heritage and religious tourism sites. Padmanabhapuram Palace and the Mattancherry Palace are two notable heritage sites. The state is also famous for the large number of festivals (about 10,000 per year) it celebrates; of these, Onam and Thrissur Pooram attract a large inflow of foreign tourists. According to a survey conducted among foreign tourists, Elephants, fireworks display and huge crowd are the major attractions of Thrissur Pooram. The main pilgrim tourist spots of Kerala are Sabarimala Temple, Aranmula Temple, Padmanabhaswamy Temple, Guruvayoor Temple, Chettikulangara Temple, Vadakumnathan Temple, Sarkara Devi Temple, Padanilam Parabrahma Temple, Beemapally mosque, Saint Thomas Syro-Malabar Catholic Church, Malayattoor, Parumala Church (Pathanamthitta) and St. Francis Church, Kochi. Saint Alphonsa Syro-Malabar Catholic Church, Bharananganam is also a destination of pilgrimage tourism.