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Innovation in the hotel industry

Paper Type: Free Essay Subject: Business
Wordcount: 5414 words Published: 1st Jan 2015

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1 Chapter Two-Literature Review

1.1 Introduction

From the literature review, one will get detailed and justified analysis, according to Saunders et al (2007, p. 595). It gives the literature's merits and faults commentary within a defined arena that is mainly demonstrates familiarity about the known facts of research topic. Literature review is substantive findings from secondary sources, and theoretically and methodologically contributed towards research objectives. It is basically well structurally consistent flow of logical ideas to preface the research paper. Innovation is basically a positive change. Organization analyst has defined it as many ways as stated below:

According to Cedicci and Trehan (2007), it stated that:“Innovation is an unremitting course of action and the best way to comprehend it to do raise questions concerning what is happening in the industry and come up with pioneering products and services”.

According to Jones (2008), it stated that:

“Innovation is the most important component of a firms' strategy because it provides direction for the evolution of a firm.”

According Baregheh et al. (2009), it stated innovation as:

"Innovation is the multi-stage process whereby organizations transform ideas into improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace."

Eco-friendly initiatives have now become a necessity because people are now getting awareness about the save planet. Hence the hotel industry is doing its best to go greener. Innovation in any field is comes with combined efforts  of research and development team and other stake holders in the firm. Innovative practices have become part of every industry to meet the customers demand and to sustain in the cut throat competition. There is an imperative need for the hotel to offer products and services on the basis of regulatory requirements. In the hotel industry, luxury hotels cannot neglect with the needs and requirements of the valuable and potential customers. Some guests don't compromise with the luxury for the sake of environmentally friendly (Wood and Brotherton, 2008). To meet the requirements of the guests is the first priority of the hotelier along with the mission of recycling of wastage and to become eco friendly. So hotelier needs to introduce radical innovative approach to initiate environmentally friendly steps without compromising with the service quality and luxury facility.

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1.2 Definition and the Innovation in the Hotel Industry

Innovation means introducing a new thing to the world. Innovation is generally taking place to offer improved product and services to the customer as well as organizational business gaining. As per Jones (2008),“Innovation is the new ways of doing the regular things, or unique or better combinations of the production elements.” To attract customers and grow their business, hoteliers are doing research and development activities to come up with innovative product and services. People prefer herbal product in comparison to the chemical product. Example, in body care product or in food and beverage product, most people buy herbal and eco-friendly materials only. In the recent years, the social activist, environmental agencies and group those are conscious about the green earth taking initiatives and pressuring all industry to reduce their process that is affecting to the environment.

In the hotel industry, there are major five elements where innovation is take place. It can be product and service innovation, process innovation, logistics innovation, market innovation or institutional innovation.

  1. Product and service innovations: For sustainable growth and to achieve remarkable bottom line, it is needed strategic development in the field of product and service innovation.
  2. Process Innovations: New ways of services are creating by the hotelier to offer to the customers. In the unique service delivery process, customers are also taken into consideration for new role. Hotels upgrading their flow of work process with adopting technology, like automated services for front and back office. Because of the process innovation there is improvement in the efficiency in the delivery of services to the customer.
  3. Process Innovations in Information Handling (Logistics Innovation): The flows of information in the organization are now getting faster.  Due to busy schedule of guest, hotelier is providing complete information in the internet so that it will be easier for them to book a suite from a single window. Now hoteliers are managing supply chain relationship with travelling agents, courier services, and tourism so that it will be convenient for guest.
  4. Market Innovations:  Promotional activities play an important role for any firm.  To connect with the customers, now hoteliers are adopting new modes of communication. Making strategic partnership with the tourism and travel agents, together promoting co-brand values.
  5. Institutional innovations: There is an emergence of innovative ways of providing financing support to the firm's investments. Firms need budgets and capitals to introduce new products, promotional marketing, and collaboration with potential partners.

1.3 Influencing elements of innovation in Hotel industry

There are five influencing elements of innovation in the hotel 

1.3.1 Innovation supporting process

A meticulous strategic planning is required for radical innovation, for which enough budgets and capital is required. There should be well developed employees' evaluation and compensation plan to motivate them. Knowledge management and Training and development are also required to encourage every individual in the firm to contribute towards business strategy.

1.3.2 Firm (Hotel) Size

The size of the firms also matter a lot for innovation process. If a firm is big in size and operate globally then its approach will be different.

1.3.3 Supplier Driven

Hotels are supplied driven business and to achieve maximum profit it strives for standardized goods. Value to the hotel is produce by its reliable suppliers.

1.3.4 Market Factor and Competition

In the fierce competition, firms need to adopt well developed marketing strategy.  Building guest loyalty, providing greater customer satisfaction, connect with the customer emotions, earning the high value of guest experience, adopting latest trends in the hotel, are the major elements   that a hotelier should focus on for strategically development of market initiatives.

How a guest is treated by an hotelier is most important. Guest is always satisfied by the personal attention by the staffs of the hotel. But it is differ from person to person. For different age group, different kind of attention is required. Example, kids prefer electronics more than the personal attention and they insist their parents to go such place. For personalization, loyalty programs offer a great opportunity to invite more number of customers. Corporate programs are not only to treat the guests as individual but also to connect with their most important customers grabbing more opportunities.

A guest has always expected from hotel that “give me an experience “. While traveling to a new place, guests are seeking for more activities. Customers are expecting for surprise experiences that would be larger than their thoughts and feelings and connect with their senses.  In the customer loyalty program, hotelier should be more focused on how to connect with emotions rather than on rational, incentive based offers.  Most of the time, customers go for tourism and prefer hotel services. Basically activity based travel gives rich emotional experiences, which can be promoted by the hotelier to attract customers. Now a day there are various activity based travel trends are encouraging in the market. It can be cultural club, because on vacation now more people prefer to go theater, visiting historic sites or indulge in educational activities. The purchasing power of the customers is increasing with the growth of economy and hence they even don't mind to pay extra money to get quality things. Adventure tourism is also one of the activity based travel trends. The main focus of this activity based travel is to stay lean and green by going to famous parks, hiking, and participating in other adventure activities. Keeping this in mind, now hoteliers are offering easy vehicles in affordable price or in free to the guest to explore the places nearby. People go for heritage tourism also to celebrate any famous area, community or historical place.

The perceptions of the people about the price have changed and due to the up and down of economic graph they are more concern about the product and quality for which they are paying. So, people are comparing the value what they are getting and what they are paying. But the most important concern for hoteliers is to increase value with the same price which required innovation in product, process, logistics, and marketing communication and institutional.  There are mostly five factors which create value to a customer while staying at hotel as given below:

  1. Guest room design:  Hotelier can create innovation in the guest room design in terms of size of the room and comfort level.  Staffs of the hotel should pay attention towards cleanliness of the room other moving areas of the guests. Room of the guest should be decorated with the classic equipments. The lighting system, curtains and the arrangement of the entertainment should be according to the taste of the guest.
  2. Physical property: The interior and exterior architecture of the hotel also creates value to a hotel. 
  3. Interpersonal Service: The staffs of the hotel need to show service friendliness, extra attentiveness to potential customers. The behavior of professionalism and personal recognition from employees is appreciated by the guest all the times.  These qualities bring smile to the guest face and spread positive words about hotel.
  4. Functional Services: Everyone expect efficiency and service speed from employees of any hotel or in any firm.
  5. Food & Beverage related service: This is the most important factor which is frequently remembered by the guest to identify the hotel experience Food and beverage is the fun part and social side of customer stay. So it's very necessity to leverage in food and beverage of the hotel, in terms of its quality and its excitement, to create value for guest. Quality food should be served in a pleasant atmosphere.

1.4 The role of Employees in Innovation

There is a need for every organization to promote innovation and creativity within and amongst their employees. This required reconciliation of the imperative demands to increase efficiency, improve quality and raising productivity. This creative process is very complex and chaotic nature which involves employee generating new ideas and concepts, or new connections of existing ideas and concepts.

According to Teresa Amabile (1998):

“Creativity that exists within every individual is a function of three components: expertise, creative thinking and motivation.”

Expertise comes from the experience. Over the years employee engages in a function and   acquired depth knowledge in that field. This knowledge comes through not only from formal education but also through practical experience in the job activities and from interaction with other professionals. Now a day in every firm they encourage the knowledge sharing program (KSP) to share experience and knowledge of an employee to all others. Doing this type of activities, it nourishes the scrutiny of difficulties and problems by creating an intellectual space. Employees get more dynamic and aware to find solutions of any problems.

Creative thinking is comes from practices. It is a skilled and determined thought process which identifies the flexibility and imaginative capability of an individual to tackle a problem. It gives immense space to a person to think out of the box. Now firms are encouraging the employees to bring new aspects of a reality, to blend the existing ideas in different manner, to turn difficulties upside down, allowing unexpected ways and ideas from heterogeneous fields. Personality of an individual and his/her style of thinking and working that highly influenced the creative thinking of a person.

After getting inputs from above two factors, makes the person to motivate to do things. If there is lack of motivation then there is no use of expertise and creative thinking. A motivated person can do a job creatively and with greater efficacy.

In conjunction with these three factors, now hotel industry is promoting creativity and ideas. Time to time, firms are conducting training programs in brainstorming, problem solving, and lateral thinking skills for employees, which can enhance the abilities of employees and hence to contribute in productivity.

  • Brainstorming
  • Problem Solving
  • Lateral Thinking

The capacity of innovation and creativity  is considered on the firm's commitment to learning. If the employees will get advance knowledge in their fields, then definitely it going to bring advantage to the business opportunities. Employees will get more alert and responsible to avoid any odd situations. Training programs helps an employee to renewing and revitalizing their knowledge and open a door to the outside world. A firm also learns by giving learning opportunities to its every individual and gets benefit from its employees. Relevant knowledge is shared among colleagues in a group, which leads to organizational development. A firm is benefitted from employees even by absorbing the better practices, procedures, advance technology, staff and competencies of other firms. The most importance is that employee should have learning attitude which can business the business environment. Giving money as a reward does not work to motivate the employees. 

Rewards System should include extrinsic and intrinsic accomplishments. Other than choosing reward tool as offing extra perk, there are many more ways to drive the employees. Now a day, human resource management is given equally importance towards contribution in business growth. They are coming with new proposals to motivate the employee. Feeling of accomplishment is one of the reward schemes where employees are encourage to contribute their thoughts, creative ideas, and bringing unique solution to problems to daily work activities. The behavior of giving recognition and respect to the talents of peers and superiors, frequent meeting between leaders and employees, are considered as healthy work culture in a firm. Those who are creative personnel, they generally respond to the intrinsic rewards and accordingly motivated   to bring something new to the work place.

1.5 Hospitality trends (Eco-Friendly Initiatives)

The hotel industry in global, are mainly struggling to undertake the problem of low rate of occupancy. Like any other industry, hoteliers are also giving much more importance to the creativity and innovativeness to attract customers and to earn loyalty. Inevitably, in the hospital sector, the luxury facility is given top most priority and that to in reasonable price. To provide luxury facility hoteliers have to work 24x7 to differentiate themselves with respect to uniqueness and level of satisfaction they are offering to the customer, also justifying the greater expenses. Hotel industry is segmented according to its services such as:

Boutique Hotels:

Boutique hotels are the traditional players in the hospitality sector. Right now, “Change the times” is the slogan for hospitality industry. Boutique hotel mainly offers late night disco clubs and techno grooves to replace the boring concerts.

Energy Spa:

“Energy medicine” industry is growing at the faster rate. This is considered as part of the hospitality sector.  To face the fierce competition, people are working hard for their existence in the corporate world. People are losing their health due to this hectic schedule. They prefer to go hotels for getting energy-spa for balancing body, mind and spirit. This is a stress reduction treatment, which are in great demand. Mini treatments like massage for five minutes are very popular these days. Hoteliers are offering spa facilities to the guests during their stay at hotel to transform their tired energy into dynamic and vibrant energy. This is not only popular for working people but also in the old age people who prefer these kinds of treatment.

No Pet Friendly Initiatives:

Dogs are not allowed in many hotels as it is not acceptable by some customers. Now pets are not allowed on the red carpet rolled out for the guests. Generally pet sleeps on the guest beds and moves in the other guest's area and it  creates problem to the other guests also. Because of the pet, hotel staff needs to put extra efforts to change all bed sheets, pillows cover, and to put them in laundry with proper care.

Resurgence of Traditional Wines

Some of the pleasing guest, who doesn't want to compromise with the quality or taste of the wines, serves in the hotel. They go to hotel to enjoy the drink so the hotelier takes special care of this type of guest.

1.6 Eco-Friendly Hospitality Initiatives

As already we have mentioned above that now every industry is taking initiatives to go green. In the hotel industry also now there is a trend to become environmentally friendly for good purpose and even this initiative help them in marketing. The operational processes of the hotel such as cooking, usage of power and water, effect the environment on regular basis. Hotel industry has also started advocating the ecological sustainability and extensive conservation of energy. Eco - friendly hotels in the initial stage perceived as located in a heavily nature-focused area, as it is constructed in jungles. But the eco hotels in urban locations also have proved that it is the mind set to go green and embraced the green philosophy to preserve the environment.

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The industry is encouraging to quite the carbon footprint and to get green label. Environmental training programs are now offering to the employees of the hotels to gear up towards nature preservation. Hotels prefer to build the property from the green resources-sustainable materials only. To find the suppliers for these raw material like local stone and tropical hardwood are a challenge for them. But eco- conscious hotels are taking all efforts to build concrete green philosophy. It's not only the business owner but also the governments actively supporting for the conversion of green philosophy. Government has announced certain accreditation and regulation on green practices and agencies are there to certify the green hotels. The best part about the eco hotel is that it actively promotes the conservation of natural resources and pollution minimization which is definitely gives positive impact on health and mind. The hotelier and the guest both get advantage from these practices. Guests learn to recycle at home, prefer to drive a more eco friendly car and save energy. Hoteliers always try to give demonstration to the guests about the good practices. There are few green best practices features as follows:

Eco-friendly Hotels harmonize with nature:

Environmentally-friendly hotels offers a harmonize environment to the customers. It is mostly located in a relaxed area with well managed eco friendly practices like recycling of rain waters. The commitment of the hotels to become eco-friendly and their respects towards the nature is proved by them in every small initiative.     

Truly 'green' hotels support the environment:

The truly green hotels offer best features supporting to the environments. Guests of the hotels are encouraged to experience the natural beauty of environment. In this way, guests get quality time to connect with the nature and sincerely appreciate the experience. The appreciation and understanding of environment help the guests to contribute towards   preservation of natural resources. Ambience of green hotels offers true comfort level and more than just a good night's sleep. Due to the surrounding with natural environment, the mind set of guests force to think about the environment and to take necessary action to work on this direction. (Article Source: http://EzineArticles.com)

Eco accommodation helps minimize consumption of materials

It's true that eco -friendly accommodation helps to minimize the consumption of materials. It is one of the most positive aspects of true green status, and probably one of the easiest ways to implement. Green hotels are truly committed to become environmentally friendly and make serious attempts to minimize in materials consumption in hotel. Its practices of rainwater harvesting to recycle the rain water, recycling of wastage, and the use of sustainable products prove the caring attitude of the hotels towards nature. 

Eco hotel should have a proactive environmental policy

Green hotels take proactive environmental policy which can be easily adoptable by guests and employees of the hotel in same manner. Genuine green hotel has environmental policy developed by them and encourage the employees and guests to follow it. According to policy hotel staffs get training to inject green thinking in every ways as possible.

An eco-friendly hotel won't sacrifice luxury and room comfort

Enlightened green hotel has no reasons to give up the comfort and luxury in the sake of eco accommodation.  In the luxury hotel, comfy beds provided for sleeping at the same time helping the nature through active sheet re-use programs, using rain water for toilet flushing in the luxury bathroom, re-use schemes of towels in the hotel cutting down the laundering.  Management of the hotel always choose healthy green furnishing and cleaning materials for the decoration of the guest room and the floors are also design to promote the natural conscience .The green practices are so simple to  
make in daily routine and some of these even don't required for certification also. For example, for using of non toxic cleaning solution such as laundry detergent and dishwashing liquids   and other stuffs used by hotel is not required anybody certification. Now new technologies are coming to replace electrical energy in some extent such as solar energy and wind energy in common. Although it needs well infrastructure to install but it helps a lot to save power. Hence hotel should source energy from this kind of technology to save energy.  Use of cotton is also an example of 100%      organic material can be adopted for green practice including bed- sheets, towels for bathing and hand wash purpose, bath robes, and mattresses.

Eco-friendly initiatives taken by hotels in London :( Sources from micro generation UK, 2011, available on http://www.microgenerationuk.com):

Hotel Cavendish

The Cavendish is a stylish central London hotel at Jermyn Street is known for its eco-pioneering. In London, Cavendish hotel is the leading eco-conscious hotel and is the winner of the most prestigious award called Green tourism for London gold award. In addition to this it has   accepted many more accolades for its initiatives. The Cavendish has a very environmentally friendly culture at their workplace which can be   seen in its every pore.

Example: Hotel Cavendish buys ethically sourced coffee and fair trade tea for customers. Throughout its use only eco-friendly chemicals and closely work with suppliers so that it can do reduce packaging and time in transportation. Its waste product is always going for recycling process. For its noble initiatives it has got recognitions through Gold Award in Sustainable Tourism, 3-Star Accreditation by the SRA (Sustainable Restaurant Association) and Icarus Environmental Award.

Hotel Park Plaza

This hotel has done a partnership with Carbon neutral company to do globally carbon reduction projects to minimize environmental impact.

The Strand Palace Hotel

Hotel Strand Palace has installed low energy lighting bulb throughout the hotel to save power. In chemical usage, hotel prefers to use biodegradable and eco-friendly chemical. Its generate electricity through combine operation of heating and power units which help them to reduce CO2 emissions. Hotel Strand Palace has engaged a dedicated Green team to deal with environmental issues.

The Royal Trafalgar London

To save water from leaking and other potential problem, Hotel Royal Trafalgar has implemented proactive water monitor. Also water saving devices is used in toilets and restrictors for bathroom tabs and showers. Hotel staffs regularly check the efficiency of the boiler and maintain a maximum water temperature. Movement sensor controlled and low energy lighting system has used in the hotel to save energy.  

Hotel Rafayel

Hotel Rafayel is considered as one of the eco-friendly luxury hotel in the world. It serves organic and fair trade food and beverage to the guests.  Without compromising with the luxury, it has taken eco- friendly initiates to save energy through installation of unique LED lighting systems with low energy bulbs, low energy consuming air conditioner systems. Installed technology for rainwater harvesting and use the rain water for plant irrigation.  The glass, paper and furnitures go for recycling process and there is a policy for no plastic.

Apex City of London Hotel

Hotel Apex City is incorporated its environmentally friendly features including offsetting carbon emissions, recycling of waste products, controlling the energy consumption of light, heating and air coolers, monitoring usage of fuel and water.

Base2Stay Hotel

Hotel Base2stay Kensington from London has significantly invested  in environmental credentials development and also encouraging their employees to follow this mission. It has a list of initiatives including recently introduction of a zero emissions vehicle. Hotel is providing electrical car for guests. The car is built with a state - of -the-art electric car technology with top speed of 60 mph. It is cheaper than renting a car and also saves from pay congestion, overnight parking or petrol charges of guests. The mission of the hotel is to provide eco- budget services to the guests. 

Hotel Zetter

Hotel is known for its eco-boutique. It's a very beautiful hotel with slightly funky feel. The management of the hotel has taken all pain to construct a well under the building which could resource the water required to meet the requirements of hotel.

Hotel Savoy

The Savoy hotel offers eco-ultra-deluxe services. The hotel has taken green initiatives like high-efficiency hotel heating and cooling systems and energy-intelligent controls. To get potential guests and skill manpower involves in events to identify and make partnerships with environmental charities. It has initiated an extensive recycling and donation programme for maximum utilization of resources and to minimize waste. Wasted food is now operated to renewal energy scheme. In this donation scheme it will support a variety of charities. Environmentally-responsible activities has extend to the kitchen also, where, the chef of the hotel supports local growers and use herbs grown in the hotel's herb garden.

Other greater ranges of environment friendly initiatives taken by hoteliers are such as follows:

  • To save water in toilet, hotelier is installing dual flush system.
  • The wastage product of paper, cardboard, obsolete IT equipments, glass, and plastic of hotel are going for recycling.
  • To become more eco-friendly, hoteliers are using local produce and organic materials.
  • Ambience of a hotel is the important one of the factors to attract guests so the hoteliers are very particular about the light arrangement for the day and night. Hence now they going for lighting arrangements that can save energy and comes with automatic dimmers as well as motion detectors.
  • Energy efficient lifts are installing in the hotels with replacing the old one.
  • Building management can control temperatures across the building. Installation of windows that are energy efficient and improves overall thermal performance.

1.7 Research Framework

1.8 Summary

In this chapter, it is explained that innovation is a positive change. Innovation is a process where in a firm; ideas are transformed into improved products and services, processes in order to sustain and differentiate themselves from competitors. Innovation can be done in the products, process, logistics, market and institutional. For sustainable growth, firms introduce changes in these five elements.  There are various factors which affect in the innovation such as supporting process, hotel size, market factors and competition, hotel specific characteristics and supplier driven. Hotel is a service oriented industry. Hotelier needs to create value to the customers in terms of guest room design, physical property, interpersonal services, functional services and food and beverage related services. Employees of the firm also contribute towards innovation.  Creativity is an internal characteristic of an individual which comprises of three components such as expertise, creative thinking and motivation.  Firms need to develop various training programs to enhance these skills of the individual. Brainstorming, problem solving and lateral thinking are encouraged through workshop in the organization. Hotels are tried to differentiate themselves through different trends like boutique hotel, energy spa, no pet friendly initiative, resurgence of traditional wines and eco friendly hospitality initiatives. Eco-friendly is now a buzz word for every industry including hotel industry. Some of the eco friendly practices features are eco friendly hotels harmonize with nature, truly green hotels support the environment, eco - accommodation helps minimize consumption of materials, proactive environmental policy, and eco - friendly hotel won't sacrifice  luxury and room comfort. Hotel Cavendish from London is a perfect example for the eco friendly-pioneering. There are more examples of eco friendly practices adopted by various hotels in London. The green practices such as recycling of paper and other material, reduction in carbon emission, harvesting of rain water, conservation of energy and other natural resources, are now in common for many hotels. Hoteliers are further taking radical innovative approach to go green with cost effective and achieving significant ROI. However, hotels those have implemented the eco-friendly systems, proved that without compromise in luxury and comfort it can do business with significant profit margin. The customers also sincerely participating in the movements of “go green “along with hoteliers.

2 Chapter Three-Methodology

2.1 Introduction

There are several research methods out of which one method is to be chosen to achieve the research objectives. So, in the first section, all type of research methods (Experiment, Survey, Action research, Case study, and Ethnography) is discussed. Chosen research design is discussed in the second section and the rational for choice is justified. In the next section where it is explain about sampling size, questionnaire and other details. Ethical and moral issues are explained in the last section.

In this research paper there is mainly two stages. In the initial stage (chapter two), the available lite


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