This research examines how strategic capabilities impact hybrid competitive strategies and the effect on organizational performance. The target population of this study was 475 3 to 5-star hotels in Malaysia. Questionnaires were sent by mail and email to all the targeted 3 to 5-star hotels’ managers. Multiple regressions were used to analyse the relationship of hybrid competitive strategy, strategic capability and organizational performance. The outcomes indicate that hybrid competitive strategy has a significant impact on performance and strategic capability. Similarly, strategic capability has a significant impact on performance. Specifically, it establishes that strategic capability partially mediates the association of hybrid competitive strategy and performance. This study found hoteliers that executing hybrid competitive strategy should simultaneously use strategic capability to attain better performance. It fills in some of the gap and showing the importance of hybrid competitive strategy and strategic capability in the Malaysia hotel industry which has received little empirical attention.