We used the systems approach framework (SAF) to study the conflict between the development of tourism and marine environmental quality in Varna Bay, a critical regional policy issue selected for study after stakeholder consultation. Water quality is of central importance to the tourism industry, as a minimum level of water clarity is required to make the water attractive for swimming and bathing. Rampant development of coastal resorts in Varna Bay has led to water-quality deterioration because the tourism capacity has expanded without concurrent increases in the capacity to collect and treat sewage. We used a numerical model to simulate the Secchi depth (as a proxy for transparency) as a function of the nitrogen loading and total suspended solids. The SAF proved valuable for illustrating the relationship between bathing water quality and the capacity of sewer systems and wastewater treatment plants, and it was helpful in evaluating policy options, even though it does not yet allow precise quantitative prediction of water quality. Results indicate that a combination of storm water management by sewer system improvement (reducing direct runoff by 80%) with construction and upgrading of wastewater treatment plants to 75% nitrogen removal could achieve the improved water quality needed to prevent a failure of recent major investments in the tourist industry, with consequent loss of jobs and profits.