The hospitality and tourism industry relies on high-quality services to retain customers, gain competitive advantage, and maintain business success. As hospitality and tourism organizations deliver services through both teams and employees, it is vital to explore how to improve team and employee service performance simutaneously. In this paper, we aim to build a multilevel moderated mediation model of the effect of ethical leadership on service performance at the team and employee levels. A total of 391 dyadic data was sampled from 54 leaders and 391 corresponding employees working for Chinese hotels. The results revealed that ethical leadership enhanced team service performance via ethical climate and boosted employee service performance via ethical self-efficacy. Task conflict positively moderated the nexus between ethical self-efficacy and employee service performance. Based on the findings, theoretical and practical implications were identified and presented.