The Republic of Croatia is surrounded by a very strong competition in attracting direct foreign investments. When it comes to economic reforms, a lot of the surrounding countries have made a significant breakthrough and have attracted a lot of foreign investment. While in other transition countries significant amounts of foreign capital are invested in export-oriented production activities, such foreign investments in Croatia are absent. The biggest problem for foreign investors remains a complicated and ineffective administration. Croatia has to promote more intensively its investment opportunities and offer support and benefits to investors while realising a project. It is also necessary to carry out structural reforms, to improve Croatia's credit rating and the image of Croatia as a potentially attractive location for investments and business. The structure and quality of accomodation should be improved, there is a larger growth required of hotels with 4 and 5 stars, due to the rich contnet they offer and which allows for the extension of the tourist season, reducing unemployment and increasing the living standards of the population. Croatia needs to focus on quality and diversify the offer of products and services if it wants to be competitive, because the new trends in tourism demand and supplyshow that changes are necessary and that we must take into account all the trends and news that are happening on the international tourism market.