The smart transformation of hotels, utilizing cutting-edge technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning, has emerged as a strategic priority within the hospitality industry. This study aims to identify and prioritize key factors of smart transformation essential for enhancing service quality within the Iranian hospitality sector. Employing a mixed-methods approach (qualitative-quantitative), the research was conducted in two phases. In the first phase, eight core factors were extracted through a systematic review of over 150 studies, benchmarking against the ISO 22483:2020 standard, and structured interviews utilizing the mastery method. In the second phase, the causal relationships among these factors were analyzed using the DEMATEL technique, based on data collected from 20 Iranian hospitality experts. The results indicated that Customer Satisfaction (R-C=0.532), Safety & Security (R-C=0.242), and Cleanliness and Housekeeping (R-C=0.241) were causal factors. Conversely, factors such as Personnel, Equipment and Facilities, and Food & Beverage Services were identified as the most influential (dependent) factors. The findings suggest that prioritized investment in causal factors can generate a cascading improvement in overall service quality. This study provides a scientific framework to support decision-making for managers and investors of smart hotels, prioritizing criteria such as customer satisfaction and security when investing in the smart transformation of hotels in Iran.