The growth of Bandung’s tourism industry has had a massive impact on the hotel sector. Most tourists visiting Bandung are domestic tourists and tend to be modest spenders fitting the profile of a mid-market (2/3 star) hotel guest. As competition has increased mid-market hotels have come under pressure from upmarket (4/5 star) and budget hotels committed to cutting prices. There is also competition with the midmarket hotel sector, which means that the 2/3 star hotels have to keep innovating in order to remain competitive. This study uses the Service Quality framework to describe customer expectations and identify gaps in hotel services. A questionnaire survey of 105 local tourists who had stayed in 2/3 star hotels in Bandung showed that the most important dimension is responsiveness, following by reliability, assurance, tangibles and empathy. Thus we conclude that local tourists’ primary expectations are that hotels will deliver the service they have promised, be responsive to guests’ needs and comply with service standards. Furthermore, these findings validate the earlier prediction that comparing 2/3 star hotel with 5/4 start hotel, the customers are having preliminary knowledge on facilities limitation and friendliness. Tourists using 2/3 star hotels tend to be prepared to accept limited facilities and less friendly staff service.