This paper aims to provide various insights on innovative practices followed by hospitality industry representing samples of hotels and restaurants operating in Manipal and Udupi, in Karnataka, whereby the industry is transforming itself to the new technological application and digital marketing aspects in day to day operation, revenue management, capacity utilization .The research focuses on the traditional hotels and lodging equipping to the new practices in recent years with different web portal and other marketing aggregators. The paper has facts and from the existing literature and other reports. Primary data collection involving face to face conversations with the Managers of the hotels and the restaurant through questionnaires and in depth interview method. Secondary data includes webpages of online travel aggregators and hospitality firms. Some of the key emerging areas are role of e commerce, competitive advantage, leverage of technology and change management, operational efficiency. The paper also suggests that it is important to understand how innovations are being managed across different areas of operations in hospitality industry and focuses on aspects of hurdles and barriers faced by the managers towards implementation of innovative ideas and processes. Karthik "Hospitality Management: Innovation and Challenges" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-6 , October 2018, URL: https://www.ijtsrd.com/papers/ijtsrd18865.pdf