WAKATOBI BASELINE DEMAND & SUPPLY, MARKET DEMAND FORECASTS, AND INVESTMENT NEEDS
MARKET ANALYSIS AND DEMAND ASSESSMENTS TO SUPPORT THE DEVELOPMENT OF INTEGRATED TOURISM DESTINATIONS ACROSS INDONESIA
WORLD BANK SELECTION # 1223583 (2016-2017)
ACKNOWLEDGMENTS
PREPARED BY:
FOR:
WITH SUPPORT FROM:
This work is a product of external contributions supervised by The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. This publication has been funded by the Kingdom of the Netherlands, the Australian Government through the Department of Foreign Affairs and Trade and the Swiss Confederation through the Swiss State Secretariat for Economic Affairs (SECO). The views expressed in this publication are the author’s alone and are not necessarily the views of the Kingdom of the Netherlands, Australian Government and the Swiss Confederation.
TABLE OF CONTENTS
INTRODUCTION ...... 1 BASELINE DEMAND & SUPPLY ...... 5 1. DESTINATION CHARACTERISTICS ...... 6 1.1 GEOGRAPHY ...... 6 1.2 CLIMATE ...... 7 1.3 NATURAL AND/OR CULTURAL RESOURCES ...... 7 2. DESTINATION DEFINITION ...... 9 2.1 KEY ATTRACTIONS & TOURISM AREAS ...... 9 3. VISITOR ARRIVALS & DEMOGRAPHICS ...... 12 3.1 LEVEL OF CURRENT DEMAND ...... 12 3.2 PROFILE OF VISITORS ...... 12 3.3 SEASONALITY OF TRIPS ...... 13 3.4 AWARENESS & IMAGE OF THE DESTINATION AMONT INTERNATIONAL MARKETS 13 3.5 TOURISM PROMOTION / DESTINATION MARKETING...... 14 4. ACCESSIBILITY HIGHLIGHTS ...... 16 4.1 EXISTING MODE OF TRAVEL & VISITORS’ MOVEMENT ...... 16 5. HOTEL & LODGING OPTIONS (AMENITIES) ...... 18 5.1 VOLUME & CAPACITY OF ROOMS ...... 18 5.2 ESTIMATED PERFORMANCE ...... 18 5.3 FACILITIES SNAPSHOT ...... 19 6. SMES: SUPPORTING TOURISM INFRASTRUCTURE (AMENITIES) ...... 22 6.1 INDEPENDENT FOOD & BEVERAGE ...... 22 6.2 TOUR OPERATORS ...... 23 6.3 TOURISM SERVICE PROVIDERS ...... 23 7. INVESTMENT ANALYSIS ...... 24 7.1 DIRECT INVESTMENT ...... 24 7.2 KEY PLAYERS / INVESTORS ...... 24 7.3 INVESTMENT SENTIMENT: DOMESTIC & FOREIGN INVESTORS ...... 26 8. SKILLS ASSESSMENT ...... 28 8.1 WHAT SKILLS EXIST? ...... 28 8.2 WHAT ARE THE SKILLS GAPS? ...... 28 8.3 TRAINING SCHOOLS ...... 28 DESTINATION SWOT & VISION ...... 30 9. DESTINATION SWOT ...... 31 9.1 STRENGTHS ...... 31 9.2 WEAKNESSES ...... 31 9.3 OPPORTUNITIES ...... 31 9.4 THREATS ...... 32 10. DESTINATION VISION STATEMENT ...... 33 10.1 TARGET MARKET ...... 33 10.2 EXISTING RESORT PIPELINE ...... 33 10.3 RECOMMENDED PRODUCTS AND ACCOMMODATION TO BE DEVELOPED ...... 33
MARKET DEMAND FORECASTS ...... 35 11. FUTURE MARKET DEMAND ANALYSIS ...... 36 INVESTMENT NEEDS ...... 38 12. AMENITIES: KEY RECOMMENDATIONS ...... 39 12.1 FORECAST OF FUTURE ACCOMMODATION NEEDS...... 39 13. STAFF REQUIRED & SKILLS NEEDED ...... 40 13.1 ACCOMMODATION STAFF REQUIRED ...... 40 13.2 ADDITIONAL WAKATOBI DESTINATION STAFF REQUIRED ...... 42 14. TRANSPORT INFRASTRUCTURE BASELINE & NEEDS ...... 43 BASELINE ...... 43 14.1 ROAD TRANSPORT ...... 43 14.2 AIR TRANSPORT ...... 47 14.3 WATER TRANSPORT ...... 50 TRANSPORT INFRASTRUCTURE INVESTMENT NEEDS ...... 52 14.4 FUTURE MODE OF TRAVEL ...... 52 14.5 ROAD INFRASTRUCTURE NEEDS ...... 53 14.6 AIR TRANSPORT NEEDS ...... 53 14.7 WATER TRANSPORT NEEDS ...... 54 15. BASIC CAPACITY INFRASTRUCTURE (AMENITIES) ...... 55 BASELINE ...... 55 15.1 WATER SUPPLY ...... 55 15.2 WASTEWATER AND SANITATION ...... 58 15.3 DRAINAGE ...... 61 15.4 SOLID WASTE INFRASTRUCTURE ...... 61 15.5 POWER SUPPLY...... 64 15.6 TELECOMMUNICATION INFRASTRUCTURE ...... 66 15.7 SUMMARY OF EXISTING BASIC INFRASTRUCTURE ...... 66 BASIC CAPACITY INFRASTRUCTURE INVESTMENT NEEDS ...... 68 15.8 FORECAST POPULATION & VISITOR ARRIVALS ...... 68 15.9 WATER SUPPLY ...... 69 15.10 WASTEWATER AND SANITATION ...... 71 15.11 DRAINAGE ...... 73 15.12 SOLID WASTE INFRASTRUCTURE ...... 73 15.13 POWER SUPPLY...... 75 15.14 TELECOMMUNICATION INFRASTRUCTURE ...... 77 KEY RECOMMENDATIONS ...... 78 16. WHAT WILL TRIGGER INVESTMENT? ...... 79 16.1 RECOMMENDATIONS ON DESTINATION ENHANCEMENTS ...... 79 16.2 LEGAL & REGULATORY ENVIRONMENT ENHANCEMENTS ...... 79 16.3 SME DEVELOPMENT INTERVENTIONS ...... 80 16.4 KEY RECOMMENDATIONS FOR TRANSPORT INFRASTRUCTURE INVESTMENT .. 81 16.5 KEY RECOMMENDATIONS FOR BASIC INFRASTRUCTURE INVESTMENTS ...... 82 16.6 RECOMMENDATIONS FOR SPATIAL PLANS ...... 83 APPENDIX I: SOURCES OF INFORMATION USED ...... 87 APPENDIX II: KEY RESORTS ...... 89
TABLE OF FIGURES
FIGURE 1: LOCATION OF 10 PRIORITY TOURISM DESTINATIONS IN ASIA 2 FIGURE 2: MAP OF WAKATOBI NATIONAL PARK 6 FIGURE 3: MONTHLY AVERAGE TEMPERATURE AND RAINFALL, BAU-BAU* 7 FIGURE 4: KEY ATTRACTIONS IN WAKATOBI 10 FIGURE 5: PULAU TOMIA’S MULTIPLE DIVE SITES 11 FIGURE 6: NUMBER OF VISITOR ARRIVALS TO WAKATOBI, 2005-2015 12 FIGURE 7: BREAKDOWN ON VISITOR ARRIVALS BY MONTH, 2015 13 FIGURE 8: ACTIVITIES AND PRODUCTS ASSOCIATED WITH WAKATOBI ON TRIPADVISOR 14 FIGURE 9: REASONS FOR SATISFACTION ACCORDING TO USER-GENERATED CONTENT ON TRIPADVISOR 14 FIGURE 10: WAKATOBI TOURISM DESTINATION AND VISITORS’ MOVEMENT 17 FIGURE 11: HOTELS IN WAKATOBI, 2008 TO 2015 18 FIGURE 12: SUMMARY OF QUALITY RESORT FACILITIES IN WAKATOBI 19 FIGURE 13: F&B OUTLETS IN WAKATOBI 22 FIGURE 14: DETAILS OF LEADING TOUR OPERATORS IN WAKATOBI 23 FIGURE 15: FORECAST OF VISITORS TO WAKATOBI 2015-2041 36 FIGURE 16: FORECAST OF GUEST NIGHTS AND EXPENDITURE IN WAKATOBI 2015-2041 37 FIGURE 17: FORECAST OF ADDITIONAL ROOMS IN WAKATOBI 2015-2041 39 FIGURE 18: ESTIMATED NUMBER OF STAFF BY HOTEL CATEGORY 41 FIGURE 19: EXISTING ROAD CONDITION IN KABUPATEN WAKATOBI 43 FIGURE 20: EXISTING ROAD CONDITION AT WANGI-WANGI 44 FIGURE 21: KEY ROADS TO TOURISM ATTRACTIONS IN WANGI-WANGI ISLAND 44 FIGURE 22: KEY ROADS TO TOURISM ATTRACTIONS, KALEDUPA ISLAND 45 FIGURE 23: KEY ROADS TO TOURISM ATTRACTIONS, TOMIA ISLAND 45 FIGURE 24: KEY ROADS CONNECTING TOURISM ATTRACTIONS 45 FIGURE 25: NUMBER OF REGISTERED VEHICLES IN 2015, WAKATOBI 46 FIGURE 26: MATAHORA AIRPORT 47 FIGURE 27: MATAHORA AIRPORT COMMERCIAL AIR TRAFFIC 47 FIGURE 28: MATAHORA AIRPORT FACILITIES 48 FIGURE 29: EXISTING GAPS IN AIRPORT FACILITIES AT MATAHORA AIRPORT 48 FIGURE 30: MATOHARA AIRPORT MASTER PLAN 49 FIGURE 31: SEA TRANSPORT ROUTES IN WAKATOBI 50 FIGURE 32: SCHEDULED SERVICES OF SEA TRANSPORT WITHIN WAKATOBI 51 FIGURE 33: PASSENGER TRANSPORT AT WAKATOBI PORTS 51 FIGURE 34: EXISTING CONDITION OF WANCI PORT (MOLA) 52 FIGURE 35: MATAHORA AIRPORT – INFRASTRUCTURE NEEDS 54 FIGURE 36: COVERAGE OF WATER SUPPLY BY KECAMATAN IN KABUPATEN WAKATOBI 55 FIGURE 37: MAP OF WATER SUPPLY COVERAGE BY KECAMATAN IN KABUPATEN WAKATOBI 56 FIGURE 38: CAPACITY OF PDAM WATER SOURCES PDAM IN WAKATOBI 56 FIGURE 39: WATER SOURCES OF PDAM IN WAKATOBI 57 FIGURE 40: HOUSEHOLDS EQUIPPED WITH SANITATION FACILITIES BY KECAMATAN, 2015 59
FIGURE 41: PROPOSAL OF ON-SITE WASTEWATER MANAGEMENT FACILITIES 60 FIGURE 42: FLOOD DISASTER RISK INDEX MAP 61 FIGURE 43: PROCEDURE FOR SOLID WASTE COLLECTION AND DISPOSAL 62 FIGURE 44: SOLID WASTE DISPOSAL IN WAKATOBI, 2013 62 FIGURE 45: TPA KOMALA 63 FIGURE 46: CAPACITIES OF PLN BRANCHES IN WAKATOBI, 2013 64 FIGURE 47: PROPOSED POWER PLANTS IN WAKATOBI 65 FIGURE 48: POWER NETWORK OF SOUTHEAST SULAWESI PROVINCE 65 FIGURE 49: TELECOM TOWERS IN WAKATOBI 66 FIGURE 50: SUMMARY OF EXISTING BASIC INFRASTRUCTURE ASSESSMENT 67 FIGURE 51: FORECAST OF POPULATION 69 FIGURE 52: FORECAST OF COMMERCIAL ROOMS REQUIRED 69 FIGURE 53: WATER DEMAND PROJECTIONS (L/S) 69 FIGURE 54: ESTIMATED WATER DEMAND RATIO 70 FIGURE 55: WATER CONSUMPTION RATE 70 FIGURE 56: SEWAGE GENERATION PROJECTION (L/S)* 71 FIGURE 57: ESTIMATED SEWAGE GENERATION RATIO 72 FIGURE 58: WOLD WASTE GENERATION PROJECTION (L/DAY) 73 FIGURE 59: ESTIMATED SOLID WASTE GENERATION RATIO 73 FIGURE 60: RATE OF SOLID WASTE GENERATION 74 FIGURE 61: POWER DEMAND PROJECTION (MWH) 75 FIGURE 62: ESTIMATED POWER DEMAND RATIO 76 FIGURE 63: POWER CONSUMPTION RATE 76 FIGURE 64: RTRW WAKATOBI REGENCY MASTER PLAN 2012 - 2032 84 FIGURE 65: WAKATOBI NATIONAL PARK PROPOSED ZONING 85 FIGURE 66: GAPS IN SPATIAL PLANNING FRAMEWORK, WAKATOBI 85 FIGURE 67: WAKATOBI DIVE RESORT, TOLANDONO 89 FIGURE 68: PATUNO RESORT, WANGI-WANGI 91 FIGURE 69: HOGA ISLAND RESORT 91 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583
INTRODUCTION
The Government of Indonesia in the National Medium-Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional, RPJMN) 2015 to 2019, has set a number of objectives to increase the role of tourism in the Indonesian economy. Between 2015 and 2019, its goals together with the Ministry of Tourism’s goals are to increase:
• international visitors from 9 million to 20 million;
• domestic visits from 250 million to 275 million;
• the tourism contribution to GDP from 4 percent to 8 percent;
• tourism foreign exchange revenues from IDR120 trillion to IDR240 trillion;
• Indonesia’s Travel and Tourism Competitiveness Index ranking from 70th to 30th place; and
• tourism sector employment from 11 million to 13 million workers.
To achieve these goals President Joko Widodo urged his cabinet in late 2015 to accelerate the development of 10 priority tourism destinations (Figure 1):
• Borobudur (Jogjakarta, Solo, Semarang: Central Java)
• Mandalika (Lombok)
• Bromo, Tengger, Semeru (East Java)
• Labuan Bajo (Flores)
• Wakatobi (South East Sulawesi)
• Pulau Seribu / Kota Tua (DKI Jakarta)
• Morotai (North Maluku)
• Tanjung Lesung (Banten)
• Tanjung Kelayang (Bangka Belitung)
The 3 destinations in bold are considered high priority destinations with additional effort being expended to encourage and develop tourism.
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The World Bank has been requested by the Government of Indonesia to support, through financing, advisory support, and analytics, the Government’s efforts to accelerate tourism development in the 10 priority destinations. As part of this support, in August 2016 the World Bank engaged Horwath HTL (HHTL) and Surbana Jurong to conduct a market analysis and demand assessment for the 10 priority destinations, with a focus on Lake Toba, Lombok and Borobudur.
FIGURE 1: LOCATION OF 10 PRIORITY TOURISM DESTINATIONS IN ASIA
Source: Google Maps, Surbana Jurong
The key objective of the Assessment is to assist the Government of Indonesia in identifying and prioritising infrastructure, skill and SME development, planning and other tourism-related expenditures to accelerate the development of the 10 priority tourism destinations thereby helping to achieve the arrivals and economic goals as listed above. The scope comprises of (1) market demand and supply analysis, plus investment analysis and (2) demand assessment (projections) and investment needs (including infrastructure).
To this end, the following key tasks were undertaken:
Task 1: Understanding governmental decentralization & its effect on decision making plus preliminary information gathering. Task 2: Collection and analysis of the government’s statistical data. Task 3: Survey of international and domestic tourism stakeholders for collection of public and private sector information. Task 4: Survey of tour-operators in selected key markets. Task 5: Secondary research on tourism supply and demand. Task 6: Analysis of the image of Indonesia and the 10 priority destinations. Task 7: Future market demand analysis. Task 8: Investment and infrastructure needs assessment. Task 9: SMEs and skills assessment and needs.
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Appendix I contains a list of interviews undertaken with both the public and private sectors to gather primary research that was used to supplement secondary research. The list includes the number of interviews, the organisation (where appropriate), the location and the dates.
This Report is part of a series of reports:
• report for Indonesia, country level;
• reports for the 3 high priority destinations (Borobudur, Lake Toba, Lombok); and,
• reports for the 7 other priority destinations (Bromo/Tengger/Semeru, Labuan Bajo/Komodo National Park, Wakatobi, Pulau Seribu/Kota Tua, Morotai, Tanjung Lesung and Tanjung Kelayang). These reports only provide rough estimates and are more basic that the ones for the 3 high priority destinations. Good practice in terms of forecasting could not always be applied, and instead, for instance, assumptions based on supply pipeline and constraints were used.
Assessment of the Destination and Key Tourism Areas
The 3As terminology (Attraction, Amenities and Accessibility) can help explain how the supply and demand analysis and needs assessment was carried out for the destination with respect to the destination boundary and the key tourism areas.
• Attractions: attractions specifically focused on engaging and drawing visitors to the destination. The destination is defined by its attractions and their ability to draw visitors. Within the destination boundary, (existing and future) clusters of attractions with potential for tourism development and propensity to generate overnight stays and revenue and/or (existing and future) key accommodation areas are identified and henceforth called “key tourism areas”.
• Accessibility: methods of reaching the destination via the main gateways (external accessibility) plus transport links between gateways, attractions and key accommodation areas all of which support the destination (internal accessibility). For external accessibility, the focus is on the gateway hubs (such as airports and ports). For internal accessibility, the Report assesses the transport infrastructure; the existing, the gaps and the required transportation network that facilitates accessibility within the destination.
• Amenities: support the destination and the attractions such as hotels, restaurants and entertainment facilities together with basic service infrastructure. Within the destination boundary, and generally within the key tourism areas, the Report:
- assesses the existing basic service infrastructure capacity (water supply, power supply, telecommunication, waste water and waste management, etc.);
- identifies any basic infrastructure service gaps;
- analyses demand and supply of existing attractions and amenities;
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- provides projections for future attractions and amenities; and
• provides an assessment of infrastructure needs of the destination to ensure success of the attraction and amenities. In some cases, when amenities within the destination boundary have a direct effect on the attractiveness of the key tourism areas, the scope of the baseline and investment needs of basic service infrastructure is conducted beyond the key tourism areas.
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BASELINE DEMAND & SUPPLY
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1. DESTINATION CHARACTERISTICS
The following section provides an assessment of the existing and potential attractions within the destination.
1.1 GEOGRAPHY Kabupaten Wakatobi is located to the southeast of Sulawesi Island, between the Banda Sea to the northeast and the Flores Sea to the southwest.1 The Wakatobi National Park (WNP) encompasses the four main Wakatobi Islands; the name Wakatobi itself is a portmanteau of the first two letters of each of the main islands: Wangi-Wangi, Kaledupa, Tomia, and Binongko. The WNP also includes smaller islands and atolls such as Tokobao, North Lintea, South Lintea, Kampenaune, Hoga and Tolandono.
Wakatobi locates at the centre of the world’s Coral Reef Triangle, the marine waters of Indonesia, Malaysia, Papua New Guinea, Philippines, Solomon Island, and Timor-Leste. It is also called the “Amazon of the seas”, covering 5.7 million square kilometres of ocean waters and contains nearly 600 different species of reef-building corals, six of the world’s seven marine turtle specials, and more than 2,000 species of reef fish. The WNP covers approximately 20,000 square kilometers, roughly 19,200 (96%) of which is sea, home to many colorful marine species and tropical coral reefs. Figure 2 shows the WNP.
FIGURE 2: MAP OF WAKATOBI NATIONAL PARK
Source: Operation Wallacea
1 In Indonesia, subnational governance includes four levels: (1) province/Provinsi, (2) city/Kota and Kabupaten/Kabupaten, (3) sub- district/Kecamatan or district/Distrik, and (4) urban community/Kelurahan or village/Desa.
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Due to difficult and time-consuming accessibility, tourism is developing slowly in Wakatobi. However, the region is blessed with abundant tourism resources including good scenery, pristine beaches, and world-class diving spots.
1.2 CLIMATE Wakatobi has two seasons, wet and dry, like in the other regions of Indonesia. The rainy season runs from December to April, and the hot and predominantly dry season runs from May to November. Due to its proximity to the equator, there is little variation in temperatures throughout the year with the average daytime temperatures between 26 and 35 Celsius (Figure 4). During monsoon season, tides usually tend to be high and the wind is strong; however, underwater visibility still acceptable during this time.
FIGURE 3: MONTHLY AVERAGE TEMPERATURE AND RAINFALL, BAU- BAU*
Climate
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Temperature 33– 32– 32– 32– 32– 32– 32– 32– 33– 34– 35– 34– (Max - Min) 0C 25 23 24 24 24 23 22 21 21 22 24 25 Rainfall mm3 195 350 180.6 336 150 47 5 - - - 27 179 (Precipitation) Source: BMKG Bau-Bau * Refers to Bau Bau weather specifically but is the closest BMKG station to Wakatobi
1.3 NATURAL AND/OR CULTURAL RESOURCES
Natural Resources
Wakatobi has diverse ecosystems with many marine and coastal species of sea grass, coral reef, fish, sea birds, turtles, cetaceans, and mangroves. According to UNESCO’s latest publication, there are around 590 fish species, 396 coral reef species, 22 major and 11 associate mangrove species, and 9 sea grass species found in the area.
The main islands are surrounded by fringing coral reefs. Parallel to the archipelago of the main islands are three large atoll reefs. Wakatobi is also hemmed by major sea straits that function as migratory corridors for large marine species such as sea turtles and whales— many of which are listed as endangered.
Besides the underwater beauty, Wakatobi has also other natural resources, such as white sand beaches, clear seawater and beach sunsets from every island.
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Cultural Resources
The four major islands in the Wakatobi Archipelago are inhabited with a total population of about 90.000 people, spread among 40 or more villages. Two major ethnic groups inhabit the islands: the Wakatobi people and the Bajo. The two groups remain socially segregated from one another and each speaks their own unique language.
In addition, cultural interest can be found in the historical fortresses across the four main islands, old villages with their pillar houses, traditional weaving, blacksmiths, Bajo tribes and various local dances.
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2. DESTINATION DEFINITION
2.1 KEY ATTRACTIONS & TOURISM AREAS The cluster of islands was originally known as Kepulauan Tukang Besi or the “Ironmongery Archipelago,” as for a long time many of the inhabitants were iron-smiths producing mostly knives and gardening tools.
Wakatobi was part of Kabupaten Buton, Province of Sulawesi Tenggara until December 2003, when it was officially designated an independent district in Sulawesi Tenggara. The Wakatobi Islands have been a marine conservation area since 1996, and in 2002 they were declared a National Park. Since then, WWF has been collaborating in a unique partnership with The Nature Conservancy to assist the Wakatobi National Park (WNP) authorities to improve their management plan, zoning, and implementation of park management. This partnership helps WNP implement effective management strategies informed by the best science and local socio-economic realities. We understand that this includes the development of a collaborative management structure, short- and long-term financing plans, alternative livelihoods, and management modules such as outreach and awareness, monitoring, surveillance, and park zoning. We are unaware of any further details. In 2012, UNESCO designated WNP as a World Biosphere Reserve. With the collaborative management structure, WNP has been able to raise awareness on marine protection and encourage more sustainable tourism.
The area’s key attractions are shown in Figure 4 overleaf.
A brief description of the region’s tourism highlights can be found below.
Destination and Destination Boundary
The Wakatobi destination boundary refers to Kabupaten Wakatobi, which consists of four islands:
• Wangi-Wangi
• Kaledupa
• Tomia
• Binongko.
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FIGURE 4: KEY ATTRACTIONS IN WAKATOBI
Source: Horwath HTL,Google maps
Wangi-Wangi Island is the northernmost and largest island in Wakatobi and the administrative capital. Commercial flights to Matahora Airport make this island accessible to visitors. The island’s settlements consist of many small villages and the town of Wanci, which is the center of transportation, economy, finance, government, and shopping.
• There are many dive spots around Wangi-Wangi Island, including Waha Cemara, Sombu, Nua Shark Point, Wandoka Pinnacle, The Zoo, Wangi-Wangi Jetty, etc.
• Bajo Mola, situated in the western part of Wangi-Wangi, is inhabited by the Bajonese, seafaring people who settled on Wangi-Wangi in 1958.
• Cemara Beach is close to the village of Waha, around 7 kilometers from Wanci; the beach is around 200 meters long and has beautiful white sand.
Kaledupa Island is a 2-hour boat ride South East from Wangi-Wangi; the island has a quieter and calmer environment.
• Hoga is one of the smaller inhabited islands off Kaledupa’s coast and boasts some of the best reefs in the archipelago. There are over 22 diving spots to visit around the island. The island’s settlements include a small local village and scattered huts along the west shore which comprise the island’s two simple accommodations.
• Bajo Sampela is a traditional village in the ocean. The houses are built in rows and around 2 meters above the water with wooden bamboo piers and footbridges connecting them.
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• Mangrove forest and lake at Sombano: the area has dense mangrove forests, various types of orchids, and pandanus leaves. Various species of birds can also be observed here.
Tomia Island is further to the South east and has been a famous dive site for more than 10 years. The island can be reached in 3 to 4 hours by public boat from Wangi-Wangi. There are also direct chartered flights from Bali, however, they are only available for guests staying at the Wakatobi Dive Resort.
• There are more than 43 dive sites around Tomia including: Ali Reef, Mari Mabuk, Roma, Sawa Island, Teluk Maya, Malabea Zoo, etc.
• Patua Fort is the biggest fortress in Wakatobi. Located in Patua Village, the fort is situated on a hilly environment that can be accessed through 5 main doors, with an old grave inside the complex.
• Nda’a Island is a small-uninhabited island situated opposite and can be reached within 40 minutes by boat from Kulati village.
Figure 5 shows the dive sites around Tomia Island.
FIGURE 5: PULAU TOMIA’S MULTIPLE DIVE SITES
Source: Worldofdiving
Binongko Island
• The sea around Binongko is rarely explored except by its inhabitants who usually go fishing using small boats and traditional tools. So far, there are 12 dive sites mapped around the island including Haka, Teluk Wall, Bela’a, and so on.
• Lighthouse and Stone Park: located underneath the fort of the told Tandu Haka Village, the park is around 3 kilometers long and on average 500 – 600 meters wide.
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3. VISITOR ARRIVALS & DEMOGRAPHICS
This chapter presents a high-level assessment of tourism demand in Wakatobi, based on a thorough review of available data, reports, and analysis on the tourism sector for Indonesia, and complemented by interviews with tour operators and local stakeholders (see Appendix I).
3.1 LEVEL OF CURRENT DEMAND
The annual level of visitor arrivals in Wakatobi National Park (WNP) is estimated on the basis of visitor arrivals in commercial accommodations, which reached 18,000 in 2015, up from fewer than 2,000 in 2005. Yearly levels are shown in Figure 6. Very active social media usage in Indonesia is believed to be driving some of the increase in domestic tourism to Wakatobi National Park (WNP).
FIGURE 6: NUMBER OF VISITOR ARRIVALS TO WAKATOBI, 2005-2015
20 000 18 000 16 000 14 000 12 000 10 000 8 000
6 000 Numberarrivals of 4 000 2 000 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Domestic Foreign
Source: BPS
3.2 PROFILE OF VISITORS
Visitors to Wakatobi are mainly domestic (11,400 visitors in 2015, 63% of the total). The majority of domestic travelers are from Jakarta, Bali, Lombok, and Surabaya. In recent years, with the introduction of flights from Makassar via Kendari, the market experienced an influx of domestic arrivals, mainly from Java and Sulawesi.
The number of foreign visitors has increased strongly since 2005 to reach 6,600 in 2015. Based on the interviews with tourism authorities in Wakatobi, foreign visitors largely come from the United Kingdom and the United States. A typical journey from Europe involves one long international flight, two short national flights and/or a long boat journey (between 4-10 hours) and a 90-minute car ride, thus nearly a week to get there and back.
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The main reasons visitors travel to WNP is to enjoy the pristine environment for diving and snorkeling.
3.3 SEASONALITY OF TRIPS The best period being for diving is between June and August, and October, and this affects the seasonal pattern of foreign visitors, as shown in Figure 7. Meanwhile, peak period for domestic travelers are between July and September and low during Ramadan months (May and June). The destination also receives a large number of domestic arrivals in November, driven by the annual Wakatobi Wonderful Festival and Expo.
FIGURE 7: BREAKDOWN ON VISITOR ARRIVALS BY MONTH, 2015
3000
2500
2000
1500
1000
500
0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Domestic Visitors Foriegn visitors
3.4 AWARENESS & IMAGE OF THE DESTINATION AMONT INTERNATIONAL MARKETS 3.4.1 A LOW AWARENESS AMONG INTERNATIONAL TOURIST OPERATORS. Wakatobi is well known at the international level among tourism professionals and in the diving industry. 19 of the 41 tour operators and travel agents interviewed for this study had heard of Wakatobi, especially high-end and niche tour operators (focusing on adventure and “off the beaten track” destinations), who were fairly represented in the study sample.
All interviewed professionals had heard of Sulawesi, but they do not systematically identify Wakatobi as part of it. Even when shown the map of the destination in its broader general context, the professionals had little familiarity with the broader Sulawesi Archipelago.
Only two of the interviewed operators offered packages which included Wakatobi: a British tour operator (Ethos Travel) who offers tailor-made tours in all parts of Indonesia, and a Singaporean operator (Congro Travel) specializing in “soft adventure” trips. This lack of commercialization is not surprising, as the destination’s tourism industry is still in its infancy.
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Limited presence on the internet illustrates the low awareness of the destination among the general public at international level. Only a few occurrences and opinions about Wakatobi as a tourism destination can be found in the English language in user-generated content websites, showing the lack of familiarity with the destination by the general public. For instance, Wakatobi accounts for only 15 reviews on TripAdvisor (consulted as of October 2016, all languages): 10 under “things to do”, and only 5 reviews under “lodging.”
The main place mentioned on TripAdvisor is the traditional village of Liya Togo; the names of the 4 islands do not appear in the reviews. The following figures (8 and 9) sum up the main elements about the destination encountered on TripAdvisor:
FIGURE 8: ACTIVITIES AND PRODUCTS ASSOCIATED WITH WAKATOBI ON TRIPADVISOR
Number of reviews Places/ attractions associated with the Main languages used on TripAdvisor destination by reviewers website Things to do: 10 50% Bahasa Indonesia Liya Togo Traditional Village Lodging: 5 40% English These places do not appear in reviews : 10% Other European -Pulau Wangi wangi Languages -Pulau Kaledupa -Pulau Tomia -Pulau Binangko
Source: Analysis of TripAdvisor Website by Horwath HHTL in all available languages, 20/10/2016.
FIGURE 9: REASONS FOR SATISFACTION ACCORDING TO USER- GENERATED CONTENT ON TRIPADVISOR
Reasons for satisfaction Reasons for dissatisfaction - Liya Togo is an interesting little village with - Liya Togo is not well-maintained and is lots of history underserved - Quality of roads Source: Analysis of TripAdvisor website by Horwath HHTL in all available languages, 20/10/2016. www.TripAdvisor.com
Wakatobi’s image, though it is low-profile, is very positive, with its remoteness and the undeveloped industry being regarded by travelers as a positive feature.
3.5 TOURISM PROMOTION / DESTINATION MARKETING The DMO/FTKP (Communication Forum for Tourism Development) in Wakatobi acts as a coordination forum. They have defined a draft work plan for 2015–2018, as well as a vision and mission for the organization. Island working groups on Tomia and Binongko Islands have been established to strengthen capacity and participation of communities and include their needs at the island-level in strategic planning for the district’s tourism development.
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Destination marketing activities include the following:
• Destination marketing activities for Wakatobi are mostly conducted by the Tourism Office of Wakatobi.
• Brand development by an external brand agency was finalized with a branding concept and strategy in 2015.
• A destination website, social media, and mobile app are available, however, they still require updating.
• Wakatobi was featured in several TV and movies including: Eagle Special Project on Metro TV which was supported by the Ministry of Tourism; ‘My Trip, My Adventure’; a short Film TV called ‘Love in Wakatobi’; and the famous movie ‘The Mirror Never Lies’ sponsored by WWF and Kabupaten Wakatobi government. The latter movie has won several awards in both domestic and international film festivals and successfully promoted the region’s natural beauty.
• Wakatobi also participated in the Bali & Beyond Travel Fair (BBTF) and ITB Asia.
Tourism Associations and Business: Wakatobi has only a small number of existing tourism businesses in association with the PHRI (Indonesian Hotel and Restaurant Association) and WPDA (Wakatobi Professional Divers Association). The WPDA is a newly- established association for all professional divers in Wakatobi. Twelve new dive sites were assessed and explored by WPDA;
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4. ACCESSIBILITY HIGHLIGHTS
Transport infrastructure is assessed for Kabupaten Wakatobi looking at the connectivity from the airport and maritime gateways to key destinations, and connectivity between these destinations and places of accommodation. The study boundary of this destination is Kabupaten Wakatobi. The attractions identified are mostly spread over three of the four main islands—Wangi-Wangi, Kaledupa, and Tomia.
Wakatobi is accessed by air or sea by all visitors. Air access is mainly through Matahora Airport located on Wangi-Wangi. Currently, there are no available international flights serving the destination. The primary gateway for international visitors to Wakatobi is Hasanuddin Airport, Makassar, which is connected to two international cities in the region, Singapore and Kuala Lumpur. There is only one airline (Wings Air) operating flights to Matahora Airport on Wangi-Wangi, via a transit in Kendari. Seven flights operate weekly between Kendari and Matahora (UPBU Matohara Airport, 2016). As the majority of visitors arrive by air, the main gateway to Wakatobi is via Wangi-Wangi (the district capital of Wakatobi). For visitors arriving by sea, major ports in Wakatobi are located in Wangi-Wangi, namely Wanci and Mola. Visitors who stay at the Wakatobi Dive Resort on Tomia Island can take charter flight from Bali, which is included in the resort package and arrives at the Wakatobi Dive Resort airport that is privately owned and managed by the resort.
Most mass market visitors arrive at Wangi-Wangi, enjoy value diving facilities there, and take a roughly three-hour boat or ferry to another island. Kaledupa is a small village island south of Wangi-Wangi, with plenty of home stay facilities. Tomia is located south of Kaledupa, with diving spots, scenery, and mostly high-end and self-sufficient villas suitable for the upscale market. A ferry is available; however, the island is connected mostly through chartered boats. Binongko Island is mostly empty and untouched. It is similarly connected primarily via chartered boat despite the existence of a public ferry.
4.1 EXISTING MODE OF TRAVEL & VISITORS’ MOVEMENT Assessment of current market share of visitors and their mode of arrival indicates the possible visitors’ movement within the tourism destination.
• Due to logistics challenges such as multiple transits and unreliable and unpredictable scheduling of boat services, many travelers prefer the exclusive direct flight from Bali to Tomia for guests of the Wakatobi Dive Resort.
• The visitor distribution for Wakatobi is illustrated below in Figure 10.
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FIGURE 10: WAKATOBI TOURISM DESTINATION AND VISITORS’ MOVEMENT
Majority of tourists arrives by air
Some tourists staying in home stay
High-end Tourists
Source: Google Maps, HHTL, Surbana Jurong
Other than air and sea transport facilities, there are also land transport facilities within the Wakatobi islands. Land transport is common for visitors in the main island of Wangi-Wangi. Usually they can take ojek (motorcycle taxi) with fares between IDR 3,000 and IDR 100,000, depending on the trip distance. In addition, vehicle rental is available at rates that vary widely from IDR 300,000 to IDR 400,000, depending on the type of vehicle.
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5. HOTEL & LODGING OPTIONS (AMENITIES)
5.1 VOLUME & CAPACITY OF ROOMS Wakatobi is a new tourist area with small-scale tourism only. The park is accessible by boat via the gateway towns of Kendari and Bau-Bau on Sulawesi, and air connections began in 2014. According to the latest statistics by the BPS, there are 40 hotels in Wakatobi, offering a total of 417 rooms, dominated by non-star-rated small properties.
It is important to note that the number of hotels tripled between 2008 and 2014, responding to the increase of tourists however new development has slowed since 2014 with no further hotels entering the market despite the new air connections.
We believe that Wakatobi has also witnessed solid growth in the number of home-stays in recent years; however, neither the BPS nor the Department of Tourism track this number. These home-stays are owned and operated by local communities on the inhabited islands and their average room count is usually small, between 2 and 4 rooms.
FIGURE 11: HOTELS IN WAKATOBI, 2008 TO 2015
Source: BPS and Regional Tourism Agency
5.2 ESTIMATED PERFORMANCE • Resorts/Hotels: Occupancy rates range from 40% to 60%, with star-rated hotel generally achieving between 5% and 15% higher occupancy compared to non-star-rated hotels. The achieved average daily rate (ADR) ranges between IDR 500,000 and IDR 1,500,000. The Wakatobi Dive Resort is the only luxury resort with a private plane and live-aboard boat in the region; hence it achieves the highest ADR in the market. The resort is particularly popular among international guests and high-spending domestic travelers.
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• Home-stays: Occupancy performance experiences strong fluctuations throughout the year, with an estimated average of between 12% and 15%. A major demand driver for this type of accommodation is Operation Wallacea (see section 7.2 below for more details), where up to 300 students are sent to Hoga every year, mainly between June and August, helping to drive occupancy up to 60% to 70% (largely empty for the remainder of the year). Homestays on Kaledupa-Hoga are mainly occupied by Operation Wallacea’s students, while those in Wanci are more popular amongst domestic travelers as the island is the center of transportation and shopping. The home-stays normally achieve an ADR of around IDR 200,000 to IDR 400,000 per room.
5.3 FACILITIES SNAPSHOT Resorts/Hotels:
• The majority of resorts in Wakatobi are medium sized, with Patuno being the largest property.
• The Patuno (4-star, only star-rated hotel) and the Wakatobi Dive Resort are the only two resorts that equip all guestrooms with air-conditioning units, private bathroom and hot water supply. Meanwhile, the Hoga Island Resort’s guestrooms do not have AC or fan, and only the suites at the Hoga Dive resort are equipped with AC.
• Due to the underdeveloped infrastructure on Hoga, the resorts on the island are generally small in scale with limited facilities. Fresh water supply is inadequate and power supply is inconsistent.
More details about the key, quality hotels are provided in Appendix II.
FIGURE 12: SUMMARY OF QUALITY RESORT FACILITIES IN WAKATOBI Number of rooms Number of F&B Island Outlets Wakatobi Dive Resort 26 2 Tomia Hoga Island Resort 8 1 Hoga Hoga Dive Resort 21 1 Hoga Patuno Resort 71 1 Wangi-Wangi Overall Average 32 1
Home-stays:
• Most home-stays do not provide complimentary amenities such as towels, bath gel, toothbrush, etc. Some guesthouses and home-stays have private bathrooms but most are shared. They normally have inconsistent power, and insufficient water supply. They provide basic accommodation with limited facilities. A few provide breakfast and other catering services on request only.
Live-aboard boat:
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• Currently this type of accommodation is under-developed, with the Wakatobi Dive Resort as the only provider in the region. The resort offers its guests an alternative lodging option to entice them to stay longer, the Pelagian dive yacht. It has 4 cabins with en-suite that can sleep a maximum of 10 guests (2, 3, 3, 2 pax), on-board chef and team. The itinerary is typically 1 week however there are other alternatives in August and November.
5.3.1 FOOD & BEVERAGE • In general, hotels and resorts in Wakatobi have a restaurant. The Wakatobi Dive Resort and the Patuno Resort offer a-la-carte and buffet options, while the Hoga Dive Resort and the Hoga Island Resort provide very limited food options.
• Due to expensive operation costs and a small room inventory, most hotels/resorts do not offer a second dining option.
• Due to a lack of quality suppliers in the region, the restaurants’ menus are simple and relatively limited. The restaurants mainly offer traditional Indonesian dishes. Aside from a few locally-sourced goods, such as fish, much of the resorts’ food, which for the most part consists of western food that is unavailable locally, is shipped directly from Bali/Makassar.
• Given the lack of food options together with the inaccessibility between the islands, most of the guests rarely venture outside of the resort’s boundaries and tend to dine most of the time at the resort, particularly for breakfast and dinner.
• Most of the non-star-rated hotels in Wakatobi feature a restaurant.
• Home-stays and some non-star rated hotels only provide breakfast, while the other meals of the day are offered on request.
5.3.2 MEETING SPACE • It is common for leisure-oriented resorts to offer limited or no meeting space given the small scale of the resorts.
• In any case, there is limited demand for conference space in remote locations.
• Only the Patuno in Wangi-Wangi offers some meeting rooms as the hotel serves some government business visitors.
5.3.3 OTHER FACILITIES • Most of the lodging establishments in Wakatobi offer very basic facilities. Spas, swimming pools, or gyms are usually not provided.
• Water sports (diving, snorkeling) are offered by most of the resorts.
• The high-end Wakatobi Dive Resort features other facilities including: a spa, souvenir shop, library/media room, kids’ club, etc.
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• At the Operation Wallacea Base, there are also dry and wet facilities, a lecture theater, and a medical clinic.
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6. SMES: SUPPORTING TOURISM INFRASTRUCTURE (AMENITIES)
There is very little supporting infrastructure for tourism in Wakatobi as highlighted in the BPS statistics presented below.
6.1 INDEPENDENT FOOD & BEVERAGE Figure 13 below displays the F&B outlets available in Wakatobi in 2014 and 2015.
FIGURE 13: F&B OUTLETS IN WAKATOBI
Source: BPS
• Food options are limited and price is relatively low in Wakatobi.
• The main F&B providers in Wakatobi are food stalls offering traditional Indonesian dishes. The number of food stalls increased by 31% in 2015 over the previous year. The average cost for a light meal in these food stalls or street vendors is around IDR 15,000–25,000 per person.
• There are a limited number of restaurants and cafés in the region. They are all small in scale with an average seat capacity of 10–20 seats. Most of them are owned and operated by local communities with the average meal costing around IDR 75,000 to IDR 100,000.
• There is no western food offering in Wakatobi except at the Wakatobi Dive Resort, which is exclusively for its guests.
• Most of the hotels and restaurants buy their supplies at the local market. The Wakatobi Dive Resort imports food supplies from Bali for its western dishes.
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6.2 TOUR OPERATORS There are no leading independent tour operators in Wakatobi, with the Wakatobi Dive Resort and Operation Wallacea servicing the market; their details are found in Figure 14.
FIGURE 14: DETAILS OF LEADING TOUR OPERATORS IN WAKATOBI Dive eco-tourism: Wakatobi Research Eco-tourism: Dive Resort, Tomia Island Operation Wallacea, Hoga Island
Ownership Swiss-owned company UK-owned company Year established 1995 1996 Operating seasons 10 months (March – December) 3 months (July – September) Clientele and Origin Experienced Divers/ photographers, University students, almost all from UK & predominantly from USA and Europe Ireland, specializing in marine biology / geography Beside the two market leaders, there are a number of local travel agents in Wakatobi. Products offered include:
• Packaged tours for guests that include their accommodation, transportation and activities.
• Luxurious dive eco-tourism by the Wakatobi Dive Resort, research-based eco-tourism by the Operation Wallacea.
• Island hopping tours and cultural excursions.
6.3 TOURISM SERVICE PROVIDERS • The local travel agencies have around 2 to 3 guides each and they get extra help from freelance guides during peak seasons. Most guides are Bahasa-speaking only with low to medium English proficiency.
• Operation Wallacea has 3 to 4 guides/scientists who are primarily foreign nationals.
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7. INVESTMENT ANALYSIS
7.1 DIRECT INVESTMENT
There is no available data regarding direct investment for Wakatobi from either the central BKPM or the regional Dinas PM PTSP (Penanaman Modal – Pelayanan Terpadu Satu Pintu).
Currently, investment in Wakatobi remains small- to medium-scale, and is mostly in the form of accommodation, restaurants, and transportation (land and water). Due to the lack of transparency in the legal framework governing investment, both domestic and foreign investors continue to be cautious in investing in the region. The largest single tourism investment that we are aware of in Wakatobi is the Wakatobi Dive Resort, which generates a sustainable income and provides support to local communities.
The owner of the Wakatobi Dive Resort oversees the Collaborative Reef Conservation Program, which maintains a symbiotic partnership with neighboring communities in the immediate vicinity and outlying areas in order to conserve the natural amenities in the area. The resort provides the local communities with economic incentives, such as employment, electricity, water supply, and training programs to maintain the agreement.
A similar strategy was adopted by the Hoga Dive Resort, where they also supply the local community with fresh water and electricity in return for the protection of the local ecosystem. However, the Hoga Dive Resort’s scale of investment is much smaller compared to the Wakatobi Dive Resort.
7.2 KEY PLAYERS / INVESTORS • WWF and The Nature Conservancy (TNC): From 2002 to 2012, the WWF and TNC spent roughly USD 4 million in support of the Wakatobi National Park (WNP). Over the same span, the park's annual operating budget has increased from USD 300,000 in 2002 to USD1 million in 2012. The expenditures include:
• Funding biological assessments and monitoring to underpin the design of management and zoning plans for WNP such as: identifying the sources of threats to the biodiversity and marine resources in the area, and discussing management challenges with park authorities.
• Providing vessels, training, and financing to support the evaluation of the park’s management (with the goal of redesigning the park’s management and revising its zoning scheme).
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• Supporting outreach to and environmental education of the local community to help build a constituency of stakeholders. Each of the main islands has community forum groups where representatives from villages meet, discuss, and work together to deal with their common problems. The outreach program provides information and arranges public discussions and workshops for these local communities to raise awareness regarding the importance of preserving the marine resources. These stakeholders assist with certain management responsibilities, including monitoring, and compliance with the WNP management and zoning.
• The investment has shown some important results, including
• 1) reducing illegal fishing;
• 2) promoting WNP as a marine tourism destination and "brand"; and
• 3) fostering a sense of ownership among Wakatobi residents.
• Wakatobi Dive Resort: is the first and only luxury resort in Wakatobi, opened in 1995. Years before any international recognition, or the founding of the WNP, the founders of Wakatobi Dive Resort realized the unique beauty of this destination and the importance of protecting this natural asset.
• Operation Wallacea: is a UK-based research volunteer tourism operator that operates biological and conservation management research programs. Operation Wallacea is based on Hoga Island and has been operating a dive and marine research center since 1996. Operation Wallacea organizes and operates volunteering research trips for university students conducting their undergraduate and masters-level field study projects. Every year Operation Wallacea sends up to 300 students, mostly from the UK, to Hoga to conduct research and to experience life abroad, for which the students pay a fee. These projects are largely designed to meet longer-term conservation objectives in the marine national park. Their site on Hoga Island is in use several months a year, mostly around June, July, and August. During the rest of the year, there are only local watch- keepers on-site.
• Patuno Resort: Owned by three local investors, one of which is the family of the head of Kabupaten Wakatobi.
• Locals on the inhabited islands invest and operate home-stays, restaurants/food stalls, transport options, travel agencies, and water activities.
• The local government operates boats and ferries for trips between islands and from Bau- Bau/Kendari to Wakatobi.
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7.3 INVESTMENT SENTIMENT: DOMESTIC & FOREIGN INVESTORS 7.3.1 FOREIGN INVESTORS INTERVIEWED2 Only one of the foreign investors canvassed had any comment on Wakatobi, which was that it was “too far, too small.”
7.3.2 DOMESTIC INVESTORS INTERVIEWED3 The domestic investors were also largely disinterested in Wakatobi, with only 1 of 9 indicating an interest in future investment opportunities there. Comments were as follows:
• Diving is good;
• Accessibility is difficult and the destination is not a focus for the next 5 to 10 years; and
• Raja Ampat is a better option.
7.3.3 SENTIMENT RELATED TO SPECIAL ECONOMIC ZONE (SEZ) INVESTMENTS It is noted that the questions on SEZ investments were not made in relation to Wakatobi specifically but to the 4 tourism SEZs across Indonesia.
In general, it is felt that SEZs are beneficial for encouraging investment; however, further clarity on benefits are required. Moreover, the investment fundamentals in the destination are more important than the benefits provided by the SEZ status (e.g. is there sufficient infrastructure and is there sufficient demand?)
Comments on Fiscal Benefits Regime:
• All things equal, fiscal benefits do encourage investment.
• Few people are likely to invest IDR 1 trillion (USD 75 million) in tourism in any of the priority destinations. Hence, the investment bar above which benefits are enjoyed must be reset lower for tourism investments.
• Tax incentives/allowances (both income tax allowance and value-added tax) for investment in the SEZs must stay ahead.
• Hotels do not make money for many years, so short-term tax holidays are of little value.
• The tax deductions and period for tax deductions must be negotiated with the government. The benefits are too unclear to make an investment decision based upon the fiscal benefits regime; transparency is very important.
2 Investment sentiment gleaned from interviews with 25 potential and existing foreign investors from Australia, China, Japan, Malaysia, and Singapore. The questions were aimed to better understanding their thoughts on pros and cons of SEZs, the tourism investment climate in Indonesia, the future of tourism investment and possible investment opportunities in Lombok. 3 Investment sentiment gleaned from interviews with 9 existing Indonesian tourism investors. The investors chosen had interests in various tourism assets including hotels, restaurants, ground transportation and travel agencies. The questions were aimed at gathering their thoughts on the pros and cons of SEZs, the tourism investment climate in Indonesia, the future of tourism investment and possible investment in Lombok.
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• The majority of construction materials (80%, according to some estimates) are Indonesian so import duty reductions on construction materials are immaterial.
Comments on Non-Fiscal Benefits Regime:
• The non-fiscal employment visa benefits are immaterial. The majority of staff is local.
• The visa on arrival program is beneficial and should help to encourage increased foreign visitor arrivals.
7.3.4 WHERE IS THE DESTINATION ON THE INVESTMENT CYCLE? The destination is still in the infancy stage of its investment cycle. There are several reasons that investment in WNP has yet to take hold.
• Limited number of tourists and slow growth prospects: Although tourist arrivals have seen significant growth in the past 10 years, they are still relatively small. The destination is difficult and expensive to access.
• Lack of awareness of destination: Many foreign investors have limited or no knowledge of the destination. There is limited information regarding the investment potential and together with the lack of government investment support or incentives there is reluctance to invest in the destination.
• Lack of supporting facilities and infrastructure: Currently many businesses face high overhead expenses due to poor electricity/power plan, poor water facilities (no water desalination on certain islands), high food and beverage costs, and high telecommunication costs.
• Lack of transparency in the system and gaps and conflicts of interests between the national park authority and local government of Wakatobi. This is especially related to the regulation of both organizations applying a retribution fee for visitors and tourism businesses, including as an entrance fee, tourism activity fee, and business permit fee simultaneously.
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8. SKILLS ASSESSMENT
It has been found that there is a lack of willingness amongst locals to enter the tourism industry. This lack of community initiative could be explained by: (1) a lack of awareness among villagers about tourism, tourism opportunities and the economic benefits associated with tourism; and (2) due to distance between villages and islands, individuals not immediately involved in the tourism industry feel as though tourism benefits are not being felt within their communities.
8.1 WHAT SKILLS EXIST? • Operation Wallacea and Wakatobi Dive Resort rely heavily on non-Indonesian staff as dive masters, dive instructors, supervisors, and managers. These establishments have also provided employment and training for local people over many years so there is a growing number of local people taking up senior positions. That said, the property is small so staff numbers are low.
• Local staff are mainly rank and file.
8.2 WHAT ARE THE SKILLS GAPS? • There is a general lack of the skills needed to service the tourism sector within WNP.
• It is very difficult to find local workers that have computer or English skills, so they often need to be hired from outside of Wakatobi.
• Finding skilled staff from outside of Wakatobi is also challenging, as they are usually not interested in working and living in a remote rural area with lack of supporting facilities.
• Most home-stays, local tour operators, and restaurants are SMEs and thus do not have proficiency in English, professional management skills, or basic understanding of eco- tourism.
8.3 TRAINING SCHOOLS • There are currently 2 schools in Wakatobi providing training for the tourism industry, including SMKN 1 Wangi-Wangi and SMK Kaledupa. However, teachers from these schools have limited competency in delivering tourism education since they do not have much experience in the tourism industry.
• Training local people is time-consuming, particularly when it comes to English language skills.
• A training and internship program has been set up for teachers from SMKN 1 Wangi- Wangi. The head of the education office in Wakatobi is supporting the program by allocating budget for about 4 SMK teachers to join the internship program at hotels in Bali.
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• A joint operational plan has been signed between SMKN1 Wangi-Wangi and SMKN 8 Makassar with the focus on improving efficiency in school management.
• SMK1 Wangi-Wangi has recently upgraded its library with 100 more books and basic equipment.
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DESTINATION SWOT & VISION
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9. DESTINATION SWOT
9.1 STRENGTHS • Located within the Coral Triangle, Wakatobi has rich natural resources and marine biodiversity, providing an excellent environment for diving and eco-tourism. Protective zones to preserve maritime and wildlife have been established with support from WWF and other NGOs.
• The islands are entirely within a National Park, which is a big marketing advantage over other similar destinations.
• The destination is remote enough to offer a very secluded retreat experience. There is no mass tourism and the nature is unspoiled and well-preserved.
• Very strong social media presence in Indonesia is driving increased tourism to WNP.
9.2 WEAKNESSES • Limited access and transportation in Wakatobi National Park (WNP), including limited aircraft and sea transportation, limited boat schedules to move between islands, and limited public transportation on the islands.
• Limited number of commercial hotels/resorts, with most accommodations being non- star-rated or homestays with limited supporting facilities.
• Limited quality suppliers for F&B and guest supplies, with the majority of the supplies required to be brought in from Bali or Makassar.
• Lack of decompression chambers/medical centers to provide emergency care. The closest decompression facilities are in Makassar, which is a barrier to entry for a number of dive tour operators who require such facilities to ensure certain safety standards are met.
• Limited public facilities and poor infrastructure, including electricity, clean water, and sewage management.
• Difficulty finding local workers that have computer or English skills; they often need to hired from outside of Wakatobi.
• Local community has very limited experience and willingness to enter the industry and to develop eco-tourism.
9.3 OPPORTUNITIES • Many research programs (international and national) have been established in Wakatobi; this will continue to promote the destination through publications and word-of-mouth.
• There is a growing interest and awareness of the destination, which is tentatively listed for nomination as a UNESCO World Heritage Site.
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• Opportunities to combine maritime and land-based tourism have not yet been exploited.
• Local government is starting to pay more attention to promoting the destination. Several marketing activities are being planned, including: destination website and social media, development of mobile apps, etc.
9.4 THREATS • There is a lack of rules and regulation that can ensure compliance with international standards of construction, whilst simultaneously respecting indigenous architectural forms and use of materials.
• The unrestricted growth of new-build local houses may also damage the prospects of developing Wakatobi into a high value eco-tourism market.
• Lack of transparency, gaps, and conflicts of interests between the National Park Authority, the Wakatobi Tourism Bureau, and the local government of Wakatobi.
• Solid / plastic waste is one of the most visible environmental threats to Wakatobi, with the amount of waste generated exceeding the capacity of available landfills.
• The destruction of the islands’ mangrove forests by local community members seeking firewood and construction materials will threaten nearby coral reefs and the marine life. Rising temperatures may also threaten coral reefs and cause bleaching and death.
• Competition from other marine activity-based destinations is growing.
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10. DESTINATION VISION STATEMENT
10.1 TARGET MARKET Leisure represents the main target market for future tourism demand and the main target segment will be divers, with 2 key profiles:
• Foreign backpackers and domestic visitors with lower purchasing power; and • Affluent tourists from either nearby or long-haul markets with eco-sensitivity, who will come to Wakatobi for the specific purpose of diving.
Divers will come for the uniqueness of the diving spots. They will choose Wakatobi because of the tranquility, relaxation, and pristine quality of the nature.
An environmental carrying capacity study should be undertaken so that a clearer understanding is formed of the environment’s vulnerability to tourism development. In the meantime, to limit the environmental pressure on the destination, the number of tourists on the islands should be controlled by restricting the volume of category 1 tourists and focusing on high-end clientele with the goal of increasing daily spend and average length of stay—i.e. quality over quantity.
As the destination is remote, and coupled with accessibility constraints and the need for divers to decompress at least 24 hours after their final dive, visitors are likely to stay around one week. In that sense, for the short-haul regional and domestic visitors, Wakatobi is likely to work as a standalone destination whereas for long haul visitors it is more likely to be part of a circuit tour of Indonesia.
10.2 EXISTING RESORT PIPELINE There are currently 2 sites in Wangi-Wangi (one is near Patuno resort, the other is close to the airport) rumored to be resort developments. However, at the time of the report, no construction had commenced.
The Hoga Dive resort is adding another 6 suites in response to the high demand for this room type during the peak season.
10.3 RECOMMENDED PRODUCTS AND ACCOMMODATION TO BE DEVELOPED
The key focus for WNP should be sustainable tourism. There should not be large-scale development in Wakatobi in order to avoid mass-tourism that may destroy marine life and the unspoiled nature of the region.
The products to be developed are small-scale integrated resorts with diving centers, offering a seamless package experience to visitors. All levels of diving skills should be offered with coral reef, wall, and wreck diving.
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A least one international standard diving center should be developed that offers international recognized courses (PADI).
While demand for live-aboards is still much lower compared to the traditional accommodation, there is opportunity for this type of accommodation to capture both category 1 (lower end, open deck, similar to Le Pirate Explorer operating out of Labuan Bajo) and 2 demand (similar to the Alila Purnama and Amandira). They are gaining in popularity among divers, particularly since more remote areas can be accessed.
Tourism infrastructure development and services should be concentrated on Wangi-Wangi Island, which should serve as the service hub with entry-level resorts for backpackers.
Products recommended, many of which can be developed by local SMEs:
• low key count lodgings, blending with nature and a maximum of 2 stories to limit impact; • Good quality restaurants and other food and beverage options should be encouraged on Wangi-Wangi; • Improvement of home-stay facilities (private bathroom, amenities, air-conditioned guestrooms, etc.) and more food options to encourage category 1 demand; • Resorts to improve their facilities by equipping all guestrooms with air-conditioning and hot water to encourage category 2 demand; • Introduction of some midscale internationally-branded hotels to attract more international guests in category 1; and • Secondary products can be island hopping and whale watching.
Finally, waste management should be regarded as a crucial component of tourism development in Wakatobi in order to ensure the sustainable preservation of the area’s natural tourism resources.
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MARKET DEMAND FORECASTS
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11. FUTURE MARKET DEMAND ANALYSIS
This section provides high level projections for the scale, origin, and characteristics of future visitor demand to Wakatobi, based on a qualitative and quantitative approach.
11.1.1 QUANTITATIVE APPROACH It is noted that Wakatobi will be competing with other popular diving destinations in the Coral Triangle. The National Park (WNP) and the fact that several research programs have been established in Wakatobi give the destination legitimacy as a potential world-class diving destination and contribute to promoting the destination nationally and internationally among the niche diver market.
International visitors
The recommendations of positioning presented above lead to consider that the tourist development of Wakatobi will be limited in volume and should target international visitors coming mainly for the purpose of diving.
This segment represents 6,000 arrivals in 2015, mainly from the UK and the USA, and has seen very significant growth with the opening of the air links (CAGR + 25% between 2010 and 2015)). The accommodation offer followed the same trend.
Our forecast of international tourism demand assumes annual growth higher than that of overall international visitors to Indonesia, but which is gradually decreasing: 9% between 2016 and 2021, 7% between 2022 and 2026 , and 4% between 2027 and 2041.
On this basis, Wakatobi would receive 29,500 international visitors in 2041.
Domestic visitors
Domestic visitors represent the majority of arrivals today (11,400 visitors in 2015), but the high-end positioning of the destination would not be consistent with rapid domestic tourism growth in the future. Therefore, we have assumed that domestic visitor growth will remain on par with projected national-level trends.
FIGURE 15: FORECAST OF VISITORS TO WAKATOBI 2015-2041
Number of arrivals CAGR in % 2016- 2022- 2027- 2015 2021 2026 2041 2021 2026 2041 Domestic visitors 11,401 12,700 13,800 16,900 1.8% 1.6% 1.3% Foreign visitors 6,626 11,700 16,400 29,500 10.0% 7.0% 4.0% Total visitors 18,027 24,400 30,200 46,400 5.2% 4.4% 2.9%
Source: Horwath HTL
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Impact on Guest Nights and Expenditure
Figure 17 presents the projected number of guest nights in accommodations and overall expenditure in Wakatobi through 2041:
• Wakatobi should host 274,100 guest nights in 2041, which is 5 the number of guest nights in 2015, and the share of foreign guest nights should become more important (75%) than in 2015 (42%).4
• The average spending should also be much higher than present levels (20% higher than the leisure market in 2015)
• Total visitors should generate an estimated total revenue of USD 36.8 million in 2041 (13.3 million in 2021 and 21.1 million in 2026), which is 9 times the current expenditures of domestic and foreign visitors. 5 Foreign visitors will account for 94% of total expenditures.
FIGURE 16: FORECAST OF GUEST NIGHTS AND EXPENDITURE IN WAKATOBI 2015-2041 2016- 2022- 2027- 2015 2021 2026 2041 2021 2026 2041 Guest nights Domestic guest nights 31,900 44,500 55,200 67,600 5.7% 4.4% 1.4% Foreign guest nights 23,200 70,200 114,800 206,500 20.3% 10.3% 4.0% Total guest nights 55,100 114,700 170,000 274,100 13.0% 8.2% 3.2%
Expenditure (in Thousands USD) Domestic expenditure 920 1,540 1,910 2,340 9.0% 4.4% 1.4% Foreign expenditure 3,230 11,720 19,160 34,460 24.0% 10.3% 4.0% Total expenditure 4,150 13,260 21,070 36,800 21.4% 9.7% 3.8%
4 On the base of Average length of stay of 2.8 nights for domestic visitors in 2015, up to 4 nights in 2026, and 3.5 nights for foreign visits in 2015, up to 6 nights in 2021 and 7 nights in 2041. 5 Average expenditure per day of USD 29 for domestic visitors in 2015, up to USD 35 in 2021, and USD 139 for foreign visitors, up to USD 167 in 2021
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INVESTMENT NEEDS
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12. AMENITIES: KEY RECOMMENDATIONS
12.1 FORECAST OF FUTURE ACCOMMODATION NEEDS The current registered number of hotel rooms is 417, with only 1 star-rated hotel with 60 rooms. We have assumed that the increase of visitor arrivals is entirely dependent on the development of new accommodations and the subsequent increase in the frequency of air connections.
Based on the following assumptions
• a density rate (number of clients per occupied room) of 2.0; • a occupancy rate of 50% for the new rooms created;
The 219,100 additional guest nights between 2016 and 2041 will generate a need for 601 new rooms, as shown on figure 17, compared with the 417 existing rooms in rooms in 2015 (60 rooms in hotels and 357 rooms in guesthouses).
FIGURE 17: FORECAST OF ADDITIONAL ROOMS IN WAKATOBI 2015-2041
2016 to 2021 to 2026 to Total 2016 2021 2026 2041 to 2041 Additionnal guest nigths per year 59 600 55 300 104 100 219 000 Density rate (clients per occupied room) 2,0 2,0 2,0 2,0 Additional room nights required per year 29 800 27 700 52 100 109 600 Occupancy rate 50% 50% 50% 50% Additional room nights available required per year 59 600 55 400 104 200 219 200 Additional rooms required 163 152 285 601
Source: Horwath HTL
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13. STAFF REQUIRED & SKILLS NEEDED
The above demand and supply forecasts will have a net positive effect on employment in Wakatobi. Additional services and potential employment growth will occur in all tourism sectors.
The following summarizes the skills gaps identified following discussions with Wakatobi hotel managers:
• Currently, there is a wide gap between training content and practices in schools and the demands of the hospitality industry. The ability of school management to provide appropriate facilities is poor. Therefore, it is important that the vocational schools offer relevant curricula with updated teaching materials and relevant internships to develop essential skills: service, culinary, and language skills in line with the labor market needs.
• SMKs are also required to offer facilities to support practical tourism programs with competent teachers to produce qualified graduates.
• Diving and first aid training is crucial to enhance capacity of local divers in the region.
• Basic service excellence training and English courses are required for everyone engaging in tourist activities in the region (i.e. non-star hotel owners, airport taxi drivers, boat captains, etc.).
• To maintain the beautiful nature and ensure sustainable tourism development of the National Park, environmental conservation training should be mandatory for all the stakeholders of the tourism sectors.
13.1 ACCOMMODATION STAFF REQUIRED
Figure 15 above highlights the number of arrivals plus additional rooms forecast for Wakatobi.
Based on these additional rooms, Figure 18 provides an estimate of the number of staff required at the entry, supervisor, and management levels by assumed hotel positioning. The hotel positioning is split into 5 categories based on actual achieved daily rates in 2015 across the country, not specific to Wakatobi, where insufficient information is available from which to draw staffing ratio conclusions.
Additional assumptions:
• % Total Rooms: the percentage of total rooms per rate category. For example, if the figure is 0.42 this means that 42% of total rooms are within this rate category. The estimates are based on the data collected in the Horwath HTL Indonesia Hotel Industry Survey of Operations 2016;
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• Staff / Room Ratio: staffing levels or full-time equivalents (FTE) per room. For example, if the figure is 0.53 this means, that 0.53 FTE are required per room. The estimates are based on the data collected in the Horwath HTL Indonesia Hotel Industry Survey of Operations 2016; and
• The staffing level split for hotels, or proportion of total staff within each level—entry, supervisor, and management—, is based on estimates from market research:
• Under USD 40 (achieved average daily rate, 2015) is 10% management and 90% entry level. It is assumed that this category includes homestays, smaller properties, family owned, and less-professionally managed properties. These are assumed to have a slightly different staff split between management (who are often owner relatives) and entry level, with no supervisor level;
• Over USD 40 (achieved average daily rate, 2015) is 5% management, 10% supervisor, and 85% entry level. These categories are assumed to typically include a higher proportion of star-rated hotels, greater professionalization, larger properties, and are assumed to include all 3 levels of staffing.
FIGURE 18: ESTIMATED NUMBER OF STAFF BY HOTEL CATEGORY USD 40 - USD 80 - USD 120 - < USD 40 > USD 240 Total 80 120 240 Staff / Room Ratio 0.53 0.83 1.15 1.56 2.70 % Total Rooms 0.42 0.31 0.11 0.13 0.03 Additional Rooms: Existing 417 2021 69 51 18 21 5 163 2026 64 47 17 19 4 152 2041 121 89 32 36 8 285 Total 1,000 Additional Staff: 2021 37 42 21 32 12 144 Entry Level 33 36 18 27 10 124 Supervisor - 4 2 3 1 11 Management 4 2 1 2 1 9 2026 34 39 19 30 11 133 Entry Level 31 33 16 26 9 115 Supervisor - 4 2 3 1 10 Management 3 2 1 2 1 9 2041 64 74 37 57 22 254 Entry Level 58 63 31 48 19 219 Supervisor - 7 4 6 2 19 Management 6 4 2 3 1 16
In other words, by 2021 it is forecast that an additional 144 staff will be required to meet the needs of the additional rooms projected. Between 2021 and 2026 a further 133 staff will be required, and between 2026 and 2041 a further 254 will be required.
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13.2 ADDITIONAL WAKATOBI DESTINATION STAFF REQUIRED As indicated in Figure 16 above, between 2015 and 2041 the estimated number of visitors in commercial accommodation is expected to increase from 18,000 to just over 46,000.
Other supporting sectors that will benefit directly, should tourism arrivals projections and tourism developments continue to grow and meet expectations, include:
• Food & beverage: in support of tourism.
• Retail: as an extension to tourism, souvenirs if produced and marketed correctly could also employ a large number of local people.
• Daily diving, fishing and general tourism guides.
• Transport service staff will be required to operate taxis, buses, boats etc.
The volume of current staff in such positions is unknown, so we cannot gauge the potential for increase; however it is reasonable to expect staff increases to be in the range of 3 times the current levels given the forecasted threefold increase in arrivals.
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14. TRANSPORT INFRASTRUCTURE BASELINE & NEEDS
BASELINE
14.1 ROAD TRANSPORT 14.1.1 EXISTING CONDITION Road Network
Road infrastructure development in Wakatobi provides basic road services for residents, and several road sections are still under maintenance and upgradation. In 2015, the total length of road in Wakatobi was 419 km, with only 45.8% paved roads. In general, the road class in Wakatobi is categorized as type III C (local road and environment road that can be passed by vehicles including cargo with a width not exceeding 2.1 m, the length does not exceed 9.0 m, and the axle load should not be more than 8 tons). Most of the roads in Wakatobi is unpaved (gravel and dirt) accounting for 54.2%. Figure 19 below shows the development and condition of the road network in Wakatobi from 2011 to 2015.
FIGURE 19: EXISTING ROAD CONDITION IN KABUPATEN WAKATOBI
2011 2012 2013 2014 2015 Road Surface (km) Asphalt 151.03 187.49 188.38 212.67 192.07 Gravel 102.69 87.35 127.35 93.31 60.75 Soil 117.80 107.36 53.07 25.37 22.79 Unknown 4.25 15.08 88.68 143.40 Total 375.77 382.21 383.88 420.03 419.01 Road Condition (km) Good (IRI <= 4) 128.76 140.18 147.97 135.34 103.24 Sufficient (4
Most visitors to Wakatobi arrive at Wangi-Wangi Island. The provincial road connecting the existing port and airport play important role as a tourism corridor in Wangi-Wangi. This provincial road is about 6.4 m wide and is generally in good condition (see Figure 20 below). The Tindoi Forest tourism attraction is 8 km from Wanci (15 minutes drive), and 2 kilometers from Posalu village.
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FIGURE 20: EXISTING ROAD CONDITION AT WANGI-WANGI
Source: Site survey, Surbana Jurong
Other tourism attractions such as Sombano, Bajo Village (Sampela), Wakatobi National Park and Wakatobi Dive Resort are mostly accessed by the Kabupaten roads. The Kabupaten road to tourism attraction is generally good, but other road conditions would require upgradation or pavement maintenance.
As the tourism attractions are spread over the Wakatobi region. The key roads providing accessibility to the tourism attractions in the main Wakatobi islands are shown in Figures 21 to 23 and summarized in Figure 24.
FIGURE 21: KEY ROADS TO TOURISM ATTRACTIONS IN WANGI-WANGI ISLAND
Tindoi Fores t
Source: Site survey, Surbana Jurong
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FIGURE 22: KEY ROADS TO TOURISM ATTRACTIONS, KALEDUPA ISLAND
Sombano Lake
Bajo Village
National Park
Source: Site survey, Surbana Jurong
FIGURE 23: KEY ROADS TO TOURISM ATTRACTIONS, TOMIA ISLAND
Wakatobi Dive Resort
Source: Site survey, Surbana Jurong
FIGURE 24: KEY ROADS CONNECTING TOURISM ATTRACTIONS
Length No Road (km) CW Type IRI Wangi-Wangi Provincial road (ring-road) 39.34 6.4 Asphalt <= 4 536 Jalan Lingk. Longa 4.02 3.5 Gravel 8 Page 45 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 Source: Department of Public Works Road connectivity from ports and the airport to the tourism attractions is mostly paved. Within the tourist destination area, on average roads are in good (IRI ≤ 4) or sufficient condition (4 Number of Registered Vehicles The number of vehicles registered in Wakatobi was 3,174 in 2015. 84.08% of the of vehicles were motorcycles. This is because they are an affordable and convenient means of transport for the residents. Although the traffic volume is relatively low at the moment, the number of vehicles will tend to grow with increasing tourists and the economic development spurred by tourism. This will have an impact on the general traffic movement in the tourism area. Hence, it is necessary to manage two-wheelers in tourism areas. Figure 25 shows the distribution of vehicles registered by type in 2015. FIGURE 25: NUMBER OF REGISTERED VEHICLES IN 2015, WAKATOBI No Vehicles Total Average per year Average growth (%) 1 Car 127 10 8% 2 Bus 139 12 9% 3 Lorry 236 9 4% 5 Motor Cycle 2669 103 4% Total 3174 134 Source: Dishubkominfo, Kabupaten Wakatobi 2016 14.1.2 EXISTING ASSESSMENT OF ROAD INFRASTRUCTURE Current road capacity is mostly adequate for the low current volume. The road connecting the ports and airport to tourist destinations is in relatively good and sufficient condition for most of its length (52 km out of 57 km). However, the road width within the core tourism area needs to be upgraded to 6m to provide more space for two vehicles running in opposite directions. The overall quality of roads in Wakatobi is low with 60.3% of roads are either bad or very bad. The low-quality roads will affect the movement of tourists within the destination. Hence, the condition of roads in tourism development area needs to be improved to good condition targeting for IRI < 4. Page 46 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 14.2 AIR TRANSPORT 14.2.1 EXISTING CONDITION Wakatobi is accessed by 2 local airports, Matahora Airport on Wangi-Wangi and Maranggo Airstrip on Tomia. While Matohara airport is managed by Ministry of Transport, Maranggo Airstrip is owned and managed privately by Wakatobi Dive Resort and exclusively for their guests. The annual numbers of passengers at Matahora Airport increased at a compound annual growth rate (CAGR) of 12.3% between 2012 and 2015. The total number of air passengers was 35,643 in 2015. Wings Air is the only airlines operator providing flight service to Wakatobi from Makassar, operating once a day with a transit at Kendari. The limited flight schedule has affected the area’s accessibility for visitors. Figure 26 shows Matahora Airport. FIGURE 26: MATAHORA AIRPORT Source: ICAO Aerodrome ArcGIS Database The tables below give an overview of air connectivity to Wakatobi. Figure 27 shows the growth in air passenger arrivals at Matahora Airport from 2012 to 2015. Figure 28 gives a snapshot of the facilities available at Matahora. FIGURE 27: MATAHORA AIRPORT COMMERCIAL AIR TRAFFIC 2011 2012 2013 2014 2015 Aircraft Arrival 56 56 211 351 371 Departure 56 56 211 351 371 Total 112 112 422 702 742 Passenger Arrival 1,599 2,047 11,150 17,015 19,100 Departure 1,555 2,326 11,867 13,786 20,081 Total 3,154 4,373 23,017 30,801 39,181 Source: UPBU Matahora Airport Page 47 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 28: MATAHORA AIRPORT FACILITIES Facilities Remark Runway (Lm X Wm) 2000m x 30m Taxiway 107m x 18m Loading Apron Requirements 103m x 73m, 2 stand (1 ATR-72, 1 B-737) Terminal building 1,524m2, 120 pax in peak hour Source: UPBU Matahora Airport Matahora Airport plays an important role for tourism development in Wakatobi as most visitors will continue to arrive at Wangi-Wangi as the gateway into Wakatobi. 14.2.2 EXISTING ASSESSMENT OF AIRPORT INFRASTRUCTURE Given the existing air passenger demand of 39,181 passengers per year and 1 aircraft movement in peak hours, the adequacy of existing airport infrastructure at Matahora Airport is summarized in Figure 29 below: FIGURE 29: EXISTING GAPS IN AIRPORT FACILITIES AT MATAHORA AIRPORT Facilities Leo Wattimena Assessment Runway (Lm X Wm) 2000m x 30m Adequate to meet existing aircraft Capacity: 10 movements per hour movement Taxiway (Parallel) 107m x 18m Adequate to meet existing aircraft No Parallel Taxiway movement Loading Apron Capacity : 2 stand Adequate to meet existing aircraft Requirements movement Terminal Building Capacity 136,000 passengers Adequate to meet existing air passenger demand Source: UPBU Matahora Airport, Surbana Jurong Analysis • Existing airport annual capacity is 136,000 passengers. The existing passenger demand was around 39,000 in 2015 indicating the airport has adequate capacity. • The estimated capacity of existing single runway is approximately 10 movements for Matahora Airport because no Instrument Flight Rule facilities are available. This is more than sufficient for now because current usage is only one aircraft per day. Page 48 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 14.2.3 FUTURE PLANS FOR AIRPORT INFRASTRUCTURE The government is planning to upgrade the runway and terminal building at Matahora Airport to accommodate larger planes. According to the Airport Master Plan (ultimate phase) by the Directorate General Civil Aviation, the following projects are proposed. • Construction of new terminal facilities, including an apron (with 2 spots for B737 and 1 spot for propeller-driven aircraft), car parking, and roads. • Construction of a new terminal building of 4,240m2 with a passenger handling capacity of 300 passengers during peak hours. The total capacity of the new Terminal building is estimated to be about 340,000 annual passengers.6 • Runway upgradation to instrument non-precision approach • Runway widening to 2000m x 45m FIGURE 30: MATOHARA AIRPORT MASTER PLAN Source: Directorate General Civil Aviation The proposed project is expected to improve Matahora Airport’s capability to accommodate narrow body aircraft for medium-haul flights and increase terminal capacity. The safety level will be improved to some extent by the installation of an instrument landing system. The urgency of the need for this infrastructure improvement needs to be assessed subject to future demand, as there may not be enough aircraft movements, considering only 1 flight a day arrives at present. 6 The Federal Aviation Administration indicates that a gross terminal area space requirement is planned to be between 0.06 and 0.12 sq ft per annual passenger. Source: Planning and Design Guidelines for Airport Terminal Facilities, FAA Advisory Circular AC/150/5360-13, Washington, DC, April 1988 Page 49 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 14.3 WATER TRANSPORT 14.3.1 EXISTING CONDITION At present, there are two types of sea transport service in Wakatobi; 1) inter- kabupaten/provincial routes and 2) inter-island routes within Kabupaten Wakatobi. Wanci Port at Wangi-Wangi acts as a main gateway for regional connection between Wakatobi to other cities such as Kendari, Buton, and Bau-Bau. This port is important from the tourism perspective to facilitate domestic visitors from surrounding region; however, it is significant primarily for the region’s economic development. This port is managed and operated by the Ministry of Transport under the Unit Penyelenggara Pelabuhan Wanci. 4 main seaports which provide inter-island service within Kabupaten Wakatobi are Mola Port (Wanci), Kaledupa Port, Usuku Port (Tomia), and Binongko Port. The service is operated with a specific timetable but is often unreliable due to weather conditions or delayed departures due to operators waiting until the boat is full. Figure 31 and Figure 32 show the sea transport services in Wakatobi. FIGURE 31: SEA TRANSPORT ROUTES IN WAKATOBI Source: Dishubkominfo Kabupaten Wakatobi, 2016 Page 50 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 32: SCHEDULED SERVICES OF SEA TRANSPORT WITHIN WAKATOBI No Route Mode Capacity Travel Time Frequency 1 Mola-Kaledupa Speed boat 50 1 hr 1/day Wooden boat 40 2 hrs 1/day 2 Kaledupa - Mola Speed boat 50 1 hr 1/day Wooden boat 40 2 hrs 1/day 3 Mola – Tomia Speed boat 50 3 hrs 1/day Wooden boat 40 4 hrs 1/day 4 Tomia - Mola Speed boat 50 3 hrs 1/day Wooden boat 40 4 hrs 1/day 5 Kaledupa - Mola Speed boat 50 1 hr 1/day Wooden boat 40 2 hrs 1/day 6 Tomia - Kaledupa Speed boat 50 1 hr 1/day Wooden boat 40 2 hrs 1/day 6 Tomia - Binongko Wooden boat 30 2 hrs 1/day 7 Mola- Binongko Wooden boat 30 5 hrs 3/week Source: Primary Survey Water transport activities are largely concentrated at Mola and Kaledupa Ports, as most visitors who arrive by sea reach the islands via these ports. The average sea passenger movements per annum were approximately 49,000 disembarking and approximately 45,000 embarking over the last 3 years, as shown in Figure 33 below. Figure 34 shows the current conditions at Wanci Port on Wangi-Wangi. FIGURE 33: PASSENGER TRANSPORT AT WAKATOBI PORTS 2013 2014 2015 No Port / Kecamatan Dep Arr Dep Arr Dep Arr 1 Kaledupa 19,493 18,154 20,468 19,062 21,491 20,015 2 Kaledupa Selatan 13,320 12,487 13,968 13,111 14,666 13,767 3 Usuku/ Tomia Timur 8,588 8,009 9,017 8,049 9,468 8,451 4 Waha/ Tomia 3,731 2,905 3,918 3,050 4,114 3,203 5 Binongko 2,177 1,679 2,286 1,763 2,400 1,851 6 Mola/ Wangi - Wangi Selatan 43,234 47,309 45,035 49,657 47,287 52,139 Source: Dishubkominfo Kabupaten Wakatobi, 2016 Page 51 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 34: EXISTING CONDITION OF WANCI PORT (MOLA) Source: Site Survey 14.3.2 ASSESSMENT OF EXISTING PORT INFRASTRUCTURE Accommodations and attractions are mostly located in Wangi-Wangi, Kaledupa, and Tomia. The current frequency of arrivals and departures by sea is minimal, with one speed boat and wooden boat per day with a capacity of 90 seats commuting between Mola, Kaledupa, and Tomia. This low frequency is adequate at the moment, however, it may need to be improved subject to demand, especially between Mola and Kaledupa and Tomia. These three Islands have basic port facilities with jetties. Wanci Port condition seems to be very basic and would need improvements in terms of pedestrian friendly environment and organized parking area for vehicles. The jetties providing access to these three islands will need regular maintenance. TRANSPORT INFRASTRUCTURE INVESTMENT NEEDS 14.4 FUTURE MODE OF TRAVEL 14.4.1 MARKET SHARE OF VISITORS According to the market study, the share of foreign visitors will further increase in future. Out of 22,530 visitor arrivals in 2021 and 51,330 visitors in 2041, around 49% are estimated to be foreign visitors. 14.4.2 MODE OF ARRIVAL The mode of arrival and visitor movement pattern is expected to remain similar to the current trends. Majority of visitors will arrive by air at Wangi-Wangi Island with few visitors arriving at Tomia via direct chartered flights from Bali. Hence, Matahora airport at Wangi- Wangi Island will remain the principal gateway airport for Wakatobi, and it is important to ensure the adequacy of this airport infrastructure. The internal road connectivity on Wangi- Wangi Island and the sea connectivity between other Islands play an important role for this destination. Page 52 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 14.5 ROAD INFRASTRUCTURE NEEDS Major Roads • The Island ring-road is a relatively good conditioned provincial road with 6.4m carriage way and play important role as tourism corridor in Wangi-Wangi. The current road capacity for the trunk roads will be adequate for the immediate and long term. However, these roads need to be standardized with Bina Marga road class width (7m). Also these roads will require routine pavement maintenance targeting for IRI < 4. Local Access Roads • Within the tourist destination, average Kabupaten roads are in good condition (IRI ≤ 4) or sufficient condition (4 • The current road capacity for the local access roads will be adequate for the immediate term and require further upgradation in the long term. All access roads in key tourism areas need to be well maintained in terms of pavement conditions targeting for IRI < 4. 14.6 AIR TRANSPORT NEEDS 14.6.1 FUTURE AIR PASSENGER DEMAND7 MATAHORA AIRPORT • Air passenger movements at Matahora Airport are estimated to reach 48,968 in 2021 and about 111,564 by 2041. • The yearly aircraft movements are forecast to reach 816 aircrafts in 2021 and 1394 aircrafts by 2041. 14.6.2 AIRPORT INFRASTRUCTURE NEEDS MATAHORA AIRPORT Matohara Airport is a domestic airport providing domestic flight to access Wakatobi Island by air. In 2021 and 2041, current airport infrastructure will be adequate to accommodate the passenger demand forecast. Certain airport facilities that will need to be improved according to the estimated passenger and aircraft demand in 2021 and 2041 are shown in Figure 35. 7 The Future Air Passenger Demand and Aircraft Movement are estimated on a broad basis to assess the airport infrastructure needs for tourism development. A separate detailed specific Airport Study needs to be conducted to look into the specific air passenger and aircraft demand for individual airports. Page 53 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 35: MATAHORA AIRPORT – INFRASTRUCTURE NEEDS Existing Airport Short Term Long Term (2015) Improvement (2021) (2041) Plan Air Passenger 39,181 NA 48,968 111,564 Demand Aircraft 742 aircrafts per 816 aircrafts per 1394 aircrafts landing and year year per year NA Take Off 1 peak hour 2 peak hour 6 peak hour Demand movement movement movement Estimated Runway extension Capacity: 8 to 2000 m x 45 m movements per Runway (Lm hour Estimated Adequate Adequate X Wm) Capacity: 12 Existing Capacity movements per Adequate hour Parallel N.A N.A N.A N.A Taxiway 2 active stands 4 aircrafts needed for stands needed 2 aircraft in peak aircrafts in peak in peak hour Loading hour Ultimate Phase hour Apron Capacity: 2 Capacity: 3 stands Inadequate Requirements aircrafts stands Adequate with with capacity capacity of 2 of 3 aircrafts aircrafts stand. stand. Terminal 136,000 annual 340,000 annual Adequate Adequate Building passengers passengers The airport capacity will be adequate in the long term, and further upgradation of terminal building wouldn’t be required. 14.7 WATER TRANSPORT NEEDS 14.7.1 FUTURE DEMAND FOR WATER TRANSPORT Very few visitors will use the water transport to visit Wakatobi. Hence, the role of Wanci port for external access would be minimal. With increased number of visitors, scheduled boat services need to be increased between Wangi-Wangi (Mola port), Kaledupa and Tomia Islands in the long term. 14.7.2 WATER TRANSPORT INVESTMENT NEEDS Based on observation, Mola Port condition needs to be improved with regular maintenance. Similarly, jetty facilities providing access to key tourism attraction areas in Tomia and Kaledupa Islands need to be well maintained. Additional boat service will need to be operational in the long term. Page 54 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 15. BASIC CAPACITY INFRASTRUCTURE (AMENITIES) BASELINE 15.1 WATER SUPPLY 15.1.1 EXISTING WATER SUPPLY CONDITIONS Wakatobi’s PDAM (local water company) piped water supply system covers 64.60% of the households in Kabupaten Wakatobi. Kecamatan Wangi-Wangi and Kecamatan Wang-Wangi Selatan on the northern main island have the best access, with 98.41% receiving piped water. Meanwhile, Tomia Island, which consists of Kecamatan Tomia and Kecataman Tomia Timur, has the lowest rate of access to potable water (only 35.19%). The rates of piped water access by kecamatan in Wakatobi are shown in Figure 36 and 37. FIGURE 36: COVERAGE OF WATER SUPPLY BY KECAMATAN IN KABUPATEN WAKATOBI 99.39% 97.42% 100% 94.37% 90% 80% 70% 64.20% 56.93% 60% 50% 45.65% 40% 34.15% 30% 24.72% Percentage Percentage (%) 20% 10% 0% Wangi - Wangi - Kaledupa Kaledupa Tomia Tomia Binongko Togo Wangi Wangi Selatan Timur Binongko Selatan Source: Dinas Pekerjaan Umum, Tata Ruang, Pertambangan dan Energi dan Dinas Kesehatan Kabupaten Wakatobi Page 55 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 37: MAP OF WATER SUPPLY COVERAGE BY KECAMATAN IN KABUPATEN WAKATOBI Source: Dinas Pekerjaan Umum, Tata Ruang, Pertambangan dan Energi dan Dinas Kesehatan Kabupaten Wakatobi PDAM Wakatobi’s raw water originates from 11 water sources operated by 9 Instalasi Kota Kecamatan (IKK, or Kecamatan Water Treatment Plant) within the kabupaten. The total capacity of raw water available from the existing PDAM water sources is 210 L/s. With the installed capacity of 140.6 L/s, the surplus is 69.4 L/s. Figure 39 shows the capacities of the 9 IKK, and Figure 39 shows the locations of water sources in Wakatobi. FIGURE 38: CAPACITY OF PDAM WATER SOURCES PDAM IN WAKATOBI Raw Water Capacity Installed Capacity No Water Source (L/s) (L/s) 1 IKK Wil. Kota 50 40 2 IKK Wil. Longa 5 2 3 IKK Wil. Kapota 5 4.6 4 IKK Wil. Numana 40 30 5 IKK Wil. Liya 10 10 6 IKK Wil. Lentea 8 5 7 IKK Wil. Batambawi 40 17 8 IKK Wil. Tomia Timur (LSM) 40 22 9 IKK Wil. Togo Binongko 12 10 Total 210 140.6 Source: PT. Surya Perkasa Raya, 2013 Page 56 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 39: WATER SOURCES OF PDAM IN WAKATOBI Source: PT. Surya Perkasa Raya, 2013 15.1.2 ASSESSMENT OF EXISTING WATER SUPPLY INFRASTRUCTURE According to the national service standards for public works and spatial planning (SPM Permen PU 01/PRT/M/2014) sustainable water supply is defined as having access to a safe and reliable water source that can supply at least 60l/cap/day. For the key tourism areas the higher quality SNI 3-7065-2005 standard is assumed, meaning that the population and visitors in key tourism areas should have access to sustainable piped water supply which is defined as having a house connection and 24 hours water supply at 120l/cap/day for domestic users and 250l/cap/day for visitors staying overnight. The national statistical office (BPS) has baseline information on service provision. BPS collects this information by sample surveys and aggregate data are available at the Provincial level and sometimes at the Kabupaten/Kota level. In practice, it was not possible to arrive at a reliable baseline for water supply service provision in the key tourism areas because data were either not available or were only available at the Provincial level which is not sufficiently detailed to serve as a baseline for the tourism areas. As a proxy data have been collected on population connected to piped networks of water supply companies (PDAM), because these data are widely available by PDAM at Kabupaten and Kecamatan level. It should be noted however that these data should be regarded as minimum number of people served by piped water supply, because apart from PDAM many local networks exist, often community operated, that deliver sustainable water supply. Page 57 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 In the context of this study PDAM data as presented here should therefore not be taken as absolute figures for current water supply service levels but should be considered as an indication of variation in service levels between the several tourism areas. More detailed study at Kecamatan level is needed to arrive at a thorough baseline for each of the key tourism areas. 72.48% of the households are served by piped water supply systems in Wakatobi. The immediate priority should be given to the development of new water sources and expansion of the water supply network so that the existing gap can be closed. Focus should be given to Kecamatan Kaledupa and Tomia Timur where existing coverages are at the lower range. 15.1.3 FUTURE PLANS FOR WATER SUPPLY The authority has identified new water sources at Desa Matahora (capacity = 15 L/s), and Desa Tee Wahoe (capacity = 5 L/s). Other potential water sources under government’s proposal are located at Ehata & Pongo (Kecamatan Wangi-Wangi) and Komala & Kapota (Kecamatan Wang-Wangi Selatan). In total, new water sources with a capacity of 20 L/s have been identified. Construction of water treatment plants and expansion/construction of the water supply network shall be implemented in the near term to produce potable water from these water sources. 15.2 WASTEWATER AND SANITATION 15.2.1 EXISTING WASTEWATER AND SANITATION CONDITIONS According to the national service standards for public works and spatial planning (SPM Permen PU 01/PRT/M/2014) sustainable sanitation is defined as having access to a private or a communal (MCK) toilet connected to a septic tank or to a piped sewer system with downstream treatment facilities. If population density is higher than 300 inhabitants/ha an off-site sewer system is required with centralized wastewater treatment plant. Waste water treatment facilities must meet specified technical and effluent quality standards. The national statistical office (BPS) has baseline information on service provision. BPS collects this information by sample surveys and aggregate data are available at the Provincial level and sometimes at the Kabupaten/Kota level. In practice, it was not possible to arrive at a reliable baseline for sanitation service provision in the key tourism areas because data were either not available or were only available at the provincial level, which is not sufficiently detailed to serve as a baseline for the tourism areas. As a proxy, STBM (Sanitasi Total Berbasis Masyarakat) data have been collected because these data are widely available at the kecamatan level. It should be noted, however, that STBM data in general give a much too positive picture of current service levels, because the STBM service level represents a lesser quality than the level required in the relevant national standards noted above. STBM’s definition of adequate sanitation includes sanitation facilities which are: Page 58 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 1. Avoid water contamination; 2. Avoid contact between human and feces; 3. Avoid contact between insects/ animals and feces; 4. Not smelling unpleasant; and 5. Easy to clean. The STBM definition actually means that all sanitation facilities are included, even pit latrines and temporary structures, and only open defecation practices are excluded. The percentage of population served as indicated by STBM data is therefore much higher than population served in accordance with national service level quality standards. In the context of this study STBM data as presented here should therefore not be taken as absolute figures for current sanitation service levels but should be considered as an indication of variation in service levels between the several tourism areas. More detailed study at Kecamatan level is needed to arrive at a reliable baseline for each of the key tourism areas. According to STBM (Sanitasi Total Berbasis Masyarakat), 72.48% of households in Kabupaten Wakatobi have access to adequate sanitation. FIGURE 40: HOUSEHOLDS EQUIPPED WITH SANITATION FACILITIES BY KECAMATAN, 2015 Source: Dinas Pekerjaan Umum Tata Ruang, Pertambangan dan Energi, 2015 15.2.2 ASSESSMENT OF EXISTING WASTEWATER AND SANITATION 72.48% of the households in Kabupaten Wakatobi are equipped with/ has access to adequate sanitation. Appropriate sanitation facilities are important in protecting the environment as well as human health. Hence, the existing gap should be closed as quickly as possible. Page 59 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 15.2.3 FUTURE PLANS FOR SOLID WASTEWATER AND SANITATION There is a 15 year plan to provide 100% wastewater and sanitation facilities by the authority. If the proposal were to be implemented as planned, all sewage generated in Wakatobi will be treated by on-site treatment facilities (septic tanks) by 2028. Figure 41 shows the future plans for wastewater management in Wakatobi. FIGURE 41: PROPOSAL OF ON-SITE WASTEWATER MANAGEMENT FACILITIES Source: Percepatan Pembangunan Sanitasi Permukiman (PPSP), 2013 The authority shall bring forward the implementation of on-site individual sewerage management system to ensure 100% adequate sanitation facilities been installed in the households at the soonest. In the longer term, off-site wastewater management system shall be implemented. Page 60 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 15.3 DRAINAGE 15.3.1 ASSESSMENT OF EXISTING DRAINAGE AND FLOODING ISSUE The entire Kabupaten Wakatobi is categorized as low-risk flood zone. No major flooding events have been recorded in the past. FIGURE 42: FLOOD DISASTER RISK INDEX MAP Source: Badan Nasional Penanggulangan Bencana (BNPB), 2010 15.4 SOLID WASTE INFRASTRUCTURE 15.4.1 EXISTING SOLID WASTE COLLECTION AND DISPOSAL CONDITIONS Generally, wastes are collected manually and transported to a TPS (Tempat Pembuangan Sementara, or Temporary Disposal Site). TPSs are located at residential and community centers. From TPS, waste is transported to TPST (Tempat Pengolahan Sampah Terpadu, or Integrated Waste Processing). Most of the TPSTs are located near markets and are managed by a kecamatan agency. Segregation of wastes takes place in TPST. Remaining waste is then transported to TPA (Tempat Pembuangan Akhir, or Final Disposal Area). The procedure for solid waste collection and disposal is shown in Figure 43. Page 61 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 43: PROCEDURE FOR SOLID WASTE COLLECTION AND DISPOSAL Source: RTRW, Rencana Tataruang Wilayah According to the national service standards for public works and spatial planning, sustainable solid waste management is defined as having access to a solid waste collection services of at least twice a week and transport of waste collected to a transfer station or processing unit. Solid waste management operations must be in accordance with national technical standards for management of solid waste facilities (Permen PU 03 Year 2013) and for urban waste management techniques (SNI 19-2454-2002). According to an Environmental Health Risk Assessment (EHRA) carried out in 2013, solid wastes disposal and management system in Wakatobi is unsatisfactory. Only 4.7% of the waste generated was collected and transported to a TPA. As much as 36.34% of waste was burned, and 15.92% duped into the sea or other water courses. The full breakdown of final waste disposal in Wakatobi is shown in Figure 44. FIGURE 44: SOLID WASTE DISPOSAL IN WAKATOBI, 2013 0.44% 4.70% Unknown to empty land Ignored 40.04% to river/ lake/ sea 36.34% to excavated soil Burnt to TPS 15.92% 1.69% 0.06% Source: EHRA, 2013 The existing TPA is located at Komala Village in Kecamatan Wangi-Wangi Selatan, with a total land area of 5 ha (location shown in Figure 45). Solid waste is collected and transported to various TPSs before being disposed at TPA Komala. At the moment, a full and proper solid waste disposal and collection system is only available at Wangi-Wangi and Mandati- Mola. Page 62 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 45: TPA KOMALA Source: Dinas Kebersihan dan Tata Ruang, Wakatobi 15.4.2 ASSESSMENT OF EXISTING SOLID WASTE MANAGEMENT There is a large gap in solid waste management system in Wakatobi. Currently, waste collection service only available at Wangi-Wangi and Mandati-Mola, managing only 4.7% of the total waste generated. Immediate attention and action are required to close the existing gap. More TPSs need to be allocated in areas where solids waste generation is high. Waste collection systems need to be improved to increase the numbers of garbage trucks and frequency of collection. 15.4.3 FUTURE PLANS FOR SOLID WASTE INFRASTRUCTURE Kabupaten Wakatobi’s Sanitation Strategy (SSK) proposes upgrading the solid waste disposal and management system in the following ways: • To increase management of direct wastes from 14% to 30% (short term), 50% (medium term), and 100% (long term). • To increase management of indirect wastes from 0% to 10% (short term), 25% (medium term), and 50% (long term). • To increase waste sorting at households from 18% to 34% (short term), 54% (medium term), and 60% (long term). • To increase 3R (Reduce, Reuse, and Recycle) waste collection by garbage truck from 0% to 2% (short term), 7% (medium term), and 15% (long term). • To increase 3R (Reduce, Reuse, and Recycle) wastes collection by garbage motorcycle from 0% to 6% (short term), 15% (medium term), and 20% (long term). Page 63 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 • To increase normal waste collection by garbage truck from 9% to 11% (short term), 16% (medium term), and 25% (long term). • To increase normal wastes collection by garbage motorcycle from 4% to 10% (short term), 19% (medium term), and 30% (long term). No concrete plans were made known as how the above mentioned targets will be realized. Involvement of the government is needed to encourage 3R by tightening the rules and regulations in waste dispose onto the private sectors. Other than that, incentives are another option the authority should consider. All solid wastes generated shall be collected and disposed at the designated TPA, especially at Wakatobi where uncollected solid wastes would cause pollution at the sea and the beach. The authority shall target 100% management of solid waste in the short term. To increase percentage of wastes collection, numbers of garbage truck/ motorcycle shall be increased accordingly. 15.5 POWER SUPPLY 15.5.1 EXISTING POWER SUPPLY CONDITIONS 83.81% of the households in Kabupaten Wakatobi are served by the PLN (the national power company) power supply network. Power supply in Wakatobi is managed by 5 PLN branches: Binongko, Waha, Ambeua, Wangi-Wangi, and Kapota. In 2013, these branches have a total installed capacity of 10,058,915 KVA, and have produced 23,398,220 KWh of power. The capacities of each branch are shown in Figure 46. FIGURE 46: CAPACITIES OF PLN BRANCHES IN WAKATOBI, 2013 Installed Capacity Produced Electricity (VA) (kWh) No. PLN Branch 1 Binongko 1079700 1220068 2 Waha 1766915 2867102 3 Ambeua 1691300 2155512 4 Wangi-Wangi 5130950 17127710 5 Kapota 390050 27828 Total 10,058,915 23,398,220 Source: BPS Kabupaten Wakatobi, 2013 15.5.2 ASSESSMENT OF EXISTING POWER SUPPLY INFRASTRUCTURE Although PLN power supply coverage is satisfactory (83.81%), our interviews reveal that the power supply in Wakatobi is insufficient to meet peak demand, which has caused power outages to occur regularly. Power plant capacity has to be upgraded so that power demand can be fulfilled even at peak times. The existing transmission and distribution system needs to be improved and expanded. Page 64 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 15.5.3 FUTURE PLANS FOR POWER SUPPLY Development and construction of new power plants in Wangi-Wangi have been proposed. These power plants are expected to be completed by 2020, with total installed capacity of 16 MW, as shown in Figure 47. The broader provincial-level plans for power supply development are shown in Figure 48. FIGURE 47: PROPOSED POWER PLANTS IN WAKATOBI Capacity Expected Year n Project Type (MW) of Completion 1 MPP Wangi-Wangi Gas and Steam 5 2017 2 Wangi-Wangi Diesel 2x3 2019 3 Wangi-Wangi Mini Gas 5 2020 Total 16 Source: The Ministry of Energy and Mineral Resources of the Republic of Indonesia, 2016 FIGURE 48: POWER NETWORK OF SOUTHEAST SULAWESI PROVINCE Source: The Ministry of Energy and Mineral Resources of the Republic of Indonesia, 2016 Page 65 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 15.6 TELECOMMUNICATION INFRASTRUCTURE 15.6.1 EXISTING TELECOMMUNICATION INFRASTRUCTURE There are 22 telecom towers in Wakatobi. 13 of them are located on Wangi-Wangi, 3 on Kaledupa, 4 on Tomia, and 2 on Binongko. Signal strength is satisfactory and reliable only in Wangi-Wangi. Figure 49 shows the locations of the towers. FIGURE 49: TELECOM TOWERS IN WAKATOBI Source: dishubkominfo Wakatobi 15.6.2 ASSESSMENT OF EXISTING TELECOMMUNICATION INFRASTRUCTURE Existing telecom coverage is concentrated on Wangi-Wangi Island. Development of telecommunication facilities should be expanded to other islands and planned in accordance with the projected growth of population and tourism. 15.7 SUMMARY OF EXISTING BASIC INFRASTRUCTURE A summary of existing coverage and gaps in basic infrastructure in Wakatobi is tabulated below in Figure 50. Page 66 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 50: SUMMARY OF EXISTING BASIC INFRASTRUCTURE ASSESSMENT Existing Existing Infrastructure Remarks Coverage Gap Water Supply Kab. 64.60% 35.40% Only Wangi-Wangi and Wangi- Wakatobi Wangi Selatan have satisfactory coverage (households served by PDAM) Wastewater and Kab. 72.48% 27.52% Adequate sanitation is satisfactory, Sanitation Wakatobi but improvement is required (households equipped/ has access to adequate sanitation) Kabupaten Wakatobi categorized as No major impact on tourism Drainage low risk flood zone activities Solid Waste Kab. 4.70% 95.3% Very poor coverage of sustainable Wakatobi solid waste management (solid waste generated collected and disposed at designated TPA) Power Supply Kab. 83.81% 16.19% Coverage is satisfactory, but Wakatobi improvement is required (households served by PLN) Telecommunication infrastructure is Expansion of coverage is needed, Telecommunication only satisfactory in kecamatan Wangi- especially at the central and south of Wangi and Wangi-Wangi Selatan the kabupaten Page 67 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 The main attractions of Wakatobi are its magnificent scenery and world class dive sites, scattered across the 4 main islands. Unlike other tourism-based islands in Indonesia which are densely populated, development of Wakatobi is on a slower pace and hence it enjoys a positive image due to this remoteness and authenticity. Therefore, planning of the infrastructure facilities has to be in sync with the projected growth of population and tourist arrivals. The solid waste collection and disposal system is poor in Wakatobi. Only 4.7% of the total waste generated is handled properly. Immediate attention and actions are required to close the existing gap. It is recommended that the number of TPS and the frequency of waste collection would need to be increased immediately. The allocation of TPAs is on each of the main islands is recommended. 72.48% of the households are equipped with or have access to adequate sanitation. The existing gap of 27.52% has to be closed as soon as possible by providing adequate wastewater and sanitation management facilities. Only 47.84% of the households in Kabupaten Wakatobi are served by the piped water supply network. It is recommended to improve the water supply system by expanding the existing water supply network and constructing new water treatment plants to treat and produce potable water from the identified potential water sources. Although power supply coverage is satisfactory, the remaining existing gap has to be closed. Moreover, more reliable power supply should be provided during peak hours. To maximize available capacity, it is important that effective action be taken to reduce power loss which is relatively high in Indonesia. It is recommended that development of telecommunication facilities shall be expanded to others islands where increased visitor arrivals are expected, especially in Kaledupa and Tomia. There is no major issue with regards to flooding in Wakatobi. No major flooding events have been recorded in the past years. BASIC CAPACITY INFRASTRUCTURE INVESTMENT NEEDS 15.8 FORECAST POPULATION & VISITOR ARRIVALS Basic infrastructure analyses are carried out for the short and long term with reference to the projected population and visitor arrivals as shown in Figure 51. The population growth for the key kabupaten is based on the statistics produced by BPS at Province level. Page 68 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 51: FORECAST OF POPULATION Key Tourism Kab. 2015 2021 2041 Kab. Wakatobi 94,985 98,536 99,936 Source: HHTL All the commercial accommodation serving visitors visiting Wakatobi are assumed to be located in Kab. Wakatobi (Figure 34): FIGURE 52: FORECAST OF COMMERCIAL ROOMS REQUIRED 2015 2021 2041 Kab. Wakatobi 417 580 1,018 Guest per room = 2.0 Source: HHTL Basic infrastructure demand projections are carried out based on the projected population in the key tourism kabupaten, and the number of visitor arrivals staying in commercial accommodation. 15.9 WATER SUPPLY 15.9.1 FUTURE DEMAND With reference to the projected population and visitor arrivals and water consumption rates (as shown in Figure 55), water demand forecasts are tabulated in Figure 53. Note that these projections represent maximum requirements assuming that all piped water supply would be provided by PDAM. In reality many non-PDAM local piped water supply networks exist, often community operated, that deliver sustainable water supply. FIGURE 53: WATER DEMAND PROJECTIONS (L/s) 2015 Kab. Wakatobi Served by Not Served by 2021 2041 Demand PDAM PDAM Domestic 110 71 39 137 139 Visitor 2 1 1 3 6 Total 112 72 40 140 145 Source: Surbana Jurong Figure 53 above shows estimated water demand (L/s) by different categories of consumers in 2015 (with amount of water served and not served by PDAM). Projected water demand by different categories of consumers in 2021 and 2041 is also presented. Ratio of estimated water demand to support tourism activities with respect to overall demand is shown in Figure 54. Page 69 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 54: ESTIMATED WATER DEMAND RATIO 2015 2021 2041 Domestic 110 137 139 Visitor 2 3 6 % of visitor / total 1.73% 2.40% 4.07% Source: Surbana Jurong Key Assumptions: The average water demand for the study area is estimated by using unit water demand per capita for local residents and visitors. The SNI 3-7065-2005 standard has been used, meaning that the population and visitors should have access to sustainable piped water supply which is defined as having a house connection and 24 hours water supply at 120l/cap/day for domestic users and 250l/cap/day for visitors staying overnight. The adopted water consumption rate in lpcd (litres per capita per day) for residents and visitors are tabulated in Figure 55. The projected water demand is then converted to L/s (litres per second). The unit rates of water consumption for different usages are expected to increase by 20% - 25% in 2021 due to an upturn in living standards and water accessibility; and then remain constant to 2041, considering sufficient water conservation approaches and awareness among residents. FIGURE 55: WATER CONSUMPTION RATE Unit Rate (lpcd) Type of Usage 2015 2021 2041 Domestic 100 120 120 VFR 85 105 105 Visitor Commercial Accommodation 200 250 250 Based on the above considerations, total existing water demand is forecast to be 112 L/s for Kab. Wakatobi. From total demand, 47.50% are provided by piped water supply. Water demand in 2021 and 2041 is estimated to be about 140 L/s and 145 L/s in Kab. Wakatobi. Existing water demand for tourism activities is about 2% of the overall water demand, and forecast to increase to about 4% in 2041. 15.9.2 WATER SUPPLY INFRASTRUCTURE NEEDS The total capacity of raw water available from the existing water sources of PDAM Wakatobi is 210 L/s. Other than that, the authority has identified another two new water sources, with total capacity of 20 L/s. Assumed that water loss in Wakatobi can be reduced and controlled at 20% in 2021 and 10% in 2041, the available supply capacity in Kab. Wakatobi could reach 184 L/s in 2021 and 207 L/s in 2041. With such supply capacity, the projected water demand in 2021 (140 L/s) and 2041 (146 L/s) can be fulfilled. Hence, there is no major concerns with regards to the availability of raw water sources to fulfil the water demand in Wakatobi. Page 70 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 Short Term Recommendations (2021) • 100% piped water coverage, especially in Wangi-Wangi Island where most of the settlements and hotels are located. • Expansion of existing water supply networks and construction of new networks to meet the above mentioned targets. • Expansion of existing water treatment plants to utilize the existing water sources available. Usage of groundwater shall be reduced due to the possible high level of salinity. • Effective and necessary efforts should be put in place to reduce water loss to 20% Long Term Recommendations (2041) • Construction of new water treatment plant(s) to produce potable water from the existing and identified water sources will be needed. Priority shall be given to raw water source from the northen kecamatan (Kec. Wangi-Wangi and Kec. Wangi-Wangi Selatan) due to the nearer location near to the settlements and hotels. Shorter water supply networks will be required. • Expansion of existing water supply networks and the construction of networks to serve the potential growth of population and visitor arrivals. • Effective and necessary efforts should be made to reduce water loss to 10%. 15.10 WASTEWATER AND SANITATION 15.10.1 FUTURE DEMAND With reference to the projected population and visitor arrivals, the forecast sewage generation is tabulated in Figure 56. Sewage generation is assumed at 80% of water supplied. Note that current coverage of adequate sanitation in this analysis relates to STBM standards. Actual current sustainable sanitation coverage is lower because STBM quality standards are inferior to national standard SPM Permen PU 01/PRT/M/2014. FIGURE 56: SEWAGE GENERATION PROJECTION (L/s)* 2015 Adequate Inadequate 2021 2041 Demand Sanitation Sanitation Domestic 88 64 24 109 111 Visitor 2 2 - 3 5 Total 89 65 24 112 116 Source: Surbana Jurong * Sewage generation = 80% water consumed Figure 56 above shows estimated sewage generation (L/s) by different categories of consumers in 2015 (with the amount of adequate and inadequate sanitation as per STBM Page 71 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 standards). Projected sewage generation by different categories of consumers in 2021 and 2041 are also presented. Ratio of estimated sewage generation from tourism activities with respect to overall generation is shown in Figure 57. FIGURE 57: ESTIMATED SEWAGE GENERATION RATIO 2015 2021 2041 Domestic 88 109 111 Visitor 2 3 5 % of visitor / total 1.73% 2.40% 4.07% Source: Surbana Jurong The total current sewage generation is estimated to be 89 L/s for Kabupaten Wakatobi. From the total generated sewage 72.48% is discharged and managed by STBM standard sanitation facilities. Sewage generation in 2021 and 2041 is forecast to be about 112 L/s and 116 L/s. Current sewage generation from visitors is about 2% of the overall sewage generation, and is estimated to increase to about 4% by 2041. 15.10.2 WASTEWATER AND SANITATION INFRASTRUCTURE NEEDS The marine environment is Wakatobi’s main attraction and most of the settlements are concentrated near the coast line. Therefore, it is crucial that adequate sanitation and wastewater treatment facilities are provided. As such, the following key projects for wastewater and sanitation infrastructure are recommended for the short term (2021): • 100% coverage of sustainable sanitation, especially at Wangi-Wangi Island where most of the settlements and hotels are located; • In accordance with the national service standards for public works and spatial planning (SPM Permen PU 01/PRT/M/2014) sustainable sanitation is defined as having access to a private or a communal (MCK) toilet connected to a septic tank or to a piped sewer system with downstream treatment facilities. If population density is higher than 300 inhabitants/ha an off-site sewer system is required with centralized wastewater treatment plant. Waste water treatment facilities must meet specified technical and effluent quality standards. • Installation of sufficient numbers of septic tanks in residential areas; • Small scale wastewater treatment plants are recommended at the hotels/ resorts; and • Public toilet and sanitation facilities should be provided at tourism sites. Recommendations for the long term (2041) are as below: • 100% coverage of sustainable sanitation; Page 72 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 • Development of integrated sewage treatment facilities, including sewage treatment plants and sewerage networks. 15.11 DRAINAGE 15.11.1 DRAINAGE INFRASTRUCTURE NEEDS There is no major issue with regards to the drainage system and flooding events in Wakatobi. Maintenance and upgrading the existing drainage systems is necessary as more developments are expected. It should be planned and designed in accordance with the regional master plan. 15.12 SOLID WASTE INFRASTRUCTURE 15.12.1 FUTURE DEMAND With reference to the projected population and visitor arrivals, and rate of solid waste generation (as shown in Figure 59), the forecast solid waste generation is tabulated in Figure 58: FIGURE 58: WOLD WASTE GENERATION PROJECTION (l/day) 2015 Sustainable Unsustainable 2021 2041 Demand Management Management Domestic 213,716 10,045 203,672 221,706 269,828 Visitor 2,919 137 2,782 4,062 8,547 Total 216,635 10,182 206,453 225,768 278,376 Source: Surbana Jurong Figure 58 above showcases estimated solid waste generation (L/day) by different categories of consumers in 2015 (with amount of sustainable and unsustainable management). Projected solid waste generation by different categories of consumers in 2021 and 2041 are also presented. The ratio of estimated solid waste generation from tourism activities with respect to overall generation is shown in Figure 59. FIGURE 59: ESTIMATED SOLID WASTE GENERATION RATIO 2015 2021 2041 Domestic 213,716 221,706 269,828 Visitor 2,919 4,062 8,547 % of visitor / total 1.35% 1.80% 3.07% Source: Surbana Jurong Page 73 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 15.12.2 KEY ASSUMPTIONS: The average solid waste generation for the study area is estimated by using solid waste generation unit rates per capita for local residents and visitors. The adopted rate in L/c/d (litres per capita per day) for residents and visitors is tabulated in Figure 60. It is forecast that there will be no changes in unit rate of solid waste generation over the short term (2021), but it will increase by 20% in the longer term (2041). FIGURE 60: RATE OF SOLID WASTE GENERATION8 Unit Rate (L/capita/day) Type of Usage 2015 2021 2041 Domestic 2.25 2.25 2.7 VFR 1.6 1.6 1.92 Visitor Commercial Accommodation 3.5 3.5 4.2 Our analysis shows that total solid waste generation in 2015 is forecast to be 216,635 L/day in Kab. Wakatobi. From the total solid waste generated, only about 5% is collected and disposed at the designated TPAs. Solid waste generation in 2021 and 2041 is estimated to be about 225,395 L/day and 280,135 L/day in Kab. Wakatobi. Existing solid waste generated from tourism activities is about 1.35% of the overall generation, and estimated to slightly increase to 1.64% in 2021, and further increase to 3.68% in 2041. 15.12.3 SOLID WASTE INFRASTRUCTURE NEEDS Sustainable solid waste management services shall be made available in all key tourism areas. According to the national service standards for public works and spatial planning (SPM Permen PU 01/PRT/M/2014) sustainable solid waste management is defined as having access to a solid waste collection services of at least twice a week and transport of waste collected to a transfer station or a processing unit. Solid waste management operations must be in accordance with national technical standards for management of solid waste facilities (Permen PU 03-2013) and for urban waste management techniques (SNI 19-2454- 2002).Sustainable solid waste facilities should be made available at residential areas, markets and visitor attractions. Organized collection, transportation and disposal systems are necessary, particularly in the key tourism areas. As such, the following solid waste infrastructure projects are recommended for the short term (2021): • 100% sustainable solid waste management (collection and disposal at designated TPAs), especially at Wangi-Wangi Island where most of the settlements and hotels are located; • Allocation of sufficient numbers of Temporary Disposal Sites (TPS); 8 Reference: Standard for Setting of Town Environmental Sanitation Facilities, China and Ministry of the Environment and Water Resources, Singapore, Kosuke. K, Tomohiro. T. Revisiting Estimates of Municipal Solid Wastes Generation per Capita and Their Reliability, 2015. Page 74 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 • Increase in the capacity of trash trucks and frequency of collection is needed; • Education and enforcement is needed to create awareness among the residents of the importance of solid waste management and to forbid them from disposing rubbish into the water bodies; and • Expansion of existing Final Disposal Sites (if there is room for expansion) at Wangi- Wangi and allocation of new Final Disposal Sites (to adopt sanitary landfill methods) at the southern islands. Recommendations for the long term (2041) are as below: • Solid waste collection and disposal facilities should be increased and expanded accordingly; • Allocation of more Integrated Waste Processing Sites (TPST) will be needed so that solid waste is sorted and segregated before transporting to Final Disposal Sites (TPA). This can reduce the amount of waste delivered and is a more sustainable and environmental friendly approach; and • Development of sanitary landfill site(s) with sufficient capacity. Location of the landfill sites should be studied taking into consideration the distance from the residential and tourism attractions, and environmental sensitivity. Landfill sites can fill up quickly if waste is not reduced and reusable waste is not collected, separately and recycled. There is also the risk of groundwater contamination if not sealed correctly or the liner system of the landfill site is damaged. Hence, landfill sites protect community health only if well managed. 15.13 POWER SUPPLY 15.13.1 FUTURE DEMAND With reference to the projected population and visitor arrivals, and power consumption rate (as shown in Figure 62), the forecast power demand is tabulated in Figure 61: FIGURE 61: POWER DEMAND PROJECTION (Mwh) 2015 Served by Not Served by 2021 2041 Demand PLN PLN Domestic 94,985 79,603 15,382 246,340 474,698 Visitor 1,668 1,398 270 2,901 6,105 Total 96,653 81,000 15,653 249,242 480,803 Source: Surbana Jurong Figure 61 above showcases estimated power demand (Mwh) by different categories of consumers in 2015 (with amount of power served and not served by PLN). Projected power demand by different categories of consumers in 2021 and 2041 are also presented. Ratio of Page 75 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 estimated power demand to support tourism activities with respect to overall demand is shown in Figure 62. FIGURE 62: ESTIMATED POWER DEMAND RATIO 2015 2021 2041 Domestic 94,985 246,340 474,698 Visitor 1,668 2,901 6,105 % of visitor / total 1.73% 1.16% 1.27% Source: Surbana Jurong Key Assumptions: The adopted rate Kwh (Kilowatt hours) for residents and visitors is tabulated in Figure 63. It is estimated that the unit rate of power consumption will increase in the short term (2021) and long term (2041). FIGURE 63: POWER CONSUMPTION RATE9 Unit Rate (Kwh) Type of Usage 2015 2021 2041 Domestic (per person), including VFR 1,000 2,500 4,750 Visitor Commercial Accommodation (per room) 4,000 5,000 6,000 Based on the above considerations, total existing power demand is forecast to be 96,653 Mwh for Kab. Wakatobi. Out of the total demand, 83.81% is fulfilled by the PLN power network. Power demand in 2021 and 2041 is estimated to be about 249,242 Mwh and 480,803 Mwh. Power demand for tourism activities remains at less than 2% of the overall demand. 15.13.2 POWER SUPPLY INFRASTRUCTURE NEEDS There is no major concern with regards to power supply to support the tourism activities due to its relatively small demand as compared to the residents demand. Power outages occur from time to time in Wakatobi and improvement and upgrading is necessary to mitigate problems of insufficient power capacity during peak hours. As such, the following key power supply infrastructure projects are recommended for the short term (2021): • 100% coverage of PLN power supply, especially at Wang-Wangi Island where most of the settlements and hotels are located; and • Expansion of existing power transmission and distribution networks and construction of new networks to meet the above mentioned target. 9 Reference: National Energy Council, Republic of Indonesia. Bin Su, Hotel Design and Energy Consumption, 2012. Page 76 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 Recommendations for the long term (2041) are as below: • Expansion of existing power plants (if there is room for expansion) and construction of new power plants to generate sufficient power; and • Expansion of existing power supply networks and construction of new networks to transmit and distribute generated power from PLN’s power plant to support potential growth of power demand. 15.14 TELECOMMUNICATION INFRASTRUCTURE 15.14.1 TELECOMMUNICATION INFRASTRUCTURE NEEDS The expansion of existing telecommunication coverage is required to cater for the additional population and visitor arrivals. This is important to ensure sufficient connectivity in case of emergencies, and for the visitors to share their travel experiences. Collaboration between the authorities and the telecom companies is needed to improve the telecommunication infrastructure. Projected population and visitor arrivals should be made known to the telecom companies so that upgrading and expansion of telecommunication facilities can be planned in advanced. Page 77 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 KEY RECOMMENDATIONS Page 78 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 16. WHAT WILL TRIGGER INVESTMENT? Investment responds to actual increases or future anticipated increases in demand. To mobilize private investment, investors need to be convinced that the anticipated future increases in demand will materialize and that the investment process will be satisfactory. In the following sections we will provide: • recommendations for improvements in the regulatory environment and destination management; • recommendations on products and services that are suitable for development and management by SMEs; and • recommendations on tourism-driven infrastructure investments, both transport and basic capacity. 16.1 RECOMMENDATIONS ON DESTINATION ENHANCEMENTS The following destination enhancements will help foster investment to enable Wakatobi to attain the projected visitor arrival levels: • The government must invest in the destination, including international-standard hospitals and infrastructure to elevate the overall status of the destination. • Improvement of infrastructure is essential as it is the key to further investment. Easy access to the destination together with fresh water and electricity are critical to attract more inventors. • Improvement of destination image and awareness regionally and internationally. • More support from government and other NGOs in developing the destination, particularly in the areas of market research, joint venture partner matching, and exhibition/trade show coordination. 16.2 LEGAL & REGULATORY ENVIRONMENT ENHANCEMENTS The following legal and regulatory environment enhancements will also help foster investor confidence and drive both domestic and foreign investment in Wakatobi: • Government provides hospitality training support to provide competent human resources for the tourism sector. • As limited transparency and government bureaucracy are two major issues that limit investment in Wakatobi the government should focus on: • Refining and simplifying the procedures and then monitoring the regulations uniformly; and Page 79 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 • Reducing bureaucracy between Jakarta and regional authorities, as well as improving communication between authorities, and between authorities and investors. • The unrestricted growth of new-build local houses will damage the prospects of developing Wakatobi into a high value eco-tourism market. • Ensuring the Wakatobi island plans include tourism zones: Zoning of parts of the Wakatobi to be used for research and tourism diving would help develop the market. Investors seeing unrestricted access by fishermen to potential tourist locations will be less keen than if there is effective policing to allow sections of the reefs to develop to their full potential. • Coherent tourism policies between different governance institutions such as implementing commons fees (entrance fee, tourism activity fee for visitors and tourism business). 16.3 SME DEVELOPMENT INTERVENTIONS For forecasts to be met, there must be a significant increase in businesses serving the tourism sector, many of which will be SMEs. They will deliver services supporting the larger investments. To encourage sufficient SME development to meet demand, the government of Indonesia may need to mobilize assistance specifically targeting SMEs. 16.3.1 SME: POSSIBLE SME PRODUCTS & SERVICES The following products and services, in line with the vision for future growth, provide opportunities for SMEs to develop. • Resorts that actively promote eco-tourism and sustainability. • Providing better hospital and transportation facilities. • Community-based tourism where tourists visit local villages and experience their culture. • English-speaking guides. • Tourist information centers. • Travel agents providing combined maritime and land-based packages. 16.3.2 SME DEVELOPMENT INTERVENTIONS To encourage SMEs seeking new business growth opportunities, many assistance programs and changes from the government are needed including: • Establishing SME institutes at all education levels in regional locations to support the development of local SMEs. • Support, advise and provide local villagers training on: - how to handle tourists, Page 80 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 - English language skills, and - reef and natural habitat conservation. • Providing trainings for different positions in the tourism sector outlining core competencies with regard to environmental awareness, hygiene and sanitation, first aid, customer orientation and others. • Sponsoring reef protection, recycling and waste management for local community. • A credit scheme for small neighborhood shops, small restaurants, and fishermen in order to help them grow their business. • Allocating government officials to assist investors with the procedures for setting up a business. • The Wakatobi Dive Resort is the pioneer in supporting the local community, and its example which should be considered and replicated by both the government and other major investors. These existing initiatives include: • Sponsoring regular marine biology and ecology presentations to staff, guests, and the local community. • Using local traditional skills to build and maintain the resort, and selling local products. • Sponsoring electricity to the village (500 people) on the island in exchange for the villagers honouring 3 kilometers reef sanctuary on their traditional fishing grounds. • Channeling a portion of the resort’s income to the local community in the form of lease payments in exchange for turning designated areas of reef into no-fishing sanctuaries. • WWF continues to support in the development of Wakatobi, particularly community- based eco-tourism development. Several initiatives by the origination include: • Support for the recently launched ‘Signing Blue’ program to encourage the practice and management of responsible nautical eco-tourism in Indonesia. All Signing Blue members (tourists and other tourism-related stakeholders) will be verified in eco-friendly business practice and received a certification. • Providing guideline and best practices for community-based eco-tourism, hotels, live- aboards, attractions, etc. 16.4 KEY RECOMMENDATIONS FOR TRANSPORT INFRASTRUCTURE INVESTMENT The key recommendations on investment needs for transport infrastructure to support tourism are presented below. Page 81 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 16.4.1 ROAD INFRASTRUCTURE The provincial road connecting the existing port and airport in Wangi-Wangi is generally in good condition. The Kabupaten road to other tourism attraction in Kaledupa and Tomia Islands are generally good as well. However, on average, the roads within the tourist destination area are in good (IRI ≤ 4) or sufficient condition (4 The current road capacity for the major roads will be adequate for the immediate and long term. These roads need to be selectively upgraded and widened to national standards as per Bina Marga road class width (7m) for the tourism attractions area. Similarly, the road widths of local access roads within the core tourism area need to be standardized to 6m, so that it will provide adequate space for two vehicles to run in opposite directions. 16.4.2 AIR TRANSPORT The current airport infrastructure at Matahora airport is adequate to meet the future air passenger demand for Wakatobi. 16.4.3 WATER TRANSPORT Very few visitors are anticipated to access Wakatobi by sea. Water transport will primarily be used between Wangi-Wangi, Kaledupa and Tomia Islands. Based on observation, Mola Port condition needs to be improved with regular maintenance. Similarly, jetty facilities providing access to key tourism attraction areas in Tomia and Kaledupa Islands need to be well maintained. 16.5 KEY RECOMMENDATIONS FOR BASIC INFRASTRUCTURE INVESTMENTS Basic infrastructure such as water supply, wastewater and sanitation, and solid waste management is important to protect against unhygienic conditions, which could pose health hazards that impact the tourism development potential. • Service level of wastewater and sanitation is considerably higher in Kab. Wakatobi as compared to other destinations. However, improvement works must be carried out, considering the importance of tourism to this specific region. Solid waste management system is not up to standard in Wakatobi, as only 4.7% of the total wastes generated collected and managed properly. Investments will be needed to resolve current deficiencies in wastewater, sanitation, and solid waste management, especially at key tourism areas including Kaledupa, Kaledupa Selatan, and Wangi-Wangi. Page 82 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 • Only half of the population in Kab. Wakatobi has access to piped water services. Level of service of piped water supply is low as compared to other utilities. Availability of raw water in sufficient, and potential new water sources has been identified. Investments will be needed to improve water coverage by expanding the existing water pipeline and constructing new pipeline in the key tourism areas. Other than that, construction of new water treatment facilities is required to support the existing and future demand. • Power supply and telecommunication facilities are satisfactory. Improvements in power supply and telecommunications infrastructures is required to provide better and more reliable service, and to cater for the potential demand growth, however, these are not hampering further tourism development. • Impact of flooding issues on tourism activities is minimal in Wakatobi. 16.6 RECOMMENDATIONS FOR SPATIAL PLANS 16.6.1 EXISTING SPATIAL PLANS AND REGULATORY FRAMEWORK To ensure a sustainable urban growth and tourism development, it is important to have a detailed spatial plan and development guidelines for tourist attractions areas where the development pressures are increasing at a rapid pace. Indonesia has an established system for spatial planning and most of the destinations have a Spatial Plan for the kabupaten, province or city level. As per the National Spatial Planning Act (Law No. 26/2007 amends Law No. 24/1992), the provincial governments and district governments (kabupaten and kota) are authorized to implement spatial planning. The Rencana Tata Ruang Wilayah (RTRW) and the Rencana Detail Tata Ruang (RDTR) are the two major Spatial Plans prepared at the regional level (province and kabupaten) and local level (kabupaten or Special Areas within kabupaten and kota), respectively. In general, RTRW serves as the concept level Spatial Plan providing broad directions for provinces or kabupaten; and the RDTR serves as the detailed level Spatial Plan indicating detailed land uses such as residential uses by density, commercial uses, mixed uses, government uses, industrial uses, social facilities, etc., for the kota or other designated areas within the kabupaten. The RTRW is managed by the provincial or kabupaten level Bappeda. It has been observed that the RTRW is prepared for the time horizon of 20 years. It is important to review the Master Plan considering the changing socio-economic conditions and infrastructure needs, including new tourism targets and plans. As discussed in the previous sections on Transport Infrastructure and Basic Services Infrastructure, there are several individual sector plans being prepared by the respective authorities, some of which are critical, while others are not needed. Based on the infrastructure needs assessment, the critical plans need to be incorporated into the revised RTRW. This will remove duplication and provide unified planning direction to the respective implementing agencies to execute development programmes towards the common vision and goals. Page 83 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 This section assesses the availability of spatial plans and regulations to ensure that the tourism assets are protected. The main tourism asset for Wakatobi tourism destination is its marine and natural environment; as such it is critical to have regulation to ensure protection of the coastal areas and the eco-sensitive areas in all potential tourist attractions. Following is the overview of plans in place for Wakatobi. Rencana Tata Ruang Wilayah (RTRW) Wakatobi Regency Master Plan 2012- 2032 • The RTRW Wakatobi Regency Master Plan is the regional level structure plan prepared for the time horizon of 2012-2032. It provides broad directions on development structure with strategic areas for urbanization, and infrastructure such as major roads, airports, and ports within Wakatobi Regency. • The plan clearly indicates the environmental protection zones such as protected forest, water absorption zone, spring water zone and mangrove forests; and other water protection zones. • Additionally, the plan shows the water cultivation and other cultivation zones indicating areas for fish cultivation, community forest, farmland, tourism, and residential uses. • For Wakatobi Regency, the detailed Master Plan Rencana Detail Tata Ruang (RDTR) is in preparation process and yet to be completed. Hence, there could be some inaccuracies in boundaries, especially with regards to the protected areas. FIGURE 64: RTRW WAKATOBI REGENCY MASTER PLAN 2012 - 2032 Source: RTRW Page 84 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 Wakatobi National Park Management Plan • The Wakatobi National Park Management Plan indicates specific zones including core zone, protected sea, tourism zone, local cultivation zone, public utilization zone, and land special zone. The Plan specifies permitted and forbidden activities in these zones. FIGURE 65: WAKATOBI NATIONAL PARK PROPOSED ZONING Source: Wakatobi National Park 16.6.2 GAPS & NEEDS FOR IMPROVEMENT IN SPATIAL PLANNING FRAMEWORK Following is the summary of key gaps and improvements needed in spatial planning framework for Wakatobi. FIGURE 66: GAPS IN SPATIAL PLANNING FRAMEWORK, WAKATOBI Existing Plans Assessment Gaps /Needs for Improvement Broad Spatial Concept Plans - The RTRW Regency - RTRW for Wakatobi - RTRW Wakatobi Master Plan provides Regency needs to be Regency Master Plan broad directions on reviewed based on the - Wakatobi National development structure tourism demand, Park Management Plan and broad level land uses. rationalized - Wakatobi National Park infrastructure needs, Plan in place and detailed socio- economic assessments. Detailed Spatial Master Plans - No approved RDTR - RDTR is needed for - RDTR Wakatobi is in Pulau Wangi Wangi and preparation process. Pulau Tomia. • RTRW Wakatobi Regency Master Plan and Wakatobi National Park Management Plan are the 2 major plans in place that identifies eco-sensitive zones for environmental protection in Wakatobi Regency and National Park area. Page 85 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 • RTRW Provincial Master Plan was prepared for the planning horizon of 2012–2032 and provides broad direction for spatial development. It is important to be reviewed and updated in line with the tourism demand and related infrastructure needs, along with the future socio-economic potentials of Wakatobi tourism destination. The reviewed RTRW will help to establish common goal for all implementing agencies to execute the respective sector development plans. • The RDTR for Wakatobi is in preparation process. It is important to speed up the finalization of the RDTR, especially for Pulau Wangi Wangi, and Pulau Tomia demarcating the clear boundaries of protection areas and further distribution of land uses. Page 86 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 APPENDIX I: SOURCES OF INFORMATION USED The methodology for evaluating the tourism potential of Wakatobi presented in this report has been developed using both primary fieldwork research and existing statistics. Quantitative data were provided by different government offices, while interviews provide qualitative information for the research. The sources of primary and secondary data are referenced in the report and listed in the below section. However, in some cases the information presented is a product of experience and observation prior to and during the fieldwork, and as such it is not specifically attributed by source. INTERVIEWS Interviews were conducted with various government offices at central as well as provincial & kabupaten level. The interviews serve to gain a better understanding of tourism development and investment process in Indonesia and Wakatobi. • Central Government • Badan Pusat Statistik • BKPM, Jakarta • Profil Kesehatan of each Kabupaten • Perusahaan Listrik Negara (PLN) • Sanitasi Total Berbasis Masyarakat (STBM) • Bappenas • Kementerian Pariwisata (International marketing, domestic marketing, investment, transport liaison, marketing communications) • Kawasan Economi Khusus, Jakarta • Wakatobi (Provincial & Kabupaten) • Interviews with the Tourism Authorities of Wakatobi. • Interviews with Wakatobi National Park Agency. • Interviews with travel agents and accommodation operators in Wakatobi. • Interviews with local and international investors. • Interviews with WWF’s representative in Indonesia. • Kabupaten Wakatobi Development Planning Agency (Bappeda) • Kabupaten Wakatobi Environmental Agency • Kabupaten Wakatobi Population Agency Page 87 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 • Dinas Perhubungan Komunikasi dan Informatika Kabupaten Wakatobi • Dinas Pekerjaan Umum Kabupaten Wakatobi • Dinas Kesehatan Kabupaten Wakatobi • Perusahaan Daerah Air Minum Kabupaten Wakatobi • PLN (National Power Company) Kabupaten Wakatobi • Dinas Pariwisata Kabupaten Wakatobi • Investment sentiment is gleaned from interviews with existing and potential tourism investors. The investors chosen had interests in various tourism-related assets including hotels, restaurants, ground transportation and travel agencies. The questions were aimed at gathering their thoughts on the pros and cons of SEZs, the tourism investment climate in Indonesia, the future of tourism investment and possible investment in Wakatobi. Potential and existing domestic investors (total of 6) and International investors (total of 25), from the current key arrivals source markets of Australia, China, Japan, Malaysia, and Singapore. • Tour operators/Travel agents: • Local: Wakatobi and Jakarta; and • Foreign (total of 41): from the current key arrivals source markets of Australia, China, Japan, Malaysia and Singapore as well as France, Germany and the United Kingdom. • Hotels in Wakatobi STATISTICS The above data was collected and cross-checked based on the below sources: • Official statistics published by the BPS of Kabupaten Wakatobi. • BPS Accommodation Survey for the South West Sulawesi Province, with results available at Regency Level • BPS Domestic Survey, with results available only at Province Level • BPS Exist survey with results available only at Province Level • BPS Census on population • Reviews on TripAdvisor Website Page 88 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 APPENDIX II: KEY RESORTS Wakatobi Dive Resort Located on the small island of Tolandono, diving and hotel operations started in 1995, with only 12 guests; all of them housed in the same building. At that time, travelling to the resort was difficult; the resort therefore completed its own airstrip runway in 2001, reducing travelling time to 2.5 hours from Bali. The resort now has 26 luxurious villas and bungalows and operates the Pelagian, widely regarded as one of the premier dive yachts in Southeast Asia. Wakatobi provides full-time employment to a workforce of about 140 locals. This luxury eco-resort offers 4 ocean view villas, 15 beach bungalows, and 9 palm bungalows, all fully air-conditioned. A longhouse at the end of the dock includes a relaxation lounge and dive center. FIGURE 67: WAKATOBI DIVE RESORT, TOLANDONO Clockwise from the top: Ocean Bungalow, All-day dining restaurant, Dive yacht’s Superlux Cabin, Villa. Page 89 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 Wakatobi Dive Resort is currently running a monopolistic operation in Wakatobi. Due to the lack of local infrastructure and the high costs involved, building and running a safe and economically viable dive operation is extremely difficult. The resort has aimed for relatively affluent tourists in the European and American markets with special dive interests, such as underwater photography. The resort is actively promoting itself as a top-quality diving resort in a beautiful, unspoiled, and uncrowded environment. As the Wakatobi Dive Resort’s central concept is ‘small is beautiful’, the number of tourists to the resort is kept low as a deliberate strategy. Furthermore, the resort establishes a close relationship with the local community, which involves direct economic benefits (employment, opportunities for local suppliers, and direct reef-lease payments) in exchange for conservation of the resort’s dive sites. Several activities are being implemented in order to protect the dive sites from inexperienced divers and unnecessary crowding including: • Keeping the dive groups small. • Guests are not permitted to fish, harass animals, touch the reef, or walk on sea grass. • Turn 20 kilometers of reef into no-fishing sanctuary by collaborating with 17 village communities around the resort. • The resort sponsors for the patrols of these areas and fishermen not complying with the community and government-approved rules are reported to the village authorities. In return, for these actions, the resort’s dive sites, and particularly the ‘house reef’, are considered by their guests to be some of the best sites in the world. Operation Wallacea Guesthouse Home Base The Hoga Island Marine Research Station offers accommodation in traditionally-built wooden houses exclusively to their students. Within the area, there is also a large, open-air restaurant with bar and a small shop. To assist the development of the research center, the government also constructed wet and dry lab facilities. In addition, there is a lecture theatre where the Indo-Pacific coral reef ecology course is delivered and a fully operational dive center. The base also has a medic and medical clinic. Patuno Resort Established in 2009, the Patuno Resort Wakatobi is located on Wangi-Wangi Island and is owned by three shareholders, one of whom is the family of the head of Kabupaten Wakatobi. The resort offers mid-range accommodation targeting the diving market. The Patuno offers dive packages and has certified dive masters and a marine-biologist on-site. Since the local government started promoting Wakatobi on Indonesian TV this resulted in Wakatobi becoming quite well known among Indonesians, and many middle-class Indonesians now visit the resort. As the resort provides meeting rooms, the Patuno is also able to capture government/group business. The resort employs around 70, mostly local, staff. Figure 68 presents some images of the resort. Page 90 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 FIGURE 68: PATUNO RESORT, WANGI-WANGI Clockwise from the top: Twin room, King-sized bedroom, All-day dining Restaurant, resort’s external. Hoga Island Resort Located on Hoga Island, the resort hosts 8 stilt huts made from coconut tree wood featuring double beds, mosquito nets and hammocks on each balcony. The resort has electricity from 6pm till 10pm. Two rooms share one traditional bathroom with water from the well. FIGURE 69: HOGA ISLAND RESORT Clockwise from the top: The island. Guestroom. Guestroom. Common dining area. Page 91 WAKATOBI: MARKET ANALYSIS AND DEMAND ASSESSMENT: SELECTION # 1223583 Hoga Dive Resort This is the newest resort in Hoga Island and also in Wakatobi, the Hoga Dive Resort opened in mid-2014 with 12 standard rooms (no AC) and 9 suites (Bungalow type with AC) and is owned by a Kendari based Indonesian notary. The resort aims to offer economy & backpacker type accommodation targeting the family and adventurous group markets. The Hoga Dive Resort offers dive packages, snorkelling, and canoeing activities. They are having difficulties coming ahead of their closest and only competitor, the Hoga Island Resort, due to lack of marketing effort. It should be noted that this resort has its own desalination plant and 24 hours electricity generator, unlike the Hoga Island Resort. Other investors/Key players: • Local communities on the inhabited islands who turn their houses into home-stays or other supporting facilities such as restaurants, convenience stores, travel agents, water sports, etc. They both invest and operate these facilities. Page 92