Concepts and Innovation in Hospitality (Unit 38)

This report discusses the importance of innovation in the hospitality industry, factors driving innovation, and innovative concepts applied by companies in the hospitality industry. It includes a case study of Savoy hotels and their approach towards innovation. The subject is Concepts and Innovation in Hospitality (Unit 38).

Concepts and innovation
in hospitality.

TABLE OF CONTENT
Introduction ...................................................................................................................................3
Main body........................................................................................................................................3
The concept of innovation and its importance to business performance..................................3
Factors driving innovation in the hospitality industry..............................................................5
The role and importance of innovation to hospitality businesses ............................................7
References......................................................................................................................................11

Introduction
Innovation is an essential factor in companies as well as in industry nowadays. The
market are highly dynamic and the demands and preferences of customers are changing at a fast
pace. In order to cope with these continuously changing trends and preferences it is important for
the company to include innovation in there management as well as operations. Innovation helps
the company in having competitors advantage in the market as the company will be able to meet
the demands and needs of the customers more accurately and efficiently(Filimonau and
Naumova., 2020). Innovation is extremely important specially in hospitality industry as it is in
service industry and their aim is to provide services to customers beyond their expectations so
that they can satisfy the needs of the customers.
In case of Savoy hotels , The hotel is located in the city of Westminster in central
London, England. It is a luxury hotel and was founded in the year 1889 . It was Britain’s first
luxury hotel which introduced electric lights , electric lift fully furnished bathrooms , constant
cold and hot water facility along with other innovations . The Savoy hotels for over a century
was owned and managed by Carte family and is now managed by Fairmont hotels and resorts. In
this report, The concept of innovation which can help the businesses in performing better in the
market will be discussed. Along with this factors who are responsible for driving innovation in
hospitality industry will be discussed.
Main body
The concept of innovation and its importance to business performance
Innovation refers to improvement in the processes of the company which can help the
management of the company in saving time, efforts as well as cost . It is important for businesses
to make sure that the processes are efficient and effective. Innovation helps the businesses in
getting competitors advantage in the market . In current business environment it is important for
the businesses to adapt changes quickly an efficiently as it is essential for the survival of the
company in dynamic market (The Importance of Innovation in Business, 2019). Innovation not
only helps the business in growth but also provide great opportunities to businesses as it helps
them in meeting demands of the customers and an opportunity to increase the sales which will

ultimately increase the profitability of the company . In context to Savoy Hotel , the hotel
strongly believe innovation and try to include it in the processes of the company from time to
time . It is important for the company to make sure that they are meeting the demand and
expectations of their customers so that they can create an advantage in the market and can retain
their customers. Some of the critical factors that can help in understanding importance of
innovation in business is given below:
Innovation help the companies in their growth as it makes sure that the processes and
products of the company are according to the demands and need of customers angry market . In
order You have growth companies generally choose merger or acquisition which can help them
in dealing with the changes in the market what are much more expensive for companies who are
looking for growth (García-Muiña and et. al., 2019). On the other hand innovation is a less
expensive approach which can help companies in having growth. In most of the research an
analysis conducted throughout the world states that innovation is one of the top business
innovative initiatives which can help them in surviving in the market and will also make them
profitable. It helps the company in keeping a step ahead in the market and from their
competitors.
Innovation is the key factor which can help the organizations in differentiating
themselves from other competitors in the market . It helps the organization in attracting
customers with the help of innovation and will also make sure that the company is able to retain
those customers for a longer duration of time. Customers nowadays are willing to spend more
money on innovative products rather than spending their money on same old products (Tang and
et. al., 2020). Innovative products provide much more value to the customers as they are
according to the trends of the market and will provide higher level of satisfaction to the
customers of the company. Innovation helps the company in having cost advantage in the market
which is one of the most crucial advantages for the company in order to stay ahead of
competition prevailing in the market.
Sources of innovation
 Unexpected success and failure: this type of innovation happens by chance. The
company was not intentionally trying to do innovation but it has happened in the course
of working. They are for the betterment of the workings of the company.

 Incongruities: It refers to the shortage of one resource makes the company innovate
products which can fill that gap. It is important for the company to look for opportunities
of incongruities in order to so innovation.
 Necessity: another factor which can be a good source of innovation for the companies.
When there is a necessity and the market is not having the product which can fulfil that
need, the company with the help of innovation can capture the market.
Factors driving innovation in the hospitality industry
Innovation factors are important to be considered by the companies as it helps the
companies in having success in long run and will also help the company in implementing
innovation related changes step by step in the company. in case of Savoy Hotels, they make sure
that they are including the factors which can drive innovation in their organization. There are
several factors of innovation in Hospitality industry and some of them are given below:
Technology advances innovation: One of the most common factor which drives
innovation is advancement in the technology of the company .Technology nowadays are helping
companies in providing effective marketing solutions via mobile phones as businesses can
constantly be in touch with their customers and can provide information to them regarding the
services and products of the company (Liu and et. al., 2020). Social media platforms a helping
company in having wider the reach to the audience which can help the company in attracting
potential customers which will eventually increase the sales and profitability of the company .
It is important for the company to make sure that they are upgrading their technology
constantly as changes in technology is related to the changes in the demands of the customers
and sometimes due to shift in consumer behaviour. In case of Savoy hotels, up gradation in
technology of hospitality industry is used in order to describe wide range of technological
solutions provided in IT and e commerce sections within hospitality industry which helps the
company in making the systems and processes more efficient and effective. Hotel industry
requires technology starting from the check in of customers till the checkout and even
afterwards. The companies are becoming more and more advanced in the field of technology
and are becoming effective on digital platforms which can help them in promoting and
distributing their products effectively and efficiently (Dogru, Mody and Suess., 2019).

Digital platforms provide an exceptional opportunity to the businesses to improve their
services as well as interaction with the customers as it helps the company in contacting potential
customers directly. The biggest disadvantage of technological advancement is that it includes
high cost which are not affordable for majority of the businesses and technology can become
obsolete in a very short duration of time. It is extremely important for businesses to make sure
that they are updating the technology on correct time as they can easily waste their money on
technology which is already innovated by other competitors.
Source: tech meets innovation
Consumer led demand: This refers to the changing demands of the customers which is
needed to be fulfilled by the company in order to satisfy the customer. It has been observed that
Millennial are spending majorly on tours and travelling, food and beverages and other services of
hotel industry. It is important for the hotels to modify their Services and product according to the
millennial as they are the target segment for the hotel (Chen and Lin., 2020). It is important for
the hotels to change their services according to the taste and preferences of target market
segment as it helps the company in making sure that they are in the right direction and are
attracting customers in the company. The advantage of this factor is that hotels can take risk
while innovating their services and products add the market is highly dynamic and if the
innovative service doesn’t work according to the expectations of hotels then they can change it
immediately .
On the other hand a major disadvantage of this factor is that the markets are highly
dependent upon the trends of the market and customers preferences as well as demands can have

a major impact on the workings of hotels. Another disadvantage is the power of internet that
customers have as Each and every information is available online and customers can easily
compare the services of the company, even a single unhappy customer can cause a major
destruction to the reputation of the company(Altin and et. al., 2018). It is extremely important for
hotels now to provide services beyond the expectations of customers.
In context to Savoy hotels the company make sure that they are innovating their services
according to the choices and demands of millennial. In order to attract the market segment which
can be beneficial for the profitability of the company , it is Important for the company to
understand the needs add demands of respective market segment . Research and analysis of
market helps the company in understanding the demands and preferences of the market
proactively And help the hotels in taking corrective actions beforehand which can help them in
having competitors advantage in the market.
(Source: How COVID-19 Is Reshaping Consumer Behavior — and What That Means for
Travel Brands Right Now)
Business strategic factor: In order to have growth in the market it is important for the
companies to make sure that they are capturing the market effectively and efficiently . Firstly the
company must target the domestic market segment and if they are successful in that market
segment then only they should think about expansion in other countries . Penetration of domestic
market helps the company in understanding the demands and needs of market as well as
customers of the company. Sustainability is another factor that is needed to be taken into
consideration by the companies .
Growing concern about environment is really affecting the businesses of the company
(Harrington and et. al., 2019). People are highly concern about the activities of the company .and
its impact an environment . It has been observed that if the company take sustainable measures in
their daily working they are likely to attract more number of customers as compared to

companies who are not taking sustainability into consideration. According to research, People
are willing to pay high prices to the companies who are promoting sustainability Anna providing
sustainable products and services to their customers . In context to Savoy hotels , the company
make sure that they are reusing and recycling products as much as possible .
The Savoy hotel is promoting paperless services , cashless transactions , reusable towels ,
Automatic electricity systems , Automatic taps which can say water and avoid anyway stage.
Companies getting support of government as well as general people and tourists as they are
providing sustainable options to their customers and the company is also enjoying competitors
advantage in the market (Mooney and Harkison, 2018). Ethics plays a major role any workings
of the company as it helps the company in having a loyal customer base . Companies who are
having strong ethics are likely to have more customer support as customers are happy and
satisfied with the policies of the company . The honesty of the company will help them in having
competitors advantage in the market .
(Source: 10 Powerful Hotel Pricing Strategies to Implement in, 2021)
The role and importance of innovation to hospitality businesses
There is a growing trend in the hospitality industry which is moving towards the advancement of
the technology in hotels . Innovation in hospitality industry is an important an essential task
which is needed to be performed in order to attract customers (The Latest Technology Trends in
the Hospitality Industry, 2021). The more unique and innovator concept used by the hotels , the

more chances they have to attract customers. The three innovative concepts applied by the
companies in hospitality industry are as follows:
Voice search and voice control: It is a growing trend in hospitality sector as it helps the
customers in utilizing the amenities of the room as well as the hotel with the help of voice
search. With the help pf voice control the customers of the company will be able to change the
light setting of the room according to their mood, will be able to order food directly via internet
without waiting for the wait staff of the hotel (Srivastava and et. al., 2021).
They will be able to set their preferences of in room devices and will be able to have a
personalized experience in the hotel. In case of Savoy hotels, the company is planning to involve
this feature in the And is already working accordingly . With the help of this feature or this
concept big company will be able to provide exceptional services to the customers and will also
be able to enhance the experience of the customers with the hotel . It will help the company in
retaining their customers and creating a strong and loyal customer base (Lee and Deale., 2021). It
can also be served as a good marketing strategy of the company as they will be able to market
their products and services easily because of the unique an innovative experience which they are
providing to their customers .
Virtual reality: It is an advancement of technology which helps the hotel in providing
realistic digital environment to their customers . The customers of the company look around and
see the digital setting made by the system rather than the real world environment they’re actually
in post op virtual reality videos especially popular in hotel industry as it provides exceptional
experiences to their customers and the technology will help the company in promoting their
products and services (Jung and Yoon., 2018).
In context to Cape Dara hotels located in Thailand are providing virtual reality
experiences to their customers. Experience marketing can be one of the major reason why
hospitality industry needs to have virtual reality systems. Potential guests of the company
looks for an ideal holiday destination and they know That they need to book the right hotel .
Virtual reality helps the customers in experiencing the property of the hotel before booking and
provide them reassurance that their experience with the hotel will be exceptional . The customers
gets to know each and every detail of the property before booking and will help them in taking
right decision according to their needs(Altinay and Arici., 2021). Value creation is another factor
which helps the company in attracting potential customers.

It is important for the company to make sure that they are adding value to their products
and services so that they can attract potential customers and will also be able to have competitors
advantage in the market. It helps the company in increasing direct bookings via digital platforms
as after experiencing everything in virtual reality the customers will be able to easily decide
weather they want to make booking or not.
(Sources: How Virtual Reality (VR) can Enrich the Hospitality Industry)
Artificial intelligence: Customers nowadays wants personalized experiences whenever
they interact with their service providers. It is important for the companies to make sure that they
are effectively interacting with their customers and are providing rapid responses to their
customers . In order to provide fast and effective services to the customers it is important for
hotels to include artificial intelligence in the processes (Jafari-Sadeghi and et. al., 2021). Having
actual staff monitoring all the channels through which the companies interacting with their
customers can be really difficult and in order to provide swift responses it is important for the
companies to include chatboats and artificial intelligence in there interaction systems.
In context to Hilton hotels , the company has implemented artificial intelligence in their
services efficiently. The aim of the hotel is to provide seamless services to their customers with
the help of automated systems and machines . The hotel understand the need to provide
exceptional services to their customers , in order to do so the company makes sure that they are

effectively using their systems (Phi and Clausen., 2020). Data analysis can be another factor
which Which can help the company in providing smooth customer services .
The company will be able to quickly sort through large amount of data and draw
important conclusions about the potential customers of the company . The company will be able
to modify the services and products according to the data collected by them through surveys ,
online reviews, etc . It will help the company in creating services and products which are unique
and are according to the needs and preferences of the customers .

Conclusion
From the above report it is concluded , hospitality industry is highly dynamic and
requires high level of innovation in their processes as well as there workings. It is important for
companies to make sure that they are working according to the demands and preferences of
customers as the markets are highly dependent on customer segment and companies who cannot
cope with the changing demand of the customers may have to suffer losses and will not be able
to survive in the market . Innovation can be a good factor for companies as it will help them
introducing the cost, time and efforts that the company is investing in their products and
processors . Innovation will also help the company in having competitors or advantage in the
market as the company will be providing new products and services to their customers which are
providing the customers of the company high value then the products and services of other
competitors. Innovation is a necessity for the company as company will be able to make sure that
they are satisfying the needs and wants of the customers by providing services which are beyond
their expectations .

References
Books and journals
Altin and et. al., 2018. Performance measurement and management research in the hospitality
and tourism industry. International Journal of Contemporary Hospitality Management.
Altinay, L. and Arici, H.E., 2021. Transformation of the hospitality services marketing structure:
a chaos theory perspective. Journal of Services Marketing.
Chen, S. and Lin, N., 2020. Culture, productivity and competitiveness: disentangling the
concepts. Cross Cultural & Strategic Management.
Dogru, T., Mody, M. and Suess, C., 2019. Adding evidence to the debate: Quantifying Airbnb's
disruptive impact on ten key hotel markets. Tourism Management, 72, pp.27-38.
Filimonau, V. and Naumova, E., 2020. The blockchain technology and the scope of its
application in hospitality operations. International Journal of Hospitality
Management, 87, p.102383.
García-Muiña and et. al., 2019. Understanding open innovation in small and medium-sized
museums and exhibition halls: An analysis model. International Journal of
Contemporary Hospitality Management.
Harrington and et. al., 2019. From goods-service logic to a memory-dominant logic: Business
logic evolution and application in hospitality. International Journal of Hospitality
Management, 76, pp.252-260.
Jafari-Sadeghi and et. al., 2021. Exploring the impact of digital transformation on technology
entrepreneurship and technological market expansion: The role of technology readiness,
exploration and exploitation. Journal of Business Research, 124, pp.100-111.
Jung, H.S. and Yoon, H.H., 2018. Improving frontline service employees' innovative behavior
using conflict management in the hospitality industry: The mediating role of
engagement. Tourism Management, 69, pp.498-507.
Lee, S.H. and Deale, C.S., 2021. Moving to Online Education Virtually Overnight Due to a
Pandemic: Perceptions of Hospitality and Tourism Students and Faculty
Members. Journal of Hospitality & Tourism Education, pp.1-19.
Liu and et. al., 2020. Clarifying the effect of organization learning on service innovation: the
mediating role of intellectual capital. The International Journal of Human Resource
Management, 31(10), pp.1207-1234.
Mooney, S. and Harkison, T., 2018. Assessment for learning in university settings: fun and
games. Anatolia, 29(4), pp.507-517.
Phi, G.T. and Clausen, H.B., 2020. Fostering innovation competencies in tourism higher
education via design-based and value-based learning. Journal of Hospitality, Leisure,
Sport & Tourism Education, p.100298.
Srivastava and et. al., 2021. Post-epidemic factors influencing customer's booking intent for a
hotel or leisure spot: an empirical study. Journal of Enterprise Information
Management.
Tang and et. al., 2020. The effect of tourism core competence on entrepreneurial orientation and
service innovation performance in tourism small and medium enterprises. Asia Pacific
Journal of Tourism Research, 25(2), pp.89-100.
Online
The Importance of Innovation in Business, 2019 [online]. Available though
<https://www.northeastern.edu/graduate/blog/importance-of-innovation/>

The Latest Technology Trends in the Hospitality Industry, 2021 [online]. Avaliable
through<https://www.revfine.com/hospitality-trends/>.