General context of the hospitality industry

This essay will focus on the definitions of innovation, types of innovation ,the relation between the hospitality industry and the concepts of innovation and key factors by ending with the conclusion.

"All innovation begins with creative ideas we define innovation as the successful implementation of creative ideas within an organization. In this view, creativity by individuals and teams is a starting point for innovation; the first is necessary but not sufficient condition for the second" (Amabile et al,1996).Innovation is "new ways of doing things, or [as] better, unique combinations of the factors of production" and identifies them as the core of an entrepreneur's work. (Schumpeter,1947).

Innovation is the implementation of new ideas within a particular industry or an organisation, so that the ideas generate profit. Any business or an organisation which continuously innovate their products or services or their business models will be successfully be able to compete in the market , for example Shangri-la which is a successful hotel brand all over the over , introduced the concept of CHI, which was the world's first speciality spa. They offered their guests and customers all treatments are based upon the principles of restoring balance and harmony to mind and body, they took the concept of a Spa and came up with an innovative strategy which has made CHI, the most recognised brand of spa's in the world.

One of the main approaches to improve quality and reputation of the brand is through innovation, or the ability to develop and launch new and successful hospitality services. Innovation has become a strategic weapon for both the hotels and other sectors of the hospitality industry and for various countries who promote tourism. Various organisations such as the hotel and leisure industry have to keep innovating new strategies and products in their life cycle, but the most important form of innovation takes place when these hotels and the various hospitality sectors want to increase their competitiveness in the marketplace or acquire a strong position in the market. 'Dubai is truly setting the pace of innovation with an extensive range of inspirational projects, from the world's first Armani Hotel to the world's largest airport highlight the emirate's bold, forward-thinking attitude to progress, setting it apart from the competition. These projects, to name but a few, make Dubai the dynamic, enlightening and vibrant destination that it is today'.

Innovation in luxury hotels is very necessary to take the hotels business little ahead. One more thing which shows the need of innovation through the industry is customer typically says that they want faster, better, and cheaper and can't easily articulate what feature they might love but haven't thought of. In this way customer always want something new. Even to be in competition one has to innovate new thing for the customer and their satisfaction.

The emergence of "boutique" hotels during recent years is an excellent example of an innovative offering in an otherwise standardized industry. The boutique hotel typically features a contemporary or minimalist dcor while also offering many additional lifestyle amenities. Hotel guests tend to perceive boutique hotels as a stylish location for which they are willing to pay premium room rates for (Binkley, 1999). Recently, the boutique hotel trend has crossed over into the mid-priced hotel market

Another example of innovation in hotel services is the use of information technology such as a wake up system, electronic door locks, in-room pay-per-view, video cassette players, multiple phone lines, video library, personal computers, voice mail, computer modem connections, video check out, electronic in-room safes, and a software library.

Customizing the service experience for hotel guests is another means of service innovation. Some examples of service customization include: allowing guests to have flexible check in/out times, personalizing room dcor, or having child care options available.

Innovation can be classified into four categories or (the 4 Ps of innovation)

Product innovation, Process innovation, Position innovation and Paradigm innovation.(Lowe 2006; Marriott 2006; p70).

The Scandic hotels which operates 125 hotels throughout Europe and is the market leader in Scandinavia are Eco- friendly hotels, had a program pioneered in Germany that takes recycling to guest rooms by providing a waste basket with three different compartments, one for paper, one for organic waste, and one for metal/plastic. The program has reduced waste by 40-50 %(Scandic hotels.2007). This is a method of product innovation.

Many of the leading as well as the small hotels in the world are using the system of online booking and reservation; these are forms of process innovation.

Innovation success in the hospitality industry depends on 9 key factors. Gnoth and Ottenbacher (2005)

Market selection, it should target the potential market which includes the current market and the future size of the market (Hotel and Motel Management,2008). Strategic human resource management (SHRM) is another important factor to innovate products than develop on their employee expertise. Employee training is an important factor that includes planned programs to improve the performance of individuals and groups of employees. (Peters and Pikkematt,2006).Market responsiveness is the response to the market or the customer to a new product or service being offered. (Hotel and Catering, 2008).Empowerment is the process in which managers give employees the power to exercise control over job-related situations and decisions. (Bowen and Lawler,1992) Behaviour-based evaluation is a process where the employees are evaluated on their behaviour towards the customers rather than work related behaviour. Marketing synergy is also a very important concept in innovation within the hospitality industry, innovation in the hospitality industry requires a proper blend of the existing skills, the product and the service mix. Employee commitment is important in innovation, because it's essential for the employees not only to understand the service, but also to support the service. Tangible quality involves the reliability, accuracy, and consistency of the service product, it involves the product with a large range of functions, better design and lower priced than its competition. (Peters and Pikkematt ,2006)

The hospitality industry, various hospitality related services, have to keep innovating and improving their services and products, cutting their costs and increasing their revenue. The hospitality industries face a lot of competition amongst each other, in terms of better customer service, better products for the customer, technological innovations and the changing needs of the customer. Innovation is one of the best ways for the hospitality sector to try and improve their services and products and to provide for the customer as well as their employees. Innovation has become a very successful tool for the hospitality sector and a lot of organisations are spending a lot of revenue in educating, training and developing their staff to innovate and think 'out of the box'.

Despite the importance of developing innovative strategies and new services, the process of how to achieve success in innovation seems to be limited. The hospitality industry is a customer oriented industry and the service levels and the expectations of the customer keep changing, hence innovation in the hospitality industry is very unpredictable.


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