Electronic Markets

https://doi.org/10.1007/s12525-020-00442-3

RESEARCH PAPER

The adoption of artificial intelligence and robotics in the hotel

industry: prospects and challenges
Kichan Nam 1 & Christopher S. Dutt 2 & Prakash Chathoth 1 & Abdelkader Daghfous 1 & M. Sajid Khan 1

Received: 29 February 2020 / Accepted: 17 September 2020

# Institute of Applied Informatics at University of Leipzig 2020

Abstract
The growth of technology has resulted in the use of state-of-the-art systems such as artificial intelligence (AI) and robot-based
applications and services in the hotel industry. Recently, there has been some discussion on the adoption of such technologies and
their impact on hotels’ operational costs as well as the quality of service to customers. Considering the importance of these new
technologies, this paper investigates the trend related to the adoption of AI and robotics in the hotel industry. For this purpose, we
interviewed senior hotel asset managers using an in-depth case study method. The context is Dubai-based hotels as Dubai is
already established as one of the premier smart cities of the world (Khan et al., 2017). The TOE framework was used, and three
domains were investigated: technology, organization, and environment to expose the underlying factors effecting AI adoption.
The findings expose the factors that influence the adoption of AI and robotics in hotels. This study is one of early attempts to
investigate the full spectrum of AI in relation to the hotel industry while detailing how its adoption could be effectuated.

Keywords Artificial intelligence . Robotics . Hotel . Hospitality . Dubai . Smart technology . Smart tourism

JEL classification O33

Introduction

Artificial intelligence has become popular in recent times as

more firms have started to adopt AI and robotics to automate
This article is part of the Topical Collection on Artificial Intelligence (AI) processes. AI-based solutions are considered to be smart
and Robotics in Travel, Tourism and Leisure.
enough to completely substitute human activities while im-
Responsible Editor: Marianna Sigala proving the speed and accuracy of transactions. To success-
fully implement AI in business activities, firms need to over-
* Christopher S. Dutt come several obstacles (Davenport & Ronanki, 2018). For
Chris.Dutt@eahm.ae
instance, AI is still too expensive or risky to adopt because
the technology is new and managers generally lack expertise
Kichan Nam
knam@aus.edu and understanding of how to implement it (Davenport &
Ronanki, 2018). Furthermore, uncertainty exists regarding
Prakash Chathoth
the various impacts AI could cause, which may lead to nega-
pkchathoth@aus.edu
tive consequences. One of the most notable and commonly
Abdelkader Daghfous described impacts is the effect upon jobs; will AI and robotics
adaghfous@aus.edu
replace people (Belanche et al., 2019)? Applying AI in the real
M. Sajid Khan world requires a good understanding of the technology, its
mskhan@aus.edu characteristics and use to ease its adoption and implementa-
1
tion. AI technologies are those which move beyond the simple
Department of Marketing and Information Systems, School of
Business Administration, American University of Sharjah,
automation of tasks to being able to learn and make its own
Sharjah, UAE decisions (Tussyadiah, 2020). AI is, therefore, able to auto-
2
Emirates Academy of Hospitality Management, Dubai, UAE
matically handle large quantities of complex data, search for
 K. Nam et al.

patterns, and make appropriate and timely decisions. Several leading hotels around the world have adopted var-
Currently, while research on AI in tourism has been gaining ious AI and robot-based technologies, as can be seen in
traction, it is still insufficient, and requires further exploration Table 1. It is reported that AI enhances hotel operations in
(Tussyadiah, 2020). several ways (Francis, 2019; Haaser et al., 2018; Starfleet
AI and robotics have many advantages over human labor. Research, 2018; Zhou, 2019): (i) it allows guests to have more
According to a recent study, a minute of work by a robot is innovative and memorable experiences by providing new
equivalent to 15 min of work by one human being (Norfleet, tools such as robots or voice-activated assistants. These tools
2017). Some experts predict that about 25% of routine tasks also save costs by reducing calls to the concierge desk; (ii) AI
will be performed by robots by 2030 (Marin, 2019). helps hotels to meet customer expectations since it provides
Depending on the complexity of technology, different levels guests with immediate and accurate responses. For instance,
of AI and robotics are employed from the simple routine level millennials who are familiar with the changes in technology
to the more advanced complex functions. According to a are more receptive to utilizing technological advancements;
study conducted by MIT and BCG (Ransbotham et al., (iii) AI provides personalized services to the targeted cus-
2017), companies adopt AI to sustain a competitive advantage tomers and then helps to predict their needs and wants; (iv)
(84%), move into new businesses (75%) and/or markets AI allows for an expansion of the guests’ experience to in-
(75%), or to reduce costs (63%), implying a more strategic clude the entire journey because hotels can communicate with
role for AI. Apart from the strategic purposes of adopting AI, them interactively anytime and anywhere before and during
it is well documented that AI provides several advantages their travel; (v) Lastly, AI significantly contributes to a reduc-
such as cost reduction, operational efficiency, and revenue tion in hotels’ operating costs by 15%, an increase in revenues
increase (Ransbotham et al., 2017). However, 54% of by 10% (WTM, 2019), and an improvement in employees’
companies did not adopt the technology at all, 23% satisfaction by relieving them from tedious, routine and repet-
adopted at the pilot level, 18% adopted AI at the basic itive tasks (Zhou, 2019).
level and only 5% adopted AI extensively (Ransbotham Table 1 classifies diverse types of technologies into four
et al., 2017). The low adoption rate can be explained by popular types of technology, regardless of difficulties in their
several prevalent obstacles, such as lack of data consol- application and function (Redmore, 2018), and includes rep-
idation, technological complexities, cyber-security risk, resentative hotels that have adopted the relevant technologies.
modelling difficulties, and process-based interactions be- Except for the last type of analytics, the first three are used for
tween people and AI (Cheatham et al., 2019). direct interactions with customers. Chatbots or voice recogni-
Buhalis (2020) predicted that in the near future, Ambient tion systems are reported as the most common applications
Intelligence (AmI) Tourism will be prevalent, driven by a being used by hotels, possibly thanks to their prevalence in
range of disruptive technologies, including: AI, autonomous modern smart devices. In-room technology, controling tem-
devices, Internet of things, diverse smart technologies, perature, lighting, and curtains is generally accepted by cus-
blockchain, sensor and beacon networks, etc. During the next tomers with minimal resistance (Hasser et al., 2018). Delivery
75 years, all tourism industries, including the hotel industry, robots and concierge robots (Murphy, Hofacker, and Gretzel,
will be transformed due to the impact of such technology 2017) are another popular technology that can be easily im-
(Buhalis, 2020). In fact, diverse information technologies plemented with minimal resistance to reduce costs as well as
have created an environment where new value-added services to enhance customer experiences (MAZARS, 2018; Starfleet
can be provided by service providers and tourists together, in a Research, 2018). However, the full impact of AI and robots on
technology-enabled co-creation ecosystem (Buhalis et al., existing employees remains unclear (Belanche et al., 2019;
2019). Owing to the innovative nature of these disruptive Ivanov et al., 2020; Tuomi et al., 2020).
technologies, services in tourism and hospitality have new Many applications under the analytics category are used for
important features such as real-time, co-creation, data-driven, back-of-house operations that underlie the interactions with
consumer-centric and experience enhancement (Buhalis and customers. It is already well understood that these applications
Sinarta, 2019). Several leading hotels have already imple- directly contribute to not only increase revenues because AI
mented the latest technologies such as AI and robotics into helps to provide customized and individualized services to
their business activities, ranging from back office operations customers, but also reduce costs significantly since AI pro-
to direct customer interactions (Epiknetworks, 2018). As ho- vides optimized solutions. Moreover, owing to such features
tels become more aware of the benefits of such technology, that many analytic applications are not connected to direct
there is a possibility that more hotels would adopt the technol- customer interactions, it is expected that hotels can adopt this
ogy. In this light, AI and robotics have already become key type of application easily once technical barriers and obstacles
components to fulfill some major requirements of smart hotel are overcome.
as well as smart tourism. In sum, even though several leading hotels have adopted
AI and robotics, the total number of hotels adopting them is
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

Table 1 AI and robot technologies commonly adopted in the hotel industry

Type Examples Hotels

Chabot-based Control for room temperature and lighting, ordering meals or Caesars Entertainment (Caesars, 2018) Hilton Worldwide
voice drinks, scheduling and managing reservation, diverse concierge (Hilton, 2016) Marriott International (Alexsoft, 2018)
recognition services Clarion Hotel in Stockholm (Makadia, 2018)
systems
Facial recognition Guest check-in and room check-in FlyZoo Future Hotel (Biron 2019)
systems
Delivery robots Food, amenities, and luggage delivery Aloft hotel (Tung and Law, 2017)
Analytics Customer profiling for customized individual services, occupancy AccorHotel (OTA Insight, 2019) InterContinential Hotel
optimization, optimization of energy and water consumption, Group (Escobar, 2019) Starwood Hotel (Boulton, 2016)
revenue management, monitoring and automation for the
maintenance of operational activities

still limited, as reflected in Table 1. Currently, most hotels relevant factors. Under the organization category, financial
have no clear plans to consider any AI technologies, given justification, and resistance by employee were chosen.
the early stages of AI adoption and the lack of demand from Finally, customer, competition and legal issue were relevant
customers (Fomby, 2019). Moreover, some hotels are report- under the environment category. As the next step, eight senior
ed to have difficulties in providing seamless services when AI hotel asset managers were interviewed, who make key deci-
applications are applied to facilitate customer interactions sions regarding AI and robotics in their hotels, on behalf of the
(Fomby, 2019). Given the range of services and quality levels owners. Besides the aforementioned eight factors, further fac-
offered by hotels, the role of these disruptive technologies in tors were explored during the interview to explore additional
hotels is unclear. For example, in a broader context, how ho- issues for the adoption of the technology. For instance, Market
tels, their staff, and their guests would accept the implemen- position was additionally found to be an important factor al-
tation of AI in a luxury setting may not be congruent or sup- luded to by the executives during the interview process. This
portive of one another. A similar level of disagreement seems study reports findings with respect to the nine factors in detail
to exist when considering issues related to sustainability in and provides a typology of AI and robotics in the hotel indus-
hotels; concerns have been raised if guests would accept ob- try. As a future study, it is proposed that factors affecting AI
vious sustainability initiatives being implemented in luxury and robotics should be investigated depending on the types of
hotels, the impact on prices, and perception of quality. These applications because of the diversity of technologies as ex-
concerns, therefore, require extensive research and consider- plained by the typology.
ation for enhancing ease of AI adoption and facilitating the AI and robotics are still new in the hotel industry (Fomby,
concept of smart hotel, smart tourism, and ambient intelli- 2019). Depending on the type of industries and the maturity of
gence tourism. technology, adoption of new disruptive technologies is gener-
This research delves into the latest trends of adopting AI and ally influenced by different factors. As a result, the contribution
robotics to arrive at key findings and implications for the suc- of this study is in determining important decision factors affect-
cessful implementation of such technologies in the hotel indus- ing the adoption of AI and robotics. Hence, it is hoped that it
try. Since AI and robotics are relatively new technologies, this will provide foundations for more advanced empirical studies.
study explores the important determinants of adopting new In the next section, this study reviews the relevant litera-
technologies from a managerial perspective encompassing the tures on adoption of AI and robotics in tourism and hospital-
hotel’s point of view. Most existing studies explored the indi- ity. Several technology adoption theories are briefly reviewed,
vidual level; whether customers are interested in adopting new and the TOE framework is introduced. Next, the research
technologies or not. However, the decision maker who adopts setting and methodology is described to explain how the case
new technologies is not the individual customer who uses them, study was conducted. Following this, the analysis section
but the hotel who allows its customers to use them after adop- shows how the factors pertaining to the TOE framework relate
tion. For this purpose, this study employs the technology- to this study. Finally, the implications are discussed followed
organization-environment (TOE) framework to carry out the by conclusions.
analysis as this framework explains the various factors affecting
the adoption of new technologies at the enterprise level.
In order to achieve the exploratory research objective of Theoretical background
this study, eight factors are initially chosen based on the
TOE literature. Under the technology category, relative ad- In tourism and hospitality, previous studies of AI and robotics
vantages, complexity, and IT expertise were chosen as can be grouped into three categories. The first group primarily
 K. Nam et al.

focuses on the topic of robotics; the second group studies study signified the role of robots since several hotels have
human resource issues such as employee turnover, resistance, already adopted the technology in their front desk for direct
or acceptance; the third group focuses on the development of interactions with customers. Gursoy et al. (2019) proposed
conceptual frameworks or perspectives about the impact of and tested a three-staged model of accepting AI-based deliv-
technologies on tourism and hospitality, and discusses the ery devices using survey data collected from an online con-
various research issues related to the AI adoption and sumer panel. Hwang et al. (2019) developed a conceptual
implementation. model to explain how four different types of consumer inno-
As for the first group on robotics, there are early studies vativeness affect the intention of using drone food delivery
that explore customer experiences and the importance of ro- services. A structural equation model was developed and test-
bots in hospitality (Tung and Au, 2017; Tung and Law, 2017). ed using 320 participants and found that customer’s innova-
Bowen and Morosan (2018) claimed, in their overview of AI tiveness motivated by functionality, hedonism, and social mo-
and robot hospitality and tourism applications, that service tivation positively affected the attitude towards the technolo-
delivery systems need to be redesigned to maximize the gy. However, behavioural intentions were affected only by
benefits from these technologies. Webster and Ivanov (2019) functionally motivated consumer innovativeness. This sug-
described the important role of robots in the future and gested that while the technology’s functionality, entertain-
claimed that the ‘robonomic’ economy would have profound ment, and social image of the customer could improve the
impacts on the nature of work, income, leisure time, trade, attitude towards the said technology, it was the functionality
social, economic, and political aspects. Go et al. (2019) de- which finally determined the adoption. This is an important
scribed the typology of diverse robots in the hospitality indus- note for businesses as they seek to include more technology in
try and proposed a structural equation model to explain the guest contact areas (Drexler & Lapre, 2019). de Kervenoael
adoption of those robots using the Technology Acceptance et al. (2020) studied the determinants that affect visitors’ in-
Model (TAM). Technology and individual factors were tentions to use social robots and empirically tested the model
included to explain the interactive nature of technology, using a survey of 443 consumers in Singapore. Conducting
however, whiles everal diverse research issues were interviews with persons who operate or use service robots in
proposed, the final model was not validated. Murphy et al. Japan and the US, Tuomi et al. (2019) studied the impact of
(2019) considered the role of humanoid robots in developing service robots in the hospitality industry based on the five
effective robotic services in hospitality and tourism. By types of role: support, substitute, differentiate, improve, and
exploring anthropomorphic characteristics of robots, Murphy upskill. Various issues such as people management and social
et al. (2019) proposed 11 robot capabilities and consequently a responsibility were discussed for hospitality executives to
future research agenda was raised and discussed. Zlatanov and highlight the importance of balance between operational
Popesku (2019) discussed diverse types of robots such as efficiency and customer expectations. Aligned with this
customer service travel bots, Facebook chatbots, AI study, Tuomi et al. (2020) compared the role of robots be-
empowered travel bots and discussed their importance in the tween the US and Japan and found that there are differences
tourism and hospitality context. Imad (2019) on the other due to cultural reasons. Ho et al. (2020) investigated the inter-
hand, proposed similar AI-based solutions, such as a ‘digital actions among human staff, service robot, and fellow cus-
operations manager’, which will be useful in the hospitality tomers when service failures happen. They found that cus-
industry to enhance users’ choices and experiences, as well as tomers would prefer assistance from employees or fellow cus-
efficiency in resource and revenue management. Drexler and tomers over a service robot, suggesting a certain degree of
Lapre (2019) discussed the pros and cons of technological customer resistance to AI and robotics.
advancements in the hospitality industry and raised the diverse As for the second group of studies on human resource
management and labour-related issues that need to be consid- issues, Neuhofer et al. (2015) presented the process model
ered in the future, especially in instances of greater guest in- of creating personalized experiences between employees and
volvement in the service delivery process. Belanche et al. tourists. As requirements of personalized experience,
(2019) developed a theoretical framework for the successful information aggregation, ubiquitous connectedness, and real
implementation of robots, which is composed of robot design, time synchronization were listed as components of the smart
customer features, and service encounter characteristic. Their mobile technology platform. Using a case study, Leung
study highlighted several important factors and presented a (2019) completed one of the earliest studies of AI in hospital-
future research agenda. In contrast, Yu and Boyol Ngan ity by conducting nine interviews to uncover the barriers to
(2019) investigated perceptual body language differences, no- operating smart hotels in Taiwan. It should be noted that the
tably smiling and head movements, between human-like robot issue of employee resistance to AI and robotics was raised as a
and human staff. They found differences in terms of significant potential barrier. Huang and Rust (2018) devel-
interpersonal warmth between male and female employees oped a theory of AI job replacement which shows five devel-
with different cultural backgrounds. Their experimental opment stages. In this model they showed certain types of job
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

are more exposed to AI replacement than others and added the Tussyadiah (2020) recently discussed diverse research is-
additional consideration of the nature of AI’s involvement in sues of AI and robotics in tourism from a research perspective.
service businesses being dependant on the job role rather than Using the list of automation applications in tourism experi-
the job level. Li et al. (2019) found that the adoption of AI could ences, four research agendas were proposed: designing bene-
create a more competitive working environment, possibly in- ficial artificial intelligence, facilitating adoption, assessing the
creasing turnover intentions. The focus on employee intentions impacts of intelligent automation in tourism, and creating a
and AI awareness are, however, a notable limitation due to the sustainable future. As diverse issues are pointed out by
fact that technology adoption in China is still in the infancy Tussyadiah (2020), three implications are found through pre-
stage, potentially limiting future generalizability of the findings. vious studies. First, academic studies regarding the adoption
Yang et al. (2020) discussed the current status of using AI and in the hotel industry are relatively scant due to the recency of
robotics in the hospitality industry and raised concerns regard- the topic. Second, except for several recent studies regarding
ing the various impacts on labor, employment, customers, com- robots, most studies are conceptual and descriptive in nature.
panies, and communities including risk factors. As a survey- Therefore, empirical studies need to be conducted in the future
based empirical study, Prentice et al. (2020) investigated the to enhance and confirm the existing findings. And, third and
moderating impact of AI on employee retention, internal ser- more importantly research on AI and robotics needs to be
vice performance, and external service performance and found conducted as a part of the tourism ecosystem.
that AI plays a significant moderating role in employee perfor-
mance. Ivanov’s (2020) conceptual paper suggested that AI’s
role in replacing or enhancing job roles is likely to be balanced.
Analytical strategy
However, whether the human incumbent of replaced jobs can
work in enhanced roles is uncertain.
To understand the key factors influencing the adoption of AI
As for the third group of studies, Ivanov and Webster
in the hotel industry it is important to delve into the technol-
(2019) edited a book that includes 13 articles discussing
ogy adoption models that theoretically explain the adoption of
theoretical and application issues of robots and AI. This was
new technology. A review of these models provides a basis to
the first book that comprehensively covers the latest trend,
use an analytical strategy that helps better understand the fac-
research topics, and practical issues. There are early papers
tors influencing the AI adoption process. This section pro-
that note the importance and the role of robots in hospitality
vides a synopsis of the various technology adoption models
and tourism. Murphy et al. (2017) classified the robot into four
and focuses primarily on the Technology-Organization-
types and discussed four research areas such as customer
Environment (TOE) framework as the basis to explain the
acceptance, impact on workforce, robot design, etc. Ivanov
adoption of AI in the hotel industry.
et al. (2020) analyzed previous research publications on ro-
According to Oliveira et al. (2014), three factors influence
botics in travel, tourism and hospitality. They presented
the adoption of innovation, which are: “individual (leadership
several research domains and discussed the role and
attitude towards change), internal organizational structure
implication of each domain. Huang and Rust (2020) devel-
(centralization, complexity, interconnectedness, the number
oped a strategic framework for using AI and illustrated various
of employees, and organizational slack) and external charac-
AI applications to enhance the benefits of using them. Among
teristics (system openness) of the organization” (p. 499). In
this group of studies, AI and robotics need to be studied as a
line with this argument, it is argued that user acceptance the-
major component of smart tourism (Gretzel et al., 2015; Koo
ories, such as Theory of Reasoned Action (TRA), Theory of
et al., 2017) and ambient intelligence tourism (Bhualis, 2020,
Planned Behavior (TPB), Technology Acceptance Model
Buahlis and Sinarta, 2019). Smart ecosystems, disruptive
(TAM), and Diffusion of Innovations Theory (DOI), are not
technologies, and co-creation of services are major concepts
appropriate to study the determinants affecting the adoption at
where AI and robotics are understood to facilitate this trend.
the enterprise level. In this sense, the TOE framework is
Among recent studies, Buhalis and Leung (2018) explained
discussed below as an analytical framework because of its
the role of AI while proposing the architecture of smart hos-
enterprise-level focus, and ability to offer interorganizational
pitality ecosystem which consists of three layers: network,
practical and theoretical insight (Baker, 2012).
cloud and data, and AI. AI performs various intelligence
related analyses combining internal and external data stored
in the cloud and data layer. In line with the smart hospitality, Technology-organization-environment (TOE)
Jayawardena (2019) studied the key innovative strategies re- framework
lated to the future of tourism using 13 papers from 17 coun-
tries and found that new technologies, including AI, will be Introduced by Tornatzky and Fleischer (1990), TOE relates to
the key component among innovative strategies. the process of innovation from an organizational perspective.
Nevertheless, empirical studies in this group are scant. The framework has received much scrutiny and has been used
 K. Nam et al.

to study contextual factors influencing e-business assimilation this framework allows for the integration of new factors with-
and innovations (Abu Khadra and Ziadat, 2012). out conflict (Baker, 2012). In the case of the hotel industry, the
There are three factors that influence a firm’s ability to decision to adopt AI and robots is made at the enterprise level
assimilate a given technological innovation. They include and there are several factors from different domains affecting
technological, organizational and environment factors. the adoption decision. For this reason, while applying the
According to Baker (2012), technological factors include all TOE framework to this study, a two-step analysis was
factors, both internal and external, that are relevant to the firm. employed. As the first step, eight important factors were in-
Such technologies encompass not only those that are currently vestigated during the interviews. The interviewees were also
in use but also those that are available in the market at large. asked to identify additional factors besides those eight items.
Van de Weerd et al. (2016; p. 917) review the TOE framework Finally, all the factors were integrated into the TOE frame-
and include compatibility, relative advantage, trialability, work to arrive at the findings of this study.
complexity, uncertainty, perceived benefits, observability,
technology readiness, cost savings, accessibility and data se-
curity as examples. Factors from the TOE framework
The organizational factor includes “the organizational char-
acteristics and resources such as scope, size, degree of central- Even though there are many factors under each TOE category,
ization, degree of formalization, managerial structure, human this study chose eight factors from prior TOE studies since
resources, amount of slack resources, and linkages among they are frequently mentioned and emphasized in the literature
employees” (Abu Khadra and Ziadat, 2012; p. 165). The (Baker, 2012; MAZARS, 2018): Relative advantage,
adoption of innovation is dependent on factors such as orga- complexity, and IT expertise are considered under technology;
nizational structure, size, intra-firm communication processes financial justification and resistance by employee are under
and the availability of slack resources (Baker, 2012). organization; and customer, competition and legal issue are
Organizational factors include top management support, orga- chosen under environment.
nizational readiness, organizational size, innovativeness,
technology-sensing capability, and knowledge resistance to Technology
new technologies (van de Weerd et al., 2016).
The environmental construct relates to external factors Relative advantage is the degree to which an innovation is
which influence the firm’s ongoing business, and includes perceived as being better than the idea it supersedes (Rogers,
the industry, competitors, macroeconomic, regulatory con- 1995). Accordingly, innovations that are perceived to be op-
texts (Abu Khadra and Ziadat, 2012; p. 165), and the role of erationally and strategically value-adding in that the “benefits
service providers (Baker, 2012). Typical factors are competi- of the technology exceed existing practices and processes, the
tive pressure, industry, supplier computing support, trading merits will positively influence its adoption” (Oliviera et al.,
partner pressure, competition intensity, market scope, govern- 2014; p. 501). AI and robotics are perceived to provide several
ment support, service-level agreement, supplier competences, useful benefits ranging from strategic motivation to operation-
among other extraneous factors such as advice of friends and al advantages (Tussyadiah, 2020; Ransbotham et al., 2017).
families, advice of business network, advice of IT specialists For this reason, this study investigates these diverse benefits to
and consultants and choice of skilled vendors (van de Weerd explore how they impact the adoption of new technologies.
et al., 2016). Complexity is the degree to which an innovation is perceived
The TOE model has been utilized in several studies: for the to be difficult to understand and implement (Rogers, 1995).
study of internet adoption (Teo, Tan, & Buk, 1998), for the Therefore, there is a greater chance of adoption if the AI tech-
adoption of cloud computing in manufacturing and service nology is less complex or easy to integrate with current archi-
sectors (Oliveira et al., 2014), for the factors affecting the tectures. This factor is frequently mentioned as one of the major
service-oriented architecture (MacLennan and Van Belle, obstacles in AI literature (Davenport and Ronanki, 2018) and
2014), for the adoption of RFID (Lee and Shim, 2007), and considered as one of the important determinants in previous
for the adoption of software as a service in Indonesia (van de TOE studies (Oliviera et al., 2014). Outdated legacy systems
Weerd, 2016). In these studies, the three TOE factors have and fragmented information systems are also noted as part of
consistently helped firms more efficiently adopt new obstacles (Bowen and Morosan, 2018).
technologies. IT expertise is the level of knowledge and skills available as
This study adopts the TOE model as an analytical frame- a resource base for implementation of the technology. There
work because (i) TOE is more effective to study the phenom- are two types of competency which needs to be in place for the
enon of technology adoption within the context of a firm; (ii) effective implementation of the technology (Davenport and
TOE has been employed across different technologies, indus- Ronanki, 2018; Oliviera et al., 2014; van de Weerd et al.,
tries, and nations with reasonable explanatory power; and (iii) 2016); internal IT expertise and external IT expertise. This
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

factor is often considered as one of the critical success factors Finally, the adoption of technology would require the firm
in the new technology adoption and innovation literature to consider legal issues that would have an impact on the
(Jukic, Jukic, and Velasco, 2009). implementation process. Abiding by the legal requirements
is a prerequisite that the firm should consider in the implemen-
Organization tation of the new technology (Oliviera et al., 2014). Typical
examples of legal issues are privacy, security, and government
Financial justification is the added value that the decision to regulations (Baker, 2012). For instance, hotels should be cau-
invest in the technology will bring about. It is the prospective tious using personal data while complying with data privacy
rate of return that the investment is projected to have and, laws and ethical issues, especially internationally.
benefits of investing need to exceed the cost for successful
implementation to take place. When the adoption is studied
at the individual level, this factor is often disregarded because Research methodology
it does not incur significant extra costs to individuals. At the
enterprise-level study this technology usually requires an ad- In this exploratory study, qualitative research methods were
ditional investment and, hence, this factor is analysed (van de utilized to gain insights and deeper understanding into the adop-
Weerd et al., 2016). tion of AI and robotics in hotels. In particular, a case study
Resistance of employees is the employees’ inertia to accept approach was adopted to move beyond structured questions
change that the new technology would bring about. In general, such as “what”, “how often” or “how many” to probing ques-
employees prefer the status quo with a resistance to accept a tions related to “what was done”, “why” and “how” (Miles and
shift from it when new technology is implemented, which Huberman, 1984; Myers, 2013; Gummerson, 2008). As such,
requires consideration during implementation. Therefore, re- eight case studies were conducted and analyzed. Eisenhardt
sistance of employees has been included as an important fac- (1989) suggested that studies of four to ten cases are optimal.
tor for new technology adoption in the literature including AI With more than ten cases, the volume of data could become
(Ransbotham et al., 2017; van de Weerd et al., 2016). quite challenging to cope with, whereas with less than four
cases, it might be difficult to generate theories.
Environment Eight interviews were conducted with hotel asset managers
who represented a variety of hotel operators and exhibited a
Customer implies that customers have a different level of diverse set of experience. Saturation was achieved at the
skills and expectations depending on age, education, income, eighth interview in terms of the consistency of opinions and
and culture when they experience certain services (Hasser the quality of contents. In effect, towards the end of the sev-
et al., 2018). With distinct technological features embedded enth interview, the answers and insights from interviewees
into services, hotels may provide a differentiated set of ser- became repetitive. One additional interview was conducted
vices to distinct groups of customers with distinct levels of to confirm saturation. Once confirmed, a decision was made
expectations (Haaser et al., 2018). Hotels need to be more not to seek more informants. Since one asset manager man-
cognizant of divergent types of consumer behaviors and ex- ages several hotels, the number of hotels included in this study
pectations which may be based on age and nationality exceeds 40 units and over 7000 rooms (16% of the total num-
(Haaser et al., 2018). For instance, millennials as digital na- ber of five-star hotel rooms in Dubai (DTCM, 2020a), which
tives are more open to use new technologies as compared to reflects that this study comprehensively represents most major
other generations. Chinese travellers easily accept new tech- hotels in Dubai. In terms of the number of interviewees and
nologies while German travellers are least in accepting them hotels, this study achieved the requirement for obtaining val-
(Singer, 2016). This study includes the customer as one of the idated results. Table 2 shows the role of interviewees who
important aspects of an external environment that impacts the participated in this study and the number of hotels they man-
adoption of technology in the hotel industry. age. However, information on exact number of hotels is
Competition would influence the rate of technology adop- concealed here given the participants’ request for anonymity.
tion because a new technology sometimes has the potential to
vary the degree of competitiveness among firms in the market.
If a firm has gained a competitive position by implementing a Research setting
new technology, the competitors would need to consider the
adoption of similar technology to remain competitive This paper focuses on the trends of using AI in hotels located
(Oliviera et al., 2014). Since this factor is often included in in Dubai, which is the leading tourism destination in the re-
previous TOE research (Baker, 2012; Teo et al., 1997/1998), gion. In 2019, Mastercard’s Global Destination Cities Index
this study employed it as part of a conceptual model to inves- rated Dubai the fourth most visited city in the world for the
tigate the impact on adoption. fifth year in a row (Hamel, 2019). The latest figures released
 K. Nam et al.

Table 2 Profiles of interview participants

No. Role Number of hotels Hotel size Location Star- Market Rankinga
level

1 Asset manager Less than 5 500+ in total Beach-side 5 Leisure Top 50–100
2 Asset manager More than 10 300+ for each hotel Beach-side 5 Leisure Top 20–250
3 Asset manager Less than 5 350+ for each hotel City 5 Business Top 50–100
4 Asset manager Less than 10 150+ for each hotel City 5 Business & Leisure Top 10–120
5 Asset manager Less than 5 200+ for each hotel City & Beach 5 Business & Leisure Top 150–200
6 Consultant & Asset manager Less than 10 200+ for each hotel City & Beach 5 Business & Leisure N/A
7 Asset manager Less than 5 200+ for each hotel City 5 Business Top 120
8 Asset manager More than 10 70–500 + for each hotel City & Beach 5 Business & Leisure Top 10–400
a
Ranking is found from TripAdvisor. TripAdvisor shows the ranking out of 689 hotels in Dubai area

by Dubai’s Department of Tourism and Commerce Marketing to the public and who clearly prefer not to be identified by
(DTCM) report that over 16.73 million international guests name or by organization. In the case of the hotel industry,
visited the city in 2019, resulting in approximately 35.5 mil- significant capital expenditure decisions, including the adop-
lion occupied room nights and a Revenue per Available Room tion of AI, falls under the responsibility of the Asset Manager,
slightly above 80 USD (DTCM, 2020b; DTCM, 2018). In who plays a key intermediary role between the hotel facility
recent years, Dubai’s government has launched a Smart owner and the hotel operator. Hotel owners are increasingly
Dubai program, which is an initiative under the emirate’s relying on the help of asset management firms, as they enter
Smart City program to maintain its current position as a hub risky and complex agreements with hotel operators (Feldman,
for business and tourism while integrating IT, AI, and smart 1995). Therefore, the level of analysis is the Asset Manager,
solutions into the city’s infrastructure and processes (Khan, representing a single and distinct asset management organiza-
et al., 2017; Smart Dubai, 2020). This falls under the city’s tion who are in charge of multiple hotels for several operators.
broad push to generate positive experiences for all key stake- On an average all asset managers have more than 10 years of
holders through technological advancements. The overarch- experience in the hotel industry.
ing vision is to become the world leader in AI by 2031, which For the second and third criteria, a purposive sampling ap-
includes the creation of a National Program for Artificial proach was adopted to select information-rich cases from
Intelligence to drive technological and procedural changes which insights could be gained and an in-depth understanding
within all industries (Ministry of AI, 2020). The correspond- of the issues of central importance to the purpose of -this study
ing shift towards AI and smart services is already visible with- was established (Patton, 2002). Moreover, informants were
in Dubai’s tourism and hospitality sectors. Marriott, for exam- deliberately chosen based on the qualities they possess. These
ple, has introduced Marriott Bonvoy, an application that en- key informants are observant and reflective members of the
ables guests to check-in without the need for keys or cards community of interest (i.e., asset management community)
(Sanu, 2019). Similarly, Atlantis has introduced Blockchain who know a lot about the issue under study (i.e., AI adoption
for payment management, while Emaar has partnered with in hotels) and who are willing to share their knowledge and
Winnow to reduce food waste through AI across its kitchens expertise (Bernard, 2002). This non-random selection process
in Dubai (Sanu, 2019). Thus, the advancing technological is not based on a specific theory or a set number of key infor-
landscape of Dubai’s AI and hospitality sectors provides a rich mants. Given this stringent research constraint, a snowball
context for this exploratory investigation. sampling strategy was used to overcome the accessibility con-
Before starting the selection of interviewees, three criteria straint. Hence, the process was started off by identifying re-
were used to decide whom to interview: (i) a person who is in spondents who can later be used to connect with other potential
charge of the investment decision of implementing new AI or respondents (Vogt, 1999) who satisfy the three required
robotics, (ii) a person who knows and understands the impor- criteria. The first key informant was identified through personal
tant issues and trends of AI and robotics in the hotel industry, connection of one of the authors. Subsequently, using a snow-
and (iii) a person who is willing to respond to semi-structured balling approach, this asset manager provided a reference to
and open-ended interview questions. As for the first criterion, other qualified interviewees in a series until the saturation point
a decision was made to contact hotel asset managers because of eight interviews was reached.
(i) the decision to adopt AI in Dubai-based hotels is not only a A series of in-depth, face-to-face one-hour discussions re-
complex one but also highly confidential, and (ii) this decision volved around the main components of the TOE framework,
is made by a few asset managers who are typically unknown namely technology, organizational and environmental factors
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

affecting hotel’s adoption of AI and robotics technologies. Findings A total of eight interviews were conducted with hotel
The discussion guide was pretested and validated with experts asset managers based in Dubai, because of their role as deci-
in the fields of hospitality and information technology. A case sion makers for the properties. As described in the methodol-
protocol was developed for face-to-face interviews to ensure ogy section, transcriptions were read multiple times to look for
consistency. Data collection occurred between the months of existing and emerging themes. Overall, participants felt that
May 2019 and May 2020. Interviews were conducted in pairs, AI would be, if it was not already, an effective tool to improve
which allowed one researcher to conduct the interview and hotel operations. Saturation was reached quickly, with partic-
another to take notes and/or record the interview. All partici- ipants quickly describing similar elements which influenced
pants were promised anonymity and confidentiality of their their decision-making process when contemplating the adop-
responses. Each interview, except one, was tape recorded for tion of AI in their property.
transcription and analysis, using the platform Otter.ai and sup-
ported by interviewer notes. Otter.ai is an AI tool, which par-
tially transcribed the interviews, meaning the researchers only
need to check and edit the transcription, thereby accelerating Understanding of AI among participants
the process. In the one instance where the tape recorder was
not used, at the request of the interviewee, copious notes were Before asking about TOE factors, the participants were asked
taken and sent back to the interviewee for them to confirm the about their understanding of AI and robots and asked for cur-
accuracy of the notes. All the interview questions were open- rent or planned examples. Table 3 shows the diverse examples
ended and exploratory in nature. It should also be noted that of AI and robotics that are either being implemented or will be
the questions were kept deliberately broad to allow the inter- implemented soon. The mix and interchangeable use of AI
viewees as much freedom and flexibility in their answers as and robotic and non-AI and robotic technologies is notable.
possible. At the same time, additional materials were request- Participants mentioned voice-activated systems, diverse ana-
ed if available and their hotel websites were visited to under- lytics, and delivery robots as examples as reported in trade
stand the current status, operations, etc. All follow up com- journals, but the number of cases were still limited.
munications through emails were saved for further analysis.
… the initial step of AI is to automate things which was
repeatedly done using rules and fixed algorithms and
then later cognitive capabilities are added to under-
Data analysis stand the patterns and to make decisions based on the
patterns. (Participant 5)
The qualitative software QDA Miner was used to assist with AI is something that is a source, which is a learning
coding the interview transcripts and identify patterns in the source, and which adapts based on what it has learned
interview data (Miles and Huberman, 1984). Data analysis and evolves from there without any human intervention.
obtained from interview, websites, additional materials, and (Participant 2)
email was carried-out in the following steps. First, write-ups
of each case (within-case analysis) was performed, followed However, some of them referred to AI as an automated system
by cross-case analysis where patterns across the different with examples such as purchasing applications or voice-
cases were explored. For each individual case, a full transcript guided service desk solutions, such as the non-AI applications
of the interview discussion was prepared and checked against provided in Table 3. In terms of diversity of AI and robotics, it
the transcriptions. A high-quality interview transcript was de- was difficult to find more advanced features such as deep-
fined as a complete and accurate reflection of the verbal and learning or more complicated AI-based robot applications.
written communication between the interviewer and the inter- These examples are shown in Table 1 as non-AI cases since
viewees (Maxwell, 1992). The transcripts were read and man- some participants regarded that they have the same impacts on
ually summarized question-by-question. For each discussion hotels as AI and robots. Even though the level of understand-
topic, the transcripts were carefully studied and detailed notes ing was different across the eight interviewees, they clearly
were made from the interviewees’ points of view. The notes understand the role and purpose of adopting AI and robotics.
were, subsequently, condensed into brief summaries of each It is interpreted that hotels understand that AI should increase
interview allowing us to cluster them accordingly. Once the the productivity in terms of reducing labor costs and stabiliz-
analysis on the individual case was completed, the cross-case ing operations for repetitive tasks.
analysis was considered by looking at the similarities and
differences among the cases. This process resulted in impor- I want to say that it is helpful for those owners, whose
tant insights regarding each factor. While comparing them to turnover is significant. And they are looking for those
the literature (Eisenhardt, 1989). departments, I wouldn’t include everyone, those
 K. Nam et al.

Table 3 Examples of using AI and robotics including other smart technologies

Technology Type Explanation Reason

Non-AI Automation of purchase order process Routine and repetitive purchase order activities that Cost reduction
made many errors and delays have been replaced Reduced errors
by a software to automate the process
Reduced cycle time
Non-AI Voice-guided service desk Small number of operators are able to take care of Revenue increase
more external calls for booking while automated Better customer response
systems handle 80–90% internal calls such as
complaints, service request, etc.
Non-AI Message box 350 employees share and exchange information Efficient communication
using their own languages and the message
box automatically translates it
Non-AI Virtual concierge Multi-language web-based touch screen concierge Cost reduction
Enhanced customer experience
Non-AI Chemical management dashboard It shows the current status of using diverse types Cost reduction
of chemical usage and helps to control
them efficiently
AI Blockchain-based virtual wallet It allows to distribute costs of package deals into Increased productivity Reduced errors
corresponding accounts while customers use
several services such as food and beverage
AI Voice recognition for room control It controls lights, curtains, TV, temperature, etc. Enhanced customer experience
AI Room service robot Robots deliver room service items upon request Cost reduction
Enhanced customer experience
AI AI-based electricity back-up system Electric battery pack replaces the emergency Cost reduction
backup generator and AI charges and releases
the electricity based on usage rates and
demands. This AI system also automatically
controls the pool heater depending on the
occupancy rate
AI Customer profiling Using rule-based engine, customer data are Revenue increase
collected from diverse channels such as Better customer service
restaurant, golf club, spa, etc., to create a
unified customer profile
AI Menu creation and validation It automatically calculates the cost of changing Cost savings
menu and streamlines the routine validation Increased productivity
process
AI Passport validation It automates the entry and validation of Increased productivity
passport information including automatic
translations
AI Room allocation AI optimizes the room utilization rate to Revenue increase
maximize profits
AI Motion detection A sensor detects whether the guest is in the room Cost reduction
or not and then the room temperature is
automatically adjusted

departments which they would love to go ahead as Technology: Relative advantage

automated. (Participant 1)
Participants generally divided the advantages of AI into three
aspects: cost reduction, revenue generation, and customer ex-
perience. From a cost perspective, AI was seen as a tool which
could improve the efficiency of operations, resulting in a cost
saving. Good examples among participants were AI-based
Technology electricity back-up systems, chemical management systems,
and motion detection systems which reduce electricity usage
Under the technology category, three factors arose, automatically. These examples were also provided from a sus-
which were relative advantage, complexity of AI, and tainability perspective, that is, how they could use AI to im-
IT expertise. prove their energy efficiency or water usage etc. resulting in
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

lower costs. Interestingly, while the sustainability benefit was As a final perspective, some participants felt that the presence
commented on, the greatest value was seen in terms of cost of AI could itself be an advantage.
savings.
Artificial intelligence also became a sort of a, you know,
Where artificial intelligence can play a major role is in PR tool or a marketing tool to position, even standalone
being energy efficient. This is going to be more and hotels or small brands (Participant 3)
more even in luxury. [Customers] like to know when they
go into place, they are environmentally friendly…. AI
can also help you to balance the room temperature so Technology: Complexity
that you don’t waste energy; it can help you to also
manage the lights (Participant 3) One of the biggest issues participants addressed was the inte-
For owners, I think it can save significant money, elim- gration of AI with existing technologies, for both hotels and
inate human error and maybe provide superior customers. The participants explained that hotels operated
service… (Participant 8) several often non-related systems for years. Furthermore,
these systems could be relatively dated, resulting in integra-
From a revenue side, participants felt that analytic AIs offered tion issues with newer technology that include both single and
opportunities to hotels to market other aspects of their busi- collective systems.
ness or reorganize business to maximize revenue.
…the challenges were in hospitality that typically hotel
…I could take two days booking this room, because systems are very fragmented. So your guest data comes
there is a demand for the deluxe room.…AI helps us in from PMS [Property Management System] solutions,
upselling and cross selling. (Participant 5). where your restaurant customers comes into your res-
taurant reservation systems and POS [Point of Sales]
Participant 5 offered the additional food and beverage exam- systems where your spa customers comes into another
ple of how analytic AIs could increase revenue by upselling. set of systems…so a customer easily can have about four
or five different profiles…major problem is that systems
…if he orders a sandwich, this is the drink that goes with are disconnected. (Participant 5)
it. If he stayed with his friends, but this time he is on a You can’t have data mining…where 10 devices that
business trip, he will not be doing that. So, to get to that don’t talk to each other…it will be impossible to mine
level of detail, I definitely need an AI engine to do that. it. (Participant 7)
(Participant 5)
At the same time, participants explained that if guests’ person-
The third common advantage of AI cited by participants al technology for example cell phones were not up-to-date,
was related to customer experience. Participants felt that there was a risk that they would not be able to interact with
the incorporation of AI could allow the hotel to offer a or utilize some of the technology the hotel implemented –
more unique and customized experience to the custom- particularly in the case of technology designed to improve
er. If a solution was able to provide this, it was per- the in-room experience.
ceived as a suitable ROI and an effective method to
promote satisfied and loyal customers. This advantage Issues could exist if the guests’ device is not upgraded –
clearly points out that AI forms a basis for hotels to their technology does not talk to the hotel systems
be smart as a part of the smart tourism ecology. (Participant 4 – recorded from interview notes)

So now assume when he wakes up in the morning, the In general, participants were not concerned about the com-
TV, the first thing that he turns on the TV, AI helps the plexity of the AI technology itself, but more about how the
TV starting with his favorite channel… We rolled out technology would interact and correspond with the existing
something called NBA (next best action). The engine technology in the hotel.
found the recommendation that should be provided to
the customer as the next action. It could tell me about Technology: IT expertise
the particular persona. I would have an opportunity to
recommend a golf event… a good Chinese dinner… For this issue, questions regarding the capability and role of IT
rather than blindly recommending something. We could department were posed. Participant’s believed that the ability
make an emotional connection with customers of the IT department to recommend and implement AI-based
(Participant 5). solutions into hotels was hampered by a currently busy
 K. Nam et al.

schedule with old, often outdated, existing technology, and a advantage, hotels will use more AI and robotics where
lack of interaction with guests. In the first instance, the IT benefits are realized within a short period of time.
department is tied up with fixing and maintaining systems that
they do not have the time nor willingness to search for or Finding 2 In addition to cost reduction, analytics have high
implement AI technology. potential to contribute to increased revenues and enhanced
customer experience. Since most analytics do not require di-
They, IT people, don’t have the capability to implement rect interactions between customers and systems, hotels will
new technology because normally they are so busy. consider adopting analytics more positively soon, but outdat-
They’re not much even bothered to propose what would ed hotel information systems are obstacles to overcome due to
be better for the hotel. …They don’t want to be bothered integration difficulties.
to replace or to implement... (Participant 1)
It is hard for IT department to work with their vision. I Finding 3 Due to the lack of internal IT expertise, AI and
don’t blame them. If you give them an obsolete system or robots are often implemented by outsourced IT. As long as
the obsolete system exists in the property, all they have external IT vendors provide a reliable technology, hotels con-
to do is maintain, maintain, and maintain, because there sider that the complexity of AI itself is not a reason to hinder
is so much breakdown in it. You cannot ask them to the adoption of such technology. Finding competent external
‘look at some efficiency or look at some new things’. IT experts is a critical issue when adopting AI and robotics.
No, you have to respect that… (Participant 2)

The final issue facing IT was the lack of interaction

with guests. Given that most of IT’s role, according to Organization
participants, was as a support function, it was felt that
they were not always aware of the guests’ actual needs Under organization category, financial justification in terms of
and, therefore, were not able to recommend the most ROI and resistance by employees were studied.
appropriate solutions. Instead of using internal IT ex-
perts, hotels find the solutions by outsourcing to a reli-
able vendor. That is, finding and managing outsourcing Organization: Financial justification
vendor is still important for AI and robotics.
A key element that participants referred to was the financial
I expect them [IT department] to be familiar with AI… justification required for the adoption of new technologies. In
But I’m not sure how much they interact with the guests. particular, participants were looking for an acceptable return
I’m not sure how much they understand about the guest on investment (ROI) which would justify the business-worth
needs. (Participant 3) of the technology.
In the market, there are competent and software ven-
dors. But I would say, who to trust is a big issue. Here I I’m not going to fund something that is not giving me an
believe…the hotel brands have to step up in the regional ROI right away or maybe it may never give us. The ROI
or the headquarter/head offices. (Participant 1) mechanism is quite important for us. (Participant 2)

In sum, regarding the technology factor, the following find- Importantly, an ROI needed to be a financial return; if the
ings are proposed based on the interviews. These findings are adoption of a technology would provide a suitable cost saving,
generally consistent with the previous reports on AI and the revenue increase, or improvement in customer experience, it
hotel industry. One of major differences is that was deemed acceptable.
Ransbotham et al. (2017) highlighted the strategic role of AI
as one of the major reasons for adopting AI. However, in the To me, AI adoption with the right use cases in those
case of hotels, it is found that the motivation is more initiated three areas I said, you don’t need to be…I mean defi-
by operational issues such as reducing costs and enhancing the nitely gives you a competitive edge. Because when your
productivity of back-office operations. guest experience is much better, because you are staff is
empowered with more customer insights, actionable in-
Finding 1 The importance of AI and robots is already well sights, so that they interact with the customer better. So
recognized in hotels and adoption cases are frequently there is a chance that the customer builds that emotional
found where the automation of the process increases connection with the hotel, which improves your ‘cus-
productivity. That is, rather than a long-term oriented tomer stickiness’, so that is a competitive advantage.
strategic purpose such as sustaining a competitive (Participant 5)
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

However, participants admitted that the flexible definitions of Organization: Resistance by employees
ROI and the inherent nature of AI technology meant that the
calculation of return is difficult. Overall, the participants felt that the staff would not resist the
new technology to the extent that it hampers the adoption of
So let’s say an owner has five or six hotels and they the technology. Some felt that if there would be resistance at
implement that technology across the board. That way first, it often exits until they could experience the technology
they can achieve the economies of scale and save as for themselves.
well. But in terms of your actual ROI it is very difficult
to calculate. (Participant 6) …We didn’t face a number of the resistance, maybe one
or two. However, it was welcomed as an idea itself,
Another important issue that arose in relation to the finance welcomed in terms of the implementation itself as well.
was the responsibility; with whom did the responsibility lie to Obviously, staff don’t like it because they do not know
locate the technology and fund its implementation? Overall, why you are doing it… But later when they become
there was a general belief that the operators (brands) should be more familiar with it, they’re saying that okay it’s actu-
the ones to find the appropriate technology and recommend its ally a good one. (Participant 1)
implementation to the local hotel owners. However, since the I think in the beginning people resist, because obviously
cost of the implementation was likely to fall on the owner, the some people will definitely lose jobs when the intelli-
operator needed to clearly identify the anticipated ROI. gence will come in. (Participant 6)

…they [the operators] have…a very big guy well paid, Regardless of whether employees supported AI or not, there
sitting in an office…and all what they are doing is to was consensus that staff would support the technology when
study artificial intelligence and see how this can enter they saw the benefits it would bring them. The staff’s resis-
into the business model…. But don’t forget that there is tance was, however, related to the hotel’s position in the mar-
an owner who actually pays specific IT fees to the op- ket; more luxurious properties did not need to replace staff,
erator. The operator should show me the ROI that can while lower positioned hotels may be incentivized to replace
be obtained in one year. (Participant 3) staff, thereby leading to resistance.
…That is one thing I would advise owners; not to get too
much involved in this [AI] investment. Because we are I don’t see much [resistance] coming apart from lower
in the early stage, right, so we may take some risks tier segment where staff is anyhow, reduced to the bone.
here…you don’t want to be the first one who invests But at the luxury hotels… to improve the experience…
who has to reinvest in two years, but you don’t want to you will always need a person at the front desk even to
be the last one either. (Participant 8) sort the technical issue… that is, you can make it faster
through artificial intelligence, (Participant 3)
However, the role of the operator sometimes provided
limitations when concern over brand image arose. Other forms of resistance occurred from the managerial level;
Participants explained that in some instances, the oper- if management were unfamiliar with the new technology or
ator would resist adopting a new technology over con- were not convinced the promised ROI was sufficient as ex-
cern that its failure may have a wider impact on the plained in the financial justification factor, they would resist
perception of the brand globally. the adoption of the new technology.
There were, overall, two forms of resistance that partici-
…for example, if it was a Marriott system and it did not pants felt could arise: staff and managerial. It was felt that staff
work, all around the world, people will start talking would resist over fear of losing their jobs even if the resistance
about that there was a Marriott system that was imple- is not considered serious. However, participants believed that
mented and did not work. But for this hotel, if something staff working in higher category hotels would be less resistant
does not work, it’s all in the house… (Participant 2) – or be more supportive sooner – because the technology
would not actually replace them. The second form of resis-
It was, therefore, clear that an acceptable ROI was necessary tance occurred from managers over a lack of knowledge and
for a certain technology to be adopted. Furthermore, it was felt understanding about the new technology and was most fre-
that it was the operator’s responsibility to locate the appropri- quently related to seeking support of adopting the technology.
ate AI and recommend its adoption, with an acceptable ROI. There are two interesting phenomena pertaining to organi-
In particular, it was also the larger operators who would some- zation factors. The first one is that the relationship between
times resist new AI technology over fear that their brand rep- operator and owner is a factor that affects the technology
utation could be harmed, in cases where the technology failed. adoption decision. The second is that AI and robots are often
 K. Nam et al.

welcomed by staff and managers because new technologies In the second case of customer experience, the participants
improve their productivity. The findings are proposed as explained that delivering better customer expectations was
below. one of key advantages using AI, along with lower costs or
improved revenue. Participants felt that AI technology
Finding 4 The ROI in terms of financial measurement such as allowed hotels to better understand their customer and offer
cost reduction or revenue increase is used as the main judg- more personalized experiences with respect to their different
ment criterion to adopt the new technology. However, de- expectations.
pending on the market position of hotels, ROI could be qual-
itative such as customer experience. Hence, as long as one of Personalized information can also be provided of suit-
the three types of ROI (cost reduction, revenue increase, and able restaurants/activities etc. in close proximity, based
customer experience) is apparent to the hotel owners (who on the guests’ profile. (Participant 4 – recorded from
invest in such technologies), the likelihood of adoption is interview notes)
higher. But at the same time maybe AI can still play a major role
in the luxury arena, when it comes to the in-room guest
Finding 5 Resistance by staff was expected to be more notice- experience. (Participant 2)
able and significant in lower positioned properties where AI
may replace people. At higher positioned properties, however, The personalized focus on the guest was, therefore, central to
the participants believed that AI would enhance the abilities the participants’ perspectives of AI. The guests’ expectations
and efficiency of staff, not replace them. and preferences influenced which type of AI was adopted and
how well it would succeed – especially when guests have
different expectations due to demographics or personal char-
acteristics, and allowed properties to provide a better, more
Environment
personalized experience to the guest.
Under the environment category, three factors, i.e., customer
Environment: Competition
expectations, competition, and legal issues are chosen to study
the impact on adoption.
When asked about the role of competition in motivating hotels
to adopt AI, participants unanimously claimed that keeping up
Environment: Customer with competitors was not a sufficient motive yet. AI tools
were seen as an optional advantage and benefit, but not some-
As for the customer, participants regularly referred to two thing that is important enough to encourage adoption solely
similar but distinct factors: i) customer readiness in terms of based on the competitors’ actions.
accepting and using new technologies; and ii) customer expe-
rience in terms of potential benefits to customers by providing … it’s not a swimming pool. AI is not a necessity as of
customized AI and robotics related services. In the case of now. If my competitor has a pool and I don’t have a
customer readiness, the participants mentioned that customers pool, that is a problem, I will lose money. If my compet-
have different experiences depending on age, culture, purpose itor has a Michelin star restaurant and I don’t, I start
of travel, and even personal preference of using technology. losing money. Not yet. Not yet for AI. (Participant 2)

Some of them are from the younger generations, they However, the participants did explain that they would draw
prefer the electronic ones [check-in] they see the queue, inspiration and ideas from competitors globally.
for example, they go to the electronic system.
(Participant 1). If you see a successful AI idea being implemented by a
Also depending on the culture and nation, the way peo- competitor, you want to be a part of the market trends.
ple behave and interact is quite different. For instance, But, to be frank, I haven’t seen others in the luxury
in Japan they want the old things to work as good as segment, even here locally doing more than what we
something new and shiny. … Even if you put a brand- do. (Participant 3)
new technology, it will not work unless this hotel is
targeted to a different audience. (Participant 2). Therefore, if they saw or experienced a particular AI solution,
Based on consumer demographics in terms of the pref- they would consider implementing a similar version, if they
erences and wants, especially of the GCC families, they felt it would add value and provide a suitable ROI. AI is not
are very different from corporate or leisure travellers in yet recognized as one of critical technologies determining the
countries like Europe… (Participant 6). competitiveness in the market.
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

Environment: Legal issue customer factors: customer readiness and customer experi-
ence. Depending on the readiness such as age and culture,
One the most significant concerns raised by participants was hotels need to decide what types of AI and robotics to provide
the legality of the AI tools they considered for adoption. From to customers. As for the customer experience, AI helps to
a customer-privacy perspective, participants did raise concern provide personalized services since analytic functions assist
about customers’ willingness to share data. However, they in the identification of customer expectations based on their
mostly dismissed the severity of this because they believed profiles and to maximize the experience.
that guests would appreciate the personalization in exchange
for sharing their data or could opt-out if they wished. Finding 7 Competition is not seen as a major factor in
influencing the adoption of new technology. That is, hotels
It [an opt-out option] has to exist otherwise you have rarely adopt AI and robotics to keep up with competition in
other problems, privacy issues and everything. A nice the market, rather adoption decisions are made primarily
big red button is your choice. This is your choice if you based on internal factors.
want to engage. However, if you don’t want, let it be.
(Participant 2) Finding 8 Legal factors were rarely seen as a major barrier but
were restrictions that hotels would need to consider when
Furthermore, some of the participants explained that the data designing solutions or interacting with customers.
they were collecting could be used to create personas, and not
be related to a particular individual. This would, in their view, Additional factor: Market position
not cause significant concern or discomfort for guests because
data were being analyzed collectively. Besides the current TOE factors, the interviewees were asked
an open-ended question at the end if there are any additional
If you are touching the personal data, it can be done as important factors. There were other factors such as technology
long as it’s anonymous…if I’m mapping you to a pro- compatibility, IT infrastructure, perceived benefits, and tech-
file…identifying you in this way,…age bracket, he’s a nical competency, but most of them could be explained by the
Middle Eastern individual, he is married ... these details eight factors identified previously. The only factor that the
are not private…because I’m not identifying the individ- participants included, which cannot be explained by the pre-
ual against it. So those level of details can be still be viously identified factors, was the market position, i.e. the
collected. (Participant 5) hotel’s star rating. Market position refers to the strategic posi-
tion of a brand or product in the marketplace in terms of
Of more significance was the legislation and regulations with- customer perception in relation to competition. In the case of
in the city or country the hotel was located. Regulations the hotel industry, hotels are categorized and perceived differ-
governing the operations of the hotel could limit the type of ently by customers based on star rating. For instance, 5-star
AI that could be implemented or, at the very least, require hotels target the high-end customers who expect high quality
changes to the technology. services and unique facilities. Likewise, other hotels with low-
er than 5-star ratings are considered less luxurious in their
…law stipulates that you have to have the passport or appeal.
ID has to be physically verified by an individual at the All participants felt that luxury hotels, (the 5-star hotels),
front desk (Participant 5) would want minimally invasive solutions which prioritized
guest experience, or affected back-of-house operations.
Legally, therefore, participants did not seem overly concerned
about implementing AI or robotics from a guest’s perspective. …especially for the luxury properties. Technology is not
The larger concern arose from country legislation. However, welcome because they are very traditional. I mean there
participants were confident that these would change to support is a culture behind it, there is the styles which cannot be
AI and robotics. changed. Maybe in the different segmentation mid-scale
These are the findings from environmental factors. or upper scale possible, but luxury for sure not.
Interestingly, it is often discussed that privacy is one of major (Participant 1)
obstacles (Ransbotham et al., 2017), but the findings suggest Depending on the nature and position of the hotel, I see
that privacy is not such a serious concern limiting the adoption AI is less on the luxury segment and more on the 2 or 3
of AI. starred economy segment. I believe that there are mostly
two reasons: one is that in the luxury people still expect
Finding 6 Customers are one of major factors affecting the more human interaction rather than AI or robot inter-
adoption of a new technology. There are two types of action. But at the same time AI can still play a major
 K. Nam et al.

role into the luxury arena, when it comes to the in-room Based on the current findings, market position, customer
guest experience for connectivity, for example, TV sys- readiness, and customer experience are classified into the first
tem control. I think luxury hotels will be less influenced order influencer affecting the adoption of technologies.
by AI, apart from the guest experience. Now in the econ- Market position appeared to be the most significant influence
omy hotel segment, AI could be used a lot because of in terms of whether AI would be adopted or not, and what
cost constraints. They need to invest because technolo- types of AI would be adopted. Customers are another impor-
gies reduce manpower. (Participant 8) tant factor affecting the adoption. High-end customers who
… if you look at the luxury segment, and people they visit luxury hotels would have higher expectations of services
want experience when they’re coming right and when due to their market position. Utilizing AI and robots allows
you want luxury experience, they actually want touch hotels to maximize customer experience and expectations by
points where you are interacting with individuals. You providing customized services to different types of customers.
don’t want just to be communicating with the machine. The second order influencers include relative advantage,
(Participant 6) complexity of technology, external IT expertise and financial
justification. This study found that technological factors are
The hotel’s market position seemed to be one of the most not the primary determinants affecting the adoption. The par-
significant factors affecting the decision whether or not to ticipants pointed out the importance of financial justification
adopt AI technology, and which technology should be imple- in terms of ROI which essentially refers to cost savings, rev-
mented. For this reason, participants unanimously felt that enue increase, or customer experience improvements in accor-
non-invasive AI would work well in luxury hotels, in a way dance with the literature (Davenport and Ronanki, 2018).
either to enhance current services by providing greater cus- Lastly, among the third order influencers, internal IT exper-
tomization to an individual customer or to enhance internal tise, resistance by employees, competition with rivals, and
efficiencies by optimizing operations to reduce operating legal issue such as privacy are identified. These factors are
costs. In this study, this factor is included under the organiza- still very important and frequently cited in trade journals as
tional category because hotels are often reported to use differ- important influencers. The participants agreed as to the impor-
ent facilities and technologies depending on their strategy, tance of these factors, but not as much when compared to the
brand and quality of services (Muthumanicam, 2019) which first and second influencer groups.
represent the organizational characteristics of the hotel. Most prior studies were conceptual (Bowen and Morosan,
2018; Go et al., 2019; Murphy et al., 2019) and descriptive in
Finding 9 Of high importance from the organization’s per- nature offering guidelines (Webster and Ivanov, 2019;
spective was the market position of the property, i.e., the Zlatanov and Popesku, 2019), or focused on the behavior of
star-rating of the hotel. Participants felt that more luxury prop- individuals (Yu and Boyol Ngan, 2019; Gursoy et al., 2019) in
erties would prefer less invasive solutions. This finding influ- terms of the adoption of technology. The conceptual papers
enced all other subsequent decisions regarding the adoption of presented diverse frameworks for effective design and imple-
AI. mentation of AI and robots and also discussed important re-
search subjects and agenda for future studies. The limitation is
that empirical studies validating these proposed frameworks
or guidelines are insufficient, mostly since real AI and robot
Discussion applications were still scant. For instance, the human resource
issue is still one of the major topics of AI and robots because
This study explored eight factors from previous TOE frame- employee resistance and job replacement are considered to be
work and proposed 11 factors. These factors include market serious obstacles to overcome (Ho et al., 2020; Tuomi et al.,
position which was derived directly from the interviews. They 2019, 2020). However, this study found that employee resis-
also include the customer, encompassing customer readiness tance is not as significant, from the hotels’ point of view, as
and customer experience, whereas IT expertise that includes previously thought. Likewise, it was found that hotels’ market
external IT expertise and internal IT expertise. In total, eight position is one of the primary determinants that affect the
interviews were conducted with senior asset managers who decision of what types of AI and robots need to be adopted.
manage over 40 hotels in Dubai. Based on the analysis, a Several empirical studies have been conducted on robot adop-
future research model is proposed for the empirical validation tion, while AI remains limited. Now data-oriented empirical
of the relevant factors as shown in Fig. 1. In total, 11 factors studies are required to validate the proposed frameworks or
are included with respect to three TOE categories and they are guidelines to derive more practical lessons and meaningful
reclassified into three groups from the first order to the third implications to practitioners and to researchers.
order influencers based on the findings in terms of the differ- The current findings need to be validated by further empir-
ent degree of impact on the adoption of AI and robotics. ical studies in future using survey data and statistical analysis.
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

Fig. 1 Factors affecting the adoption of AI and robotics in the hotel industry

That is, future studies of AI and robotics need to be fine-tuned tasks. Traditional smart software can be utilized for this pur-
by their types and characteristics, i.e., the typology of AI and pose. Implementing the technology may face a certain level of
robotics. For this reason, based on current findings and dis- resistance by employees, but this level of automation emerges
cussion, this study classified different types of AI and robot before the use of AI and robotics. Therefore, the management
applications in the hotel industry into four types as shown in prefers to use technology at this level despite resistance and
Fig. 2. the decision would take relatively less time.
In Fig. 2, the horizontal axis represents the type of hotel In the operational enhancement cell, AI and robotics en-
business activities and operations: back-office activities can hance the role of human labor related services. Traditional IT
be carried out without direct customer interactions while applications were not able to provide proper tools in the do-
front-office activities require interactions with customers. main before because the technology was neither smart nor
Back-office AI and robot applications will be primarily used advanced enough to enhance the human manpower. For in-
by hotel employees while front-office applications are adopted stance, it is quite a recent trend that integrating AI into energy
for customers. management and revenue management helps to save costs and
The vertical axis represents the role of AI and robotics, to increase revenues. Employees welcome this technology
whether it would substitute or enhance manpower. This di- rather than resist because it increases their productivity with-
mension is chosen because the human interface is the most out concern of job security. For this reason, hotels have im-
critical factor determining the quality of hotel services, and plemented AI relatively early when the technology became
reducing manpower is one of the important advantages of AI available. As AI and robotics mature, hotels will adopt more
and robotics. At the same time, nowadays the collaboration of such technologies.
between human and AI is considered very important to max- Regarding strategic enhancement, customers interact with
imize the benefits (Davenport and Ronanki, 2018; Wilson and AI and robotics directly through the interface provided by
Daugherty, 2018). For instance, cognitive augmentation and hotels. Such technology will also provide hotels with the flex-
generative design are good examples of collaboration. That is, ibility of managing manpower to suit their requirement. Only
depending on the purpose, AI can simply substitute the human a limited number of leading hotels have adopted such technol-
interface and can be reinforced to enhance productivity. Based ogy. Most luxury hotels do not use it because of the risk of
on the characteristics, a typology of four cells emerge: opera- sacrificing personal touch related to service quality and cus-
tional substitution, operational enhancement, strategic tomer satisfaction. However, if more customized and individ-
substitution, and strategic enhancement. ualized services could be directly provided to customers using
Regarding operational substitution, reducing transactional advanced analytic and enhanced user-friendly interfaces, AI
and psychological costs is the primary purpose of using AI would provide strategic value to hotels and customer experi-
and robotics that pertain to simple, routine, and repetitive ences can be maximized. However, for this to happen, AI and
 K. Nam et al.

Fig. 2 Typology of AI and

robotics in the hotel industry

robotics-based technologies need to further develop to be- adoption of technology, future studies should be fine-tuned
come more mature. In the future, even luxury hotels should to find different determinants with respect to different depen-
consider this orientation to provide differentiated and custom- dent variables, i.e., the typology of AI and robotics.
ized services.
Strategic substitution relates to technologies that are used
to interact directly with customers to replace manpower. Conclusion
Examples are delivery robots and facial recognition systems
that will have direct interface with customers. The major ob- To study the factors affecting the adoption of AI and robotics,
jective of such an orientation will be the reduction of costs. an in-depth case study was conducted with senior managers.
Depending on its strategic position, the hotel has to decide The data from the interview transcriptions including email,
whether to adopt this type of application. Five-star hotels will relevant materials, and websites, were scrutinized to report a
not adopt the type of strategic substitution since customers series of 11 findings with respect to nine TOE factors. Market
prefer to have direct contact with the hotel employees. The position and customer are found to be more influential than
adoption in this regard should be more strategically consid- others while internal IT expertise, competition and legal issues
ered because of high risk. have less impact on AI adoption. Finally, this study proposed
Integrating with the results of current study, the proposed four types of AI and robotics in the hotel industry which can
typology is useful to decide which technologies to adopt de- be useful to categorize the trend of adoption in the future.
pending on characteristics of strategic position and customers. There are two important implications of the study. First,
In the case of 3- and 4-star hotels, technologies are already this study found that the customer is one of the most influen-
adopted without sacrificing the service quality and customer tial factors (Murphy et al., 2017). It supports the fact that AI
satisfaction because customers who are more cost-conscious and robotics have become an important component of smart
accept the technology without any resistance. An example is hotel and smart tourism. The Ambient Intelligence (AmI)
the FlyZoo in China which has already implemented the full Tourism (Buhalis, 2020) driven by a range of disruptive tech-
spectrum of voice recognition systems (Biron, 2019). nologies is already prevalent in the hotel industry. Future stud-
Implementing AI and robotics for the purpose of replacing ies of AI should be carried out as a part of a smart ecosystem.
employees where customer interactions are important should Second, in line with the smart tourism, even though hotels
be scrutinized. Hotels must clearly understand their market have already adopted diverse AI technologies, this study
position and types of customers before the implementation shows that more diverse applications using more advanced
of AI and robotics. It should be noted that the future research features of machine learning or deep learning need to be de-
needs to be conducted with respect to the typology of technol- veloped by IT professionals and implemented by hotels. The
ogies. The current study carried out without differentiating the participants clearly pointed out that hotels are ready to adopt
typology, but in order to derive practical guidelines for the new applications as long as benefits are apparent. Due to the
The adoption of artificial intelligence and robotics in the hotel industry: prospects and challenges

lack of competency of the internal IT department, advanced Longitudinal studies would also provide considerable insights
AI-based solutions integrating the feature of real-time, co-cre- into the adoption process how it evolves over time. Finally,
ation, data-driven, consumer-centric and experience enhance- future research should develop testable hypotheses based on
ment need to be produced through close collaborations be- the findings; and test these hypotheses via a large-scale sur-
tween hotels and external AI professionals. vey, not only in Dubai, or the Middle East, but also across
This study has several contributions from the research point other regions of the world. It is our hope that this exploratory
of view. First, 11 factors were found as determinants affecting study provides a starting point for these investigations.
the adoption of AI and robotics. The factors are derived based
on the TOE framework and in-depth interviews. Since it is one Funding This research was funded by The American Univeristy of
Sharjah, Faculty Research Grant (FRG19-S-B90).
of the earliest studies focusing on the hotel industry, this study
provides a theoretical foundation for the future empirical stud-
ies. Second, it was found that the market position is one of
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