Configuring Sustainable Competitive Advantage in the Hotel Industry: A Multiple-Case Study of Upscale, Upper-Midscale, and Capsule-Tech Hotels in Malang, Indonesia

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Hotels in Malang Build Competitive Advantage Through Distinct Guest Experiences

Hotels in Malang are no longer competing only on price and room availability. New research from Universitas Negeri Malang shows that sustainable competitive advantage in the hospitality industry increasingly depends on how hotels align customer value, brand identity, operational resources, and digital adaptability.

The study, published in the International Journal of Applied Economics, Accounting and Management (IJAEAM) in 2026, was conducted by Suprapto, Sudarmiatin, and Agus Hermawan from the Faculty of Economics and Business at Universitas Negeri Malang. The researchers analyzed how three different hotel models in Malang — Grand Mercure Malang Mirama, The Alana Malang, and Bobobox Malang — create long-term competitive strength in a rapidly changing tourism market.

Their findings are significant as Indonesia’s hotel sector faces stronger competition from digital booking platforms, changing travel habits, online review systems, and growing demand for personalized guest experiences.

Hotel Competition Is Becoming More Complex

The researchers explain that the hospitality industry has entered a new era where customer expectations go beyond clean rooms and affordable prices. Travelers now compare hotels instantly through online travel agencies, social media, and review platforms.

In a city like Malang, which functions as an education center, tourism gateway, and business destination, hotels serve highly diverse customer groups. Corporate meeting participants, family tourists, young travelers, and budget-conscious guests all seek different forms of value.

Because of this, the study argues that hotels can no longer rely on a single business formula. Instead, each hotel must develop a strategic identity that matches its target market.

The research highlights three distinct hospitality models operating within the same urban environment:

  • Grand Mercure Malang Mirama represents upscale premium hospitality.
  • The Alana Malang represents upper-midscale service-oriented accommodation.
  • Bobobox Malang represents technology-driven capsule lodging.

According to the authors, these hotels succeed not because they use identical strategies, but because each aligns its services, branding, facilities, and customer experience with the expectations of its chosen market segment.

Research Examined Three Different Hotel Strategies

The researchers used a qualitative multiple-case-study design to compare the three hotels. Instead of relying on surveys alone, the study combined conceptual analysis, public hotel profiles, hospitality literature, and strategic management theories.

The analytical framework integrated several well-known business concepts, including:

  • Porter’s competitive strategy model
  • Customer value theory
  • Brand equity analysis
  • Resource-based business strategy
  • Dynamic capability theory

The study focused on five key dimensions:

  1. Market positioning
  2. Customer value
  3. Brand strength
  4. Resource advantage
  5. Adaptive capability

This approach allowed the researchers to compare how hotels with different formats achieve sustainable competitive advantage within the same city environment.

Premium Hotels Depend on Service Consistency and Brand Trust

The study found that Grand Mercure Malang Mirama relies heavily on premium differentiation.

Its competitive advantage comes from:

  • International brand credibility
  • Large-scale facilities
  • MICE capabilities for meetings and events
  • Integrated leisure and business services
  • High service standards

The researchers found that guests choosing upscale hotels expect more than luxurious rooms. They also expect reliability, professional staff, smooth event management, and consistent service quality across every interaction.

The hotel’s affiliation with the global Accor ecosystem strengthens customer trust because international branding reduces perceived risk before guests even arrive.

However, the study also notes that premium positioning creates greater operational pressure. Small service failures can damage reputation more severely in upscale hotels than in lower-tier accommodations.

Midscale Hotels Must Balance Comfort and Affordability

For The Alana Malang, the main competitive advantage lies in service-based differentiation.

The researchers found that upper-midscale hotels succeed by offering:

  • Comfortable rooms
  • Functional facilities
  • Warm hospitality
  • Modern-ethnic design identity
  • Balanced value-for-money experiences

Unlike luxury hotels that emphasize exclusivity, midscale hotels must convince guests that the experience exceeds expectations relative to the price paid.

The study explains that this segment faces intense pressure from both directions. Budget hotels compete on affordability, while luxury hotels compete on prestige. As a result, maintaining a distinctive identity becomes essential for survival.

The researchers observed that consistent service culture and strong local market understanding help midscale hotels avoid becoming generic or interchangeable.

Capsule-Tech Hotels Win Through Digital Simplicity

The most distinctive case in the study involved Bobobox Malang, a capsule-tech accommodation model that targets digitally comfortable travelers.

Instead of emphasizing luxury or large facilities, the hotel focuses on:

  • Digital access systems
  • Capsule privacy
  • Operational efficiency
  • Minimalist design
  • Affordable pricing
  • Fast and practical service

The study found that Bobobox transforms limited space into a competitive strength by combining technology with convenience and cleanliness.

Its target customers include solo travelers, young professionals, transit guests, and urban tourists who prioritize efficiency over traditional hospitality rituals.

However, the researchers warn that technology-based advantages can disappear quickly if competitors imitate features or if digital systems become unreliable.

According to the study, maintaining trust in digital hospitality requires constant improvement in booking systems, user interfaces, noise management, cleanliness control, and customer support responsiveness.

Competitive Advantage Depends on Strategic Alignment

One of the study’s most important conclusions is that sustainable competitive advantage does not come from a single feature.

Instead, the researchers describe hotel success as a “strategic configuration” where positioning, branding, customer value, operational resources, and adaptability reinforce one another.

The authors explain that hotels weaken their competitiveness when they imitate rivals without considering their own market segment.

For example:

  • Luxury hotels risk damaging prestige if they compete mainly on price.
  • Midscale hotels risk commoditization if they lack a unique identity.
  • Capsule hotels risk operational inefficiency if they add unnecessary full-service features.

The study also highlights the growing importance of customer review analysis. Online reviews are no longer just marketing feedback; they have become strategic intelligence tools that reveal whether guests truly experience the hotel’s intended value proposition.

Hospitality Industry Faces Digital and Behavioral Shifts

The researchers argue that Indonesia’s hotel industry is entering a period of accelerated transformation driven by:

  • Digital booking behavior
  • Social media influence
  • Artificial intelligence
  • Online reputation systems
  • Changing travel expectations
  • Experience-based tourism demand

“Competitive advantage becomes sustainable when a hotel understands its segment, delivers a credible value proposition, protects distinctive resources, and adapts to market change,” the authors wrote in their conclusion.

The study recommends future research involving direct interviews with hotel managers and guests, along with analysis of occupancy rates, customer loyalty, and online engagement metrics.

Author Profiles

Suprapto is a doctoral researcher in Management Science at Universitas Negeri Malang with research interests in competitive strategy, hospitality management, and sustainable business advantage.

Prof. Dr. Sudarmiatin is an academic at Universitas Negeri Malang specializing in management, entrepreneurship, and organizational development.

Prof. Dr. Agus Hermawan is a lecturer and researcher at Universitas Negeri Malang focusing on strategic management, marketing, and business competitiveness.

Source

Title: Configuring Sustainable Competitive Advantage in the Hotel Industry: A Multiple-Case Study of Upscale, Upper-Midscale, and Capsule-Tech Hotels in Malang, Indonesia
Journal: International Journal of Applied Economics, Accounting and Management (IJAEAM)
Year: 2026
Authors: Suprapto, Sudarmiatin, Agus Hermawan
Affiliation: Universitas Negeri Malang
Volume and Issue: Vol. 4, No. 3, pp. 145–156

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