The term “innovation” comes from the Latin “innovare” which means “to renew” or “do something differently”. Innovation can come from brand new ideas or can be an improvement on a product or service already present. Innovation can foster success and can involve taking risks in order to do so. Through innovation, problems can be solved creatively to bring something new to the table. In the hospitality industry, innovation brings about new ideas which drive substantial improvements to benefit not only the organisation but enhances guest experiences too.
Benefits of Innovation
- Personalisation: Innovative technologies like AI and data analytics enable hotels and other hospitality businesses to offer personalised experiences tailored to individual guest preferences. For instance, customised room settings, personalised recommendations, and bespoke services can significantly enhance guest satisfaction.
- Improved Service Quality: Implementing new service protocols or technology can streamline operations, reduce wait times, and increase service efficiency, leading to a more pleasant guest experience.
- Differentiation: Innovative practices and offerings can set a business apart from competitors. Unique features, such as themed accommodations, novel dining experiences, or exclusive cultural activities, can attract more guests and create a distinctive brand identity.
- Market Leadership: Continuously innovating can position a business as an industry leader, attracting media attention, increasing brand loyalty, and establishing a strong market presence.
- Cost Reduction: Innovations such as automation, energy-efficient systems, and waste reduction initiatives can lead to significant cost savings. For example, adopting smart thermostats and lighting can reduce energy consumption, while automated check-in systems can lower staffing costs.
- Streamlined Processes: Implementing innovative management systems can optimise operations, reduce errors, and enhance overall productivity. This can result in smoother workflows and better resource utilisation.
- Environmental Responsibility: Innovations aimed at sustainability, such as green building practices, renewable energy use, and waste management systems, help reduce the environmental footprint of hospitality businesses. This appeals to the growing segment of eco-conscious travellers.
- Corporate Social Responsibility (CSR): Sustainable practices contribute to a positive brand image and fulfil corporate social responsibility goals, which can enhance reputation and customer trust.
- New Revenue Streams: Innovation can open up new revenue streams. For example, offering virtual tours, creating exclusive online content, or developing unique in-house experiences can attract additional customers and generate extra income.
- Higher Customer Retention: By continuously improving and adapting to customer needs, innovative businesses can increase customer loyalty and repeat visits, thereby boosting long-term revenue.
- Engagement: A culture of innovation can lead to higher employee engagement and motivation. Staff members who feel encouraged to contribute ideas and be part of a dynamic work environment are likely to be more satisfied with their jobs.
- Professional Development: Providing employees with opportunities to learn new skills and be involved in innovative projects can lead to better job satisfaction and lower turnover rates.
- Crisis Management: Innovative businesses are often better equipped to handle crises and adapt to changing market conditions. For example, during the COVID-19 pandemic, many hospitality businesses that quickly adopted contactless technologies and virtual services were able to maintain operations more effectively.
- Future-Proofing: Regularly implementing innovative solutions ensures that a business remains agile and can quickly respond to future trends and challenges, securing long-term viability.
Key Innovations in the Hospitality Industry
- 1898: Luxury Hotels
- The Ritz, Paris: Established by César Ritz this hotel introduced opulent décor, private bathrooms and a high level of personalised service.
- 1948: Central Reservation Systems (CRS)
- Hilton Hotels: introduced the first central reservation system which streamlined the booking process.
- 1950s: The hotel chain
- Holiday Inn: Standardised services and amenities across multiple locations and providing consistent, reliable guest experiences.
- 1950: All-inclusive resorts
- Club Med: Pioneered the all-inclusive concept and offered a single price for accommodation, meals, activities and entertainment.
- 1978: Boutique hotels
- The Blakes Hotel, London: introduced the concept of boutique hotels. It was characterised by unique design, personalised service and intimate settings.
- 1980s: Loyalty programmes
- 1981: American Airlines AAdvantage Scheme revolutionised customer relationship management (CRM) with frequent traveller programmes
- 1983: Marriott Rewards extended the concept to build brand loyalty through rewards and exclusive benefits.
- 1983: Sustainable practices
- Scandic Hotels’ Environmental Programme was one of the first comprehensive environmental programmes focusing on waste reduction, energy efficiency and sustainable sourcing
- 1996: Online booking platforms
- Expedia and Booking.com transformed the booking process by offering convenience, price comparisons and user reviews
- 2007: Smart Hotel Technology
- Yotel: introduced smart hotels with automated check-in kiosks, robot concierges and compact, high-tech rooms.
- 2010s: Mobile and Contactless technology
- Various hotels implemented mobile check-in, digital room keys and contactless payment options
- 2014: Sharing economy
- Airbnb popularised the concept of short-term home rentals, offering unique and often more affordable accommodations.
- 2020: Enhanced health and safety protocols
- Covid-19 required the introduction of rigorous cleaning standards, contactless services and health screenings to ensure guest safety during the pandemic.
- 2020s: Sustainability and eco-friendly innovations
- Various hotels focus on sustainability with initiatives like eliminating single-use plastics, using renewable energy sources and promoting eco-friendly practices.
- 2020s AI-enhanced guest experiences
- Various hotels: use of artificial intelligence to personalise guest experiences, from customised recommendations to AI-powered customer services.
In order to innovate, you must first be aware of what’s happening in the general hospitality industry, as well as in society overall. The word “trend” could either mean “the latest fashion” or could mean “a general development or change in the way people are behaving”. There is a key difference between the two interpretations which can be rephrased as Trends vs Fads.
A fad is “a style, activity or interest that is popular over a short period of time” and indicates a product, style or activity which might not last very long. If your innovative idea is only short-lived, it may quickly become irrelevant and seem dated before you see any return on the investment. On the other hand, recognising a viable, growing and long-lived trend is important when introducing innovation.
Fads
The food and beverage sector is one which is very susceptible to change and subject to trends and fads. Some examples of fads from recent years which now seem either run-of-the-mill, dated or have disappeared altogether include:
- Extreme diets: paleo, keto, celebrity diets
- Fondue restaurants
- Frozen yoghurt
- Kale chips
- Cupcakes and macarons
- Deconstructed food
- Avocado toast
- Cronuts: hybrid
- Freakshakes
Trends
- Plant-based diets
- Farm-to-table
- Healthy eating
- Craft beer
- Artisan spirits
- Specialty coffee
- Fermented foods like kimchi, sauerkraut and kombucha
- Sustainable packaging
- Global cuisines, e.g. Korean, Middle-eastern, African cuisine
- Allergies and intolerances, e.g. gluten-free foods, dairy-free foods
- Alternative sweeteners, like stevia, monk fruit and agave nectar
Activity
Forum Name: Forum
Thread Name: Food and Beverage Fads and Trends
Instruction: What’s your favourite food or beverage trend? Which fad did you once enjoy? Why do you think some innovations last and others are short-lived?
Post your thoughts about trends and fads to the forum. Read and respond to your classmates’ posts.
Overtourism
Overtourism refers to the notion that tourist numbers can exceed the capacity of a destination to cope with them, leading to negative impacts on local communities, environments and cultural heritage. As a result, many of the honeypot destinations around the world are reacting to limit visitors numbers to minimise their negative impact on their environment. For example, in the summer of 2024, protestors in Barcelona drenched tourists in popular tourism areas with water pistols and chanted “tourists go home”, in Majorca 20,000 locals marched to protest the hordes of holidaymakers, Venice introduced a temporary visitor tax and Amsterdam made plans to limit the number of cruise ships in the city (Bleiberg, 2024)
Video Title: Is it even a city?
Watch Time: 1’45”
Video Summary: This Oslo travel advert which extols its lack of pretension, small size and accessibility is a twist on traditional travel destination advertisements.
Pre Watch Question: What would motivate you to visit a particular destination?
Post Watch Task: Think about how this advert ties in with the concerns about overtourism. How successful do you think it is? What type of tourist is likely to be persuaded to visit after watching this?
Source: YouTube Channel: Visit OSLO
Watch
Activity
Forum Name: Forum
Thread Name: Tourism trends and overtourism
Instruction: Read this article from bbc.com about travellers’ changing attitudes to their expectations in different destinations. Do you think this constitutes a trend which tourism operators should heed? What trends do you see in this article and in the previous articles and videos about overtourism?
As we have seen, innovation in the hospitality industry can bring about some positive effects and is essential for maintaining competitive advantage and enhancing guest experiences and customer satisfaction. Innovation can also lead to wider societal benefits, particularly in championing sustainable business practices and eco-friendly solutions.
In order to get the process of generating ideas, and then evaluating and implementing them, there are several steps needed in that process.
Understanding the Market and Market Trends
- Market Research: Stay abreast of industry trends, customer preferences and technological advancements. For example, consider the increasing demand for eco-friendly practices and technology-driven experiences which can inspire innovative solutions. Read this article from Forbes.com to find out more about the importance of researching market trends and finding out what your customers want to see.
- Competitor Analysis: Analyse competitors to identify gaps and opportunities to explore what others are doing well and where they are falling short. These insights can be used to brainstorm ideas which could set your business apart from the competition. Read this article as a refresher on what competitor analysis is and how to execute it.
Encouraging a Creative Culture
- Employee Involvement: Foster an inclusive environment where staff at all levels feel empowered to share their ideas. Regular brainstorming sessions and suggestion boxes can be effective.
- Diverse Teams: Encourage collaboration among employees with diverse backgrounds and expertise. This diversity can spark unique perspectives and innovative solutions.
Read this article to start exploring how employees can contribute to a creative company culture.
Leveraging Technology
- Digital Tools: Utilise technology such as AI, big data, and IoT to identify patterns and opportunities. For example, predictive analytics can forecast customer preferences, enabling tailored services.
- Social Media: Engage with customers on social media to gather feedback and ideas. Social listening tools can help track what customers are saying about your brand and industry. Some ideas on how technology and social media can be leveraged to innovate in the hospitality industry can be found in this article.
Incorporating Te Reo Māori and Tikanga Māori
- Cultural Integration: Integrate te reo Māori and tikanga Māori into your services and experiences. This not only respects the local culture but also attracts tourists interested in authentic New Zealand experiences.
- Community Collaboration: Partner with Māori communities to co-create culturally rich offerings. This can lead to unique and respectful innovations that stand out in the market.
- New Zealand-Aotearoa Government Tourism Strategy: There is a link below for you to read and download the government’s tourism strategy. Adopting tikanga Māori and te reo Māori is an important part of the strategy, and the strategy itself is themed in both English and Māori and this table shows the outline of the strategy:
| Theme | Outcome | Focus |
|---|---|---|
| Te ōhanga - The economy | Tourism sector productivity improves. | This focuses on the type of growth that we want tourism to deliver – with an emphasis on lifting the productivity of the sector. |
| Te Taiao - The environment | Tourism protects, restores and champions New Zealand-Aotearoa’s natural environment, cultural and historic heritage. | Our natural environment is the backbone of New Zealand-Aotearoa’s economy, culture and wellbeing. To achieve sustainable tourism growth, we must protect the environment and manage activity within its limits so New Zealand-Aotearoa will be in great shape for the next generation. |
| Ngā manuhiri o te ao, o Aotearoa anō hoki - International and domestic visitors | New Zealand-Aotearoa delivers exceptional visitor experiences. | To ensure the sustainability of the tourism sector New Zealand-Aotearoa needs to develop and promote high-quality, authentic visitor experiences that draw on New Zealand-Aotearoa’s unique visitor proposition. |
| Tātou o Aotearoa me ō tātou hapori - New Zealanders and our communities | New Zealanders’ lives are improved by tourism. | For New Zealand-Aotearoa to achieve sustainable tourism growth we require the support of New Zealanders and our community. |
| Ngā rohe - Regions | Tourism supports thriving and sustainable regions | We want to make sure that sustainable tourism growth is inclusive and the benefits of tourism are distributed across all regions in New Zealand-Aotearoa. |
(from 2019 New Zealand Tourism Strategy)
Reading
Article Title: New Zealand-Aotearoa Government Tourism Strategy
Read time: 10 minutes
Article Summary: The New Zealand-Aotearoa Government Tourism Strategy is more important than ever as we welcome visitors back to New Zealand. The Strategy sets out a more deliberate and active role for government in tourism.
Pre Read Question: How do you think the New Zealand government is trying to encourage innovation in the tourism industry in its recovery from the COVID pandemic?
Post Read Task: Download and read the full government tourism strategy document in PDF form here. How does the government’s strategy include concepts of te ao Māori and tikanga Māori? How is the government trying to encourage innovation?
Source: Ministry of Business, Innovation and Employment
Evaluating Innovative Ideas
1. Feasibility Analysis:
- Technical Feasibility: Assess whether the idea can be realistically implemented with the current technology and resources.
- Operational Feasibility: Consider if your existing operational framework can support the new idea. This includes evaluating staff capabilities and the potential need for training. Read more about feasibility analysis here.
2. Cost-Benefit Analysis:
- Initial Investment: Estimate the upfront costs required to implement the idea, including technology, staffing, and marketing expenses.
- Return on Investment (ROI): Return on investment (ROI) is the ratio between net income over a period and investment. It is a measure used to evaluate the efficiency of an investment. Calculate the expected ROI by projecting the financial benefits the idea will bring, such as increased revenue, cost savings, or improved customer retention. Read more about cost-benefit analysis here.
3. Market Viability:
- Customer Demand: Conduct surveys or focus groups to gauge potential customer interest in the new idea. This can help ensure there is a market for your innovation.
- Competitive Advantage: Evaluate how the idea will give your organisation a competitive edge. Will it differentiate you from competitors and attract new customers? Read more about market viability here.
4. Sustainability and Scalability:
- Environmental Impact: Consider the environmental implications of the idea. Sustainable innovations not only benefit the planet but can also appeal to eco-conscious customers.
- Scalability: Assess whether the idea can be scaled up or adapted to different parts of the business. Scalability ensures that the innovation can grow with your organisation. Read more about scalability for business here.
Case Study
Generating Innovative Ideas at Pauanui Ocean Resort
Pauanui Ocean Resort has built its reputation on providing exceptional service and a unique guest experience. As the hospitality industry evolves, the resort is focused on generating and evaluating innovative ideas to stay ahead of the competition and exceed guest expectations.
Generating Innovative Ideas
- Guest Feedback and Surveys: The resort actively solicits feedback from guests through post-stay surveys and in-person interactions. Insights gathered help identify areas for improvement and potential new services that guests would appreciate.
- Industry Trends Analysis: The management team regularly reviews industry reports, attends hospitality conferences, and benchmarks against leading resorts worldwide to identify emerging trends and best practices.
- Staff Brainstorming Sessions: Staff members at all levels are encouraged to participate in regular brainstorming sessions. These sessions leverage the frontline experience of employees to generate practical and creative ideas for enhancing the guest experience.
- Partnerships with Local Businesses: Collaborations with local artisans, tour operators, and food producers allow the resort to offer exclusive experiences and products, such as guided eco-tours, local wine tastings, and handmade crafts.
- Technology Integration: Investing in the latest technology to streamline operations and enhance guest services is a priority. Ideas include mobile check-ins, digital concierge services, and smart room controls.
Evaluating Innovative Ideas
- Feasibility Studies: Each idea undergoes a feasibility study to assess its practicality, cost implications, and potential impact on operations. This ensures that only viable ideas are pursued.
- Pilot Programs: Before a full-scale implementation, promising ideas are tested through pilot programs. For example, a new digital concierge service might be trialled in a select number of rooms to gather guest feedback and refine the system.
- Cost-Benefit Analysis: A thorough cost-benefit analysis helps determine the potential return on investment (ROI) for each idea. This includes evaluating both the financial benefits and the enhancement of the guest experience.
- Guest Feedback and Metrics: Implemented ideas are monitored through guest feedback and key performance indicators (KPIs) such as occupancy rates, guest satisfaction scores, and repeat bookings. This data-driven approach helps gauge the success of new initiatives.
- Continuous Improvement: The resort fosters a culture of continuous improvement. Regular reviews of implemented ideas ensure they remain effective and relevant, with adjustments made based on guest feedback and changing market conditions.
In any industry, challenges are inevitable. However, it is through facing these challenges that opportunities for innovation and growth emerge. Creativity is the cornerstone of problem-solving, offering novel and effective ways to address issues. On the other hand, complacency is the enemy of innovation: it’s much easier to stay inside your comfort zone than venture into the unknown.
Creative Problem Solving
Problem-solving requires research, but finding exactly where a problem lies is not always a straightforward task; people may disagree on how to analyse the problem and sometimes there isn’t enough time to find the source of the problem. These situations call for creative problem solving, which can propose solutions before the problem has been fully defined.
Creative problem-solving encourages seeking open-ended solutions and is not as structured as other innovation processes. It encourages workplace-creativity and looking at issues with a new perspective.
Benefits of Creative Problem-Solving
- Creative solutions for complex problems: Creative problem-solving can find solutions to complex problems even without extensive research into the situation
- Adapting to Change: Business leaders need to react to a constantly evolving business environment. Creative problem-solving can help in overcoming unforeseen problems to find solutions to unconventional problems.
- Fuel Innovation and Growth: Creative problem-solving can spark innovative ideas to drive growth which can lead to new products, services or achieve operational efficiencies.
Principles of Creative Problem-Solving
The concepts of divergence and convergence can be used to generate creative solutions to problems.
Divergence generates ideas in response to a problem.
Convergence narrows them down into a shortlist.
Creative problem-solving takes divergent ideas and convergent ideas and balances them to turn ideas into solutions. Read more about divergent
When problems are reframed as open-ended questions solutions may be developed more effectively as they can generate a lot of useful information. Closed questions usually only elicit yes or no answers and are not very useful in this context, and statements generate little or no response at all (What Is CPS? | Creative Education Foundation, n.d.)
Examples:
Problem: Feedback suggests that guest experiences at Pauanui Ocean Resort are sub-optimal for families at busy times.
Open-ended question: “What innovative activities and services can we introduce to create memorable personalised experiences for families with young children during the summer school holiday peak season?”
Problem: Energy costs are getting too high
Open-ended question: ”What are the sustainable energy practices and which technologies can we use to minimise energy consumption without impacting guest satisfaction?”
It is tempting to dismiss or accept ideas instantly in brainstorming sessions, but immediate judgements can inhibit the idea-generation process. Sometimes the most unlikely idea can result in stunning innovations when explored and developed further.
Use positive language to help build and maintain an environment conducive to innovation and creative ideas. Using negative terms like “no” and “but” can discourage creative thinking.
(Adapted from Harvard Business School Online (What Is Creative Problem-Solving & Why Is It Important?, 2022))
Creative Problem-Solving Process
- Define the Problem Clearly: Understanding the root cause of a problem is crucial. Break down the issue into smaller, manageable parts to see the full scope and identify where creative solutions are needed.
- Encourage Divergent Thinking: Foster an environment where brainstorming and open discussions are encouraged. Divergent thinking allows for multiple ideas and solutions to be considered, leading to innovative outcomes.
- Embrace a Growth Mindset: A growth mindset promotes the belief that skills and intelligence can be developed through hard work and dedication. This mindset encourages teams to view challenges as opportunities for learning and improvement.
- Collaborate Across Disciplines: Bringing together diverse perspectives from different disciplines can lead to more comprehensive and innovative solutions. Interdisciplinary collaboration combines various expertise and viewpoints.
- Utilise Technology and Data: Leveraging the latest technology and data analytics can provide new insights and tools to solve problems creatively. This can include using AI, big data, and other technological advancements.
- Prototype and Iterate: Developing prototypes and continuously iterating based on feedback helps refine solutions and ensure they are practical and effective. This process allows for testing ideas in real-world scenarios and making necessary adjustments.
- Encourage Risk-Taking: Creativity often involves taking risks. Encouraging a culture where calculated risks are supported can lead to groundbreaking solutions. It's important to learn from failures and use them as stepping stones.
Applying Creative Solutions in the Hospitality Industry
The hospitality industry faces a unique set of challenges, from managing guest experiences to operational efficiencies. Here’s how the principles of creative problem-solving can be applied:
- Enhancing Guest Experience:
- Problem: Ensuring a consistently high level of guest satisfaction can be challenging due to varying guest preferences and expectations.
- Creative Solution: Implementing personalised experiences using data analytics and AI can predict guest preferences and tailor services accordingly. For example, hotels can use guest data to personalise room settings, recommend activities, and offer tailored promotions.
- Optimising Operations:
- Problem: Operational inefficiencies can lead to increased costs and reduced service quality.
- Creative Solution: Employing technology such as automated check-ins, mobile concierge services, and smart room technologies can streamline operations. Additionally, adopting sustainable practices can reduce costs and appeal to eco-conscious travellers.
- Training and Development:
- Problem: Keeping staff motivated and well-trained in a high-turnover industry is a constant challenge.
- Creative Solution: Developing engaging and interactive training programs using virtual reality (VR) can provide immersive learning experiences. Gamification of training modules can also boost engagement and retention.
- Crisis Management:
- Problem: The hospitality industry is susceptible to crises such as natural disasters, pandemics, and economic downturns.
- Creative Solution: Implementing comprehensive crisis management plans that include flexible booking policies, enhanced cleaning protocols, and clear communication strategies can mitigate the impact of crises. Additionally, creating new revenue streams, such as virtual tours and online experiences, can help sustain business during downturns.
- Sustainability Initiatives:
- Problem: Balancing guest expectations with sustainable practices can be challenging.
- Creative Solution: Introducing green technologies, such as energy-efficient systems and waste reduction programs, can enhance sustainability. Hotels can also engage guests in sustainability efforts by offering incentives for eco-friendly choices, such as using refillable water bottles or participating in linen reuse programmes.
You’ve reached the end of the learning material for this topic. Let’s recap the key points, and then make sure you’ve completed all the forum discussions and activities.
- Innovation is key to bring new ideas to the table and drive improvements to benefit the organisation and enhance guest experiences
- Innovation requires an understanding of what people want, but there it is also important to recognise the difference between trends and fads
- Generating new ideas requires
- research into what the market wants
- what competitors are doing
- encouraging a creative workplace culture
- leveraging technology
- Incorporating te reo Māori and tikanga Māori is an important consideration in the modern New Zealand business environment
- The process of evaluating innovative ideas requires analysis of:
- Feasibility
- Cost-benefit
- Market viability
- Sustainability and Scalability
- Creative problem-solving techniques
