BMS 409 - Innovation and Enterprise: Proposal for Corinthia Hotel

This project presents a comprehensive innovation proposal for the Corinthia Hotel, a luxury establishment in the UK, addressing the challenges posed by competitors like Airbnb and evolving consumer behaviors. The core of the proposal centers on integrating Augmented Reality (AR) services, such as interactive hotel rooms and environments, to enhance guest experiences and create a unique brand image. The project applies the disruptive innovation theory, targeting a niche market of tech-savvy travelers before expanding to a broader audience. It includes a critical analysis of the proposed AR services, discussing benefits such as attracting a technologically-oriented customer base and drawbacks such as cybersecurity vulnerabilities. The proposal provides a detailed justification of the target audience, employing psychographic segmentation, and offers strategic recommendations for the hotel, including enhancing cybersecurity, providing discounts, leveraging AR in marketing, and collaborating with celebrities to boost AR service sales. The report also mentions the use of virtual keys and interactive walls to create a unique experience for the customers.

Proposal-
Innovation
and Enterprise

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Organisation Overview and description of situation..............................................................1
Discussion of relevant theories to develop innovative idea...................................................2
Critical analysis of the AR Hotel services suggested for The Corinthia Hotel......................3
Justification of target audience...............................................................................................4
Recommendations for the company.......................................................................................5
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................8

INTRODUCTION
Business enterprises seek innovation in order to expand the product portfolio with unique
and differentiating services which given the company competitive advantage and help the firm
survive in their industry for a long time period. Innovation theories play an important role in
identification of profitable innovation which helps business firm gain success in their industry.
The establishment selected for the preen report is Corinthia Hotel which is UK based luxury
Hotel. This report involves development and discussion of innovative idea with the help of
relevant innovation theories. In addition to this the proposed idea is critically analysed and
justification of target market segment and costs are also provided in this report.
MAIN BODY
Organisation Overview and description of situation
The Corinthia Hotel is one of the most successful luxury Hotels in Britian. The Hotel was
opened in the year 2011 after the Restoration of the 19th century Metropole Hotel. The Hotel is
equipped with various facilities such as fitness centre, Wi-fi connection, 24-hour concierge
service and under floor heating. Airbnb which is online community marketplace for temporary
accommodation services has grown rapidly and poses a threat to the hospitality industry (An
unravelled welcome in the hearth of London, 2021). Airbnb is present in London and reduces
profitability of Hotels during Peak seasons. In addition to this, technologically savvy young
travellers select alternate accommodation services such as Airbnb in search of unique and
personalised travelling experiences instead of booking Hotel Rooms (The Airbnb Effect:
Cheaper Rooms for Travellers, Less Revenue for Hotels, 2018). These factors have reduced are
danger to long-term survival of the Corinthia Hotel. In order to compete with new competition
and changes in consumer behaviour, the respective establishment needs to develop and
implement innovative services for their consumers.
The innovative service proposed for the respective establishment are interactive hotel
environment and Hotel rooms created with the help of augmented reality. This innovation can
help the company provide unique experience to the consumer and create a differentiated brand
image in the hospitality industry to survive in the digital age for long time period.
1

Discussion of relevant theories to develop innovative idea
The innovative idea developed to help Corinthia Hotel compete with new business rivals
and attract consumer in changing business environment includes creation of Augmented Reality
Hospitality services such as interactive rooms and Augmented Reality Hotel environment. The
disruption innovation theory is applicable to this business idea. The disruptive innovation theory
states that disruption is a process in which small business firms are able to challenge incumbent
organisations in their industry by focusing on the lower end of the market and moving upwards
(Aronson and Cowhey, 2017). This occurs as the incumbent focuses on enhancing products or
services for the most demanding consumers while the needs of consumers at the lower end of the
market are not recognised.
This theory is applicable to the innovative idea of creating Augmented Reality Hotel
environment. This business idea targets the fringe section of the hospitality market which are
consumers looking for unique experience in from their accommodation service instead of the
mainstream market of consumers which book low cost temporary accommodations at lucrative
spots. Airbnb does not focus on personalisation and instead focus continuous expansion to newer
location in order to provide demanding consumer cheaper accommodations at famous tourism
spots across the globe. The implementation of the Augmented Reality Hotel services will help
the Corinthia Hotel attract niche consumer base initially. The firm will be able to create a
differentiating brand image with the help of this service which enables will enable the company
to attract mainstream consumers in the Hospitality industry by providing technology savvy
services and interactive Hotel environment. The disruptive path followed by the respective
establishment with the introduction of Augmented Reality Hotel services is new market
disruption. This path focuses on underserved consumers of the market (Burrus, 2017). The
technologically savvy consumers which are habitant to technologically advanced environment
are not served
The mainstream consumers in the Hospitality industry will be attracted to the AR services
offered Corinthia Hotel which will ensure the upward movement of thee company in the market
from the fringe consumer base of technologically savvy travellers which seek unique experience.
The AR services such as interactive Hotel walls which provide information about landmarks
around the Hotel after pointing to the Augmented Reality equipped wall will be improved on the
basis of consumer reception gained from niche market segment in order to make them appealable
2

for the demanding consumer segments. In addition to this the Augmented Reality services can be
easily modified and the Corinthis Hotel can reduce the price of the services offered in order to
attract mainstream audience over time and compete with the incumbent business opponents. This
upward trajectory of the Hotel depicts application of disruptive innovation theory as the
disruptive business enterprises establish brand name in upmarket segment and attract demanding
consumer base by continuously improving their services on the basis of experience gained by
targeting niche consumer base (Cowhey and Aronson, 2017).
The idea of interactive Augmented Reality services is beneficial for the respective
company as it enables the company to follow disruptive innovation path and gain leading
position with large consumer base. In addition to this by utilising an innovative idea which
applies disruptive innovation theory Corinthia Hotel will be able to provide best products to
mainstream consumers and travellers which will ensure complete booking during Peak as well as
normal Holiday seasons. This is because apart from being located near famous London
landmarks, the hotel will also become a famous tourism spot due to interactive Augmented
Reality environment.
Critical analysis of the AR Hotel services suggested for The Corinthia Hotel
The suggested innovation idea for Corinthia Hotel development of augmented reality
services which provide consumers interactive Hotel environment. This involves creation off
Hotel rooms with interactive walls which provide information about nearby landmarks, shopping
centres or information about any other site in which the consumer is interested. In addition to
this, the Augmented Reality environment involves providing virtual keys to the consumers which
can be used to lock their rooms easily in comparison to physical key cards. Virtual keys are easy
to use as and do not malfunction as often as physical key cards. In addition to this these keys can
also be used by foreign consumers or young children with families which do not have any prior
experience of being at the Hotel.
The disruptive innovation theory is applicable for this innovative idea. This because the
idea targets consumers from niche market segment initially and helps the company capture
mainstream market which is highly profitable through continuous improvement and modification
to appeal to profitable consumer base (Duggan, 2019). The primary benefits provided by the
adoption of this idea are that the Corinthia Hotel will be able to attract technologically savvy
consumers which have been overlooked by the hospitality industry. The hospitality sector has
3

been behind other industries in adoption of digital technology. This is depicted by the failure of
hoteliers to build the best locking online engine after the rise of internet. The online Travel
agencies or OTA’s moved into the space leaving hoteliers behind. The adoption of this idea can
help the respective establishment cater to technologically savvy consumers and build a brand
technologically advanced brand image. In addition to this, Corinthia Hotel will be prepared for
future and will gain profitability after the Augmented Reality technology is accepted among by a
large amount of consumers. This is explained with the help of diffusion theory of innovation
which outlines the spread of technology from innovation to widespread adoption. The diffusion
theory provides information about individuals which play role in adoption of innovation. As per
this theory the early majority includes set of general population which pave the way of an
innovation to be accepted by the mainstream population (Syahadiyanti and Subriadi, 2018). The
Corinthia Hotel will make improvements in the Augmented reality services after consumers from
the fringe market segment utilise new services effectively so that the services appeal to the
broader mainstream while being useful for the niche consumer segment of technologically savvy
customers. This will help the company bridge the gap between early adopters and early majority
to become industry leader swiftly.
The main disadvantages associated with adoption of the Augmented Reality service idea is
that as it connects various devices available in the Hotel room to a common network. This will
increase the possibility of hackers using unprotected devices such as smart machines like smart
thermostat to reach breach security measures constructed for protecting sensitive data available
in computing devices (Vyas and Bhatt, 2017). This makes sensitive information such as financial
information of consumers or security information of virtual locks available to cyber criminals.
This issue needs to be addressed by the respective establishment in order to ensure security of
Hotel guests after adopting this technology and gaining long-term success form investment in
this innovation.
Justification of target audience
Segmentation: The idea to provide consumers at Corinthia Hotel Augmented Reality
services utilises psychographic segmentation. This segmentation divides consumers on the basis
of their technological lifestyle (Ahani and et. al., 2019). This segmentation is justified as the
niche target market includes tech savvy travellers which are dependent on technology. This
segment is profitable for the company as the AR enables environment fulfils their need to use
4

technology for conducting various activities and enables the company to focus on niche market
which is overlooked by the hospitality industry.
Targeting: The target consumer base is of young technologically dependent consumer
because Corinthia Hotel can easily upsell and cross-sell them services.
Positioning: The USP of Corinthia Hotel is the Augmented Reality experience provided
by the Hotel which can lead the company to disruptive innovation path and assist inbecoming
market leader. In addition to this, the USP is justified as it serves the needs of target consumer
base.
Recommendations for the company
 Enhance cyber security: Security is major issue related with AR environments and
technology (Auer and May, 2020). Corinthia Hotel needs to establish advanced cyber
security system in order to adopt Augmented Reality technology as a part of the services
provided by the company. This will help the company create an Augmented Reality
environment in which data of the employees, the Hotel and the consumer is safe from
cyber-attacks. The company needs to ensure that unprotected devices such as Internet of
Things do not have common network with security systems of the Hotel.
 Provide discounts and combined offers: In order to attract the mainstream consumer
base which is looking for affordable personalised accommodations, the company needs to
create discount packages and personalised offers combining different Augmented reality
services such interactive walls and Virtual locks or gasification and Augmented Reality
entertainment combined offers during off seasons in order to attract consumers which are
seeking budget friendly accommodations options.
 Augmented Reality Marketing: Corinthhia Hotel not only needs to incorporate
Augmented Reality in their services but also use Augmented Reality in their marketing
strategy. This includes providing Augmented Reality Tours of the Hotel area and
surrounding view of the Hotel rooms to the consumers (Rauschnabel, Felix and Hinsch,
2019). This helps the consumers gain better understanding of the accommodation
services provided by the Corinthia Hotel.
 Collaborate with celebrities and gain access famous IP’s: In order to increase the sale
of Augmented Reality services, The Corinthia Hotel needs to collaborate with celebrities
from sports or entertainment industry or gain access of famous Intellectual Properties
5

such as Disney or Hurry Potter. This can be used to create Augmented Reality service
which enables guests to click pictures or have limited interaction with celebrities or
famous characters such as Harry Potter or Sherlock Holmes. This will become an
attraction point for the Hotel and assist in securing high sales before Holiday seasons so
that the Hotel gains profits all year long.
6

CONCLUSION
From the above report it is determined that it is important for business firms to seek
innovation in ordure to survive in the industry for a long time period. Disruptive innovation
theory states that small business firms are able to gain success in their industry by seeking the
path of disruptive innovation. This path involves creating products or services which solve the
needs of a fringe consumer base which is overlooked by the industry incumbents. The company
which introduces disruptive innovation is able to attract mainstream consumers by continuously
improving the offered services or products as per the disruptive innovation theory. The diffusion
theory of innovation is another innovation theory which provides information about the stages of
spread of new innovation in the market from introduction to maximum market saturation.
7

REFRENCES
Books and Journals
Ahani and et. al., 2019. Market segmentation and travel choice prediction in Spa hotels through
TripAdvisor’s online reviews. International Journal of Hospitality Management, 80.
pp.52-77.
Aronson, J. D. and Cowhey, P. F., 2017. Digital DNA: disruption and the challenges for global
governance. Oxford University Press.
Auer, M. E. and May, D. eds., 2020. Cross Reality and Data Science in Engineering:
Proceedings of the 17th International Conference on Remote Engineering and Virtual
Instrumentation (Vol. 1231). Springer Nature.
Burrus, D., 2017. The anticipatory organization: Turn disruption and change into opportunity
and advantage. Greenleaf Book Group.
Cowhey, P. F. and Aronson, J. D., 2017. Digital DNA: disruption and the challenges for global
governance. Oxford University Press.
Duggan, S. B., 2019. Education Policy, Digital Disruption and the Future of Work: Framing
Young People’s Futures in the Present. Springer Nature.
Rauschnabel, P. A., Felix, R. and Hinsch, C., 2019. Augmented reality marketing: How mobile
AR-apps can improve brands through inspiration. Journal of Retailing and Consumer
Services, 49. pp.43-53.
Syahadiyanti, L. and Subriadi, A. P., 2018. Diffusion of Innovation Theory Utilization Online
Financial Transaction: Literature Review. International Journal of Economics and
Financial Issues, 8(3). p.219.
Vyas, D.A. and Bhatt, D., 2017. Augmented Reality (AR) Applications: A survey on Current
Trends, Challenges, & Future Scope. International Journal of Advanced Research in
Computer Science, 8(5).
Online
The Airbnb Effect: Cheaper Rooms for Travellers, Less Revenue for Hotels, 2018. [Online]
Available through <
https://www.forbes.com/sites/hbsworkingknowledge/2018/02/27/the-airbnb-effect-
cheaper-rooms-for-travelers-less-revenue-for-hotels/?sh=2499faa1d672>
An unravelled welcome in the hearth of London, 2021. [Online] Available through
https://www.corinthia.com/london/
8