Sustainable Tourism Industry Development: A Collaborative Model of Open Innovation, Stakeholders, and Support System Facilities

Sustainable development in the tourism industry is a significant challenge requiring various stakeholders’ collaborative efforts. The tourism industry must adopt sustainable business practices and improve its performance to overcome this. Support system facilities, stakeholders, and the application of open innovation can help increase optimal performance and support in achieving a sustainable tourism industry. Therefore, the main objective of this research is to propose a collaborative model of open innovation, stakeholders, and support system facilities to develop a sustainable tourism industry in a dynamic and competitive environment. This study uses quantitative methods for analysis. The sampling technique used purposive sampling with the criteria of SMEs scattered around the tourist area. The research model was analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM) using data from 358 respondents from SMEs in the tourist area of Rembang Regency, Central Java, Indonesia, and Banyuwangi Regency, East Java, Indonesia. The study results show that performance improvements can significantly and positively affect the sustainability of the tourism industry (
$\beta $
= 0.530; p = 0.005, p ≤ 0.05). The tourism industry’s performance can be achieved by implementing open innovation, participation of stakeholders, support system facilities, and environmental dynamism (p ≤ 0.05). However, environmental competitiveness is not proven to improve the tourism industry’s performance (
$\beta $
= 0.022; p = 0.120, p ≥ 0.05), because every organization and stakeholder is interdependent. Theoretically, this research contributes to the debate about how open innovation, stakeholders, support system facilities, and environmental dynamism can improve tourism’s performance, ultimately achieving a sustainable industry. Practically, this research benefits stakeholders and SMEs in formulating an appropriate policy for achieving a green industry.