Abstract
We develop and test a model of innovation behavior in the hotel industry. The model relates four types of innovation—i.e., management, external communication, service scope and back-office—to the key determinants: service provider characteristics, customer competences and the market drivers. Using statistical probit models and cross-sectional survey data from a stratified sample of hotels in the Balearic Islands ( N = 331 ) we were able to verify the model including innovation types determinants and the innovation impact on hotels performance. Main findings verify the model indicating the effects of these determinants on innovation and the positive impact of the innovation on the hotels performance. Hence, innovation decisions determinants are: the additional services on offer, that bookings are made through tour operators, that hotels are part of a hotel chain and that the owners of the hotel run the business.
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