Disclosing AI Integration in Hospitality Services Can Erode Customer Trust

By Eric Hollenbeck

New research from Washington State University’s Carson College of Business reveals that disclosing the use of artificial intelligence (AI) in hospitality services may unintentionally lower customer trust. The study shows that in settings where personal interaction is essential—such as hotels and restaurants—transparency about AI integration can negatively influence customer perceptions.

Published in the International Journal of Hospitality Management, the study examines how AI’s presence in service delivery impacts services focused on luxury and connection, for example, dining recommendations versus services focused on functionality, such as check-ins. In settings where emotional engagement is key, customers tend to trust the service less when AI is involved. Conversely, in settings where efficiency is prioritized, disclosing AI has little effect on trust.

“People are fundamentally uncomfortable with AI taking on roles that involve emotional or social engagement,” says Dogan Gursoy, WSU Regents Professor of hospitality business management and one of the authors of the study. “Businesses must be careful about how they disclose AI. The wrong messaging can alienate customers expecting human warmth.”

The roots of AI hesitancy

The researchers explored why customers react negatively to AI in luxury-type services They found existential threats—fears that AI could one day surpass human intelligence—and identity concerns, where customers feel AI challenges human uniqueness, drive much of this discomfort. The researchers suggest these fears are more influential than concerns about AI being a new technology.

“We’ve never seen these fears with previous technologies like computers or the internet,” Gursoy says. “AI is different because it’s perceived as intelligent. People fear it might outpace human capabilities, which impacts their willingness to engage with AI-powered services.”

Managing AI integration

To reduce customer concerns toward AI in luxury services, Gursoy and his colleagues recommend businesses use broader, more positive terms like “high-tech” or “advanced technology” rather than explicitly mentioning AI could help. This allows companies to highlight innovation without triggering negative perceptions.

“Framing is critical,” Gursoy says. “By presenting AI as a tool that enhances customer experiences, businesses can alleviate fears and build trust.”

Broader industry implications

These findings build on previous research coauthored by Gursoy, which found that mentioning AI in product descriptions reduces purchase intentions. Findings showed customer trust in AI is a complex issue across multiple industries, and businesses must strike a balance when integrating AI, particularly in industries that rely on personal interaction.

Coauthors and deeper insights

Coauthors include Yingwei (Wayne) Xu, Gongmei (May) Zhou, and Ruiying (Raine) Cai. For more detailed insights, read the full paper Disclosing AI Integration in Hospitality Services.