The Indonesian Tourism Industry Tourism Essay

The Indonesian Tourism Industry Tourism EssayThe capital city of Indonesia, capital of Indonesia with a total populations of 9.6 million (BPS, 2012) with five beas namely West, East, North, South and Central, has incontrovertible economic emersion since period 2000 to 2011, which mostly was sustained by the trey main sphere of influences such as (1) financial, real estate and seam operate sector, (2) trade hotel and eatery sector and (3) manufacturing sector. (BPS, 2012)The increasing of economic growth gives forces to the tourism industry in Indonesia. In January 2011, the nuance and Tourism Minister of democracy Indonesia announced the replacement of Visit Indonesia Year branding with Wonderful Indonesia as part of tourism campaign that expected to attract 7.7 million strange holidaymakers and generate $8.3 billion of gross. Whereas 50% of this revenue allow for be generated from meetings, normal and exhibitions that will take place in various place in Indonesia. (The capital of Indonesia Post, 31st December 2010).Jakarta, where the central government, trade, services and industry argon located at, makes Jakarta a destination for problem travellers or as a government central meeting. In addition, with the completing facilities at JIExpo Kemayoran in North Jakarta, Jakarta Convention Center in Central Jakarta, Balai Kartini in South Jakarta, Semanggi Expo in South Jakarta, Jakarta will operate one of the tourism destination for MICE (Meeting, Incentive, Convention, and Exhibition) personal credit line. (Sarya, 2011, p.16)Table 1.The statistic of function of international tourist arrival through gate dromeYear2008200920102011Soekarno Hatta,1,464,7171,390,4401,823,6361,933,022Ngurah Rai,2,081,7862,384,8192,546,0232,788,706Polonia,130,211148,193162,410192,650Sam Ratulangi21,79529,71520,22020,074Batam1,061,390951,3841,007,4461,161,581Juanda, Surabaya156,726158,076168,888185,815Adi Sumarmo19,02216,48922,35023,830Minangkabau,40,91151,00227,48230,5 85Others1,257,9391,193,6121,224,4891,311,468 count6,234,4976,323,7307,002,9447,647,731Source Biro Pusat Statistik, 2012Table 1.1 shows that the international tourists who arrived through Jakartas International Airport namely Soekarno Hatta, put one across increased social class to year which in 2011, it reached astir(predicate) 1.9 million. The total international tourists who came to Indonesia in 2011 have almost reached the tar restore of the Culture and Tourism Minister to attract 7.7 million foreign tourists.Hotel IndustryFor several(prenominal) giant countries like Jakarta, which has numerous transaction activities, hotel becomes one of the most robust income-producing properties (Internal selective cultivation Colliers International Indonesia, 2012).There atomic tot 18 quad benefits from hotel industry for a country (Medlik Ingram, 2000, p.4), which ar,In some atomic number 18as, hotel as an attraction of visitor who guide spending power and who tend to spend m ore money than they do when they are at home. This visitor spending power a safe deal gives immense ploughshare to the thrift revenue of a country. In Jakarta, hotel, trade and restaurant sector is one of bring in three sectors which give a biggest ploughshare in GDP for mostly years. From period 2009-2011, hotel, trade and restaurant sector has contri exactlyed 20% for DKI Jakartas GDP (Gross Domestic Product). (BPS, 2009 2011)In areas which receiving foreign visitors, hotels play big single- observed functions as foreigner currency earners which flush toilet give big contri exactlyion to their countrys balance of payments. For countries which have small possibilities of export may take hotels as their foreigner currency earners.Hotels can provide many job opportunities that this role is important for areas which have small number of sources of employment, where they contribute to regional get outment.Hotel can act as a medium to promo the products of different industri es. Mostly hotel are supplied with food, drink and different consumables which purchased from croakical anaesthetic farmers, fishermen and other suppliers. Using local products in their services makes this hotel not only can contribute directly to their economy revenue to nation as a foreigner currency earners but to a fault indirectly as an outlet to promote other local industries.Hotels may become social activity centres for local people and often their restaurants and other facilities can attract local custom.The positive macroeconomic growth encourages the positive growth of hotel tally in Jakarta, as a reply from hotel assemblys for the positive growth of room take on. several(prenominal) hotel groups fatten their hotel chain by increasing their number of hotel, such as Tauzia (local chain) which its hotel management will develop 23 hotels until 2012, consist of 15 units Harris Hotel and 8 units of Pop Harris. Next, there is the Accor group (international chain found on France and the largest operator of hotels in Asia Pacific) plan to expand their network across Indonesia from 40 hotels in 2011 to 100 hotels by 2015.PT Surya Semesta Internusa Tbk (SSIA), who own and manages the 5- headliner Gran Melia Hotel Jakarta and Melia Hotel Bali, plans to expand its revenue in the hospitality market by developing a cypher hotel network in 2012.The increasing number of hotel for a calculate hotel to a five stars hotel for period 2000 2011 are shown on the Figure 1.2, (from the period 2012 2015 are projection number),Source adopt from data internal Colliers International Indonesia, 2012Figure1. The hotel put out in Jakarta by number of hotel from period 2000-2015Source adoptive from data internal Colliers International Indonesia, 2012Figure1. The hotel supply in Jakarta by number of room from period 2000-2015Based on the Figure 1.2, the supply of hotel since 2000-2011 are dominated by 5-star hotel and 4-star hotel, whereas until 2011 there were alrea dy 37 five-star hotel and 35 four-star hotel in Jakarta.These hotel groups which play in Jakarta hotel market consist of international and local brands. Some of international brands in Indonesia which the writer would like to keep an eye on are Holiday Inn, Sheraton, Four Seasons, Kempinksi, InterContinental, Hilton International, Ritz-Carlton and Mandarin Oriental. While the local brands also aggressively work to build their own chain, from Santika, Mulia and Sultan to the Sahid Group and many others.The Emerging of work out Hotel in JakartaThe concept of Budget Hotel in Jakarta began to emerge in 2006, initiated by the Accor Group, France with the Hotel Formule1, which plans to build four other branch of this hotel in Bali, Semarang, Yogyakarta and Jakarta. Then fol pitiableed by Santika Group with their Amaris Hotel that until 2012 having 22 Amaris hotel and mean to expand the chain by adding another 13 Amaris Hotel.Basically the make players in reckon hotel market are hotel groups who already have established their star hotel chains, and because they can see the potential market and direct of cypher hotel, they add one line in their chain for figure hotel. Some of the hotel groups are shown in Table 1. Hotel groups and their brand on star and calculate hotel.Table 1. Hotel groups and their brand on star and cipher hotelHotel Group ace Hotel BrandBudget Hotel BrandAston InternationalAston Hotel (3 Star)Fave HotelAccor GroupGrand Mercure (4 star)Novotel (4 star)Pullman Hotel (5 star)Ibis Budget Hotel (previously Formule 1)Grahawita SantikaSantika Premiere (4 Star)Santika Hotel (3 Star)Amaris HotelTauzia Hotel ManagementHarris Hotel (4 Star)Pop HotelPT Intiland DevelopmentGrand sensory faculty (3 Star)Whiz HotelSource Adopted from data internal Colliers International, 2012Budget hotels are known for its low fare hotel (Barrows Powers, 2009, pp.273), where guests can experience nonplusing at good quality hotel, with a low price. The guests pay on ly for what they use. This will declaration in not only cost efficiency for the costumer but also for the investor.Based on Colliers International Indonesia data 2012, in year 2011 there are only 6 cipher hotels in Jakarta, which are,Formule 1, Menteng by AccorAmaris Hotel, Panglima Polim by SantikaFormule 1, Cikini by AccorAmaris Mangga Dua Square by SantikaAmaris Soekarno Hatta, Cengkareng by SantikaAmaris Senen by SantikaIn the Figure 1.3 shows the total number of figure hotel in Jakarta since emerged in 2006 to 2012.Source Adopted from data internal Colliers International Indonesia, 2012Figure1. The number of figure hotel in Jakarta from period 2006-2012The Segment of Budget HotelThe main atom of budget hotel in Jakarta is blood traveller. The high demand of business activities in Jakarta, which require low price try-on with limited service, has promote budget hotel as a main preference for company in choosing their business accommodation. In addition, there is a shift wo rk agreement among skunk when they will do expansion into a new area. In the era of the 1990s, to monitor or ensure the potential for business in area which newly initiated, the company usually sends a direct top management (Hari et al., June 2011, p.44). Since 2000s, with the improving economy and quality of human resources, the corporation began to ascribe the task at middle management aim (Hari et al., June 2011, p.44).In addition, by delegating tasks to the level of management, the costs will be cheaper than sending the top management. Those changes of pattern, then affect the travel business in Indonesia, from the emergence of low cost carrier (LCC) to the mushrooming budget hotel (limited service hotels) which only provide the staple fiber needs of the guests the comfortable rooms for rest. Basically the potential of business traveler market in Jakarta is quite large, because of few reasons, which areThe benefit in all sectors and positive economic growth has big impact in the increasing of business activity in Jakarta. In their business activity, the businesses often do business catch to out of town, even overseas. And as a central government, trade, services and industry, Jakarta becomes one of the most destinations for business travellers in Indonesia.Based on data from Asia Pacific Business traveler Research 2011 by Accor Group, the cost which spent for hotel accommodation for Indonesian business traveller is $92/night (2011, p.11), while the average long stay is 2.08 day. (BPS, 2011)As the total business traveller in Indonesia in 2011 is almost 90% of the total domestic tourist in Indonesia (Siahaan, 2012), therefore business travellers will be around 6.84 million in a year. and then from this total of business travellers, there is about $1.3trillion of the total cost of the trip that flows into the hotel industry in 2011.Global financial crisis in 2008 had also triggered the corporation to cut their business travel budget. There are some s trategies that they have done during 3 years after the crisis (2009-2011). Based on go on Corporate Travel Survey 2012, from 340 actent of business travellers who based 43% Europe, 30% North America and 17% Asia pacific, there is an increasing number of company which planning to change their choice of hotels to save money in 2011. Whereas this condition was encouraged budget hotel as a preference accommodation for company for business tripThe Industry of Budget Hotel in JakartaWhat becomes interesting from budget hotel market in Jakarta is how the supply and demand of budget hotel is markerificantly increasing in the short period of time. many another(prenominal) hotel groups or airline groups expand their business to invest in budget hotel, by seeing the potential demand of this hotel. For instance, AirAsia Group, an airline company based on Malaysia, who became a pioneer of providing a budget airline (Low personify Carrier, LLC), has also interest to earn budget hotel with b rand form Hotel. aft(prenominal) first established in Malaysia in 2007, Tune Hotel has spread in 6 countries, such as Malaysia, Indonesia, England, Thailand, Filipina and Australia. In 2009, they launched two Tune Hotel in Bali which is in Kuta and Seminyak and in 2013, they are planning to expand 13 Tune Hotels in Indonesia which will be in Jakarta, Bekasi, Surabaya, Pekanbaru, Makassar, Sola, Palembang, Tangerang and Bali (Kompas, 5th September 2012, p.19)In the Figure1. The growth in terms of number of rooms from period 2000-2012 on a lower floor shows that budget hotels growth compared with 3, 4 and 5 star hotels in terms of number of rooms is rising significant since emerged in 2006.Source Adopted from data internal Colliers International Indonesia, 2012Figure1. The growth in terms of number of rooms from period 2000-2012The significant supply of budget hotel is a respond for significant demand from the market. It can be seen from the moving in rate of budget hotel which is quite good better than 3 5 star hotels. The Figure1. The occupancy rate from 5-star hotel to budget hotel shows that only two years after budget hotel has emerged to the market, its occupancy rate is highly better than 3 5 star hotels, even 5-star hotel has the lowest occupancy rate from 2000-2011.Source Adopted from data internal Colliers International Indonesia, 2012Figure1. The occupancy rate from 5-star hotel to budget hotelThe higher demand of budget hotel than 3, 4, 5 star hotels gives an idea that budget hotel probably has well-provided their node and could create their faithfulness clients who wants to do repeat purchases of their services. However, before arrival high node mirth level and having allegiance customers, there are shelters that budget hotel should give to their customer. How customer value population that budget hotel has done to their customer and how this value conception impacts their customer felicity and loyalty that ultimately will increase t heir demand level and how this customer value creation impacts to the hotel profitability that impact the supply level will be a purpose for this search.Problem IdentificationDue to the demand of budget hotel is higher than 3, 4, 5 star hotels, thus there is a sign that probably budget hotel has satisfied their customer that ultimately could create customer loyalty who wants to do repeat purchases of their services hotel. However, in order to come across their customer and create customer loyalty, they should give values to their customer.Therefore, the yield in this thesis is to analyse The Impact of Customer Value Creation on Budget Hotel towards Customer Satisfaction, Customer Loyalty and Hotel Profitability. There are four areas of research problem,What value creation that budget hotel has done towards its customers?What is the customer pleasure level of budget hotel as an impact of customer value creation?What are the dominating values in influencing customer satisfaction w hich will lead to create customer loyalty?How is the profitability level of budget hotel compared to 4 and 5 star hotel as an impact from customer satisfaction and customer loyalty?Research ObjectiveThe main purposes of this research reputation areTo identify and excuse the customers value of budget hotelTo identify and explain of customer satisfaction of budget hotel as impacts of the customer value creationTo identify and explain the dominating value in influencing customer satisfaction level of budget hotel, which will lead to create customer loyaltyTo identify and explain the correlation between customer satisfaction and customer loyalty of budget hotelTo analyze the profitability level of budget hotel compared with 4 and 5 star hotel as an impact from customer satisfaction level and customer loyaltySignificant ResearchThe study is significant because it provides information which will be helpful for the readersThe study is significant in spirit the customer behavior and needs better.The study will address the issue of customer value creation to improve the customer satisfaction to create customer loyalty.The study may be useful for many interested parties, especiallyBudget hotel groups. They may use this research to support sweetener of customer satisfaction and relationshipStudents and internal parties of Swiss German University. This research can be use as a reference for lecturers and other students to conduct further research.The researcher. The result of this research can be used to enrich my knowledge.Academics. The result of this research can be used to do further research in the same industry.Scope and Limitation of dissertationIn order that the study on this subject more focus, and to get the benefit from the study, therefore the study limited toThe value creation by budget hotel in Jakarta towards its customerThe impact of customer value creation on customer satisfaction and loyaltyThe impact of customer satisfaction and loyalty on profitabili ty level of budget hotel compared with hotel industry.