Towards a More Appropriate Measurement of Innovation in Hospitality

2.1 Innovation in Hospitality

The hospitality industry is undergoing a profound transformation characterized by both radical and incremental innovations. It has seen radical innovations, such as Airbnb’s emergence as an alternative accommodation model and Booking.com’s evolution into a digital reservation giant, as well as more recently the introduction of immersive virtual and augmented reality experiences and the hyper-personalization of services through big data and AI technology (Pikkemaat et al. 2019; Kong et al. 2024; Fan et al. 2022). Artificial intelligence (AI) and machine learning (ML) are becoming integral, allowing for personalized recommendations, dynamic pricing strategies, and refined predictive analytics to optimize management practices (Kong et al. 2024). Additionally, the integration of immersive technologies, such as virtual and augmented reality, is revolutionizing guest engagement by facilitating virtual tours and enhancing destination marketing (Fan et al. 2022).

Furthermore, due to the profound impact the COVID-19 pandemic had on the hospitality industry, this crisis also resulted in numerous radical changes, for instance the shift towards virtual and hybrid events and the heightened implementation of contactless technologies (Abhinav Sharma et al. 2021; Breier et al. 2021). The proliferation of digital tools has streamlined check-in processes through mobile technologies and introduced keyless room entry, which greatly enhances guest satisfaction by providing greater convenience (Dang-Van et al. 2024). Effectively utilizing different technologies can also generate experience innovation. As an example, Disney has used wearable technology to create a seamless, personalized, and immersive guest journey by integrating room access, payments, reservations, and tailored interactions, enhancing emotional connection and customer satisfaction (G. Collins 2024). Even though these are all great examples of hospitality innovations, incremental innovations, such as service modifications and process adaptations, are vastly more common (Pikkemaat et al. 2019). While a less dynamic image of hospitality may be portrayed thereby, the role of incremental innovations in enhancing business performance and competitiveness cannot be underestimated (Souto 2015).

In addition to these technological innovations, sustainability has emerged as a pressing concern driving transformation within the hospitality sector. Awareness of environmental issues and shifting consumer preferences are prompting industry players to adopt eco-friendly practices, such as utilizing renewable energy, implementing waste reduction strategies, and pursuing green certifications (Kamboj et al. 2022; Sharma et al. 2020). Academic literature suggests that these sustainability practices not only align with consumer expectations but are also critical for the long-term viability of hospitality enterprises (Jones and Comfort 2020).

The emphasis on immediate customer satisfaction and service quality in hospitality reveals that factors such as employee creativity, training, and market responsiveness are important indicators of innovative performance in hospitality. Co-creation as a core concept of service delivery plays an essential role in the investigation of innovation in the hospitality industry. The co-creation concept in service delivery describes actively engaging customers and other stakeholders in the design and delivery of services, allowing them to shape the final offering (Kandampully et al. 2023). This collaborative approach drives innovation by uncovering unique customer needs, fostering tailored solutions, and enhancing service experiences, ultimately leading to greater customer satisfaction and competitive advantage (Marasco et al. 2018).

Unlike high-tech sectors where R&D investments can lead to vast technological advances and substantial returns, the hospitality industry often emphasizes service delivery and customer experience over product development. Many hospitality firms operate on tight margins, making high-risk R&D investments less appealing, especially when immediate profitability is prioritized. In addition, due to the predominant composition of small and medium-sized enterprises (SMEs) within the hospitality sector, financial constraints further complicate innovation efforts in the hospitality sector (Pikkemaat et al. 2019; Molina-Castillo et al. 2023). These firms frequently face challenges such as limited access to capital and a reliance on external funding sources, which in turn can restrict their ability to pursue innovative projects (Soluk et al. 2023).

2.2 Input factors for Innovation in Hospitality

When examining innovations in the hospitality industry, numerous input factors contribute to their evolution and implementation. These input factors can be categorized into several key areas: emerging technologies, workforce development, organizational structure, market dynamics, and cooperative frameworks. Each of these elements has shown to play an essential role in shaping the innovative capacity of hospitality firms. Other factors that have been shown to be important for innovations in the manufacturing sphere, such as R&D, capital investment or access to raw materials, have only shown little applicability in the hospitality space (Camisón and Monfort-Mir 2012).

Emerging technologies serve as a critical driver of innovation. The integration of advanced technologies such as artificial intelligence (AI), the Internet of Things (IoT), and enhanced analytical tools is transforming industry practices and improving operational efficiency. AI facilitates personalized guest experiences through data analysis, enabling establishments to tailor services uniquely to individual preferences (Gupta and Pareek 2024). Furthermore, IoT enables smart room functionalities, enhancing convenience for guests while streamlining hotel operations (Mercan et al. 2021). Technological advancements create smart environments that allow for improved service delivery and innovative business models in hospitality.

Workforce development is another vital factor in promoting innovation in hospitality firms. A skilled and knowledgeable workforce that is adaptable to market changes is essential for the successful implementation of new ideas. As highlighted in the literature, training programs and a focus on continuous professional development can greatly enhance the creativity and effectiveness of staff, leading to higher levels of innovation (Hughes et al. 2018; Chaubey et al. 2022). While manufacturing contexts commonly focuses on formal education and skill development, the focus lies on inclusivity and empowerment in the hospitality industry. Empowering employees to think creatively and actively participate in decision-making processes fosters a culture of innovation, enabling hospitality firms to adapt better to ever-changing customer needs (Burton and Dickinger 2025).

Organizational structure also has a meaningful influence on the innovative capacity of hospitality businesses. Firms that exhibit flexibility and a willingness to embrace change tend to foster a more innovative environment (Chaubey et al. 2022). Hierarchical structures can inhibit the flow of ideas, while more decentralized models allow for better communication and collaboration across various departments (Khan and Naeem 2018; Gomezelj 2016). The agility of an organization, its ability to pivot quickly in response to market changes, and its capacity to experiment with new concepts are critical for fostering innovation.

Market dynamics, including changing consumer preferences and competitive pressures, play a vital role in driving innovation across industries. The increasing popularity of sustainable and responsible tourism has compelled firms to rethink their service offerings and operational practices (Kamboj et al. 2022; T. Sharma et al. 2020). A competitive landscape characterized by both traditional service providers and new entrants, such as those from the sharing economy, further necessitates resilience and creativity in developing unique value propositions (Garrido-Moreno et al. 2024).

Cooperative frameworks, such as industry collaboration and partnerships, can also enhance innovation efforts, particularly in hospitality. Due to the prevalence of SMEs with limited financial means, hospitality firms often depend on collaborations and external networks to foster innovation (Marasco et al. 2018). By combining resources and knowledge, firms can tackle challenges more effectively and develop innovative solutions that may not be possible in isolation (Soluk et al. 2023; Heirati and Siahtiri 2019). Networking allows institutions to share best practices and collaborative ideas, which ultimately accelerates the pace of innovation.

3.1 Data Collection

A two-stage qualitative design is applied in the data collection process, as suggested in similar studies evaluating existing measurement instruments and developing them for further use (Nordli 2017; S. C. Smith et al. 2005; Petri et al. 2015).

3.2 Analysis

Transcribed interview material lasting a total of 8 hours and 18 minutes, supplemented with notes taken during the interviews, was used for the analysis. The thematic analysis method described by Braun and Clarke’s (2006) was used in the analysis, comprising six steps: (1) becoming familiar with the data, (2) generating codes and concepts, (3) generating themes, (4) reviewing themes, (5) defining and naming themes, and (6) locating exemplars.

A manual thematic coding approach was used to investigate the data (Saldaña 2016). The coding process involved creating a codebook that clearly defined each code. This was done to ensure consistency and reliability in the coding process across multiple rounds of analysis. In a next step, codes were compared to the literature and grouped into first-order constructs and then second-order themes (Nowell et al. 2017). The themes were guided by the CIS survey, as well as extant literature. Thereby, the different blocks in the CIS provided a framework, while allowing for additional material to be added, extending beyond the existing survey questions.

In an iterative approach, transcripts were analyzed and their responses were compared to the predefined codes, looking for variations, patterns, and deviations (Saldaña 2016). Where appropriate, new constructs were included in the thematic framework, as well as extending and refining themes where necessary. This flexibility allowed for a more comprehensive understanding of the data, striking a balance between the application of existing theory and the exploration of novel findings (C. S. Collins and Stockton 2018). The analysis is visualized in Table 2.

To improve the findings' reliability and validity, an online tool was used to collect anonymous feedback on the preliminary analysis from interviewees. This allowed participants to review the preliminary analysis and offer comments, which were then integrated into the final analysis. This iterative process ensured the analysis accurately reflected the interviewees’ perspectives and strengthened the study’s credibility.

4.1 Hospitality Fit

4.2 Adaptions: Innovation inputs

4.3 Adaptions: Innovation outcomes

5.1 Implications for Theory

This exploration of innovation within the hospitality industry contributes to the advancement of innovation theory by emphasizing its unique characteristics, drivers, and challenges. By evaluating, refining, and expanding an existing innovation measurement to capture the intricacies of hospitality, a more accurate representation of innovation activity in this sector can be achieved (Molina-Castillo et al. 2023).

Addressing the research question regarding the effectiveness of the Community Innovation Survey (CIS) in capturing innovations in hospitality reveals its partially alignment with literature highlighting the prevalence of incremental innovation within the industry (Souto 2015; Beck et al. 2016). The survey acknowledges various innovation types, such as product/service innovation, process innovation, and eco-innovations, aligning with established typologies and taxonomies which are critical for analyzing hospitality innovations (Hjalager 2010). However, the current definitions of innovation in service settings, particularly within hospitality, call for broader conceptualization (Randhawa and Scerri 2015). The findings illustrate a disconnect between the survey’s content and the realities of hospitality innovation, echoing previous research concerns that inadequately defined questions could lead to biases or inaccuracies in responses (Pikkemaat et al. 2019; Camisón and Monfort-Mir 2012). Interviewees highlighted that certain elements of the CIS do not resonate with core service practices, potentially discouraging engagement and resulting in survey abandonment, as discussed in previous literature (Camisón and Monfort-Mir 2012).

Importantly, the difficulties reported by industry professionals do not stem from a lack of understanding of language or the general survey structure; rather, a perceived disconnect between the survey content and the nature of hospitality businesses and innovation is highlighted in the findings. This provides insights into how hospitality professionals engage with standardized innovation measurement instruments and supports the notion that innovation in the service industry may be higher than reported (Hertog et al. 2011).

In terms of suggested improvements to the Community Innovation Survey for the hospitality sector, it is essential to prioritize input and outcome factors of hospitality innovation. The results advocate for a greater emphasis on collaborations, networks, and employee involvement while de-emphasizing R&D investments and patents, which do not align with service-oriented innovations (Martin-Rios and Ciobanu 2019). Research supports the argument that collaborative practices can enhance innovation in hospitality businesses. For instance, effective co-creation with customers has been shown to foster service innovation by incorporating customer feedback into service design, leading to mutually beneficial outcomes that improve overall performance (Sharma and Bhat 2023). The flexibility of hospitality firms to adapt in response to market dynamics further emphasizes the importance of collaboration and shared learning among industry stakeholders (Marasco et al. 2018).

The critical role of employee engagement in the service innovation process has been widely recognized in extant literature and must be acknowledged to ensure inclusivity in the CIS (Chaubey et al. 2022; Bani-Melhem et al. 2018; Engen et al. 2021). Active employee involvement is essential, as it encourages innovation within service delivery, leading to improved customer experiences and competitive advantage (M. K. Smith 2018). Furthermore, studies indicate that well-engaged employees enhance organizational performance through their commitment to creating value (Engen et al. 2021). With this understanding, the CIS must adapt to capture these employee-driven insights alongside collaborative networks.

Moreover, the proposal to minimize patent and R&D-related inquiries within the survey aligns with findings suggesting that such measures may be ill-suited to service industries, potentially causing frustration and early survey exit (Hjalager 2010; Sipe 2021). Previous research highlights that an excessive focus on patents can detract from recognizing the multifaceted nature of innovation in the service sector, where many innovations are process-oriented and reliant on interpersonal interactions and generate service quality enhancements (Kallmuenzer 2018). In addition, the research emphasizes the importance of discussing innovations related to experience design, service delivery, and sustainability in more detail. Innovation in hospitality increasingly focuses on creating memorable and sustainable experiences for guests, which requires a revised framework for CIS that incorporates these emerging themes (Kandampully et al. 2023). By prioritizing these dimensions, the CIS may become more relevant to hospitality professionals, better reflecting current and emerging trends within the industry.

5.2 Implications for Practice

This research provides a more nuanced understanding of innovation and its input factors in hospitality. A better understanding of innovation across the industry can help hospitality businesses identify areas for improvement and develop innovative solutions, leading to increased competitiveness in the market. Thereby, businesses may be encouraged to increase their innovation activities, ultimately leading to the development of new services, amenities, and offerings, enhancing the overall guest experience. Innovations in processes, technology, and management practices can streamline operations, reduce costs, and improve efficiency within businesses, increasing operational efficiency. Additionally, innovation can drive the adoption of sustainable practices, such as energy-efficient technologies, waste reduction strategies, and eco-friendly initiatives, contributing to environmental stewardship.

Importantly, the suggested adaptations to a standardized measurement instrument allows for comparative studies of innovation processes and outcomes between the hospitality sector and other industries. This can provide insights into the similarities and differences in dynamics across sectors, enriching the understanding of innovation as a universal phenomenon. Cross-industry comparisons may be interesting for national governments and therefore could be pushed at the national level. Furthermore, utilizing a measurement instrument that is comparable across countries enables cross-national studies of innovation in the hospitality industry, which allow the examination of different factors influencing innovation practices and performance in different countries. Comparisons of innovative activities between European countries seem feasible, provided that the CIS is already a mandatory survey within the European Union. The hospitality industry could be added to the list of mandatory sectors and the data could be collected by the national statistics authorities. Even though this would increase administrative costs due to the additional industry, the implementation of the CIS in the hospitality sector would benefit from economies of scale.

Measuring innovations in the hospitality industry holds profound policy-related implications, serving as a linchpin for informed decision-making and targeted governmental interventions. An industry-appropriate CIS not only enables policymakers to gauge the overall innovation landscape but also identifies specific areas where strategic interventions can catalyze positive change. Furthermore, a nuanced understanding of innovation dynamics allows policymakers to align their initiatives with the evolving needs of the industry, fostering resilience and adaptability. For instance, the integration of AI to personalize guest experiences and optimize resource allocation demonstrates how the information of innovation prevalence can guide policymakers in crafting supportive frameworks for economic growth and workforce upskilling.

5.3 Limitations & Future Research

While specific suggestions are made in the research at hand to improve the measurement of innovation in hospitality, certain limitations warrant consideration. Firstly, the proposed adaptations to the CIS require validation through real-world testing and application. Future research endeavors may involve the implementation of the adaptations to the CIS across diverse hospitality settings to assess its effectiveness and reliability in different contexts.

A notable limitation lies in the use of purposive sampling in the data collection process, which may introduce potential biases, even though proactive steps have been implemented to increase validity and reliability. Moreover, comparative analyses with existing CIS and other measurement tools would offer valuable insights into the relative strengths and weaknesses of the proposed adaptations.

Additionally, the decision to build upon an existing survey raises questions about the potential limitations inherent in adapting a general survey tool to a new environment. Even though the approach has the advantage of comparability and certain standardization, future research could explore the feasibility and benefits of creating a bespoke measurement tool tailored explicitly to the intricacies of innovation within the hospitality industry. This comparative analysis could shed light on the advantages of using a customized survey versus adapting existing frameworks.