Artificial intelligence readiness and service innovation performance in hospitality: The role of employee digital self-efficacy and psychological safety

Artificial intelligence (AI) is increasingly transforming service delivery and innovation processes in the hospitality industry. However, limited research has examined how organizational readiness for AI translates into service innovation outcomes through employee-related mechanisms. Drawing on Social Cognitive Theory, this study investigates the relationship between artificial intelligence readiness and service innovation performance, considering the mediating role of employee digital self-efficacy and the moderating role of psychological safety. Data were collected from 392 employees in hospitality businesses across four major Australian cities using a three-wave time-lagged survey design. The results of structural equation modeling indicate that AI readiness positively influences service innovation performance and significantly enhances employees’ digital self-efficacy, which partially mediates this relationship. Furthermore, psychological safety strengthens the positive effect of digital self-efficacy on service innovation performance. These findings highlight the importance of integrating technological capabilities with supportive psychological and organizational conditions to foster innovation in AI-enabled hospitality environments.