Innovativeness and business performances in tourism SMEs

• The article proposes a two-stage interactive model.
• The model explains innovative outcomes and the influence on the profitability.
• The model demonstrates its validity and the importance of the explanatory variables.
• A positive linear relationship between innovative outcomes and profitability exists.

Research on innovation in the tourism industry has gained relevance, and in recent years knowledge of this complex phenomenon has increased. The article proposes a two-stage interactive model based on innovative capability, environment and other contextual factors of firms, in order to explain first, the innovative outcomes in products and processes and, subsequently, the influence of these outcomes on the profitability of SMEs in the Andalusian hospitality industry. The model has undergone various hypothesis tests, thus demonstrating its validity, the importance of the main explanatory variables and the existence of a positive linear relationship between innovative outcomes in products and processes, and business profitability.