The article discusses the analysis of problems in the development of small hotels in modern conditions in Russia, specifically in regards to limited financial resources. Experts predict that the small hotel business will continue to develop in the near future. Additionally, there is a problem with the quality of service in small city hotels due to limited resources. These hotels often face financial limitations and thus are unable to independently solve these problems. Effective human resource management in small hotels must also take into account intangible benefits such as psychological compatibility of employees. The article also examines the qualities that give competitive advantage to small hotels in Kiev and the potential for their preservation and development. There may be challenges for small hotels in scaling their business due to limited financial resources. This can lead to disruptions in the distribution of tourist flows and the purpose of their stay. Huburzania's dissertation discusses strategies for the formation and development of small hospitality services.