Service Innovation and SMEs in Tourism: The Case of Travel Agencies

Abstract “Service innovation is not a one-company thing; rather it is a service- ecosystem affair” (Mele et al., 2014: 626). Innovations occur as a result of the interaction of some basic components of organizational capability derived from in-house research and development activities. These include managerial systems, values, norms, market and technological competencies. Innovation is best understood not as a provider concern or a customer concern but as a network issue (Mele et al., 2010; Nam and Lee, 2010, cited in Mele et al., 2014). What matters for service innovators to be successful in the long run is not only being able to successfully launch a service innovation once, but to be able to introduce and exploit service innovations repeatedly in order to stay competitive. This is a conceptual paper aimed at assessing the application of service innovation in SME tourism businesses and in particular, travel agencies. Specifically, the study aims to reveal innovation activities of travel agencies and the relationship between their innovation and operating age and between their innovation and number of personnel. The result revealed a significant relationship between operating age of travel agency and service innovation dimensions. The result also indicated a significant relationship between the number of personnel and organizational innovation dimensions Keywords: Service innovation, SMEs, Travel Agencie