Outsourcing activities have been receiving amount of managerial attention, but previous studies focus mainly on finished goods by manufacturing and seldom on service industry. This research attempts to develop a conceptual framework of outsourcing decision of supplementary service for service industry and to explore the critical factors in outsourcing activities based on Transaction Cost and Resource-based View theories. The research focused on hotel industry and sampled the five international hotels in Taiwan. The result indicates that the positive relationship between supplementary service and outsourcing will be moderate by following variables: (1) the characteristics of service product including inseparability, service encounter and the level to support core service (2) technical level (3) environmental uncertainty (4) asset specificity (5) strategies choice.