Tourism is one of the fastest-growing industries globally. Over the past two decades, the average growth rate of the tourism sectors in OECD countries has exceeded GDP growth, and many non-OECD countries have experienced even higher growth in their tourism sectors (OECD, 2010). Tourism plays an important role in economic development by sustaining employment and bringing in foreign currency. Growth is driven not only by increasing wealth and economic development but also by the tourism industryís ability to offer new products and experiences. Tourism firms operate in a competitive market that is characterized by high turbulence and rapid changes. To compete effectively, tourism firms must be highly innovative either in cutting costs or in offering new, high-quality products that meet customer demand. No country or region can rest on its natural endowment or cultural heritage. Strategies to support innovation are needed to remain competitive in the global tourism market (OECD, 2010). The tourism sector is presently undergoing extensive change because of a transition to more experience-based products (Sundbo et al., 2007) and because of strong market growth (Lordkipanidze et al., 2005). This transformation places even stronger demands on tourism firms to innovate. Product life spans are becoming shorter, requiring firms to introduce new and better products more frequently. The capacity for firms to change, develop new products and adapt to market changes is therefore crucial to firm and industry performance. Research-based knowledge on innovation in tourism firms remains scarce.