Indra Santo

Type of the article: Research Article

Abstract
Organizational agility and service innovation have become critical strategies for strengthening customer-based brand equity in highly competitive hospitality markets. However, how customers perceive firms’ dynamic capabilities and how such perceptions translate into brand-related outcomes remains insufficiently understood. Drawing on perception-based extensions of dynamic capabilities theory, this study examines the direct and indirect effects of customer-perceived dynamic capabilities on customer-based brand equity, with customer-perceived service innovation as a mediating mechanism, in the Indonesian hotel industry. Data were collected from 340 customers who stayed at three- to five-star hotels in Indonesia between June and August 2024 using a structured questionnaire. Two-stage Structural Equation Modelling (SEM) approach was employed to test the proposed relationships. The results indicate that customer-perceived dynamic capabilities have a significant positive effect on customer-based brand equity (β = 0.389, p < 0.001) and on customer-perceived service innovation (β = 0.768, p < 0.001). Customer-perceived service innovation positively influences customer-based brand equity (β = 0.309, p < 0.001) and partially mediates the relationship between dynamic capabilities and brand equity. Existing brand strength positively moderates the relationship between customer-perceived dynamic capabilities and perceived service innovation (β = 0.109, p < 0.001), while no moderating effect is observed between service innovation and brand equity. The model explains 77.78% of the variance in customer-based brand equity and 68.10% of the variance in customer-perceived service innovation. These findings demonstrate that dynamic capabilities contribute to brand equity not only through innovation outcomes but also as customer-recognized signals of organizational adaptability in service-intensive contexts.

Acknowledgment
The authors declare that there is no conflict of interest. The study received no external funding. All authors contributed equally to the conceptualization, analysis, and writing of this paper.