EHL recently released a comprehensive hotel industry report: the Hospitality Industry Innovation Report, authored by Dr. Carlos Martin-Rios, an Associate Professor at EHL.
Dr. Rios has been tracking hospitality innovation for the past several years, surveying hundreds of managers and interviewing more than 50 executives and thought-leaders to produce this report.
The key objective of the hotel industry report is to increase knowledge about the adoption of innovative practices by global hospitality businesses, and to support the integration of innovation strategy into hospitality business strategy.
Few would argue that innovation is essential to business growth. Yet, it seems surprising that for many hoteliers something as simple as defining innovation can be a challenge.
In the hotel industry, like in most service activities, the interplay between customers and firms broadens the scope of innovation and departs from the narrower technology-driven innovation dominant in manufacturing.
However, not only developing truly innovative concepts (i.e. ideas that add value to an existing service) and embedding them within a hotel’s operations, present their own sets of challenges - but as true innovations often breed copycats, creating strong differentiators and barriers to inhibit imitation, can be daunting for hotel operators.
We put six innovation scenarios to test and asked hospitality industry executives what scenario(s) were more likely to take place in their organization within the next three to five years.
Two main groups emerged:
The report identifies seven evidence-based factors that drive innovative business practices, regardless of size, ownership structure or region.
This was the overwhelming conclusion drawn from the study.
One leading innovation factor: highly innovative firms have typically engaged in non-technological innovation. Research results show that technological innovation alone will not be sufficient to hold competitive advantage over the long term, so harnessing the non-technical kinds of innovations (in organizational innovation, workplace, marketing strategy or business models) is critical.
One example: investing in technological innovations along with ‘creative workspaces’ where employees are empowered to develop new ideas and test new concepts.
In the short-medium term, innovation is what will determine the productivity performance and competitiveness of hospitality companies, whether independent hotels or national or multinational chain hotels.
Big hospitality innovators will look beyond incremental improvements for sources of breakthrough innovation.
However, a considerable proportion of executives consider that innovation strategy will remain one of the most elusive dimensions of organizational routine and performance.