The tourism industry is a major source of income for a nation and helps in attracting tourists from various countries. The following paper explores tourism as a percentage of GDP for which Thailand and Australia are considered. The research paper is entirely qualitative as data is extracted from online sites and reports of WTTC (World Travel and Tourism Council). The findings explained that Thailand and Australia both serve as a tourism hub and the number of tourist activities is increasing with every passing year. In Australia; Melbourne and Sydney are main cities. However, in Thailand; Pattaya and Bangkok are the most attractive tourist destinations that mesmerize visitors with their beauty and eye-catching views. The number of tourists that visit these destinations bear witness to the fact that these regions have been successful in experiencing the positive economic impact of tourism on GDP.Tourism sector constitutes an important fragment in the economy of any country, with strong growth in both international and domestic visitor numbers (Deloitte, 2017). The sector has been growing rapidly, with a wide contribution in GDP. Also, growth in tourism acts as a driving force in generating employment opportunities and foreign income thereby, decreasing the trade deficit (Haque, et al., 2016).The research topic is significant as it analyzes the relation between tourist activity and its contribution towards GDP. It also discusses the significance and importance of tourism in the economy of Australia and Thailand since the sector has gained constant diversification and expansion in the recent years. The spending on tourism has increased in the recent years. The importance of tourism in concern to its contribution to economy is held by its commitment towards the GDP growth as it refers to the buying behavior of consumers and its influence on the economy of the country (?erovi?, et al., 2015).As per the latest research published by World Council of Travel and Tourism (WTTC), despite dynamic macroeconomic factors and appreciation in Australian Dollar, the tourism sector in Australia has emerged to be the fastest growing sector and has outperformed global performances across Asia Pacific. According to Hooper & Zyl (2015), the main territories of Australia that attract tourists from across the world are Queensland, Victoria, and New South Wales. Spending on domestic tourism is majorly accounted by households who like to plan overnight holidays. However, Australians also prefer to travel overseas and the segment has gained popularity in the last decade which has affected the economy of the country to a small extent (Hooper & Zyl, 2015).According to Royal Thai Embassy, the tourism industry of Thailand is ranked amongst the top 10 sectors for its high contribution to the economic development of the country. According to Vora-Sittha (2016), Thailand attracts tourist from across the world for its white sandy beaches, shopping, tropical forests and trekking, inexpensive luxurious accommodation and exotic cuisines. In the past, tourism has been the most significant contributor to the country’s economy, as it has been ranked as the 10th highest source of income(Chulaphan & Barahona, 2017). The strategies used to upgrade Thailand’s tourism sector for producing income for the Thai economy is mainly; infrastructure, niche diversification, favorable government policy and a luminous hotel industry.The objectives of this research are to analyze the significance of tourism sector in the economy, also highlighting the contribution of tourism activities in the GDP by reviewing the reports published by WTTC. The vital effect of tourism has also been signified with the help of Butler’s Tourist Area Life Cycle (TALC), along with the discussion of pros and cons of tourism activities. The research paper also throws some light on the tourism industry of Australia and Thailand by reviewing some research papers published in the past.Tourism has emerged as one of the most important activities in various countries of the world. The industry has continued to generate both direct and indirect impact on the income generation of the world economy as it helps in supporting the economic well being of the population of the country by creating more employment opportunities (Wallace & Riley, 2015). With the increase in jobs in a country, the domestic income of households increases, thereby resulting in an increase in expenditure and circulation of money in the market.Since tourism can be inbound and outbound, physical and monetary impact of tourism is long lasting and helps in bringing sustainability to the local and national economies to preserve the socio-cultural base. Different areas that generate positive returns to the GDP of any country are traveling, cultural heritage of a country, employment, infrastructure and accommodation facilities (Ardahaey, 2013). All these areas prove to be essential catalysts in the economic development of worldwide economy. Tourism impacts the social, political and financial development of the country, this in turn contributes to the overall economic development that helps serve the economic welfare of the country’s population.