The quality of service encounter is the basis for a customer's evaluation of the service provider. When companies provide a service encounter that suits consumers, they generate a positive experiential value and lasting customer relationships which lead to customer satisfaction and loyalty. During a service encounter a customer will form a judgment of the quality of service provided based on expectations, perceptions, desires, feelings and values. (Phiri & Mcwabe, 2013). Consumers of services have expectations about what they will receive from the delivery system. Therefore, understanding customer expectations helps diagnose problems and leads to higher satisfaction, repeat customers, and customer referrals. Perceived value is critical to the success of a business especially when a firm’s marketing strategy is developed based on value creation for customers (Bilington & Nie, 2009). A major objective for delivering value to customers is to develop loyal customers who can increase purchase frequency, purchase quantity and avoid switching behavior. Hotels are part of the hospitality sector and are seen as a commercial establishment providing lodges, meals, and other services. This sub sector’s significant contribution is seen to be on an upward trend, as evidenced even here in Kenya where international hotel chains are opening branches to reap the market rewards from this competitive industry (Kangongo, Musiega & Manyasi, 2013). The sub-sector has been identified among the key productive sectors of the economy under Kenya Vision 2030 due to its potential. Further, it is a major source of government revenue in the form of taxes, duties, license fees and even entry fees. Due to tourism’s linkage with other sectors, it has a very high multiplier effect on the economy. The broad objective of this study is to establish the influence of the quality of service encounter, customer expectations and perceived value on loyalty of guests in hotels. In particular the study aims to determine the extent to which the quality of service encounter influences customer loyalty of hotel guests; assess the extent to which customer’s expectations influence the relationship between the quality of service encounter and loyalty; examine the effect of perceived value on the relationship between the quality of service encounter and customer loyalty; determine the joint effect of quality of service encounter, customer expectations and perceived value on loyalty of hotel guests in Kenya. This study is based on the consumer behavior theory. Three theories under this are the expectancy disconfirmation theory (EDT), balance theory and service encounter needs theory. A conceptual model has been developed and from it four hypotheses have been formulated. The study has adopted a descriptive cross-sectional research design which will capture a population’s characteristics and test hypotheses quantitatively and qualitatively. The population for this study will be guests at star rated hotels in Nairobi and the unit of analysis in this study will be resident guests in the 5 and the 4 star rated hotels. Stratified sampling technique will be used to select the desired sample from each stratum. A total of 355 questionnaires will be distributed proportionately among the respondents. Primary data will be collected from the study population using structured self-administered questionnaire and observation. Reliability test will be undertaken using Cronbach’s alpha of 0.70 as the cut-off point. Pre-testing will be carried out to determine content validity and necessary corrections and adjustments made to the instrument. Analysis of data will be done using various measures and tests through descriptive and inferential statistics. Simple and multiple linear regression, and correlation analyses will be used to test the four hypotheses.