The development of tourism can have negative effects on environment, economy and society if the precautionary and environmental measures are not adopted in a timely manner or if the principles of sustainable development are not respected or taken seriously. Tourism is a complex and labour-intensive activity that can develop very quickly and bring great economic benefit to the destination in which it is conducted. Tourism creates multiplicity that leads to an increase in income based on tourist consumption. Also, in countries where tourism is the leading economic branch, there is an increase in the number of employees and the level of education and training of local population so they can be included in the tourist market and business. In addition to the positive effect that tourism has, there are also the negative effects of tourism. Looking from the aspect of place and location, tourism has a negative impact on the environment, more precisely, it causes saturation and depletion of natural resources of the destination in which tourism takes place. Natural resources are the basis of Tourist offer and diminishing their value by the negative impact of tourism diminishes the value of destination itself. The domicile population may also have disrupted quality of life. More and more tourists follow the trends of sustainable and ecotourism and choose destination that bases its tourist offer on sustainable development, ecological awareness and environmental protection. This thesis will explain further how the Tourist company „Ilirija“ in Biograd na Moru has solved the problem of negative tourist impact on environment and how it has implemented sustainable development in its business and management.