This research examines the relative technical efficiency of 80 hotels in Croatia in size up to 150 rooms in Croatia in 2022. Using Analysis of Bounded Data (AOMP), the research empirically confirms two hypotheses. First, there is a noticeable disparity between the levels of inefficiency of different hotels. Metrics such as overall technical efficiency (OTE), pure technical efficiency (PTE) and scale efficiency (SE) show significant differences, with some hotels operating efficiently while others lag significantly behind. Average indicators suggest that most hotels do not operate at the maximum level of efficiency. The average OTE for all hotels is 0.56, suggesting that on average hotels operate at about 56% of their full total technical capacity. The average PTE is 0.61, which means that the average hotel operates at 61% pure technical efficiency. The average SE is 0.92, suggesting that most hotels operate close to their optimal level, but could face problems of technical inefficiency. Furthermore, this research offers effective recommendations for relatively inefficient Croatian hotels. Using the AOMP and BCC models, specific areas for improvement, such as material costs and personnel costs, were successfully identified. The findings of this research provide valuable insights aimed at resource optimization and operational adaptation. They urge hotels that show sub-optimal results to re-evaluate their business models and resource allocation strategies, while those that operate efficiently are encouraged to maintain their competitive advantage through further investment.