Hospitality industry consumes large amounts of water. Water management in hotels is an important issue and it's impacted significantly on operational performance and competitive advantage. The aim of this research is to determine the best practices of water management as an important issue in the Egyptian hospitality industry. To attain this aim a self-administrated questionnaire employed as the data collection tool. This survey consisted of The 45 items, and these items categorized into nine groups, i.e., general practices (GP), kitchen (K), laundry (L), room service and accommodation (R), pool (P), gardens (G), operational performance (OP), competitive advantage (CA) and firm performance (FP). The questionnaire was directed to a randomly sample of employees in the investigated hotels. A number of 300 forms was distributed, among them 272 forms, representing a response rate of 90.6 % were completed and valid for analysis. The study hypotheses verified over structural equation modeling (SEM) using analysis of moment structure (AMOS v.25). On one hand, the findings showed a significant relationship among all groups with firm performance and competitive advantages except laundry with OP also gardens with CA. On the other hand, there is a significant between OP and FP and non-significant between CA and FP.