The paper presents the hotel industry in Croatia, the history and phases of it's development, and types and sorts of hotels. It's about concept and definition of hotel industry, and the emphasis on success is primarily in good entrepreneurial management, entrepreneurial innovatins in order to be able to follow trends in tourism. In this paper Zadar County is presented as a tourist destination. Seasonality, lack of quality service san low capacity utilization are cited as the main hotel industry problems. By analyzing arrivals and overnight stays, it is evident that the trend of increase becomes constant. The number of three-and-four-star hotels is increasing, with small hotels being the foremost. Characteristic for the Zadar County is that the apartments int he household grow much faster than the hotel accomodation, which refers to the quality oft he guests in the destination. Guidelines for reducing or removing the problem are provided. In the end, it is thought about possibility of developing a small hotel in the destination and the conclusion was written based on the situation in the Zadar County.