The potential improvement of water management in the hospitality sector relies on how well artificial intelligence (AI) is used. This study explores the impact of AI-based technologies on improving water efficacy in hotels by analyzing complex datasets to identify consumption trends that allow hotels to adopt proactive methods such as forecasting water usage based on occupancy levels and meteorological conditions. Furthermore, for efficient irrigation and laundry scheduling, AI facilitates real-time surveillance and automation to reduce water waste. AI-based water conservation initiatives can significantly contribute to broader environmental goals at both local and national scales by contributing to lower water usage and improved resource efficacy. Smart sensors and Internet of Things (IoT)-based devices and their integration with AI can detect leaks, monitor water flow rates, and automatically adjust usage in response to real-time demand. Introducing AI to water management has many benefits, including improved public perception, cost reduction, and enhanced sustainability efforts in hospitality sectors. Water scarcity is becoming a critical worldwide issue, primarily in regions that are strongly dependent on tourism. Therefore, hotels are required to implement smart water management systems not only for financial profit but also as moral and operational obligations. This study reviews existing research and case studies to highlight the transformative potential of AI in promoting a more efficient and sustainable future for water management within the hotel sector.