Due to the particularity of their business activity small luxury hotels are becoming a form of accommodation adjusted to the needs of modern tourists. The owner’s personality in management, flexibility in adjustment to markets, possibility of outstanding differentiation, personalised relation towards guests are some of the aspects in management of small luxury hotels. City of Split is one of the leading destinations in Croatia and according to the conducted research within Strategic marketing plan of Split destination the best rated elements of offer are - culture/history and atmosphere/sole. The conducted research within this diploma essay has ascertained a high level of tourism satisfaction in small luxury hotels. 44% of examinees agree with the assertion that the service quality in small luxury hotels in higher compared to other forms of accommodation, while 53% of them totally disagree with the mentioned assentation. Exactly the small luxury hotels and their offer are in synergy with tourist needs, the development directives and objectives of historic city nucleus, but due to their size which is a limitation factor (and at the same time also their advantage) they do not satisfy the requirements of generating a more significant touristic traffic at the destination.