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This study aims to identify the critical success factors (CSFs) of Lean Six Sigma (LSS) at low-cost budget hotels, which are affiliated with virtual hotel operators (VHOs) that provide some knowledge on how CSFs influence the LSS implementation and how LSS can affect operational and organizational performances on the basis of employees’ perception. To achieve this objective, the researcher surveyed 120 respondents who work in hotels that are affiliated with VHOs, such as Airy Rooms, RedDoorz, and OYO Rooms at Semarang City. The result indicates that among the six CSFs that were determined, only three affected the LSS implementation, namely, management involvement and commitment, linking LSS to business strategy, and project selection and prioritization. LSS has a weaker direct influence on organizational performance than its relationship with operational performance. This study focused on hotels that have partnerships with VHOs, which do not implement LSS in their business environment. This research was based on employees’ perception if LSS was implemented in their working environment to give some points of view on what CSFs could successfully affect the LSS implementation and whether it could effectively boost the performances. At the end of part of the discussion, the authors attempted to explain the importance of CSFs in the hotel industry, especially hotels that are affiliated with VHOs, and how they can influence the success of LSS and finally can affect hotel performance.

Employees’ Perception of Lean Six Sigma Implementation to Business Performance on Low-cost Budget Hotels