Effective travel demand management measures provide the opportunity to fully utilize limited transportation resources, especially in underdeveloped areas. It is increasingly recognized that the improvement in existing transportation infrastructure and the optimization of traffic demand management method would result in a complicated urban transportation system with multiple travel modes. This paper aims to investigate the relationship between transportation improvements (e.g., pedestrian flow, free bus for the elderly, and parking space planning) and the mode choice behavior of pilgrimages in the Lhasa of Tibet, China. This study employed a distinctive survey conducted among pilgrims in Lhasa, including both individual questionnaires and interviews from 2010 to 2016. The analysis was undertaken using a multinomial logit model to identify the extent to which transportation improvements could affect the pilgrim’s travel mode choice behavior. The results show that transportation improvements, as an operational method in underdeveloped areas, play an important role in motivating the pilgrimage to travel that can increase the attractiveness of private car use, and make pedestrian traffic more prominent. However, improvements in the public transport need to be conducted to attract more travelers. These results confirm that increasing the attractiveness of low-carbon transportation (e.g., buses, walking, and cycling) to the public can reduce the usage on private vehicles and maintain the development of sustainable transportation in underdeveloped areas with limited transportation resources.