Digital Transformation is playing an important role in hospitality industry, because of its ability to carry out traditionally human functions at any time of the day, which can save significant money, eliminate human error and deliver superior service. With artificial intelligence, the possibilities for improving the guest service are almost endless, ranging from increased personalization to tailored recommendations. The main purpose of this paper is to examine the impact of digital transformation on guest loyalty at Marsa Alam hotels, which is considered as one of the main destinations in Egypt. The field study was conducted through a web-based survey of a sample of hotel guests in Marsa Alam, where 384 questionnaires were sent to the respondents in the selected hotels, and 323 were valid. Data were analyzed by using SPSS software version 22. The findings of the study showed that there are significant and positive relationship between digital transformation and guest loyalty. Digitalizing hotel operations includes many benefits such as increased brand awareness, improved guest experience, and increased operational efficiencies. The recommendations included: The necessity of activating Egypt's Vision 2030, create a technological infrastructure for the digital economy, announce digital transformation initiatives through digital platforms.