Tourism, as a secondary activity, has a significant impact on the economic stability of the Republic of Croatia. This paper analyzes tourism expenditure and the contribution of tourism to the economic development of the Republic of Croatia. Based on the conducted analysis, it is concluded that tourism is a key driver of Croatia's economy. Tourism represents the main source of foreign exchange revenue in Croatia, helping to cover the trade deficit, as Croatia has significantly higher imports than exports. In addition to covering the deficit, tourism creates a considerable number of jobs, especially in coastal Croatia, although its primary drawback is seasonality, leading to high employment during the summer months and increased unemployment for the rest of the year. Furthermore, tourism affects inflation, as the increased demand for tourism services during the peak season leads to rising prices. The significant impact of tourism on GDP is highlighted by the fact that rising tourism revenues directly stimulate GDP growth, while the decline in tourism during the Covid-19 pandemic negatively affected the country’s overall economic growth. Tourism is a crucial driver of Croatia’s economy, sensitive to external shocks and global crises, as demonstrated during the pandemic, making it important to develop year-round tourism and invest in other sectors such as industry, technology, and more.