Pavlopetri is a small Greek islet located in Laconia, on the south coast of Peloponnese. There lays a submerged ancient city aged 5.000 years old. This city is considered to be unique as it is the oldest underwater city in the world. The prehistoric city spans 80.000 sq. and has an excellent and integrated town planning, public buildings, monuments, squares and two - storey buildings surrounded by gardens. Furthermore, the city has a complex water management system and even a cemetery. Main objective is the analysis of scuba diving development prospects of the submerged prehistoric settlement of Pavlopetri and the wider areas of Peloponnese region. An attempt is carried out, through SWOT analysis, with the evaluation of strength and weaknesses of the internal environment and the exploration of the opportunities and potential threats surrounding the tourism industry of the region. Furthermore, interviews were conducted to institutional and professional authorities' representatives, in order to detect the perceptions and opinions of local residents on the enrichment, diversification and improvement of tourism products quality.