Innovation Areas of the Hotel Industry

Innovation is one of the main determinants of competitiveness. Management, external communication, service scope and back-office are four types of representative of innovation in the hotel industry.

1."The management innovation type refers to the quality of management processes, to the ICT (information and communication technologies) applications for management, and to improvements of the organizational structure.” In the concept of management innovation, the environmental quality play an important role in the hotel's competitiveness .The information and communication technologies applications are also vital in making management processes efficient. Furthermore, the changes in the organizational structure capture the organizational innovation that is relevant in services .
2. “Innovation in external communications depicts the high information-intangible content of services products and processes in the hotel industry.” Definitely, the ICT plays an crucial role, both in generating opportunities and new services, and in revolutionizing the ways in which most of the traditional services are provided . The use of ICT is a very relevant innovation that helps increasing the competitiveness of firms because it facilitates the management of relationships with customers, through better and easier information exchange. Further, ICT can improve the efficiency of the relationships between the firm and intermediaries, suppliers and public administrations.
3. “The service scope innovation is relevant due to the importance of the service delivery for the competitiveness of hotels as in other service sectors”. Service scope innovation advises changes in the service output and the incorporation of technological assets which improve the service output and the tangible aspects of service delivery.
4. “The back-office innovation consists of the incorporation of new technological assets for the improvement in productivity and for achieving more efficient service delivery.” The process and system design and testing of a new service encompass the whole delivery process, not just the element experienced by the customer, but also often involves back-office process re-engineering.

http://www.sciencedirect.com/science/article/B6VC4-4NMWRGX-2/2/f9346dd3e308beedbb6ec018ed605d4a

A Fee to be Healthy

In most places today, smoking in public places has become a major issue to the population. Non-smokers argue that second-hand smoke affects their health, therefore, smokers should be prohibited to smoke in all public places. New laws have been created to ban smoking in certain restaurants and create non-smoking rooms in many hotels. This accommodation in hotels has allowed non-smoking guests to enjoy their stay smoke-free. Yet, recently the MGM Grand hotel in Las Vegas has created a $20 a day fee for guest who requests a non-smoking room. This fee is quite surprising because it doesn’t leave much option for hotel guest who prefer to avoid the effects of smoking. If guest don’t want to pay the $20 fee then they are expected to deal with a sour-smelling smoking room that could extremely affect their health. This fee could be a huge detriment to the MGM Grand hotel and cause many non-smoking customers to go to another hotel.

Thanks to the impact of the anti-tobacco advocacy group, MGM Grand was pressured to rescind the fee and instead caused the price of a guaranteed smoking room to increase. Also joining the advocacy group in protesting against the hotel was The Campaign for Tobacco-Free Kids, believing that hotels shouldn’t punish guest for wanting to be healthy. A statement from the group said “no one should have to pay extra to avoid exposure to a harmful substance that causes lung cancer, heart disease and other serious illnesses. What will MGM charge for next? A room without asbestos? One with a sprinkler system or fire alarm? One without bed bugs?”

Rather than the MGM Grand Hotel enforcing a fee for non-smoking rooms, they should instead follow the trend of making their hotel smoke-free. Many hotels such as the Marriott or Hilton already enforce non-smoking rooms throughout, therefore, MGM should follow such policies. With an absurd fee, customers could definitely take their business elsewhere, causing MGM Grand Hotel to suffer.

http://travel.usatoday.com/hotels/post/2011/02/mgm-grand-hotel-las-vegas-non-smoking-room-guarantee-fee/143431/1

Panera Bread Co. enforces new Customer-Loyalty Program

Panera Bread Co. is implementing a new loyalty program and adding new items to its menu as a way of maintaining high profit and sales growth. While launching its customer-loyalty program, Panera will be adding steak to its sandwiches as a new source of protein for its customers, with extra marketing to accompany its addition to the menu. However, this addition will be putting high commodity pressure on Panera, since beef prices are now at an all-time high. Instead of being reactive to this year's underlying inflation, Panera “stayed true to doing what it did well. And steak is simply a manifestation of that.”

Panera is launching MyPanera cards as part of its loyalty program, which will surely be a factor of great traffic growth. The card allows the company to track its customers' preferences as well as when they buy and how much they spend. This free program presents customers with “soft rewards” such as complimentary items that match their buying habits. Panera has been working on this program for years and states that it is about building a deeper relationship with its customer base. “It lets us talk to them individually and get to know what they like, and what they do, and that is hugely powerful”. Such an incentive is indeed very powerful and is sure to ensure Panera vastly growing sales and profit.

Analysts point out that this kind of insight will be used to make marketing for the company far more effective and influential. Rewards as simple as giving a free bakery item to a customer who usually just orders coffee, Panera is creating the opportunity to establish a long-term relationship with its customers. For instance, it could bring breakfast frequenters in more regularly for lunch and dinner as well.

Adding steak to its menu as well as implementing a new and more powerful loyalty program is sure to attract more customers to Panera in the long run, and will make itself appealing for all three meals of the day. Attempting to create a long lasting relationship with its customer base, Panera is sure to see long-lasting success in the very near future.
http://online.wsj.com/article/BT-CO-20110211-712481.html?mod=WSJ_Hospitality_middleHeadlines

Sustainability in the Hotel Industry

In these days, the green economic revolution is a big issue of the U.S. hotel industry. One innovative leader is Ashley Carroll who directs the Environment program at the Ritz-Carlton, Kapalua in Hawaii. They offered the experiences to guests such as they can travel to see Maui’s native forests, gardens growing crops, and hear about Maui’s primitive culture and environment. This kind of trend is connected with current trends concerning the environment and how it can increase hotel’s revenue due to competitiveness of unique experience.

In addition, food grown in the hotel's native garden provides hotel guests with a healthy dining experience. In fact, the hotel's adoption of native gardening also gives guests a motivation to eat at the hotel and accounts for 15 percent of hotel’s revenue.

In this reason, while the hotel industry is down because of the recession and high fares of traveling, a hotel can make enough profit by procuring competitive advantage.

Three lessons from the green revolution's impact on the hotel industry:
1. Cost-competitive advantage: Saving green by going green is where most of today's business focus is directed. In these recessionary times, going green can make the difference in being able to compete on price.
2. Green revenue growth: This is where the green economic revolution is heading, growing revenue by going green. This is a multi-trillion-dollar global opportunity for building or cementing customer loyalty as consumers focus increasingly upon sustainability and wellness.
3. Green entrepreneurship: In every economic revolution, there is opportunity for the entrepreneur as the traditional big players struggle to adopt their legacy systems and business practices. Customers are looking for businesses that offer fresh solutions that support their quest for "going green."

http://www.entrepreneur.com/management/greencolumnistbillroth/article201838.html

Aloft and InterContinental Emerge

It is currently a relatively difficult time for the hotel industry due to the status of the economy. That being said, one particular group of entrepreneurs have worked hard to promote their “no-name” hotels in an attempt to compete with the major hotel chains such as Marriott, Westin and Hilton. These entrepreneurs strategized as to how they could compete with these well-established hotels, and decided to base their strategy on having their hotels be cheaper than hotels like the Marriott, Westin and Hilton. They also try to emphasize music and local culture, have new and up-to-date hotels, and have “the consistency, reliability and accessibility of a branded hotel.” Starwood executive, Brian McGuinness, thinks that one particular group, Aloft is so successful because they suggest to their customers that they will get “style at a steal” for their money.

Aloft currently has 42 locations and InterContinental Hotel Group's boutique-style Hotel Indigo has 36, while Hyatt has 156. Aloft and InterContinental have some work to do in order to promote their name, but it seems like they are off to a great start. In order to be a successful entrepreneur, you need to be innovative and have something that your competitors do not offer. While many hotel chains have recently renovated their existing hotels and built new ones to provide a similar experience no matter where you are, Aloft thinks that their hotels should reflect where they are located. In order to present their customers with the local feel, while still having necessary attributes like loyalty points in which the customer can develop a relationship with the chain.

The competitive landscape for the hotel industry has inevitably changed now that these entrepreneurial hotel chains are entering the industry. These hotels have taken a new stance on the hotel industry, and appear to be successful. Aloft and InterContinental need to be smart in order to maintain an edge on hotels like Marriott, Westin and Hilton, but they seem to be on the right track.
http://travel.usatoday.com/hotels/2010-07-29-newhotels29_ST_N.htm