The current study aims to identify the impact of incentive systems and promotions on employee performance in economy hotels. To achieve this aim, a self- administered questionnaire was designed and distributed on a random sample of employees in a number of economy hotels in the cities of Greater Cairo and Mansoura. The questionnaire aimed to identify the perspectives of such employees in relation to the applied incentive systems and promotions and their impact on employee performance. Three hundred questionnaires were completed by employees of which 250 (83.3%) were valid for statistical analysis. Study findings revealed a statistically significant positive relationship between incentive systems (i.e. physical and moral) and the promotion system as well as employee performance in the surveyed sample of economy hotels.