UK hotel industry alive with innovation

8 August 2012

Large hotel chains are quick to adopt and adapt innovations developed in other industries, while smaller hotels make almost continual incremental changes in response to customers' needs. The UK hotel industry is alive with innovation and new ways of improving service for customers, research funded by the Economic and Social Research Council (ESRC) has found.

The findings of a project led by Professor Gareth Shaw of Exeter University and Professor Allan Williams of Surrey University run counter to the traditional image of the hotel sector as slow to change. Official measures such as the UK Innovation Survey (UKIS) report that the hospitality sector introduces few new practices, with just 39 per cent of hotels reporting some form of innovation.

"Contrary to this picture, we believe that the UK hotel industry is highly innovative and sets an example to many other service industries," said Professor Shaw. "Although it is widely recognised that innovation is critical to the success of businesses in the UK economy, innovation in the service sector has traditionally been neglected in terms of official statistical measures. This is particularly true of the hotel industry, where there has been a lack of interest by policymakers in service innovation."

One major area of innovation lies in the growth of new hotel types. Branded chains such as Travelodge or Holiday Inn now make up some 12 per cent of London's hotel stock, while budget accommodation has also seen the rise of the 'Microtel' which is based on a variant of low cost hotels. Innovative design plays a key role, particularly in the growth of the luxury boutique hotel market.

Many hotels have introduced environmental measures which range from switching to energy-efficient light bulbs to the installation of solar panels. Other hotels incorporate recycled materials into their interior design, use furniture made from sustainable sources and bedding and towels made of natural fabrics.

Changes in small and medium-sized hotels may involve the development of a new website or marketing materials, the purchase of new software for property management systems or simply updating the decor.

"Customers are playing a large part in shaping the innovation as hotels increasingly seek consumer feedback through social networks.  Some conduct in-depth research through focus groups, while one major international hotel group has a laboratory bedroom which is used to test the latest innovations and gather customer feedback to new and emerging technologies" Professor Williams states.

Meanwhile, knowledge of new developments spreads quickly through the hotel industry, partly due to the high movement of staff. Two thirds of the managers of small and medium hotels in London were born abroad, and play a critical role in introducing innovation. The findings also suggest that migrant managers are more likely to be innovative than their non-migrant counterparts.

"Our findings suggest that large and small hotels can learn from each other. Larger corporations tend to lead innovation in their systems and processes, IT and marketing. Small hotels are good at responding to customer needs and providing more personalised services, as well as cutting edge design ideas," said Professor Williams.

With more than 10,000 businesses, the hotel industry contributes some £18 billion to the UK economy and accounts between four to five per cent of the country's employment. "It is surprising, given its contribution to the UK economy, that there is so little recognition of the role the hotel sector plays in innovation," said Professor Shaw.

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Notes for editors

  1. This release is based on the findings from: Internationalisation and innovation in the service sector: the role of international migrants and UK(London) hotels. The project was funded by the Economic and Social Research Council and carried out by Professor Gareth Shaw at the University of Exeter and Professor Allan Williams of the University of Surrey.
  2. The research was carried out in two phases, the first examining the practices of large hotels across the UK and the second the impact of migrant-managers in small and medium enterprises. Both qualitative and quantitative methods were used to gather data, which included in-depth interviews with high level staff, informal discussions and surveys.
  3. The Economic and Social Research Council (ESRC) is the UK's largest organisation for funding research on economic and social issues. It supports independent, high quality research which has an impact on business, the public sector and the third sector. The ESRC’s total budget for 2012/13 is £205 million. At any one time the ESRC supports over 4,000 researchers and postgraduate students in academic institutions and independent research institutes.
  4. The ESRC confirms the quality of its funded research by evaluating research projects through a process of peers review. This research has been graded as outstanding.