Cape Town is a coastal city in South Africa.  It is the second most populous urban area after Johannesburg. The city is famous for its harbour, for its natural setting in the Cape Floristic Region, Robben Island, and the beach and for such well-known landmarks as Table Mountain and Cape Point. For this reasons Cape Town shines as a tourist destination. The purpose of this Project is to develop simulation model for Cape Town Tourism using Stella software in order to study the behavior of the system for the next coming 10 years. System dynamics is an approach to understanding the nonlinear behavior of complex systems over time using stock, flows, internal feedback loops, table functions and time delays. The approach that was used was to develop a simulation model is based on the following five stages of system dynamics modeling process: problem articulation, formulation of dynamic hypothesis, formulation of simulation model, testing of the model, and policy design and evaluation. Initial hypothesis was generated based on the research done. The Model study supports the hypothesis; as the population of Cape Town grows without the necessary expansion of services, Cape Town will be less attractive to tourism. Therefore, the number of tourists visiting will decline.