Daruvar is a famous spa town with the tradition of health tourism for over two thousand years, the town boasts with an enriched combination of greenery, new and historic buildings and a rich selection of recreational facilities. Today, this area is in the stage of tourism development in which systematic, coordinated and planned development has become a necessity. The successful destination development cannot be achieved without the implementation of the marketing concept that should contain following elements: analysis of current situation, determination of aims, selection of marketing strategies and implementation of marketing activities. The purpose of this paper is to analyse comparative advantages, define the basic conditions for the development of tourism in the town of Daruvar and its surrounding areas and point out the need for establishing destination management – destination management organization. DMO represents the latest concept of organized management at the destination level and involves public and private stakeholders who act according to the partnership model. In this way DMO becomes the strategic leader in the tourist destination marketing and development in order to achieve the common vision of the destination. The main goal of this work is to emphasize that tourism destination marketing concept should be based especially on three elements of extended marketing mix (7P): people, physical evidence and process, to achieve the satisfaction of tourists and the quality of the tourism product.