This community service program aimed to enhance the capacity of local communities in managing guesthouses based on local wisdom as part of a sustainable and environmentally friendly hospitality industry development strategy. The program was conducted in Melinggih Kelod Village, Payangan District, Gianyar Regency, an area renowned for its rich cultural and natural potential yet still facing challenges in the professional and ethical management of tourism accommodations. A total of 30 participants, consisting of local business actors and community members, took part in a series of socialization and training sessions. The training materials covered fundamental principles of sustainable tourism, cultural preservation strategies in tourism services, the integration of local values into guest service practices, and digital marketing techniques based on cultural content and authentic experiences. The method used a participatory approach involving case studies, simulations, and field-based mentoring. The results indicated that the community possesses strong potential to develop culturally and environmentally based guesthouses, provided that capacity building through practical training is offered. These findings are supported by several theories, including Community-Based Tourism (CBT), which emphasizes active community participation; Cultural Capital, which highlights the value of cultural assets as economic resources; and the Triple Bottom Line framework, which balances economic, social, and environmental aspects. This approach enables the development of competitive local guesthouse businesses while contributing to cultural preservation and sustainable development.