By Carlos Martin-Rios
Hotels face a life-threatening competitor that might forever change the industry landscape, at least the landscape as we know it today. Competition is coming from for-profit firms that generate the bulk of their revenues from exploiting the growing (and hence attractive) world of collaborative consumption: online, peer-to-peer marketplaces of bed-sharing. This business model jeopardizes the industry and millions of jobs.
Online intermediary firms (such as Airbnb) are examples of disruptive innovations and, as such innovators, they might shape the present and the future of the industry. Disruptive innovation occurs when a firm breaks the established industry's rules by minimizing costs and lowering service price, to the point of leaving traditionally well-positioned firms with a dilemma: reinvent their service offering or perish.
Disruptive innovation can and must be overcome by more (and better) innovation. Recent studies on service firms highlight their increasing reliance on innovation for strategic transformation. Not surprisingly, hospitality innovation has experienced mounting interest in recent years. One important driver of this trend is the need for continuous sustainable innovation to stay competitive, which might lead hospitality firms to search for and to implement a variety of innovative solutions.
As I have often said before, the real challenge for traditional hotels is to accept that the very meaning of what it is to be a host, as well as the relationship between guests and hosts, may be forever changing.
Notwithstanding the relevance of these developments for hospitality firms, the field is still in its infancy and many open areas have emerged. Many questions remain, including:
- What path must hotels take if they want to survive against disruptive competitors?
- How does innovation facilitate strategic transformation and add value to hospitality firms? And how does it develop?
- How do different forms of technological and non-technological innovation contribute to the goal of renewal?
- What are the drivers of technological and non-technological innovation, organizational transformation, and sources of sustained competitive advantage?
- Should hospitality firms attempt discontinuous transformation or incremental strategic renewal and the joint adoption of specific pairs of technological and organizational innovations?
- When and how to assess the impact of different forms of non-technological innovation—business model, organizational, and marketing innovation—in hospitality firms' dynamic capabilities?
Investigating and responding to these challenges is of paramount importance.
Hospitality leaders are realizing how important it is to address the upcoming challenges related to disruptive innovators. In that sense, strong partnerships with academic experts are essential. While academics from hospitality management bring a wide range of transferable knowledge to companies, we also take a more distant, uninvolved approach. Yet academics and professionals should be natural partners—there is so much we can learn from each other.
It is time to build collaborative relationships aimed at identifying the major forces that drive hospitality innovation. The objective is to integrate the largely interdependent works on strategic renewal and innovation to the specific firm’s context, so hospitality leaders can apply what contemporary research on service innovation has revealed on organizational transformation. These collaborations will help develop a more integrative and comprehensive response by means of innovation in hotels, resort, restaurants, recreational, and other hospitality and tourism industries firms.