Tourism, one of the largest service industries in the world, is an important driver of economic development, employment generation, and investment attraction, particularly in well-developed areas of the world. However, studies dealing with its characteristics (such as benefits, challenges, and other aspects) in less-developed areas are not abundant. Even fewer are the studies synthesizing the findings of studies conducted in less-developed areas. Therefore, the present review work is an attempt to understand the multifaceted role of tourism, particularly in less-developed areas. In this work, we have attempted to review the economic, social, and developmental impacts of tourism in the earlier-mentioned areas, along with the challenges and opportunities it offers. This work is based on a comprehensive and systematic desk review of relevant studies conducted in different parts of the world. Subsequently, the emerging and repetitive themes were identified, which include tourism as a catalyst for regional development, spatial inequalities, livelihood diversification through rural and niche tourism, governance and community participation, resource-based tourism, innovation, and the obstacles to sustainable growth of tourism in such areas. These findings highlight the uneven distribution of tourism benefits, with well-developed destinations attracting the majority of investment and visitors, while marginal regions struggle to realize their potential. The work also highlights five recurring determinants for successful tourism development in less developed areas, which are stronger governance, effective and inclusive community participation, robust infrastructure, sustainability, and inclusion of innovation.