As the global economy and digital technology rapidly advance, the service industry faces increasingly intense market competition and challenges in meeting diverse customer demands. This study, set against the backdrop of chain hotels in China, empirically analyzes how service modularity could impact customer perceived value and contribute to innovation performance of hotels. Using two innovative prototypes from Jinjiang Hotels at different development stages as examples, both quantitative and qualitative research methods were employed to delve into the effects of service modularity innovation. For the “fit-up” module at the incubation phase, conjoint analysis was applied to understand consumer preferences and willingness to pay for the module combination, defining the product version 1.0. Regarding the “pure room” module at the pilot phase, structural equation modeling (SEM) was used to validate the relationship between modular innovation and perceived value, satisfaction, and consumer willingness, laying the foundation for optimizing and promoting version 1.0. Empirical results indicate that service modularity significantly enhances customer perceived value, enabling efficient personalized service innovation design to respond more rapidly to consumer demand iterations. Service modularity, as a crucial trend in service management, holds significant importance in improving service efficiency, meeting customer needs, and enhancing enterprise competitiveness. This study enriches the theoretical framework of service modularity and innovation performance, providing empirical evidence of its impact on customer perceived value and innovation performance. Furthermore, as an innovation management strategy, service modularity proves effective in enhancing the innovation performance and service upgrades of chain hotels, especially the mid-scale segment, offering meaningful insights and references to strengthen competitive advantages.