Optimisation of restaurants’ hospitality performance: the roles of innovation, internal and external power understanding capability

Abstract

Purpose This study aims to explore which drivers of innovation in the hospitality industry optimise hospitality performance in a multivariate nexus of restaurants’ value system for hospitality (VSH) and internal–external power understanding capability. Design/methodology/approach The study applied a cross-sectional questionnaire survey research design, targeting employees who were working in full-service restaurants. Descriptive statistic, confirmatory factor analysis and structural equation modelling (SEM) were performed. A total of 364 respondent’s responses were used in the data analyses. Findings Results of the empirical analysis reveal that collaborative innovation capability has the closest relationship with hospitality performance optimisation (HPO), followed by VSH, employee creativity and knowledge management system capability. The analysis with the bootstrapping method shows that VSH mediates the relationship between the drivers of innovation and HPO. The empirical results also suggest that firms’ capabilities of understanding internal and external environments are significant moderators of the relationship between VSH and HPO. Research limitations/implications The empirical findings provide restaurant managers with an improved understanding of how the drivers of innovation capability influence HPO. Findings from this research emphasise that hotel managers should consider internal and external environmental issues to adjust their strategies for improving hospitality performance in a competitive environment. Practical implications Findings suggest that restaurant managers should implement the drivers of innovation in their respective work environment, together with their adequate involvement with staff and understanding of environmental issues, to produce innovative hospitality strategies. Originality/value This research contributes a comprehensive framework of HPO in the restaurant business setting that leads to a competitive advantage. To the best of the authors’ knowledge, this research is one of the pioneer studies to contribute to the hospitality literature that investigates the effect of the drivers of innovation on VSH and HPO by considering the moderation role of internal and external environmental understanding capability.