This is according to figures compiled by Tourism Research Australia, which show that the total sum spent by tourists down under increased by $6.3 billion to reach a new record high between March 2016 and March 2017.
New South Wales was the state where people spent the most, with the area accounting for $32.2 billion of the total spend. Queensland and Victoria were also popular with tourists, amassing a tourism spend of almost $25 billion each over the course of the year.
Food, drink and accommodation were the main commodities that international tourists spent their money on, accounting for $41.1 billion of the $121.2 billion total, marking an increase from $38.7 billion for the year ending in March 2016.
Organised tours were another increasingly popular expenditure for tourists, with $200 million more spent on these this year in comparison to the previous 12 months.
This suggests that more people are interested in exploring Australia beyond the city or state that they have arranged to stay in, which is also reflected in the fact that spending on domestic airfares rose by $600 million to reach $9.6 billion over the last year.
Margy Osmond, chief executive officer of the Tourism and Transport Forum, commented: "With each set of data coming out, it is becoming more and more apparent that the visitor economy is the Australian economy's great success story.
"Now that the visitor economy is poised to overtake the economic contribution from mining, it is vital that governments at all levels provide the support needed to ensure tourism meets its potential as Australia's next super growth sector."
To put the growth in tourist spending into perspective, Australia's lucrative mining sector generated $121.1 billion for the country's economy last year, demonstrating just how valuable overseas visitors are to the nation.