Purpose – In Malaysia, globalization has increased the number of multinational hotel chains and independent five-star hotels employing foreign professionals, interns and labourers. This study aims to explore the benefits and challenges for hotels of the many foreigners working in Malaysia. Design/methodology/approach – Semi-structured interviews were conducted with Malaysian hotel managers concerning employment of foreign workers. Findings – The results indicate that the employment of foreign workers benefits customers, enlarges the hotel's network of industry contacts and enhances the knowledge, professionalism and service culture of the hotel workforce. This study identified challenges for the foreign workers such as culture shocks and problems with learning the Malay language. Research limitations/implications – This is an exploratory qualitative study conducted prior to the outbreak of COVID-19. The unemployment issue is worsened as COVID-19 spreads globally. To the best of the authors' knowledge, this is among the first study to examine the positive and negative impacts of foreign workers employment in hotels in Malaysia. Practical implications – The employment of foreign workers reduces the availability of jobs for locals. Recommendations are provided for locals to improve their employability and for hotels to better host international interns. Social implications – This study highlights the need for balance between the benefits of foreign workers employment, and its challenges such as local unemployment. Originality/value – To the best of the authors' knowledge, this research is among the first in the International Human Resources Management Literature to Provide a First-Hand Perspective of Employment of expatriate managers, foreign labourers and interns in hotels in a Southeast Asian developing country.