Institutional Mediation in Small-Island Tourism: Extending the Triple Bottom Line Framework to Enhance Guesthouse Sustainability in the Maldives

Abstract

Sustainability in small-island tourism presents unique challenges due to limited resources, fragile ecosystems, and dependency on regulatory frameworks. This study investigates the determinants of guesthouse sustainability in the Maldives by extending the traditional Triple Bottom Line (TBL) framework to include psychological and institutional factors. The research examines the direct and indirect effects of psychological and strategic, economic, social, and environmental dimensions on sustainability outcomes, with institutional factors hypothesized as a key mediating mechanism. Using a structured survey of Maldivian guesthouse operators and employing Structural Equation Modeling (SEM) with AMOS 26.0, the study validates a comprehensive measurement model and tests the proposed structural relationships. The results indicate that psychological, economic, and social factors significantly influence guesthouse sustainability both directly and indirectly, while environmental factors exert a significant indirect effect only through institutional mediation. Institutional factors are confirmed as a critical transmission mechanism, demonstrating that regulatory engagement, policy compliance, and governance structures are essential in translating internal efforts into measurable sustainability outcomes. The study provides theoretical contributions by extending the TBL framework to integrate institutional dynamics, offering a nuanced understanding of sustainability in small-island contexts. Practically, the findings emphasize the need for strengthened institutional frameworks, capacity-building for managers, strategic alignment of social and environmental practices, and enhanced collaboration between policymakers, industry stakeholders, and local communities. Recommendations include implementing structured incentive programs, promoting eco-certifications, establishing internal sustainability policies, and linking environmental initiatives to regulatory support. By highlighting the interplay between internal capabilities and external governance, this research provides actionable insights for sustainable tourism development in small-island destinations.