Exploring the Role of Product Innovation and Marketing Capabilities in Enhancing Hotel Performance: An Empirical Evidence from Indonesia

The hotel industry in Yogyakarta is facing increased competition along with increasing consumer expectations for excellent service and memorable stay experiences. In this research, product innovation capabilities and marketing capabilities are strategic internal resources that play an important role in supporting competitive advantage and hotel performance. This research aims to analyze the influence of product innovation capabilities and marketing capabilities on hotel performance in Yogyakarta. A quantitative approach was used with the Structural Equation Modeling method based on Partial Least Square (SEM-PLS). Data was obtained by distributing questionnaires to 322 respondents consisting of key employees in the fields of marketing, finance, human resources (HR), business development, supervisors and front office from star hotels in Yogyakarta. The research results show that product innovation and marketing capability have a significant effect on hotel performance. These findings provide a theoretical contribution to the development of dynamic capabilities theory and present practical implications for hotel management in designing adaptive, based on innovation and marketing strategies to improve overall company performance.