Original Scientific Article Innovation in Smaller Hotels in Argentina before and after the COVID-19 Pandemic Carolina Pasciaroni National University of the South, Argentina carolina.pasciaroni@uns.edu.ar Viviana Leonardi National University of the South, Argentina viviana.leonardi@uns.edu.ar Silvina Elias National University of the South, Argentina selias@uns.edu.ar The study aims to explore the pre-covid-19 innovative behaviour of smaller hotels located in an urban centre of Argentina and to recognize whether the current pan- demic operates as an innovation-inducing factor in these hotels. The contribution andmainmotivation lies in the lower number of studies on hotel innovation in South American destinations and the need to identify the strategies adopted by smaller ho- tels in the face of the covid-19 crisis. The methodology followed is a multiple case study composed of six small and medium-sized hotels located in Bahía Blanca city (Argentina). The primary information was collected by surveys sent to hotel man- agers. The study shows a pre-covid-19 innovative profile oriented to the acquisition of embedded technology, staff training and obtaining incremental innovations. In- ternal factors and external factors influence the innovative profile described. The covid-19 pandemic is not an inducing factor, but rather an obstacle to innovation. Keywords: innovation, hotels, small and medium-sized hotel, Argentina, covid-19 pandemic https://doi.org/10.26493/2335-4194.15.363-379 Introduction Service innovation is a source of competitive advan- tage for hotels in dealing with the competitive envi- ronment that illustrates the tourism industry world- wide (Gomezelj, 2016; Backman et al., 2017; Ambrož& Omerzel, 2018). In addition, innovation emerges as an alternative for the recovery and transformation of the tourism sector given the unprecedented repercussions of the covid-19 pandemic (United Nations, 2020, p. 2; oecd, 2020; unwto, 2020; Le & Phi, 2021; Breier et al., 2021). In the current pandemic scenario, the use of tech- nology is a key element in reducing the real and per- ceived risk of contagion (Shin & Kang, 2020; Sharma et al., 2021) and in designing new marketing strategies and using digital platforms to improve the competi- tiveness of small and medium-sized firms (smes) in the sector (United Nations, 2020). The international chains Marriott, Hilton, Hyatt and Best Western adopted fully automated check- in systems to ensure social distancing, and cleaning robots, uv technology and electrostatic sprayers to improve cleaning anddisinfection (Shin&Kang, 2020; Le & Phi, 2021). Following Lau (2020), 5g and Wi-Fi Academica Turistica, Year 15, No. 3, December 2022 | 363 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina 6 technology, facial recognition, artificial intelligence and robots are some of the new technologies that are aiding the survival of the sector. It should be noted that the adoption of technological advances in the field of ict is a specific feature of innovation in the tourism and hospitality sector (see, for example, Fernández et al., 2011; Nieves &Osorio, 2019). Additionally, innova- tions can be implemented in the hotel business model to confront the covid-19 crisis through changes in reservation and cancellation policies, adjustments in restaurant services to the take-away modality, and adoption of an annual membership system (Breier et al.; 2021; Le & Phi, 2021). Given the traditional conception of innovation as a source of competitiveness and its current relevance as an alternative for the recovery of tourism in face of the covid-19 crisis, this study aims to explore the in- novative behaviour of small and medium-sized hotel firms located in an urban centre of Argentina in the pre-covid-19 stage and examinewhether the covid- 19 crisis signifies an opportunity to innovate for these firms. The research on tourism and hospitality innova- tion in small andmedium-sized firms (smes) is a topic of particular importance due to the number of these enterprises in the global tourism sector (Pikkemaat, 2008; Thomas et al., 2011; Motta & Sharma, 2020) and the specificities of their innovation process. In Ar- gentina, the tourism sector has a high proportion of smes compared to other economic sectors. Specifi- cally, the hotel sector comprises 57 of private em- ployees (aht & ieral, 2020). Adding to the numeri- cal importance, innovation in tourism and hospitality smes has particular features such as low economies of scale and scope; low level of qualification of its employees; a propensity to invest in acquisition of hardware and software; difficulties in accessing financ- ing; and little propensity to cooperate with customers, competitors, suppliers, and universities (Pikkemaat & Peters, 2006; Pikkemaat, 2008). The paper aims to contribute in diverse directions to the empirical knowledge about innovation in the hospitality sector. First, the study addresses the gap related to the lower number of empirical studies on tourism and hospitality innovation in South America compared to other regions. In his review of the state of academic research in the area of hospitality and tourism innovation, Gomezelj (2016) found that most of the studies refer to European and Asian tourist des- tinations. Thus, for the pre-covid-19 stage, the study offers empirical evidence on the innovative behaviour of hospitality smes located in destinations little ex- plored in the literature. Second, this paper aims to contribute to the knowledge about innovation in hos- pitality smes in response to the covid-19 crisis. The crises in the tourism sector have an amplified impact on smes given their limited business volume and low marginal profitability and, therefore, a low level of sav- ings or own reserves; their restricted access to cap- ital markets; and their internal constraints, such as scant management experience (Kukanja et al., 2022; Dias et al., 2022; United Nations, 2022). Nevertheless, the smaller firms tend to be more flexible and inno- vative (Kukanja et al., 2022; Tejada & Moreno, 2013; Pikkemaat, 2008). Recent studies on the covid-19 pandemic suggest the need to deepen the knowledge of the creative strategies implemented by hospitality smes that are not affiliated with a large international chain (Shin & Kang, 2020; Le & Phi, 2021). The proposed analysis uses the multiple case study methodology (Yin, 2009, 2018). Six small andmedium- sized hotels located in Bahía Blanca city (Argentina) constitute the selected case studies. Based on the dis- tinction between survival strategies and innovation strategies for facing the covid-19 crisis (Le & Phi, 2021), reports for the national tourism sector reveal that hotels in Argentina adopted savings measures and requested government aid more than innovation strategies. This paper tries to deepen knowledge of this last type of strategies. From the literature on innovation in tourism and hospitality, some questions raised regarding the stage prior to the covid-19 crisis are: What type of inno- vation activities did the hotel firms under study invest in? What type of external sources of information did these hotels use to update themselves on new market trends, new technologies, new management and/or organization models during their innovation process? What kind of innovative results did they obtain?What internal factors, such as size, chain affiliation, and con- 364 | Academica Turistica, Year 15, No. 3, December 2022 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina servative attitude influenced their innovative profile? What external influences on the innovation process emerged in the proposed analysis? Concerning the covid-19 crisis, the research questions are: How did hotels perceive the covid-19 crisis? What innovation strategies did hoteliers adopt to face the crisis? After this introduction, the paper is structured as follows. The next section offers a review of theoreti- cal and empirical aspects of innovation in hospitality. The third section introduces methodological consid- erations related to the case study, the data collection instrument used in this paper and the type of infor- mation collected. The fourth section analyses this in- formation, dividing the analysis into two stages: pre- covid-19 and the pandemic context. Section five dis- plays a discussion of the results, and section 6 offers a conclusion, indicating limitations and future research guidelines. Innovation in Hospitality: Review of the Literature Hospitality is considered a lower innovative perfor- mance sector compared to industry and knowledge- intensive services (Gomezelj, 2016; Martín-Rios & Ciobanu, 2019), even though the study of innova- tion in hospitality generates a growing interest derived from the diversity and specificities of its processes and activities (Gomezelj, 2016; Martín-Rios & Ciobanu, 2019). Most empirical studies on innovation in hospital- ity and tourism are based on definitions and categories from the Schumpeterian approach (Hjalager, 2010; de Larrea et al., 2021). Based on the taxonomy proposed by Schumpeter, innovation is defined as the imple- mentation of a new or significantly improved prod- uct (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations (oecd, 2018). Alternative innovation classifications have been suggested in order to capture the particularities of the sector (Orfila-Sintes & Mattsson, 2009; Hjalager, 2010; de Larrea et al., 2021). Following Martín-Rios and Ciobanu (2019), hospitality integrates the taxon- omy called supplier-dominated services (sds). The sds firms are characterized by low levels of formal in- novation, and their innovation process relies on the purchase of goods and the interaction with suppliers and users. Unlike other sds sectors, the hospitality industry is further characterized as a labour-intensive, largely seasonal, cost-driven industry, with less incli- nation towards R&D and large investments in techno- logical innovation. Orfila-Sintes and Mattsson (2009) point out that hotel firms show a greater propensity to innovate through the introduction of R&D incorporated in technology (new equipment and/or software) and a lower predisposition to carry out internal activities of R&D. Among hotel firms in Spain, Guisado-González et al. (2013) find that the most common innovation strategy is the acquisition of new technology through the purchase of machinery and equipment, followed by the training of personnel involved in innovation activities, the purchase of intangible technology and marketing activities related to the introduction of new services. Firms are little oriented towards internal gen- eration of knowledge, external R&D and cooperation with other firms and agents. In summary, innovation in the hospitality sector is illustrated in the adoption of new technologies and translates into competitive advantages, either due to productive efficiency, understood as a reduction in costs, or to the greater capacity for differentiation through improvements in the service and its greater adaptation to the client (Orfila-Sintes & Mattsson, 2009; Nieves et al., 2014). Specifically, innovation in this sector is widely associated with advances in ict (Orfila-Sintes&Mattsson, 2009; Fernández et al., 2011; Nieves et al., 2014; Nieves & Osorio, 2019). It should be noted that firms do not innovate alone. Innovation is a process that depends on the acquisi- tion of knowledge and information from outside the firm (see, for example, oecd, 2018; Lundvall, 2010). Nieves et al. (2014), Nieves and Segarra-Ciprés (2015), and Backman et al. (2017) offer empirical evidence in favour of the positive impact that the interactions with external actors (customers, suppliers, competitors, firms of the same group and industry) have on hotel innovation regardless of their location. Kallmuenzer (2018) finds that employees, guests, and competitors are key drivers of innovation. Academica Turistica, Year 15, No. 3, December 2022 | 365 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina Firm-level innovation process Innovation inputs (internal R&D, external R&D, ICT acquisition, design, consultancy, training) Hotel features (size, age, affiliation with a chain, management modality, additional services) Characteristics of demand and mar- keting strategies (seasonality, reason for travel, channels used to book) Product innovation Process innovation Marketing innovation Organizational innovation Policies to promote innovation in tourism and hospitality Crises and economic cycles New technologies available in the market Environmental factors Changes in the tourist infrastructure and new communication infrastructures External knowledge flows Figure 1 Firm-Level Innovation Process and Its Conditioning Factors Source (based on López-Fernández et al., 2011; Orfila-Sintes & Mattsson, 2009; Fernández et al., 2011) Several factors condition the innovation process in the hotel industry. These factors can be classified into: (1) internal ones, such as size, belonging to a group of firms, organizational rigidity and lack of qualified personnel, and (2) external ones, such as the availability of financing sources, the lack of infor- mation or the scant interest of consumers regarding innovation (Orfila-Sintes & Mattsson, 2009; López- Fernández et al., 2011). Among the internal factors, the knowledge, skills and creativity of employees con- stitute key sources of innovation for hotels (Nieves et al., 2014; Nieves & Segarra-Ciprés, 2015; Dhar, 2015; Backman et al., 2017) as well as the behaviour of em- ployees and their actions towards innovation (Zopi- atis & Theocharous, 2018). Following Backman et al. (2017), innovation is not mainly a function of the in- tensity of R&D but of the knowledge acquired through the processes of learning by doing, learning by using and learning by interacting. Thus, specific knowledge of the firm derives from the human capital of the em- ployees (education, experience, ability to solve prob- lems, etc.). Regarding external factors that influence hotel in- novation, Fernández et al. (2011) include (1) policies to promote innovation in tourism and hospitality; (2) economic crises and business cycles; (3) sociodemo- graphic conditions such as changes in consumption habits and the rise of new market segments; (4) new technologies translated into product, process, orga- nizational or marketing innovations in the tourism sector; (5) environmental factors exemplified in legis- lation to regulate pollution and preserve the environ- ment; and (6) changes in tourist infrastructure and new communication infrastructures. Figure 1 illus- trates the innovation process at the firm level and the internal and external factors that affect this process. The academic literature as well as the reports com- piled by international organizations suggest that the covid-19 crisis may be a potential external factor that induces innovation. Hotels, particularly those belong- ing to large chains, have already implemented inno- vations in response to the pandemic (Shin & Kang, 2020; Sharma et al., 2021), ranging from procedures that guarantee higher standards of hygiene and social distancing to adjustments in reservation and cancella- tion policies (Shin & Kang, 2020; Sharma et al., 2021; Breier et al., 2021; Hao et al., 2020). Le and Phi (2021) identify strategic responses adopted by the hotel sector to deal with the covid-19 pandemic. In an early phase of the pandemic, hotels chains suspended their investments in new projects or implemented an ‘asset-light’ policy, while small and medium-sized hotels implemented a savings strategy by freeing up working capital, improving business ef- ficiency and postponing non-essential renovations. In the next phases of emergency and crisis, hoteliers adopted defensive or survival strategies focused on cost reduction, the adoption of health and safety pro- cedures, sales promotions through coupons and dis- count offers and free accommodation for health work- ers. For the recovery phase, the authors argue that the pandemic accelerated business innovation through service automation and revenue diversification. In particular, new automated service processes such as 366 | Academica Turistica, Year 15, No. 3, December 2022 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina contactless check-in/check-out, digital menus, online service ordering, mobile concierge apps, and smart room control have been adopted at a rapid pace. Breier et al. (2021) show that the incremental inno- vations carried out by hotels in the context of a pan- demic are explained by the time available, the gen- eral pressure to change due to the crisis, financial re- strictions and the role of frequent guests as imple- menting partners and early adopters. Hotel size, hotel resources, and government regulations and support policies are additional factors that have a strong in- fluence on hotel sector responses to crises (Hao et al., 2020; Le & Phi, 2021). Large hotel chains are generally better equipped than small and medium-sized hotels in pandemic crisis management (Shin & Kang, 2020; Le & Phi, 2021). Innovation in Small and Medium-Sized Firms in the Tourism and Hospitality Sector Several authors agree that innovation in small and medium-sized firms (smes) in the tourism sector is a relevant research topic (Tejada & Moreno, 2013; Hjalager, 2010; Pikkemaat & Peters, 2006; Thomas et al., 2011). This relevance is based on the numerical importance of smes in the tourism industry and the specific features assumed by innovation among these firms. Data and studies in several countries show that the tourism industry is dominated by micro and small businesses, and most of them are owned and man- aged by a single person or family (Pikkemaat, 2008; Thomas et al., 2011; Pikkemaat & Zehrer, 2016). Although, starting with the seminal work of Sch- umpeter (1942), there is extensive literature on the in- fluence of firm size on innovation, there is no con- sensus on such influence (Pikkemaat, 2008; Tejada & Moreno, 2013). Some studies reveal that larger firms have the advantage over economies of scale in inno- vation activities, while other research indicates that smaller firms have greater flexibility to innovate and adapt to changing environments (see the review of Te- jada & Moreno, 2013). In any case, the literature refers to specific features shared by the tourism and hos- pitality smes (Pikkemaat & Peters, 2006; Pikkemaat, 2008; Tejada&Moreno, 2013; Thomas et al., 2011; Kall- muenzer, 2018): • Low economies of scale and scope, and difficul- ties in increasing profit margins that allow rein- vestment in research and development, market research, product development, upskilling or cre- ativity. A lack of time, money and knowledge for a strategic innovation process is identified among smes. • Unlike large firms, smes do not have research and development departments. • Low professionalism; smes employ numerous low-cost and semi-skilled labour. • Lack of cooperation and networking; smes in the tourism and hospitality industry are reluctant to cooperate or form strategic allianceswith other partners (competitors, suppliers, customers and/ or universities). • smes predominantly focus on acquisition ofma- chinery as well as upgrading of the facilities in general, rather than creating service or manage- ment innovations. The most common type of in- novation is associated with the adoption of in- novations in the field of information technology. Most innovations are adoptions that originate as new technologies suggested by suppliers. • smes are risk averse, and, therefore, tend to fol- low and imitate only after making sure invest- ments are feasible. • Innovations in smes are often reactive in nature rather than proactive innovations. The former are changes undertaken to solve an existing prob- lem, while the latter introduce a new capability or experience for tourists. The stated features limit the innovation capacity of tourism smes. The reluctance to cooperate with com- petitors, suppliers, customers and/or universities is a significant limitation. It should be noted that coopera- tion allows smes to access the material and cognitive resources necessary to innovate (Kim & Shim, 2018; Kallmuenzer, 2018); at the same time, the cooperation allows for obtaining the necessary economies of scope to increase the variety of products and services offered. In addition, the lowqualifications of theworkforce and the low cost of labour not only does not allow boosting labour productivity in the sector, but also does not of- Academica Turistica, Year 15, No. 3, December 2022 | 367 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina fer the necessary incentives to carry out labour-saving process innovations (Pikkemaat & Peters, 2006). Moreover, difficulties in access to financing consti- tute an additional factor that undermines the innova- tive capacity of tourism smes (Dias et al., 2022;Motta & Sharma, 2020). smes find it difficult to obtain fi- nancing from commercial banks due to the lack of col- lateral, small cash flow, high-risk premiums or under- developed banking relationships, as well as experienc- ing difficulties in obtaining credit from suppliers and financial institutions (see review of Dias et al., 2022). As a consequence, the smes of the sector are financed with their own profits. Regarding innovation in tourism smes during the covid-19 pandemic, these firms experienced lower levels of training, less digitization of their processes, greater vulnerability to external shocks, and greater dependence on government aid compared to large firms (Dias et al., 2022; Iancu et al., 2022). In any case, recent studies show that the adoption of new technologies, new business models, and employee training were part of the main strategies followed by tourism smes in the face of the crisis (Breier et al., 2021; Haqbin et al., 2022; Estiri et al., 2022). Dias et al. (2022) find that the risk-taking attitude of managers and the existence of a cooperation network are factors that positively affected innovation during the covid- 19 crisis. The authors indicate that state financial aid had no impact on innovation during the pandemic, although this may be due to a high degree of correla- tion with the variable risk. However, Estiri et al. (2022) argue that the development of digitalmarketing is con- firmed as an applicable strategy for tourism smes to access new markets. Government support in the pro- vision of infrastructure to implement these strategies leads to the strengthening of organizational innova- tions that provide a competitive advantage for smes. Methodology and Source of Information Method This paper adopts the case study methodology (Yin, 2018). This methodology should be used: (a) to an- swer the ‘how’ and ‘why’ research questions; (b) when the researcher has little or no control over behavioural events; and (c) the focus of the study is contemporary as opposed to an entirely historical event (Yin, 2018). Additionally, a case study would be appropriate when the researcher needs to describe a social phenomenon in depth. This technique was recently used to understand how hotel firms innovate in their business models in reaction to the covid-19 crisis (Breier et al., 2021). Following Yin (2009), the case study technique is suitable for analysing complex real-life phenomena for which theory knowledge is scarce. In this way, the technique is appropriate to address the questions raised for smaller hotels, which are little explored given the recent and disruptive nature of the covid- 19 pandemic (Le & Phi, 2021; Shin & Kang, 2020). As a limitation, the case study does not allow generaliza- tion in probabilistic or statistical terms. According to Yin (2009 and 2018), the case study admits an analyt- ical generalization, in which a previously developed theory is used as a template to compare the empiri- cal results of the case study. In analytic generalization, the researcher attempts to generalize a particular set of results to a theory. The proposed qualitative research, with an ex- ploratory and descriptive scope, uses the holistic mul- tiple case research design (Yin, 2009, 2018). The six 3- and 4-star hotels belonging to the small and medium- sized category and located in Bahía Blanca city (Ar- gentina) constitute the selected case studies. The unit of analysis is the hotel. Bahía Blanca is a medium-sized centre of regional gravitation based on its geographic location, produc- tion structure, supply of health services and university education, and transportation and communications infrastructure. Public universities and several science and technology institutes are located in the city. In particular, one of the local universities offers under- graduate courses in the discipline of tourism, as well as in ict-related areas. From the tourism perspective, Bahía Blanca is a stopover and distribution centre for tourists and visitors to nearby beach and mountain destinations (Pinassi & Ercolani, 2012). Only 33.69 of visitors come to the city for vacations (Informe an- ual perfil del visitante 2019, n.d.). The hotel business sector in Bahía Blanca is made up of nine small and medium-sized firms (smes). Ac- 368 | Academica Turistica, Year 15, No. 3, December 2022 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina Table 1 Structure of the Survey Hotel features Affiliation to a chain. Business start year. Number of employees, number of employees with tech- nical or university training. Number of rooms. Location in the urban space Demand and market- ing strategies Main reason for travelling to the city. If the guests are frequent customers. Place of residence of the guests. Reservation channels – promotion policies/rate setting policies Innovative behaviour and performance pre- covid- pandemic Investment in innovation activities (internal R&D, external R&D, acquisition of hardware, soft- ware, machinery and equipment, consulting, design and marketing, training). Obtaining inno- vative results (introduction of a new or improved product, processes, marketing method, orga- nizational method). Use of external sources of information to innovate (guests, suppliers, com- petitors, hotels of the chain, universities). Access to funding sources for innovation. Obstacles to innovate, motives to innovate. Perceptions and in- novation during the covid- pandemic Opinion of hotel managers on duration and effect of the health control policies. Expectations of hotel managers regarding the recovery period of activity to pre-pandemic levels. Innovations implemented and/or planned by the hotels. cording to the Ministry of Production and Labour of Argentina (Resolution 19/2021) and following the cri- terion of the number of employees, micro to medium- sized firms are service companies with more than (or equal to) 7 employees and less than (or equal to) 535 employees. As previously stated, this paper focuses on six selected 3- and 4-star hotels. Among the hotels not selected, two of these firms belong to the 2-star cat- egory and the remaining one does not have a catego- rization. This last hotel, although it had a building, be- gan its activities after the conclusion of this study. The six highest category hotels are selected con- sidering convenience. Based on contacts prior to this study, the lower category hotels of the city did not show innovative behaviour before the covid-19 crisis, fo- cusing their attention on daily or current operations. Therefore, the analysis of the six selected hotels makes it possible to compare the pre-pandemic innovative profile with innovative behaviour during the covid- 19 crisis. This allows identification of the effects of the crisis on innovative behaviour when comparing both stages. It is highlighted that the six hotels under study show differences regarding their size, age and affil- iation to a hotel chain. There are two chains of local originwith regional projection. These differences con- tribute to the robustness of the finding (Guest et al., 2006 in Breier et al., 2021). Conversely, all hotels face a similar demand: frequent national guests who mainly travel for work and use the same booking channels (Online Travel Agencies, website, telephone, Airbnb). Data Collection and Analysis The proposed study examines the use of primary and secondary sources of information. The primary infor- mation was collected by sending a form to the email address of the managers of the 3- and 4-star hotels of Bahía Blanca city. The form focused on the pre-covid 19 stage, and on the recovery expectations and innova- tion strategies adopted by local hotels in the face of the covid-19 crisis. The process of sending the form and receiving the responses lasted between the months of July and October 2020. The questions that compose the questionnaire (Table 1) followed the guidelines of the OsloManual (oecd, 2018). Based on Sharma et al. (2021), the categories of the Oslo Manual are still ap- plicable to many of the measures that hotels have im- plemented in response to the pandemic, although the unprecedented nature of the crisis forced hotels to in- novate without the benefit of the experience. For the analysis of the primary information col- lected, this paper follows the scheme proposed by Breier et al. (2021), using a cross-case analysis or com- parative analysis between local hotels for the pre- covid-19 stage and a within-case analysis for each local hotel for the covid-19 stage. The analysis of the primary information is combined with secondary in- formation from official statistics and reports compiled Academica Turistica, Year 15, No. 3, December 2022 | 369 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina by national business chambers. Secondary informa- tion refers to the strategies or responses adopted by hotels at the national level in the face of the covid- 19 crisis, with the aim of identifying whether innova- tion is part of this set of strategies. After providing a summary of the strategies adopted by hotels at the na- tional level, the information on innovation in times of pandemic is analysed for the hotels under study in particular. Results Pre-Pandemic Innovative Behaviour and Performance As indicated in the previous section, the comparative analysis on innovative behaviour prior to the covid- 19 crisis requires local hotels to show some variability in their features in order to draw conclusions. Accord- ing to Table 2, the six hotels under study show differ- ential characteristics. In this sense, the hotels A, B and E belong to a national chain while the three remaining hotels are independent. Similarly, half of the six local hotels are more than 25 years old (Hotels A, C and D) or have a number of rooms equal to or greater than 100 (Hotels A, B andC). The hotels E and F are smaller in age and size. A relevant aspect to highlight for the purposes of analysing the innovative behaviour of ho- tels refers to the training of their employees. In the six hotels under study, the percentage of professional em- ployees is low, and this attribute is more pronounced in the larger hotels. Beyond the aforementioned distinctive features, the six hotels under study face a similar demand. In all cases, the demand is seasonal, concentrated in the months of March to November. Guests travel mainly for work and come from nearby towns and other re- gions of the country. The managers of the six ho- tels reported using the website, telephone and Book- ing.com as reservation channels before the covid-19 pandemic. Some hotels also used Despegar, Facebook, emails and Airbnb. Except for Hotel A, none of the local hotels had a policy of overbooking rooms. Re- garding the rate-setting policies, the hotels segmented the market according to the type of clients (individ- uals/group); sales channel (travel agency, direct sales, online travel agencies); and previous agreements with companies and/or sports clubs. Hotels D and E also discriminated rates according to the type of reserva- tion (refundable, non-refundable, early booking). Despite the differential characteristics in terms of age, size and belonging to a chain, the comparative analysis shows similarities in behaviour and innova- tive performance (Table 3). In line with previous stud- ies for destinations in developed countries, all local hoteliers invested in the acquisition of technology em- bedded in software, hardware or equipment. Hotels A and E, belonging to the same hotel chain, adopted the software Property Management System (pms). This software addresses reservation management, guest check-in and check-out, room assignment, room rate management, and billing. In addition, Hotel C incor- porated an accounting administration software devel- oped by a national firm and used especially by smes from different productive sectors. The software pur- chased byHotel C allows the firm tomanage purchases and stock, create price lists, issue invoices and compile management reports. Except for Hotel B and the recently founded Hotel F, the local hotels also opted to train their employees. The hotel business chamber of the city (fehgra) pro- vided such trainings, which focused onmarketing and sales and guest service. Only Hotel C implemented an incentive programme for its staff based on the achieve- ment of objectives. None of the local hotels carried out regular evaluations of their staff. Although human re- sources constitute a key innovation factor in the hotel sector (Nieves et al., 2014; Nieves & Segarra-Ciprés, 2015; Dhar, 2015), the local large hotels showed a low percentage of professional employees such as accoun- tants, graduates in administration and graduates in tourism (Table 2). The six hotels under study financed their innova- tion activities with their own funds. The hotels did not finance their innovation process from external sources, even when they mentioned the high costs of innovation as obstacles to innovate. Hotels A and D, which have been in operation for more than 25 years, indicated that the main obstacles correspond to the conservative organizational culture, the lack of quali- fied personnel and the high costs of innovation. Hotel F, recently opened and smaller, pointed to the costs of innovation together with the limited availability of 370 | Academica Turistica, Year 15, No. 3, December 2022 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina Table 2 Description of Local Hotels Item Hotel A B C D E F Category  stars  stars  stars  stars  stars  stars Chain affiliation Yes Yes No No Yes No Age > years < years > years > years < years < years N° of rooms       N° of employees       N° of professional employees  no data     Main reason for travel Work Work Work Work Work Work Place of residence of the guests Regional Regional Foreigner Regional Regional Regional Regional Frequent guests Yes No Yes No No Yes Seasonality of demand Yes No Yes Yes No Yes Notes Elaboration based on primary information provided by the hotels, web pages of each hotel and the web page of the Municipality of Bahía Blanca. Table 3 Innovation Behaviour before covid-19 Crisis by Local Hotel Features Hotel Hotel description Innovation process () () () Innovation activities Source information Innovation results A Yes > years  Acquisition of embodied technology. Training. Chain. Generally available sources. Market sources. Academic sources. Product/Service innovations. Process innovations. Market- ing innovation. B Yes < years  Acquisition of embodied technology. Chain. Market sources. – C No > years  Acquisition of embodied technology. Training. Generally available sources. Market sources. Product/Service innovations. Process innovations. Market- ing innovation D No > years  Acquisition of embodied technology. Training. Cre- ation new image. Generally available sources. Market sources. Product/Service innovations. Marketing innovation E Yes < years  Acquisition of embodied technology. Training. Chain. Generally available sources. Market sources. Process innovations Market- ing innovation. F No < years  Acquisition of embodied technology. Creation new im- age. Adoption quality man- agement system. Generally available sources. Market sources. Marketing innovation. Notes Column headings are as follows: (1) chain affiliation, (2) age, (3) number of rooms. Elaboration based on primary information provided by the hotels. financing. It should be noted that investment in inno- vation activities is not the only input in the innovation process of firms. Since the 1980s, different theoretical approaches have pointed out the relevance of external Academica Turistica, Year 15, No. 3, December 2022 | 371 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina knowledge as a source of innovation. As in previous studies, employees are the internal source of informa- tion used by local hotels. Within each hotel, the infor- mation is conducted through regular meetings, emails and use of WhatsApp. Respondents indicated that they usemore than one external source of information to update on innova- tion and new trends in the sector.Most of the local ho- tels used generally available information sources (spe- cialized magazines, internet and fairs). Similarly, all the hotels used market sources represented by clients and/or competitors. Only Hotel B indicated that they also used suppliers as a source of information. Except for Hotel A, which is larger and belongs to a chain, none of the establishments used the university as a source of information. The three hotels that belong to a chain (Hotels A, B and E) indicated that they use this organization as a source of information. Nevertheless, the hotel chain can be considered an internal source of information. It is highlighted that the hotels are located in a city that has a university that offers a degree in tourism, and training in disciplines in the field of economic sci- ences, and in engineering associated with ict. These last scientific fields of interest for the promotion of in- novation in the sector are aimed at the digitization of firms. Regarding the innovative results, the local hotels obtained product, process and/or marketing innova- tions, but not organizational ones: • Product/Service innovations. Hotels A, C and D obtained incremental innovations represented by improvements in Wi-Fi network connectiv- ity (Hotels A and D), incorporation of electronic locks by approach (Hotels A and C) and im- provements in heating equipment (Hotel D). The younger hotels B, E and F did not obtain innova- tions. • Process innovations.Hotels A and E, belonging to the same chain, adopted the Yield Management philosophy (see, for example, Kimes, 1989; Talón Ballestero et al., 2008), an aspect that suggests a greater complexity of management processes and decision-making regarding rate setting and in- ventory policies. The independent Hotel C also digitized its administrative processes. From the perspective of front-office innovations, Hotel C added the practice of late check-out. • Marketing innovation. Except for Hotel B, the lo- cal hotels indicated that they modified their rate setting policies, offering discounts for long stays and through a booking channel (Hotel A andHo- tel D), special weekend rates (Hotel C), and dis- counts for groups of guests who come to the city to participate in specific events and conventions (Hotel E and F). Only Hotels A and F incorpo- rated new sales and promotion channels: online travel agencies and direct web bookings. Hotels A and C have made changes to their website. Regarding the factors underlying the innovation process described, the study suggests that the affilia- tion to a chain, the size and the age of the hotel do not seem to influence the innovation process of local hotels. While Hotels A and B, affiliated to the same chain, stand out for the adoption of the ym philos- ophy, Hotel B, belonging to another chain, did not attain innovations in the pre-covid-19 period. The internal factors outlined by the hotels surveyed refer to the conservative attitude and the lack of qualified personnel. Among external factors, the high costs of innovation and the lack of financing lines emerge as obstacles to innovation. For the cases studied, the fea- tures assumed by demand can serve to explain the similarity in the innovative behaviour evidenced. Lo- cal hoteliers indicated that their guests travel for work and stay in the city for a few days, suggesting that the accommodation and additional services offered by lo- cal hotels meet their expectations. Figure 2 summa- rizes the relatively homogeneous innovative profile of local hotels. Innovation as a Response to the COVID-19 Crisis Based on Le and Phi (2021), innovation is one of the strategies that hotels can adopt in the face of the covid-19 pandemic. Although the present paper fo- cuses only on innovation, the strategies adopted by hotels at the national level are shown below with the purpose of providing a general framework of the re- 372 | Academica Turistica, Year 15, No. 3, December 2022 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina Financing sources: own resources Innovation activities: acquisition of incor- porated technology (equipment and ICTs) and training Product innovation Process innovation Marketing innovation Wi-Fi network improvements, electronic locks by approach, improvements in heating/cooling of environments Back-office: Yield Management front-office: late check-out Changes in rate setting policy new sales and promotion channels Information sources: generally available information (specializedmagazines, internet), market, own chain Figure 2 Pre-Pandemic Innovative Profile of Local Hotels Source (based on primary information provided by the hotels) sponses implemented at the national level and identi- fying if innovation is part of such strategies. Innova- tion is analysed for the particular hotels selected after providing this general framework. Strategies against the COVID-19 Crisis Implemented by Hotels Nationwide In March 2020, after the recognition by the World Health Organization of the covid-19 outbreak as a pandemic, Argentina declared a public emergency (Decreto de Necesidad y Urgencia 260/2020, 2020; Ley de solidaridad social y reactivación productiva en el marco de la emergencia pública, 2019) and adopted policies aimed at restricting the arrival of international passenger flights and limiting the internal movement of people (see summary of government measures in Instituto Nacional de Estadística y Censos (2021)). Thus, international tourist arrivals showed a negative year-on-year variation of 97.7 compared with De- cember 2020. In this scenario, Argentina adopted fis- cal and monetary policies to mitigate the effects of the crisis and accelerate recovery and measures to protect jobs and promote training and skills. Before the gradual resumption of tourist activity recorded at the end of 2020, hotels reported difficulties in operation (Asociación de Hoteles de Turismo de la República Argentina, 2020; Asociación de Hoteles de Turismo de la República Argentina & Instituto de Es- tudios sobre la Realidad Argentina y Latinoamericana 2020; Observatorio Económico Hotelero, 2020): • 94 of the hotels surveyed requested state aid for the payment of salaries, 53 carried out person- nel suspensions, 52 suspended programmed in- vestments, 47 reduced personnel salaries and took bank loans; • More than 80 of the surveyed establishments indicated that they have infrastructure and equip- ment and protocols to operate safely; • 21 of the hotels indicated that they can convert their establishment to another type of activity. At this point, it stands out that 20 of the hotels continued to offer their restaurant service and 5 of the hotels offered this service under the take- away modality. Innovation among Local Hotels During the COVID-19 Crisis At the local level and prior to the reopening of tourism activities, the 3- and 4-star hotels in the city of Bahía Blanca made adjustments to adapt their service to the ‘covid-19 Protocol for Tourist Accommodation’ of the Ministry of Tourism and Sports of Argentina. Re- garding the possibilities for innovation offered by the covid-19 crisis, Table 4 summarizes the behaviour and perceptions of the hotel respondents that are de- tailed below. Hotel A. The hotel established a maximum capacity in the breakfast room, signalled physical distancing in common spaces, and adopted physical barriers at the reception. Even when the respondent indicated that the pandemic context demands innovative behaviour, he considered that the hotel does not have the capacity to introduce changes. In addition, the respondent ex- pressed that the government policies taken to mitigate the impacts of the covid-19 pandemic were not suf- ficient in a highly affected sector, stating that: ‘Costs are increasing and accumulate with a very poor de- mand, the hotel that remains open does nothing more than borrow in an abysmal way that will undoubtedly Academica Turistica, Year 15, No. 3, December 2022 | 373 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina Table 4 Innovation Behaviour of Local Hotels during covid-19 Crisis Hotel Hotel description Innovation during covid- () () () A Yes > years  Innovation strategies are not verified. Hoteliers do not perceive the crisis as an opportunity to innovate. Minor organizational changes and service changes for compliance with health protocols that are not considered innovative results. B Yes < years  C No > years  D No > years  E Yes < years  F No < years  Notes Column headings are as follows: (1) chain affiliation, (2) age, (3) number of rooms. Elaboration based on primary information provided by the hotels. affect its future performance, seriously compromising the ability to respond to innovative changes that adapt to the new visitor or tourist.’ Hotel B. Hotel B modified its organization, internaliz- ing the laundry service through the incorporation of its own laundry room. The respondent indicated that ‘the current situation for the entire industry is critical, hotels are literally struggling to survive. Many will not be able to do it and will close their doors permanently. The recovery is going to be slow and hard, the costs to maintain the protocols are higher than in the normal situation. All renovation and technological advance- ment activity is going to be relegated for quite some time. The investments are going to be minimal, just to be able to operate and provide the appropriate quality to each hotel.’ Hotel C. Beyondminor renovations to common spaces to contribute to physical distancing, Hotel C indicated that it does not plan to make any changes. The re- spondent explicitly pointed to the covid-19 crisis as a limitation to innovation and revealed that ‘The im- pact of covid-19 was great in the hotel sector in the city. The hotel had to adapt to the new municipal and provincial protocols. The government policies were correct at the beginning of the pandemic, but later it seems to me that they were contradictory or unclear.’ Hotel D. Like previous accommodations, Hotel D im- plemented minor renovations in common spaces to contribute to physical distancing between people. The hotel indicated that it plans to adopt off-line card pay- ment, web check-in and express check-out and inten- sify the use of social networks as an advertising and loyalty strategy for its guests. The respondent stated that the primary strategy is to survive: ‘it is working with aminimum staffing,with limited service, the staff is receiving less salary [. . .]. The government policies were not successful in my opinion. I see everything [as] very improvised.’ Hotel E. Beyond the adaptations of the service to the requirements imposed by the protocol, Hotel E did not consider adopting innovative strategies. The respon- dent explicitly indicated that the pandemic constitutes a limitation to the development of an innovation strat- egy and stressed that the implementation of changes ‘is going to depend on the region in which we find our- selves and the evolution of the situation.’ Hotel F. The hotel carried out renovations in com- mon spaces to contribute to physical distancing be- tween people. As in the previous accommodation, the respondent explicitly pointed out that the pandemic constitutes a limiting factor for innovation. Likewise, he indicated that the new hygiene protocols meant an increase in his costs and pointed out that ‘all the eco- nomic measures that are implemented to provide sup- port at this juncture are very useful. The prospects de- pend a lot on the evolution of the pandemic in the short term, and its effects on the flowof passengers and means of transport.’ Figure 3 sums up the strategies adopted by local and national hoteliers in the face of the pandemic. Un- 374 | Academica Turistica, Year 15, No. 3, December 2022 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina COVID-19 crisis Survival strategies Innovation strategies Minor organizational changes and service changes for compliance with health protocols Suspension of programmed investments Application for state aid for the payment of wages Personal suspension Limitations: lack of own financing funds, cost increase, closure risk, personal suspension. The hotels declared they had the necessary equipment and infrastructure to operate in the new normality Strategies verified Strategies not verified Figure 3 Hotels’ Response during the covid-19 Crisis (based on Asociación de Hoteles de Turismo de la República Argentina, 2020; Asociación de Hoteles de Turismo de la República Argentina & Instituto de Estudios sobre la Realidad Argentina y Latinoamericana, 2020; Observatorio Económico Hotelero, 2020; Breier et al., 2021; Le & Phi, 2021) like previous empirical studies and reports from in- ternational organizations (Sigala, 2020; Breier et al., 2021; unwto, 2020; oecd, 2020; Le & Phi, 2021), the covid-19 crisis is not a triggering event to innovate for the local hotels. Although one of the hotel firms surveyed considers that the covid-19 crisis demands innovation, enhancing factors such as staff time off, financial pressure due to loss of income and support from frequent guests are not verified among the pri- mary information collected. Discussion The information collected for the pre-covid-19 stage shows an innovative behaviour of local hoteliers ori- ented to the following innovation activities: acqui- sition of ict and staff training. This innovative be- haviour is representative of the tourism and hospital- ity sector, and is more pronounced among small and medium-sized firms (smes) in the sector (Pikkemaat & Peters, 2006; Pikkemaat, 2008; Tejada & Moreno, 2013; Kallmuenzer, 2018). In addition to these innovation activities, the pre- covid-19 crisis innovation process was based on sev- eral external sources of information, except for Ho- tel B, which stands out for not having obtained in- novative results in this stage. Therefore, a relationship could be drawn between obtaining innovative results and openness to information and external knowledge. Although this relationship is in line with previous em- pirical literature (Nieves et al., 2014; Nieves & Segarra- Ciprés, 2015; Backman et al., 2017; Kim & Shim, 2018; Kallmuenzer, 2018), it is not a conclusive result given the qualitative nature of this study. It should be noted that the university was not an external source of infor- mation widely disseminated among local hotels. How- ever, the local university can provide relevant knowl- edge for the hotel innovative process since this aca- demic unit has degree programmes in fields related to the hotel and tourism sector. Hoteliers turn in the op- posite direction, to the local business association, to train their employees. The results derived from this pre-covid-19 in- novative behaviour were incremental. The applica- tion of the Yield Management philosophy stands out. Although it is a technique applied in the hotel sec- tor since the 1980s, it is not very widespread among smaller hotels (Talón Ballestero et al., 2008) and im- plies a higher degree of digitization. From the differ- entiation between internal and external factors, the conservative-type attitude and the lack of qualified personnel emerged as internal conditioning factors of the pre-covid-19 innovative process. The high costs of innovation and the lack of financing lines appeared as external factors. According to previous studies on tourism (Dias et al., 2022; Motta & Sharma, 2020), small and medium-sized local hotels finance their in- novation activities with their own resources. In addi- tion, the characteristics of the demand is a key ele- ment to inducing innovation in the tourism and hos- pitality sector (Orfila-Sintes &Mattsson, 2009; López- Academica Turistica, Year 15, No. 3, December 2022 | 375 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina Fernández et al., 2011). Before the covid-19 crisis and today, local hotels face little dynamic demand that does not require the introduction of innovations. This feature of the local demand explains the similarity evi- denced in the innovative profile of hotels with dissim- ilar features. The covid-19 pandemic may be an external fac- tor that induces innovation, according to reports from international organizations and recent studies (United Nations, 2020, p. 2; oecd, 2020; unwto, 2020; Le & Phi, 2021; Breier et al., 2021; Haqbin et al., 2022; Es- tiri et al., 2022). However, the primary data collected shows that local hoteliers did not report perceiving the pandemic as an obstacle to innovation rather than an inducing factor. During the lockdown, local hoteliers did not innovate, nor did they plan investments in that direction. The main concern of the hoteliers was fo- cused on surviving, on continuing to operate, rather than on innovating. Conclusions, Limitations and Future Guidelines Innovation is a source of competitiveness and growth for hotel firms, and it is recognized as a strategy for survival and adaptation to the current covid-19 cri- sis. Following the multiple case study methodology and the analysis scheme used by Breier et al. (2021), the proposed exploratory and descriptive analysis fo- cuses on innovation in small and medium-sized ho- tels, not belonging to large international chains, lo- cated in a medium-sized city of Argentina oriented to business tourism. In this way, the paper aims to con- tribute to the empirical knowledge about innovation in small and medium-sized firms (smes) in tourism and hospitality, addressing the research gap in tourism innovation in SouthAmerica and adding empirical ev- idence on the innovative behaviour of tourism smes in times of crisis. As previously indicated for the pre-covid-19 stage, the study reveals an innovative behaviour similar to that reported by the literature for the tourism and hos- pitality sector (Orfila-Sintes &Mattsson, 2009; Nieves et al., 2014; Kallmuenzer, 2018), and, in particular, to that evidenced in the studies for the smes of the sec- tor (Pikkemaat & Peters, 2006; Pikkemaat, 2008; Te- jada &Moreno, 2013; Kallmuenzer, 2018). The need to mitigate the influence of some internal and external factors mentioned by local hoteliers emerges from the findings. In this way, policy recommendations arise aimed at favouring access to financing lines, and train- ing the workforce employed, which is a key innovative factor for the tourism innovative process. In the lat- ter case, a policy recommendation derived from this study involves promoting a more active role for the university both as a training centre and as a potential assistance and innovation centre for local hotels. After the outbreak of the covid-19 pandemic and its conception as a window of opportunity to innovate in the tourism and hospitality sector (see, for example, United Nations, 2020; oecd, 2020; unwto, 2020; Le & Phi, 2021; Breier et al., 2021), local hoteliers not only did not deploy change and innovation strategies but also contemplated the covid-19 crisis as an obstacle to innovate. It should be noted that the impact of the covid-19 crisis on innovative behaviour of the hotels under study must be interpreted with caution, given that the information collected does not account for an outstanding innovative behaviour prior to the pan- demic. Secondary information at the national level con- sulted shows that, although national support policies were arranged for the sector, the extension of restric- tions on the operation of tourist activities, with the consequent loss of income, added to the costs associ- atedwith compliancewith health protocols, are factors that hinder innovation in times of pandemic. Like- wise, the partial or total suspension of employees is an additional factor that undermines the possibilities of innovating due to greater staff time off during a re- duction in operational activities (Breier et al., 2021). As indicated by Le & Phi (2021), the study suggests that small and medium-sized hotels opt for a strat- egy of freeing upworking capital and postponing non- essential renovations. This paper is not exempt from limitations. A first limitation of the proposed analysis is associated with the scope of the case study methodology. This tech- nique does not allow statistical generalization from a single or multiple case studies (Yin, 2009 and 2018). Therefore, deepening of the knowledge of the internal and external factors that influence the behaviour and 376 | Academica Turistica, Year 15, No. 3, December 2022 Carolina Pasciaroni et al. Innovation in Smaller Hotels in Argentina innovative performance of hotel firms requires the ap- plication of an extensive quantitative-type methodol- ogy to a greater number of hotels. A second limitation comes from the temporal extension of this paper. It is limited to the first phases of the covid-19 crisis (Le & Phi, 2021), therefore, it is necessary to collect infor- mation on the current recovery phase to obtain a com- plete understanding of the crisis as a potential window of opportunity to innovate. A future research line involves examining the im- pact of the covid-19 pandemic on the innovative be- haviour of hotels taking into account different sizes, categories, and localities, aswell as exploring the strate- gies carried out by them in the four stages of the cri- sis indicated by Le and Phi (2021). A complementary study suggests recognizing whether the influence of the obstacles to innovation prior to the covid-19 cri- sis becomes more pronounced during the pandemic or, in contrast, their impact is attenuated by state aid or the need to adopt less conservative behaviour facing a disruptive event. 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