PurposeThe purpose of this paper is to explore the nature and implications of knowledge advanced through service employees’ innovative behaviour and leading to initiating innovation within the hotel service subsector.Design/methodology/approachA case study research method was applied to achieve the research objectives, which investigated two hotel properties resembling two personal–interactive service systems. In total, 52 semi-structured interviews were conducted along with other qualitative research methods, including the direct observation of employees, review of management archives/literature and the assessment of “micro cases”.FindingsThe research outcome highlights the role of knowledge as supplementary to the interlinked process of idea generation and development. A novel classification of two types of knowledge is revealed as pre-encounter and encounter-dependent knowledge, implicating four patterns of service employees’ innovative behaviour.Practical implicationsThis paper recommends practical measures to nurture service employees’ innovative behaviour, leading to innovation.Originality/valueThis study contributes to service innovation research by providing an in-depth assessment at the micro level, overlooked to date, of the nature of knowledge and the service employees’ role in initiating innovation within the hotel service subsector.
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