Innovation Problems in Hotel Management I the article innovations problems in hotel management" the innovation was described as the combination of survival, development and competition factors faced by small family business running a pension Tadeusz in Lanckoro-na. All issues concerning family business were discussed through the scope of small business management, its contribution to global economy and actual threats. Many definitions explaining the term .innovation" were compared to those from other publications concerning the issue of both substantial and functional meanings. Further on, the meaning of innovation has been narrowed down to the method of shaping and influencing the services in hotel management. This means introducing new organizational and technical solutions for most of the hotels. The example of pension stated above showed the approach towards innovation as the way of shaping the image of its unique features. The unforgettable image was constructed of warm homeliness and uncommon style and charm of the twenties. Generations of pension owners have contributed to it collecting souvenirs, preserving traditional customs and cultural heritage with polite and honest attitude towards hotel guests. In that case, innovation is a fruitful use of already possessed values. The final product of individual treatment of many different and uncommon needs and customers behavior became the attracting agent for those seeking unconventional ways of fulfilling their demands. This is what leads to achieving the unique appreciation on the market in comparison to other hotel services. The example of Tadeusz explains how the growing tendencies of escaping from the reality into emotions and specific climate of this place can assure its position on the market and give the advantage over competitors.