The article provides an analysis of the economic situation of the Hotels and Restaurants (HORECA) sector. Within this analysis, on the basis of GUS data and own empirical research, indicators have been selected in order to describe the situation of enterprises in the entire sector including microcompanies. The analysis also takes into account internal variation within the section and the data have been disaggregated into specific groups of NACE activities. Statistical data analysis has been supplemented with results of empirical pilot research carried out in 2003 in two voivodships (Pomorskie and Podlaskie) differing from each other in terms of the level of economic development, including development of tourism. The study covered such issues as the number and structure of entities by section, sales revenues, investment activity, cost level indicators, employment and wages. The part of the article illustrating results of empirical research is focused on presentation of opinions of entrepreneurs concerning their financial situation and prospects for changes on the Single European Market. Other problems have also been tackled, such as perception of barriers to development, conditions of market operation with special reference to the “hidden economy”, as well as factors of competitiveness. The analysis was also carried out in regional perspective.