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This study investigates the gap between customers’ expectations and perceptions of service quality of hotels in selected cities of Tigray region, Ethiopia. Data was collected from 282 customers through use of a self-administered questionnaire. This study employed non-probability sampling techniques mainly convenient and purposive approaches in order to select respondents. Service quality was measured using a modified version of the SERVQUAL scale having 29 items. Using factor analysis four dimensions of service quality such as tangibility, reliability and responsiveness, assurance and empathy were identified. The results of the study indicated that the level of customers’ perception was below their expectations for all dimensions of service quality. Moreover, tangibility was found to be an important dimension for customers in evaluating the service quality of hotels. The study finally suggested that in an attempt to improve the quality of service provided to customers, managers should improve or renew all physical facilities, equipment and communication materials used by hotels.