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Service innovation and customer choices in the hospitality industry

Liana Victorino (David Eccles School of Business, University of Utah, Salt Lake City, Utah, USA)
Rohit Verma (David Eccles School of Business, University of Utah, Salt Lake City, Utah, USA)
Gerhard Plaschka (Kellstadt Graduate School of Business, DePaul University, Chicago, Illinois, USA)
Chekitan Dev (School of Hotel Administration, Cornell University, Ithaca, New York, USA)

Managing Service Quality: An International Journal

ISSN: 0960-4529

Article publication date: 1 December 2005




The purpose of this paper is to understand the impact service innovation has on customers' choices within the hotel and leisure industry. The paper also discusses the influence of the creation of new services on both service development and operational strategy.


The analysis is based on a national survey of approximately 1,000 travelers in the United States, using a web‐based data acquisition approach. The travelers are segmented by reason of travel (business or leisure), and discrete choice analysis is applied to model customer preferences for various hotel service innovations.


Overall, the study finds that service innovation does matter when guests are selecting a hotel, with type of lodging having the largest impact on a customer's hotel choice. In addition, service innovation is found to have a larger influence on choices when guests are staying at economy hotels rather than mid‐range to up‐scale hotels. Also, leisure travelers were found to be more influenced by innovative amenities such as childcare programs and in‐room kitchenettes than business travelers.

Practical implications

The understanding of customers' choices allows managers to better design their service offerings and formulate corresponding operational strategies around customer needs.


This paper examines the addition of innovation to the hotel service concept and is an excellent tool for managers deciding on which innovations to implement.



Victorino, L., Verma, R., Plaschka, G. and Dev, C. (2005), "Service innovation and customer choices in the hospitality industry", Managing Service Quality: An International Journal, Vol. 15 No. 6, pp. 555-576.



Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited

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