Abstract During the 1970s tourism in Lesotho developed rapidly, representing a vital source of foreign exchange to a country where economic options are severely constrained. However, an analysis of the spatial and temporal patterns of tourist movements reveals a serious downswing in fortunes in recent years. The number of arrivals, length of stay and bed occupancy are all declining. An explanation for this is sought in the highly specific nature of Lesotho's tourism and in its dependence upon the South African market and externally controlled corporate strategy within the hotel industry. Despite its considerable scenic attractions, Lesotho in fact relies almost exclusively upon its two casinos to generate tourism. Before gambling was legalized within the borders of South Africa's ‘Bantustans’ these kind of operations were monopolized regionally by Holiday Inns and located on the Republic's periphery. However, in the late 1970s Southern Suns successfully invaded this market through investment within the Bantustans and, as an outcome of this competition, the future planning of both corporations is now to transfer development from the traditional arenas to the Bantustans where profitability is higher. Lesotho's inability to compete with these newer units is clearly demonstrated by the data, particularly in the loss of Witwatersrand punters to Bophuthatswana. Nevertheless, tourism planning in Lesotho is still based upon consolidation of its casino trade. In the light of these and parallel observations in Swaziland this prospectus must be seriously reappraised.