Due to 2020, the world was affected by the pandemic virus COVID-19, in Croatia the first negative effects on the economy were recorded in March 2020. In order to stop the infection, the Civil Protection Headquarters suspends the possibility of working in a number of activities, including hospitality. As the hospitality industry belongs primarily to small and medium enterprises, this master thesis first defines the criteria for determining the size of enterprises and then the importance of small and medium enterprises in the Croatian economy. This master thesis deals with small and medium – sized enterprises during a certain period of time of the COVID-19 virus pandemic. The master thesis analyzes: the share of income, exports and employment in small and medium enterprises in relation to the total income, exports and employment of enterprises. The normative frame work of small and medium enterprises is defined, and International and Croatian financial reporting standards are compared. They are compared and considered in the context of the financial reporting of small and medium enterprises. Due to the pandemic, the Government of the Republic of Croatia brings various economic measures to help the economy. Economic measures are mostly aimed at various companies that cannot perform their normal activities due to the new situation caused by the pandemic. Three companies in the hospitality sector are analyzed by comparing the financial indicators of success in 2019 with the pandemic 2020. The aim of this master thesis is to determine the importance of small and medium enterprises and the hospitality industry for the Croatian economy and to analyze and compare the impact of lockdown and other restrictions on the business and performance of three companies in the hospitality industry.