The concept of sustainable development was introduced in 1987 by United Nations as a development that focuses on the progress of the current generation, but at the same time bearing in mind the needs of future generations. Since then, the concept has been widely used in all domains of society, with tourism not being an exception. Tourism, as one of the fastest growing sectors of the last decades creates a lot of pressure on the environment so sustainable tourism development has appeared as response to its negative effects. Sustainable tourism is tourism that takes full account of balance between economic, environmental and socio-cultural sustainability, while the interests of all key stakeholders are met: public and private sector, local community and visitors. As the best example in the implementation of sustainability concept in Croatia the Town of Mali Lošinj was chosen. Town’s Tourist Board worked systematically on building the „Lošinj – the Island of Vitality” destination brand, which fundamentally relies on the concept of sustainability. By virtue of numerous natural and social resources, the island of Lošinj has a century-old tradition of tourism development, and it all began in the late 19th century when Mali and Veli Lošinj were declared as climatic health resort and recognized as destinations for health tourism. Today, the island of Lošinj wants to position itself as an elite destination that offers high added value to the visitors, and this process has to rely on the concept of sustainable tourism development.