The aim of this chapter is to present literature relevant to this research and to provide a theoretical framework

The aim of this chapter is to present literature relevant to this research and to provide a theoretical framework. The chapter begins firstly brief summery about tourism industry and the relationship between the innovation and the tourism industry. Secondly about independent variable of innovation, type of innovation, and Innovative technological amenities in hotels and performance. Thirdly about dependent variable of hotels’ organization performance. Fourthly conceptual frame work and operationalization has been presented in this chapter. Operationalization chart provide brief idea about what are the independent variable, dependent variable, and how measurement that variables. Finally this chapter provide summery about second chapter.
2.2. Tourism ; hospitality industry
Since the past years, services industry has achieved a rapid growth in the global context. It Service industry has been contributed the international and the global economy in term of economy of scale. It play critical role in economically and industrially. In Sri Lanka service sector contributed more than 61% to GDP (central bank report, 2017). According to the UNWTO word Tourism Barometer sown 7% remarkable grew rate in tourism arrivals and 4%- 5% rate expect in 2018. To achieve that target hotel industry contribution is most important. In Sri Lanka also face more challengers: world economic dip activities, terrorism attack as well as natural disaster in the last decades. Those led to decline tourism and hospitality industry and the industry profitability. In Sri Lankan context tourism industrials offer unique characterized services through innovation for their customers. For that industrial’s use innovative technology, information technology (IT), the multyskill employees and optimum resource utilization.
2.2.1. Hospitality industry and Innovation
In modern world tourisms industry achieved their goals through innovation, information technology applications, multyskill employees and optimum resource utilization. Information technology industry is dynamically change combined with the innovation. K. Tajeddini’s study of “effect of customer orientation and entrepreneurial orientation on innovativeness: evidence from the hotel industry in Switzerland” emphasize innovation have a positive impact on hotel service performance, and also innovativeness will have positive effect on profit goal achievement, sales goal achievement, and return on investment (ROI) achievement. This research reveals the owners and manager of hotel who are investing innovative technologies, service or product are able to achieve their profit sales and ROT goals. And this study suggests to improve performance , customer orientation, entrepreneurial and innovations should be encouraged by top managers and owners in hotel sector and if their perceive innovative technologies as an integral part of corporate strategy (Liu, 2002) According to Anil Bilgihan, Fevzi Okumus and David Joon (2011) information technology application may lead to competitive advantage in hotel companies. This study mention investing in IT applications in hotelier can lead to superior competencies and IT capabilities. And also it can subsequently result in lower cost, agility, innovation, added value for service. This research study mention four key areas in implementing IT applications: technology sophistication, management skill, integration of resources, integration of IT systems.
In tourism and hospitality industry frequently use information technology for their operational activities. It is newly available factors of production were the new information and communication technologies, specifically designed for the tourism industry such as computer reservation systems and destination information systems, tourism web-sites on the internet or computer assisted backup systems for complex vacation or business travel packages (Birgit Pikkemaat and Mike peters, 2014). Not only it aid to reduce stationary and maintain cost, enhance operational efficiency, and most importantly to improve service quality (provide quick service) and customer experience (Rob Law, Rosanna Leung, and Dimitrios Buhalis, 2009). Hotels have in general more professional training structures and also invest more money in training. Hotels have realized that employee training is important when developing innovations in order to enhance front-line expertise. Enz and Siguaw (2000) argue that employee training has become an increasingly critical aspect in the hotel sector, in order to increase service quality, reduce labor costs and increase productivity (Ottenbacher, Shaw, and Lockwood2014).
Chain and independent hotels are continuously forced to improving quality and reputation, cutting costs, and increasing sales ; profits in their organization. One of the way hospitality organizations to achieve their objectives through innovation. (Brentani and Cooper; 1992, Michael Ottenbacher and Vivienne Shaw; 2014). Hence innovation has become the strategy for success of the hotel industry. According to the Ottenbacher, Shaw and Lackwood (2014) innovation impact on the service firm’s performance. It supports effective marketing communication in the industry and significantly improve their level of maturity. And this study suggested innovation activities have been affected for the success of the independent hotels and chain hotels. Especially small and medium businesses (SME) in rural regions, the tourism industry displays special disadvantages in terms of product development (Peters and Weiermair; 2002). Basically, small businesses lack economies of scale and are not able to raise profit margins which allow small units to reinvest in research & development, market research, product development, skill or creativity enhancement (Bieger, 2001; Weiermair, 2004). This situation totally change in the present world through the government and non-government organizations’ support (financially and ideally) and innovation technologies. It value added to the value chain of services. Gomez and Probst’s (1995) model categorizes innovation levels in tourism using core competencies as the unit of analysis. This differentiation seems to be appropriate, as innovation in tourism is often based on core competencies. It may comprise internal or external factors. Internal resources of the company are most important determinants regarding positioning and competitive advantages of a company which are difficult to imitate.
2.3. Innovation
Schumpeter (1947) was one of the first to develop a theory about innovation. He defines innovations as “new ways of doing things”. Innovation word cover new and creativity ideas as well as implication of discoveries. Service innovation is “introducing something new into the way of life, organization, timing and placement of what can generally be described as the individual and collective process that relate to consumers” (Tan and Decelle; 2004). “innovations are the outcome of the innovation process, which can be defined as the combined activities leading to new, marketable products and services or new production and delivery systems” (Burgelman and Maidique; 1996). According to Weiermair (2003) innovation recognized most firms to product development and competition in markets, and he mention large tourism firms use information technology and e-tourism are seen as a major change although nobody sees it as an innovation because it comes from outside the industry. Sorescu (2011) expressing different definition for innovation, cannot define extract definition for innovation. But it is derived from originally the Latin verb “innovare” and the Latin noun “innovatus”, standing for transforming an idea or a process into a marketable product or service thus adding value to it. (Peters & Pikkemaat: 2006; Banger: 2007; Vatan: 2010). Not only Peters and Pikkemaat (2011) define it may be concluded that, innovation in tourism industry may be attained by new services, new target groups and consumers, new channels of distribution, new promotion tools and strategies, new marketing applications or new infrastructures. According to these literatures innovation can define create new products and innovations to meet someone needs & wants and find new solution for the problems in present and near future. In this study measure existing innovation technologies in Sri Lankan context.
2.3.1. Type of innovative
According to the Weiermair (2003) two basic innovation in the tourism and hospitality industry. Product innovations are new products in catering, trendy comfortable hardware in the hotel room, new wellness hardware and applications, new architecture & design, customer loyalty programmers and price innovations. Process innovations are Internet, B2B information, reservation systems, controlling systems, restructuring of the company, new distribution channels and marketing systems, collaboration in various departments and fields, further training of the staff members, and service optimization. According to this study half of the process innovation are affect to the hotel operational performance. As an example wireless internet access, IT base reservation system, robots for cleaning services, guest communication system (Nordin S, 2003; Blichfeldti, 2011). Brentani (2001) the critical dimensions influence service innovation performance that have been separated into four, there are service or product- related, market-related, process- related, and organizational- related. Product- related determinants the relative advantage of a product or service has been recognized as important source of success in new product and service development literatures (Cooper, 1994; Cooper and Kleinschmidt, 1987). And also have been found to improve the performance of service innovations. The market determinants

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