The main issue as per my study and experience in tourism research is the lack of investment and poor governance are the major issues in tourism development.
Tourism is seen as an important source of income for developing countries in general. Domestic tourism can provides critical support to tourism in several areas but if it's manage in a proper way. Especially "seasonality", "regional dispersal" and "increased spending domestically" issues are seen as important. Domestic tourism usually associated with regional development, regional economy and seasonality, especially in areas where mass tourism and seasonal intensity are prevalent.
These are important issues in my country as a country of western Asia where seasonal concentration is high (Turkey).
Briefly, “seasonality, local development, local capital distribution, spending domestically, regional development, contribution to regional economy” … may be key sentences for your question.
Domestic tourism provides critical support to developing countries:
Seasonality: domestic tourism industry can generate visitor spending in slower shoulder and off season months.
Regional dispersal: Domestic visitors can be vital in providing an even greater level of spending in ‘emerging’ regions, smaller, remote or less developed areas of tourism.
Increased spending domestically: It promotes domestic investment, employees and income for families.