Purpose: Organisations are becoming increasingly invested in artificial intelligence (AI), and many face challenges in helping employees adapt to these new technologies. This study aims to consolidate and synthesise the existing literature to underscore the importance of understanding employees’ experiences in AI-enabled work environments and the potential impact on their psychological well-being.

Design/methodology/approach: The review employed a structured process of searching, screening and synthesising studies, as proposed by Tranfield et al. (2003). The study selection followed PRISMA, and thematic analysis was used to analyse 137 articles to identify significant patterns and concepts.

Findings: This study identifies six key themes. 1. Present State of AI-Employee-AI Collaboration: Defining Employee Roles and Guest Experiences in Hospitality 5.0; 2. AI Transforming the Employee Experience; 3. AI Integration and Its Impact on Employee Psychological Well-Being in the Hospitality Sector; 4. Implications of Employee Experience on Employee Psychological Well-Being; 5. Importance of Embracing AI in Hospitality; and 6. Theoretical Frameworks for Employees’ Acceptance of AI in the Workplace. Together, these themes show both how AI empowers and limits employees, highlighting the importance of employee-centred methods.

Originality/value: This review provides a unified synthesis of how AI reshapes employee experience and psychological well-being in hospitality, explicitly linking two constructs that have remained under-theorised in prior research. This study concludes with a research agenda of six key areas to advance understanding of human–AI collaboration and employee experience, and also offers strategic guidance for practitioners managing Industry transformations in Hospitality 5.0.