From Vienna’s Heritage Luxury to Java’s Competitive Hospitality Market: Digital Transformation and Luxury Hotel Brand Performance

Abstract

This study investigates the effects of Digital Transformation Capability and Global–Local Strategic Orientation on Sustainable Competitive Advantage and Luxury Hotel Brand Performance, with Strategic Agility and Service Innovation Capability acting as intervening variables. Data were collected from luxury hotels in Java, Indonesia. The comparison with luxury hotels in Vienna is included solely for strategic context, emphasizing global brand consistency and local adaptation. A standardized questionnaire was distributed to 110 top- and middle-level management respondents, and the data were analyzed using validity, reliability, multicollinearity, and normality testing, followed by multiple regression, t-test, F-test, and path regression analyses. The findings indicate that Strategic Agility does not significantly influence Sustainable Competitive Advantage, whereas Service Innovation Capability does. Global–Local Strategic Orientation enhances Service Innovation Capability but not Strategic Agility, while Digital Transformation Capability strengthens both. Sustainable Competitive Advantage, in turn, significantly improves Luxury Hotel Brand Performance. These results indicate that competitiveness among luxury hotels in Java is primarily driven by service innovation rather than agility alone, and that digital and global–local capabilities contribute to performance mainly when translated into distinctive, innovation-based service value.