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Beyond the traditional way of innovating in the hospitality industry

Source: EHL Blog


Innovations form a significant backbone to an organization’s ability to secure a competitive advantage. While historically we attribute much of that innovation potential to product, process or service innovations, a study conducted by KPMG in 2015 revealed that three out of four executives believe their company’s future competitive advantage would be challenged by a competitor’s business model innovations (BMIs).

When we talk about BMIs, we are referring to the basic logic in the way a firm does business: how the company is able to create value for customers, either by defining a new value proposition for the customer or redefining how existing value is delivered.

But where does the hospitality industry stand in this regard?

From time to time we see the emergence of new hotel concepts, new market penetrations, and even process innovations that modify the way the industry operates. Consider for instance digital room keys, in-room technological services, or the robot hotel in Japan. These innovations have changed hotel procedures, operations, job descriptions, but also the customer experience.

However, to what extent does this represent the pool of radical innovations happening in the industry?

During the recent International Advisory Board meeting at EHL, we led roundtable discussions on radical innovations in the hospitality industry. Industry experts as well as EHL students put forward their views, and while it wasn’t easy to find consensus on what innovation really means for the industry, we all agreed in that the industry has experienced – and will continue facing – changes that alter the way hotels operate. But as the discussions suggested, the most radical and innovative changes currently in hospitality are not necessarily related to technology but to a firm’s ability to leverage an innovative business model. In line with the KPMG study, hospitality experts highlighted the need for hotels and operators to provide distinct business models in order to create competitive advantage in the future.

Related article: 4 innovation blogs all hospitality professionals should follow