Developing Innovations: What Factors Impact the Performance of Chain Affiliated versus Independent Hotels

The failure rate of new service projects is high, because the knowledge about how innovations should be developed is limited. In the last decade, several studies have investigated the success factors associated with service innovations (e.g. AtuaheneGima, 1996; de Brentani, 2001; Storey and Easingwood, 1998). However, no research in new service development (NSD) has addressed the question of whether chain affiliated and independently operated service firms have different approaches for developing successful innovations. The majority of past new service development (NSD) success studies have concentrated on the financial service sector, which is generally represented by large corporate organizations. The findings of this study indicate that the factors which impact on the performance of NSD depend on the organizational relationship of hotels – chain affiliation or independent operation. The study’s results suggest that market attractiveness, process management, market responsiveness and empowerment predict NSD success within chain affiliated hotels. While empowerment and market attractiveness are also related to NSD success in independent hotels, this is also linked to effective marketing communication, employee commitment, behaviour based evaluation, training of employees and marketing synergy.