AI-Driven Hyper-Personalization in Hospitality: Application, Present and Future Opportunities, Challenges, and Guest Trust Issues

Artificial intelligence (AI) has significantly transformed the hospitality industry by enabling hyper-personalized guest experiences, enhancing customer satisfaction, loyalty, and overall brand perception, and enhancing operational efficiency. However, its deployment presents a dichotomy of opportunities and challenges, often framed within paradoxes such as the Personalization-Privacy Paradox. While AI-driven personalization fosters value co-creation through tailored services and convenience, it also raises concerns regarding privacy, technology anxiety, reduced human interaction, and loss of control of personal data, leading to potential value co-destruction and consumer trust issues. This review examines the future direction of AI-driven personalization in hospitality by analyzing existing literature and industry trends. It identifies key benefits, ethical considerations, and trust-related challenges, offering insights into strategies that balance AI’s advantages while mitigating risks. The paper concludes with recommendations for future research and industry practices to optimize AI’s role in hospitality.