Based on dynamic capability perspective, this study presents a novel scheme that incorporates market orientation, total quality management, and organizational learning collectively referred to as dynamic capability, and can react to environmental change. The research subjects were managers of Taiwan hotels with a capacity of over fifty rooms. A questionnaire survey and Structural equation modeling was performed. We conclude the following: (1) In addition to the fact that market orientation insignificantly affects hotel performance, other research constructs significantly influence relationship. (2) Total quality management has a mediating effect on the association between market orientation and organizational learning; Organizational learning has a mediating effect on the association between market orientation and hotel performance or between total quality management and hotel performance; Market orientation affects hotel performance, which is mediated by series mediators of TQM and organizational learning.