This paper analyses the effects of the business environment on the development of the tourism industry. During the period of the COVID-19 uncertsinty, the preserved context of the continuum of products and services is taken as an example of the civilization's survival in the world. The reason behind this research in the insufficient sustainability of the existing form of tourism and the impossibility of implementing innovative forms of tourism. Therefore, the main goal of this research was to determine how and to what extent certain factors of the business environment influence the development of tourism in the Republic of Croatia. In the paper, research was conducted by using an anonymous questionairre on the population of tourist services' users and the sample size was 60 (N=60) respondents. The results of the research show that before and during the pandemic there was an observation of a phenomenon that suggests a change in the current management model to new strategic intentions. Moreover, competitive strategies and innovative models aimed at the sustainability of other sectoral industries are explained. In addition to tourism the comparative advantages of industries with investments contribute to the development of SME in the Republic of Croatia. Synergies of strategies and tactics are implemented to improve products and services in the tourism, sports and leisure industries. Laws and measures for the stay of the population, which are also programs for the return of emigrants to the Republic of Croatia, are being initiated.