ABSTRACT
The research aims to reveal the influence of differentiation strategy using local culture and nature as the indicators of differentiation in order to build competitiveness of hotels in Ubud; these indicators differ from previous research. There are 12 hotels covered by the research and the population consisted of guests staying at the hotels. The determination of respondents was conducted through accidental method with a sampling of 1,200 people. Data collection was conducted via questionnaires and analyzed using multiple linear regressions. The research results show that product differentiation, service and image are able to improve sustainable competitiveness. Local culture and nature are determinant indicators in building differentiation, so that Ubud has remained in existence until now. The result of this research is able to develop a competition strategy developed by Barney (1991) related to intangible asset. The research requires the leaders of the hotels to maintain the harmonious relationship between cultures, nature and humans that makes Ubud such a peaceful place.
