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Home , 2018 Asian Para Games, Banyuwangi Regency, Ijen, Indonesia, Mandalika (resort area), Nusantara

ISSN : 2230-9519 (Online) | ISSN : 2231-2463 (Print) IJMBS Vo l . 10, Iss u e 1, Ja n - Ma r c h 2020 Boosting ’s Sector to be Competitive 1Ahmad Zafrullah Tayibnapis, 2Made Siti Sundari 1,2Surabaya University, Indonesia

Abstract of transportation infrastructure so that tourist destinations are At present and in the future Indonesia still relies heavily on accessible, and echo the image of Indonesian tourism Wonderful tourism to cover the current account deficit and the state budget Indonesia. However, the target number of visitors tends to be deficit. In fact, every year it is quite difficult to reach the target difficult to achieve due to various factors, such as volcanic of tourists to visit Indonesia because of various obstacles that eruptions, disasters, and others. should be overcome by the government and tourism business The contribution of tourism to the (GDP) actors. Therefore, this research aims to boost tourism sector and foreign exchange supply for Indonesia is still lagging behind through increasing competitiveness. This research analysis refers , and due to the low competitiveness to the views of Crouch & Ritchie (OECD, 1999). This qualitative index, especially relating to the availability of information and research uses secondary data and primary data that are processed communication technology, tourism infrastructure, and and analyzed comprehensively. The findings of this research prove health and issues. Other problems that also reduce that the government has done a lot for the development of tourism competitiveness are institutional factors (especially in regions), and set 10 main destinations as tourism icons. On the other hand, security factors (prone to crime and dishonesty in transactions), there are still disharmony and sectoral ego between the ministry and low awareness. Indonesia’s desire to become a shopping and the local government so as to reduce competitiveness, such paradise, as one part of the tourism industry, seems to be still as lack of promotional activities, the high price of domestic flight difficult to realize due to the lack of support, for example the tax tickets, and limited number of tourism ports. refund process that is still difficult for tourists, the small number of shops incorporated in tax returns, and the absence of factory Keywords outlets. Competitiveness, Attractive Destination, Promotion, Tourism. Other problems that also hamper the development of are the lack of promotional activities to attract tourists I. Introduction and the lack of focus on the development of tourist destinations Indonesia’s tourism sector continues to be encouraged to become which results in the non-optimal achievement of the tourism sector. one of the foreign exchange earner sectors and has a direct In addition, access to tourist destinations is often constrained impact on the people involved in tourism activities in the hope by the price of domestic flight tickets which is more expensive of covering current account deficits, increasing employment, than the price of international flight tickets. This makes tourists and moving Micro, Small and Medium Enterprises (MSMEs). It think twice about visiting other tourist destinations that must be should be understood that the tourism sector has direct and indirect reached by airplane, and finally the length of stay in Indonesia impacts on the domestic economy. Indirectly the development of is not optimal. the tourism sector is able to absorb labor so that it has an impact on increasing economic growth. In addition, the tourism sector II. Literature Review can directly increase capital flows to Indonesia. Tourism competitiveness in Indonesia can be approached by Indonesia has many attractive tourist destinations, such as the views of Crouch & Ritchie (1999) adapted from Michael , , , Ampat, Porter’s model, in which the attractiveness of tourist destinations Bajo, and others. The tries to is influenced by 4 components: (1) core resources & attractors; increase the number of overseas visitors through the exemption (2) supporting factors &resources; (3) destination management; of visitor visas for 169 , accelerate the development and (4) qualifying determination (OECD, 1999).

Table 1: Destination Attractiveness Destination Attractiveness Core Resources & Supporting Factors & Component Destination Management Qualifying Determinants Attractors Resources

1. Resources Stewardship 1. Physiography 2. Marketing 2. Culture and History 1. Infrastructure 3. Finance & Venture Capital 1. Location 3. Market Ties 2. Accessibility 4. Organization 2. Interdependencies Aspect 4. Mix of Activities 3. Facilitating Resources 5. Resource 3. Safety/Security 5. Special Events 4. Hospitality Development 4. Awareness/Image/Brand 6. Entertainment 5. Enterprise 6. Information / research 5. Cost/value 7. Superstructure 7. Quality of Service 8. Visitor Management

Source: OECD, The impact of culture in tourism, 2009 www.ijmbs.com International Journal of Management & 9 IJMBS Vo l . 10, Iss u e 1, Ja n - Ma r c h 2020 ISSN : 2230-9519 (Online) | ISSN : 2231-2463 (Print)

Core resources& attractors, with 7 aspects,are one of the key factors come because there was no intensive promotion abroad so the for potential tourists to determine tourist destinations by achievement of tourism indicators was not optimal, in which the paying attention to the natural state, local culture, event agenda, number of international visitors was only 12,948,000 people with entertainment, and recreation. Supporting factors and resources, total revenues of approximately 12,530.8 million US dollars or an with 5 aspects, are supporters from the trip to the visit to tourist average revenue per visit of 967.8 US dollars in 2019 only. attractions, such as infrastructure, transportation, accommodation services, energy, and others. Destination management, with 8 Data from the shows that the average length aspects, is intended to strengthen the quality and effectiveness of stay of foreign and domestic guests at classification relating to the obstacles or opportunities faced at each tourist reached 1.8 days during July 2019 and increased compared to the sites. Furthermore, qualifying determinants, with 5 aspects, are average length of stay in July 2018 which was 1.73 days. While very influential on competitiveness that is outside the control of the occupancy rate of star rooms in July 2019 averaged the tourism sector in doing anything. 56.73% or down compared to the average in July 2018 which reached 59.30%. This research only focuses on 4 aspects: mix of activities, facilitating resources, organization, and location because of the At present and in the future the tourism sector is truly relied upon to limitations faced by researchers. reduce the current account deficit. The tourism sector was targeted to contribute 17.6 billion US dollars of foreign exchange with the III. Research Method arrival of 18 million foreign tourists in 2019. But the realization This qualitative research focuses on the results of interviews and until September 1, 2019 only reached 9.31 million foreign tourists, observations on tourist destinations that are made as the research even though Indonesia’s tourism competitiveness improved two samples, such as Borobudur Temple, Mount , - ranks to 40th out of 140 countries in 2019 with a score of 4.3. NTT, shopping tourism in , and two tourist in The assessment score of 4.3 is based on environmental aspects, , to see reality, study phenomena, and interpret findings travel and tourism conditions, infrastructure, as well as natural in the field. This study uses secondary data from the Ministry of and cultural resources. Indonesia’s best value in competitiveness Tourism and Creative Economy / Tourism and Creative Economy is in terms of price, and the lowest value is in environmental Agency of the of Indonesia, Statistics Indonesia, and the sustainability. Singapore is a in the ASEAN region with / Government Tourism Office. Furthermore, primary the highest ranking, or 17 with a score of 4.8. Malaysia has a data was extracted from 50 domestic tourists and 50 overseas score of 4.5 with a ranking of 29, and Thailand has a score of 4.5 tourists in each tourist destination with data triangulation patterns with a ranking of 31. and attempted to capture, record, interpret, and present various information by always holding to the data collection to produce Table 2: Tourism Competitiveness Ranking in ASEAN, 2019 in-depth and comprehensive analysis, including understanding Country Score Ranking 2017 Ranking 2019 related to the problem in each tourist destination. Singapore 4,8 13 17 This study also seeks to understand the meaning that arises from Malaysia 4,5 25 29 existing social interactions and the essence of the experience of Thailand 4,5 34 31 tourists as a sample by grouping various existing issues and giving Indonesia 4,3 42 40 meaning to these issues with the support of literature review, such 3,9 67 63 as books, journals, and newspaper articles in daily . This Darussalam 3,8 74 72 study is not “ of value”, meaning that tourism activities are The 3,8 80 75 highly dependent on local values, meanings, culture, and wisdom, 3,4 94 97 given that tourist destination attractiveness is a socially-formed 3,4 101 98 reality through the interaction of business entities and their environment. Source: Economic Forum, 2019

IV. Research Findings Indonesia’s diversity, which includes more than 17 thousand Naturally Indonesia has a large potential of natural and cultural , more than 300 ethnic groups, more than 700 , resources to improve tourism, but the weakness lies in the quality of world heritage sites, and the third largest , is a guides, tourism information, destination development, cleanliness, great potential for tourism development. In the framework of and inadequate tourism service infrastructure. The positive shift realizing Indonesia as a leading tourism destination, 6 programs in ranking in 2017 and 2019 is due to the reduction in travel have been launched: (1) developing leading destinations; (2) constraints and reduced travel costs, as well as the emergence of increasing competitiveness; (3) increasing tourism diversity; new tourist attractions and international events, such as sports (4) increasing tourism integration; (5) strengthening as an Asian tourism, fashion, , and cultural shows. leading destination; and (6) strengthening as a world leading destination. Indonesia’s tourism sector actually has several advantages, one of which is the price is more competitive than in Singapore, Malaysia, The target of 21.6 million overseas visitors by 2020 and 31.8 million and Thailand. But the main problem lies in the limited budget by 2025 is realized by setting five super priority destinations, for promotion so competitive prices and attractive packages are including Lake Toba in North Province, Borobudur not communicated to foreign tourists well. One of the examples in Central Province, Labuan Bajo in is the “Pesona Indonesia” program. Actually there were many Province , in Province, and tourists who knew the program but they were not encouraged to Likupang in North Province. The five tourist destinations

10 International Journal of Management & Business Studies www.ijmbs.com ISSN : 2230-9519 (Online) | ISSN : 2231-2463 (Print) IJMBS Vo l . 10, Iss u e 1, Ja n - Ma r c h 2020 are part of the 10 priority tourist destinations whose development takes the involvement of communities or tourists who can share has been accelerated in the last five years. their experiences while enjoying a tourist destination, including involving public figures who are considered influential to give Table 3: Target of Overseas Visitors testimonials on a tourist destination. Year Number (x people) Sports tourism, such as 2018, 2020 21.6 million 2018, ASEAN Football (AFF) 2018, , 2025 31.8 million Tour de -Ijen, Tour de Bintan, Tour de , Tour 2030 42.8 million de , , Borobudur Run, and others, has proven to be 2035 57.5 million effective in boosting the tourism industry. In addition, the activities 2040 65.1 million of the IMF and meetings in 2018 in Bali also greatly 2045 73.6 million enlivened tourism and the creative industries.

Source: BAPPENAS, 2019 The development of community-based tourism in rural areas has also been proven to be able to sustain the economy, such The budget provided to realize the five priority destinations is as increasing income, reducing unemployment, and suppressing IDR 9.34 trillion in 2020 to build infrastructure, such as , urbanization. For example, a number of villages in the Special bridges, dams, hotels, commercial areas, airports, and ports. Some Region of Yogyakarta have developed tourism, including priority tourist destinations have also been designated as Special Pentingsari , Umbulharjo Village, Cangkringan District, Economic Zones in an effort to attract foreign investors, such as , and Bejiharjo Village, Karangmojo District, Likupang and Labuan Bajo. . Pentingsari Hamlet has developed the concept of village authenticity tourism, and Bejiharjo Village Indonesia is actually very rich in natural tourism and can be an has Pindul Cave tourism. At a minimum the villagers are able to attraction for tourists to come, but it does not necessarily make obtain additional income between IDR 1 million to IDR 2 million visiting time longer because natural beauty has not been followed per month, among others comes from in-house services, village by service offerings from the creative industry sub-sectors, such as culinary specialties, and tour guides. The number of visitors could fine arts, crafts, and culinary. The creativity that drives the tourism be more than 1,000 people per month, and village income was sector has been a real evident in , such as able to reach IDR 200 million per month in 2018. organizing 99 festivals to attract tourists and make tourists stay longer in Banyuwangi with a target of 2.8 days. On average foreign The attractiveness of the Special Region of Yogyakarta as a tourists spent IDR 2.7 million per day per person and domestic tourist destination is still high because of its innovative, creative tourists spent IDR 1.5 million per day per person in 2018. and empathetic community support, such as the holding of the Biennale Jogja, which is regularly organized every year and is The phenomenon of blue fire in the Crater of Mount Ijen until participated by participants from various countries and regions now is still the mainstay of tourism in Banyuwangi Regency. The outside Yogyakarta. The Biennale Jogja XV was participated by Taman Suruh Village Agro-tourism Park at the of Mount 33 artists from the country and 19 artists from ASEAN which Ijen covering an of 8 hectares is used for the Agro Expo lasted 40 days. Similarly, the Jazz Festival event Festival capable of attracting 1,000 tourists a day. The Kemiren at the Prambanan Temple Complex has been going on for five traditional village, which is one of the villages located on the years, participated by Indonesian and foreign musicians, such as path that tourists travel to or leave Mount Ijen, always presents Diana Krall, Sarah Brightman, and an Irish vocal group, Boyzone. cultural and traditional culinary tourism. The number of domestic This kind of event has multi-effects in various fields, including and foreign visitors in the last eight years shows that tourism and economic equality, increasing local revenue, and international the creative industry have proven to be able to become one of the branding. economic drivers in Banyuwangi Regency, Province. In addition to Prambanan Temple, Borobudur Temple which Nationally, the existence of tourism and the creative industry is located 7 kilometers from also has already had a has been undeniable, given the behavior of the community in fixed agenda, such as the Borobudur Marathon which is held travelling has changed and shows something more unique and every year. Besides, there are also a Village Economic Center, brave and is not reluctant to spend more when they want to realize bicycle facilities for rent with all amenities, Manohara Hotel and dream tourism. The current consumption of society has shifted others which are expected to reach around 2 million people by from ownership of goods to travel and adventure consumption 2019. However, the target seems difficult to achieve, especially that has been experienced. This means that the leisure segment foreign tourists, due to the absence of a hospital, no routine continues to grow in line with changes in people’s lifestyles that schedule for performing arts, and inadequate infrastructure and make holidays a necessity. supporting facilities, for example the development of tourist line from Yogyakarta to Borobudur Menoreh People’s consumption patterns have shifted along with digital Hills, while the people in the Borobudur area seem enthusiastic to convenience. The fields of airline ticket services, hotels, and attract tourists by providing cheap lodging, catering, motorbike travel ownership experience an increase in transactions due to and bicycle rental by promoting hospitality. online sales. In addition, the testimonies of tourists uploaded to several social media have proven to be an effective means of Borobudur Temple is increasingly in demand by travelers after tourism promotion in the current so that a tourist destination the presence of De Loamo Glamping, a nomadic concept resort can be more widely known. In applying storynomics tourism, it in Sedayu Village, Purworejo covering an area of one hectare www.ijmbs.com International Journal of Management & Business Studies 11 IJMBS Vo l . 10, Iss u e 1, Ja n - Ma r c h 2020 ISSN : 2230-9519 (Online) | ISSN : 2231-2463 (Print) which is part of the Borobudur Highland area, and is managed Table 4: Destination Attractiveness by the Borobudur Authority Agency. With a location of about 12 Supporting Factors & Core Resources & Attractors kilometers from the Borobudur Temple, it is expected to increase Resources competitiveness and boost and prolong the visit. De Loamo Mix of Activities Facilitating Resources Glamping is also harmonized with the potential of garden tourism in Pagerharjo Village, Samigaluh District, Kulon Progo • Sports tourism, • Tourism facilities Regency. In addition, off- tours are also available by jeep to fashion, music, cultural tend not to change explore the pine forest and Menoreh Hills. performances, souvenirs and there are no new and culinary, which are sensations to attract Tourism is very reliable because it has a very fast effect and has associated with natural tourists. multiple impacts on the eyes of tourists. They not only see beautiful beauty and history. • Tourists are always scenery, but also stay overnight, taste food and drinks, shop, and • Holding international looking for new, enjoy the activities provided by the locals. But the prestige of Bali events, such as unique, pleasant, and until now still occupies the highest position and become the first sports tourism, ballet relaxing places that tourist destination in Indonesia. This means that the attractiveness performances, are integrated in one of tourist destinations other than Bali must be increased so that exhibitions, and music area, or close to one tourists do not hesitate to visit these destinations and can make performances. another. long trips and spend their money in Indonesia. • Tour packages are less • Tourism not only integrated and packaging requires branding, Incessant efforts by the government to offer 10 tourist destinations as tends to be monotonous. but also intensive a priority for tourism development must be accompanied by careful promotion. measures to avoid over tourism as a result of tourism exploitation that can erode the carrying capacity of the environment, ecology, Destination Management Qualifying Determinants social and culture. One worrying example is that groundwater Organization Location conditions in Bali are increasingly critical due to being sucked in • Ministry of Tourism by the tourism business, as well as the scandal of smuggling 41 and Creative Economy • The government, dragons from Komodo to abroad. Other factors / Tourism and Creative after establishing that also need improvement are unfair price competition between Economy Agency of the 10 strategic national conventional travel agents, including illegal practices that only Republic of Indonesia. tourism areas. promote via social media or the to attract potential tourists. • Provincial, Regency and • Tourist destinations The purity of the environment, ecology and local culture must be City Government Tourism are scattered in protected because it is a long-term investment and can increase Offices. various regencies Indonesia’s bargaining power in the eyes of the world. • Center for Conservation of / that require Culture. ease of accessibility Another thing that is also very important with regard to tourism • Ministry of Transportation, and completeness of is that Indonesia has a sailing tourism line of 3,000 nautical miles • Ministry of Transportation, facilities on site. which does not get throughout the year. This shows Transportation Agency of • Tourist villages that Indonesian sailing tourism can take place in a full year with Provincial, Regency and emerge and are different locations. However, the development of sailing tourism City Governments. managed according in Indonesia does not only require the of physical • Ministry of Public Works to local wisdom. infrastructure in the form of tourism ports, but also include local and Public Housing (PUPR), • Mall, hotel, human resource management, control by the local government, Provincial, Regency, and restaurant, and marketing strategies to foreign markets, including ensuring City Government. merchandise shop. the safety and comfort of travelers. Source: Researcher, 2019, Adopted from OECD, 2009 Indonesia already has several sailing boat festival agendas, including , Wonderful Sail to Indonesia, and Based on information in Table 5, domestic tourists expect that the Darwin-Ambon Yacht Race. However, the interaction and during the tour they feel comfortable, safe, friendly, and always economic benefits received by local residents have not been look at social media to determine one or more tourist destinations. optimal so it is necessary to realize inclusive tourism to improve Domestic tourists prefer tourist destinations that provide the living standards of the local community by always paying playground, especially when bringing children, while foreign attention to local wisdom. tourists prefer destinations that have good prestige and privacy, in the sense that they are not chased by traders, beggars, and those Basically tourism market is formed because of the balance of who suddenly ask to take pictures, or serve as a spectacle. demand and supply. There are many factors that affect the amount For domestic and foreign tourists, the unique tourism experience of demand and supply in the tourism market. Tourism demand is is a target, and price is not a major problem because the most influenced by the amount of revenue, the effect of promotion, the important thing is to get interesting experiences and stories that price of airplane or ship tickets, the availability of infrastructure are worth paying, including experiences that cannot be done in and facilities, the agenda of tourism security activities, and others. the country of origin of foreign tourists. Meanwhile tourism supply is more influenced by the excellence The tourism market is experiencing rapid development due to and uniqueness of tourist destinations, hotels or lodging facilities, lifestyle changes, the emergence of new tourist attractions, the games, entertainment, souvenirs, and others. incessant promotion of tourism, and the rapid development of

12 International Journal of Management & Business Studies www.ijmbs.com ISSN : 2230-9519 (Online) | ISSN : 2231-2463 (Print) IJMBS Vo l . 10, Iss u e 1, Ja n - Ma r c h 2020 attractive and affordable creative products. This is in line with the destinations, including implementing . viewpoint of Crouch & Ritchie (1999) that there are many factors The development of tourism in Indonesia is not only in that influence the demand and supply in tourism, including factors infrastructure, but also in in an effort to support the that are ignored by many stakeholders, such as toilet cleanliness, success of tourist destinations, such as aspects of culture, creativity, the expensive price of flight ticket to get to main destination, and hospitality so that people around the tourist destinations are discrimination on the price of ticket to enter not just spectators. Thus the development of tourism is expected sites between domestic and foreign tourists, including the price to provide economic benefits, maintain the environment, and of souvenirs. Indifference, or without any effort to improve and empower people in the real sense. change, makes Indonesia’s tourism competitiveness be inferior to other countries, such as Singapore and , that regularly VI. Acknowledgements make innovations and develop creativity,. The research was funded by .

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Ahmad Zafrullah Tayibnapis graduated from Economic Faculty of Surabaya University, Surabaya, Indonesia at 1980. Master Graduate from , Yogyakarta, Indonesia at 1991. He has been Associate Professor of Economic and Business Faculty of Surabaya University at 1979-2021. His research interest included industrial economic, Indonesia’s Tourism, Indonesia Economics, and International Economics.

Made Siti Sundari graduated From Economic Faculty of University, Surabaya, Indonesia. Master Graduate from Brawijaya University, , Indonesia. Ph.D graduate from Brawijaya University, 2015. She was lecturer in Surabaya University. Her research interest included industrial economic, Indonesia Economics, and International Economics.

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