This paper reviews the theoretical studies on international tourism by discussing the several findings, which are derived in the literature, in a unified model. Inbound tourism is defined as foreign visitors' consumption of goods and services produced in the home country. This means that via tourism, the home country exports the nontraded services, the price of which is endogenously determined, and can have a market power in trade even though the country is small in the international market of traded goods. Because of this tourism terms-of-trade effect, the home country can benefit from foreign visitors' tourism boom. The tourism terms-of-trade effect may also affect the conventional results that free trade is optimal for a small country and, in the presence of environmental pollution, the optimal environmental policy is to impose the standard Pigouvian tax that equals the marginal environmental damage. In the basic model, the tourists' demand is assumed to be exogenous, but recent studies consider the endogenous choice of tourism destinations, and this paper briefly reviews the findings of these studies. In the concluding section, this paper presents several directions for future research.