Smart and inclusive sustainability in hospitality: the interactive roles of stakeholder engagement, knowledge digitalization, circular economy, and hybrid intelligence

Introduction While the hospitality industry faces growing pressure to improve environmental performance, the mechanisms and boundary conditions shaping these outcomes remain unclear. Drawing on the Natural Resource-Based View and Stakeholder Theory, this study aims to investigate how stakeholder engagement influences hotel environmental performance through key internal capabilities, namely knowledge digitalization and circular economy practices. It examines their individual and sequential mediating roles, as well as the moderating effect of AI–Human Intelligence (AI–HI) collaboration on these relationships. Methods Data were collected from 224 managers, executives, and their assistants working in five-star hotels across the Kingdom of Saudi Arabia (KSA). The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). Results The findings show that stakeholder engagement is significantly associated with environmental performance, knowledge digitalization, and circular economy practices. Knowledge digitalization and circular economy practices both positively influence environmental performance and act as individual mediators in the stakeholder engagement–environmental performance relationship. A significant serial mediation effect was also identified, indicating that stakeholder engagement enhances knowledge digitalization, which subsequently improves circular economy practices, ultimately leading to higher environmental performance. Furthermore, AI–Human Intelligence (AI–HI) collaboration significantly strengthens the relationships between stakeholder engagement and knowledge digitalization, and between circular economy practices and environmental performance. Discussion This study contributes to the literature by demonstrating that knowledge digitalization and circular economy practices function as interdependent and sequential capabilities linking stakeholder engagement to environmental performance. It also introduces AI–HI collaboration as a key boundary condition, highlighting how the integration of technological and human capabilities enhances sustainability outcomes in the hospitality sector.