In the competitive environment of the hotel industry, a sophisticated portfolio of IT applications and high-quality IT infrastructure is an important driver of hotels' performance, playing a strategic role in organizations, where it creates competitive advantage and enables new business opportunities. Cloud computing, the latest strategic inflection point in the development of IT, can deliver new value for customers through innovative applications along the value-chain. The purpose of this research is to explore the impact of organizational and business benefits of cloud computing adoption on the hotels’ internal and external competitive capabilities. A survey was conducted in hotel companies in Istrian county in Croatia and based on hotel managers’ perceptions and attitudes, a research model is assessed using the PLS-SEM method. Implications for hotel management are provided.