In the modern global economy that is constantly changing and causing constant threats and challenges, various forms of association and networking enterprises are of growing importance. Considering that small and medium enterprises are drivers of economic growth and employment, they should be the most dynamic and most efficient segment of the economy. The same is true for the hospitality industry, where small and medium hospitality enterprises are the main providers of the tourism offer. The lack of networks in clusters of small and medium hospitality enterprises in Croatia is the cause of the unsatisfactory level of competitiveness and quality of hotel facilities with negative implications for economic and social development. The beginning of clustering in Croatia could be a good way to increase the economic efficiency of Croatian small and medium hospitality enterprises. The aim of this paper is to present clustering as a factor that affects the quality of small and medium hospitality enterprises by increasing their competitiveness in the tourism market which is becoming an important element for their business efficiency. For the purposes of the research, a survey was carried out on a sample of 72 small and medium hospitality enterprises in the period from June to September 2012. The survey results have shown that clusterization is a factor of efficiency in small and medium hospitality enterprises.