The tourism sector is a critical economic pillar for many African nations, yet it faces significant sustainability challenges. There is a pressing need to understand how enterprises in this sector can innovate their business models to achieve long-term viability while delivering positive social and environmental outcomes. This study aims to explore how tourism enterprises in Tanzania perceive and enact business model innovation for sustainability. It seeks to identify the key drivers, processes, and barriers they encounter in this endeavour. A qualitative, multiple-case study design was employed. Data were collected via in-depth, semi-structured interviews with founders and senior managers from 18 purposefully selected tourism enterprises. Thematic analysis was conducted using NVivo software. A dominant theme was the strategic integration of hyper-local community value chains, which over two-thirds of participants identified as central to their innovation efforts. This involved deliberately sourcing goods, services, and labour from immediately adjacent communities to enhance economic inclusion and secure social licence to operate. Business model innovation for sustainability in this context is fundamentally relational and place-based. Success is contingent on constructing models that deeply embed the enterprise within local socio-ecological systems, moving beyond transactional community engagement. Policymakers and development finance institutions should design support mechanisms that incentivise and de-risk localised procurement and partnership models. Enterprise managers should prioritise stakeholder dialogue to co-design value propositions that address specific local needs and assets. Sustainable business models, tourism, qualitative research, innovation, Tanzania, community engagement This paper provides novel empirical evidence on the micro-level processes of sustainable business model innovation within an under-researched sector and geographical context, highlighting the critical role of spatially bounded value creation and capture.