Hospitality Innovation and Concepts: Hilton Case Study Report

This report provides a comprehensive analysis of innovation within the hospitality industry, with a particular focus on the international hospitality organization, Hilton. It begins by defining the concept of innovation and exploring its various sources, referencing Peter Drucker's framework. The report then delves into the importance of innovation for business performance, outlining its impact on problem-solving, operational changes, and marketing strategies. The report analyzes factors driving innovation in the hospitality industry, including sustainability, customer experience, and competitive advantage, while also considering their advantages and disadvantages. Furthermore, it examines different innovative concepts and approaches implemented in the industry. Finally, the report proposes and evaluates a new innovative concept for the hospitality sector, assessing its market potential and feasibility, and concludes by summarizing the key findings and implications for the future of innovation in the hospitality industry.

Hospitality innovation and
concepts

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P 1 Innovation concept and different sources of innovation.......................................................3
P 2 Importance of innovation to business performance...............................................................4
M 1 Evaluation of contribution of innovation’ to business performance and benefits that can
gained from it...............................................................................................................................5
LO2..................................................................................................................................................5
P3 Analysis of the factors driving innovation in hospitality industry.........................................5
M2 Analysis of advantage and disadvantage of factors driving innovation in hospitality
industry........................................................................................................................................7
LO 3.................................................................................................................................................7
P 4 Different innovative concepts and approaches that have been implemented in the
hospitality industry......................................................................................................................7
M 3 Evaluation of a range of innovative concepts and approaches within the hospitality and
analysing the extent to which they have added value..................................................................8
LO4..................................................................................................................................................9
P5 Innovative concept for the hospitality industry that has market potential and feasibility......9
P6 Pitch an innovative concept..................................................................................................10
M4 evaluation of market potential of innovation in terms of customer alignment and financial
return..........................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Innovation can be simply defined as a process or an idea of innovating something new.
Innovation has brought various kinds of changes in hospitality industry (Kahn, 2018). In fact, in
hospitality industry adoption of innovative concepts and approaches have become a necessity as
it has increased overall expectations of their customers in terms of provision of products and
services. This assignment will lay emphasis upon concept of innovation in hospitality industry
and provide details of Innovation concept and different sources of innovation, analysis of the
factors driving innovation in hospitality industry, innovative concepts and approaches that have
been implemented in the hospitality industry, and pitching of an innovative concept.
Organizations focused upon in this assignment is Hilton. It is an international hospitality
organization that has their hotels and resorts in approximately 6250 locations.
LO 1
P 1 Innovation concept and different sources of innovation
Innovation concept can be defined as a process introducing or implementing new ideas or
methods. It helps in finding different ways of doing a certain task or inventing new products or
services with new or different features. Innovation has become one of the most important things
required to be focused upon by companies in order to sustain within the market in which they
operate. It can also help a firm in gaining competitive advantage and achieving success. There
are various sources of innovation that can help an organization in achieving success. Perter
Drucker’s has explained seven sources of innovation, that are:
 Unexpected: One of the most common sources of innovation is an unexpected success or
failure (Arfi, Hikkerova and Sahut, 2018).
 Incongruity: Many times, firms develop their products and services without actually thinking
about incongruity (Tonț and Tonţ, 2016). Without doing market research organizations
cannot identity what their customers actually want. Development of products without market
research can lead a company towards downfall or failure. But this downfall can be a great

source of innovation as it can help the organization in knowing needs and requirement of
their customers in a much better manner.
 Market Structure: Sudden change in market structure can also bring various kinds of
opportunities with then that can help in innovating something new.
 Process need: Most of the innovations or invention is done because of necessity (Turriago-
Hoyos, Thoene and Arjoon, 2016). Necessity of bringing change within internal or external
process of company can lead to development of innovative solution that can not only helps
company in bringing necessary changes within required process but can also help in
innovating something new.
 Demographics: if demographics changes then it can result in change demand of product and
services because of which new opportunities can emerge for company. Like in hospitality
industry, requirement of 24*7 customer service gave rise to development of application
where online website or application that can be used by customers for booking required
services.
 Changing perception: It is one of the most common sources of innovation as change in
perception can become a source of innovation. For example: today customers prefer more
environment friendly hotels. This gave rise to increasing usage of products that uses
renewable energy like solar heaters.
 New knowledge: it is one of the best sources that can lead an organization towards success.
New knowledge areas such as artificial intelligence, bio technology etc. are great source of
innovation.
P 2 Importance of innovation to business performance
Innovation is one of the most important factors that can affect overall business
performance in both positive and negative manner. It can not only help in increasing success
chances of organization, but can also help in enhancing overall productivity and performance of
a firm. Focusing upon innovation can also help a firm in expanding their overall business in new
market segment as well. Some of the main reasons or factors that can help in explaining
innovation importance for business performance are as follows: Innovation can help in

identifying innovative or creative ways that can be used for resolving business problems in an
appropriate manner (Jajja and et. al., 2017). For example Hilton provide virtual reality based
training their employees so that they can understand complex business operations easily.
Innovative solutions help in thinking of creative ideas that can help in resolving any kind of
business problem and enhancing overall performance of organization (Hilton uses VR to boost
corporate employees' empathy for housekeeping staff, 2020). Innovation can help in bringing
positive changes within overall operations of an organization due to which overall productivity
and performance of company can increase. Innovation can help in development of new
technology that can directly boost overall productivity like automation in machinery has not only
helped in reducing requirement of man force but has also enhanced productivity and accuracy.
Innovative ideas can also help a business in marketing and promotion of its products and
services. As new ideas can help in attracting a greater number of customers, add value to
products and services, increase brand value and can further help the firm in standing out from
crowd by gaining competitive advantage. When an organization think of innovative process or
development of innovative products and services it can help them in connecting with their
customers, develop effective marketing strategy which can further help them in gaining
advantage over their competitors.
Innovation plays a vital role in enhancing overall performance of business. This can be
explained with the help of balanced scorecard. It further helps in enhancing overall productivity
and sales of business. For example innovative product of hands free hand cleaner and sanitizers
developed by organizations has increased their overall sales of this innovative product.
Innovative technology that helps hotels to recycle their waste products dans also helps then
business in enhancing their overall productivity. For example Hilton has created a recycling
policy that helps them to recycle most of the waste produced by them and reduce wastage. Hilton
recycle soap, lotion and shampoo bottles that can be used for hygiene purpose in future.
Balanced scorecard helps in measuring return on product development expenses. It is a
comprehensive KPI that helps in measuring performance of innovative products and services.
For example below graph can easily help in comparing return on product development expenses
of new innovative product developed.

But there are various kinds of challeges that are created due to innovation in business
performace. First is innovative technology use like AI and big data has created privacty issues
(Dzhandzhugazova and et. al., 2016). It has becomme difficult for organizations to protect their
data and information in an approprite manner. For this this many organizations have created
privacy polikcies in order to protect their data or information.
M 1 Evaluation of contribution of innovation’ to business performance and benefits that can
gained from it
Innovation has helped in bringing various kinds of changes within the way in which
business operates and has also helped in enhancing overall performance of firms by providing
different kinds of benefits from it. Innovation has helped in making business operations much
simpler and advance (Cismaru and Iunius, 2020). One of the main benefits that innovation has
provided is bring changes within business processes as per the changing market trend and neds
and requirement of customers. It has not only helped firms in enhancing their overall
performance but it has also brought changes within their current offering as per the changing
neds and requirements of customers.

LO2
P3 Analysis of the factors driving innovation in hospitality industry
Factors driving innovation are the factors that encourage firms and organisation to
innovate in order to sustain their performance and for effective attainment of the organisational
objectives. There are several factors that drive innovation in Hilton and mainly these factors
involve strategic directions of the company or factors that exist in internal and external
environment of the organisation. Concerned with strategic direction for Hilton this involves
driving loyal, profitable guest to property, enhancing guest experience. Other than this, target
market and competitors are also important element to drive innovation in Hilton (Alegre and
Berbegal-Mirabent, 2016). Concerned with Hilton target more than one customer segment, its
target market involves middle and senior level professionals with high income or those
belonging to upper class and pursues luxury lifestyle. Another target segment involves ambitious
individuals who like to express perceived high status and achievement by staying in 5 star hotels.
Concerned with competitors of the Hilton its main competitors are Marriott, Hyatt, IHG,
Peninsula, Loews Hotels and Holiday Inn. On the basis of products that are offered by Hilton
Hotel that provides luxury hospitality services. These are certain factors that drive innovation in
Hilton Hotel. Other than this, factors driving innovation in hospitality industry involves-
Sustainability
This is one of the most important factors that drive innovation in hospitality industry.
Sustainability refers to long term benefits that organisation can have and innovation provides
benefit of sustainability to organisation. Other than this, in relation with sustainability along with
organisational sustainability environment sustainability is also one of the reasons that is driving
innovation hospitality organisations are looking for and innovating techniques through which
they can reduce their environmental impact.
Hospitality experience
This is another important factor driving innovation in hospitality industry. This means
that Hilton Hotel is working towards providing its guest and customers best hospitality

experience and with help of innovation hospitality industry can improve customer’s experience
in their hotel. Innovation also contributes in realising and exceeding customers’ experience.
Competitive advantage
This is another important factor that drives innovation in hospitality industry
(Kallmuenzer, 2018). This is because hospitality industry is getting more competitive and firms
are competing over their hospitality experience and in such situation it is important that Hilton
Hotel keep innovating its services and practices in order to get competitive advantage and stay
strong in competition.
M2 Analysis of advantage and disadvantage of factors driving innovation in hospitality industry
Every factor that drive innovation has few positive elements that provide advantage
associated with innovation. In above discussed factors that drive innovation involve
sustainability, experience and competitive advantage of the organisation. Concerned with
sustainability advantage are long term benefits and position that Hilton Hotel will get and also
sustainable driven innovation can be expensive initially but long terms financial impact of these
practices and services are positive for Hilton Hotel. However, success of such innovation mainly
depends on their uniqueness and their inimitability. Concerned with innovation driven on the
basis of hospitality experience, in relation with this it can contribute in increasing customers and
their loyalty for Hilton Hotel but as hospitality industry is getting more conscious about customer
experience, such innovation cannot provide long term success (Julião and et.al., 2018).
Innovation driven by competitive advantage allows company to stay strong in competition and
also get competitive advantage in terms of increasing customers but this advantage is only
limited till innovations are not imitated by competitors.
LO 3
P 4 Different innovative concepts and approaches that have been implemented in the hospitality
industry
There are various kinds of innovative concepts that has helped organization in providing unique
and different products and services to customers. Some of the most unique and innovative
concepts and approaches that have been applied in hospitality industry are as follows:

 Virtual reality training programs is one of the most innovative concepts that have been
implemented in this industry (Dzhandzhugazova and et. al., 2016). Nowadays many hotels
are focusing upon using VR headsets for different purposes like providing a virtual tour to
customers or provide training to employees though VR headsets. For example, Hilton is one
of those hotels that has adopted this technology. They provide virtual training to their
employees though VR headsets. So that they can understand physicality and complexity of
hotel operations in a much better and appropriate manner. Marriott has focused upon
adapting this virtual reality concept. They provide their customers with a virtual trip of hotel
though room service with the help of VR headsets.
 Eco-friendly equipment’s usage is another innovation that has been implemented in various
organizations. In order to attract a greater number of customers who are concerned about
environmental issues. Most of the hotels today have focused upon adopting environment
friendly equipment’s or products like solar heaters, using wind power turbines for power
generation etc. Hilton has focused upon implementing wind power turbines within their
hotels and these wind turbines are sufficient enough to light whole building. It not only helps
in reducing electricity consumption but also helps in attracting a greater number of customers
(Dzhandzhugazova and et. al., 2016).
 Many hotels are also focusing upon artificial intelligence concept by adopting chat bot
concept (Dzhandzhugazova and et. al., 2016). In order to provide 24*7 service to customers,
make information available to customers, many hotels have adopted concept of chatbots. So
that any kind of service required by guest like booing spa, current offers in restaurants or bar
of hotel can directly be known by customers with the help of chatbots. For example: Hilton
has introduced AI customer service chatbots that consist of an animated character that
interacts with customers. With the help of this concept, customers can use this service and
enhance their staying experience. In this current pandemic, this service has helped them in
boosting their sales as in this situation, customers rely on online services more as compared
to traditional services and availability of these AI chatbots has helped customers to safely
stay at hotels without any issue.

M 3 Evaluation of a range of innovative concepts and approaches within the hospitality and
analysing the extent to which they have added value
Innovative concepts and approaches that has added value in hospitality industry are:
Product and service innovation: introduction of technologies like facial recognition, chatbots or
voice- controlled rooms has enhanced overall experience of customers. And has added value in
customer service and marketing department of hospitality industry organizations.
Process innovation: Adoption of advance technology has helped hospitality industry
organizations in bring changes within their internal and external processes (Dzhandzhugazova
and et. al., 2016). Like adoption of VR headsets has brough changes and innovation in training
processes of hotels. VR headsets have not only helped in enhancing training programs and has
further helped in bringing improvement within overall performance of employees as they can
understand complexity in operations in a much better manner (Dzhandzhugazova and et. al.,
2016).
LO4
P5 Innovative concept for the hospitality industry that has market potential and feasibility
Technology is one of the most important factors driving innovation and also playing key
role in innovation. Hospitality industry is also using technology for various purposes including
financial soundness, sustainability and most importantly increasing and enhancing customer
satisfaction and realising and exceeding customer expectations. Concerned with Hilton Hotel it
targets high-class customers and professionals and charges premium price from its services. This
is why it is important that it is able to fulfil expectations of its customers and ensure they get best
possible experience at Hilton Hotel (Wei, 2019). Hence innovation being introduced here is
employing augmented reality to assist customers in decision making. This means that with help
of augmented reality Hilton Hotel will be able to communicate the experience that customers
will get while staying at the hotel. Using augmented reality Hilton Hotel needs to give a tour of
the hotels and different types of rooms.
Using augmented reality in its organisation, Hilton can help its guest and customers to
make better decisions. There are different applications where consumers can get knowledge of

available hotels, and rooms and this also enable customers to compare price of different hotels
and different rooms in hotel. By using augmented reality Hilton Hotel will be able to
communicate and share what experience customers will have staying in certain room of the hotel
and what are the privileges of staying is some hotel. Using augmented reality Hilton can also
enhance their customers’ experience when they are staying at the hotel. This involves different
elements of the customers such as customers can see what exact view from the window is and
what the nearest attraction they can go for. This means that creating augmented reality and
employing at customer touchpoints so that they make better decision about their hotel stay.
Ensuring customers get what they have visited through augmented reality can add value in
customer satisfaction related to the hotel.
P6 Pitch an innovative concept
Innovative concept- Creating and employing augmented reality for Hilton Hotel in order to
allowing customers to understand the experience that they will have while staying in Hilton
Hotel.
Augmented reality is being utilised by several types of businesses whether they are in automotive
industry or are in home appliances industry. Augmented reality can be said as interactive
experience of real-world environment, where objects of real worlds are created by computers.
Aim of the innovation- Assisting customers in decision making while selecting hotel and room
in Hilton Hotel based on the experience that they will have while staying in Hilton Hotel
Project management for development of the product
Initiating - This involve what needs to be showcased through using augmented reality.
Planning - In this Hilton Hotel will involve a tour of hotel and different places in hotel. Other
than this, it will also involve tour and experience of different types of rooms, their specific
features and what kind of view they provide (Kerzner, 2019). This involves giving them
experience from starting of the room to ending of the room.
Planning also involve determination of touchpoints where customers will be able to utilise the
facility and experience hotel stay virtually. In order to do this Hilton Hotel can implement this at
their mobile application and on their website.

Executing - execution of the planning requires developing technology and creating augmented
reality based experience. This involves developing reality with help of which customers can get
experience about their potential experience that they will have while staying in Hilton Hotel.
Development of augmented reality further requires to implementing augmented reality.
Implementing augmented reality on mobile application and website will give knowledge to
customers about their stay in Hilton Hotel.
Monitoring and controlling – This involve monitoring execution of the plan for creation of
augmented reality. This involves creating and evaluating success of the plan on the basis of key
performance indicators and major milestones.
Feasibility- This is concerned with confirming that strategy and plan that has been developed is
possible or make sense (Kerzner, 2019). There are certain factors on the basis of which
feasibility of product is identified. These factors are-
Financial feasibility- Yes (cost of the project is high but an organisation like Hilton can invest
this cost)
Schedule feasibility- Yes
Technical feasibility- Yes
Market feasibility- Yes (this is aimed at increasing customer satisfaction and augmented reality is
being adopted by several organisations and adoption and creation of augmented reality by Hilton
will definitely be successful in market)
Regulations and standards feasibility- Yes
Organisational feasibility – Yes
Operations feasibility- Yes
This means that plan developed is feasible on all these criteria or this can be said that
identified innovation is completely feasible (Shabani, Munir and Hassan, 2018).
Timelines

From its inception to launch, this project will require a time of around 3 months.
Issues and challenges for adoption of Innovation
Training of Staff- This is one of the issues that is associated with adoption of innovation as
innovation in organisation require to train employees about how they can work in changed
processes.
Lack of company-wide adoption- This is another issue and challenge in which adoption of
company-wide adoption is a big challenge for company regarding innovation.
Having adequate technological intelligence- This is also a challenge in which company
requires to adequate intelligence in technology because innovation is based on technology.
Getting technology experts suitable for organisational purposes is also a challenge for company.
Ethics- It is very important that innovation being adopted is ethical and concerned with adoption
of augmented reality, this is a completely ethical process. Ethics involve determination of
decisions on the basis of right and wrong conduct and this innovation in Hilton Hotel is
completely ethical on this basis.
M4 evaluation of market potential of innovation in terms of customer alignment and financial
return
Customer alignment
This is concerned with understanding requirements of customers. On this basis it can be
said that this project will enhance value in decision-making of the customers. With help of big
data customers now can make decision considering several factors such as price, experience and
value of the service and with help of augmented reality of Hilton Hotel customers will be able to
experience virtually what experience they will have in reality. This will enable customers to
make better decisions regarding hotel as well as type of room they should stay in.
Financial return
This project will provide strong financial return because customers will be able to get to
know about the experience that they will have at Hilton Hotel (Loureiro, Guerreiro and Ali,

2020). This will increase customers and more number of customers will generate more financial
return for Hilton.
CONCLUSION
On the basis of above discussion, it can be concluded that innovation is highly important
for sustainable growth and success of the organisation. This becomes more important when
organisations are operating in competitive environment. Hilton is an hospitality organisation that
is operating in a highly competitive organisation and this is why it is important that Hilton has a
strong emphasis on innovation. There are several factors that drive innovation for Hilton and on
the basis this innovation identified was creation of augmented reality for Hilton hotel and this is
a plan that is completely feasible for Hilton hotel to adopt and implement.

REFERENCES
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Online
Hilton uses VR to boost corporate employees' empathy for housekeeping staff. 2020. [online].
Available Through: <https://www.zdnet.com/article/hilton-uses-vr-to-boost-corporate-
employees-empathy-for-housekeeping-staff/>