While prior research has examined the role of smart technologies (e.g., IoT and AI) in sustainability, the combined influence of IoT, AI, and organizational capabilities on hotel sustainable performance, particularly through the mediating roles of data-driven decision-making and innovation capability, remains underexplored. This study investigates how the integration of smart technologies, specifically the Internet of Things (IoT) and artificial intelligence (AI), as well as dynamic managerial capabilities focusing on data-driven decision-making (DDM) and innovation capability (IC), enhances hotel sustainable performance (HSP) within the context of Saudi Arabia’s hospitality sector. Grounded in the Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT), the research develops and tests a conceptual model that explores both the mediating roles of DDM and IC in the link between IoT and HSP and the moderating role of AI application in the relationships between IoT and DDM, IC, and HSP. Using data collected from 312 managers of four- and five-star hotels across Saudi Arabia, the study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine the hypothesized relationships. The results reveal that IoT has a significant positive effect on HSP, DDM, and IC. Further, the IoT-HSP relationship is partially mediated by both DDM and IC. Furthermore, AI significantly strengthens the relationships between IoT and DDM, IoT and IC, and IoT and HSP, highlighting AI’s crucial role as an enabler of digital transformation and sustainability. The findings extend the RBV and DCT by demonstrating how technological resources, when combined with dynamic managerial capabilities, lead to superior sustainability outcomes. Practically, the study emphasizes that hotels must pair digital adoption with employee training, innovation culture, and AI-powered analytics to enhance HSP.
Ahmed Hassan Abdou (2025) studied this question.