Tourism is the main activity in Croatia. The vast majority of the population is employed in the tourism sector, directly or indirectly.Tourism is also one of the largest generators of income, and like many other countries in the world, Croatia has decided that tourism should be the driver of the country's economy. Croatia had a good predisposition in the past to start tourism when people came to Croatia mostly during the winter. Even today, natural beauties, national parks and nature parks, clean Adriatic Sea, pleasant climate, historical heritage, tradition and gastronomic offer are the drivers of tourism in Croatia. At a time of rapid and great changes in society, tourism has become even more dynamic than it was before. The development of new trends and an accelerated way of life leads to innovations in the hotel industry. Small family hotels are a way to meet the needs and desires of today's tourists. Market segmentation and the promotion of selective forms of tourism are an important factor in shaping the offer of each destination, but also of each individual accommodation facility. Small family hotels respond easier and faster to new challenges precisely because of their size. Small family hotels are hotels that are established and run by one family. Such families are generally very motivated, innovative, flexible and creative. However, one of the main disadvantages of this way of doing business is the lack of knowledge, expertise and competencies to perform certain jobs in the hotel industry. Small family hotels have a great role in promoting and strengthening the tourism of the Republic of Croatia. Individually they do not have the resources to promote and compete in the worldwide market, that’s why small family hotels are mostly grouped into associations. The most important association in Croatia is the National Association of Family and Small Hotels, which is established for the purpose of promoting and facilitating the operation of family and small hotels.