Green and smart: sustainable performance of Pakistani SME hotels: the mediating effect of eco-innovation and the moderating role of artificial intelligence capability

Environmental issues have become the greatest challenge for SME survival and growth. In Pakistan, SME hotels, which can play a healthy role in the economy, are also dealing with several challenges, including their negative environmental impact, which is not unnoticeable. Building on the resource-based view theory with dynamic capability theory, a mediated moderation model was proposed to investigate the impact of green entrepreneurial orientation on the sustainable performance of SME hotels. The impact of green entrepreneurial orientation on sustainable performance (financial, social and environmental) remains ambiguous despite the significant attention given to it. Moreover, eco-innovation and artificial intelligence capability (AIC) have become relevant in understanding innovation and environmentally friendly practices. This study investigated the relationships among GEO, EI, and SP and the moderating role of AI capability between EI and SP. A quantitative methodology was employed. A total of 350 samples were obtained from SME hotel owners,executives and managers through a self-administered questionnaire. The data were analyzed through SMART-PLS version 4.0. The results indicate that GEO has a substantial positive impact on SP. Furthermore, EI plays a mediating role between GEO and SP. Which indicates the improtance of EI in current era for hotels survival and growth. The moderating impact of AIC is significant in the relationship between EI and SP, which means that AI capability helps to attain sustainable performance in the industry. The current study has significant implications for SME hotels and services industry, as it highlights the importance of GEO, EI, and AIC in enhancing SP in the hotel industry. Furthermore, the moderating role of AI capability has rarely been explored. Future studies need to consider AIC with eco-innovation in turbulent market conditions to ensure the sustainable performance of hotels in underdeveloped countries.