This research was undertaken to assess the practices of Customer Relationship Management inrnFive Star Hotels in the case of some selected Five Star Hotels in Addis Ababa. In order hotels tornsurvive in an increasing competition, they need to implement Customer RelationshiprnManagement. The research finding indicated that hotels understudy did not yet fully implementrnCustomer Relationship Management. As a result of this they have faced challenges and could notrnresist stiff competition. The awareness of employees on Customer Relationship Management wasrnfound to be minimal. Tourists/customers data were not gathered and compiled properly.rnTrainings were not conducted in a planned manner. The historical development of CustomerrnRelationship Management showed that Customer Relationship Management developed togetherrnwith the development of Industries and businesses. Through the process of this developmentrnchange was an important factor to be considered. Customer Relationship Management startedrnin the early 1970s and became popular in 1990s. The specific objective of this study was to knowrnthe practices of Customer Relationship Management in five star rated hotels in Addis Ababa andrnto identify challenges facing these hotels. The data was collected from both the employeesrnincluding managers and the guests/tourists who minimally stay in the rooms of the hotels andrnconcerned stake-holders. In order to gather the relevant data, three hundred and forty eightrnsample questionnaires and nine unstructured interviews were administered. All these data werernaccepted and used as a valid. Gathered data were classified, analyzed, and interpreted. Therndescriptive analysis adopted for both Quantitative and Qualitative analysis and thematicrnanalysis and narrative conducted for qualitative data. After analysis, data were formulated inrntable, frequency and charts style. Findings illustrated that most of the hotels were trying tornpractice Customer Relationship Management. But many of them faced challenges in effectivelyrnimplementing all the known Customer Relationship Management practices. This problemrnoccurred because of lack of implementing customer relationship management strategies and lackrnof knowledge on Customer Relationship Management. The researcher concluded that CustomerrnRelationship Management practice is an important component because of incremental impact itrnhas to the market share. The researcher has recommended that the managers of the hotelsrnunderstudy should able to conduct sustainable training program for employees and toprnmanagement members to develop awareness about Customer Relationship Management. Andrnmanagers of the hotels have to strive for the full implementation of Customer RelationshiprnManagement. Because, it has been tested by many researchers that Customer Relationshiprnmanagement changes the overall performance of the hotels.