Domestic tourism provides critical support to tourism industry in several areas of performance including seasonality, regional dispersal and increased domestic spending. A vibrant domestic tourism industry can generate visitor spending of substantial contribution to the industry’s overall financial resilience. Statistics on the uptake of domestic tourism especially in Kenya has received little attention as the focus is predominantly on international tourism, with a major allocation of tourism budgets and tourism research going towards promotion of international tourism. The study aimed at assessing the economic significance and opportunities for promoting domestic tourism in Kenya. The study employed descriptive and causal research designs and used questionnaires for data collection from tour operators and hotel owners in Nairobi. A stratified random sampling design was used to select 362 hotels and tour operators. The study found that key economic indicators for promoting domestic tourism among tour operators and hotels are economic returns and job sustainability. A positive relationship was established between domestic tourism volumes and financial gains. The results show that increased disposable income, improved transport network, price incentives and awareness are major opportunities for promoting domestic tourism in Kenya. These findings provide insights on potential of domestic tourism to enhance sustainability and functionality of tourism in Kenya during the off-peak months.