DOI: 10.52340/ekonomisti.2026.01.17

The specific nature of the tourism industry and its products compels business entities within the sector to maintain rigorous oversight of rapidly growing and volatile market trends. These include shifting consumer demands, technological advancements, and innovations in process management aimed at enhancing production efficiency. Shifting various management aspects or the overall leadership style provides a company with a competitive advantage. Therefore, this research demonstrates the importance of an innovative management style for a companys long-term effectiveness. The key hypothesis asserts that companies constantly updating their management approaches incur higher production costs in the short term, yet they reach the minimum efficient scale of production sooner and sustain the constant effect of scale for a longer duration.

The modern academic community emphasizes the connection between management innovations, technological advancements, digital tools, and artificial intelligence with organizational efficiency. Knowledge serves as the primary resource determining competitiveness, while innovation functions as an interactive, learning-based process. In the tourism sector, innovative management encompasses digital booking and sales platforms, Customer Relationship Management (CRM) systems, internal rotation mechanisms, and eco-friendly corporate cultures.

A survey of 103 companies in the Georgian tourism industry revealed that democratic management is the most prevalent form, where teams participate in decision-making and managers focus on collective efficiency. Companies typically implement management innovations 1–2 times per year, most frequently through digital CRM platforms and security systems. While international practice or competitor examples stimulate these changes, the initiative primarily stems from top-level management. Main challenges include limited financial resources and the delayed manifestation of results from management innovations.

In-depth interviews identified that success in implementing innovations depends on how management positions itself toward: a) the companys market position; b) other managers; c) the employees and d) the owners. This strategic positioning determines a companys inclination to implement management innovations.

A comparative analysis of two tour operators in Georgia showed that a tour operator oriented toward implementing management innovations reaches the minimum average cost at approximately the same level as a tour operator less oriented toward innovation. However, the minimum average cost for the innovation-oriented company is relatively higher due to the expenses incurred on innovation implementation projects. At the same time, in the long term the innovation-oriented tour operator reaches the minimum efficient scale of production sooner, with a lower level of average costs per excursion, and maintains this efficiency for a longer duration.

Ultimately, the research confirmed that to gain a competitive advantage in the tourism industry, it is essential to implement new approaches based on digital technologies and an innovative organizational culture. This ensures the company’s long-term efficiency and survival in the market.

Keywords: Innovative management. Tourism industry. Technological innovation. Organizational culture. Digital transformation. Competitive advantage. Management style. Long-term efficiency. Georgias tourism sector.