The natural features of Novalja, preservation of its natural beauties, traditions in tourism, agriculture and fishing are the basic starting points for the development of the town itself, as well as the surroundings of Novalja. The economic development of the Town of Novalja is determined by its geographical, demographic, historical and transport potential. Also, a large factor in the development, both economic and demographic, is the population itself. The vision of the Town of Novalja is based on the already established market relations, the general perception of the area by the local population, tourists and other visitors, as well as highlighting the specific features that distinguish Novalja from the competition. One of the most important components for the development of the town itself is tourism, which is the backbone of development itself. In order for this development to achivede, a good development policy is needed, as well as destination management, close cooperation between businesses, local people and the tourist community. This master thesis analyzes the development of tourism in the town of Novalja from 2008 to 2018, the attitudes of the local population on tourism development, and the satisfaction of the local population with their current and past status. One of the major pillars of development is party tourism, which will also be analyzed in greater detail. Thanks to party tourism, Novalja has gained a reputation as a major party destination in Croatia, which is why it attracts large number of young tourists. Zrće Beach and its nightclubs have strongly influenced the economy and demographics, the structure of tourists visiting Novalja and the age structure of visitors. It has also affected the development of the town and the income of the inhabitants and changed the way of life in Novalja as well.