Hotels realize that providing high service quality is considered one of the most effective ways to ensure hotel superiority over its competitors, where hotel can guarantee a distinct competition position among competitors through providing quality services that unswerving with expectation of consumers. The findings explicate that significant difference is prevailing in quality of service of budget hotels among profile of domestic tourists. Reliability, responsiveness, assurance, empathy and tangibility have positive and significant influence on satisfaction of domestic tourists towards budget hotels. To improve service quality of budget hotels, they should provide error free transactions and employees of budget hotels must ready to resolve issues related with services. Employees of budget hotels should give services timely and they must give services quickly. Further, they should give personal attention to tourists and they must have good interest at heart for tourists. Besides, budget hotels should generate confidence among tourists and employees of budget hotels must behave politely with tourists.

___________________________________________________________________________________

Keywords: Budget Hotels, Domestic Tourists, Satisfaction, Service Quality.