Service Innovation in the Hotel Sector in the United Arab Emirates (UAE)

Abstract

The tourism sector in United Arab Emirates (UAE) is currently witnessing strong growth, with 13.8 million visitors in 2013. MasterCard’s Global Destination Cities Index reported that Dubai was the fourth most visited city in the world in 2015. In February 2015, the occupancy rate of hotels in Dubai reached 86.2%, contributing to sector revenue of AED 6.5 billion in 2014. The number of visitors to Dubai is expected to double by 2020, from its 2015 level of 10 million. It is therefore important for the hospitality industry to continue to innovate to match customer expectations.

The rapid growth in numbers of tourists visiting the UAE has made the hotel sector an attractive target for investment. Service innovation adds value and is beneficial for the hospitality industry. By adopting service innovations, hotels will be able to maintain their current market and also create new business. Recent literature has focused on innovation, rather than efficiency, as a vital factor in business success, growth or failure. Limited research is available, however, on service innovation in the hotel sector in the UAE. We hope that this study will encourage future research in this area and location.

UAE hotels are considered innovative in the quality and variety of services provided to their guests. Many have innovated in multiple areas, including customer service, design, and range of restaurants. For example, some hotels provide iPads in guest rooms, with information about the hotel, and many hotels contain branded stores or are connected to shopping malls. There are many examples of innovation in the design and range of restaurants, including the Royal Mirage Hotel’s Moroccan design and restaurant, and Palazzo Versace’s Italian design, based on a 16th century Italian palace, and Italian cuisine.