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The increasingly complex service context with the convergence of physical products, digitalization, and service offerings presents a major challenge for IS research on service innovation. This article addresses the resulting need for research on an adequate understanding of the perceived value of innovative digital services. It continues previous work that makes the first move in this regard-conceptualizing this value as the sum of direct value-in-context (S-D logic), and indirect and option value-in-context (both newly introduced). This article closes two research gaps. First, the option and indirect value-in-context components are clarified by developing propositions that link both to S-D logic's main concepts of service innovation. Second, the value-in-context anatomy is empirically validated with two conjoint analyses. It can be shown that both newly introduced components of value-in-context indeed are decisive factors for customers' perceptions of value with innovative digital services-implicating their conceptual separation.

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New enhancements that foster more customer-focused services, such as the co-creation of hotel service offerings with hotel guests, have changed the conventional thinking in the hospitality industry. In this regard, the current study contributes to the understanding of the effect of co-creation on customer satisfaction in the hospitality industry, focusing on customers’ idiosyncratic characteristics. Particularly, the study investigates the moderating role of customers’ regulatory focus orientation (promotion vs. prevention) and the mediating role of customers’ positive disconfirmation on the relationship between value co-creation (VCC) level of hotel services and customer satisfaction. The model is tested using an experimental design with 328 responses. The results show that a high level of VCC in hotel services leads promotion-focused (prevention-focused) customers to experience lower (higher) levels of positive disconfirmation compared to a low level of VCC, as promotion-focused (prevention-focused) customers have higher (lower) performance expectations from a high VCC service offering due to the regulatory fit (non-fit) they have with the service design. The findings also indicate that service failure generates less dissatisfaction in a high VCC level in hotel services than a low VCC level since customers take more responsibility for the unfavorable outcome when they participate more in the VCC process. These results indicate that when hotels design co-created services, they need to generate coherence between customers’ regulatory focus orientation and the service's VCC level.