Innovation typology in tourism
2.3. Characteristics of the Tourism Product
The tourism product is a combination of many elements. These elements can be tangible or intangible. For instance, in a destination several suppliers such as hotels, restaurants or tourism guides participate in the production of services. Furthermore, tourism is not only based on the production of goods or services. Many intangible characteristics are embodied in individuals. Accordingly, sociological and cultural aspects of the local population as well as of tourists can influence the tourism experience. In spite of this diversity, tourists contemplate the product as a complete experience (Weiermair 2006). Tourism is thus an industry that creates experiences rather than isolated products.
Each experience is unique. Accordingly, as in other service industries, personalization plays a major role in tourism. However, personalization is not only a characteristic of services, but also of some manufacturing products. Besides, some services can be standardized in order to increase productivity. This phenomenon of industrialization in services and flexibilization in manufacturing (Miles 2005) has neared both sectors. Nonetheless, standardization in tourism is not always possible or desirable. The limits of standardization are usually related to significant cultural differences between markets (Hall and Williams 2008) and the difficulty of reproducing services in the same form.
However, imitation, although not in exact form, is frequent in the tourism sector. Innovation in services is difficult to protect. In this context, product innovations are more difficult to protect than organizational, marketing or process innovations. Due to its intangibility, tourism innovation is seldom patented. Consequently, organizations try to innovate continuously, in order to gain advantage on competitors5 (Hjalager 2002). However, the lack of innovation protection may as well reduce the incentive to invest in innovation (Hipp and Grupp 2005).
Given its intangibility most of services cannot be stored or transported. Intangible innovations have thus a time-length. Tourism services usually occur in a determined time period. For this reason, the supply cannot be postponed to another period of time. In order to minimize the impacts of high seasonality and low capacity utilization, tourism firms implement management strategies such as pricing systems. For example, airlines and hotels offer different prices regarding occupancy.
Another characteristic of the tourism product is its simultaneous production and consumption (Weiermair 2006). Coterminality is thus a characteristic of services (Miles 2005). Tourists habitually have an image of what they expect, but they can first evaluate the complete experience once they return from holidays. Given that the qualities of services are not easily transmitted to customers before consumption (Hipp and Grupp 2005), Weiermair (2006) indicates that destinations should create confidence and introduce quality criteria.
Interactions between individuals as well as information exchanges are fundamental in tourism innovation. Furthermore, with the development of the service sector, the
5 The topic of competition in relation with innovation in the tourism industry is further developed in chapter 4.