Excessive increase of tourism capacities at the expense of living space and the normal way of life of the local population has been the dominant feature of Croatian tourism development for the whole decade. Croatian tourism is all about income generated from tourism development and it is impossible to find any information related to expenses generated by tourism. Without a clever approach to these issues the real price could be paid in the years to come. The construction of newer and newer rooms, apartments and holiday houses disfigures our settlements and environments and contributes to the inflow of tourists, which in turn leads to less interest, less attractivity and consequently fall in prices of goods and services.Under such circumstances tourists and tourism industry exploit the local culture, resources, attractions and the whole way of life of the local community. Croatia is in desperate need of a smaller scale tourism which wouldn’t consume but preserve the environment and resources and improve the quality of life of the local population and which wouldn’t endanger local traditions and the demographic structure of the territory. The main point is that tourism alone is not enough and that the country’s competitiveness may not be grounded only in tourism and traditional industries. Country’s sustainable development should be based on new technologies, software production, creative industries with high added value, energetics and knowledge and creative economy in general and Croatia should adapt to new trends and new age as soon as possible.