Purpose – The purpose of this article is to identify the key factors that impede service quality delivery in the context of luxury hotels (four‐ and five‐star properties) in Sydney, Australia.

Design/methodology/approach – The empirical dataset for this qualitative study was collected through 22 individual semi‐structured interviews with senior hotel managers of ten luxury hotels in Sydney, Australia. The technique used for analysing the data was progressive comparative analysis, after which constant comparative methodology was applied. The key themes emerging from these techniques have been categorised to form conclusions.

Findings – Analysis of the data revealed a number of impediments to developing and maintaining distinguishable, superior service. These impediments fell into four broad areas: Budget constraints, Staff attitude, Lack of mentoring and High customer expectations.

Research limitations/implications – The limitations with the current study are primarily related to the scope of the research in terms of the number of hotel properties participating, and the fact that it incorporates the views of managers only. Furthermore, the focus of this study was on the hotel sector, and thus the findings cannot be accepted as being necessarily relevant and applicable to services across the tourism/hospitality industry as a whole. Future research needs to be conducted to incorporate the views of all stakeholders in service quality, including non‐management staff and customers.

Originality/value – The findings of this research can inform hotel sector researchers and practitioners of identified impediments to service quality, whether current strategies are addressing these impediments and, if not, how strategies may be modified to address to achieve this.