The purpose of scientific research in this doctoral thesis is to summarize and expand the knowledge about the characteristics of small family businesses in tourism and to determine the impact of owner`s entrepreneurial traits and knowledge on business performance. Along with the company analysis, the entrepreneurial traits of small family business owners and specific family resources are analyzed at the same time. The theoretical framework used for the development of the research and empirical model relies on the development models of family entrepreneurship while the applied theories are the entrepreneurship of resource theory, the social identity theory and the human-capital theory. In accordance with the aforementioned theories, an empirical model that proposes a combination of business performance indicators, owner`s entrepreneurial traits and family specificities has been developed, which contributes to contemporary family business valuation methods. Furthermore, using statistical multiple and logistic regression methods, the influence of owner`s entrepreneurial traits and knowledge on the performance of small family businesses in tourism measured by financial and non-financial indicators was determined. For the purposes of empirical research and hypothesis confirmation a sample consisting of small family hotels, members of the National Association of Family and Small Hotels was selected. It was confirmed that specific entrepreneurial knowledge acquired through education significantly influences business performance. Owner`s entrepreneurial traits, risk and proactivity preferences have a significant impact on business performance, while innovation does not affect business performance, indicating low levels of business innovation in the sample. Motives that have the greatest influence on the continuation of family business are securing a job for family members and keeping the family within the business. To complement the empirical model, twenty small family hotel owners in the Republic of Croatia were interviewed to gain a deeper insight into the characteristics of small family businesses in tourism.