This study addressed the relationship between the innovativeness of hotels and their profitability. The authors propose that innovativeness and the visibility of the benefits to customers from innovative activities both serve as endogenous variables. Competitive market advantage, sales growth, and capacity utilization serve as mediators. Both key informants and financial statements provided data for a sample of 298 hotels. The results show that the relationship between innovativeness and profitability is positive and fully mediated.
AgarwalS.ErramilliM. K.DevC. S.2003. Market orientation and performance in service firms: Role of innovation. Journal of Services Marketing17 (1): 68-82.
2.
AndersonE. W.FornellC.LehmannD. R.1994. Customer satisfaction, market share and profitability: Findings from Sweden. Journal of Marketing58 (3): 53-66.
3.
AndersonJ. C.GerbingD. W.1988. Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin103 (3): 411-23.
4.
Atuahene-GimaK.1996. Differential potency of factors affecting innovation performance in manufacturing and services firms in Australia. Journal of Product Innovation Management13 (1): 35-52.
5.
BagozziR. P.YiY.1988. On the evaluation of structural equation models. Journal of the Academy of Marketing Science16 (1): 74-94.
6.
BakerJ.BerryL. L.ParasuramanA.1988. The marketing impact of branch facility design. Journal of Retail Banking10 (2): 33-42.
7.
BakerJ.GrewalD.ParasuramanA.1994. The influence of store environment on quality inferences and store image. Journal of the Academy of Marketing Science22 (4): 328-39.
8.
BakerJ.GrewalD.VossG. B.2002. The influence of multiple store environment cues on perceived merchandise value and patronage intentions. Journal of Marketing66 (2): 120-41.
9.
BaumJ. A.GreveH. R.2012. Young and growing research directions in competitive strategy. In Handbook of research on competitive strategy, ed. DagninoG. B., 83-105. Cheltenham, UK: Edward Elgar.
10.
BerryL.1986. Big ideas in services marketing. Journal of Consumer Marketing3 (2): 47-51.
11.
BerryL. L.1980. Services marketing is different. Business30 (3): 24-29.
12.
BitnerM. J.1992. Servicescapes: The impact of physical surroundings on customers and employees. Journal of Marketing56 (2): 57-71.
13.
BoozAHamilton. 1968. Management of new products. Chicago: Booz, Allen and Hamilton.
14.
BoyleE.2007. A process model of brand cocreation: Brand management and research implications. Journal of Product & Brand Management16 (2): 122-31.
15.
BuganzaT.VergantiR.2006. Life-cycle flexibility: How to measure and improve the innovative capability in turbulent environments. Journal of Product Innovation Management23 (5): 393-407.
16.
BuzzellR. D.GaleB. T.1987. The PIMS principles: Linking strategy to performance. New York: Free Press.
17.
CalantoneR. J.ChanK.CuiA. S.2006. Decomposing product innovativeness and its effects on new product success. Journal of Product Innovation Management23 (5): 408-21.
18.
CampbellA. J.CooperR. G.1999. Do customer partnerships improve new product success rates. Industrial Marketing Management28 (5): 507-19.
19.
CaponN.FarleyJ. U.HoenigS.1990. Determinants of financial performance: A meta-analysis. Management Science36 (10): 1143-59.
20.
CarpenterG. S.GlazerR.NakamotoK.1994. Meaningful brands from meaningless differentiation: The dependence on irrelevant attributes. Journal of Marketing Research31 (3): 339-50.
21.
ChangS.GongY.ShumC.2011. Promoting innovation in hospitality companies through human resource management practices. International Journal of Hospitality Management30 (4): 812-18.
22.
ChenW. J.2011. Innovation in hotel services: Culture and personality. International Journal of Hospitality Management30 (1): 64-72.
23.
ChoH. J.PucikV.2005. Relationship between innovativeness, quality, growth, profitability, and market value. Strategic Management Journal26 (6): 555-75.
24.
CooperR. G.1994. New products: The factors that drive success. International Marketing Review11 (1): 60-76.
25.
CooperR. G.de BrentaniU.1991. New industrial financial services: What distinguishes the winners. Journal of Product Innovation Management7 (2): 75-90.
26.
CooperR. G.EdgettS.1996. Critical success factors for new financial services. Marketing Management5 (3): 26-37.
27.
CooperR. G.KleinschmidtE. J.1987. New products: What separates winners from losers?Journal of Product Innovation Management4 (3): 169-84.
28.
CroninJ. J.PageT. J.1988. An examination of the relative impact of growth strategies on profit performance. European Journal of Management22 (1): 57-68.
29.
CrossR. G.HigbieJ. A.CrossD. Q.2009. Revenue management’s renaissance: A rebirth of the art and science of profitable revenue generation. Cornell Hospitality Quarterly50 (1): 56-81.
30.
DahlD. W.ChattopadhyayA.GornG. J.1999. The use of visual mental imagery in new product design. Journal of Marketing Research36 (1): 18-28.
31.
DamanpourF.1991. Organizational innovation: A meta-analysis of effects of determinants and moderators. Academy of Management Journal34 (3): 555-90.
32.
DanneelsE.KleinschmidtE. J.2001. Product innovativeness from the firm’s perspective: Its dimensions and their relation with project selection and performance. Journal of Product Innovation Management18 (6): 357-73.
33.
DardenW. R.BabinB. J.1994. Exploring the concept of affective quality: Expanding the concept of retail personality. Journal of Business Research29 (2): 101-109.
34.
de BrentaniU.2001. Innovative versus incremental new business services: Different keys for achieving success. Journal of Product Innovation Management18 (3): 169-87.
35.
DeshpandéR.FarleyJ. U.WebsterF. E.1993. Corporate culture, customer orientation, and innovativeness in Japanese firms: A quadrad analysis. Journal of Marketing57 (1): 23-37.
36.
DessG. G.RobinsonR. B.1984. Measuring organizational performance in the absence of objective measures: The case of the privately held firm and conglomerate business unit. Strategic Management Journal5 (3): 265-73.
37.
DicksonP. R.1992. Toward a general theory of competitive rationality. Journal of Marketing56 (1): 69-83.
38.
DubeL.EnzC.RenaghanL.SiguawJ.2000. Managing for excellence: Conclusions and challenges from a study of best practices in the U.S. lodging industry. Cornell Hotel and Restaurant Administration Quarterly41 (5): 30-39.
39.
EnzC. A.2008. Creating a competitive advantage by building resource capability: The case of outback steakhouse Korea. Cornell Hospitality Quarterly49 (1): 73-78.
40.
FishbeinM.1967. Attitude theory and measurement. New York: Wiley.
41.
FornellC.LarckerD. F.1981. Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research19 (1): 39-50.
42.
GarciaR.CalantoneR.2002. A critical look at technological innovation typology and innovativeness terminology: A literature review. Journal of Product Innovation Management19 (2): 110-32.
43.
GatignonH.RobertsonT. S.1985. Propositional inventory for new diffusion research. Journal of Consumer Research11 (4): 859-67.
44.
GatignonH.XuerebJ. M.1997. Strategic orientation of the firm and new product performance. Journal of Marketing Research34 (1): 77-90.
45.
GeroskiP.MachinS.1992. Do innovating firms outperform non-innovators?Business Strategy Review3 (2): 79-90.
46.
GounarisS.KoritosC. D.2012. Adoption of technologically based innovations: The neglected role of bounded rationality. Journal of Product Innovation Management29 (5): 821-38.
47.
GrissemannU.PlankA.Brunner-SperdinA.2013. Enhancing business performance of hotels: The role of innovation and customer orientation. International Journal of Hospitality Management33:347-56.
48.
HartlineM. D.MaxhamJ. G.IIIMcKeeD. O.2000. Corridors of influence in the dissemination of customer-oriented strategy to customer contact service employees. Journal of Marketing64 (2): 35-50.
49.
HenardD. H.SzymanskiD. M.2001. Why some new products are more successful than others. Journal of Marketing Research38 (3): 362-75.
50.
HertogP. D.GalloujF.SegersJ.2011. Measuring innovation in a “low-tech” service industry: The case of the Dutch hospitality industry. The Services Industry Journal31 (9): 1429-49.
51.
HeskettJ. L.JonesT. O.LovemanG. W.SasserW. E.Jr.SchlesingerL. A.1994. Putting the service-profit chain to work. Harvard Business Review72 (2): 164-74.
52.
HinkinT. R.1998. A brief tutorial on the development of measures for use in survey questionnaires. Organizational Research Methods1 (1): 104-21.
53.
HomburgC.KlarmannM.ReimannM.SchilkeO.2012. What drives key informant accuracy?Journal of Marketing Research49 (4): 594-608.
54.
HossainM. S.KumarV.KumarU.2010. Innovation process in Canadian and US hotels. Global Journal of Business Research4 (3): 127-37.
55.
HuL. T.BentlerP. M.1999. Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling6 (1): 1-55.
56.
HuM.-L. M.HorngJ.-S.SunY.-H. C.2009. Hospitality teams: Knowledge sharing and service innovation performance. Tourism Management30 (1): 41-50.
57.
HultG. T.HurleyR. F.KnightG. A.2004. Innovativeness: Its antecedents and impact on business performance. Industrial Marketing Management33 (5): 429-38.
58.
HuntS. D.DuhanD. F.2002. Competition in the third millennium: Efficiency or effectiveness?Journal of Business Research55 (2): 97-102.
59.
HuntS. D.MorganR. M.2005. The resource-advantage theory of competition: Review. Review of Marketing Research1:153-206.
60.
JacobsonR.1992. The validity of ROI as a measure of business performance. American Economic Review77:470-78.
61.
JohnsonM. D.NaderG.FornellC.1996. Expectations, perceived performance, and customer satisfaction for a complex service: A case of bank loans. Journal of Economic Psychology17 (2): 163-82.
62.
KayamanR.ArasliH.2007. Customer based brand equity: Evidence from the hotel industry. Managing Service Quality17 (1): 92-109.
63.
KleinschmidtE.CooperR.1991. The impact of product innovativeness on performance. Journal of Product Innovation Management8 (4): 240-52.
64.
KrakhmalV.2012. Customer profitability accounting in the context of hotels. In Accounting and financial management, eds. HarrisP.MongielloM., 188-210. Oxford, UK: Butterworth-Heinemann.
65.
KramerT.IrmakC.BlockandL. G.IlyukV.2012. The effect of a no-pain, no-gain lay theory on product efficacy perceptions. Marketing Letters23 (3): 1-13.
66.
LancasterK. J.1966. A new approach to consumer theory. The Journal of Political Economy74 (2): 132-57.
67.
LangerakF.HultinkE. J.RobbenH. S. J.2004. The impact of market orientation, product advantage, and launch proficiency on new product performance and organizational performance. Journal of Product Innovation Management21 (2): 79-94.
68.
LevittT.1981. Marketing intangible products and product intangibles. Cornell Hotel and Restaurant Administration Quarterly22 (2): 37-44.
69.
LiT.CalantoneR.1998. The impact of market knowledge competence on new product advantage: Conceptualization and empirical examination. Journal of Marketing62 (4): 13-29.
MarshH. W.WenZ.HauK.-T.2006. Structural equation models of latent interaction and quadratic effects. In Structural equation modeling: A second course, eds. HancockG. R.MuellerR. O., 225-65. Greenwich: Information Age Publishing.
72.
Martínez-RosE.Orfila-SintesF.2009. Innovation activity in the hotel industry. Technovation29 (8): 632-41.
73.
Martínez-RosE.Orfila-SintesF.2012. Training plans, manager’s characteristics and innovation in the accommodation industry. International Journal of Hospitality Management31 (3): 686-94.
74.
Meyers-LevyJ.MalaviyaP.1999. Consumers’ processing of persuasive advertisements: An integrative framework of persuasion theories. Journal of Marketing63 (4): 45-60.
75.
MooreG. C.BenbasatI.1991. Development of an instrument to measure the perceptions of adopting an information technology innovation. Information Systems Research2 (3): 192-222.
76.
MoormanC.1995. Organizational market information processes: Cultural antecedents and new product outcomes. Journal of Marketing Research32 (3): 318-35.
77.
MoreauC. P.LehmannD. R.MarkmanA. B.2001. Entrenched knowledge structures and consumer response to new products. Journal of Marketing Research38 (1): 14-29.
78.
MorganN. A.VorhiesD. W.2001. Product quality alignment and business unit performance. Journal of Product Innovation Management18 (6): 396-407.
79.
NarverJ. C.JacobsonR.SlaterS. F.1993. Market orientation and business performance: An analysis of panel data. In Developing a market orientation, ed. DeshpandéR., 93-121. Cambridge, MA: Marketing Science Institute.
80.
NarverJ. C.SlaterS. F.1990. The effect of a market orientation on business profitability. Journal of Marketing54 (4): 20-35.
81.
NasutionH.MavondoF.MatandaM.NdubisiN.2011. Entrepreneurship: Its relationship with market orientation and learning orientation and as antecedents to innovation and customer value. Industrial Marketing Management40 (33): 336-45.
82.
NayyarP. R.1993. On the measurement of competitive strategy: Evidence from a large multiproduct U.S. firm. Academy of Management Journal36 (6): 1652-69.
83.
NicolauJ. L.Santa-MariaM. J.2013. The effect of innovation on hotel market value. International Journal of Hospitality Management32:71-79.
84.
NijssenE. J.HillebrandB.VermeulenP.KempR. G.2006. Exploring product and service innovation similarities and differences. International Journal of Research in Marketing23 (3): 241-51.
85.
OliverR. L.1997. Satisfaction: A behavioral perspective on the consumer. New York: Irwin McGraw-Hill.
86.
OlsonE. M.OrvilleC. W.RuekertR. W.1995. Organizing for effective new product development: The moderating role of product innovativeness. Journal of Marketing59 (1): 48-62.
87.
O’NeillJ. W.MattilaA. S.2006. Strategic hotel development and positioning: The effects of revenue drivers on profitability. Cornell Hotel and Restaurant Administration Quarterly47 (2): 146-54.
88.
OrdaniniA.ParasuramanA.2011. Service innovation viewed through a service dominant logic lens: A conceptual framework and empirical analysis. Journal of Service Research14 (1): 13-23.
89.
Orfila-SintesF.Crespi-CladeraR.Martínez-RosE.2005. Innovation activity in the hotel industry: Evidence from Balearic Islands. Tourism Management26 (6): 851-65.
90.
Orfila-SintesF.MattssonJ.2009. Innovation behavior in the hotel industry. Omega: The International Journal of Management Science37 (2): 380-94.
91.
OttenbacherM.2007. Innovation management in the hospitality industry: Different strategies for achieving success. Journal of Hospitality & Tourism Research31 (4): 431-54.
92.
OttenbacherM.GnothJ.2005. How to develop successful hospitality innovation. Cornell Hotel and Restaurant Administration Quarterly46 (2): 205-22.
93.
OttenbacherM.HarringtonR. J.2009a. Institutional, cultural and contextual factors: Potential drivers of the culinary innovation process. Tourism and Hospitality Research9 (3): 235-49.
94.
OttenbacherM.HarringtonR. J.2009b. The product innovation process of quick-service restaurant chains. International Journal of Contemporary Hospitality Management21 (5): 523-41.
95.
OttenbacherM.ShawV.LockwoodA.2006. An investigation of the factors affecting innovation performance in chain and independent hotels. Journal of Quality Assurance in Hospitality & Tourism6 (3-4): 113-28.
96.
ParasuramanA.ZeithamlV. A.BerryL. L.1985. A conceptual model of service quality and its implications for future research. The Journal of Marketing49 (4): 41-50.
97.
Pereira-MolinerJ.Claver-CortésE.Molina-AzorínJ. F.2010. Strategy and performance in the Spanish hotel industry. Cornell Hospitality Quarterly51 (4): 513-28.
98.
PlouffeC. R.VandenboschM.HullandJ.2001. Intermediating technologies and multi-group adoption: A comparison of consumer and merchant adoption intentions toward a new electronic payment system. Journal of Product Innovation Management18 (2): 65-81.
99.
PorterM. E.1980. Competitive strategy. New York: Free Press.
100.
RogersE. M.2003. Diffusion of innovations. New York: Free Press.
101.
RuberaG.KircaA. H.2012. Firm innovativeness and its performance outcomes: A meta-analytic review and theoretical integration. Journal of Marketing76 (2): 130-47.
102.
RushmoreS.1997. The broker vs. the appraiser: How to value a hotel. Real Estate Financial Journal12 (4): 15-23.
103.
SääksjärviM.SamieeS.2011. Assessing multifunctional innovation adoption via an integrative model. Journal of the Academy Marketing Science39 (5): 717-35.
104.
SandvikI. L.ArnettD. B.SandvikK.2011. The effects of new product development proficiency on product advantage and tourism business performance: Evidence from the Norwegian hotel industry. Journal of Travel Research50 (6): 641-53.
105.
SandvikI. L.SandvikK.2003. The impact of market orientation on product innovativeness and business performance. International Journal of Research in Marketing20 (4): 355-76.
106.
SenguptaA.DevC. S.2011. Service innovation: Applying the 7-I model to improve brand positioning at the Taj holiday village Goa, India. Cornell Hospitality Quarterly52 (1): 11-19.
107.
ShermanE.MathurA.SmithR. B.1997. Store environment and consumer purchase behavior: Mediating role of consumer emotions. Psychology & Marketing14 (4): 361-78.
108.
SkalpeO.SandvikK.2002. The economics of quality. Tourism Economics8 (4): 361-76.
109.
SlaterS. F.NarverJ. C.2000. Intelligence generation and superior customer value. Journal of the Academy Marketing Science28 (1): 120-27.
SongX. M.Di BenedettoC. A.ZhaoY. L.1999. Pioneering advantages in manufacturing and service industries: Empirical evidence from nine countries. Strategic Management Journal20 (9): 811-36.
112.
SongX. M.Montoya-WeissM. M.2001. The effect of perceived technological uncertainty on Japanese new product development. Academy of Management Journal44 (1): 61-80.
113.
SongX. M.ParryM. E.1997a. A cross-national comparative study of new product development processes: Japan and the United States. Journal of Marketing61 (2): 1-18.
114.
SongX. M.ParryM. E.1997b. The determinants of Japanese new product success. Journal of Marketing Research34 (1): 64-76.
115.
SorescuA. B.ChandyR. K.PrabhuJ. C.2003. Sources and financial consequences of radical innovation: Insights from pharmaceuticals. Journal of Marketing61 (4): 82-102.
116.
SorescuA. B.SpanjolJ.2008. Innovation’s effect on firm value and risk: Insights from consumer packaged goods. Journal of Marketing72 (2): 114-32.
117.
StoreyC.EasingwoodC. J.1998. The augmented service offering: A conceptualization and study of its impact on service success. Journal of Product Innovation Management15 (4): 335-51.
118.
SundboJ.1997. Management of innovation in services. The Service Industries Journal17 (3): 432-55.
119.
SzymanskiD. M.KroffM. W.TroyL. C.2007. Innovativeness and new product success: Insights from the cumulative evidence. Journal of the Academy Marketing Science35 (1): 35-52.
120.
TajeddiniK.2010. Effect of customer orientation and entrepreneurial orientation on innovativeness: Evidence from the hotel industry in Switzerland. Tourism Management31 (2): 221-31.
121.
TajeddiniK.TruemanM.2012. Managing Swiss hospitality: How cultural antecedents of innovation and customer-oriented value systems can influence performance in the hotel industry. International Journal of Hospitality Management31 (4): 1119-29.
122.
TalkeK.O’ConnorG. C.2011. Conveying effective message content when launching new industrial products. Journal of Product Innovation Management28 (6): 943-56.
123.
TeasR. K.AgarwalS.2000. The effects of extrinsic product cues on consumers’ perceptions of quality, sacrifice, and value. Journal of the Academy of Marketing Science28 (2): 278-90.
124.
TheoharakisV.HooleyG.2008. Customer focus and innovativeness: Their differing roles in new and old Europe. International Journal of Research in Marketing25 (1): 69-79.
125.
ThölkeJ. M.HultinkE. J.RobbenH. S. J.2001. Launching new product features: A multiple case examination. Journal of Product Innovation Management18 (1): 3-14.
126.
TornatzkyL. G.KleinK. J.1982. Innovation characteristics and innovation adoption-implementation: A meta-analysis of findings. IEEE Transactions on Engineering Management. EM-29 (1): 28-45.
127.
TsengC.-Y.KuoH.-Y.ChouS.-S.2008. Configuration of innovation and performance in the service industry: Evidence from the Taiwanese hotel industry. The Service Industries Journal28 (7): 1015-28.
128.
ValenciaJ. C.ValleR. S.JimenezD. J.2010. Organizational culture as determinant of product innovation. European Journal of Innovation Management13 (4): 466-80.
129.
VenkatramanN.VasudevanR.1986. Measurement of business performance in strategy research: A comparison of approaches. Academy of Management Review11 (4): 801-14.
130.
VergantiR.BuganzaT.2005. Design inertia: Designing for life-cycle flexibility in internet-based services. Journal of Product Innovation Management22 (3): 223-37.
131.
VermaR.AndersonC.DixonM.EnzC.ThompsonG.VictorinoL.2008. Key elements in service innovation: Insights for hospitality industry. Cornell Hospitality Roundtable Proceedings no. 1 (November) Ithaca, NY: Center for Hospitality Research, Cornell University, School of Hotel Administration, 6-12.
132.
VermaR.ThompsonG.LouviereJ.1999. Configuring service operations based on customer needs and preferences. Cornell Hotel and Restaurant Administration Quarterly44 (5-6): 155-65.
133.
VictorinoL.VermaR.PlaschkaG.DevC.2005. Service innovation and customer choices in the hospitality industry. Managing Service Quality15 (6): 555-76.
134.
VilaM.EnzC.CostaG.2012. Innovative practices in the Spanish Hotel Industry. Cornell Hospitality Quarterly53 (1): 75-85.
135.
WangC. L.AhmedP. K.2004. Development and validation of the organizational innovativeness scale. European Journal of Management7 (4): 303-13.
136.
WeiR.2001. From luxury to utility: A longitudinal analysis of cell phone laggards. Journalism & Mass Communication Quarterly78 (4): 702-19.
137.
WoodsworthR. M.MandelbaumR.2010. Seventy-five years of U.S. hotel revenues, expenses, and profits. Cornell Hospitality Quarterly51 (1): 20-26.
138.
XieC.BagozziR. P.TroyeS. V.2008. Trying to presume: Toward a theory of consumers as co-creators of value. Journal of the Academy Marketing Science36 (2): 109-22.
139.
ZajoncR. B.1968. Attitudinal effects of mere exposure. Journal of Personality and Socia Psychology9 (2): 1-27.
140.
ZajoncR. B.MarkusH.1982. Affective and cognitive factors in preferences. Journal of Consumer Research9 (2): 123-31.
141.
ZeithamlV. A.1981. How consumer evaluation processes differ between goods and services. Marketing of Services9 (1): 25-32.
142.
ZeithamlV. A.1988. Consumer perceptions of price, quality, and value: A means-end model and synthesis of research. Journal of Marketing52 (3): 2-22.
143.
ZeithamlV. A.2000. Service quality, profitability, and the economic worth of customers: What we know and what we need to learn. Journal of the Academy of Marketing Science28 (1): 67-85.
144.
ZhouK.BrownJ. R.DevC. S.2009. Market orientation, competitive advantage, and performance: A demand-based perspective. Journal of Business Research62 (11): 1063-70.
145.
ZhouK.NakamotoK.2007. How do enhanced and unique features affect new product preference? The moderating role of product familiarity. Journal of the Academy of Marketing Science35 (1): 53-62.
