The main topic of this paper revolves around tourism as the lead growing economic activity not only in Croatia, but the rest of the world as well. Tourism makes up for one tenth of overall GDP in Croatia and is, therefore, necessary to be the subject of detailed analysis with all its external environment factors which influence the sector starting from customers to their behaviour. The paper complies theoretical analysis of tourist sector in Croatia alongside with comparative analysis with other countries of Europe and the world, followed by comprehensive theoretical and empirical analysis of external environment factors in the market. Analysis has shown that the impact of external environment factors, grouped political and legislative, social and cultural, economic, and technological, have a significant impact through which it is clear which one of the above mentioned has the most impact and which have the least impact which allows for clear understanding on which factor environment needs to be improved presuming the desired outcome of tourism sector improvement. Due to analytical nature of the paper which yield explicit conclusions, its purpose is to serve as a sum of all advantages and disadvantages of each factor environment and, therefore, can help in improvement.