Hospitality industry along with most parts of the service sector is making significant efforts to minimise service breakdowns in day-to-day business operations to improve the quality and efficiency of its processes and procedures to achieve service excellence vis- a- vis competitive advantage. The study investigates the role of ‘emotions’ in service encounters in the context of the hospitality industry and analyzes the perception and evaluation of service from the perspective of both the service provider and the customer. This research uses a field survey methodology through structured questionnaire to generate primary data. The result of the study indicates that emotions displayed both by customers and employees during the normal course of service encounters are positively associated with evaluation of the service encounter and the overall assessment the establishment.