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Key Indicator : Ticket taxes and airport charges, Hotel price index, Purchasing power parity, Fuel price levels
The cost of travel within a country is a significant factor that can attract or deter tourists as well as investment in the tourism sector. In terms of the cost of travel within a country, the T&T Development Report 2021 lists Pakistan at 16 with a score of 6. The country’s position in price Development is the highest compared to its rankings in other categories.
As stated in the National Aviation Policy 2019, a goal of the government was to introduce efficient taxes on aviation in order to prevent the Federal Bureau of Revenue’s (FBR) excessive taxation, which had previously restricted the growth of the civil aviation sector, since any new tax introduced was shifted to the consumer through increasing the overall cost of air travel, including the price of tickets. Moreover, to facilitate aviation growth, Pakistan eradicated charges on airport and air navigation for domestic flights. In addition, it reduced the Civil Aviation Authority (CAA) charges on international flights by 25%,[162] showing the government’s intent to raise the quality of air travel and make it affordable.[163]
With the corona pandemic hitting worldwide, the impact is now seen in the rising diesel prices, which, in August 2022, have been recorded at US$ 1.102 (PKR 236)
After being hit by Covid-19, average hotel prices in Pakistan have increased. According to experts in the hotel industry, the current average hotel room rate for the three major cities, Islamabad, Lahore, and Karachi is as follows:
| Hotel Tiers | |||
| Location | 1st Tier | 2nd Tier | 3rd Tier |
| Islamabad | 35,000 PKR | 12,000 PKR | 8,000 PKR |
| Karachi | 20,000 PKR | 10,000 PKR | 5,000 PKR |
| Lahore | 20,000 PKR | 10,000 PKR | 7,000 PKR |
The government vowed to uplift infrastructure for accommodation and transport services over the country. Recently, the government rest houses have been opened to the public in an effort to allow affordable accommodation for travellers and tourists.[164]
In 2021, the Purchasing Power Parity (PPP) was 0.3, which had remained consistent since 2015.[165] The inflation rate increased drastically from 5.1% in 2018 to around 10% in 2019, although it fell to 9.5% in 2021.[166] Despite this, in 2020, Pakistan was ranked as the least expensive country to live in.[167] While in August 2022, the country’s inflation rate increased to 27.26%.[168]
The fuel price levels also have a major impact on the national price level. The retail diesel fuel prices in Pakistan declined to US$ 0.81 (PKR 125) in December 2019 but increased to US$ 0.82 (PKR 127) in February 2020. With the corona pandemic hitting worldwide, the impact is now seen in the rising diesel prices, which, in August 2022, have been recorded at US$ 1.102 (PKR 236). Currently, the average price of diesel globally in 2022 is US$ 1.36[169], which is higher than the country’s current fuel price, thus signifying lower transport costs and product prices in Pakistan compared to most economies around the world.
With the increase in the cost of travel, Pakistan needs to maintain its prices for economic stability to attract international and domestic investors and entrepreneurs to the tourism sector, as well as promote domestic travel and tourism, for this sector to thrive.