The tourism industry is currently Malaysia’s third most important industry in terms of foreign exchange earnings after the manufacturing and palm oil sectors. Its contribution to GDP growth is about 7.2%, suggesting that the industry is still in its infancy and therefore offers much scope for future growth. Furthermore tourism industry has been recognized as important economic activities especially during the current economic crisis. Malaysian government announced as part of the Mini Budget tabled in parliament on 10th March 2009 that RM200 million will be allocated to various tourism related programs. However, tourism industry is in a downward spiral due to various reasons such as global economic crisis and strong competition from other countries. Innovative efforts are necessary to further promote this industry so as to reap the full benefits and potential of this sector, besides giving it a competitive edge against its competitors like Thailand, Hong Kong and Singapore. Emphasis should be given to the development of competitive tourism products or services to enhance foreign exchange earnings and savings. Innovative approach such as creativity is the key element for success. This paper attempts to synthesize the scope and role of innovation in the determination of effectiveness of tourism related entrepreneurs. Furthermore, this paper proposed that strategic innovativeness and behavioral innovativeness enhance performance of entrepreneurs.