Concept and Innovation in the Hospitality Industry: IHG Hotel Report

This report examines the concept of innovation within the hospitality industry, focusing on IHG Hotel as a leading example. It defines innovation, explores its various sources, and highlights its significance in enhancing business efficiency, covering both internal and external impacts. The report identifies and analyzes factors driving innovation, including process, management, marketing, and the role of artificial intelligence. Furthermore, it discusses the importance of innovation in the hotel's business model and overall strategy, emphasizing the need for adaptability and customer-centric approaches. The report also touches on the advantages and disadvantages of innovation in the hospitality industry, with examples, and considers how innovation is vital for business growth. This comprehensive analysis provides insights into how IHG Hotel uses innovation to achieve sustainable competitive advantage, market leadership, and improved business performance.

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INTRODUCTION
The hospitality industry is a wide classification of services industries sectors that
involves hotels, snacks and drinks facilities, event preparation, theme parks, and
transportation. It is comprised of hotels, pubs, and restaurants. The service industry
helps to establish themselves – both technically and as an individual. Not only
improving its already possessed knowledge and skills but also learning others with effort
and patience because of the variety of coworkers, customers, and circumstances that
will also be put into practice (Battour and Ismail, 2016). In the present time in this
industry people carry out different types of innovation that impact the business
operations. This report based on the concept and novation in the hospitality industry. To
better understand the concept of the paper selected organisation IHG hotel this is a
leading organisation in the hospitality industry. This report consists of various topics
such as the concept of idea, varied origins, and the significance of innovation.
Moreover, identify various agents that relate to the hospitality industry and various ideas
and approaches that apply in the hospitality industry.
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Concept of innovation and different sources of innovation
Innovation is the design, production and application, with the goal of enhancing
performance, effectiveness or competitive edge, of a modern product, process or service.
Innovation has been defined as an innovative method by which new or enhanced
concepts are effectively created and implemented to create realistic and value-added
results (Yfantidou and et.al, 2019). The mechanism through concepts for different (or
better) goods, services of the organisation are created and sold on the markets.
 Innovation as an invention: It is an inventive method that includes two or more
business notions or organizations integrated in a certain novel manner to create
a specification not known simply to the individual concerned(Estiri et.al, 2018).
 Innovation as value driver:Innovation defined as infusing innovative product
and services, and therefore by starting up markets for foreign trade to the
advanced nations (Dorgu et.al, 2020).
 Innovation as a conduit of change: Applying functional methods and strategies
to allow improvements, big and minor, to goods, systems, and programs to
implement anything different for the enterprise to brings benefits to people and
leads to the company's information market(Sheresheva, 2018).
There are defined different types of innovation that apply by the business in the
hospitality industry in an effective manner such as:
 Materialand technical innovation: This are the development of new resources,
goods, facilities and technology, modern forms of example the number, and the
enhancement of existing stuff(Chen and Chon, 2016).Technical innovation "best
represents the business concern of maximising market efficiency by focusing on
product or service technology advancements. It is the synthesis, incorporation
and communication of various technologies to make the goods or services a
successful.
 Economic innovations: The growth of emerging businesses created by the
implementation of new goods or technology, the development of different
methods of purchasing and selling commodities, and post-innovation phases in
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the economy. Conventional economic growth model which places information,
innovation, entrepreneurialism at the core of the system instead of as
autonomous elements seemingly unchanged by policies (Rikap, 2019).
 Organisation and management innovation: It involves introducing new
strategies and recommendations for the management or organization of the
working environment. Managing innovation is a mixture of innovation system
integration, and process improvement. Management of innovation enables the
company to adapt to internally or externally challenges, and use its imagination
to implement new ideas, processes or goods (Mehrez, 2019).
 Social innovation: Social innovations are new policy approaches that seek to
better address human needs than that of the proposed systems, arising from-for
instance-working conditions, employment, community advancement, or safety.
These proposals are generated with the intention of increasing and consolidating
democratic society. It includes the creation of new thoughts and methods to
tackle the economic-political difficulties facing the world today(Smit and Melissen,
2018).
 Legal innovation: Legal Innovation is a improvement made to a legal practice
that resulted in the lawyers giving their customers a greater quality. It’s really that
easy. If this does not bring satisfaction to the client so it is not groundbreaking!
Introducing new laws or rules, as well as substantive improvements in current
ones (Hatuka et.al, 2018).
Sources of innovation- According to Peter F Drucker(1972)defined various sources of
the innovation such as:
 Unexpected: Innovations will suddenly take place. They can happen by
accident. Someone may just come across a new product or concept. The
hospitality industry has a lengthy list of unexpected inventions. Also fire, which
humans happened upon, is considered an unforeseen invention. Another
instance is that of dynamite. A key point to remember, though, is that many major
developments have occurred spontaneously in our past. Sometimes, when
researchers are searching for anything, they come across that instead.
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 Incongruities: Innovation might be conceived when the need is incongruent with
the supply. People could drive innovation in an effort to reconcile the established
incongruities. There was a shortfall of parking space, for instance, as the
customers numbers grew. The sporty coupe was founded in an effort to
overcome the inconsistency between the parking structure and the lack of
parking. A compact car which can fit in tiny rooms is a smart car. A significant
source of creativity may be incongruities. It is essentially in human behavior to
find something to fill in the incongruities around him because he perceives.
 Market culture: An established business structure may also give rise to
innovative solutions. Here's how Google was born. The web search industry was
formed by Google. The web pages were not as flawless prior to Google, and
Google put it all in order in the hotel room. The World Wide Web had so much
material all over it. This innovation helps to find out right location of the hotel and
take reach on right time. (Yfantidou and et.al, 2019).
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Significance of innovation in business efficiency
In the hospitality industry, an organization applies various technologies and
applies innovation in order to conduct the effective business performance. These are
mentioned various importance of innovation in the context of IHG hotel that helps to
improve performance such as:
Internal Importance:
There are mentioning some internal importance of innovation that helps to any
business to get growth at internal manner (Boruah, and Das, 2017).
Improve profitability: Through service innovation as a create-in side-free innovations
and electronic forms of food, the company seeks to enhance its efficiency at the
management level, resulting in even more revenue production for the company in the
current and also in the lengthy period.
Improve return on investment: The Company spends enormous sums of money in the
IHG in producing new services and food goods that contributes to a successful profit in
the long term as the consumer continues utilizing their product and sticks with the
information for a limited period of duration.
Improve cash flow: By delivering the latest service in terms of technology, IHG
managers are capable of producing efficient cash flow in their company , helping to
satisfy the lot of consumers at the managerial level , creating more income for the
company and improving the cash flow for the company.
Improve quality- Innovation also aims to improve the perceived prices of the product a
company sells. It therefore leads to a higher number of businesses being drawn by the
organization.
External Importance:
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Competition: Since in the hospitality industry there is tremendous competition,
creativity in their goods and services allows them achieve a sustainable competitive
advantage and concentrate on reaping the benefits of the market. In comparison to the
IHG hotel, the world would be where some company often provides the consumer with
different services in order to compete with its competitors. Companies need to keep up
with innovative foodservice goods so that consumers can bring the hotel with them
during the longer term.
Lower costs: Innovation is not expensive in the hospitality business as they have to
include the latest types of ingredients that require less expenditure in the system so that
the company can gain the gross profit by selling the food items. The lodging service
could also be offered at low rates that allow getting more IHG customers.
New entrant: Innovation in the hospitality industry, by supplying its consumers with new
technologies to improve their travel experience, provides a path to join this industry.
With both the new food, the consumer is drawn to the company and that leads to higher
company performance.
Market drivers: The Company aims to figure out the consumer's appetite for what sorts
of product they are searching for on the marketplace so that IHG can give lots such
better quality of the product and service depending on several factors such as
economic, social and statistics.
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Factors driving innovation in hospitality industry
There are mentioned different types of factors driving innovation in hospitality
industry such as:
Process innovation: For a long time, the bulk of hotel operations centred
through conventional P&L systems. New procedures software framework combined
customer engagement, ecommerce, data analytics and business innovation, and
automation for overall sales. Process improvement is the introduction of a modern
system of processing or execution or substantially enhanced in hotel. It requires major
mechanical, machinery, and/or device adjustments (Kofler and et. al, 2018). For
example, Marriot international a big hotel where conduct different types of process and
require providing deliver of products to every cents who are visiting in hotel. Method
improvement is a fresh or substantially changed way to do stuff in a market that usually
improves rates of productivity and reduces costs. Innovation in the system may exist in
the way of new methods or procedures, modern equipment, or applications.
Management innovation: Management is a concept that is often utilized in
organizations. It is responsible for overseeing a mission and organizing efforts to
accomplish a given objective and objectives. As a consequence, strategic planning is
the organized implementation of corporate developments which involves preparation,
coordination, supervision, and monitoring functions. Management innovations play a
significant part in lifestyle products. Not only in the viewpoint of the result but also the
growth, execution, and analysis of the success of distinguishing interventions that
enhance productivity (Laužikas, Miliūtė, and Kičiatovas, 2016). For example IHG hotel
can apply the innovation in management and apply all modern techniques to operate all
the activities properly and satisfied to all customers. It is important for the marketing
strategy to be capable of responding to consumer trends and emerging technology
while keeping a firm emphasis on the consumers (Laužikas, Miliūtė, and Kičiatovas,
2016).
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Marketing innovation: Some of the important points to sustainability in the
creation of digital technologies are the delivery of exclusive, competitive offerings with
an essential product offering. The complexity of programs and the speed of transition
have changed rapidly in recent years, and it is no doubt enough just to learn the
conventional facets of service provision. Marketing innovations are directed at stronger
meeting consumer needs, developing new markets, or renewing the industry placement
of a specific product, with both the intention of boosting the company's sales. Marketing
innovation as a disciplinary comprises marketing operational processes of technology
development. It covers consumer requirements analysis, design and application
development for consumers, and the promotion of innovative goods, for instance. These
are all crucial roles of management research, and promotion for technology plays an
increasingly important role in obtaining and enhancing innovation performance(Horng,
Hsu and Tsai, 2019).
Artificial intelligence: With the cornering of the hospitality industry, the role of artificial
intelligence has a significant effect on innovation as it allows to communicate with
customers and employees and to provide internal control productivity. The organisation
uses "construct in hands free" that serves the consumer's customized wants and allow
the business grow its market. It can be used to provide customer support in person, for
example. This is because consumers now days trust service and also personalized
goods.
Business model innovation: Here, the company focuses on the latest corporate needs
and generates value for the service that contributes to a stronger business strategy in
which the company can win the business with the creative framework.
Service innovation: Under this push, the company provides customers with new
feature with the additional price of the items and service provided to the consumer so
that their needs and desires can be met inside the defined time span. Consumers enjoy
the thought they have at a hotel and, if it is personalized, it is deemed even more
significant.
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Different innovative ideas and approaches that implement in
the hospitality industry
There are mentioned some innovative ideas and approaches which are applied
in the hospitality industry such as:
To save cash and attain a constant way of living than they would experience under their
own, people have lived with outsiders. They call it "co-living". This tied to specific brand
includes leasing personal bedrooms in bedroom-like buildings whereby they exchange
living rooms, bedrooms, and even toilets. Co-living is a housing brand which entails
leasing personal rooms in basementlike structures that connect sleeping areas,
appliances, and sometimes even baths. To stay, function, and play together, is a new
way of cooperative living for like-minded individuals. Co-living is a new version of
sustainable living, where tenants get a private bathroom in a spacious house with
collective public areas. In large cities, co-living is common as a form of cheap housing
for moving students, staff, virtual nomadic tribes or persons.The idea of co-living
acquires universal adoption throughout counties and has taken several innovative ideas
to the forefront in the private housing sector (Liu and Cheng, 2018). Although big hotel
chains such as Marriot, Four Seasons, and Hilton are at Times kept insisting that their
hospitality customers vary widely primarily in demographics Many of AirBnb's users, and
the profit was not impacted, one could presume that the maturity of online disturbance
was the tourism sector. The growth of AirBnb has had a detrimental effect (Liu and
Cheng, 2018).
Benefits:As the expression goes, that infers strength in numbers. In addition to being
safeguarded by the generally highly secure specification that most advancements
provide, leaseholders will likely feel more secure along with better
acquaintances/neighbors and friends. Many cohabiting households have arrangements
that take care of certain payments, turning costs into realistic monthly averages that
render it far simpler to carry out spending.
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Customer relationship management: Managing Consumer Relationships
(CRM) is a technique used to handle interaction from consumers and prospective
buyers. This is the handling of communications, a technique that enables companies to
control revenue, efficiency, etc. Streamlining procedures, developing client connections,
increasing revenue, enhancing satisfied customer and productivity improves. The CRM
system is often used to maximize organizational company objectives by obtaining a
thorough knowledge of the market of the institution and behaving on its expertise to
strengthen collaboration within the company. Modern CRM structures developed as a
phase of evolution arising from customer relations programs at the business. These are
systems can improve customer satisfaction by delivering client assistance (Kaminakis
et.al, 2019).
 Supply chain management
 Marketing and campaign management
 Contact or customer prospecting
 Sales force automation
CRM program tracks consumer contact details such as name, mobile, social media
account on the platform, and more. It may also essentially take in other content, such as
the latest affairs more about the operation of the organization, and can hold data such
as personal interests of a customer on correspondence. CRM program organizes
records to give a comprehensive consumer database, and product organizations can
get a clearer view of the interaction between client and business over time. CRM
system enhances customer service and customer relationships by constructing a 360 °
customer experience, trying to capture their conversations and emerging the necessary
data to provide great customer dialogues (Mariani, et. al, 2018).
Benefits: CRM helps support customers by offering unique knowledge that is specific
and important. It improves the capacity and willingness to consider the desires and
expectations of a client by posing questions and responding to their replies, as well as
watching their behavior.
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CONCLUSION
As per the above report, it has been concluded that hospitality industry is broad
industry that plays essential role. Maintaining a business in this industry require
applying innovation that helps to collect all the information in a certain period of time.
These are defining various types of innovation that select by the company according to
the structure. These innovations are beneficial for the business and help to increase
performance and get effective results. There are defining various concepts and
approaches such as Airbnb and customer relationship management.
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