Leadership and Strategy in Hospitality and Tourism

INTRODUCTION

According to the World Travel and Tourism Council, the largest industry in the world is Tourism, Hospitality and Leisure, which accounts 9 percent of world gross domestic product (GDP). ( World Travel and Tourism Council, 2011) Hence, the Tourism / Hospitality industry has its strategic innovations to be considered as such.

There are many kinds of innovation. Classification may vary according to the object of innovation, for example innovation of socio-cultural systems, of ecosystems, of business models, of products, of services, of processes, of organizations, of institutional arrangements, etc., to the drivers of innovation (technology, markets, design, users, etc.), or to the intensity of innovation (Norman and Verganti, 2012)

Thus, in this paper we are going to study: “The current strategic innovations in tour-ism/Hospitality industry”. This topic seems interesting for the future performance of an industry and especially for increasing knowledge in strategic management area, further, innovation is considered a major source of competitive advantage and economic growth (Porter, 2003)

Besides, innovation is among the top three strategic priorities for senior managers, ac-cording to a Boston Consulting Group (BCG) survey of senior executives in leading compa-nies (F.Westfall, May/June 1992). For 23 percent of the senior managers studied, innovation was their most important priority (R.C.Camp, May/June 1992). Some argue that innovation is the most important component of a firm’s strategy, because it provides direction for the evolution of a firm (L.Dube, C.Enz, L.Renaghan, and J.Siguaw, 2000). This view is supported by research that shows innovative firms to be higher performers (Enz, Cathy. Siguaw, Judy, 2003).

Strategic innovations, tourism and hospitality industry are defined as the central words in this topic; and the concepts are based on types of innovations, styles, sources and success factors.

The central theoretical and empirical contributors to this topic are:

1. A review of tourism and hospitality Innovation Research, by Nagy Andrea, 2012

2. Green Innovation in Tourism Services, OECD Tourism Papers, 2012

3. Innovation in Special Hotels as a Key to Success by Petra Gyurácz-Németh, Nóra Friedrich and Alan Clarke, 2013.

The main purpose of this paper is to examine the current strategic innovations in tourism and hospitality industry. For that, some definitions of innovations will be presented followed by some findings within tourism and hospitality innovation; and finally the analysis of the findings.

REVIEW OF THE TOPIC

Researchers have been trying to understand the key concept of innovation in hospitality and tourism for many years: factors that influence innovation, innovation types, innovation cases, and measurement of innovations’ success (Petra Gyurácz-Németh & Nóra Friedrich & Alan Clarke, 2013), (Hjalager, Anne-Mette, 1997), (Hjalager, Anne-Mette, 2002), (Enz, Cathy. Siguaw, Judy, 2003), (Orfila-Sintes, Francina. et al., 2005), (Ottenbacher, 2008), (Lori J. Sipe and Mark Testa, 2009)

According to Enz A. Cathy: “Firms innovate in several ways, including business models, products, services, processes, and marketing channels, with either the goal of maintaining or capturing markets or the desire to reduce costs or prices through greater efficiencies”. (Enz, Cathy. et al, 2010)

In fact, Innovation is all about improvements and new developments. Because the whole world is always changing, innovation is not only an important matter for firms or organizations but it is an inherent part of our lives. (BOGERS, Mai 2009)

As cited previously, there are many kinds of innovation in different area but here in this paper, we are focused on innovation in Tourism/ Hospitality industry which defined as something original, new, and important, in whatever field, that breaks in to (or obtains a foothold in) a market or society (Frankelius, 2009)

Innovation in the hotel industry

The innovation is not so popular in the hotel industry because the conservative and capital intensive nature of the structure, which promises a return of more than 25 years, is

not conducive to innovation. (Gyurácz-Németh & Raffay & Kovács, 2010). Allegro and de Graff (Allegro, 2008) have found that in the hotel industry’s most innovative ideas come from those, who have an outsider’s perspective looking at the operation and they do not impede the existing paradigms (Gyurácz-Németh & Raffay & Kovács, 2010)

Innovation in the tourism industry

The tourism industry belongs to the service sector, so the theories of service innovation can be applied for this sector as well. Researchers can also help to dig deeper insight into tourism’s innovation (Petra Gyurácz-Németh & Nóra Friedrich & Alan Clarke, 2013)

One of the authors in their research concluded that innovation also appears in the tourism industry in various forms. Therefore, the method of classifying should be applied in case of dealing with different forms of innovation. (Gyurácz-Németh & Raffay & Kovács, 2010)

According to Tseng and his colleagues (Tseng, C. Y., Kuo, H. Y., & Chou,, 2008), the innovation capacity is determined by organizational and procedural conditions and this is the proviso of the innovation process. Three main categories can be identified to measure innovation activities: technological innovation, organizational innovation and human capital innovation.

Innovation advantages and disadvantages

Otterbacher presented in his research several advantages and disadvantages of innovation in the hospitality industry. (Ottenbacher, 2008)

Advantages:

 The major benefit of successful innovation is to be or become more competitive.

 Innovation helps to keep the portfolio of the service and product competitive and thereby achieve a long-term competitive advantage. The less quantifiable benefits of successful innovations include enhancement of a business’s reputation and increased loyalty of existing customers.

 As the hospitality companies cannot rely on past successes, they have the ability to work in an innovative environment.

Disadvantages:

 For hospitality organizations, the dilemma is not only that the company's long-or short-term success is critical, but also that ‘the failure rate of new products and

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