The purpose of this study was to determine the effect of entrepreneurial orientation and service innovation on sustainable competitive advantage on the performance of 3,4 and 5 star hotels in Indonesia. The researchers took a quantitative approach by measuring the sample variables built from the construct and representing the research population. The unit of analysis in this study is a company engaged in accommodation services (hotels) with 3, 4, and 5 stars spread throughout Indonesia, namely in Bali, West Java, DKI Jakarta, Central Java, East Java, DI Yogyakarta, Banten, Lombok., Sulawesi, Kalimantan, Sumatra, while the unit of observation is the General Manager of the Hotel. Researchers take a quantitative approach using Partial Least Square (PLS) method used in this study to analyze the response. Based on the analysis and discussion above, it shows that Entrepreneurial orientation has no effect on Sustainable Business Growth, Service Innovation has a positive effect on Sustainable Business Growth, Entrepreneurial Orientation has a positive effect on Firm Performance, Service Innovation has no positive effect on Firm Performance, Service Innovation has a positive effect on Firm Performance and Sustainable Competitive Advantage is proven to be able to mediate the relationship between Service Innovation and Firm Performance. Based on this research, it shows that service innovation is important for organizations engaged in services to maintain competitive advantage for their long-term survival in a competitive and complex business environment.