CHAPTER 1 INTRODUCTION the Number of Tourists Visting Indonesia

CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Each year, the number of tourists visiting Indonesia has kept on growing. It is shown at the official website of the Ministry of Tourism, Republic of Indonesia statistic’s data regarding the number of tourists visiting Indonesia from other countries. Year 2017 compared with year 2018, the number of tourists had increased from 14,039,799 (2017) to 15,610,305 (2018) which is 5.3%. Year 2018 compared to year 2019, the number of tourists had increased from 15,610,305 to

16,106,954 which is 1.57%.

Zooming in to each month in 2019 compared with 2018, the statistic has shown an upward curves pattern although there were several downward curves.

The Number of Tourists Visting Indonesia 2,000,000 1,500,000 1,000,000 500,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2019 2018 2017

Figure 1. 1 The number of tourists visiting Indonesia

Source: Ministry of Tourism Republic of Indonesia (2020)

Moving into Medan, North Sumatra, the statistic also shown fluctuating numbers in 2019. Compared to 2018, last year (2019), Medan number of tourists who came through Kualanamu International Airport, has increased by 6.51%.

Table 1. 1 Growth difference 2018 and 2019 Month Kualanamu, North Sumatra

The growth between December 2018 and 12.35 December 2019 (%)

Jan – Dec 2019 244,530 2018 229,586 Growth (%) 6.51

Source: Ministry of Tourism Republic of Indonesia (2020)

Knowing that in these few years, government has kept on developing and expanding Indonesia’s tourism. As for North Sumatra, Mr. President of Indonesia,

Joko Widodo, would like to create Lake Toba, world’s biggest volcanic lake, as

Monaco of Asia. New hotels and resorts surrounding Lake Toba has also been established. The government has created Silangit International Airport to boost or support the idea of creating Monaco of Asia. However, not all flights are available to land and depart from Silangit International Airport yet. So, the easiest way to access is through Medan, Kualanamu International Airport, and this will increase the number of tourists staying in Medan as Medan is well known for its culinary.

Also, the number of hotels in Medan has kept on increasing from year to year as the number of tourists visiting Medan increases due to business trip, leisure or vacation, MICE (Meeting, Incentive, Conference, and Exhibition) could be weekly, monthly or annually. These reasons will create competition between each

hotel, and they might have to rely on marketing segment to gain high or full occupancy.

PT. OYO Rooms Indonesia (Medan) is considered as a new corporation in

Medan in 2018. OYO Rooms is a startup of an Indian budget hotel chain that was founded by Ritesh Agarwal in 2013. It partners with unbranded hotels or empty rooms to give similar guest experience staying in a hotel. After six years long, this startup has already expanded throughout the world with thousands of hotels, vacation homes, and millions of rooms across hundreds of cities in India, Malaysia,

Nepal, Philippines, Vietnam, Saudi Arabia, Sri Lanka, Indonesia, and many more.

The founder, which is also the CEO, Ritesh Agarwal, said that the team would like to train the workers to be able to work in a hospitality industry, to develop technology, and to expedite marketing strategy in order to attract new guests or users.

In 2018, October 18, OYO Rooms has officially started the business in

Indonesia with a corporate name of PT. OYO Rooms Indonesia. The founder has a desire of helping unbranded hotels with their technologies to increase their service quality on a par with chain hotels so that the occupancy will increases. They have a very strong commitment to help Indonesia develop through hospitality industry.

The country lead of OYO Indonesia is Rishabh Gupta and the head of central operations of OYO Indonesia is Tadeus Nugraha. In this business, properties that have already partners with OYO will have to adopt franchise model (including the management).

OYO will have a full control and management towards the properties and will have a 20% commission of the properties total sales. This will be monitored

through five different applications. There are Krypton, OYO Owner, Co OYO,

OYO OS, and OYO: Branded Hotels for customers or users.

After almost a year establishing, PT. OYO Rooms Indonesia has already able to expand to 80 cities throughout the nation, 720 hotels, and 20,000 rooms. In

Medan, there are three types of OYO, which are OYO Rooms Hotels, Premium

Hotels, and Flagship Hotels, and six different types of rooms. They are standard single, standard double, standard twin, deluxe single, deluxe double, deluxe twin.

They offer an affordable budget hotel price starting from IDR 105,286 per room.

The author observed and found the number of OYO Rooms in Medan is increasing quite fast. Seeing the growth of PT. OYO Rooms Indonesia in Medan, the author would like to analyze how this can corporation competes with other affordable hotels (1 to 5-star hotels) and budgets hotels through its marketing strategies in Medan. Therefore, the author has chosen this research title to be, “The

Analysis of Marketing Strategy at PT. OYO Rooms Indonesia in Medan”.

From several previous researches on this research, the researcher could not find any research about OYO Medan analyzing marketing mix, SWOT, promotional tools, and marketing strategy, all at once. The researcher found one journal with similar industry, Airbnb, however it focuses more on sharing economy.

These are the novelty and originality of the research.

1.2 Problem Formulation

Analyzing the practice of marketing strategy at PT. OYO ROOMS

INDONESIA (MEDAN) is the main purpose of this research.

Therefore, the author identified two problems in this research. They are:

1. What are the current goals (corporate strategy) for PT. OYO Rooms

Indonesia in Medan in marketing segment?

2. What marketing strategies have PT. OYO Rooms Indonesia in Medan

applied to increase room sales and compete with other competitors?

1.3 Research Focus

This research focus on Medan area only, by interviewing one representative from PT. OYO Rooms Indonesia Medan area, spreading questionnaires to people surrounding Medan to see whether the marketing strategy is effective or not, also by conducting some observation related to this research. The access of information given by the corporation and respondents will be also one of the focus for this research. In the end, the result of data collected will be analyze with SWOT analysis

(Strength, Weakness, Opportunity, Threat), EFAS (External Factor Analysis

Strategy), and IFAS (Internal Factor Analysis Strategy).

1.4 Research Objective

Below listed are some objective of the research that could be used to solve the problems listed above. They are:

1. To examine the current goals (corporate strategy) of PT. OYO Rooms

Indonesia in Medan in marketing segment. To show that marketing

strategy and SWOT analysis are relevant, and the data collected are

reliable enough.

2. To analyze the marketing strategies that have been applied by PT. OYO

Rooms Indonesia in Medan to increase room sales and compete with

other competitors.

1.5 Benefit of the Research

The benefit of this research can be found through the process of research and analyzing the problems formulation and objective of the research. The benefit of this research can be separated into two types of benefits, which are:

1.5.1 Theoretical Benefit

1. The theory can be used to convince established businesses or in growing

businesses, it is important for them to identify their marketing

strategies. As we know that the competition between businesses are

quite competitive.

2. To allow citizens to understand more about the existence and the

purpose of PT. OYO Rooms Indonesia establishing in Medan.

3. To be a reference material for others’ studies who are searching for