Since the start of globalization the competition in the hospitality industry has been growing. The industry relevance in the economy is also at growth and is a source of employment for many. The challenges that have to be overcome in such industry is to keep the customers coming back and differentiating the offer while still satisfying the needs of the customers. Internal marketing has great potential for solving these issues since the employees are seen as the representatives of the organization. Investment into creating personal contact with the external customers and employees and creating experiences in such a way for the guests, creates a positive image of the organization for the customers. Researches and literature point out to an average or above average use of internal marketing in Croatia. The results of this research show that the internal marketing in the hospitality industry (hotels) in the researched part of Croatia is applied but not in a very thorough manner and shows an alignment of the internal market operations with the external results and client relationships. Considering that the world and the market are changing, it is of the uttermost importance to introduce this issue to the young entrepreneurs, managers and business man and women so they can be up to date with the trends on the market and be able to develop their business further.