Strategies for Building Sustainability and Operational Harmony in Star-Rated Hotels in Yogyakarta in the Face of Changes in Public Policy

Changes in public policy particularly government budget efficiency measures that have led to restrictions on business travel, meetings, and the hosting of government events at hotels have impacted room demand, revenue in the MICE (Meetings, Incentives, Conferences, and Exhibitions) segment, and the operational sustainability of star-rated hotels in Yogyakarta. This study aims to analyze hotel strategies for building operational sustainability and harmony through the perspectives of adaptive strategy and dynamic capabilities. The study employs a qualitative approach through interviews, observations, and documentation, covering approximately 50 hotels that are members of the Yogyakarta Chapter of AMKAH (Association of Hotel Finance and Accounting Managers) and involving 20 informants were selected using purposive sampling, consisting of 10 financial managers, 5 heads of operations, and 5 general managers. The research findings indicate that hotels’ responses are manifested through strategic adaptation, operational efficiency and resilience, market diversification and innovation, as well as collaboration and organizational learning. These four strategies reflect dynamic capabilities through the ability to sense, seize, and transform that is, to identify changes, capitalize on opportunities, and transform resources and operational processes to address external changes. Their implementation strengthens efficiency, flexibility, financial resilience, operational continuity, and harmonious relationships with stakeholders. Thus, the integration of these four strategies serves as the foundation for the sustainability and operational harmony of hotels in the face of changes in public policy.