Considering that tourism sector is very significant generator of revenues in Croatian economy it is widely explored in available researches and literature. Most commonly explored determinants of performance include category measured with number of stars, location, size measured by number of beds and quality of service. However, given that author’s practical experience is more focused on financial analysis, this paper aims to investigate which financial aspects of the hotel operations influence its performance. The pocus of this paper is to explore which financial determinants influence hotel performance.
For the purpose of this paper performance is measured with return on assets (ROA), return on equity (ROE) and net margin (NM). The paper investigates influence of 4 variables on the performance: size on the basis of revenue, leverage, coverage ratio I and coverage ratio II. Based on the practical experience and literature review he author expects that leverage would be most significant among chosen variables. The sample covered by the analysis comprises of 40 largest hotel companies in Croatia. While scoping the sample size is measured by revenues realized in year 2016. Data was statistically analysed using regression and the results show that in fact leverage is the most significant variable and that it is negatively correlated with performance measured with net margin. This means that higher leverage will bring lower net margin as it expected. On the other hand, statistical analysis also showed that explored independent variables didn’t have statistically significant influence on performance measured by return on assets (ROA) and that only coverage ratio has significant influence on performance measured by return on equity (ROE).