YS Hotel is an independent 3-star hotel located in Jayapura, Papua, Indonesia. It has been established since 1998 and has operated since then. The hospitality industry, specifically in Jayapura now faces intense competition and is significantly sensitive to environmental dynamics driven by emerging technologies and evolving customer preferences, thus creating a complex business problem that is necessary to be addressed. The increasing number of competitors and ongoing price wars, along with the political and economic dynamics in the area, have undermined the financial performance of YS Hotel, highlighting its struggle to remain viable—an organization’s ability to adapt and survive in a changing environment. This research aims to explore the gaps that stagnated SY Hotel’s viability by adapting the Viable System Model (VSM) designed by Stafford Beer. The research included conducting Focus Group Discussion (FGD) and one-on-one interviews with various stakeholders. In conclusion, seven gaps have been identified within the organization. In order to bridge the gap, adopting the value-co-creation is recommended, firstly to enhance collaboration between customers and the internal organization, and then within the internal organization itself, to ensure continuous viability.