Challenges of Innovation Activities in Hotels - Literature review Example

Student Name: Instructor name: Unit Name: Date: Introduction In relation to Economics and Business, the word innovation refers to the channel to the growth of performance. Innovation can be broadly termed as the creation of improved and more efficient technologies, processes, ideas, and products accepted by governments, society and market (Ingold, 2000). However, innovation differs from renovation and invention, in the sense that innovation represents an optimistic change compared to growth changes. In the society, innovation activities have a widespread effect in business, because in business, an innovation activity yields efficiency, convenience and comfort. With rapid growth in communication and transportation over the past years, the old concepts of comparative advantage which only focused on unique inputs have are outdated for today’s economy, in terms of business performance. As Chen (2010) points out, the productive or competitive of any inputs requires the continuation of innovation activities for any business to succeed. Ingold (2000) argues that industries should revolutionize their economic structure, which should have better innovative and effective activities, in terms of products and processes. Entrepreneurs in hotel industry should therefore, look for ways to satisfy their consumer needs with improved services, quality, prices, and durability which comes in hand with the fruits of their chosen innovation activities with advanced organizational and technological strategies. In this regard, this paper aims at discussing the challenges of innovation activities in hotels in order, to increase their business performance. For example, the competitive performance to gain greater market share, and further identify and explain practices that are currently being adopted by the hotel industry to address this challenge. An innovation activity in businesses is achieved in a number of ways. For it to be successful, development and research should be given much thought when it comes to getting a breakthrough innovation activity. However, there are a number of innovation activities which are different in the market and industry structures in both global and local demographic. Hotel industries face some challenges when it comes to innovation activities, which are seen to increase their business performance. Apart from increasing business performance in a hotel industry, innovation activities are linked to organizational objectives and goals in a market and business plan, in terms of competing with other organizations. In most corporations, innovation activities drive them towards achieving their objectives, since businesses cannot only grow reengineering and cost reduction alone. Innovation activities are the key element in providing the top growth and increasing business performance. According to Smythe (2011), innovation activities are mostly driven by, the creation of new markets, improved production processes and quality, reduced labor costs, environmental damage, materials and energy consumption, as well as the replacement of both products and services. These can be referred to as business goals which apply in any business firm but depend heavily on the firm’s environment. Additionally, the main challenge of the innovation activities is first of all, the failure to develop the above explained goals in the line of programs of innovations. Some of the challenges are external to the business and the influence from the other corporations that are beyond its control. Conversely, some will also be internal and within their business control. The common challenges of innovation activities in hotels to increase business performance i.e. the competitive performance to gain greater market share is where a hotel industry, does poor in defining their goals. Individuals running the industry do not define their goals in terms of knowing their objectives. A hotel industry should focus on meeting the demands of their customers, as well its own outcomes, maybe in terms of what they want to achieve over the next few years. This is the main challenge when it comes to innovation activities in hotels (Smythe, 2011). For example, McDonald’s Plan to win in the hotel industry, revitalized their products and pushed innovative activities through a number on initiatives. Having more than 30,000 restaurants in more than 100 countries, it provides food to almost 50 million customers every day, but innovative activities like sales growth, profits and expansion has made business become of the largest burger complacent. This is because; this hotel industry focuses more on getting bigger and better. Hotels are part of hospitality industry whose main objectives are oriented towards the provision of amusement, accommodation and amusement. It maintains its facilities for their customers whom they think are potential. For example, many hotel industries targets both local people and tourists. However, the most significant segment in this type of industry is the number of customers seeking their services. This is where another challenge of innovation activities, where economic recession is affecting the industry business and operations status. Pener and Sharpley (2005) assert that the hotel profitability and efficiency of hotel industries have been affected significantly, which in turn has led to reducing their labor force and cut down costs. This has made it hard for the hotel to increase their market share in business performance, but has still managed to survive in the market. In addition, the tourism industry is seen to influence the hotel industry. This is because, there is a decrease in the number of tourists, and therefore, customers are small in number. This affects their innovation activities, in terms of increasing their sales and profitability of the hotel industry. The hotel industry should therefore, assess the current players and their competence level that operates the industry. They should also encourage their employees to establish a direct contact with their customers. Moreover, in terms of the competitive performance to gain a greater market share, innovative activities are also challenged by Macroenvironmetal variables in the hotel industry, like the political, international and technological among others. A hotel industry should scan its environment to better understand the opportunities and threats that can be created by such variables in terms of innovative activities, so that it can retain and obtain the competitive performance in order to gain a greater market share. Indeed, sociocultural activities that consists of lifestyles, customs and values of a particular society in which the hotel exists. This influences and challenges the firm’s ability to obtain resources in order to make its services as well as goods, and fit within the society (Lunati, Dembiniski, et. al 2008). In terms of technology, a combination of both empirical and theoretical knowledge used in the marketing and production of both goods and services, is also a challenge of innovation activities in hotels to increase their business performance. Khosrowpour (2000) explain that the discoveries and innovations emerges in the field of information technology and communications, which are the main dramatic transformations that society and economy have undergone over the last years. Hotel sector is therefore, heavily influenced by the new technologies and have been forced to make some changes in their marketing, production and development of innovation activities, in addition, production. In order for them to survive in the industry, both in long term and medium, the hotel industry will be forced to innovate by obtaining new products and processes. Technology therefore, plays a great role in competitive performance of a hotel to gain a greater market share. By adopting the new technologies, it always comes with indirect and direct costs, with other constraints of flexibility, funding and quality in the hotel improvement of resources and quality. Furthermore, given that hotel industry is a service sector, the human aspect is a crucial factor both through the development of its standard, services and technology in the industry. A quick and competent way to make the most of innovative activities and diffusion to address these challenges is for the hotel industry to quick apply and absorb the telecommunication and information technologies. This can help solve problems of innovation activities, by adopting a suitable training system to help employees adapt to the new technology. The innovation capacity in hotel industry is related to quick absorption and application of both telecommunication and technologies, mostly conditioned by the level of qualification and workforce in the advanced technology. Smythe (2011) point out that the market share of a business performance is the percentage or portion of sales of a good or service that is controlled by a business. Additionally, it is used in businesses to determine their strength in their sector. For instance, the market share in hotel industry will be used to compare its strengths with other hotels. It is also used to assess their performance every year, therefore, hotels which measure their market share is able to determine if they are doing better or worse in the industry. Some of the ways that a hotel industry can improve its market share, to address the challenge of innovative activities is to first of all improve their services, so that their businesses can become better than their competitors. For example, a hotel can change its prices or offer incentives to its customers, like discounts. Alternatively, it can also promote and advertise their services to improve their market share. Lunati and Dembiniski (2008) note that increasing market shares is not always a best solution for the hotel industries, especially if it is associated with big decrease of their products and services and expensive advertising. A hotel may also not be able to meet the demand of increased market share without an enormous investment in new employees and advanced equipments. Therefore, in some cases, it can be to a hotel advantage to decrease its market share, if by lowering its costs of market share can help improve its profits. Managing a hotel market share is therefore, a very significant aspect of managing its business. In addition, a hotel can decide to acquire the practice of five P’s like the McDonald’s restaurant of products, people, place, place and promotion. A hotel can develop and refine new strategies in order to deliver value, as well as offer products and services varieties. It should also consider remaining open for 24 hrs, enabling wireless internet access and accepting debit and credit cards among other practices. By so doing, their market share and revenues rise and overcome their innovative challenges. Attracting more and more customers should be every hotel goal for its growth. It should adopt a right mix of services and products at the right time. Additionally, it should develop and manage their relationships with other hotels and individuals who have a stake in their firms. Ritchie and Crouch (2003) explain that hotels should adapt the policy of maintaining their luxuries and facilities accordingly, in order to address innovative challenges. The market themes are promoted and managed by hotels through their innovative and marketing activities, helps creates a positive image in the industry. It is therefore, essential for the hotels to focus on the professional behavior and genuineness for their customers, in addition to, well being and positive concern of their customers. Hotel industries should also priotize on representing a positive image in the industry, as well as becoming successful through a competitive advantage provided by the strategies. Conclusion In summary, the challenges of innovation activities in hotels to increase their business performance, in terms of the competitive performance to gain a greater market share are economic recessions, which have drastically affected the hotel industry and its operations, in terms of reducing their profitability and efficiency. Additionally, it is also directly influenced by tourism activities due to the fact that their decrease in number reduces the number of customers in the hotel industry. However, Innovation activities are the key elements in providing the top growth and increasing business performance and challenged by factors like; technology, politics, failure for the hotels to develop business goals, for example, creation of new markets, improved production processes and quality, reduced labor costs, environmental damage in the line of innovation. Generally, hotels can adopt practices like maintaining their luxuries and facilities accordingly, quick apply and absorb the telecommunication and information technologies, and adopting new advanced technologies in order to increase their market share as well as to address the innovative challenges. References Chen, J. S. (2010). Advances in hospitality and leisure: Vol. 6. Bingley: Emerald. Ingold, A. (2000). Yield Management. London: New York: Continuum Khosrowpour, Mehdi. (2000). Challenges of information technology management in the 21st century. Idea Group Publishing: Hershey, PA Lunati, T and Dembiniski, P. (2008). Enhancing the role of SMEs in global value chains. Paris: OECD Pener, L and Sharpley, R. (2005). The Management of tourism. London: Sage Ritchie, J. R. B and Crouch, G. I. (2003). The competitive destination: A sustainable tourism perspective. Smythe, H. (2011) Managing the professional practice in the built environment. 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