While many studies on social media from users' perspectives have been conducted, less attention has been paid to the effect of social media on organizations' performance, particularly among hotels. The aim of the study is to investigate the effect of social media on hotels' business performance in the Lebanese hotel sector. In this study, a structural equation modelling method has been used for data analysis. The survey data was gathered from a sample of 146 hotels in Lebanon. Data analysis results demonstrate the positive and significant relationship between social media characteristics (visibility and association but not editability) on hotels' business performance. The findings present valuable implications for hotel managers to direct their social media strategy and to capitalize on the possible benefits of social media to increase the business performance of hotels. In addition, the findings could also provide useful insights into other business sectors that have an intention to invest in social media.