Enhancing customers’ life satisfaction through AI-powered personalized luxury recommendations in luxury tourism marketing

Abstract

Empowered by artificial intelligence (AI), luxury tourism and hospitality brands are increasingly using personalized recommendations as a novel approach to engage customers in the pre-purchase phase. While considerable research exists on customers’ post-purchase responses to luxury tourism products, their psychological states driven by personalized recommendations during the pre-purchase stage are not well understood. Differing from traditional marketing strategies, personalized recommendations impart implicit social labels, often exclusive to the customers. Therefore, personalized luxury cues in tourism products, driven by AI, significantly contribute to customers’ positive self-perception due to their scarcity and exclusivity, further influencing their psychological states such as life satisfaction. Drawing upon self-perception theory, three scenario-based experiments across various tourism contexts were conducted to investigate this effect. Results reveal that personalized recommendations for luxury (vs. ordinary) tourism products can enhance customers’ life satisfaction by fostering perceived future self-growth. However, this positive effect is less pronounced under user-based recommendation framing.