The current ecosystem of organisations has generated a high degree of competition amongst business actors, requiring them to develop a range of business management strategies to enhance competitiveness and sustainability. This study examined the interactive effects of innovation capability and potential absorptive capacity on a firm's innovation performance. An empirical analysis was conducted on a sample of 238 firms in cultural tourism destinations in Peru. The hypotheses were tested using the partial least squares statistical method. The results reveal the positive effect of the interaction between innovation capability and potential absorptive capacity on innovation performance. Our findings expand the theoretical background to the interactive effects of dynamic capabilities in promoting innovation, while the practical contribution will be useful in developing strategies, especially for companies located in cultural tourism destinations.