Tourism and Innovation

C. Michael Hall, Allan M. Williams

• Publisher: Routledge
• Year: 2019
• Print ISBN:
  9781138060760
• eBook ISBN:
  9781351669382
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

This ground-breaking volume on the relationships between tourism and innovation provides an overview of relevant innovation theories and related literatures on entrepreneurship, productivity, regional development and competitiveness, and their significance to contemporary tourism practices.

Innovation is a key concept in business and entrepreneurial studies and the broader social sciences. Yet, despite its policy and academic importance, historically little attention has been given to the role of innovation in tourism and the corresponding contribution of tourism-related human mobility to regional, firm, and product innovation. This book emphasises that innovation in tourism is much more than a series of technological innovations, as important as they are, and instead needs to be understood in an economic, social, and political context, with particular stress being placed on the extent to which innovations are shaped by the framework of governance and regulation, as well as by institutional factors and activities of individual actors and entrepreneurs.

It is structured so as to introduce the reader to the overall significance of innovation at various levels and the role that innovation plays in firm and place competition. Supported with case studies throughout, this book is essential reading for all tourism students.

1 Introduction

Understanding innovation as the key to understanding changes in tourism

Introduction

Many tourism publications start by inviting readers to gaze in awe at the rapid growth and changes in the sector. Although rarely articulated, those changes are underpinned by the process of innovation, a topic which was surprisingly neglected by researchers until relatively recently.

Since the first edition of this book was published in 2008, there has been a marked acceleration in the intensity and scope of research on tourism innovation (Gomezelj 2016; Rodríguez Sánchez et al. 2019) but the field remains relatively fragmented and unevenly developed: there are as many gaps as there are areas of significant advance. This second edition provides an overview of the rapidly changing field, and of the forces which are shaping tourism innovation – technological, organisational, and globalisation. These are epitomised by the growth of clubbing in Ibiza, an established but still spectacular example of innovation (Box 1.1). This shows how a single innovation can, under favourable conditions, lead to the reshaping of an entire tourism landscape, and contribute to broader international changes in the clubbing and the rave scene far from the immediate locality (Goulding and Shankar 2011).

Box 1.1 Innovation and the clubbing tourism scene in Ibiza

The first night club on Ibiza opened in 1973, at which time the island was considered an upmarket millionaires’ playground. Initially, a relatively small-scale innovation, it sparked a series of both discontinuous (radical) and incremental innovations that transformed Ibiza’s tourism. From the late 1970s onward, British music and dance entrepreneurs and fans, effectively constituting an informal innovation partnership between tourism firms and tourists, developed the island as a party destination. Spanish entrepreneurs also became involved in the development of club attractions, as well as in linked innovations in the hotel and other tourism sub-sectors. As Goulding and Shankar (2011: 1435) write, Ibiza emerged as a major club scene:

‘amidst the hedonistic indulgences that attracted thousands of young people from across Europe to the Spanish island of Ibiza. The island, with its relaxed attitudes to drugs and the new musical and dance phenomenon known as the ‘Balearic’ sound, became a magnet for those in search of pleasure’.

By 2001 there were several mega clubs on Ibiza which were at the core of the ‘magnet for those in search of pleasure’ (Table 1.1). The club scene was highly internationalised but, at the same time it was influenced by British youth culture and tastes, so the innovations were characteristically hybrids of UK and local ideas, with an infusion of international ideas. The clubs were in a highly competitive environment, and constantly re-invested to remodel and relaunch themselves in a changing market. In effect, they were engaged in both continuous and discontinuous innovations, as they reinvented themselves in terms of product, process, and market innovations: in terms of their target audience, the styles of music, the use of multimedia and foam, and scale (‘the biggest …’).

Table 1.1 Establishment of clubbing scene in Ibiza

Amnesia is one of the most famous and larger venues. Founded in 1976, it has undergone a series of design makeovers and had grown to have 16 bars and more than 200 employees by 2017 (www.amnesia.es/history/en). Themed party nights are one of its trademarks. The oldest of these, Cream, was initiated in 1994, but was still being presented as a regular feature on Thursdays at the time of writing. The newest themed venture, dating from 2017, was the club’s hosting on Saturday nights of party events linked to Barcelona’s Elrow brand.

Each club has innovated in an attempt to create a unique product that would give them first entrant edge in the market, but the difficulties of patenting innovations means they remain locked into a continuous process of innovation to survive and expand in a highly competitive market.

Source: After Swarbrooke 2002: 354–355; with information from the web site of the Amnesia club

Although it is undeniable that there have been remarkable changes in recent decades, this does not imply that tourism was previously a largely unchanging form of activity that is now being revolutionised by new technologies (e.g. mobile apps), organisational forms (for example, Airbnb, Uber), and markets (especially in Asia and the Middle East). Tourism has always been subject to change, reflecting shifts in tastes and preferences, cultural values, technologies and politico-economic conditions. And the long history of tourism is littered by landmark innovations such as the emergence of new destinations, the introduction of rail travel, budget airlines and the popularisation of travellers cheques and credit cards (Löfgren 1999; see also Hjalager 2015). But globalisation and technological changes have significantly modified the stage on which innovations are played out, and the rhythm of change has intensified in recent years. Poon’s (1993: 3) perceptive comments, still resonate more than two decades later:

The tourism industry is in a crisis – a crisis of change and uncertainty; a crisis brought on by the rapidly changing nature of the tourism industry itself… . The industry is in metamorphosis – it is undergoing rapid and radical change. New technology, more experienced consumers, global economic restructuring and environmental limits to growth are only some of the challenges facing industry.

Tourism innovations have diverse forms, heterogeneous drivers and are manifested at different scales whether the individual, the firm, the tourist resort, the destination or the national tourism system (Cooper 2006; Coakes et al. 2002; Hjalager 2010). These are bound together in complex patterns and it is important therefore to see innovation as systemic, or as integral to the tourism system as a whole. Of course, when asked to identify the most significant innovations in tourism, particular names come to mind, whether individual entrepreneurs such as Thomas Cook and Walt Disney, or major corporations such as South West Airlines or TripAdvisor. Similarly, when asked ‘to place’ innovation, specific places immediately come to mind; taking the USA as an example, names such as Baltimore, Las Vegas, or Orlando, Florida, or in the case of Asia, Singapore. The internet serves to change but not to eradicate the rootedness of tourism experiences and innovations in specific places. But tourism innovation pervades all corners of the tourism system, whether it is the first tentative step by an individual to place their home on the Airbnb web site, the restaurant that introduces new ‘exotic’ (to its local context) dishes, or the many hundreds or thousands who subscribe to the crowdfunding (Wang et al. 2017) of particular tourism initiatives.

Not only is innovation pervasive in tourism, but there is also a need to understand how tourism innovation is situated in relation to broader economic, social and political changes. First, and most obviously, there have been changes in the organisation of work, leisure time, and in absolute and relative income distributions (Gershuny 2000). Baumol (2002: 3) captures the essence of these:

Even the most well-off consumers in pre-Industrial Revolution society had virtually no goods at their disposal that had not been available in ancient Rome. In fact, many consumption choices available at least to more-affluent Roman citizens had long since disappeared by the time of the Industrial Revolution. In contrast, in the past 150 years, per capita incomes in a typical free-market economy have risen by amounts ranging from several hundred to several thousand percent.

Increases in disposable income, non-work time and also in consumption preferences have had profound impacts on tourism, including revolutionising the scope for innovations that would have been almost unimaginable a century earlier, let alone before the Industrial Revolution. Equally important has been the extension of market economies, or proto market economies, to a raft of ex-state socialist (especially from the late 1980s) and emerging market economies, where new forms of tourism are being favoured by the growing middle, and more affluent, working classes – whether in Eastern Europe, China, the Middle East or India. Moreover, at the time of writing, Africa was rapidly emerging as a major tourism destination.

Secondly, the sources of tourism innovation often lie outside the sector itself. This is especially true of technology which generally tends to be sourced from other firms or organisations rather than from in-house research and development (Hjalager 2002; Hall 2009). For example, investment in military technology (especially jet engines, and aircraft) during World War Two contributed the infrastructure which was essential for the key innovation of air charter holidays from the 1950s, while the internet and mobile technology have created platforms for innovations as diverse as TripAdvisor, Uber, and Deliveroo (Gössling and Hall 2019). ‘External’ regulatory changes, such as air travel deregulation and relaxation of foreign exchange controls, have also stimulated tourism innovations. However, while many innovations in tourism do involve adaptation of innovations from outside the sector, tourism can also be a powerful driver of innovation in its own right, as evidenced, for example, by the role of American Express in popularising the use of credit cards (Weaver 2005a).

Given the pervasive and persistent nature of tourism in the modern world, let alone the intensification of innovation in recent decades, there is surprisingly little research in this field. Just over two decades ago, Hjalager (1996) could write that this contributed to tourism innovation research being exploratory in nature. A decade later, there had been a substantial expansion of the emerging literature on tourism innovation, so that the same author (Hjalager 2010: 1) observed that: ‘recent research is now reaching a level which is comparable with studies in other economic sectors’. However, tourism innovation often still seems to be rather inward looking, isolated from broader economic analyses of tourism, and from the wider and long-established tradition of social science research on innovation (Hjalager 2002, 2010).

The aim of this book is to explore tourism innovation in this broader context. Of course, care must be taken not to reify tourism innovation because, as Nowotny et al. (2001: 36) observe, innovation has become ‘a new religion rooted in a continuous drive to bring forth the New’. Instead, the study of innovation can provide no more than one component of how we understand tourism changes and tourism-related changes. But it is equally true that it would be futile to try and understand the contemporary shifting landscape of global tourism without also understanding the nature of tourism innovation. Before further elaborating this central tenet of the book, we first need to consider some essential features of tourism innovation, beginning with the fundamental question of ‘what is innovation’.

Defining innovation: an elusive goal

The concept of tourism innovation remains elusive. Schumpeter (1934) saw innovation as being ‘at the core of competition and the dynamic efficiency of firms and industries’ (Cainelli et al. 2005: 437) but contended that ‘standard theories’ of the firm provided poor explanations of innovations (Phan 2004: 617). He stressed that innovation did not equate to invention. Rather, inventions were connected with basic scientific or technological research, while innovations were further developments of these, or just the application of bright ideas. As Metcalfe (2005: 11) argues, such applications and developments involve ‘judgment, imagination and guesswork, and the optimistic conjecturing of future possible economic worlds’. These various notions are caught by Kanter’s (1983: 20–21) broad definition of innovation:

Innovation refers to the process of bringing any new, problem solving idea into use. Ideas for reorganizing, cutting costs, putting in new budgetary systems, improving communication or assembling products in teams are also innovations. Innovation is the generation, acceptance and implementation of new ideas, processes, products or services… . Acceptance and implementation are central to this definition; it involves the capacity to change and adapt.

This only provides a starting point for our definition, because innovations take many forms and can be classified in different ways, but especially in terms of ‘newness’, ‘focus’, and ‘attributes’ (see Box 1.2). The degree of newness is linked to questions about the scope of the innovation, whether at one extreme it is only new to the firm or a destination/region or whether, at the other extreme, it is ‘new to the world’. The definition in terms of the focus of the innovation effectively relates to the aspect of production-distribution that it focusses on, ranging from the product through process, to management, marketing, and organisation. Finally, attributes are a series of descriptive properties or features of the innovation, many of which are key to its potential success, such as complexity, relative advantage, compatibility, trialability, and observability (Rogers 1983).

Box 1.2 The classification of innovation: an application to hotels

Adams et al. (2006) identify three main ways to classify innovation. These can be applied to the categorisation of innovations in hotels:

• 
  Newness. This was most famously captured by Schumpeter (1934) who distinguished between radical and incremental innovations.
  • 
    Example: Does a new hotel have significant new design features, or does it largely replicate an existing formula?
• 
  Focus. Whether the innovation centres on product, process, administrative, or technological dimensions, amongst others.
  • 
    Example: Does a new hotel innovate in the products it offers (for example in-room IT facilities), its processes (how it provides services), how it markets these, how it works with other firms or agencies, or in some other way?
• 
  Attributes. This is exemplified by Roger’s (1983) framework of five key attributes: compatibility, observability, relative advantage, trialability, and complexity.
  • 
    Example: is a new hotel and its innovative products and processes, compatible with other components of the local tourism system; are they easily observable to their competitors and, if so, what are the relative advantages to the hotel as the originator?

Source: the generic conceptualisation draws on Adams et al. (2006) but is applied here to a specific tourism example.

Incremental versus radical innovation

For Schumpeter (1934) the essence of innovation was newness, but he considered this could be either incremental or radical, depending on whether innovation occurred within, or departed from, existing technologies and practices. This is often summed up in terms of the question of ‘whether it has changed the rules of the game’, that is of the nature of competition. In the case of tourism, many radical innovations were extrinsic to, or originated outside of, tourism (Box 1.3).

Box 1.3 One hundred (extrinsic) radical innovations which transformed tourism

Developments in tourism are strongly driven by innovations which are extrinsic to the sector. Hjalager (2015) provides an overview of what she considers have been the 100 most influential such innovations. Their selection is guided by a number of largely intuitive selection criteria which relate to impacts on tourists, tourism firms, and tourist destinations. Given the difficulties of quantifying the notion of ‘importance’ she instead aims to be illustrative and diverse in the selection, drawing on insights from a wide range of personal and documentary sources. Despite some obvious limitations of the approach, this paper nevertheless captures some of the key characteristics of these radical extrinsic innovations – both technological and orga...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• List of figures
• List of tables
• List of boxes
• Preface
• List of abbreviations
• 1 Introduction: understanding innovation as the key to understanding changes in tourism
• 2 Competition, innovation, and productivity
• 3 Knowledge, creativity, and innovation
• 4 Technology and tourism innovation
• 5 The state and tourism innovation: institutions, policy, regulation, and governance
• 6 The regional innovation system: territorial learning, regions, cities, and smart specialisation
• 7 Firm organisation and innovation
• 8 Entrepreneurship, the market, and innovation
• 9 Entrepreneurship and innovation pathways
• 10 Public good entrepreneurship: community, place, social entrepreneurship, and innovation
• 11 Conclusions: an innovative future for tourism
• References
• Index