Abstract This paper focused on the studying of the marketing aspect of the small-to-medium size hotels in Fuzhou. The purpose of the thesis was to identify the competitive advantage of those hotels and what can be done to sustain competitive advantage. The scope of the study was within Fuzhou city, the economic and political center of Fujian province. First, a review of existing literature on small and medium size enterprise, competitive advantage, resource-base view and marketing strategy of hotel industry followed by an overview of the China hotel industry was taken. Second, PEST model was used to analyze the macro environment. Then five small-to-medium size hotels of Fuzhou were chosen as the sample. The general managers were interviewed mainly using open-end questioned. Next, compared and contrasted the similarity and differences among the chosen hotels, especially in the aspect of marketing strategy. Finally, to help those hotels sustain competitive advantage in the severe competition, some effective recommendations were put forward at the end of the paper, followed by implications for the future researchers. Keywords: Small-to-medium-sized enterprises, hotel industry, competitive advantage, sustainable competitive advantage, Fuzhou