Tourism is a very large sector of the Australian economy. According to a recent report on the industry by the Australian government, the tourism industry represents 4.7% of Australia's GDP, is responsible for 11.2% of Australia's export earnings, and employs 6% of the workforce. At least until September 2001, tourism and particularly international tourism had grown rapidly for the past two decades.

Australia's international tourism campaigns have largely centred around the image of Australia as a wild, expansive, almost uninhabited continent, with all manner of exotic scenery and wildlife, endless beaches, and friendly, relaxed locals. A famous advertising campaign of the 1980s featuring Paul Hogan offering American tourists the chance to "throw another shrimp on the barbie" serves as an exemplar of this marketing approach. Whilst often criticised in Australia as presenting an unrealistic and embarrassing image of Australians and Australia as unsophisticated and uncultured, the approach seems to have succeeded in attracting visitors.

Some of the iconic destinations for international tourists include:

Major sources for international tourism to Australia include the United States and Japan. Both countries tourists benefitted from the weakness of the Australian dollar against their own currencies over much of the 1980s and 1990s, making Australian holidays quite cheap. Japanese tourists make up a distinctive part of the Australian tourism market, usually taking short package tours which concentrate heavily on the iconic sights, Australian native animals (particularly the koala and to a lesser extent the fairy penguin, which the Japanese seem to find irresistibly cute), and souvenir shops, to the bemusement of locals who wonder what these tourists are actually getting out of their visit.

Another major source of tourists to Australia include backpackers, mostly young people from the United States and western Europe (particularly the United Kingdom). Spending more time in Australia, these travellers tend to explore considerably more of the country.

Visitors from the UK are also common. A particularly noticeable part of this market coincides with visits of British sporting teams, such as the English cricket or rugby union team. The Barmy Army, numbering into the thousands, provides fanatical support to English cricket tours. At the final of the 2003 Rugby World Cup, played in Sydney's Telstra Stadium between Australia and England, about half of the 83,500 crowd supported the visitors.

Australians are big domestic travellers as well, with a profusion of seaside resort towns in every state (many located on or near good surfing beaches), mountain retreats (including ski fields, though poor ones by international standards), fishing locations, wine growing regions, as well as domestic visitation of the major tourist spots. With the large number of four-wheel-drives purchased in recent years, "adventure tourism" exploring the many remote parts of Australia inaccessible by other means has become more popular.