In this paper, we provide both theoretical and empirical contribution to the tourism literature in two steps. First, we innovate by proposing a top-down model to investigate whether residents who have higher level of life satisfaction would perceive more tourism benefits than costs. Doing so highlights the vital role of improving residents’ life satisfaction on long-term tourism development. Second, we also examine a modified version of the existing bottom-up model. This helps to offer a fuller understanding of the effects of tourism impacts on life satisfaction and therefore tourism development than what the literature depicts.