This paper sought to examine the relationship between service quality and customer satisfaction in the hotel industry in Adama The study adapted the SERVQUAL model as the main framework for analyzing service quality. Descriptive analysis was used to examine the relationships between service quality dimension and customer satisfaction.The results indicated that the strong relationship between service quality dimensions and customer satisfaction. Beside the importance of other factors service quality plays an important role as a driver for higher customer satisfaction level in service enterprises in general and in hotel business in particular.rnDimension of service quality namely tangibility, reliability, responsiveness, confidence, communication andempathy found statistically significant impacts on customer satisfaction with significant level at 5%. This result indicates that service quality confirms its role as an important driver of customer satisfaction which leads to customer loyalty and the hotelsâ€™ profits. Therefore, service quality should be taken into high consideration in both academic and practical activities.rnData was collected from 151 three star hotel customers through questionnaire, additionally the 14 key informant should selected through purposive sampling those are hotel manager, employees and culture and tourism office through interview. The techniques of analysis used in this study are descriptive statics such as frequency and percentage was used toanalyze the data. (regression, correlation, ANOVA and Chi-square test). Customer satisfaction coefficient formulae were used to measure and quantify the relationships between service quality and customer satisfaction with the support of SPSS version 20