Since the early 1980s there has been a growing interest globally in service quality, driven by the supposition that high service quality will lead to more satisfied customers. Satisfied customers will remain loyal and spread positive word-of-mouth advertising, and therefore improving service quality is linked to competitive advantage. In Australia the recognition that the service industry is a significant economic driver has resulted in an increasing interest in service quality. Sydney, as the most popular tourist destination in Australia, has a large number of hotels that represent a critical component of the local service industry. To respond to the rising attention to impacts of service quality on the hospitality industry this thesis explores service quality within the hotel sector of Sydney, Australia. The research presents and discusses a comprehensive analysis of the expectations and perceptions of key actors, the customers, managers and employees of hotels, along with a service performance analysis, using both qualitative and quantitative data collection. Despite the fact that the concept of service quality in tourism and hospitality has been researched for over two decades, limited understanding exists of the hotel sector of Sydney, Australia. Thus the primary focus of this research is to analyse the needs, expectations and perceptions of three-, four- and five-star hotel customers in Sydney, Australia. This research, which seeks to address the gaps within the tourism and hospitality literature surrounding service quality in Sydney hotels, is guided by two main research questions: First, what are the main factors that customers consider to be important in the evaluation of service quality in three-, four- and five-star hotels? To answer this question it was necessary to: 1) examine what attributes customers use in choosing between three-, four- and five-star hotel accommodation in Sydney; 2) determine management’s perceptions of the attributes they believe are important in patrons’ choice process when deciding between alternative three-, four- and five-star accommodation providers in Sydney; 3) use the SERVQUAL framework to develop measures of service quality in three-, four- and five-star hotels in Sydney; 4) evaluate the validity of the SERVQUAL framework in the context of three-, four and five-star hotels; 5) identify which of the dimensions is the most important in delivering customer satisfaction in three-, four- and five-star hotels. Second, how well are these hotels delivering the required levels of satisfaction to their customers? To answer this question it was necessary to: 1) ascertain from the perspective of both management and staff what impediments exist within the hotel sector to delivery of quality service; 2) compare the perception of performance with customer expectations to identify discrepancies; 3) identify those aspects of hotel service that require attention and modification in terms of teaching and learning; 4) identify the perceptions of performance by customers of Sydney hotels; 5) compare managers’ perceptions of performance with those of customer perception in this area. In order to address the research questions outlined above, a mixed methodology grounded in the pragmatic paradigm was adopted. The pragmatic paradigm allows for mixed methods research and was chosen because it reflects the exploratory nature of the research to be undertaken through multiple methods. The methodological approach in this thesis was undertaken in four phases: Phase 1, the qualitative phase, where individual interviews and fieldwork provided the groundwork for questionnaire development; Phase 2, the quantitative phase, where the questionnaire was developed and extensively tested; Phase 3, the continuation of the quantitative phase, which included employment of the highly structured questionnaire; and Phase 4, the final phase, using the triangulation technique to combine and explain the data collected. The results of this research revealed that respondents hold numerous and differing views about the notion of service quality. In general, respondents provided an overview of the attributes customers use in choosing between three-, four- and five-star hotel accommodation in Sydney, which both confirmed and added to previous research. Managers demonstrated understanding of customers’ expectations, but showed high levels of frustration with the multiple impediments to delivering quality services to customers within the hotel sector. The SERVQUAL framework proved to be useful in measuring service quality in three-, four- and five-star hotels in Sydney; measures needed, however, considerable refinement in terms of context to be useful to hotel managers in Sydney. A number of relationships were established, including correlations between: customer expectations and service quality; customer satisfaction and service quality; customer loyalty/retention and service quality; price/value and service quality. These findings will allow managers of hotels to make better decisions in terms of resources. Additionally, a number of areas were identified as needing modification to improve service quality in three-, four- and five-star hotel accommodation in Sydney. These include paying greater attention to employee and customer contact, and making modifications in the broad area of human resources. Overall this thesis adds to the body of literature concerning service quality, with a specific emphasis on Sydney, Australia. This thesis provides a better understanding of those aspects of service that are considered by customers to be important in their overall experience, and makes suggestions about the changes that can be made to improve customer experience. Further, the identification of impediments to service quality delivery highlights the problems for staff and managers in delivering what the hotel promises. This information can then be used to inform management of the changes that can be made to achieve better performance.