Innovation is generally considered as one of the main key drivers of economic growth. Fostering innovation activity helps firms to improve and maintain a competitive advantage on a global market, which is especially important for tourism firms that operate in a very competitive environment. The goal of the article is to explore the determinants of innovations in hotel and travel agency services. We tried to investigate the impact of information and communication technologies and the enterprise readiness on the innovations in hotel and travel agency service industry. In order to achieve this goal, the empirical survey was conducted on a sample of hotels and travel agencies in Croatia and Montenegro. Principal component analysis with Varimax factor rotation was applied on a set of information and communication technologies items. Three logistic regression models were developed for the hotel firms and travel agencies, separately. The research results showed the usage of information and communication technologies as well as enterprise readiness for innovations have a significant impact on innovation activities, but the impact was different between hotel firms and travel agencies.

KEY WORDS
innovation, ICT, tourism industry, Croatia, Montenegro

CLASSIFICATION

JEL:	L83, O31, Z32