Indonesian Hotels’ Dynamic Capability under the Risks of COVID-19

Abstract

The effects of COVID-19 on tourism are irreversible, with potential reductions in income, job losses, shifting working landscapes, and visible health-related fears. These adversities are reinforced in the hospitality business, particularly for hotels, the income streams of which rely on individual movements. This study investigates the process undertaken by the hotel industry in Indonesia to face the current challenges, particularly in terms of the dynamic capabilities possessed by hotel businesses. This construct discusses the potentiality of maximizing existing resources and its impact on innovation norms to leverage hotel dynamics. A total of 329 hotel managers responded to the survey, and the data were finalized by employing PLS-SEM. The findings primarily support the hypothesized direct relationships, but refute the presence of indirect relationships. The results amplify how past investments in sustainable resources are easily deployed assets during COVID-19 and create a welcoming environment for dynamic innovation among hotels during periods of change.