Airbnb took the No. 1 spot among lodging companies in the third annual American Innovation Index™, which measures company innovativeness based on customers’ perceptions and experiences. Hyatt Hotels ranked at the top on the Social Innovation Index™, which gauges innovation that benefits society and the environment.
The American Innovation Index™ (www.americaninnovationindex.com) is a project of Fordham University’s Gabelli School of Business, New York; the Norwegian School of Economics, Bergen, Norway; and market research firm Rockbridge Associates Inc., Great Falls, Va. The index score is based on the customer perceptions of companies as being innovative, creative, pioneering and transformational. For the lodging sector, the scores are based on the experiences of consumers who interacted with a brand in the past 12 months.
The top 5 lodging companies on the American Innovation Index™ (from highest to lowest) included:
- Hilton, and
- Best Western
For the Social Innovation Index, the top 5 ranked institutions, starting with the highest, consisted of Hyatt, Airbnb, Marriott, Best Western, and IHG.
“Our research shows that brands are viewed as more innovative when customers notice changes in the products and services, the ease and speed of service delivery, customer care and physical and digital presence,” Charles Colby, Principal at Rockbridge Associates and the chief methodologist for the study.
The study showed that in the lodging sector, several factors drive customer perceptions of innovation, including ease of booking through technological developments and exclusive loyalty programs. Customers also notice positive changes in the perks and discounts available across the industry, as well as the high level of customer care through all communication channels.
Social innovation consists of perceptions of a company being a leader in and placing a priority on benefiting society and the environment. In the lodging industry, customers focus on how companies help them save money and make efforts to keep their locations clean, litter-free, and safe. Customers also notice when lodging companies care about the environment, and how their new location openings promote economic growth within the local community.
Airbnb is unique because it is an innovative disruptor in the industry, changing the way guests find places to stay away from home. One area that may lead to customers rating Airbnb high in innovation is its simple and novel booking procedure. Airbnb’s Instant Book allows people to make reservations as they would in a hotel and does not require approval from the host before they can be booked. Guests can mix and match their travel dates, and check-in plans with the host. Airbnb also offers the ability to customize the booking based on the purpose of the trip, whether it is a business trip or family vacation.
On the social innovation front, Airbnb promotes the fact that it prioritizes the safety of their guests and hosts. For example, Airbnb partnered with the American Red Cross to provide general safety resources. Airbnb also promotes environmental well-being by hosting events that promote home sustainability. Earlier this year, Airbnb hosted a “Meet the Experts” event for hosts on Airbnb to find out more about sustainability and energy saving.
The lodging industry in general performs lower than other industry industries on their innovation index, according to the study. Out of 173 companies, the American Innovation Index Scores range from 84.2 (Ikea) to 51.4, for a median of 68.2. The majority of lodging companies Rockbridge captured have scores below the median. Only Airbnb, Hyatt, and Marriott landed above the median (75.6, 68.8, and 68.7 respectively).
Ikea took the No. 1 spot overall, proving the most innovative companies are not always in technology. Apple (No. 2), Trader Joe’s (No. 3), John Deere (No. 4), and Weber (No. 5), a manufacturer of grilling equipment, complete the top 5 customer-perceived most innovative companies. Major tech brands such as Twitter (No. 71) and Facebook (No. 137) lag behind.
“The American Innovation Index™ is unique because it recognizes the companies with the highest innovation index scores based on customer ratings,” said Lerzan Aksoy, professor of marketing at Fordham University’s Gabelli School of Business. Professor Aksoy further observed, “this year, the American Innovation Index™ observed an across the board increase in innovation scores by companies, a phenomenon driven by their response to the unprecedented challenges caused by the pandemic, economy and social movements. While most companies were seen as more innovative than in the past, the ones that leap to the top of their industry will experience the most positive growth and financial performance.”
According to Gina Woodall, President of Rockbridge Associates, “companies can excel in satisfaction, but if they do not deliver an innovative customer experience, they face obsolescence,” said Gina Woodall, president of Rockbridge. “Your industry does not matter. For example, among supermarkets, Trader Joe’s is an innovation leader while other supermarkets rank near the bottom.”
The American Innovation Index™ study was conducted in July 2020 and covers 173 firms from 20 industries. The researchers surveyed 5,012 consumers and covered more than 23,000 customer-company relationships.