The notion of service innovation has gained significant source of competitive advantage to any organization, in general, and also to firms in the hospitality industry. Any organization desiring to succeed must continually seek to create innovative products or services to gain and sustain an edge in the increasingly competitive market environment. This paper reviews extant literature associated with service innovation from two perspectives. A general literature review of the concepts associated with service innovation is performed drawing attention to such items as, the concept of service innovation; the definitions of service innovation; the differences between product and service innovation; the dimensions of service innovation; the drivers of service innovation; patterns of service innovation; effects of service innovation; and service innovation success factors. Second, a literature review associated with service innovation in the hospitality industry is undertaken. This latter review draws attention to the benefits of service innovation in the hospitality industry; the types of innovations in hospitality firms; and summarizes the findings of recent studies on service innovation in hospitality firms. Overall, the study found evidence of significant research attention to service innovation in the context of services in the hospitality industry. Moreover, it was found that some regions or countries, such as Europe and the Far East (Taiwan, in particular) appeared to be the recipients of greater attention in service innovation literature associated with the hospitality industry
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