摘要：Business recession conditions at activity levels in Croatia enhanced the real boom of small and medium sized enterprises. The increased market shares of tourism SMEs was realized exclusively on the basis of the market share of large enterprises, whose drastic decrease was influenced by transformation and privatization. Although SMEs have serious problems (lack of capital, planning, computerized information reservation system, lack of cooperation, complex regulations, etc.), their future lies in a globalization world. SM Es are able, due to their small size, to act flexibly and to find a niche market where they can provide personal services, which is a key point in the tourism industry. Tourism SMEs cannot overcome the obstacles presented by the process of internationalization of demand on their own. Tourism policies have to support the SMEs structure. The state should encourage both cooperation and competition in order to rejuvenate supply in an innovative way. Cooperation should lead to several benefits, such as access to new technology, the opening of new markets and a reduction in purchase and capital costs. The paper will discuss the findings of a study into the best practice of SMEs in the Dubrovnik's hospitality industry, within the context of strategic development.
