Artificial intelligence in service industries: customers’ assessment of service production and resilient service operations

Abstract

Artificial intelligence (AI) is increasingly embedded into service firms’ operations. However, production systems and operations management scholars have not yet examined if AI-empowered service operations are positively judged by service customers. To bridge this gap, this study draws on the three-factor theory of customer satisfaction applied to online review data, to capture the effect of AI-empowered service operations on overall customer satisfaction, operationalised by means of online review ratings. Based on text analytics techniques applied to a sample of more than 50,000 TripAdvisor ORs covering 35 international hotels in Asia and America, we develop a penalty–reward contrast analysis. The findings reveal that the effects of customer interaction with mechanical AI on customer satisfaction with service operations are asymmetric: positive customer interaction with mechanical AI positively and significantly influences overall customer satisfaction with AI-empowered service operations, whereas negative customer interaction with mechanical AI does not significantly alter customer satisfaction. Taken together, these findings suggest that mechanical AI constitutes a key element of resilient AI-empowered service operations.