Innovation In Tourism

PRODUCT IMPROVEMENT OR INNOVATION:
WHAT IS THE KEY TO SUCCESS IN TOURISM? by Klaus Weiermair
Professor and Head of the Center for Tourism and Service Economics
University of Innsbruck

Abstract
This paper is built like a three–layered club house sandwich with the first layer providing some theoretical and conceptual insights regarding expected innovation behaviour in tourism based on available material in tourism and industrial economics. The second layer will provide empirical insights and/or testing regarding the causes and consequences of innovation and product development in tourism based on recent empirical research carried out at the Center for Tourism and Service
Economics, University of Innsbruck, and interviews carried out by the author both in Europe and
North America with various larger national and global tourism firms, e.g. tour operators, airlines and theme parks. Finally the last layer will draw some conclusions and discuss research results with respect to issues and prospects in tourism policy making.
Relevance and importance of innovation and product development in tourism
It is probably fair to say that most sectors of economic activity in Western economies have undergone strong technological changes moving towards IT–based flexible manufacturing with global outsourcing, creating the “.com” or “new economy”, which very much fits with what Schumpeter described as the creative destruction of existing institutional arrangements and patterns of exchange in order to create new wealth through innovation. His vision also included an increased willingness to take calculated risks by new or “real” entrepreneurs (Schumpeter, 1934).
Even though much innovation emanates or originates from the service sector, there has so far been relatively little discussion as to its importance and prevalence in tourism. A priori one should expect that innovation and product development (or differentiation) should constitute unique selling propositions and a strategy towards

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