How small things affect the big picture? The effect of service product innovation on perceived experience value

Purpose - By adopting retrospective evaluation theories, this study aims to explain how innovations provided by separate suppliers in the tourism value chain influence tourist's perceived value of the overall experience and further uncover which innovative product attributes are more effective in improving tourist perceptions of the overall value. Design/methodology/approach - A survey yielded 584 valid responses from tourists who had experienced specific tourist product innovations during their travels. Structural equation modelling was used to test the proposed theoretical model. Findings - The results reveal that tourists evaluate overall travelling experience value either by recalling an intense, impressive moment (i.e. a heuristic approach) or through an evaluation of the overall utility gained from the whole trip (i.e. a normative approach). Furthermore, innovations that are perceived as increasing convenience and enabling learning contribute to tourists' overall value perception through both normative and heuristic approaches, while immersion resulting from innovation only contributes to overall perceived value through the heuristic approach. Practical implications - Given the complex service ecosystem of tourism destinations, each tourism service provider should consider how innovations contribute to the experience of the whole trip and which attributes of innovations increase tourists' overall perceived experience value. Originality/value - This study complements existing knowledge by revealing the relationship between product innovation in tourism sectors and tourists' perceived value of the whole trip. Moreover, it offers a theoretical framework for further investigation into service product innovation in hospitality and tourism industry.