Abstract/Summary

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.