Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2022 Vol: 21 Issue: 1

The Effect of Public-Private Partnerships on Trust in Tourism Networks Management and Tourism Service Innovation during Covid-19 Pandemic in Indonesia

Mashuri H. Tahili, Muhammadiyah University of Luwuk Banggai

Rahmawati Halim, Tadulako University

Sutrisno K. Djawa, Muhammadiyah University of Luwuk Banggai

Farid Haluti, Muhammadiyah University of Luwuk Banggai

Nurhidayah Layoo, Muhammadiyah University of Luwuk Banggai

Asriadi AR, Muhammadiyah University of Sinjai

Citation Information: Tahili, M.H., Halim, R., Djawa, S.K., Haluti, F., Layoo, N., & Asriadi, AR. (2022). The effect of public-private partnerships on trust in tourism networks management and tourism service innovation during covid-19 pandemic in Indonesia. Academy of Strategic Management Journal, 21(1), 1-11.


The public-private partnership is the paramount approach in creating trust in public sector management and innovation development in public service. The role of public-private partnerships and Trust in tourism networks management has not been studied previously in developing tourism service innovation. Therefore, the primary goal of this research is to analyze the effect of public-private partnerships on trust in tourism networks management as a moderating variable and its influence on tourism service innovation during the Covid-19 pandemic in Indonesia. The research approach is used quantitative through survey exploratory for describing and explaining the association of each variable. The research data were gaining through questionnaires, and then a structural model is applied to test three hypotheses of the research. The total sampling has selected through stratified random sampling and the total sample is 350 people. Structural model analysis through SPSS and AMOS software is applied to analyze data and measure the three hypotheses of the research. The findings indicate public-private partnerships have a positive and significant effect on trust in tourism networks management and tourism service innovation. Besides, the result also confirms that trust in tourism networks management has a positive and significant influence on the tourism service innovation achievement. We argue that public-private partnerships and trust are necessary to make tourism industry management successful in the next future.


Public-Private Partnerships, Trust, Tourism Networks Management, Tourism Service Innovation, Covid-19 Pandemic.


During the COVID-19 pandemic, which has been spreading for almost the last two years, the impact has greatly disrupted socio-economic, financial conditions, especially public health conditions (Cairney & Wellstead, 2020; Gössling et al., 2021; Radu, 2021). Tourism sector would become a source of revenue, tax income, and economic growth of local government, and also ascend a beneficial for decrease unemployment (Alexandri et al., 2019; Alexandri & Raharja, 2020). However, tourism innovation programs will not be able to be successful, since the PPPs and trust were absent, especially in the COVID-19 pandemic. It must be admitted that due to the spread of pandemic disease have had impacted to decrease of the economic growth, reducing the tourism revenue, tax income, and local community investment. For development countries, it has impacted towards disrupting global supply chains, producing significant market volatility, triggering consumer demand disruptions, and causing a slew of negative consequences in essential industries such as infrastructure, transportation, and tourism industry (Mishra, 2020), unstable economic growth and debt sustainable burdens (Morgan et al., 2021). Then, to minimize this negative impact of COVID-19 pandemic, the PPPs and trust in tourism networks management become the paramount approach to keep the tourism industry will get sustainability. Likewise, it must be provide a model of branding such as the attractiveness of tourism location, competitive edge (Tresna & Chan, 2019), and engagement and corporate reputation through social media marketing and online advertising platforms and digital marketing (Thaha et al., 2021). In addition, the tourism sector is seen as a sector that has a major role in achieving the Sustainable Development Goals (SDGs) (Birendra et al., 2021; Hall, 2019; Rasoolimanesh et al., 2020).

In the public sector, there has been an increasing the number of researches conducted to assess the antecedents and outcomes of the public-private partnerships approach. However, there is a few studies analysing the impact of PPPs on tourism service innovation, and trust in tourism networks management as a mediating variable. There are many professionals have viewed that PPPs can be used to be a practical tool in policy implementation and strategic management in public sectors (Boyer et al., 2015; Boyer, 2019; Wang & Ma, 2021; Warsen et al., 2018). We can say that Public-private partnerships have emerged as a critical component in maintaining the success of tourism service innovation and infrastructure development. In this context, we argue that PPPs has strongly influence trust and service innovation in public sector, especially in tourism management. Then, the objective of this study is to provide the analysis of public-private partnership and trust in tourism networks management on tourism service innovation during the COVID-19 pandemic in Indonesia.

Literature Review

Public-Private Partnerships

Public-Private Partnerships (PPPs) can take many various institutional forms, including those that leverage private financing and construct long-term contracts for public infrastructure projects. Actually, PPPs represent a challenge to public governance theory and practice and focus on keeping democratic governance and real collaboration between the public and private sectors (Hodge et al., 2018; Hodge & Greve, 2017). PPPs have main benefits to public sector organization; for example, focus on global needs, long term alliances, total involvement for economics and financials, and the outcomes achievement. In the context of public management theory, PPPs has been being useful in the development of tourist service innovation, such as risk sharing, investment, resource development, accountability, and recognition (Grissemann et al., 2013). PPPs will effective to assist the public sector programs since trust or goodwill trust is involved whether formal or informal (Abdullah & Khadaroo, 2020). Acoordingly, PPP has had a close relationship both management and trust in infrastructure development. PPPs may strengthen the stakeholders’ involvement in policy making, cooperation, and stakeholders’ involvement in infrastructures, transportation, and constructions (Babatunde et al., 2016). PPPs viewed a dynamic approach to supporting the project ending based on the consensus and success smoothly (Kavishe & Chileshe, 2019).

Based on the literature review, we argue that PPPs get necessary to take for granted the trust in tourism networks management, the key to achieve tourism networks management, stakeholders’ involvement, and innovation.

H1 The PPP has effect on trust in tourism networks management.

H2 The PPP has effect on tourism service innovation.

Trust in Tourism Networks Management

The tourism business in the context of COVID-19 pandemic disease tends to be decrease in economic revenue, it is important to build trust of citizen for economic sectors, social capital, and management for public sectors. Trust has become a tool to creating a comfortable, secure, community trust, and compliance (Haning et al., 2021; Liu et al., 2019; Berg & Johansson, 2020).

The tourism service innovation is more important to be developed at local government to design and formulate of a new grand design of programs, service, or process (Gardiner & Scott, 2018; Nunkoo, 2015; Nunkoo et al., 2018). Trust has become the main factor to develop the sustainable development and innovation in public sectors (Albrecht & Travaglione, 2003). The role of governance in the tourism development is needed in the context of building innovation and tourism service innovation, creating the tourism policy programs and innovation (Qian et al., 2016).

There are some programs in tourism development that trust should present to make the tourism networks management and tourism innovation succeed. In fact, the tourism service innovation can be determined by many factors for example; building tourism physical infrastructure such as capital goods, essential services, not directly consumed products, long-lived service innovation, internet, clean water, and the capital intensive and forecasting sustainability (Gardiner & Scott, 2018).

H3 Trust in tourism networks management has an effect on tourism service innovation.


The research approach is quantitative and it is a survey method. The research is used a quantitative methodologically, because it has prescribed to cover up big data to be analysed and testing the objective data in the field of research. This study consists of three variables that will be tested using the structural equation model, such as public-private partnership; trust in tourism networks management view as a moderating variable, and tourism service innovation. The data were gathered through questionnaires, and structural modelling through AMOS Software is used to data analysing and hypotheses measurement.

Population and Sample

The research has been conducted in South Sulawesi Province during COVID-19 pandemic diseases. The total population of research was 3.150 people who involved actively in the tourism industry and pro-active to support the branding image of tourism in local tourism destination in local government. We use 40 percent sample for the purpose to get the representative samples required, and the total sample is 350 people. The research sample is selected through stratified random sampling which considered the respondents’ representative that considered from gender, formal education, and marital status. The total of respondents are divided on such their position in supporting the tourism industry in the three tourism regions in Sinjai, Bulukumba, and Bantaeng Regency, namely the tourism and culture agency was 80 (22.9%), tourism local servants are consisted of 75 people (21.4%), Travel Groups was 50 people (14.3%), Ecotourism Groups involve 40 respondents (11.4%), culture community groups was of 40 respondents (11.4%), hotel, restaurants and café are involved 35 respondents (10%), and engineering designer communities are 30 respondents (8.6%).

Instruments Design

The data were collected using a closed questionnaire with 1-6 point Likert scale ranging from strongly disagrees to strongly agree. The instrument of public-private partnerships is formulated based on the literature that has seven indicators included actors’ accountability, commitment for contractual accomplishment, cooperation, partnership strategic planning, responsibility, growing period and sustainability, and availability in tourism service costs (Boes et al., 2016; Caperchione et al., 2017). Meanwhile, the trust in tourism networks management, there are some indicators will be measured the variable of including tourism employee engagement, tourism service accountability, tourist trust in service, trust in tourism data and information, trust in tourism scrutiny, trust in tourism healthy procedures (Liu et al., 2019). Moreover, the tourism service innovations, the instruments are designed based on the literature stated that there are some factors related significant to produce innovation in tourism sectors such as; strategic planning, financing, constructing the tourism infrastructure togetherness both public and private sectors (Qian et al., 2016; Cheng et al., 2018).

Construct Validity and Reliability Measurement

According to the validity and reliability test by using Alpha Cronbach, the researchers have been discarded for such several items of questionnaires, because the validity values were below ≥0.30. Accordingly, the validity results analysis of the item must not be under ≥0.30 (Azwar, 2012). The score of each item use in this research have the reliability score is more than 0.6. and it is consistent with the literature states that the questionnaires have had been valid and reliable above 0.60 (Hair et al., 2014). Each questionnaires item was accepted rationally and methodically utilizing the convergent and discriminant validity tests.


According to the results of central tendency values, reliability and validity of instruments show that the public-private partnerships has been tested by descriptive statistics found that responsibility has the highest mean value was 4.249 and the deviation standards was achieved 1.439, validity was 0.516, and reliability was achieved 0.868. We find that there are four indicators have had a reliability and validity which have been available to use in this research. According to the results found that the trust in tourism service agreement has the highest values of central tendency, including mean value is 4.349, and the standard deviation is 1.512, and then validity items value that is 0.718, and the reliability value is 0.859. The result of analysis of tourism service innovation variable show that there are four indicators have been available for validity and reliability test involve availability of tourism funding allocation, tourism roadmap designed and standards operating procedures, tourism social reconstructions, and tourism capacity building. The results of tendency central analysis reveal the availability of tourism funding allocation has the highest mean value that is 4.477, and the standard deviation values is 1.391, the validity test is 0.715, then, the reliability test is 0.860. We confirm that, the whole indicators used in this research has achieved above 0.80 (≥0.80). The summarise of each construct will presented in the following Table 1.

Table 1 Central Tendency Values, Reliability and Validity Instruments
Variables Indicators Code Min Max. Mean SD Validity Reliability
Public-Private Partnerships (PPPs) Accountability in alliances PPPs2 1 6 3.749 1.441 0.328 0.877
Commitment to contractual accomplishment PPPs3 1 6 3.828 1.373 0.381 0.878
Cooperation in partnership PPPs4 1 6 3.763 1.411 0.336 0.876
Partnership Strategic Management PPPs5 1 6 3.946 1.557 0.593 0.865
Responsibility in Works Completion PPPs7 1 6 4.249 1.439 0.516 0.868
Growing period and sustainability PPPs8 1 6 4.097 1.522 0.321 0.878
Availability in tourism service and trust in partnership PPPs10 1 6 3.883 1.569 0.572 0.866
Trust in Tourism Networks Management
Trust in Tourism Service Agreement TTNM2 1 6 4.349 1.512 0.718 0.859
Trust in tourism strategic tourism planning and implementation TTNM4 1 6 4.226 1.571 0.260 0.881
Trust in tourism data and information TTNM5 1 6 4.160 1.601 0.330 0.878
Trust in tourism healthy procedures TTNM9 1 6 4.223 1.606 0.679 0.860
Tourism Service Innovation (TSI) Availability of Tourism Funding Allocation TSI1 1 6 4.477 1.391 0.715 0.860
Tourism Roadmap Designed and Standards Operating Procedures TSI6 1 6 4.386 1.374 0.779 0.857
Tourism social reconstructions TSI7 1 6 4.366 1.355 0.782 0.857
Tourism capacity building TSI9 1 6 4.420 1.317 0.836 0.855

Based on the results analysis show in Table 1 by using SPSS and AMOS, the reliability of each item instrument by using a consistency analysis, the results indicate the instruments reliability value is 0.876. Further, the researchers have to analyse the convergent validity and factor loading, the average variance extracted (AVE), and composite reliability (CR). According to the analysis show that there has no violation of assumptions for each instrument. Based on the CFA results analysis, we can count the average variance extraction (AVE), and composite reliability (CR) values of each variable as can be seen in the following table:

Table 2 shows that the convergent, discriminate, and nomological validity of the items was confirmed by EFA in which the measurement of items had above the requirements of suggested thresholds. Based on the CFA criteria for hypothesis testing, the AVE values should not be under 0.500. The result analysis shows that AVE and CR for PPP value is found 0.539 and 0.812, the TTNM has found 0.500. For AVE values and CR value was 0.768, and the TSI variable indicates that the AVE value was 0.671 and the 0.890 for CR values. The results indicate that all variables have validity construct and can be used to test hypotheses. The CFA model will be presented in the following picture:

Table 2 The Results of AVE and CR Analysis
AVE 0.539 0.500 0.671
CR 0.812 0.768 0.890

Figure 1 reveals that the SEM model shows that chi-square was found 115.341, probability p=0.013, DF value is 0.84, CMIN/DF have found 1.373, NFI was 0.962, and GFI 0.960. Further, the AGFI value was 0.942, TLI value has had 0.987, CFI values were 0.989, and the RMSEA have also found 0.033. The findings confirm that all of the items have goodness of fit for statistics used to test the research hypotheses. The Goodness of fit result analysis can be seen the next table:

Figure 1 CFA Results Analysis

Table 3 shows that the structural model results show that the PPPs have a positive and significant effect on the trust in the tourism networks management with a coefficient regression value was β=0.526, standard error, 0.237, composite ratio was 2.822, and probability p=0.000 (α= ≤ 0.05). These results finding revealed that first hypothesis (H1) that is the PPP has positive and significant affect the trust in tourism networks management is accepted. And also, PPPs have a positive and significant effect on tourism service innovation with coefficient regression was β= 0.509, standard error, 0.037, composite ratio was 3.075, and probability p=0.000 (α= ≤ 0.05). This finding indicated that second hypothesis (H2) stated PPPs will affect tourism service innovation was accepted. Furthermore, this study also verifies that trust in tourism networks management has a positive and significant effect on tourism service innovation with coefficient regression was β=0.473 and the standard error was 0.162, composite ratio was 2.909, and probability p=0.000 (α= ≤ 0.05). Based on this result verified that the third hypothesis (H3) states that the trust in tourism networks management will affect the tourism service innovation is accepted.

Table 3 Goodness of Fit Statistics for Hypotheses Testing
  Absolute Fit Measures Incremental Fit Measures Parsimony Fit Measure
Criteria > 0.05 <5 ≥ 0.90 <0.05 ≥ 0.90 ≥ 0.95 ≥ 0.90
Obtained 0.013 1.373 0.960 0.033 0.962 0.989 0.942

According to the whole research finding and discussion, this research confirms a new theoretical in PPPs and trust in tourism networks management have significantly to creating better tourism services. In addition, trust in tourism networks management effect on tourism service innovation significantly. The empirical analysis of this study will present in the following model Figure 2.

Figure 2 Research Empirical Model


After doing the detailed analysis through the structural model analysis by Amos, based on the significance test for the estimated coefficient has been used to justify the basis for accepting or rejecting the proposed hypotheses. According to result analysis of first hypothesis shows that PPPs have a positive and significant effect on trust in tourism networks management. The finding is supported by the previous research stated that the PPPs have perceived as a new strategy to create trust among actors in public organizations (Heeley, 2001). Then, public-private partnership has viewed as an approach to maintain trust and commitment among actors and ensure the responsibility to create the success of policy implementation (Teicher et al., 2006). The role of PPPs view as a necessary approach to make the tourism networks management and tourism innovation will get more succeed and effectively, then it can be reduced the complexities in partners relationships (Liu et al., 2019).

The research gives the benefit contribution to government to have a commitment as a public sector to involve private sectors in accomplishing the project that they could not carry out by themselves. Besides, the government or local government can create opportunities to get the sustainable programs of development. Here, we argue that PPPs become an important “tool” to create the sustainable development (Gracy, 2013). In other words, PPPs have a necessary role to increasing the tourism networks management and create trust to all alliance’ members, sustainability, and innovation (Omerzel, 2015). Further, this approach may improve service delivery and obtained the tourism development for large programs and tourism destination building, whether in short or long term period (Warsen et al., 2018). Moreover, the results of analysis find that the second hypothesis (H2) that the public-private partnership have a positive and significant effect on tourism service innovations. PPPs can be recognized as a successful instrument for arranging strategic management in the public sector, and it has become one of the government's strategic orientations for achieving program sustainable. Accordingly, PPPs approach has positive value to creating local government to achieve services in public sectors, joining the job networking, conducting programs, and management in public service (Mahama & Chua, 2016). Then, building trust into the service management and contractual, PPPs may promote transparency, integrity, and focus on fixing challenges resources for local government. However, in the name of trust, it needs all alliances perceived that commitment, accountability, consistency, and constructive routine to practice as the crucially trajectory in building public trust (Haning et al., 2021).

PPPs and trust in tourism networks management can be picture as the key concepts of making tourism management more innovative, because both of them have strong correlation with each other. This is related to previous researchers have the same argumentation that PPPs has had worthiness in building trust, developing infrastructure, creating service innovation, social empowerment, and financial development (Akbari & Heravi, 2019).

Moreover, PPPs have benefit to build better the new products or services, achieving greater efficiency or economies of scale, innovation, infrastructure, and human resource management. However, the issue of building innovation and infrastructure has transformed into an enterprise struggle for government funding (Verweij et al., 2019), and it has been viewed the vehicle for the growth of the innovation social-economy and economic growth (Casady et al., 2019). Empirically, PPPs and trust have a close relationship to make the innovation in public sectors, and then it uses as the paramount strategy to make the tourism service innovation growth (Herrero Amo & De Stefano, 2019). PPPs have been viewed necessary to make the tourism programs will get more effectively and becomes the “key driver” to creating the sustainable development. In line with the crisis of COVID-19 pandemic, we argue that trust in tourism networks management viewed as the key to tourism service innovation.


PPPs approach can become the fruitful strategy to creating trust in tourism networks management and tourism service innovation for local government. The research findings confirm that there is a positive and significant effect of PPPs on trust in tourism networks management and tourism service innovation. This finding is related to relevant research showing that PPPs can ensure trust in tourism networks management and innovation. We argue that PPPs can endorse the private sector become a pivotal subject when they have mobilized appropriately, a better tool for public sectors reform, and getting a better efficiency for both of public and private sector in the tourism industry.

In this research, we argue that trust in tourism service management has also taken an important role to strengthen tourism service innovation and infrastructure development, as it is followed by the best strategic planning and programs. Besides, the trust in tourism networks management should carry out constructively through the availability of tourism strategic planning, implementation, and sustainable evaluation programs. Trust may facilitate actors to encourage actors working together in build infrastructures of tourism, tourism security, and green environments of tourism destinations, such as the Village Tourism Innovation Programs in Indonesia.

In line with the research boundaries, the researchers have found some limitations, especially during the COVID-19 pandemic, because there were some respondents are not easy to meet for collecting data, and it is difficult to distribute instruments. Then, researchers have used Whatsapp and Gmail. However, in fact, that all of the respondents have not been mastery using WhatsApp and email, then researchers' own self must be returned to the field for taking them in three disparate regions. Other limitations associate with to the research methodology, we argue that for the others researchers who attract to these subjects, it’s interesting to use a mixed-method approach to analyze with comprehensive research data. In building tourism innovations services, all stakeholders of local tourism must take responsibility to keep the tourism destination more accessible and friendly. The local culture and heritage branding must be creative to supporting the tourism innovation programs such as Tourism Village Innovations. Further, local culture, tourism destination infrastructure modernization, branding, and tourism online marketing must be needed for making tourism sectors succeed in getting more effective for SDGs programs.


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