This study addressed the relationship between the innovativeness of hotels and their profitability. The authors propose that innovativeness and the visibility of the benefits to customers from innovative activities both serve as endogenous variables. Competitive market advantage, sales growth, and capacity utilization serve as mediators. Both key informants and financial statements provided data for a sample of 298 hotels. The results show that the relationship between innovativeness and profitability is positive and fully mediated.
- capacity utilization
- market advantage
- sales growth
- visibility of customer benefits