Multicultural festivals are more enjoyed by the nationals and foreigners who come as tourists in Australia. They are the platforms for promoting harmony in diverse cultures of Australia. The positive effects of multicultural festivals are more than the local festivals as they promote integration in Australian population by making the destination of festival and the associated community a major attraction for visitors and urging a desire in them to visit those destinations. In 2009, a survey was done by The Tourism Research Australia, 51% of the tourists participated in the various activities of the festivals (Syed, 2009). Through multicultural festivals the Australian community shows and promotes its respect and appreciation for different cultures in Australia. This positive image of a multicultural society promotes tourism in Australia and increases its revenue from tourism sector. These multicultural festivals prove to be good means of generating foreign exchange in the form of sponsorships from foreign countries (Forrest, 2010). These festivals are proved to be a good platform of recreation, participation, enjoyment and cultural expression for minorities. They have the capability of becoming strong tourist attractions with the spread of word of mouth by relatives and friends of people belonging to other countries. The goodwill of the company will be established for the company that respects cultural diversity (Stratton, 2009). The response of the target market toward the sponsors will be favourable and prompt with positive effects if they could find cultural alignment of the company with the festival. Few examples of multicultural festival that promotes tourism in Australia are The Adelaide Festival Centre’s “Oz Asia Festival”. It is a festival that promotes the cultural and artistic traditions of Asia. Cabramatta’s Moon festival in Australia is an annual festival of people from South-east Asia each year in September.