Concepts and Innovation in the Hospitality Industry

This report discusses the concept of innovation and different sources of innovation in the hospitality industry. It explores the importance of innovation for business performance and analyzes the factors driving innovation using organizational examples. The report also reviews a range of different innovative concepts and approaches implemented in the hospitality industry. It provides insights into the significance of innovation in sustaining market position and meeting customer expectations. The report is based on the case of Intercontinental Hotel Group and includes relevant examples and explanations.

Concepts and Innovation

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Discuss the concept of ‘innovation’ and different sources of innovation.........................1
P2. Explore the Importance of innovation to business performance......................................3
TASK 2............................................................................................................................................5
P3. Analyse the factors driving innovation in the hospitality industry using a range of
organizational examples.........................................................................................................5
TASK 3............................................................................................................................................6
P4. Review a range of different innovative concepts and approaches that have been
implemented in the hospitality industry using specific examples..........................................6
TASK 4 ...........................................................................................................................................6
Covered in PPT.......................................................................................................................6
CONCLUSION ...............................................................................................................................6
REFERENCES ...............................................................................................................................8

INTRODUCTION
In the current era of emerging trends this is highly required by every sector specifically
hospitality business to adopt innovations in their business function in order to sustain their
market position and to attract more customer so as to enhance customer base as well. The
innovation is required by businesses and customer as well, for customer innovation is helpful for
satisfying their needs and demands in prominent manner and on the other side for businesses this
is useful for enhancing their return on investment (Arfi and et. al., 2018). Innovation is directly
linked with science and usage of new technologies in order to provide advantages to the
economy and population as well. This report is prepared in order to understand numerous
concepts which are directly associated with innovation within hospitality business within
background of intercontinental hotels and their contribution to local or national economy of the
country. Ich is a chain of resorts and hotels which was founded in 1946 and headquartered in
Buckinghamshire, UK. They are having more than 200 hotels chains around the world and now
they are planning to introduce innovation of RFID in their services with the major view to
enhance their business within marketplace.
TASK 1
P1 Discuss the concept of ‘innovation’ and different sources of innovation
Concept of innovation
Innovation is defined as emergence of new techniques or methods by which better
solution or services can be provided to customer and helps the business to meet up needs and
demands of their customer in more effective manner. The major aim of innovation is to bring
efficacy in business along with greater sustainability as well.
In the context of intercontinental hotel group as the business is willing to capture new
market size then innovation is having distinct significance for them as this is the source by which
high end business distinctiveness can be provided which could lead them to achieve their overall
objectives (Divisekera and Nguyen, 2018).
Majorly innovation is being divided into four categories which are architectural
innovation, incremental innovation, disruptive innovation, radical innovation. Incremental
innovation is dependent on current technology but at the same time this is focused on increasing
value for customer by innovating designs or feature of offerings. Disruptive innovation is taking
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new technology with the major purpose to enhance market size of the business. In architectural
innovation new skills and and technology is used within various marketplace in order to target
new customers. At last in radical innovation revolutionary technology is used in order to provide
new business or industry (Putthiwanit, 2016).
In the context of hospitality industry radical and disruptive innovation is used as this
industry is focused in providing high end satisfaction to their customer and meeting up their
expectation in prominent manner with their offerings.
Sources of innovation
Innovation is emerged from various sources in which different things are to be pondered
and here are some sources by which intercontinental hotel group can get idea for their
innovation:
Management sources: This source of innovation is associated with internal factors of business in
which the business is be managed in particular manner. Some of the major factors within this
factor are elaborated as under:
Process needs: This source of innovation is defined as when process of business requires
any improvement in order to execute operations in more effective and advantageous manner then
this lead to emergence of innovation in the business. In the context of intercontinental hotel
group, when business manager feels that their processes are in need of improvement or
innovation then this could be treated as source of innovation (Godin, 2016.)
Services needs: This source of innovation is defined when service offering are requiring
any improvement in order to capture more customer or to satisfy them in prominent manner then
companies try to innovate their offerings so as to keep their customer adhered to their services
and to sustain them for longer duration. In the context of intercontinental hotel group as they are
engaged in providing hospitality services to their customer and their competitor is introducing
some innovation in their services then this is becoming source for intercontinental hotel group to
provide some innovative features in their services for the major purpose to retain their customer
and get high competitive edge within marketplace.
Physical product needs: This source of innovation undertakes production process, as
when business manager feels that in their production process some of the feature or processes are
making the production process slow and inefficient then this lead the company to innovate their
production process in order to satisfy their prominent objective. In the context of intercontinental
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hotel group, as the manager is observing that their services are taking high time to get delivered
to their customer then this source may lead them to innovate their service proceedings in order to
avoid delay in services reaching to their customer.
Non management sources: Some of the aspects within this factor are elaborated as under:
Psychology: This source of innovation can not be managed by the business as this is
associated with thinking power and scientific disciplines (Rahimi and Gunlu, 2016). In this
context intercontinental hotel group is taking their business to new heights by introducing
innovation in order to cover up their customers in scientific manner.
Design: Design is defined as the first impression of product that means this is the facet of
the offerings. In business the major source of innovation is considered as design as when
customer are facing any issues in using a particular product then this is leading the company to
emerge with new innovation that could help them to meeting with their prominent business
objectives as well.
Culture: Culture is defined as values and beliefs of people and this is having significant
impact over business in context of innovation (Ivanov and Webster, 2019). For example when a
country is having vegetarian culture then industries like hospitality are required to innovate their
product or services offerings so that it can parallel go with cultural balance and upkeep demands
and needs of their customers in prominent manner.
P2. Explore the Importance of innovation to business performance
Within market intense competition is seen due to latest up-gradation in service and
product offerings by businesses in order to retain their customer and gain distinct edge within
marketplace. Within this context this is highly required by business that they adopt innovation as
according to market needs and priority in order to emerge as full fledged business and to meet up
expectations of their customer in apt manner. Innovation is having significance for
intercontinental hotel group which is elaborated as under:
External factors:
Competition: In the current era of intense competition hospitality industry exhibiting
high level of competition due to which they are required to provide distinct services in order to
sustain in the market so as to get attention of their customer in prominent manner. With the help
of ample innovation in their product or services intercontinental hotel group can provide strong
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competition to their rivals and this provides the company a global presence along with high
distinctiveness.
Reduced cost: Innovation may lead to reduce overall cost of the business as it eliminates
redundant processes and introduce highly efficient process which is helpful in meeting business
objectives in minimum cost so as to earn tremendous profits. In the context of intercontinental
hotel group, with the help of emerging innovation in their business they are able to receive high
end sustainability by reducing their expenses and using effective business processes as well
(Rangus and Slavec, 2017).
New entrants : In hospitality industry new entrants of businesses are high as the
industry is vast and customer are prone to use emerging services and offerings as well
(KOLEVSOHN, 2019). So innovation is having high significance in business of intercontinental
hotel group as with the help of innovation is processes or offerings they can tackle their rivals in
a very prominent way due to which probability for sustainability increases in their case in
significant manner.
Market drivers: There are numerous factors within marketplace those are having
negative implications and lead to creation of issues such as social factors, economic factors,
market demand and m any more. These factors are known as market drivers and significant for
intercontinental hotel group in maintaining their market position at prominent level. So by
inculcating innovation in business this will be easier for intercontinental hotel group to reduces
negative implications of these factors and enhance their success ratio within marketplace.
Internal factors
Improves Profitability: With the help of bringing innovation in working processes
profitability can be improvised as innovation helps the business to eliminate redundant processes
by which extravagant expenses can be controlled and this is having positive impact over
profitability of the organisation. In the context of intercontinental hotel group, as they are
innovating their processes in order to remain market leader and this is positively impacting
profitability of them.
Improves ROI: ROI is the ratio between net profit and total investments, every business
is operating in order to earn high ROI so as to enhance their sustainability and profitability as
well. In the context of intercontinental hotel group, with the help of innovation in their offerings
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and processes continuous improvements can be inculcated in the business due to which they are
able to intensify ROI in effective manner.
TASK 2
P3. Analyse the factors driving innovation in the hospitality industry using a range of
organizational examples
With the help of innovation working conditions and processes can be made more efficient
and to run business in more smooth and faster manner. In the context of intercontinental hotel
group the major factors which are driving innovation are elaborated as under:
Technology Advances innovation: Management of intercontinental hotel group is using
innovation in their processes and offerings so as to attain effective outcomes. In this context
there are various approaches which are associated with this such as OS (Point of Sales), PMS
(Property Management System), CRS and many more. These approaches are helpful for
customer and intercontinental hotel group as these are helping them in managing payment
system of business and to easily get assistance over used product and services (Morin and
Samozino, 2018).
Artificial Intelligence: This is helpful for intercontinental hotel group to provide easy
assistance to their customer by giving them support of chat box so as to solve their queries in
prominent and prompt manner. This is working as driving factor for them in achieving goals and
objectives.
Marketing Innovation: This is associated with changes in working styles so in the
context of intercontinental hotel group they are using digital marketing tactics in order to
promote their services and making them reasonable so that this can help them in dealing with
their overall objectives. Management Innovation: This is directly associated with
alteration in working style so as to boost up overall efficacy and to deal their customer in
prominent manner. In the context of intercontinental hotel group they are taking continuous
feedbacks from their customer regarding business offerings so as to tackle prevailing market
situation in effective manner.
Process innovation: Within business sometimes whole the processes requires changes in
order to cater customer in more effectual manner. This is working as driving factor for
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intercontinental hotel group as needs and demands can be easily met with the help of innovating
process in full fledged manner.
TASK 3
P4. Review a range of different innovative concepts and approaches that have been implemented
in the hospitality industry using specific examples.
There are numerous concepts which are used by hospitality businesses within innovation
these are elaborated as under:
Co-living: This is defined as the concept of modern living in which private bedrooms are
provided along with fully furnished area. This is the most prominent way of stay and used in
major cities as these are cheap and worthy so helpful for individual to make their stay
remarkable.
AirBnB: This is known as place for online marketing in which contact is established
within those people who are looking for services associated with accommodation. The major
characteristic of AirBnB is that this is directly linked with demands of customer and meet up
requirements of society. The major benefits of this is that it provides accommodation places to
customer according to budget and requirement of them.
CRM: Within this various processes are used in order to make effective relationship with
customer and sustain them for longer duration. The major characteristics of CRM states that it is
directly associated with communication with customer and allows the business to improvise
overall quality of service so as to provide ample benefits to customer.
TASK 4
Covered in PPT
CONCLUSION
From the above detailed report it can be summarised that innovation is playing significant
role in hospitality industry as this industry is wholly dedicated to customer preferences and their
satisfaction. With the help of innovation processes and functions can be improvised and made
better due to which more attention of customer can be drawn out (Nieves and Diaz-Meneses,
2018). In hospitality industry innovations are highly adopted as there are huge rivals and all the
homogeneous so as to provide distinctiveness to one's business innovation is the feature which is
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to be inculcated in order to get separate market edge and deal with complexities in prominent
manner.
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REFERENCES
Books and journals
Arfi and et. al., 2018. External knowledge sources, green innovation and performance.
Technological Forecasting and Social Change. 129. pp.210-220.
Divisekera, S. and Nguyen, V.K., 2018. Determinants of innovation in tourism evidence from
Australia. Tourism Management. 67. pp.157-167.
Godin, B., 2016. Technological innovation: on the origins and development of an inclusive
concept. Technology and Culture. 57(3). pp.527-556.
Ivanov, S. and Webster, C. eds., 2019.Robots, artificial intelligence and service automation in
travel, tourism and hospitality. Emerald Publishing Limited.
KOLEVSOHN, P.J., 2019. Living together in a crowded city. The reuse of existing structures as
a solution to urban housing demands.
Morin, J.B. and Samozino, P. eds., 2018. Biomechanics of training and testing: innovative
concepts and simple field methods. Springer.
Nieves, J. and Diaz-Meneses, G., 2018. Knowledge sources and innovation in the hotel industry.
International Journal of Contemporary Hospitality Management.
Putthiwanit, C., 2016. An analysis of Joseph Schumpeter's life, concept of innovation, and
application for Estonia.
Rahimi, R. and Gunlu, E., 2016. Implementing Customer Relationship Management (CRM) in
hotel industry from organizational culture perspective. International Journal of
Contemporary Hospitality Management.
Rangus, K. and Slavec, A., 2017. The interplay of decentralization, employee involvement and
absorptive capacity on firms' innovation and business performance. Technological
Forecasting and Social Change. 120. pp.195-203.
Varma, A. and et. al., S., 2016. Airbnb: Exciting innovation or passing fad?. Tourism
Management Perspectives. 20. pp.228-237.
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Visnjic, I., Wiengarten, F. and Neely, A., 2016. Only the brave: Product innovation, service
business model innovation, and their impact on performance. Journal of Product
Innovation Management. 33(1). pp.36-52.
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