Internal Innovation versus External Coordination in Sustainable Tourism: Managerial Perspectives from Indonesia

This study examines how circular economy capability contributes to sustainable tourism performance through green process innovation and green supply chain management from the perspective of tourism managers in Indonesia.A quantitative exploratory approach was employed using survey data collected from 118 tourism managers and destination operators representing tourism destinations across Indonesia.Data were analysed using partial least squares structural equation modelling (PLS-SEM).The findings reveal that circular economy capability positively influences green process innovation, green supply chain management, and sustainable tourism performance.Green process innovation is significantly enhanced by circular economy capability; however, it does not significantly influence sustainable tourism performance and does not mediate the relationship between circular economy capability and sustainable tourism performance.In contrast, green supply chain management significantly improves sustainable tourism performance and serves as a significant mediating mechanism through which circular economy capability enhances sustainability outcomes.These findings suggest that sustainable tourism transformation depends not only on the development of internal sustainability capabilities but also on the effective coordination of environmentally responsible practices across tourism stakeholder networks.The study highlights the critical role of green supply chain management in translating circular economy capability into sustainability performance within emerging tourism destinations.This study contributes to the sustainable tourism literature by extending circular economy and sustainability research into the tourism service sector and provides managerial insights for tourism organisations seeking to strengthen sustainability-oriented operational practices.