Due to the increasing importance of “Outsourcing” as one of the strategic management tools used by hotels worldwide, the current study attempts to assess hotel outsourcing in the Egyptian Hotel Industry by providing insights into the outsourcing drivers or reasons and the encountered barriers. The study also discusses the most common activities outsourced by hotels in Cairo and Sharm El Sheikh. A total of 48 participants including General and Department Managers working in four and five-star hotels, mainly in Cairo and Sharm El Sheikh participated in this study. The methods used to collect data included personal interviews using a structured questionnaire. The findings revealed that outsourcing occurs in a variety of hotel functions and departments including information technology, transportation services, health club, pest control, animation, security, reservation, as well as other activities. The main reasons for outsourcing in hotels were found to be access of external expertise, reducing costs and focusing on core activities. Although participating hotels showed interest to expand their scope of outsourcing some constraints are limiting their ability to do so. Lack of reliable suppliers, minimal knowledge concerning outsourcing adoption, possible risk of providing unqualified staff and hidden relevant costs represented the most significant barriers of outsourcing. Finally, the study presents a group of practical and academic recommendations.