This study investigates the structural relationships of cost, activities and size of the organization towards outsource decision in Malaysian hotel industry. Questionnaires that consist of cost, activities, size of the organization and outsource decision were distributed 300 respondents that are department managers in Klang Valley hotels. Findings showed that the significant relationships between cost, activities, size of the organization and outsource decision are confirmed in Structural Equation Modelling (SEM). Implications and suggestions for future research are also provided. Key Words: Cost, Activities, Size of the Organization, Outsourcing Decision, Malaysian Hotel Industry, Structural Equation Modelling.