Tourist Markets of Indonesia

Indonesia tourism has both cultural and natural component that widely includes unique heritage with a combination of tropical climate, a wide range of archipelago having 17,508 islands (Pettina, 2016). The country ranks second in the list of largest shorelines in the world (54,716km), following only Canada (202,080km) (Smith, 2017). The country offers many attractive tourist places in the South East Asia.  The key international markets for the tourism sector of Indonesia are China, Singapore, Australia, Malaysia and Japan. These are followed by the other countries in Asia, such as, India, Thailand, Taiwan and Philippines, countries from Europe, such as, UK, France, Germany, and Russia, and the United States. In 2017, the total international footfall in Indonesia was more than 14 million, with an average stay of 21.88 days (bps.go.id, 2018). Tourism and hospitality sector in Indonesia contributes approximately USD 28.2 billion to the GDP of Indonesia in 2017 and accounts for around 4% of the total economy (Investments, 2018).

                               

                                                 Figure 1: Tourist Investment in Indonesia

                         (Source: Forces shaping the future of work in a changing regional economy, 2018)

Pull factors in tourism describe why people travel from one place to another. According to Mason (2015), pull factors include those elements that attract the tourist to move to a particular tourist destination. These include the attraction points, economic and political stability, level of infrastructural development regarding the facilities etc. (Boniface, Cooper and Cooper, 2016). These are mainly the supply-side factors of tourism. According to Garau-Vadell, Díaz-Armas and Gutierrez-Taño (2014), Weaver and Lawton classified the destination pull factors into the following categories:

• geographical proximity to markets;
• accessibility to markets;
• availability of attractions;
• cultural links;
• availability of services;
• affordability;
• peace, stability and safety;
• a positive market image and
• pro-tourism policies which go further to enhance attraction to the destination (Azman and Chan, 2010)

A closer proximity to Australia, New Zealand and South East Asia attracts many tourists to Indonesia. Accessibility to the destination is a major influencing factor. Although the major tourist destinations in Indonesia are easily accessible by road, sea-ports and airports, there are many attractions which are in the interiors. There are plenty of natural and man-made attractions in the country.

International standard services are available in the country, as it has taken the initiative to develop its hotels and beach resorts in some fashionable destination like- Bali island as a prime destination. The economy and political conditions are stable and being a developing nation, the products and services are easily affordable to the international tourists. It has been investing in infrastructure and developing the tourism facilities and services. The social environment is generally safe, although there are some occasional terrorist attacks. It has a culturally positive and vibrant image, with historical and cultural remnants, beautiful countryside and beaches, interesting nightlife in Bali and Jakarta, and the exquisite Indonesian cuisine to splurge on. The pro-tourism policies in Indonesia, such as, visa on arrival, easy money exchange, and tourist friendly policies are helpful in attracting more international tourists to achieve a sustaining growth. For example, the government of Indonesia also revised its policy of free visa-access in 2015 (Joshi et al., 2017).

Tourist Pull Factors in Indonesia

The organization of world tourism describes “crises” as unexpected situation/events, which affects traveller’s confidence to travel to a destination and interfere with their ability to continue the process (Mat Som et al., 2014). Poor infrastructure is one of the major crises that are causing problems for tourism in Indonesia. Poor infrastructure significantly affects the pull factors such as, the accessibility to the markets and destinations, and availability of the services. The lack of sufficient infrastructure in the country has become a persistent problem, not because of the rise in logistic costs suddenly that making the investment climate less eye-catching but because it limits the effortlessness of travelling for visiting the attractions (Hendijani, 2015). The infrastructure in Bali and Jakarta are developed and good to compared to the other parts in the country, except for the problem of traffic congestion, but outside of Jakarta and Bali where the most infrastructure of the country is insufficient, particularly in eastern parts of the country, where there is a problem of shortage of ports, hotels, roads and airports. As stated by Suparwoko (2012), there is infrastructural development gap between the central and the regional areas. The hotels and accommodation facilities, public utilities, telecommunications, restaurants, and roads are more developed in the central areas, contributing in the easy access of the destinations and availability of standard services, while, in the remote and regional destinations, these facilities are not developed well enough to attract the elite visitors. At the same time, the natural calamities, like, floods, earthquakes and volcanic eruptions often cause damage to the existing infrastructure. In July 2018, Bali faced some damages and transport disruption due to volcanic eruption in Mount Agung (Laud, 2018). Such events cause disruptions in network, communications and transport, which have a negative impact on tourism. The lack in this infrastructure of intra and inter-island indicate towards means that a number of regions in Indonesia contain the huge potential for tourism, but it cannot be met easily due to one of the major reasons for creating obstacles for a pull factor about the tourism sector in Indonesia and emerging as crisis in the country.  

Another crisis factor is the terrorist activities in the nation, affecting the pull factor of peace, stability and safety. Being an Islamic country, Indonesia is vulnerable to terror attacks, inspired by the ISIS. The prospect for effectively negative effect is greater in areas where there is limited social security along with economic toughness on the tourism sector. In 2002, the Bali Island in Indonesia archipelago noticed terrorist bombing that has made a huge impact on structural and physical damage on an individual’s psychological and emotional condition (West, 2015). This caused the distraught tourists to leave island leading drop in hotel occupancy to small figures facing the daunting reality of tourism crises. In May 2018, four men with Samurai swords attacked a Sumatra police station, which was an ISIS-inspired attack. One officer was killed and the Indonesia security forces were able to kill those four men. Prior to this event, six people staged suicide-bombing in 3 Christian churches in Surabaya and killed 13 people including themselves (theweek.co.uk, 2018). The terrorist attack that took place in Bali and Kuta in Indonesia, gave rise to the issue of tourism security and safety for both residents of Bali and tourists as well. It created an environment of uncertainty and fear.

Crises Factors Affecting Tourism in Indonesia

The crises of poor infrastructure and poor safety and security measures regarding the terror attacks have been significantly affecting the tourism sector in Indonesia, causing a decrease of a number of travellers to the country per year. The vulnerabilities can be identified as the most popular destinations, which attract the maximum number of people, which could be a target for the terrorists, the attraction points in the remote areas, affected by the poor transport and network systems, and the buildings, which are not suitable during any natural calamity.

Vulnerability to the terrorist attack in Indonesian states and in the most crowded attraction points, causing the serious perception of danger among the tourists, could only be decreased by highly tangible and visible economic, political and military actions enabling the public to be confident in their efficacy (Tsao and Ni, 2016).  The country’s military measures and policies should have an operational structure where they must verify an individual’s identity before allowing them to enter the country and prioritise the safety and security of its tourists. The safety measures should be increased in the crowded tourist spots, so that the impact of any terror attack in future can be mitigated.

Indonesia often faces crises from natural calamities, like, earthquake, floods, tsunami and volcanic eruptions. In February 2017, Jakarta was affected by severe floods. The 9.2 magnitude of earthquake and the consequent tsunami in 2004 had a major impact on the nation, whose effects continued for a long time (indonesia-investments.com, 2018). Hence, when the infrastructure gets affected, it hampers tourism. The lack of developed roads in the regions far from the cities and lack of strong buildings cause infrastructural crisis for Indonesian tourism.

In order to resolve crises by enhancing local economic strength, maintain its residents quality of life, providing intergenerational and social equity, enhancing environmental quality, Incorporating disaster mitigation and resilience and enhancing usage of consensus building, infrastructure and standard education in the country. All these points would be considered while planning the future strategies for the tourism sector in Indonesia to make it more resilience and attracting a large number of tourists from all around the world giving it a competitive edge.  

Strategic crisis management is a very important function of the government in any country. According to the strategic crisis management report by OECD, the governments of the nations must be prepared for any kind of potential crisis, such as, economic shocks, natural calamities, terrorism, and must be able to plan efficiently the actions to handle the shocks or crises (Baubion, 2013). Crises include large scale floods, industrial accidents, like gas leak, cyber-attacks, earthquakes, typhoons, tsunamis, terrorist attacks, volcanic eruptions, epidemics and revolutions to change the political leadership, as seen in the recent past in some countries (Taneja et al., 2014).

The growth of the tourism and hospitality sector of any nation is highly dependent on the economic and political stability of the nation. A stable government can take prompt actions during any type of crisis affecting the tourism sector and a stable economy will help it to implement the measures effectively (Brandon-Jones et al. 2016, p.10). Thus, during any type of natural or man-made crisis, which has a negative impact on the tourism, if the government can implement efficient strategic management measures to mitigate the impact, it would increase the faith of the international tourists on that nation (Al Shobaki, Amuna and Naser, 2016). This will also improve the position of the county in the international tourism market.

Infrastructure as a Crises Factor in Indonesia’s Tourism

Preventive crisis management refers to the anticipation of crisis and taking the measures accordingly by efficient and accurate planning and effective implementation of the crisis management actions (Glaesser, 2006). This type of management requires the skill of anticipation of the crises. The term ‘Crisis’ can be broken down into three categories, namely, potential crisis, latent crisis, and acute crisis (Martens, Feldesz and Merten 2016, p.90). This classification is based on the nature of the crisis.

                             

                                                                 Figure 2: Types of crisis

                                             (Source: Martens, Feldesz and Merten 2016, p.90)

According to De Sausmarez (2007), potential crises are not existing but might occur in the future, hence, those need to be identified and preparations must be made in case the imaginary crisis becomes a reality. Latent crisis is the one that is existing but does not have any measurable negative impact yet. And lastly, acute crisis refers to the one that already has a perceivable and quantifiable negative influence. Thus, it can be inferred that, preventive crisis management is based on the potential crises and the history of the acute crisis situations in the past for similar existing conditions.

In the tourism and hospitality industry, the destination image is an influencing factor. This image is created based on many elements, such as, attraction points, accessibility, and infrastructural development, availability of services, affordability, culture, stability, safety and security. These factors are classified under the pull factors by Weaver and Lawton (Yousefi,and Marzuki 2012, p.170). It can also be said that not only the tourism related aspects but also the economic and political system related aspects also contribute in developing a destination image among the tourists (Mason, 2015). The government of any nation must be prepared to deal with the crises situations.

Preventive crisis management is mostly applied in case of natural calamities. The Meteorological Departments of all the nations have advanced technology to give forecast regarding typhoons, hurricanes, earthquakes etc. (Jia et al. 2012, p.141). This helps the governments to announce early warnings about the upcoming calamities and evacuate the vulnerable people immediately as a part of crisis management plans. Infrastructural development is another significant factor that affects accessibility to the market. Since, the products of tourism are mostly intangible and consist of numerous service providers, the quality of those cannot be evaluated before purchasing and consuming those products or services (Salazar and Graburn, 2014). Acceptance of those goods or services depends on the accessibility. There are many natural attractions in remote destinations in almost every country and to improve the growth of the tourism sector the governments should invest in infrastructure, that is, roads, bridges, public utilities, buildings with sustainable technology etc. However, preventive crisis management enables the governments to monitor the conditions of the infrastructural developments and take appropriate actions if necessary, so that the accessibility to the destinations does not get interrupted.

Terrorist Attacks as a Crises Factor in Indonesia’s Tourism

Safety aspects are extremely crucial in developing a destination image. In case of political instability or potential terrorist attacks, the governments can announce the warnings and tighten the security on the citizens, in the airports and on the international travelers. For example, after the 9/11 attack on the World Trade Centre in New York, the USA federal government had increased the security measures in all over the country, especially in the tourist destinations, which attract a huge number of international tourists every year (Glaesser, 2006). This type of preventive crisis management measures has improved the destination image of the tourist destination spots of the USA, which had benefitted the tourism of the country over the years.

Crisis management instruments are those tools, which are applied or adopted to mitigate the impact and severity of the crises. According to Glaesser (2006), crisis management requires implementation of different types of tools or instruments based on the nature of the crises. However, the common categories of instruments are the products, prices, communication and distribution policies. Marketing mix needs to be developed before selecting and applying the instruments. In the time of crisis, the target market must be determined based on the interested people and change of activity according to the need. The instruments must be implemented in a manner, which would include their duration, sequence and their relation to the crisis event.

During and after the crisis, the marketing tools or instruments are applied in line with the reaction strategy. Before implementing the marketing mix, and crisis management tools, the first step is to identify the crisis through perception and assessment. After a negative event has been identified, that is, in the active phase, the instruments must be implemented with a changed point of view, even if the actions remain same (Johansen, Aggerholm and Frandsen 2012, p.273). In the next phase, the instruments are chosen on the basis of selected reaction strategy. Hence, during crisis, the instruments should be placed in a way that would continuously monitor and indicates if the strategy changes are necessary. In the post active point, instruments are applied to deal with the negative consequences and memories. Regarding the communication tool, during the pre-event phase, the communication is the risk communication, while in the pre-active, active and post active phase; the communication takes the form of crisis communication (Alexander 2014, p.722).  

The crisis management tools and the implementation strategies in tourism are almost similar with that in organisational structure. The marketing mix also needs to be developed in the crisis situations in tourism and the tools will be applied combined and not separately. The product, prices, communication and distribution policies are also assessed during crises in tourism before selecting and implementing the crisis management instruments to reduce the impact and severity of the crises (Drennan, McConnell and Stark, 2014).

For example, during terrorism in Indonesia, the safety and security of the residents, as well as that of the international tourists are at stake. Thus, the priority of the government should be to mitigate the impact of the terrorism. In this case, the safety measures are the product and that need to be developed for all. The product policy as an instrument of crisis management acts as a medium to develop or adjust the product or service in line with the reaction strategy to reduce the negative impact of the crisis. Thus, during and post a terror attack, the services in the tourism and hospitality industry are adjusted by applying the product variation strategy for the benefit of the society by providing the affected community with shelter, food, and emergency healthcare and mental trauma care services. The pricing policy is also adjusted, as the service providers act as non-profit organisation. With the grants and aid from the government, the service units come forward to help the affected community. The communication policy is one of the most crucial instruments during any crisis. It must be distinguished with risk communication. Measures such as, pictorial information, social media, news and media, should be taken to spread the information of crisis to the target audience and to a wider social environment. Lastly, the distribution policy in tourism can be direct or indirect and it is important to know the distributions channels to be adopted during the crisis period. Tour operators, travel agents, transportation and accommodation, destination companies, leisure and sports, are the distribution channels, which operate through direct and indirect distribution channel (Ley et al. 2012, p.1535). During a terrorism crisis, the government should create incentives and other supportive measures for the distribution channels of the tourism industry so that they come forward to mitigate the impact of crisis on the community and the visitors.

Regarding the crisis due to poor infrastructure, caused due to natural calamities or man-made crisis, such as, terrorism, forest fire etc. the government can adopt the product variation strategy and repair and restore the damaged infrastructure. The pricing policy again needs to be adjusted and made free of cost, since the damage is caused by crisis. Crisis communication strategies should include various information and communication channels to inform the wider society and environment about the infrastructural crisis. Lastly, the distribution channel policy should include adoptive strategies for the agents and service providers to make them take part in dealing with the crisis situation and reduce the impacts and severity (Sterner and Coria, 2013).

Crisis recovery stage refers to the phase in which an organisation or a destination in case of tourism industry goes through while normalizing their business (Aljuhmani and Emeagwali 2017, p.53). In the recovery stage, the strategies that should be implemented must contain policies for damage audit or monitoring system, clean-up and restoration actions, and media communication strategies (Blackman and Ritchie 2008, p.51). The recovery strategies include the following steps:

• In this stage, communication is an important tool. It generally revolves around the post-crisis counselling and an attempt to return to the pre-crisis policies and the operations. The messages should contain simple and declarative statements, reflecting the anticipated actions needed to return to the pre-crisis state. Confidence, reassurance and stability are necessary for effective communication (Walters and Mair 2012, p. 98-99).
• Social media communicationare beneficial for gathering information regarding damages, public opinion, threat monitoring, weather updates etc.to mitigate the impact of crisis (Chandler, 2015).
• Calculation of the cost of damagebefore designing the restoration strategies
• Effective clean-up and restoration actionsmust be implemented based on the allocated funds and needs priorities.

The long term recovery stage includes the reconstruction and reassessment actions, which are mostly based on organisational strategies (Huang, Tseng and Petrick 2008, p.212-214). Those strategies are as follows:

• Repair of the damaged infrastructure, like, hotels, roads, water, electricity, and other necessary services
• Rehabilitation or restoration of the damaged environment
• Counselling of the victims
• Restoration of the confidence of the businesses or consumers and bring in more investments
• Debriefing for promoting the inputs to revise the disaster strategies (Ritchie, 2009)
• Allocation of public funding as per the requirements

Thus, in the long term strategies, the major aim is to implement effective communication, post-mortem of the crisis and its damages on the community, infrastructure and economy, and healing processes to return to the pre-crisis state.

Conclusion and Recommendations:

From the above analysis of the crisis management strategy and its implementation, it can be concluded that, the nature of crisis management and its strategies are almost similar in the corporate level and in the tourism industry. During any natural or man-made crisis, the authorities follow corporate generic strategies to mitigate the impact, as in the case of the crises identified in Indonesia, the authorities can implement product variation strategies to reduce the impact. Instruments such as, communication through social media, and change of pricing and distribution methods should be applied. Lastly, in the recovery stage, the tourism authorities can implement reconstruction and reassessment planning and actions. Following are the recommendations that the Indonesian government can implement for crisis management as identified earlier.

• The authorities must implement the communication instruments, such as, social media tools, and news and media to keep the world informed about the crisis, its impact and the plan to recover.
• The product, pricing and distribution strategies should be followed from corporate generic strategies, that is, the agents should be given instructions and incentives to make them participate in crisis management for the benefit of the society. Before implementing the reconstruction activities in the recovery phase, the authorities must assess the costs of the damage from poor infrastructure and terrorist attack and renovation to bring back the pre-crisis stage. After that, required fund should be allocated, and it must be monitored that the fund is not misused.

Hence, by taking the necessary measures, such as, infrastructural development, enhanced security measures etc. the tourism authorities of Indonesia can reduce the effects of crisis like poor infrastructure and terrorism.

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