Concepts and Innovation in Hospitality Industry in UK Report

This report delves into the concepts and application of innovation within the UK hospitality industry, using Hilton Hotel as a case study. It examines the definition and sources of innovation, differentiating between evolutionary and revolutionary approaches, and exploring product, process, and business model innovation. The report emphasizes the importance of innovation for business performance, both externally (competition, cost reduction, new entrants, market drivers) and internally (profitability, ROI, quality). It evaluates the contribution of innovation to business strategy, analyzing factors driving innovation such as technological advancements, including POS and PMS systems, artificial intelligence, and management innovation. The report also reviews innovative concepts and approaches implemented in the hospitality industry and critically evaluates their success, offering insights into sustaining profitability and competitive advantage.

Concepts and Innovation in
Hospitality industry in UK

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1. Discuss the Concept of ‘innovation’ and sources of innovation...........................................3
P2. Explore the Importance of innovation to business performance...........................................4
M1. Evaluate the contribution of innovation to business performance and analyze the benefits
that can be gained as a result.......................................................................................................6
D1. Critically evaluate the contribution of innovation to business strategy and performance to
achieve hospitality business objectives.......................................................................................6
LO2..................................................................................................................................................6
P3. Analyse the factors driving innovation in the hospitality industry using a range of
organizational examples..............................................................................................................6
M2. Critically analyse the advantages and disadvantages of factors driving innovation in the
hospitality industry for meeting business objectives to maximise profit....................................8
D2. Critically evaluate how the factors driving product, service and brand innovation across a
range of organisations in the hospitality industry sustain profitability and competitive edge....9
LO3..................................................................................................................................................9
P4. Review a range of different innovative concepts and approaches that have been
implemented in the hospitality industry using specific examples...............................................9
M3. Evaluate a range of innovative concepts and approaches within the hospitality industry
using specific examples, analysing the extent to which they have added value........................10
D3. Critically evaluate the success of a range of innovative concepts and approaches adopted
by hospitality organisations.......................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation can be defined as the process into which an entity tries to bring changes within
their product and services in order to competitive advantage from the market. In current scenario,
it has been seen that innovation is among the most crucial process within the entity for surviving
within the market. Frequent changes in product and services keeps customers or guest attracted
towards the organisation through which goals can be accomplished easily. The current report is
based on Hilton Hotel which is a multinational brand where it serves its services in different part
of the world. The entity was founded in the year 1919 which is almost 100 years back.
In this particular file, there are different topic which will be discussed which will be related
to the innovation where its meaning and importance of innovation for the business performance
will be discussed. Factors driving the concept of innovation will be focused including different
range of innovation and its approaches.
LO1
P1. Discuss the Concept of ‘innovation’ and sources of innovation.
Innovation is explained as the concept where new idea or methods is used by business
entity in order to sustain and accomplish their goals through market. It needs to be understand
that organization must be able to do proper research related work in order to accomplish their
goals and target. It is needed to be understood that innovation is categorized into two categories
which is evolutionary innovation and revolutionary innovation (Jones, Hillier and Comfort,
2016). In evolutionary innovation, organization tries that how they can advance their technology
in order to attain their targets at the same time revolutionary innovations is for those innovation
which is completely new and which changes the whole working pattern.
There are basically three different types of innovation which can be seen and they are
product innovation, process innovation and business model innovation. The detail description
about types of innovation has been mentioned below:
 Product Innovation: It is the type of innovation which relates with changes in product
and services which company offers to their customers. In context of Hilton Hotel, they
can introduce new services for their customers such as introducing of mobile room keys
which will enhance the security system within the premises of hotel.

 Process Innovation: In this particular process of innovation, organization tries to bring
changes within their process of operating with customers so that effective services can be
provided. Hilton Hotel can work themselves in the area where they can provide location
based services so that customers can feel more comfortable to enjoy their services.
 Business Model Innovation: It is the process of innovation into which whole of working
process is changes within the entity for attaining the targets. While talking about Hilton,
they if they will adopt this particular process of innovation process then lots of changes
are required which they must bring into the business entity (Three Types of Innovation –
Product, Process and Business Model, 2018).
In current scenario, there are number of sources through which innovation can be brought
within the entity into which management sources and non-management sources plays the most
crucial role. In context of Management sources, it is said that entity should be able to work in
that respective where they can allow themselves to bring changes within their process and
service which they provide to customers. Similarly, in non-management sources, organization
works in that particular way into which they must be able to develop the psychology through
which their goals and target can be accomplished. Even changes can be brought within culture by
adding on the diversified working environment.
P2. Explore the Importance of innovation to business performance
It is necessary to understand that on a daily basis competition is increasing within the
market where people or organisation must be able to upgrade themselves in order to sustain
within the market. Talking about hospitality industry, there are number of organisation which has
been performing within the market and it is essential that they should be able to work as per the
requirement of situation by bringing some of the innovation (Kasemsap, 2017). There are two
types of importance of innovation for Hilton hotel which has been explained below in detail.
External Importance
 Competition: In present scenario, competition is increasing on a daily basis within the
hospitality sector and if any of the organisation wants to survive within the market, they
must be able to bring innovation within their working style. Talking about Hilton Hotel,
innovation will allow them to give strong competition to some of the global brands like
Intercontinental, Holiday Inn and many more.

 Lower Cost: Nowadays, any of the customers likes to see price structure along with
services included in it. Similarly, if management of Hilton Hotel will be able to work for
those innovation process through which overall expenses can be reduced then it will
certainly allow them to sustain within the market by giving competition to rivalry firms.
 New Entrants: On a daily basis, number of organisation enters into the market which
has been increasing the competition for existing organisation as well. If company like
Hilton will be able to work on their innovation process, then they can easily allow
themselves to create problems for new entrants to survive within the market (Bowie,
2018).
 Market Drivers: It needs to be understand that whenever any of the organisation
performs its business activity there are number of factors which may create issue such as
demand, economic forces, social changes and many more. In context of Hilton Hotel, it is
essential for the entity to ensure that they are able to work according to the requirement
market drivers and being innovation accordingly because it will reduce the negative
impact of market drivers and even it will provide the way to accomplish the goals.
Internal Importance
 Improves Profitability: It needs to be understood that management of Hilton hotel can
easily enhance their overall profitability ratio if they can bring innovation to their
working process. It is because innovation will certainly allow them to bring positive
changes within the entity through which higher percentage of customers can be attracted.
 Improves ROI: Rate of Investment is the ratio between net profit and cost of investment.
Higher rate of investment is very much crucial for company in order to gain advantage
from the market place. In context of Hilton Hotel, their management is required to work
that how they can improve their ROI with the help of innovation because it can be only
reduced if overall expenses on investment can be decreased (Kallmuenzer, 2018).
 Improves Quality: It is always essential for any of the business organisation that they
must be able to improve the overall quality of product and services which they provide to
their customers. It is essential for the company like Hilton to work continuously on
improvement of service which is only possible through the process of innovation.

These are some of the internal and external importance which Hilton can automatically
improve if they will be able to work on innovation program. If in case company fails to do so
then it gets difficult for them to survive within the market and even huge problem may also occur
for the entity.
M1. Evaluate the contribution of innovation to business performance and analyze the benefits
that can be gained as a result
In current scenario, innovation the part of each business organization and if a
management is unable to focus in this particular stream then it is very difficult for them to
survive within the market. The way hospitality industry has shown its growth in past few years, it
is all because of innovation idea which they bring into the business. If talking about Hilton Hotel,
innovation has provided them a number of benefits because they are easily able to attract more
number of customers towards the organization. The profit margin has increased significantly just
because of innovation (Jones and Boer, 2018). Also, innovation has allowed them to attract
customers which is very much important for any of the hospitality industry.
D1. Critically evaluate the contribution of innovation to business strategy and performance to
achieve hospitality business objectives
Contribution of innovation to the business organization is huge because it simply allows
the organization to improve their strategies which simply allows to improve the overall
performance of a company which is crucial in present scenario. Innovation gives the idea to an
organization that how they are needed to perform with the market so that their goals can be
accomplished. But, at the same time, it is necessary to understand that the process of innovation
is very much expensive and if company fails in their planning and plotting then huge problem
can be created for them because company might have to suffer from losses. So, it is necessary
that organization work within their research and development process before bringing any of the
changes within the organization.
LO2
P3. Analyse the factors driving innovation in the hospitality industry using a range of
organizational examples
Organisation can perform better only with the help of bring innovation to their working
style because it making working condition easier and faster which is very much important in

current scenario. Hotel like Hilton must focus within innovation area on regular basis because it
is the only way through which they can attain success within the specific time period. There are
some of the key factors driving innovation within the hospitality industry which has been
discussed below in detail.
 Technology Advances innovation: Every time company uses innovation process,
technology plays the major role because of the current requirement of the market. In
context of Hilton Hotel, their management always believes upon innovation process
because of the outcomes which it has provided to the company. Some of the technologies
where company have brought changes successfully in last few years are related with POS
(Point of Sales), PMS (Property Management System). Both of this technology has been
helpful for customers of Hilton as well as for company too because payment system
improved because of it. Additionally, available space with the hotel can be easily
identified through PMS technology (Bowie and et. al., 2016).
 Artificial Intelligence: It is one of the thing where organisation can easily work and even
it can become helpful as well for obtaining the result. In order to bring innovation with
the company management of Hilton Hotel can try to work for developing Chat-box
through which any of the customer’s query can be resolved. It can be the key driving
factors through which Hilton hotel can accomplish their goals and target.
 Management Innovation: It relates with the process of bringing changes within the
working style of management with the help of innovative process. In order to bring
changes Hilton Hotel, can collect different feedbacks from its customers because it will
certainly provide them the way that how they are needed to deal with any of the situation
with innovative ideas.
 Marketing innovation: This is among one of the most important innovation process
which can be helpful for hospitality industry because it will certainly provide them the
way that how any of organisation can attract more number of customers. In terms of
Hilton Hotel, their organisation can easily focus towards those innovation process
through which effective marketing can be done. Here, company can even take the help of
digital marketing for promoting their services are a reasonable amount (Bharwani and
Talib, 2017).

 Business model innovation: It is among one of the most important factor for the
business organisation like Hilton because here they will have to focus upon business
model innovation into which organisation will focus that management can bring changes
into their working style so that unnecessary expenses can be reduced and even which can
allow them to attract more customers.
 Process innovation: There are some of the situation in which an organisation is required
to bring changes into whole process of working. In terms of Hilton, organisation can
work in that particular manner through which services to customers can be provided in
short time period. It is among one of the most important needs within the innovation for
organisation like Hilton for attaining their goals.
 Service Innovation: This types of innovation are helpful for the business organisation
like Hilton. The main thing in this types of innovation is that organisation tries their best
that how they can bring changes within the process of delivering services to the
customers which must be different then rivalry firm. If customers will get the option to do
comparison, then they can easily allow themselves attain success (Backman, Klaesson
and Öner, 2017).
These are some of the key essential factors which may play crucial role within the whole
process of innovation. If an organisation becomes able to bring changes as per the requirement of
then they can easily take competitive advantage in the market which is very much important in
current scenario.
M2. Critically analyse the advantages and disadvantages of factors driving innovation in the
hospitality industry for meeting business objectives to maximise profit
Any of the entity works with the motive of earning profit and for that they try to bring
different types of changes which is very much important in current scenario. For maximising
profit, organisation uses driving innovation which have its own benefits as well as drawbacks.
Talking about the positive side, it can be said that it brings changes with the working style where
major focus is always given towards finding the way to reduce overall expenses. Secondly, it is
one of the way which certainly strength up the company to attract more number of customers. At
the same time, there are some of the disadvantages which clarifies that it is one of the time

consuming process as well as expensive too if proper information is not collected as per the
requirement.
D2. Critically evaluate how the factors driving product, service and brand innovation across a
range of organisations in the hospitality industry sustain profitability and competitive edge
Driving factors like product, service and brand innovation is the key factor for sustaining profit
within service industry because it directly or indirectly provides the way to organisation in which
they are required to deal. If any of the hospitality industry will bring innovation in this area then
they can easily give higher competition because of the changes which has been brought within
the entity.
LO3
P4. Review a range of different innovative concepts and approaches that have been implemented
in the hospitality industry using specific examples.
There are different types of innovation concept which can be used within the hospitality
industry but major focus is given to the concept of Co-living and AirBnb and CRM where detail
description has been mentioned below:
Co-living: It is the concept into which intentionally community provides sharing house
for the person who have the intention to live by sharing. It is one of the modern concept which is
which can be very effective.
 Characteristics: This types of place are generally having more number of people as
compared to size where it tries to resolve the problem by developing the concept of
sharing.
 Contribution: It has been allowing to develop the mind-set of people where they can
adjust with each other (Oskam, 2018).
 Benefits: This process can become less expensive for an individual because of the
concept of sharing on which it relies.
AirBnB: It generally stands for Air-bed and breakfast for specific time period. It is one of
the online market place which connects the people who seeks for rented homes including
accommodation.

 Characteristics: The main characteristics of AirBnB is related with providing services to
the customers as per their requirement.
 Contribution: It has been contributing to the society where this organisation will work
on behalf of the person who requires service and the one who wants to provide services.
 Benefits: The main benefits of AirBnB people will have to pay charges on the basis of
area rather than number of people which is mainly seen with hotels.
CRM: It is defined as the process where organisation tries to build connect with customers
for the purpose of providing services as per their requirement. It can simply allow to provide
suitable services to its customers.
 Characteristics: The main characteristics of CRM is that it simply allows to do proper
communication, which is important factor within hospitality industry.
 Contribution: The main contribution of this concept is to hire those employees who are
able to perform their part of work as per the requirement of client.
 Benefits: It simply allows to improve and deliver better customer services which is very
much important in current scenario.
M3. Evaluate a range of innovative concepts and approaches within the hospitality industry
using specific examples, analysing the extent to which they have added value
It needs to be explained that innovation concept has been very much helpful because it simply
allows to attain the result which company is willing to attain. In general words, it can be said that
innovation concept has provided the idea that dealing as per the requirement of customer is very
important for hospitality industry and if they fail in in then problem may occur in some of the
situation (Alzyoud, 2019).
D3. Critically evaluate the success of a range of innovative concepts and approaches adopted by
hospitality organisations
There is a high success range for the organisation which has involved themselves with
innovative concept and approaches because it simply proves them the way to deal with
customers which is very much important. Also, it gives the idea that how unnecessary expenses
can be reduced just because of the preferences being given to the customers in hospitality
industry.

CONCLUSION
After having detail analysis to the file, it can be concluded that organisation should be able
to work in that particular manner where they can allow themselves to bring changes with the help
of innovation process. Different models and factors are there through which innovation can be
done but the main thing which is necessary to be understood is that proper research program
should be done by organisation in order to bring innovation within the entity.

REFERENCES
Books & Journals
Jones, P., Hillier, D. and Comfort, D., 2016. Sustainability in the hospitality
industry. International Journal of Contemporary Hospitality Management.
Kasemsap, K., 2017. Promoting Service Innovation and Knowledge Management in the
Hospitality Industry. In Strategic Marketing Management and Tactics in the Service
Industry (pp. 243-279). IGI Global.
Bowie, D., 2018. Innovation and 19th century hotel industry evolution. Tourism
Management, 64, pp.314-323.
Kallmuenzer, A., 2018. Exploring drivers of innovation in hospitality family firms. International
Journal of Contemporary Hospitality Management.
Jones, P. and Boer, A., 2018. Developing the Edge Hotel School. In Innovation in Hospitality
Education (pp. 161-179). Springer, Cham.
Bowie, D. and et. al., 2016. Hospitality marketing. Taylor & Francis.
Bharwani, S. and Talib, P., 2017. Competencies of hotel general managers: A conceptual
framework. International Journal of Contemporary Hospitality Management.
Backman, M., Klaesson, J. and Öner, Ö., 2017. Innovation in the hospitality industry: Firm or
location?. Tourism Economics, 23(8), pp.1591-1614.
Oskam, J. A., 2018. Introduction: Innovation in Hospitality Education. In Innovation in
Hospitality Education (pp. 1-12). Springer, Cham.
Alzyoud, S. Y., 2019. Psychological safety and employee innovation in four-and five-star hotels
in the UK (Doctoral dissertation, Manchester Metropolitan University).
Online
Three Types of Innovation – Product, Process and Business Model. 2018. [Online]. Available
Through: <http://mdi.com.pk/management/2018/05/three-types-innovation/>