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Service Management Of Innovation Tourism Industry Research Paper

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Updated: Jan 31st, 2020


Tourism sector is seen to be experiencing fierce and increased competition specifically as a result of continued globalization. This is further compounded by the fact that there have been increased developments in information technology in the sector, and as a way to be relevant in this changing situation, tourism and the entire hospitality industry are working harder to maintain competitiveness.

Today, the call is for hospitality and tourism industry to balance art, innovation, and performance in order to achieve success. One characteristic about tourism is that it has become mature in nature, a fact that in turn is accelerating the need for innovation in the sector in order to identify and pursue new tourism attractions and ventures.

Many stakeholders in the tourism industries are convinced that the new order that is taking place in the tourism sector and the larger hospitality industry calls for players to embrace innovation. This should be achieved through providing enhanced product and service innovation, which is to be achieved, by providing more varied tourism experiences for quality-conscious and saturated multi-option customers.

Elderly population in the tourism sector is an area that the larger industry still disregards despite the important role elderly customers play in propelling the industry.

Many of products and services in the industry are yet to fully address the needs of elderly people, which in turn have resulted into under-utilization of market potential of this segment. Therefore, the aim of this research paper is to investigate and recommend how well service-innovation in tourism industry can serve and satisfy the elderly consumers.

Elderly sharing with service management of innovation performance in Tourism industry

Innovation has become important irrespective of the particular business an individual or organization is involved in (Hotel Mule, 2011). It has been regarded as a critical aspect in ensuring business grows or expands.

The role of innovation in national, international, and even industry economies has been explored and the conclusion drawn is that, as a result of innovation, countries and industries have experienced growth (Hotel Mule).

Predicting the important role of innovation in contemporary world, Drucker’s (1999) postulated that the management challenge of the new 21st century was grounded on innovation and that innovation constituted a critical and vital competence that every organization that aspires for growth and continuity requires (Hotel Mule).

Innovation in any business is seen to have numerous benefits. First, according to Ottenbacher and Gnoth (2005), innovation results into more competitiveness of business (cited in Hotel Mule). Second, all products and services have life cycle where, after going through numerous phases, the product or service decline in quality and usability and new products and services need to be developed.

Therefore, innovation becomes the key to unlocking new ways and means of introducing new products and services to the market to substitute for ageing ones. In other words, innovation becomes important to companies and businesses in providing help of producing better products and services that have the ability to achieve long-term competitive advantage (Hotel Mule).

Further, innovation introduced in an organization is likely to contribute to the increase in revenue for the organization, as the products and services gain competitive performance in the market place. Lastly, through innovation, a company or business is able to meet the changing needs of its constituent consumer-population hence continue appealing to its consumers.

Literature Review

Tourism continues to play an important role in economies of many countries. For instance, economic growth of most of the OECD countries has benefited from tourism and this is estimated to be more that 30% (OECD, 2004). At the same time, tourism has become the major avenue of creating income and employment for populations of many countries at various stages of development.

Today, there are many new forms of tourism coming up mostly in traditional areas of tourism. The observation is that, more innovative, specialized and customer-experience oriented form of tourism are being developed and introduced in the sector due to dynamism taking place in the industry (OECD, 2004).

The changes are further heightened by expanding needs in the industry coupled by increasing demographic changes such as ageing populations, which is leading to acceleration in segmentation of tourism products and creation of new types of tourism products (OECD, 2004).

Innovation taking place in tourism industry is resulting into new ideas, services, and products to the marketplace and as part of overall changes taking place in the industry, innovation in the industry is leading to new and innovative services, products, and processes. Therefore, regard for innovation in tourism industry should be to view it as permanent, global, and dynamic process (OECD, 2004).

‘New tourism’ that has come about as a result of tourism segmentation and customization to respond to tourists needs, is differentiated from the ‘old tourism’ in which the later is characterized as “mass, standardized and rigidly packaged tourism” (OECD, 2004, P.1). The ‘new tourism’ has come as a result of changing demographics, lifestyles, holiday and work patterns (OECD, 2004).

Of importance is the aspect of the ‘new tourism’ as a result of demographic changes, whereby in majority of OECD countries, the population is largely seen to be ageing and these elderly people, to great extent, are playing an important and increasing role in shaping tourism activities (OECD, 2004).

At the same time, studies show that elderly people unlike other demographic segments spend more money consuming tourism products and services; thus, to experience and maximize benefits from the elderly people, the tourism industry has been forced to embrace the idea of innovation (OECD, 2004).

Service innovation in tourism

A lot of literature concerning innovation has greatly been dominated by manufacturing industry, which helped to reinforce the belief that this was the main driver of economic change, and further, as a result of high profile technology as the driver of change (Hall and Williams, 2008).

Nevertheless, the recent times have witnessed accelerated effort by key stakeholder to pay more attention to the service sector, which has been recognized as site of innovation (Hall and Williams, 2008). Tether (2004) provides two approaches of service sector innovation where the author states two approaches – assimilation and demarcation (Hall and Williams, 2008).

Applicable to the service industry is the demarcation approach, which postulates that the service sector is unique in that its services are intangible, involving considerable interaction with customers and have unique aspects of service delivery (Hall and Williams, 2008).

Services are perceived to be dynamic and fluid, time and again changing to customers’ demands and as a result of stiff competition. Innovation and new service development constitute two strategic features that assure growth and sustainability of any industry (Hall and Williams, 2008).

Although service innovation is seen to be vital in almost all industries, it has particularly become critical in those industries that are seen to be market-saturated, and customer needs change constantly such as in the case of tourism (Peters and Pikkemaat, 2006).

Innovation is a word that has received numerous definitions and understanding but the general consensus has rested on perceiving innovation to constitute the process of creating something new (Peters and Pikkemaat, 2006).

Further definitions of innovation have been developed by varied authors such as Schumpeter (1934) who, in defining innovation outlined five key areas in which an organization can introduce innovation.

The five areas are: “generation of new or improved products; introduction of new production processes; development of new sales markets; development of new supply markets; and reorganization and restructuring of the company” (Peters and Pikkemaat, 2006, p.2).

Hjalager (1997) observed that innovation in tourism industry is characterized by limited research and political consideration, and definition of the term innovation according to tourism industry is “the market-based application of new processes, products, or forms of organization” (Peters and Pikkemaat, 2006, p.2).

Different authors have investigated the issue of service innovation, which to extent relates to tourism. For example, Booz-Allen and Hamilton (1982), in a well-published research, they carried out identified numerous kinds of service innovation to exist.

They include new product and service innovation; new product and service lines; accelerated improvements or modification in the existing products and services; innovation in terms of repositioning; and lastly cost reductions innovation (Booz-Allen and Hamilton, 1982 cited in Hotel Mule, 2011).

Further, Lovelock (1984) carried out another research in which the following kinds of service innovation were identified: innovations originating in new service for the markets in undefined markets; innovation of new services for market that already benefit from the existing services which meet the same generic needs; and innovation for new services for the currently served market which generally are offered to the organization’s existing customers.

Other types of service innovations identified by the author include service line extension where innovation in this particular area is carried out to achieve different way of service; service improvements where innovation dwells making improvements on existing services; service improvements; and innovation with regard to style changes (Lovelock 1984 cited in Hotel Mule, 2011).

Carrying out research on the same, Debackere et al. (1998) observe innovation in service marketing largely centers on incremental changes to the products and processes and also fundamental changes to products and services (Hotel Mule, 2011).

Gadrey et al. (1995) observes that service innovation has to do with unbundling of existing service products; modification of service products; innovations in processes and organization for existing service products (Hotel Mule, 2011).

Lastly, Avlonitis et al. (2001) note that service innovation has to do with introducing new services to the market; new improvements to the company services; improvements to the delivery processes; service modification; service line extensions; and service repositioning (Hotel Mule, 2011).

Therefore, service innovation in tourism largely takes place within the precepts of the above-discussed types of innovations.

Elderly consumers and service innovation in tourism

One would say the ‘baby-boomers’ are getting old now, majority of them retiring from jobs and embracing satisfying leisure activities (Behrens, 2009). At the same time, the young generation seems to have been outnumbered by the baby-boomers and as result, tourism and leisure consumption draws large percentage of baby-boomers as compared to the young generation (Behrens, 2009).

Elderly tourist has drawn greater attention and many tourist and hospitality firms have re-designed their marketing plans and strategies to pay more attention to this group (Behrens, 2009). However, as more attention and focus on elderly tourist becomes the issue, many of the services provided to the elderly consumers have little concern for the wellness of the consumers (Behrens, 2009).

Much attention has been directed to traveling services, which older people seem to be enjoying. Therefore, health tourism for elderly people is still an infant area that little has been written and discussed about, hence little is known.

Experience and observation in many of the developed economies is that there is a steady growing demand for wellness products, wellbeing, health, fitness, and stress management products and services a situation that positively indicate that new health and spa products are likely to continue emerging and developing (ETC, 2006 cited in Behrens, 2009).

Research continues to show that health and wellness tourism products and services for elderly consumers will continue to be strong in the industry, and as such, there is need to increase quality of services and spur design. These products and services will continue to excite mostly the western elderly consumers.

Further, recent research work has shown that there will be continued demand for spiritual products and services for this segment of consumers.

In this case, it can be seen that popularity for products and services such as extravagant and luxurious services of exotic massage oils, Thai massage, Indian head massage, acupuncture, hot stone massage, several hours’ massages, underwater spas, private hotel, and spa room, together with design spa are increasing greatly (PATA, 2005 cited in Behrens, 2009).

Consensus that is fast gaining ground in tourist and hospitality industry is that, Spas are gaining an exceptional aura of respect as more and more baby boomers and their children continue to show strong desire for healthy ageing treatments and products that delivers results in terms of looking young and healthy (Behrens, 2009).

More so, some elderly tourists are convinced that these kinds of treatments and services are more attractive and less injurious as compared to injections and surgery (Behrens, 2009). At the same time, elderly consumers are looking and getting attracted to personal care programs that hospitality industry could provide.

Research Model

The reasons why people consume tourism services and products has been explained using many theories and models. Motivation has been identified as the key factor that contributes to tourist consumer behavior and the central to this motivation is the aspect of need (Pizam and Mansfeld, 1999).

Needs are regarded as powerful forces that stimulate behavior, and the general conviction is that, to fully understand human motivation, it is required to identify and explain what needs people have and how they can be fulfilled.

Abraham Maslow’s development of the hierarchy of needs model in 1947 brought about a model that could explain the motivational factors that may contribute to why individuals express particular behavior about consumption of products and services.

Maslow’s work or model can be seen to tie with tourism consumption motivation as the consumption in general is seen to be stimulated by a need or want satisfier (Pizam and Mansfeld, 1999). Crompton (1979), utilizing Maslow’s results and findings, identified nine motives that can be classified as needs that motivate tourist actions and consumption behavior (Pizam and Mansfeld, 1999).

To the author, these needs could be classified into two: push factors and pull factors (Pizam and Mansfeld, 1999). Push motives can be classified as escape from mundane environment, exploration, and evaluation of self, relaxation, prestige, regression, enhancement of relationship, and facilitation of social interaction (Pizam and Mansfeld, 1999).

On the other hand, pull motives constitute novelty and education (Pizam and Mansfeld, 1999). On the other hand, Mannel and ISO-Ahola (1987) identify two main types of push and pull factors as personal and interpersonal (Pizam and Mansfeld, 1999).

The postulation of the author is that people especially elderly travel to leave behind personal and interpersonal problems of their environment and to obtain compensating personal or interpersonal rewards (Pizam and Mansfeld, 1999).

The escaping and seeking model of leisure motivation

The escaping and seeking model of leisure motivation.

Source: Pizam and Mansfeld, 1999

Maslow’s hierarchy of needs

Maslow’s hierarchy of needs.

Source: Montana and Charnove, 2008

Discussion and Recommendations

Many of the available wellness and health services and facilities in tourism industry have continued to suffer from decline in quality and popularity as majority of its users are elderly, and little attention continues to be paid to this segment of the tourism market (Smith and Puczko, 2008). For instance, there is lack of adequate purpose-built wellness resorts, hotels, and centers within the hospitality and tourism industry.

The little available facilities in the tourism industry are largely dilapidated and lack meaningful renovation, while at the same time, service levels are usually not developed, as they should be. The situation has been motivated by lack of clear and coherent policy work to guide such undertaking and generally, the support from key stakeholders is minimal (Smith and Puczko, 2008).

Wellness, together with medical tourism, is an area that is slowly attracting elderly consumers as the issue of physical incapability and health problems take order. In addition, there is need for key industry players to get involved in putting up efficient wellness facilities that are able to accommodate medical elderly visitors on one hand and the wellness elderly visitors on the other and (Smith and Puczko, 2008).

Still, the problem is further compounded from the fact that the location issue is also contributing to scarceness and inaccessibility of wellness facilities among the elderly tourists.

For instance, the available facilities are located in relatively remote and inaccessible or unknown parts of the country, and though the domestic consumers may have knowledge of these facilities, the problem normally is felt among international elderly tourist consumers who largely may not be aware of the existence of such sites or facilities (Smith and Puczko, 2008).

Therefore, to address this problem will require branding wellness tourism and initiating programs that can be used to promote wellness programs to both local and international elderly consumers (Smith and Puczko, 2008).

The following is recommended as part of the strategies to improve the wellness tourism among elderly segment of the market. First, there is need to combine luxury brands together with high technology in order to make this uncharted market segment popular.

The following should be some of the strategies to initiate within this industry: establishment of MySpa, this constitutes a wellness lifestyle trend that combines technology to provide wellness facilities such as spas rooms, hospitals within the tourism sector.

Elderly people, when they visit particular tourist destination, should be able to find personalized treatment and health status information more appropriately and quickly (Pearce, Filep and Ross, 2010).

Second, the industry needs to encourage establishment of hol-life retreats, which in essence, are retreat-style wellness centers or spas where people go for some time away from their stressful lives and workplaces to recover and refocus on themselves and their needs (Smith and Puczko, 2008).

The benefits of such centers to the elderly tourist consumers is that, it will be able to provide the consumers with ample time to re-adjust specifically after retirement or after a stressful event in their lives (Smith and Puczko, 2008).

At the same time, enhancement of these kinds of wellness spas is that there can be incorporation of lighter courses, classes or even workshop in which elderly tourist consumers can be subjected to in attempt to enable them recover very fast (Smith and Puczko, 2008).


Demographic changes are fast changing the landscape of tourism and hospitality industry. Age today is used in tourism industry to design appropriate products and services for the specific and particular population segment concerned.

Elderly segment of the population is becoming an important tourism consumption segment and this may be associated to available time and leisure opportunities they are presented with after retirement (Weiermair and Mathies, 2004).

Nevertheless, as the industry may be convinced that elderly clients consume almost similar products and services as other demographic segments, it is coming out clear that this group has distinct needs, as far as tourism industry and its services are concerned.

Wellness and health tourism is an area that is yet to receive considerable literature development but profound evidence shows that elderly people are being motivated by needs from this area. Older people face both health and stressful issue that majority of them will want to do away with.

Appropriate wellness and health programs, facilities and even training within the overall tourism industry will help to meet the needs of elderly consumers. Motivation to undertake this remains grounded in the fact that elderly tourist continue to dominate large group of people who consume tourism products and services, and any form of ignoring this demographic segment will as well mean impacting the business negatively.


Behrens, A. (2009). . Berlin: GRIN Verlag. Web.

Hall, C. M. and Williams, A. M. (2008). . NY: Routledge. Web.

Hotel Mule. (2011). Hospitality Service Innovation Management. Web.

Montana, P. J. and Charnov, B. H. (2008). . London: Barron’s Educational Series. Web.

OECD. (2004). Innovation and Growth in Tourism. OECD Conference held in Lugano Switzerland. Web.

Peters, M. and Pikkemaat, B. (2006). . NY: Routledge. Web.

Pearce, P., Filep, S. and Ross, G. (2010). . NY: Taylor & Francis. Web.

Pizam, A. and Mansfeld, Y. (1999). . NY: Routledge. Web.

Smith, M. and Puczko, L. (2008). . MA: Butterworth-Heinemann. Web.

Weiermai, K. and Mathies, C. (2004). . Haworth Press. Web.

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