Abstract Conferring to the leader-member exchange (LMX) theory and social exchange theory as the guiding basis, this inquiry attempts to investigate the mechanism of how servant leaders are able to enhance and elevate the level of psychological capital (PsyCap) among frontline employees in the hospitality setting. Data was gathered from 193 frontline employees in two different waves through a two-week time lag from five-star hotels in North Cyprus. The results proved that servant leader is able to enhance person-group fit (P-G fit) and person-supervisor fit (P-S fit), which in turn affect employees' PsyCap. The results further suggested that both P-G fit and P-S fit both functions as a mediator in the relationship between servant leadership and PsyCap. The abovementioned relationships were assessed using structural equation modeling. Implications for managers as well as directions for future research are also discussed in this study.