Exploring Determinants of Local Sustainable Tourism Associated with Satisfaction and Financial Improvement Using a Novel CPBM Approach: A Case Study of Lac Village, Vietnam

Sustainable tourism is increasingly important for local sustainable livelihoods; however, its development is often hindered by financial limitations. Hence, a better understanding of the constraints on sustainable tourism and the strategies to tap into untapped funds to improve its financial situation is paramount. This study uses a novel CPBM approach to answer the question: Is there a strong relationship between customer satisfaction and their willingness to pay (WTP) for improving Community-Based Tourism (CBT) service? If so, how can satisfaction be improved? We employ a Culture Tower-based approach that integrates PLS-SEM and BMF method to analyze a dataset collected from 275 young people in December 2024. We found that alongside respondents’ financial status, environmental quality concerns, and environmental assessment, customer satisfaction is a strong predictor of WTP, showing a positive association with WTP for CBT service improvement. Furthermore, we also found that food, service quality, and infrastructure factors are strong determinants of customer satisfaction with CBT services. This finding suggests that improving customer satisfaction is the key to enhancing the financial sustainability of CBT, which in turn necessitates greater attention and investment from the local government and private sector. Our study offers significant policy implications regarding financial management, service quality, investment strategies, and the coordination of actor participation for facilitating sustainable tourism at the local level in Lac village and beyond.