Purpose: The main objective of the article was to analyze the conditions and factors that determine the tourist development of Madera Island in relation to the assumptions of the sustainable development concept and the smart city concept. Moreover, the conducted own research made it possible to identify key problem areas related to the development of tourism in the discussed area, formulated by representatives of the local community and tourists. Design/Methodology/Approach: The research presented in this paper was conducted in April 2021. It was addressed to both permanent residents of Madeira and tourists visiting the island. A total of 391 people participated in the survey (diagnostic survey, questionnaire). Based on the collected opinions, the preferences observed in the surveyed groups were analyzed and an extensive list of recommendations was proposed. These recommendations have broad implementation potential, both in relation to Madeira and other tourist locations with similar social, economic, and environmental conditions. Findings: Areas of strong tourist reception are usually a common ground for actions of various institutions, environments, and people representing different and sometimes conflicting interests. The Portuguese Island of Madeira described in the paper is a perfect example: in a relatively small area, one can find both areas that require protection due to the valuable natural and cultural assets, areas of agricultural and industrial character (on a small scale), and places with strongly developed tourism and tourism-related infrastructure. Ongoing discussions on the future of Madeira indicate that the economy based on sustainable tourism and smart city concept will play a key role. Own research made visible that the catalogue of problem areas is very extensive and includes phenomena of various character and intensity. The concepts of sustainable tourism and smart city, which are the key reference point for the presented research, can be perceived as a certain ideal, being a source of inspiration and a tool for searching for optimal (taking into consideration interests of various groups) development paths for a given area. Practical Implications: Based on the collected data, the preferences observed among the respondents were analyzed and an extensive list of recommendations was proposed. These recommendations have broad implementation potential, both in relation to Madeira and other tourist locations with similar social, economic, and environmental conditions. Originality/Value: Previous studies are mostly limited to the discursive domain of the problem under consideration. Few studies have extensively discussed the implementation area of the concept in relation to the theoretical indications, especially concerning social expectations and preferences, formulated by both representatives of the local community and tourists.
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