Chapter 1: Introduction

1.1. Introduction

In this chapter, the introduction is briefly presented. Setting the hook in the right manner is very important as it sets the tone for the whole manuscript. It shapes reader expectation as well as makes them excited. This principle has been followed in the introduction of current research. It provides the background of the topic. Then researcher identified the problem statement. On the basis of problem statement and the variables used in this research, research questions and objectives are formulated. The research gap is also identified. The introduction chapter also covers the significance of the study, and at the end of this chapter, thesis structure is also given.

According to the previous researches, the main issues and the problems faced to the hospitality industry. These are operating issues, marketing issues, technological issues and economic issues (PKF Hospitality Research, 2006). The operating issues include the labour shortages because of the limited human resources, cost containment is needed; competition between the growing number of hotels across the globe (The Globe and Mail Report on Business Magazine, 2007).The marketing issues include overlapping brand market segmentation and increased guest sophistication (Butler, 2006).The technological issues include interactive reservation system, guest – room innovations, data mining and yield management (Mauri, 2007).The economic issues include globalisation and dependence on nation’s economy. In the previous researches the challenges that have been identified are many. These include low occupancy level (Gu, 2003). Others are related to lack of support from the government, inadequate training provided, lack of attractions and facilities, lack of financing, unreliable financial environment and access to finance (Zapalska and Brozik, 2007). These issues are very basic issues but there are issues to which researches have not given importance and these include recession and other societal as well as economic issues. These are researched out in the current research and the problem is to identify as well as postulate out some innovative actionable ways to the Hilton Hotels & Resorts to improve its current situation in all of the locations in China.

Hilton Hotels & Resorts is a brand which can be seen in all parts of the world with full service hotels, resorts and the Hilton Worldwide (flagship) (McMorris, 2016). Hilton Hotels & Resorts was previously known with the name Hilton Hotels (Rooney, 2011). This company was formed by Conrad Hilton in the year 1919 in Cisco, Texas (Hilton website, 2016). To date, the number of hotels is more than 570, present in 84 countries and in six continents (McMorris, 2016). The properties of the hotels are managed by, owned by, or franchised to an operator who is independent. In China, Hilton Hotels & Resorts are present in more than thirty cities which show that how much the hotel is liked by the consumers of China. However, Hilton Hotels & Resorts is not enjoying success in Chinese environment and this is studied out in the current research.

The Hilton Hotels & Resorts, China is the case of the research because it is one of the hotels which are present all across the globe. The Hilton Hotels & Resorts is facing issues and problems through which the hotel is not enjoying success in terms of more customers or revenues. Therefore, there is a need to provide some recommendations to the Hotel on how it can continue its operations in China successfully.

The problem which is under investigation in the current research includes identification of the main problems which are faced to the Chinese hospitality industry and that relates to Hilton Hotels & Resorts in China as well. In addition to this, the problems are evaluated and discussed so as to provide clear current picture of Chinese hospitality industry. Besides, the major part of the problem is linked with the identification of innovative ways through which the current situation of the hospitality in China can be improved. The main problem which is under investigation is

            “What is the current situation of the hospitality industry in China to seek breakthrough and innovative ways to replenish and bring future to the Hospitality?”

1.2. Research Aim

The aim of the research is to review the current situation of hospitality, seek breakthroughs and find some technological innovative ways through which the future of the hospitality can improve efficiency.

1.3. Research Objectives

The objectives in a research are designed to be followed in the study because they give direction to the whole research. They are accomplished in different sections of research study. The objectives of the current research are mentioned below.

• To appraise the current situation regarding the hospitality sector in China.
• To evaluate the frameworks related to innovation, specially technological innovation.
• To review aspects of operational efficiency within the hospitality sector
• To provide recommendations for the use of technology within the hospitality sector of China

1.4. Rationale of Research

The rationale or the significance of the study is very important section and it is identified in the start of the research because it attracts attention of the reader towards the forthcoming parts of the research. It is the significance part, to which companies are interested to look into. The significance of research can be identified from three angles namely theoretical, implications and novelty.

First of all, it is important to explain the theoretical importance of the study. The study is conducted on the topic which is current and is based on the current situation of Hospitality industry in China. In the past, there are many researches which have been conducted on different aspects of hospitality industry but many of those studies have researched out the service quality and SEVQUAL model and has neglected to identify the issues, problems and loopholes of this industry which is causing downfall. The current research is an addition to the literature because it will qualitatively as well as quantitatively identified the issues encountered to Hilton Hotels & Resorts China and is also going to provide solutions to those problems. Innovation is another aspect which is added in the recommendations part and the literature and previous studies as well.

The second aspect of significance of the current research is implications which include practical implications and implications for managers. The last objective of the research is associated with this point. The researcher in the end of the dissertation is going to present some implications which are innovatively postulated out and through these innovations the situation at the company end can be improved and the issue or the problem, to some extent can be resolved or its effect can be minimised. These implications are designed by collectively considering the Chinese hospitality environment, literature sources and the data obtained from the employees of the Hilton Hotels & Resorts. The practical as well as managerial implications are important for Hilton Hotels & Resorts China but these can also be used by other companies as well.

The third aspect or the importance of the research is novelty in the research. Novelty is newness. It is something world is not aware of. It has been mentioned before that in past there are many researches which have been conducted on different aspects of hospitality industry. These studies have neglected to identify the issues, problems and loopholes of this industry which is causing downfall. This is the novelty aspect of the current research because it is going to dig deeper to this issue and present actionable ways through which the situation can be improved.

1.5. Conclusion

The introduction of the study has focused on the unexpectedness, simplicity, emotionality, concreteness, credibility and story. It has been designed in a manner that the reader attention can be drawn towards the research and the topic under investigation. There are many parts of introduction each of which have their importance. The problem of the research has been defined in a detailed manner and the background is also provided which reveals out that there are problems to the hospitality industry in China and there is a need to encounter them. The objectives and research questions have been designed accordingly through which the problem can further be unveiled, studied out and negative outcomes can be managed positively. In addition to this, the thesis structure has also been provided in the introduction.

Chapter 2: Literature Review

The aim of current section is to highlight the literature on hospitality industry which is serving as the guideline for current study. The discussion has been carried out various sections. Firstly, the overview of hospitality industry has been presented, which is well supplemented by the views of characteristics of hospitality sector.  The discussion has mover further to hospitality sector of China which is followed by innovation aspects that can serve as basis of progress in hospitality sector.

2.0. Theoretical Underpinnings

The foundation of this research lies on three theoretical views i.e. resource based view, dynamic capabilities and knowledge based view. The below figure summarises the key points of these theoretical views.

 

 

 

 

 

 

 

 

 

 

Figure 1: Theoretical Underpinnings

Source: Self-created after reviewing literature and theories

 

2.1 Hospitality Sector in China

Among the various sectors of global economy, the hospitality industry is one of the rapidly growing industries due to increasing rate of international tourist arrivals. The hospitality industry refers to the organisations and companies who are responsible for providing accommodation, food and good treatment to the guests both domestic and international (Andersson, Carlsen and Getz, 2002). The major drivers behind expansion of hospitality industry are related to lower travelling cost and increasing globalisation. It has been asserted by the researchers that international tourism will continually increase over the years and it will have a significant impact on perspective of hospitality industry growth (Baum, 2002). The figure 1 mentioned below is clearly indicating the expansion trends in hospitality industry of different emerging markets based on increasing international arrivals. It can be seen that rate of international arrivals is continually increasing and it is expected to increase further till 2020 (Yoo, Lee and Bai, 2011). The forecast has been presented by the UNWTO while reflecting their insight on world’s tourism patterns.

Figure 2: International tourist arrival

Source: UNWTO Tourism highlights (2009)

In accordance with the categorisation of services which are done by Hai-yan and Baum (2006) the definition of hospitality industry can be done as intensive of labour (in against to technology intensive) and activity (against to standardisation), mainly based on the professionalism and knowledge of workers. It is based on the characteristics of human resources and therefore there is less dependency of innovation over the development of new items (integrating a gourmet restaurant) than on the development of new procedures (like empowerment of the co-workers and middle management). Developing on services features (called as perishability, heterogeneity, simultaneity of consumption and production, and intangibility which appear to collect some consensus among different researchers), Jayawardena et al (2013) identified that simultaneity and intangibility of consumption and production enhances the requirement for communication and interaction among the actors who are involved in the process of innovation. Along with it, Yoo, Lee &Bai (2011) researched about the evolution in the management of hospitality and then related the alterations in the structure of hotels (today more flexible and flat) for the employees’ empowerment and the significance of innovation as procedure of improvement of quality. Along with it, more of the complexity has come into the roles of manager, as one should target on the increment of cost and quality control for dealing with enhancing competition and for attending the internal and external satisfaction of clients. One needs to be an expert in the hospitality activity, in human resources management and in management. As most of the hotels still depict a functional structure, it is the managers present at the levels who make assumptions about the coordination of different operations. Along with it, the low level education of employees stresses over the roles in stimulation of innovation and change.

The hospitality industry is substantially unique in terms of its service oriented nature which offers huge emphasis on the human factors with an aim of fostering effective service delivery. The figure 2 is providing integrated set of characteristics that are being prevailing in the hospitality industry. 

Figure 3: Integrated characteristics of hospitality industry

Source: Pantelidis (2014)

The hospitality industry is ruled by the mix of products and services and the consumers are likely to pay both for the products and the services. It can be clarified by the instance of restaurant where a consumer not only pays for food that is being served on the dining but also for the services of servers (Tranter, 2009). The increase level of interaction between customers and staff can help the staff to recognise needs and desires of customers in an immediate manner. In this manner, the two way communication can serve as the key of enhancing customer satisfaction in long run.

The development of long term association with the customers can help the hospitality industry to realise their performance goals through repeated customer experience. The positive word of mouth of repeated customers can help to strengthen the loyalty of the customers in long run. Along with this, the diversity in culture is substantially important for hospitality industry due to its closer relevance with tourism industry (Godbey, 1993). The tourist are from diverse places with diversity in cultural values  and the staff in hospitality sector has to deal with people from diverse regions with different set of values, which requires them to be open minded and respectful towards differences. Finally, the hospitality industry is labour intensive that is based on its service oriented nature which requires high reliance on human resources (Theng Loo, 2012). The high degree of care that is being expected by the customers can be offered by maintaining highest staff to customer ratio. Increasing reliance on labours requires higher degree of training and education programs by hospitality organisations. 

The emerging economies are gaining enhanced significance in terms of hospitality expansion. According to world travel and tourism council’s forecast, China is among the BRIC (Brazil, Russia, India and China) emerging nations that have high potential of expansion in hospitality industry (Lu and Adler, 2009). The Report of World tourism council was forecasting the trend till 2015 that can be seen in figure 3 mentioned below is indicating that followed by America and Japan, China has higher growth potential. It is reflecting that annual growth rate of tourism and hospitality industry in China is 11 % hat is significantly higher than all other nations including US and Japan with growth rate of 4 % and 2% respectively.

Figure 4: Travel and tourism forecast in mature and emerging markets of world

Source: Lockwood (2007)

The evolution of Chinese hospitality industry is based on the progress of Chinese national economy (Salazar, Costa and Rita, 2010). It has been highlighted by the researchers that investment in hospitality industry has remained noteworthy in China and the development of new hospitality brands has been seen significantly in Chinese market (Blum, 1996). Therefore, the hospitality players in China are expanding their portfolios through new brands and China is expected to become most important actor in hospitality industry. The figure 4 is providing the detailed view of national bureau of China’s statistics, in terms of growth prospects of hospitality sector. It can be seen that there are high growth prospects by 2020, which is 5.8 % CAGR for high end hotels. While the growth is expected at CAGR of 6.6 % and 6.8 % mid scale and budget hotels. These growth rates are for 2015 to 2020 which is reflecting that Chinese hospitality industry has bright future growth prospects.

Figure 5: Growth trends in Chinese hospitality industry

Source: Barrows and Powers (2008)

The hospitality industry of China is relying on number of telecommunication sources for its promotion and marketing. The figure 5 is clearly indicating the sources of information and channels that are being used for reaching hospitality organisations such as hotels. The research has indicated that almost 70% of travellers in China rely on traveling websites for gaining information about their desired hotels. 

 

Figure 6: Sources to gain information about hospitality industry of China

Source: Jayawardena et al. (2013)

China is highly investing country in hospitality sector’s progress by encouraging real estate investment in tourism. The hospitality players are receiving support from Government in China in terms of priority approval process, relaxation of taxes and land prices discount (Connolly and Sigala, 2001). It has also been asserted by the researchers that in China, hospitality market is highly consolidated and new players are continually emerging which is indicating higher level of competition in future. The tourism development of Government is in line with the growth of hospitality industry of China. It is also important to note that hospitality players in China are implying models which can leverage them higher level of synergies through an innovative mixture of products and services (Lucas, 1993). One significant example of innovative models is the availability of butler services and vacation rentals to the consumers with the purpose of enhancing their experience and growth potential.

2.2. Innovation

New service development and innovation are the most significant characteristics for assuring sustainable wealth and development of every industry, but particularly for such industries where saturation of markets are done and clients select services and products throughout the world, like case tourism. There are different descriptions for the term ‘innovation’ which has come from the Latin word ‘innovatio’ which implies the creation of something new. The diversity of the description is present in various objectives of observing this process (Rauen, 2013). The most beneficial definition is the one which is given by late Tranter (2009) who has distinguished five sections in which different hotels can introduce innovation:  development of improved or new items,introduction of new procedures for production,creation of sales markets, creation of supply markets and re-organisation of the organisation. This categorisation distinguish the innovation from different alteration in the delivery or make up of items in extension form of adding service factors, product lines or product differentiation. As Pantelidis (2014) identified that the characterisation of innovation in tourism industry can be done through political considerations and limited research (in contrast to invention) can be explained as the market-dependent application of new forms, products or procedures of company. Therefore, the idea for new product or process does not suffice; the idea needs to own the potential in order to be commercialised and it should be grown to the point where it must be tested by the market.  Utilising an instance from tourism being a product, ‘alpine wellness tourism’ is still an approach; on the other hand Brooker et al (2012) treatment dependent tourism involves an innovative product or novel in the spa family. What are the major drivers of innovation in hotels or in the organisations of tourisms, and what differentiates innovative hotels from the ones who follow the upcoming trends in markets? Through the analysis of current research in tourism, it can be assured that there are less radical innovations as compared to increased innovations. Innovations rates are comparatively low.

A research done by Alegre andBerbegal-Mirabent (2016) is related to innovation and leadership processes which targets on the creation of services and products dependent on core competences in destinations of tourism. The implementation of innovation process is done as inter-hotels network procedure. As network and cooperation plays less role in the medium and small size Alpine tourism currently, the next question is that ‘how to solve the issues of cooperation and how to start network operations for fostering innovation networks in tourism destination’. The outcomes of research depicts that particular types of cooperation are given for reinforcement and empowerment of innovation in destination. Though, there are various forms of innovation, the present research specifically focuses on technological innovation. Therefore, the next section reviews the literature related to technological innovation.

 

 

2.2.1. Technological innovation

This is concept which is developed within the scientific field of innovation studies which aims to explain the nature of technological change. According to Bergek et al., (2008), it is defined as a dynamic network of agents which interact in an environment under a certain institutional infrastructure and it is involved in generation, diffusion and utilisation of technology. The technological innovation has its implications at knowledge level, product or service level, or a combination of products and services. In hospitality industry, numerous products and services are provided hence the technological innovation in hospitality industry is applied at the combination of various products and services (Baden-Fuller &Haefliger, 2013)

Business models and innovative technologies have revolutionised the tourism industries and hospitality. Instances of these innovations are guest device connection tools, optimisation systems in hotel, bring your own device, electronic luggage tags, lobby media panels, mobile booking, mobile self-check-in, and phone-as-key-cards, voice transferring over internet phone that are linked through ecosystem of hotels (like phones present in the guest rooms that can be used by guests for making orders directly through touch screen and then these can be used by housekeeping for putting works orders and then system can have direct communication with the departments) (Slåtten and Mehmetoglu, 2015). Wearable devices are used for the identification of table reservation systems, table menus and guests. These innovations are done in the service frontline where customers see the innovation or the operations can be performed at the backend and can be invisible for customers (Sipe, 2016). In some of the hospitality services, guests contact the new gadgets present in the hotel lobbies or use mobile phones for making plans of services or dinner. For instance, Link@Sheraton is a touchscreen device, it makes up a new experience through interaction with guests and gives them a way to determine attractions of local tourists and increase the experience of hotel. However, some of the innovations like customer relationship management (CRM) and tools of customer intelligence are not seen by guests. Hoteliers can do customisation and can increase the experience of guests through consumption patterns and order histories (Alegre&Berbegal-Mirabent, 2016).

2.3. Operational Efficiency

According to Masson et al., (2016) operational efficiency refers to the capability of an organisation to deliver the products and services such that the cost is minimum while quality is best. So, the operational efficiency is about being cost effective and still providing the highest possible quality to the customers. This could be achieved through streamlining the core processes of the hotel such that changing market needs could be responded in a cost effective manner. For achieving the operational efficiency, it is important to minimise the redundancy and waste and leverage the resources in a manner that they contribute most to the success of the business processes. The reduced internal costs allow the hotel to increase the profits and become more successful in the market. Though, there are various ways to achieve this operational efficiency, one of the best ways is to do it through technological innovation (Kim and Kim, 2016). The present research aims to explore that how this could be ensured. Therefore, it will conduct the research on Hilton Hotel to analyse how technological innovation contributes in the operational efficiency of the hospitality industry. The section below reviews the innovation in hospitality industry of China. This will set the foundation for analysing the impact of technological innovation on operational efficiency in Hilton Hotel.

2.4. Innovation in Hospitality industry

With reference to Guisado-González, Guisado-Tato and Sandoval-Pérez (2011) innovation commonly is the commercialisation/incorporation of a service or product with enhanced performance features such as to provide customer with impartially new or enhanced service. A process innovation is acceptance and incorporation of new or considerably enhanced production or delivery procedures. Thus, product innovation is a service or product which is either considerably enhanced or new concerning its basic features, implemented software, technical specifications or other unimportant components, user friendliness or intended uses. Innovation process comprise of considerably enhanced and new production technology, considerably enhanced and new approaches of delivering goods and providing services.

The sector of tourism and services have turned out to be mature markets needing innovation and new attractions of tourism as present destination approaches do a small bit in fulfilling the market needs (Jayawardena et al., 2013). Challenge is to supply maximised value for money by means of innovation-driven cost minimising alterations in marketing mechanisms and production or by means of service or product alterations supplying more diverse experiences of tourism for saturated multi-option and quality conscious customers (Ottenbacher&Gnoth, 2005)

Deliberately resolute alterations are taken into account as innovation, depending upon modern technologies or knowledge developed within or got from external to the hotel. In services specifically the sector of tourism, active contribution of consumers in realisation and conception of an innovation is required for becoming successful in addition to operators of market which make innovation decisions. Larger communication and understanding between retailers of services in the destination to tourist is expected to affect the progress of new services or goods.

This is not as easy as mechanism. Large numbers of actors are playing their role which is why it is not that easy, rising plan of network or system models for better understanding process of innovation (Kervin, 2014). This uneasy interactive mechanism is a combined one which involves coordination; cooperation and communication of various actors are required for spreading and developing new services, processes and products. This system of innovation involves a communication between an institutional structure and a production structure. In the system of innovation, actors rely on country and industry. Linkages and components inside such system comprise of hotels, research and educational institutes, regulatory bodies, non-governmental organisations and even financial institutes. The significant aspect behind involving this system strategy is that process of innovation is an interactive learning, relying on communication between multitudes of individuals. Also, it is a social mechanism, occurring in close and extended cooperation between individuals both inside hotels and various other educational and financial institutes, and among them, needing mutual understanding and trust.

According to Tranter (2009) innovation in the goal of tourist is motivated if hotels are situated not so far from one another. This long-lasting close and direct cooperation among actors in a zone is significant for creation of specialised and complex services, processes or product. It is made sure by proximity that individuals can meet quickly and frequently, in an informal or formal way as in A.R.E where terms of informality are multiple informal locations like village bakery, alpine skiing association and so on where various informal system grow, and so many decisions are taken already before a formal meeting as spoken by a local member of business association. Innovation has got some obstacles as well (Cummings, Kwansa&Sussman, 2013). 

Figure 7: Innovation obstacles according to a survey by Wiig and Isaksen in one of Europe’ s peripheral regions

Source:Wiig, Heidi & Arne Isaksen (1998)

The biggest issue is less number of qualified personnel who own less investment capital. The lack of infrastructure/ support is also the main issue in the way of innovation. Public sector is the main cause of this support. Least of all the obstacles are less technological help and lack of information (Sipe, 2016).          

 

 

2.4.1. Game Changing Perspective of Hospitality Industry

There are numbers of game changing factors that can have a significant and positive impact on the hospitality sector. The figure 8 is indicating the game changing factors that are needed to be integrated by the contemporary hotels. These game changing factors encompass the following; emerging markets, demographics, brand, exogenous events and cycles, technology human capital and sustainability (Costa, 1997). This game changing view of hospitality industry is based on the satisfaction of consumers and it provides that responding to consumer’s needs in innovative way can be of huge assistance to ensure the growth of hospitality organisations. The game changer hospitality players are likely to engage in filling the gaps in emerging markets by grabbing the opportunities with an aim of exploiting growth potential in domestic market (Jones, 1999). Followed by this, it is important for game changers to pursue the life style brand opportunities into account by offering life enhancing experiences to the target consumers. The game changing branding and demographic approaches can lead to enhance loyalty of consumers in long run. In related vein, the game changing hospitality firms can rely on smart phones, and other in room technologies with an aim of responding quickly to the customer’s needs (Houran, Lange and Kefgen, 2013). The technological usage can lead to innovation in the hotels and it can strengthen loyalty of consumers by enhancing their experience. The hospitality organisations with efficient and integrated information and enterprise resource planning system can help to link all units of hotels with an aim of staying ahead of needs of consumers (Jayawardena et al., 2013). Likewise, the technology can make the hospitality organisation more cost effective and it can also improve their relationship with consumers that are the key source of gaining long term competence. In addition to combining all of these key factors, the hospitality sector needs to focus on establishment of values that can protect environment and can help in building strong community image (Torres et al., 2013). The reliance on consumer’s needs and increasing attention to fulfilment of consumer’s needs can offer sustainable competitive advantage to hospitality organisations in long run (Masson et al., 2016).

Figure 8: The game changing view of hospitality sector

Source: Hunter-Jones (2014)

2.4.2. Smart Controls and Beacons for Driving Innovation in Hospitality Sector

The smart phones and technological devices has become standard for industry and hospitality players can bring innovation by relying on smart controls. The most innovative hospitality organisations have enabled their customers to control the room services through their smart phones. The major actors in hospitality sector are relying heavily on smart controls such as Hilton hotel has offered discretion to their guests to access rooms and rooms’ service through smart phones (Giritlioglu, Jones and Avcikurt, 2014). The smart phones are replacing the room keys and they can approach fitness and other recreational areas through their phones. Additionally, the research has indicated that Chicago hotel has allowed their guests to use their smart phones and tablets for controlling lightning level and room temperature (Denizci and Mohammed, 2015). The guests can also change their television channels through their smart phones. The availability of smart controls has mainly enhanced the experience of consumers by offering them greater ease. It has been mentioned by Hai-yan and Baum (2006) that millennial generation is tech-driven and they are willing to spend huge amount on enjoying personalised and high tech experience during their visits to hospitality organisations. Therefore, the implication of smart controls in hospitality industry will assist significantly in gaining the attention of millennial that is highly significant for growth of industry in long run.

Followed by this, the beacons are also considered as an important approach by the contemporary hospitality organisations to satisfy the needs of customers in innovative manner (Taylan, Varinli and Kitapci, 2014). The beacons are Hardware devices that are blue tooth based and help in transmission of messages in real time. The beacons can help in improving service quality by quickly responding to concerns to customers. The adoption of beacons was slow in hospitality industry but with the evidences of their success in other sectors such as restaurants and airports, the beacons are viewed as innovative tools to be implied by hospitality sector (Barrows and Power, 2008). It has been predicted by the Business Insider’s business intelligence that sales of beacons is expected to reach to $ 40 million by 2016 in hospitality sector of US, which is reflecting that beacons are new drivers of innovation in hospitality industry (Pantelidis, 2014).

2.5. Literature Review Matrix

This table of literature matrix provides the overview of recent studies which has analysed how technological innovation could lead towards the operational efficiency. These research studies has targeted few factors that lead towards the technological innovation, hence, these factors are depicted in the below table. 

Authors	Context	Methodology	Key Factors of technological innovation
Bilgihan, &Nejad (2015)	UK hotels athwart star ranking	Multiple Regression Analysis	Top management support Employees creativity
Chang, Gong & Shum (2011)	Hotels and restaurants operating in the People's Republic of China	Survey on 196 independent hotels and use of Regression analysis for analysing the relationship between dependent and independent variables	multi-skilled core customer-contact employees training core customer-contact employees Incremental innovation Radical innovation
López-Fernández, Serrano-Bedia& Gómez-López (2011)	Spanish hospitality firms	Survey, Use of CIS data	Government assistant programs Firm size Membership in business group
Alegre&Berbegal-Mirabent (2016)	Hospitality firms at Barcelona (Spain)	Grounded theory approach (Inductive comparative case study)	Value proposition Appropriate market research Stakeholder involvement
Sipe (2016)	senior-level executives in hospitality industry of Southern California	Exploratory sequential mixed methods	Organisational capacities; (i) connect, (ii) energise and (iii) refresh
Slåtten&Mehmetoglu (2015)	Norway	Quantitative survey	Transformational leadership Employee-perceived creativity Employees’ length of time at workplace
Brooker et al (2012)	Australian outdoor hospitality park industry	Qualitative research method with 30 semi-structured interviews	Availability of sufficient time Adopting ideas through market research
DenizciGuillet& Mohammed (2015)	Hong Kong	Analysis of literature review using content analysis	Core activities of revenue management in hospitality industry
Giritlioglu, Jones and Avcikurt (2014)	Spa hotels of Turkey	Self-administered questionnaire distributed to 331 customers	assurance and employee knowledge healthy and attractive food Empathy Tangibles Responsiveness of service delivery Reliability
Salazar, Costa and Rita (2010)	Portugal	Mixed survey method i.e. both quantitative and qualitative research technique	Room Feelings Restaurant service Tangibles Reception
Torres et al (2013)	Upscale US hotels	Questionnaires were distributed to hotel general managers of upscale US hotels	Electronic feedback Social networking Perceived improvement in ratings generated by customers

Table 1: Literature Matrix

 

 

On the basis of the above literature matrix, following framework is developed for the present research.

 

 

 

 

 

 

Figure 9: Framework

2.6 Summary

The hospitality sector is one the widely expanding sector in economy which is based on increasing international tourism rate. China is among the most important emerging market that has higher expected growth in coming years. The game changing view of the hospitality industry is one of the contemporary model that is innovative and highly effective for strengthening growth in Chinese hospitality market.

 

 

Chapter 3: Research Methodology

3.1. Introduction

This chapter deals with elaboration of methodology used to conduct the research. The methodology used to conduct the research is explained in terms of philosophy, design, approach and instrument used for achieving goals of research.

3.2. Choice of Research Design

In order to conduct a research, two types of research approaches can be used (Walliman, 2011). These techniques are quantitative and qualitative research techniques (Bryman, 2012). In current study, quantitative research approach is used to conduct the research. With the help of quantitative approach, researcher becomes capable of measuring and analysing to the point and accurate data (Bryman and Bell, 2011). The quantitative study helped researcher in analysing the relationship between independent and dependent variables (Walker, 2010). In current study, use of innovation practices for improving future performance of hospitality sector is analysed. Quantitative research is used as the involvement of more objectivity related to findings of research (Bryman, 2008). It also helped the researcher in testing the hypotheses due to its capability of measuring data with the help of statistics (Saunders, 2009). The present research is not conducted through qualitative research approach, as there is an involvement of subjectivity in it and data is interpreted by researcher in his/her own way, due to which chances of biasness are increased (Ghauri and Grn?haug, 2010). Moreover, this type of research method requires a lot of time and effort (Punch, 2009).

According to Bryman (2012) for doing research on some specific issue, there is a strong need of using some effective research design. The present study is done with the help of cross-sectional survey design for assessing innovation management and its impact on performance of hotels in China. The focus of cross-sectional studies is on one specific group at one point in time (Arthur, 2012). The data is collected by researcher at single point in time. Cross-sectional research design needs less time and dedication from participants of study and there is no involvement of many obstacles relevant to findings and maintenance of a sample population (Gillham, 2000).

Somekh and Lewin (2005) stated that the case study method is mostly used by researchers to gather data in social sciences’ research. Under case study method, the survey strategy is considered as an appropriate method used to ask people about their perceptions, beliefs, opinions, expectations and knowledge about some specific issue (Cohen, Manion and Morrison, 2007).Moreover, surveys include use of instruments to describe characteristics of large sample populations (Rugg and Petre, 2007). The aim of survey method was generating quantitative or numerical data related to innovation management at hospitality sector of China. 

This study is undertaken through self-administered survey. This method was most appropriate due to different reasons. First of all, the method made researcher capable of identifying and accessing the sample population with ease and comfort (Trochim and Donnelly, 2008). The second reason of choosing survey strategy is that members of sample population were literature and expert, due to which the need of explaining the questions to participants was eliminated (Ghauri and Grn?haug, 2005). The last reason was that most of managers of hotels showed willingness for cooperating with researcher for presenting their perceptions related to innovation in hospitality sector. With the help of self-administered surveys, respondents become capable of completing questionnaires at their own ease (Brunsdon, 2016). With the help of case study research, researcher became capable of understanding complex issues (Cohen, Manion and Morrison, 2007). It is considered to be a robust research method specifically when a holistic and detailed investigation is needed (Arthur, 2012). According to Punch (2009) case study method is identified as a tool in many studies of social sciences. In case study method, the researcher goes beyond the quantitative statistical results and understands the behavioural conditions from the perspective of actor (Saunders, 2009). The current research has used case study of Hotel Hilton (five hotels from home and five from here). The reason behind selection of case study method is that it helps in examining the data within the context of its use that means within the situation in which activity takes place (Trochim and Donnelly, 2008). Walker (2010) stated that for exploring the strategies used by someone, there is a need of observing the subject within his or her environment. As, the research is conducted for analysing innovation practices in current hotel industry of China, so for this purpose, hotel Hilton China was selected for getting insight from employees of that hotel about innovation practices within the hotel. The Hilton Hotels & Resorts, China is the case of the research because it is one of the hotels which are present all across the globe. The Hilton Hotels & Resorts is facing issues and problems through which the hotel is not enjoying success in terms of more customers or revenues. Therefore, there is a need to provide some recommendations to the Hotel on how it can continue its operations in China successfully.

The problem which is under investigation in the current research includes identification of the main problems which are faced to the Chinese hospitality industry and that relates to Hilton Hotels & Resorts in China as well. In addition to this, the problems are evaluated and discussed so as to provide clear current picture of Chinese hospitality industry. In addition to this, the major part of the problem is linked with the identification of innovative ways through which the current situation of the hospitality in China can be improved.

A case study is helpful in which an authentic text is comprehended by a subject (Somekh and Lewin, 2005). According to Trochim and Donnelly (2008) for exploring the strategies used by the subject, its environment has to be analysed. This is opposite to experiment strategy in which phenomenon is isolated from its context and focuses on limited number of variables. Moreover, with the help of variations with respect to intrinsic and collective approaches to case studies help in both quantitatively as well as qualitatively analysing the data (Cohen, Manion and Morrison, 2007). In case studies, both qualitative and quantitative approaches can be used but rather than this only quantitative approach can also be used (Weissmann, 2009). The present research has used quantitative research approach under case study method. The researcher did survey research for explaining and doing detailed analysis of innovation practices of Hilton China.

3.3. Construction of chosen method

There are two types of data that can be collected while doing a research (Cohen, Manion and Morrison, 2007). These are primary data collection and secondary data collection (Else-Quest and Hyde, 2016). At the time of undertaking a research, there is a need of collecting the needed information, however sometimes that information is available already and sometimes researcher has to collect information for the first time (Bryman and Bell, 2011). On the basis of these broad approaches to collection of information, data can be divided into two main categories;

• Primary data
• Secondary data

Figure 10: Methods of Data Collection

Source: (Saunders, 2009)

Information collected through first approach is termed as primary data, whereas the sources utilised in second approach are termed as secondary sources (Ghauri and Grn?haug, 2010). The current study has used primary data as well as secondary data for the purpose of data collection.

In present research both primary and secondary data is used as it helped the researcher in testing biasness and gathering enough information for fully exploring a topic. Primary data is a data that is collected by the researcher for the first time. It includes observations, survey and interviews (Davies, 2007). In opposite to this, secondary data is a type of information collected from other researchers (Tenenbaum and Driscoll, 2005). For example, in current research journals, books, statistical information and financial records were used for collecting secondary data. According to Cohen, Manion and Morrison (2007) with the help of both primary and secondary data, the researcher became capable of testing the validity of study. Moreover, secondary data helped in backing up the primary data collected by the researcher. The primary data is collected from staff members of Hilton Hotel China with the help of questionnaires. The researcher distributed 100 copies of questionnaire and 58 filled questionnaires were received back. The filled questionnaires were received back by researcher to email address as well as collected by personally visiting the respondents. According to Punch (2009) pointed that a questionnaire is a document that includes a list of various questions, the answers to which are given by respondents. The questions are read and interpreted by respondents and then they select the answer (Somekh and Lewin, 2005). The difference between questionnaire and interview is that in interviewing, one by one question are asked by researcher and respondents give an answer, but in case of questionnaire time is saved in a way that a document is given to respondents and they have to answer accordingly (Jackson, 2016). The questionnaire was designed using Five point Likert Scale which includes options from Strongly Disagree to Strongly Agree.

The researcher ensured designing of questionnaire in such a way that can easily be comprehended, completed and returned by respondents. Moreover, the most interesting items were asked first and demographic items were asked in the end. The guidance was also provided in the cover letter attached at the start of questionnaire. Questionnaire requires less time to complete as there is no need of explaining the meaning of items to respondents, but for this the questions must be clear and easy to understand (Else-Quest and Hyde, 2016). In addition to this, researcher also kept that layout of questionnaire that can easily be read, pleasant to easy and easier for respondents to follow sequence of items (Rugg and Petre, 2007). The style of questionnaire was interactive. It means researcher tried to make respondents feel like if they are talking directly to the researcher. For some sensitive questions for which respondents might feel hesitation, researcher prefaced them to an interactive statement describing the relevance of that question.

The questionnaire is used in present study as it is less costly (Newman and Newman, 2007). According to Laher (2016) it is convenient to use questionnaire for collection of primary data, rather than interviews. It provides great anonymity (Punch, 2009). There is no involvement of face-to-face interaction in case of questionnaire, so anonymity is provided (Ghauri and Grn?haug, 2010). Moreover, in case of sensitive questions, the likelihood of getting accurate information is increased (Tenenbaum and Driscoll, 2005).

The current research is not conducted through interviewing as it requires a lot of time and is expensive (Walker, 2010). A questionnaire is particularly used in case when respondents are scattered over different areas in China. However, in current situation respondents were chosen from Hilton China, but it was not easy for researcher to take time from all respondents in order to conduct interview. Moreover, in interviews the quality of information gained can be affected by interaction done between interviewer and interviewee (Trochim and Donnelly, 2008). Sometimes, researcher could not convey right question to interviewees and sometimes interviewees could not convey right information to the researcher (Schmid and Dusseldorp, 2010).

3.4. Sample

As current study is conducted on Hotel Hilton of China, so population of study is all employees of Hilton China. As it was not possible to undertake research on whole population of study, so a sample of 58 employees was selected from this population through purposive sampling. Purposive sampling helped the researcher in getting that sample through which purpose of research can be achieved (Martinez, 2015). In addition to survey strategy in case of quantitative research method, sample for secondary data on the basis of reliability and credibility has to be selected (Cohen, Manion and Morrison, 2007). The inclusion and exclusion matrix of literature review is developed in order to specify that on what criteria, secondary sources are included or excluded.

Source	Reason for Inclusion	Reason for exclusion
Year of publication (Journal)	The researcher used articles that were published after the year 2000 as innovation is continuously increasing day by day, so for analysing recent issues related to innovation, recent articles were evaluated.	In case of data collection, articles that were published before year 2000 have been excluded as they might contain out-dated information.
Year of publication (Books)	The researcher studied various books related to the topic and theories. As innovation is a new topic and its significance has been highlighted after 1990s, so books written after 1990s by various authors were included.	Those books with publication before 1990s have not been studied as most of them do not contain information related to innovation.
Analysis	Those sources were used in which researchers did analysis of data without any biasness. Only fair means were used for the analysis of data. There was no personal biasness showed by researcher.	The review do not contain those sources in which biased and unfair means were used to analyse data.
Business Area	Most of sources used were based on hospitality industry.	The publications on industries other than hospitality industry were avoided.

Table 2: Inclusion/Exclusion Criteria

3.5. Procedure

The researcher collected primary data with the help of questionnaires in which all respondents were properly informed about the research topic. The questionnaires were distributed to respondents directly face to face and to some respondents questionnaires were distributed through email. None of the respondents was forced to fill questionnaire and proper permission was taken from them before distributing them questionnaire. In questionnaire the language was kept simple and understandable so that every respondent can easily understand the questions. Moreover, the researcher for secondary data, the researcher first of all selected different reliable journals, books and other internet sources related to the research topic and then on the basis of inclusion and exclusion criteria, specific journals and books were selected. After selection of secondary sources, the researcher collected secondary data.

3.5.1. Reliability

Reliability is the concern which is linked with the credibility of findings of research or meanings of findings of research. Bryman (2008) said that reliability deals with the possibility of occurrence of measurement causing the similar outcomes in the repeated attempts. It cannot be assured that any measurement is error-free because of the reason that there is always a possibility that it might have some random/chance error (Else-Quest and Hyde, 2016). That is why; reliability deals with the establishment of consistency along with some repeated measures (Pluye et al, 2009).

Different techniques have been used in this research for the enhancement of reliability measures. At first, the researcher gave the measurement of the ideas under observation. It can be stated that every participant completed the survey for the collection of data. It was done in order to ensure that participants had same experiences related to the completion of survey products. Second, survey items were dependent over the information which was present in the literature review. This was done in order to let the researcher formulate particular questions for asking potential participants (Hafford-Letchfield, 2015). Basically, the literature review is the guide for the basic purpose of research (Brunsdon, 2016). Third, every survey involved consistent and clear dimensions for completion of survey items (Fielding and Schreier, 2001) and description of this survey was done in a language which is easy to interpret. At final stage, categories of response for the survey products were easy to complete and comprehend.

3.5.2. Ethical Issues

The major ethical drama in the social science research is the problem of deceptive study (Laher, 2016). There were no components of deception that were utilised in this research. Prior to the acquirement of access to population, the researcher showed the objective and nature of intentions of research for potential participants. The risks linked with the return and completion of survey was discussed. On opposed to the deception, the researcher was trying to develop trust with participants for the attainment of accurate and truthful data. Procedures for development of trust involved the absence of deception, the participation’s nature, the risks included, the use of document, the relation of topic to the population, and security of anonymity.

The most important concern linked with the protection of respondent is the security and privacy (Fielding and Schreier, 2001). Respondents make more participation in inquiries of research if they are permitted to make participation in anonymously (Klein and Kozlowski, 2000). Anonymity implies that research can link the specific data with individual that gives the data. First of all, anonymity is ensured by the research, though not have direct link with the frame of sampling.

Secondly, researchers are provided with the instruction that they should not involve any marks of identification on the survey. Therefore, researcher cannot determine which participant returned the survey. Third, surveys were completed through a return envelope being given by the researcher with the postage. This was done for making the participants enough able to mail the survey through a location of their selecting to ensure anonymity. Participants were also given the choice to contact with the research through email in the event, that when other copy of survey was required. If contacted, researcher can delete the request of mail and can email the survey. This action does not influence the anonymity due to the fact, that research don’t know for if the individual who has request for the survey through email has actually returned or completed the survey or not (Schmid and Dusseldorp, 2010).

Respondents gave their permission for participation. Before doing this task, it is the responsibility of researcher to inform participant of the processes and objectives of research along with the benefits and risks included in the participation (Walliman, 2011). As stated earlier, there is a cover letter along with the survey, which conveyed the objective of approach inquiry, the usefulness and significance of participation. It provides the services of the informed consent document. Returning and completion of survey was taken as implied consent through participants. The informed consent document which was provided to the respondents, the lack of deception, the nature of participation, and participation remained anonymous. The researcher stated entry of data as accomplished surveys were being returned.

3.6. Data Analysis

The data collected through questionnaires was analysed using Minitab 15. This software was used for descriptive analysis. The item wise analysis for responses of respondents for each item was done with the help of tables and figures. 

3.7. Conclusion

It can be summarised from this section of research that study is conducted with the help of quantitative research method. In order to draw valid and reliable conclusions, both primary and secondary data are used. The primary data is collected from 58 employees of Hilton Hotel China. The primary data is collected with the help of questionnaires. In contrast to this, secondary data is collected with the help of articles published after year 2000 and books relevant to the research issue. The data is analysed with the help of Minitab 15.

 

 

 

Chapter 4: Findings, Analysis and Evaluation

4.1. Introduction

This chapter includes analysis of responses collected from employees of Hilton Hotel China. In order to analyse data collected from respondents, Minitab software is used. This software is used for descriptive analysis of data. First of all, in this chapter secondary data is analysed and after that primary data analysis is done. In primary data analysis, firstly demographic variables like gender, age and experience are analysed and then descriptive analysis of responses for each item is done. The analysis is done with the help of tables and graphs.

4.2. Analysis

Hospitality industry all around the world is facing a set back from the past decade because of many environmental, social, political and economic issues (Okech, 2010). China is a developed country and it is one of the top – most country in terms of development and investment in the development projects (Cichy et al 2009). However, the hospitality industry likewise other parts of the world is facing issues and problems (Caalders, 2003). Chinese hospitality industry is going down from the past 6 to 10 years and this is because of recession that hit the world economy in 2008-2009 (Quah& Chan, 2008). Terrorism is another issue which has affected the countries in which there is no sign of terrorism but still consumers take this issue in consideration.

Hotel Hilton China

Hospitality industry has become stagnant because of lack of innovative ideas and new developments.To attract the customers, the contemporary techniques are required rather than focusing on the old methods of satisfying consumers. The major issues faced to the Hospitality industry can be resolved with the help of innovative ideas. One of the hotels in China, named as Shanghai Hotel has currently stopped growing due to the fact that hotel management of Shanghi does not focus primarily on innovation. The hotel is unable to bring innovation in its services as it has been noticed that the hotel faced 20% reduction in skilled employees in 2015 (DenizciGuillet and Mohammed, 2015). Due to poor human resource management policies, the hotel management is unable to retain employees for longer time. Due to this reason the hotel has not shown any special kinds of innovation and the firm has not grown highly like Hotel Hilton (Rooney, 2011).

Salazar, Costa & Rita (2010) studying the tourism companies of innovation, stated that hospitality innovation has its basic root in the direction and towards the clients, implying that front office personnel tend to have more probability to look for innovations as compared to other employees of hotels. The hospitality industry is characterised by both the tangible and intangible offerings and the delivery of product and services mix in the satisfactorily manner can help them increase the level of customer satisfaction. Likewise, the importance of two way communication is highly significant in hospitality industry which focuses on the notion that input of both consumers and service providers in needed to increase the effectiveness of service delivery process (Cummings, Kwansa and Sussman, 2013).

 

 

4.3. Demographic Analysis

Table 3: Gender

Gender
		Frequency	Percent	Cumulative Percent
Valid	Female	36	62.1	62.1
	Male	22	37.9	100
	Total	58	100

Figure 11: Graphical representation of responses for Gender

In order to conduct research about innovation management practices at hospitality industry of China, the data with the help of questionnaires was collected from 58 employees of Hotel Hilton. They were asked about various questions related to current situation of innovation in the hotel. Prior to the items typically related to innovation, respondents were asked about their demographics. From the data collected from respondents, it has been found that among total respondents there were 38% males and 62% females. The analysis shows that in total sample, there were more females as compared to males. The questionnaires were distributed to 100 employees of Hotel Hilton but filled questionnaires were collected from 58 respondents and among those there were more females.

Table 4: Age

Age
		Frequency	Percent	Cumulative Percent
Valid	31-40 years	10	17.2	17.2
	41-50 years	42	72.4	89.7
	More than 50 years	6	10.3	100
	Total	58	100

 

 

Figure 12: Graphical representation of responses for Age

In addition to the gender, the respondents were also asked about their age. It can be seen from Figure 2, that among 58 employees there were 73% employees belonged to the age group of 41 to 50 years, 10% were from more than 50 years of age group and in opposite to this only 17% were from age group of 31 to 40 years. It shows that most of employees from whom data for current study is collected belonged to age group of 41 to 50 years.

 

 

 

 

 

 

 

 

Table 5: Experience

Experience
		Frequency	Percent	Cumulative Percent
Valid	1-5 years	9	15.5	15.5
	6-10 years	46	79.3	94.8
	More than 10 years	3	5.2	100
	Total	58	100

 

 

Figure 13: Graphical representation of responses for Experience

 

All of respondents from whom data was collected were employees of Hotel Hilton. In order to ensure that they know about practices and operations of hotel, they were asked about their level of experience. The above table and graph shows distribution of their responses on the basis of percentage. It can be seen from the graph that 79 percent of respondents stated that they have 6 to 10 years’ experience of working in the hotel. In contrast to this, only 16 percent stated that they have experience of 1 to 5 years, whereas only 5 percent employees had more than 10 years of experience. It clearly shows that most of respondents of current research had 6 to 10 years’ experience. It means that they must have a lot of reliable knowledge about the innovation practices of hotel.

4.3. Item-wise Analysis

Table 6: The hotel undertakes or leverages R&D extensively.

		Frequency	Percent	Cumulative Percent
Valid	Somewhat Oppose	5	8.6	8.6
	Neutral	7	12.1	20.7
	Somewhat Favour	37	63.8	84.5
	Strongly Favour	9	15.5	100
	Total	58	100

 

Figure 14: Graphical representation of responses for hotel’s practices of leveraging R&D extensively

In order to initiate innovative practices within the organisation, it is important to conduct research at a priority. Nowadays, it has become highly important for organisations to utilise a lot of resource on research and development. This helps the organisations in successfully bringing innovation within the firm. For evaluating the focus of Hotel Hilton’s management on R&D practices, employees were asked that whether or not the hotel undertakes or leverages R&D on extensive basis. The responses have shown that among 58 employees, there were 64 percent employees who showed somewhat favour with the statement. 16 percent employees were strongly in favour of the statement that hotel undertakes research and development extensively. In opposite to this, among total employees there were only 9 percent employees who somewhat opposed to the statement. The analysis shows that most of employees are in favour of the statement that hotel focuses extensively on research and development.

Table 7: The hotel develops new operating techniques

		Frequency	Percent	Cumulative Percent
Valid	Strongly Oppose	1	1.7	1.7
	Somewhat Oppose	6	10.3	12.1
	Neutral	14	24.1	36.2
	Somewhat Favour	34	58.6	94.8
	Strongly Favour	3	5.2	100
	Total	58	100

 

Figure 15: Graphical representation of responses for development of new operating techniques in hotel

The hospitality sector has to focus highly on its operational efficiency and for increasing this efficiency there is a need of development new operating techniques in hotel.  In order to assess the use of operating techniques in Hotel Hilton, the employees were asked that whether or not new operating techniques are developed by management in hotel. Their responses have shown that among 58 employees, there were 59 percent employees who were of view that the hotel develops new operating techniques in order to ensure success and operational efficiency. In opposite to this, only 10 percent and 2 percent employees somewhat opposed and strongly opposed respectively to the statement. Moreover, there were 24 percent employees who were neutral that they neither agreed nor disagreed to the statement. The analysis clearly depicts that most of employees are in favour that the hotel focuses on development of new operating techniques in hotel for improving operational efficiency.

Table 8: The hotel focuses on active marketing and sales department geared to relationship selling

		Frequency	Percent	Cumulative Percent
Valid	Strongly Oppose	5	8.6	8.6
	Somewhat Oppose	5	8.6	17.2
	Neutral	8	13.8	31
	Somewhat Favour	28	48.3	79.3
	Strongly Favour	12	20.7	100
	Total	58	100

 

Figure 16: Graphical representation of responses for focus on active marketing and sales department geared to relationship selling

In order to bring innovation within the organisation, it is important for the hotel to focus on marketing and sales department. The efficient marketing department helps in gearing relationship selling. With the help of undertaking research through marketing department, the firm can get to know about latest trends and demands of customers. The employees of hotel Hilton were asked that whether or not hotel focuses on active marketing and sales department geared to relationship selling. The responses of employees have shown that among total respondents there were 48.3 and 20.7 percent employees respectively who were in somewhat and strongly favour of the statement that hotel considerably focuses on marketing and sales for relationship selling. In opposite to this, only 10 percent respondents somewhat opposed and strongly opposed to the statement. This analysis shows that most of respondents are of view that relationship selling is focused by hotel, which means the hotel is able to bring innovation through getting insights from the market.

Table 9: It has a state of the art information systems and shares customer data extensively

		Frequency	Percent	Cumulative Percent
Valid	Strongly Oppose	7	12.1	12.1
	Somewhat Oppose	7	12.1	24.1
	Neutral	8	13.8	37.9
	Somewhat Favour	23	39.7	77.6
	Strongly Favour	13	22.4	100
	Total	58	100

 

Figure 17: Graphical representation of responses for state of art information systems and sharing of customer data

The respondents of Hotel Hilton were asked that whether or not there is a state of art information systems and data related to customers is shared extensively by the management. The data collected from respondents has shown that among 58 employees, there were 40 percent and 22 percent employees who are in somewhat favour and strongly favour of the statement that management of hotel Hilton uses information systems and shares data of customers extensively. In contrast to this, there were only 12 percent employees who somewhat opposed and 12 percent employees who strongly opposed to this statement. It shows that most of employees are of view that there is a state of art information systems within the hotel and data related to customers is shared extensively by the management. It means hotel Hilton focuses on using advanced technology for the purpose of bringing innovation.

Table 10: It develops or leverages new products & services for bringing innovation

		Frequency	Percent	Cumulative Percent
Valid	Somewhat Oppose	1	1.7	1.7
	Neutral	17	29.3	31
	Somewhat Favour	30	51.7	82.8
	Strongly Favour	10	17.2	100
	Total	58	100

 

 

 

Figure 18: Graphical representation of responses for practices of hotel to develop and leverage new products for bringing innovation

In an organisation, innovation is brought through development and leveraging of new and unique products and services. This item was added in questionnaire for knowing that whether the hotel develops new and unique products for getting competitive edge. From responses, it has been clearly shows that among total employees, 52 percent employees were in somewhat favour that hotel Hilton develops and leverage new products for bringing innovation. In contrary to this, there were 2 percent employees who were somewhat opposed to the statement.

 

 

Table 11: The hotel has customised products or services

		Frequency	Percent	Cumulative Percent
Valid	Neutral	14	24.1	24.1
	Somewhat Favour	31	53.4	77.6
	Strongly Favour	13	22.4	100
	Total	58	100

 

 

Figure 19: Graphical representation of responses for customisation of products and services by hotel

From the analysis of data gathered from employees, it has been found that most of employees agree to the fact that in Hotel Hilton the focus is on customised products or services. The customisation of products helps the hotel in getting competitive advantage. Among 58 employees, none of employees was opposed to the statement and there were 53 percent employees who were in somewhat favour of the statement that hotel Hilton ensures customisation of products and services by hotel. It depicts that the management of hotel customises its products on the basis of updated information and unique ideas. So, in this way more innovation is practices within the hotel.

Table 12: The hotel has a responsive customer service department

		Frequency	Percent	Cumulative Percent
Valid	Somewhat Oppose	5	8.6	8.6
	Neutral	7	12.1	20.7
	Somewhat Favour	34	58.6	79.3
	Strongly Favour	12	20.7	100
	Total	58	100

 

Figure 20: Graphical representation of responses for responsive customer service department

For ensuring effective services of the hotel, there must be a responsive customer service department. It also helps in getting feedbacks of customers in order to bring necessary changes in the products. The data shows that most of employees are in favour that customer service department of hotel Hilton is responsive. It means the hotel focuses strongly on its customer service department in order to get feedback from customers which help them in bringing improvements in their operational efficiency.

 

 

 

Table 13: It has decision-making power and authority in project teams

		Frequency	Percent	Cumulative Percent
Valid	Somewhat Oppose	5	8.6	8.6
	Neutral	15	25.9	34.5
	Somewhat Favour	34	58.6	93.1
	Strongly Favour	4	6.9	100
	Total	58	100

Figure 21: Graphical representation of responses for decision-making power and authority in project teams

For bringing innovation within the firm and to increase operational efficiency of hotel, it is important to give authority to team members to take part in decisions. The employees of hotel Hilton were asked that whether or not they are provided with authority to take part in decisions. The data collected from respondents that among total employees, there were 59 percent employees who were in somewhat favor of the statement that Hotel Hilton gives its employees an authority of taking part in decisions. Among total employees there were only 9 percent employees who somewhat opposed to the statement. Moreover, 26 percent employees showed neutral attitude in this regard.

Table 14: It focuses on improving measures of performance

		Frequency	Percent	Cumulative Percent
Valid	Strongly Oppose	2	3.4	3.4
	Somewhat Oppose	7	12.1	15.5
	Neutral	8	13.8	29.3
	Somewhat Favour	32	55.2	84.5
	Strongly Favour	9	15.5	100
	Total	58	100

 

Figure 22: Graphical representation of responses forfocus on improving measures of performance

In order to ensure better performance of Hilton hotel, it is necessary that they keep on focusing on enhancing measures of performance. This item was asked from the employees of hotel in order to know that do they support or not that the hotel management focuses on enhancing measures of performance. There were 55.2 percent of the respondents who somewhat favoured this item. However 15.5 percent of them strongly favoured this statement that Hilton hotel focuses on enhancing measures of performance. 13.8 percent of the respondents remained neutral on this occasion. On the other hand, there were 12.1 percent who somewhat opposed this statement and 3.4 percent of them strongly opposed this statement. As majority of respondents were in favour of this, therefore, it can be said that it is a good step by the Hilton hotel to focus on improving measures of performance.    

 

Table 15: In recent years, the hotel developed new products/services that create an entirely new market.

		Frequency	Percent	Cumulative Percent
Valid	Strongly Oppose	1	1.7	1.7
	Somewhat Oppose	5	8.6	10.3
	Neutral	17	29.3	39.7
	Somewhat Favour	29	50	89.7
	Strongly Favour	6	10.3	100
	Total	58	100

 

Figure 23: Graphical representation of responses for development of new products or services by hotel

Introducing new services and products is an important strategy for any organisation in order to attract more and more customers. So, this question was asked from the employees of Hilton hotel that what they think that whether or not in the recent times, Hilton hotel has developed new products or services in order to create a completely new market. 50 percent of the respondents somewhat favoured this statement, however, there were 10.3 percent of the respondents who strongly favoured this statement that hotel is introducing new products/services which creates a completely new market. 29.3 percent of the respondents remained neutral when asked about this question. On the other hand, 8.6 percent of the employees somewhat opposed this statement and there were 1.7 percent of them who strongly opposed this statement. Hence, as majority of the respondents favoured this item, so it can be said that yes the hotel has developed new products or services which creates a completely new market.

 

Table 16: In last few years, new products/services that provide improved performance or enhanced value and replace existing products were introduced by the hotel.

		Frequency	Percent	Cumulative Percent
Valid	Strongly Oppose	3	5.2	5.2
	Somewhat Oppose	1	1.7	6.9
	Neutral	14	24.1	31
	Somewhat Favour	32	55.2	86.2
	Strongly Favour	8	13.8	100
	Total	58	100

 

Figure 24: Graphical representation of responses for new product development to provide improved service and enhanced value by hotel

This item was included in order to know from the employees of Hilton hotel that whether or not in the past few years, company has introduced the new products or services that provide enhanced performance of enhanced value and replace existing products. There were 55.2 percent of the employees who somewhat favored this statement that yes their company has introduced new products or services which has provided enhanced performance. 13.8 percent of the respondents strongly favoured this statement. 24.1 percent of the neither favoured nor opposed but stayed neutral on this statement. However, there were 5.2 percent who strongly opposed this statement and 1.7 percent somewhat opposed this statement. As majority of the employees were in favour of this statement. Hence, it can be said that Hilton hotel has introduced new products or services which provided enhanced performance or improved value and replaced existing products or services.

 

Table 17: The hotel has an effective innovation infrastructure of methods and tools.

		Frequency	Percent	Cumulative Percent
Valid	Strongly Oppose	2	3.4	3.4
	Somewhat Oppose	7	12.1	15.5
	Neutral	8	13.8	29.3
	Somewhat Favour	30	51.7	81
	Strongly Favour	11	19	100
	Total	58	100

 

Figure 25: Graphical representation of responses for innovation infrastructure

In the recent times, innovation is an important factor towards the success of any business. Therefore this question was asked from the respondents in order to know that whether or not the company has an effective innovation infrastructure of methods and tools. There were 51.7 percent of the employees who somewhat favoured this statement. 19 percent of the employees were in strong favour of this statement. 13.8 percent employees stayed neutral when asked about this question. However, there were 12.1 percent of the respondents who somewhat opposed this statement and 3.4 percent of the employees were strongly against this statement but as majority of the respondents were in favour of this item asked so it can be said that the Hilton hotel has an effective innovation infrastructure of tools and methods.

 

 

Table 18: The hotel has innovation portfolio process at managing innovation risk.

		Frequency	Percent	Cumulative Percent
Valid	Somewhat Oppose	3	5.2	5.2
	Neutral	13	22.4	27.6
	Somewhat Favour	34	58.6	86.2
	Strongly Favour	8	13.8	100
	Total	58	100

Figure 26: Graphical representation of responses for innovation portfolio process

Of course, there are risks involves when a company tries to bring innovation. In order to know how the hotel is tackling the risks involved in innovation, this question was asked from the employees of hotel that what they think that the company has innovation portfolio process at managing the innovation risks. Result gathered from the employees reflected that 58.6 percent of the respondents somewhat favoured this statement and there were 13.8 percent who were strongly in favour of this statement that their company has innovation portfolio process at managing innovation risks. There were 22.5 percent of the respondents who stayed neutral when asked about this item. 5.2 percent of the employees somewhat opposed this statement and none of the employee strongly disagreed on this occasion. Therefore, it would not be wrong to say that the hotel has innovation portfolio process at managing the risk of innovation.

Table 19: The overall innovation process of hotel is highly innovative.

		Frequency	Percent	Cumulative Percent
Valid	Strongly Oppose	2	3.4	3.4
	Somewhat Oppose	4	6.9	10.3
	Neutral	12	20.7	31
	Somewhat Favour	32	55.2	86.2
	Strongly Favour	8	13.8	100
	Total	58	100

Figure 27: Graphical representation of responses for overall innovation process of hotel

Innovation has a great impact on the turnover of any organisation. Therefore this item was asked from the employees of hotel that what they think of the overall innovation process of hotel, whether it is highly motivated or not. There were 55.2 percent of the employees who somewhat favoured this statement, while 13.8 percent of the respondents strongly favoured this statement. There were 20.7 percent of the employees who neither favoured nor opposed this statement; rather they remained neutral when asked about this. However, there were 6.9 percent who somewhat opposed this item and 3.4 percent who strongly opposed this statement. As majority of the employees were in favour of this item, therefore it can be said that the overall process of innovation of Hilton hotel is highly innovative.   

4.2. Discussion

In current study, from the analysis it has been found that innovation can be termed as the integral activity that includes the overall organisation, which is more linked with the ability of organisation for seeking better and new ways of implementation, acquirement and identification of tasks and ideas.

From the responses of Hotel Hilton’s employees, it has been revealed that for the existence of innovation in the organisation, it is important to cultivate the internal and external determinants and environments and the forces for providing better interpretation of the continuing innovative operations and innovative potentials.This finding has a consistency with research conducted by Chang, Gong and Shum (2011), in which it has been found that for interpreting the innovation, the innovation and business management literature linked with micro and macro determinants (internal and external driven factors) that are related to the deals of innovation mostly with large organisation in economies and developed markets. On contrary to this, the current study has found that management of hotels can play major roles in terms of innovation through diversification and socio-economic development, in rising market like hospitality industry of China.

In addition to this, it has been found from present research that internal change agents are the main individuals that drive the management innovation and underscores the role of agency in pursuing the management innovation. These major individuals in the companies are instrumental to identify new trends in the surrounding and requirements in the company for which management innovation can be desirable. They are also significant for facilitating the initiative links with the changing structures, processes and practices.

In international economy, where actions related to economy are cheaper carried out in the low wage economies like China, then the major way, or the single way is to identify better and new process and products; or like to innovate (Storey and Salaman, 2005). It should be identified that innovation is significant for hospitality industry of developing countries. For example, the capability to do innovation is the major need for success in industrial and economic development in most of the developing countries (Gerstenfeld and Wortzel, 1977).

Innovation is different in accordance with sector, scale and type. It is a process and it should be managed. From analysis, it can be claimed that management of innovation would become the most important task of organisation in future. The challenge suffered by the organisation is to look for new ways for controlling the procedures for providing solution to the renewal issue (Tidd, Bessant and Pavitt, 2005). Chandra and Neelankavil (2008) state the procedure of development of product is most risky, time consuming, expensive and complex. In most of the industrial countries, the rate of success of innovation is low and is comparatively lower in developing countries.

 

 

Chapter 5: Final Discussion, Conclusion and Recommendations

5.0. Introduction

This chapter includes summary of key findings drawn from the research. In this section, some specific conclusion statements were identified and then recommendations are given on the basis of each concluding statement.

5.1. Conclusion

The current research is conducted for analysing the trends of innovation within hospitality industry of China. Moreover, the research is done to review aspects of operational efficiency in hotels. In order to undertake the research, Hotel Hilton China is used as a case study. The data is collected both through primary and secondary sources. The primary data is collected with the help of quantitative research technique in which questionnaires were used. Moreover, the secondary data is collected from journals, books and other internet sources. The implications and contributions of this research are for practice, policy and theory. The employment of research design has made much of the contribution in the empirical interpretation in the context of method of quantitative research and survey design of questionnaire. It has more of the implications for practitioners and policy makers related to the role of internal driven and external driven factors and practices of innovation and their influence over development performance of business. It gives much of the insight into the resource- dependent factors of innovation that are linked with the development of business for medium and small organizations in rising markets.

Conclusion 1: There is a significant role of service innovation in providing competitive advantageto hotels in China.

The current study has concluded that the service innovation can result into the competitive advantages for all of the respondents in new netlike business model. IT system provider makes improvement in the partners and consumers competencies along with the product. The convenient information and attractive functions let the consumers to be ready for using and exploring it, and therefore they get satisfaction and at the same time, they get profit for other actors(Connolly and Sigala, 2001). The dependency over requirements of customer and more attention for the fulfilment of requirements of customer can provide sustainable competitive benefit to the organisations of hospitality in long term (Giritlioglu, Jones and Avcikurt, 2014).Hotel does the lodging of guests and gives more space to other actors, and gets rewards like loyalty of customers and improved facilities of IT. Through partners, local business gets opportunities like advertisement of products to the focused group of customer directly. However, threats and opportunities both follow the innovation.

China is the biggest developing country of world, China has also transformed into the fastest developing nations in last few decades. This major development has influenced the international economy. In this thesis, the China market and the feasibility to get into the business of China have been analysed, and the result is that risks, difficulties and opportunities coexist. Despite of the fact, that this paper targets the case started in the hotel industry, some of the other industries can also be stimulated through the new model of business. In accordance with Service-Dominant Logic, service innovation with the help of cooperation of respondents of business, using the operant resources and targeting the value co-development with consumers, result into new opportunities for organisation in various industries (Torress et al, 2013). It further looks over that how hotels with various capabilities and resources observe the organisational (internal) and environmental (external) determinants that affect the practices of innovation as being part of developmental performance of business, developing a strong endogenous incentive for the progress of economy in China market in accordance with the developmental theory (Mauri, 2007).

Conclusion 2: In hotels, different effective strategies are used for improving operational efficiency with the help innovation management practices.

The area of services and tourism have now become mature markets which require new attraction of tourism and innovation as current destination aspects do a little in fulfilling the requirements of market. The major challenge is to give increased value for money through innovation-driven cost which reduces the change in the mechanism of marketing and development or through means of product or service alterations giving more of the experiences of tourism for quality-conscious customers (Bilgihan and Nejad, 2015).

The hospitality companies with integrated and efficient information and resource planning system of organisation can assist in linking different units of hotel with objective of staying ahead of customers’ requirement. Similarly, technology can make the hospitality enterprise more effective in terms of cost and it can make improvement in the link with customers that are the major source for acquirement of long term competence. Along with the combination of all of these factors, the sector of hospitality should target the development of value that may secure the environment and can assist in developing operational efficiency of hotels (Torres et al., 2013). According toHouran, Lange and Kefgen (2013), within most of the service organisations, the major part of program is the innovation. With exception of some integrated organisation, most of the service organisations do not provide a particular theme of innovation or formulate and depicts targets relative to the activities of innovation. So, in order to improve operational efficiency of hotels, there is a need of formulating some innovation related themes and targets.

Conclusion 3: There is a significant role of management in bringing innovation within hotels.

General management is responsible relative to innovation within the service organisations, which are followed closely through development of business and business unit managers. The more the size of organisation will be, the more significant the role of managers become. At the stage of launch, marketing managers assist the business unit managers. Purchase managers are not responsible profession.The system of innovation involves a communication between an institutional structure and a production structure. In the system of innovation, actors rely on country and industry. Linkages and components inside such system comprise of hotels, research and educational institutes, regulatory bodies, non-governmental organisations and even financial institutes. The management of hotels has to face a challenge to supply maximised value for money by means of innovation-driven cost minimising alterations in marketing mechanisms and production or by means of service or product alterations supplying more diverse experiences of tourism for saturated multi-option and quality conscious customers. The role of top management in the process of innovation is more in the service organisation. All of the chosen criteria got high score. Particularly, frequent information flow and regular involvement related to progress are significant items relative to the involvement of top management. 

5.2. Recommendations

Based on Conclusion 1:

Particularly, it can be stated that more improvement can be made in all of the major sectors of innovation, particularly in the innovations of organisation. The innovation is the major driver of competitiveness, hotel managers are required to reinforce and rethink the efforts of innovation. Also, regulatory bodies need to rethink about their operations and actions required to stimulate this kind of behavior (Jayawardena et al, 2013).

Based on Conclusion 2:

A tourism organisation committed to improving and developing marketing and organisational competencies should try to make improvement in the innovativeness operations of organisation. Innovation influences the performance of organisation. 

The justification for this research is based over the statement that still more things should be interpreted related to the practices of innovation and the hotels in the context of local China market. With most of the hotels that are performing their operations in this competitive environment, innovation can be the major key for achievement of successful developmental performance of business (Kim and Kim, 2016).

There are some of the issues related to the refining and developing of new knowledge, issues and implementation and adoption of new products and processes, problems in the acquirement of adoption and support of innovation, issues acquiring acceptance. That is why; since uncertainty and risk are inherent in the innovation, the most significant factor while consideration of innovation is to pay attention to risks and to the management of risks (Okech, 2010). Some of the basic parameters that are managed by innovation should be considered:  the environmental state, available resources that can be invested in new processes and products, expertise of organisation and their capability of dealing with such risks and uncertainty linked with innovation (Rooney, 2011).

Based on Conclusion 3:

Managers need to look over the major factors that affect the innovativeness, and they are required to be acknowledged that entrepreneurial link and market is of significance for innovativeness of tourism organisation and performance of organisation. According to this, they can motivate the approaches of innovation, for instance, paying more attention to services after sales, perspectives of business driven through satisfaction of customer, and so on. The management should target the radical innovation and R&D investment, which can conclude in more returns. The focus of organisation over protection of IP and equity-financing is also observed as the major key for boosting the rent.

5.3. Limitations and Future Research Directions

In current research, due to the lack of time and resources, only one hotel is studied as a case study. In future more hotels of China can be studied in order to increase generalizability of research. Moreover, due to less time available to the research, the sample size for quantitative research is kept small, so in future researchers can use larger sample size in order to conduct primary research.

 

 

 

 

 

 

 

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Appendix

Questionnaire

Gender

1. Male

2. Female

Age

1. 20-30 years

2. 31-40 years

3. 41-50 years

4. More than 50 years

Experience

1. Less than 1 year

2. 1-5 years

3. 6-10 years

4. More than 10 years

 

Kindly select from 1 to 5, where 1= Strongly Oppose, 2= Somewhat oppose, 3= Neutral, 4= Somewhat favour, 5= Strongly favour

The hotel undertakes or leverages R&D extensively.	1	2	3	4	5
The hotel develops new operating techniques	1	2	3	4	5
The hotel focuses on active marketing and sales department geared to relationship selling	1	2	3	4	5
It has a state of the art information systems and shares customer data extensively	1	2	3	4	5
It develops or leverages new products & services for bringing innovation.	1	2	3	4	5
The hotel has customized products or services	1	2	3	4	5
The hotel has a responsive customer service department	1	2	3	4	5
It has decision-making power and authority in project teams	1	2	3	4	5
It focuses on improving measures of performance	1	2	3	4	5
In recent years, the hotel developed new products/services that create an entirely new market.	1	2	3	4	5
In last few years, new products/services that provide improved performance or enhanced value and replace existing products were introduced by the hotel.	1	2	3	4	5
The hotel has an effective innovation infrastructure of methods and tools.	1	2	3	4	5
The hotel has innovation portfolio process at managing innovation risk.	1	2	3	4	5
The overall innovation process of hotel is highly innovative.	1	2	3	4	5