The topic of this master's thesis is Redevelopment of cultural and historic heritage into hotels – new competitiveness. The paper issues repurposing of cultural heritage to fund sustainable tourism, valorization of historic buildings that are in poor or unusable condition. This paper defines aspects of cultural and historical heritage that can be repurposed. The research on the hotel accommodation offer in the Republic of Croatia was carried out to define if the risk of overbooking exists and if there is a potential need for more accomodation units. The key articles in the Croatian Law on the Protection and Preservation of Cultural Assets were analyzed, in order to better understand the conditions under which repurposing of cultural and historical heritage can be executed. The good practice examples of heritage hotels were provided and discussed. The second part of the paper presents a case study which proposes a project of repurposing of the abandoned Vladimir Gortan military barracks into a hotel. Case study provides macro-environment and micro-environment analysis, and the conceptual design of the hotel, buisiness models, and financial projection.