The interest in tourism destination loyalty has increased in recent times. Although the recent literature has shown that a tourist’s loyalty to a destination is the direct result of quality service and the type of experiences, the correlation between service quality and customer loyalty has yet to be thoroughly researched within the tourist-destination context. Since these destinations are constantly changing, it requires further analysis and research. The purpose of this paper is to investigate the relationship between service quality performance and destination loyalty, as well as the mediation impact of destination image in Saudi Arabia for local tourist destination perspectives in Albaha region, while considering the attitudes towards service quality within three, four- and five-star hotels. The partial least square to structural equation modelling was used (PLS-SEM) to examine 298 local tourists from Saudi Arabia who took part in a survey. The results show a positive relationship between service quality performance and destination image, as well as a positive relationship between service quality performance and loyalty. The results also confirm that destination image mediated the relationship between service quality performance and destination loyalty. The results of this study contribute to knowledge by informing service managers in tourism sector about the perspectives of local tourists towards destination image and loyalty.