<p>Recent literature has emphasized exploring the diverse skill set necessary for effective leadership. However, there has been relatively less focus on the influence of leadership emotional intelligence, especially within hospitality and tourism industry. This study seeks to address this gap by examining the key role of leadership emotional intelligence in influencing employee engagement and performance within the hospitality and tourism industry. Building upon the conservation of resource (COR) theory, study hypothesized that leaders’ emotional intelligence influences employee engagement and performance through employee psychological capital and service climate. In this cross-sectional analysis, a total of two hundred and eighty-seven (287) employees from the hospitality and tourism industry participated in the data collection process. Confirmatory factor analysis (CFA), discriminant validity, and mediation tests were used for empirical analysis. The empirical findings revealed that leaders with high emotional intelligence positively impact employee engagement and job performance with service climate and psychological capital significantly mediating this relationship. The study provides both theoretical insights and practical implications to improve employee leadership abilities and employee performance.</p>