<![CDATA[Tourism micro, small and medium enterprises (MSMEs) in Indonesia's priority tourism destinations face a widening gap between the digital expectations of travellers and their conventional business models. This study examines whether digital transformation mediates the relationship between dynamic capabilities and strategic adaptation among tourism MSMEs in the Bunaken area, North Sulawesi. An explanatory quantitative design was applied to data collected from 200 owners or managers of accommodation, culinary and tour service businesses selected through purposive sampling. Data were analysed using partial least squares structural equation modelling (PLS-SEM) with 5,000 bootstrap subsamples. The results show that dynamic capabilities positively influence digital transformation and strategic adaptation, while digital transformation positively influences strategic adaptation. Digital transformation significantly mediates the relationship between dynamic capabilities and strategic adaptation, with an indirect effect of β = 0.242 and complementary partial mediation, accounting for 52.3 per cent of the total effect. Descriptive findings reveal a persistent capability–implementation gap: dynamic capabilities are relatively stronger than digital transformation and strategic adaptation. Digital culture also exceeds technology adoption and business process change, suggesting that willingness to transform has developed faster than actual implementation. The findings indicate that digital transformation serves as a key mechanism through which managerial capabilities are translated into strategic adaptation. For tourism MSMEs in island destinations, digital training is therefore unlikely to generate substantial returns without improvements in basic infrastructure, particularly electricity reliability and affordable data access.]]>
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