Tourism is a rapidly evolving industry in the global marketplace. Tourism in India has grown substantially over the last three decades. Foreign tourist arrivals during 1997 were 2,374,094 as compared to 2, 2867,860 in 1996, an increase of 3.8%. India’s share in the world tourist market at the end of 1996-97 was 0.39 per cent. Foreign exchange earnings in the same year were estimated at Rs. 10,418 crore. Tourism has become one of the largest foreign exchange earners of the country. Domestic tourism’s contribution to the generation of employment is very high. The tourism’s contribution to GDP of the country has been 5.9% in 2003-04, while employment in tourism sector both direct and indirect, has been 41.8 million in the same year, which accounts for 8.78% of total employment in the country. Another important feature of the industry, is its contribution to national integration, preservation of natural as well as cultural environments. The state of Gujarat has taken a number of steps to promote tourism. This paper examines the progress and prospects of tourism in this state. The state has visualized various event based tourism which strengthens the prospects of Gujarat tourism in the near future.