DIGITAL TRANSFORMATION AND AI-DRIVEN SERVICE INNOVATION IN NIGERIAN HOTELS

Abstract Nigeria's hospitality industry entered the second decade of the twenty-first century at an important crossroads, where competitive survival increasingly demanded technological reinvention. This study examined the influence of digital transformation dimensions on service innovation performance in three-, four-, and five-star hotels in Nigeria. Six digital transformation variables were investigated: AI-powered guest experience systems, digital revenue management, smart room and Internet of Things (IoT) integration, digital marketing and online travel agency (OTA) utilisation, contactless and mobile payment systems, and data analytics with customer relationship management (CRM) platforms. A descriptive survey design was employed, with structured questionnaires administered to 385 hotel management and frontline service personnel drawn from selected hotels in Lagos, Abuja, and Port Harcourt using stratified random sampling. Data were analysed using descriptive statistics, Pearson correlation analysis, and multiple regression analysis. All six digital transformation dimensions were found to significantly and positively influence service innovation performance (R² = .630, F(6, 378) = 107.38, p < .001). AI-powered guest experience systems (β = .298) and digital marketing and OTA utilisation (β = .284) emerged as the strongest predictors. The study concluded that deliberate investment in artificial intelligence, digital marketing infrastructure, and data-driven management tools substantially enhances the service innovation capacity of Nigerian hotels. It was recommended that hotel operators develop phased digitalisation roadmaps, invest in staff digital competency development, and leverage collaborative platforms to overcome the infrastructure deficits that currently constrain AI adoption in the Nigerian hospitality sector.