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Despite the competitive necessity of New Service Development (NSD), research into NSD and specifically within hospitality is scant. As tourists are becoming more sophisticated and less loyal, hotels need to continuously innovate to address the dynamically changing tourists’ demands and the fierce competition. This study aims to explore the level, type and processes of NSD efforts that Greek hotels undertake for creating, assessing and further improving their NSD practices. To achieve that, literature on NSD is critically reviewed and expanded. Data from the Greek hotel sector revealed not only that hotels need to substantially increase their NSD activities, but findings also confirmed the fact that, in contrast to manufacturing, NSD in services should consider the ad hoc nature of processes in service development as well as the role and participation of guests and other stakeholders in NS processes.