The aim of this paper is to point out the importance of internal marketing in the application of customer relationship management in the hotel industry. Since clients are responsible for the existence of the hotel, it is of great importance to listen to their wishes and needs to create a long-term relationship. For the quality of service to always be at a high level and for guests to be satisfied, it is important to invest in internal marketing. Employees are the first to get in touch with customers and most importantly, create a first impression of the hotel. In this way, they create greater market competitiveness and better business results. This paper thesis deals with the theoretical assumptions and concepts of internal marketing and customer relationship management in hotel industry. In the research part of the paper, the task was to investigate and determine the impact of the application of the strategy of internal marketing and customer relationship management in the hotel industry in the Republic of Croatia. A survey questionnaire on a deliberate sample was used as a research instrument. A total of 108 respondents completed the survey. Firstly, the results bring an interesting fact, although the employees are currently satisfied with their position and working conditions, they are not ready to work in any workplace in order to stay and be employed in the same hotel. Likewise, they are not willing to guarantee their commitment to the hotel where they are employed regardless of their current job satisfaction. Furthermore, the results show that respondents are extremely satisfied with the technological solutions in the hotels where they work, which leads to the conclusion that hoteliers in Croatia are in step with the times and technological changes. It has also been confirmed that effective CRM management leads to better customer relationships.