The impact of clustering on the business performance of Croatian SMHEs

The purpose of this paper is to study how clustering affects the results of operations of small and medium hospitality enterprises (SMHEs) in Croatia and to support SMHEs tend to cluster, forming critical masses in one place, to take advantage of synergies such as increased productivity, a higher pace of innovation and in essence the possibility of becoming more competitive. What are clusters and in what way do they increase business performance and the competitiveness are frequently asked questions. The paper presents the results of the impact of clustering in SMHEs in the Republic of Croatia on business performance. The special focus is given to financial and non-financial indicators that are significant for measuring business performance in SMHEs. The methodology of research includes a literature search of clustering in hospitality enterprises research, collection of data directly from managers of SMHEs and from the Croatian Bureau of Statistics, analysis of the financial and non-financial data of 72 SMHEs in the Republic of Croatia. The research takes a longitudinal approach, examining SMHEs that are in clusters in Croatia over a two-year period as well as a control group of non-clustered SMHEs for comparison. The emphasis is on seeking to establish the impact of clustering on business performance. In this paper, the impact of clustering of 72 SMHEs involved in the study is discussed. The research has shown that the advantages of clustering in SMHEs have not been utilised in Croatia. The originality of this research is based on the fact that it refers to an area that has not been explored enough in the Republic of Croatia.