Internet innovation for external relations in the Balearic hotel industry

The purpose of this paper is to unveil and discuss the importance of factors determining the internet innovation for external relations in the lodging industry. These external relations include those with customers, other businesses and administrations (B2C, B2B, B2A)

Empirical evidence extracted from a sample of tourism lodging establishments in the Balearic Islands has been used to unveil the determining factors of internet innovation in the lodging industry. The lodging industry has been chosen in order to preserve a certain internal homogeneity since it has been shown previously that the innovation adoption process differs across economic sectors. The factors affecting internet innovation in external relations arise from the estimation of the discrete choice econometric models that represent these firms' decisions.

It was found that certain factors increase the probability that the lodging industry innovates through the use of internet for external relations, i.e. larger establishments, lower seasonality – months per year an establishment remains open; and positive managerial attitudes towards the internet, all have a positive relationship with internet innovation.

Competitiveness of tourism destinations depends on the innovation abilities of its firms. Government and tourism managers should foster the factors that affect them positively. To this extent, some practical implications can be extracted: first, the need for governments to implement specific policies aimed at smaller establishments, since those are the ones that have more difficulties bridging the technological innovation process; second, the need for administrations to adopt a global vision that includes the whole tourist destination; third, the appropriateness of internet innovation in order to improve the seasonal distribution of tourist flows, which is one of the common weaknesses of the tourism sector; and finally, the need to address managers in order to increase their awareness with respect of the usefulness of information and communication technology innovation, and encourage a proactive posture towards it.

The paper contributes to a better understanding of the innovation determinants in service sectors and specifically in the lodging industry. Apart from traditional factors that affect internet innovation, such as size of the establishment, number of months opening, etc., the paper includes and measures the effect of managers' attitudes and opinions towards internet innovation. Finally, the findings obtained may suggest certain guidelines to help tourism destination managers to address their competitiveness policies.