Digital Transformation and Sustainability Driving Tourism MSME Performance in Central Java

Abstract

This study examines the role of digital transformation and sustainability orientation as key drivers of tourism MSME performance in the green economy era, with empirical evidence from Central Java, Indonesia. In the context of increasing digital disruption and environmental awareness, tourism MSMEs must adopt adaptive, strategic approaches to maintain competitiveness. This research employs a quantitative method using primary data collected from 34 tourism MSMEs through structured questionnaires. The data are analyzed using multiple linear regression to evaluate the impact of digital transformation and sustainability orientation on business performance. The findings reveal that digital transformation has a positive and significant effect on MSME performance, indicating that adopting digital platforms, online marketing, and digital payment systems enhances operational efficiency and market reach. Furthermore, sustainability orientation also shows a positive and significant influence on performance, suggesting that environmentally responsible practices, resource efficiency, and community engagement contribute to long-term business success. Simultaneously, both variables demonstrate a strong combined effect on improving MSME performance, highlighting the importance of integrating digitalization with sustainable business practices. This study contributes to the development of managerial strategies for tourism MSMEs by emphasizing the importance of aligning digital innovation with sustainability principles. The findings also have practical implications for policymakers, suggesting that they support MSME development through digital empowerment and green economy initiatives.