In recent years the robot and its AI software has become increasingly a part of the hospitality and tourism economy. The automation of service industry has been a natural evolution as a result of demographic decline in many countries and the inadequacies of the alternatives to increasing automation. In this paper, the authors explore the role of regulation of service automation and the impact of such regulation on the hospitality and tourism industries.

Using Porter’s Diamond Theory of National Advantage, a framework for illustrating the competitiveness of countries and their industries, the authors illustrate the role of regulation in influencing of the competitiveness of the hospitality and tourism industries. The authors demonstrate that regulatory agencies have a major impact on factor conditions, related and supporting industries, aspects of firms and the industry (firm strategy, structure and rivalry), and demand conditions.

In addition, the authors discuss the intentions and the sources of regulatory policies on industry. The authors consider the various levels at which such regulations may be made and how these levels impact  global competitiveness. The authors describe the various impacts that a consensus (global regime), the European Union, and national and subnational authorities would have upon the competitive environments of the industry. Additionally, the authors discuss the importance of the political philosophy influencing the regulations, comparing how a liberal, social-democratic, and mercantilist mindset would impact the industry differently, thus impacting competitiveness massively.