The Role of Technology in Enhancing Operational Efficiency in SME Hotels in Sri Lanka: A Review

The hospitality industry is one of the major economic drivers in Sri Lanka, and Small and Medium-sized Enterprise (SME) hotels plays vital role, but SMEs are especially prone to operational inefficiencies due to many concerns, such as limited resources, manual processes, and growing competition from the larger and tech-enabled hotel chains. Despite the digital tools advancement in the global, there is a research gap in understanding the barriers and enablers of technology adoption specific to SME hotels in Sri Lanka. Recent Sri Lankan research indicates limited but growing attention to digital transformation in SME hotels; however, most studies remain fragmented and lack theoretical depth. This review article addresses the gap by critically examining and analysing how emerging technologies such as Hotel Property Management Systems (PMS), cloud platforms, Artificial Intelligence (AI), and the Internet of Things (IoT), could enhance operational efficiency in SME hotel operations. This review is based on a narrative literature review methodology, blended with peer-reviewed research published from 2015 to 2024. A thematic analysis, utilising key theoretical frameworks, including Technology Acceptance Model (TAM), Resource-Based View (RBV), and Dynamic Capabilities Theory (DCT), to critically examine the role of digital tools such as PMS and others mentioned above in enhancing the operational efficiency of SME hotels in Sri Lanka. Finding reveals that the technological solutions provide many opportunities to streamline their operations, improve the services, and reduce costs, major challenges such as financial constraints, resistance to change, and low digital literacy persist. The paper concludes that contextual readiness and targeted policy support are essential for meaningful technology adoption. Many recommendations are proposed, such as promoting Software as a Service (SaaS) models, improving digital skills, introducing mobile-based management tools, and finally implementing government-supported incentives to enable a sustainable digital transformation. The revised paper also elaborates the review methodology, inclusion criteria, and conceptual integration among TAM, RBV, DCT, and Stakeholder Theory to improve theoretical clarity and methodological transparency. This study's importance is rooted in its comprehensive theoretical framework and its practical applicability to a vital but minimally researched element of the hotel industry in Sri Lanka.