This paper analyses tourism, motives and needs of tourists, the process of product and service development in tourism and their forms, the trends in the tourism today and how it will change in the future. The emphasis is on the importance of technology and the location in the development of new products and services in in the tourism, i.e. the technology is seen as the basis for the development innovation. It is important to recognise the need for the investments in new products and services and to foster investors to cooperate in order to achieve their mutual goals alongside the economic development. Nowadays, tourism is one of the most important factors which affect the economic development of Croatia. The capital of Croatia is used as an example of an excellent combination of both tourism product and service. Zagreb is the most visited town in Croatia because of the years of hard-work and effort of Zagreb Tourist Board, which not only encourages various events in the town but also communicates successfully with other countries.