Tourism has been considered as one of the promising sectors for development that influences the achievement of sustainable growth through large scale employment generation and other related developmental initiatives. Tourism development requires sagacious plans and its implementation with effective coordination and communication among the tourism players. In the blueprint of World Travel and Tourism Council, 21st century travel plans should bring balance among the government priority, economical aspects, environmental issues and socio-cultural implications. For obtaining competitive and sustainable tourism sectors applying systems approach to change management with total quality management orientation has been considered as an important option. Present study aims to explore the prospects of tourism industry, identifies important problems and suggested strategies to harness utmost potentials through this sector. As methodology along with citation method some unstructured interview has been conducted on some policy experts, government officials in the relevant ministries, tour operators in the field level and some local people in the host destinations. Finally, data collected from the interview and literature review has been integrated into the final paper. The study found that although Brunei has an immense prospect for development as a unique tourist destination due to different attractions but in spite of that it could not reap expected benefits from this sector due some factors, such as, gap in the coordination among the various institutions, lack of promotional measures and the quality management problems etc. Thus, to improve the overall performance of tourism sector and make the sector more competitive, sustainable and vibrant present study suggests applying the Total Quality Management with special focus on Lean thinking and Kaizen approach as strategic options.