Unlocking Customer Loyalty through the Interplay of AI Service Quality, Perceived Value, and Trust in Hospitality Industry: Mediation Role of Customer Satisfaction

Abstract

This study offers insights into how Artificial Intelligence (AI) influences customer loyalty, specific to the hotel industry in Pakistan, including both privately owned and government-operated hotels. It focuses on how AI service quality, AI perceived value, trust in AI, and AI reputation promote customer loyalty. The integration of AI-driven solutions like digital concierges, voice-activated assistance, and automatic check-in/out processes increasingly facilitates customer experiences in the hospitality sector, making it essential to understand their impact on customer retention. For this the data were collected from a sample of 350 hotel customers using a structured survey instrument designed to capture perceptions of AI-enabled services in various hotel contexts in Pakistan. Smart PLS 4 is used, and Partial Least Squares Structural Equation Modeling (PLS-SEM) is adopted to analyze the direct and indirect impacts of AI service quality on perceived value, trust, reputation, and ultimately customer loyalty. Expected results aim to provide insights into novel components of customer loyalty linked to individual and collective aspects of AI-related factors, supporting strategic refinement of hotel management practices regarding AI applications. This research introduces a unified theoretical basis for AI-based loyalty programs, fostering significant academic discussions. Moreover, it offers practical implications for the hospitality industry, aiding the optimization of AI technologies to enhance customer retention and satisfaction. In addition to enriching the theoretical literature, the study equips hotel operators in Pakistan with actionable insights to achieve a sustainable competitive advantage in a rapidly evolving environment.

Keywords: Service Quality, Customer Loyalty, Perceived Value, Customer Satisfaction