Faculty of Economics Airlangga University Surabaya-Indonesia ABSTRACT Tourism in all parts of the world has been an important sector to gain devisa and enable economic movement. It is also one of three super service industries together with information technology and telecommunication which is experiencing fast growth. Recently in Indonesia, travel and tourism sector are also becoming development priority after bombing, terorism issues and contagious deseases that cause the decreasing of tourism sector in the last five years. Tourism industries in East Java have 605 tourism objects, potentially and strategically to become tourist main destination. Morever, East Jawa lies in the centre of three popular tourism destination areas like Bali, Jogjakarta and Central Java. Its key success factors rely on choosing strategies for developing East Java Tourism sector. Then, East Java will have magnetism for foreign and domestic tourists whose all the time preferring out bond tours onto neighbour countries like Malaysia, Singapore, Thailand and Vietnam. This research goal is to find strategic factors (internal and external) that influence East Java tourism development, and then, followed by strategic recommendations to develop tourism sector using qualitative method, particularly descriptive-evaluative type. The data collection were collected from Dinas Pariwisata Jawa Timur, Dinas Perhubungan Jawa Timur, DPRD Jawa Timur, Dinas Pariwisata Surabaya, Probolinggo, Magetan and Mojokerto. Also at ASITA (Association of the Indonesian Tours and Travel Agencies) Jawa Timur, PHRI (Perhimpunan Hotel dan Restoran Indonesia) Jawa Timur, HPI (Himpunan Pramuwisata Indonesia) Jawa Timur and Casa Grande Surabaya. Including tourism objects direct observation in Kabupaten Magetan, Kota Madiun, Kabupaten Pacitan, Kabupaten dan Kota Probolinggo, Kabupaten Mojokerto, Kabupaten Gresik, Kota Batu, Kabupaten Lamongan, and Kota Surabaya. The recommendations from the research are to create synergy between all East Java tourism stake holders. Managerial up grading on tourism objects management and quality of its services. Increase quality of tourism human resources, and infrastructure particularly at Southside of East Java. Intensification and extend of promotion, marketing and create positioning. At last, it is also important to consider the market potency of abroad and domestic tourists, as well as to increase tourists’ safety and comfort. Key words: Tourism, Strategic factors, strategic development.


INTRODUCTION Tourism as one of the national development programs in Indonesia, now has become a focus of national and regional government. The development of tourism will be conducted with the variety of culture, art and natural condition. It is being estimated that economics world will be supported by three super service industry, such as information technology, telecommunication and tourism ( Yoeti, 1999,5). In 1999 it seems that the performance of tourism in Indonesia getting better even the growth is still in the small scale about 2,6 % with 4.73 million visitors and US$4.71 billion income ( Musa, 2005:3) The unpredictable situation in Indonesa, due to the economics crisis, Bali blast and terorism issue and global desease like avia flu, brought some effects to the tourism industry both globally and nationally. After economic crisis the number of foreign tourists is decreasing. In 2001 the number of visitor is 5,153,600 and became 5,033,400 in 2002. (BPS Pusat, 2004: 78). The effort to raise the national tourism industy need integrated link among every elements in tourism activities. It means that if one of the activities weak, than will be affecting the performance of tourism industry. The improvement of tourism industry really need a serious plan, coordination and link among every single element which support tourism ( Spilane, 1987:92). The purposes of this research focus on the effort of development in tourism sector through the implementation of strategic management. Firstly, it will discribe the potentials and obstacles that East Java has in the tourism development. Secondly to find the strategic factors that influece the effort of the development tourism sector. Finnally conducting the formulation of strategic and teh development programs throgh the analysis of strategic management. Conceptual Framework Tourism is estimated being the dominance income of the regional area of East Java. The development of tourism sector has the importance role, because it will raise the regional income and also job opportunities. Moreover the development of tourism has an importance role to keep the culture remains. By the definition, tourism is traveling from one place to another, both individual and groups to find the pleasure and happiness with the scenery, culture, art, knowledge and science. ( Soekardijo, 2000:5). Tourism is also known as a business activities in providing goods and services for the tourists concerning with the nessecities in traveling. So tourism is an activity that consist of hundred element of business, include transportation like flight, cruise, train, tour agents, travel biroes, hotels , restaurant, convention hall, etc. ( Lundberg, et al., 1997:6) In other words so tourism is such an economic activity. In the global perspective, tourism is an economic industry that has a biggest position in the future, and called as “ the biggest earner and employer” (Yoeti, 1998:9). The definition of tourim will expand in more complex way in the future. This research concern with the tourism development that include the facilities, marketing, potential area and participation of all of parties in the tourism industry. 2

In developing the tourism area, it needs to be supported by the following factors: 1. The potential tourism such as the scenery, culture, tradition, art and historical places 2. The facilities include infrastructure of transportation, hotels and restaurants 3. Marketing is an effort to increase the visitors and tourism image. 4. Society participation in making tourism development 5. Financial support from national and regional or local government for funding the tourism development

The tourism plan Optimizing the advantages and preventing from negative effects of tourism, the good plan is needed. The following reasons below show the importance of tourism plan. 1. Management of modern tourism is still a new area both for government and the private institution. 2. Tourism is complicated and concern with multi sectors area, include sectors like agriculture, fishery, historical landmark, transportation, infrastructure, etc. 3. Tourism is a service marketing, it is closely related to the place, facilities and services that need an integration among them. 4. Tourism is really influenced by the changes in time, market trend and all internal and external environmental changes 5. Tourism need human resources that have expertise and specific capabilities in the tourism business areas. 6. The tourism development needs a specific organization structure, marketing strategies, promotion programs, legal aspect and regulation 7. The good plan can give a rational bases for the project development to public and private sectors in investment planning According to Mountinho strategic planning in the tourism organization is the development of the long range planning starting with the analysis of opportunities and threats faced by the tourism organization. The strategic planning process is described in the figure-1 below.


The strategic planning process Phase 1 Define the firm’s mission

Phase 2

Conduct a SWOT analysis

Phase 3

Formulate specific goals

Phase 4

Define the strategic options

Phase 5

Conduct a portfolio analysis

Source: Luis Moutinho, Strategic Management in Tourism. (London: CABI Publishing, 2000), p. 263. Methodologies This research was conducted with the descriptive-evaluative method. This method generally use to observe an object, condition of a system. The purpose of descriptive research is figuring the facts and interrelation among phenomena in a systematic, factual and accurate way (Nasir, 1988:63). Moreover this method can be used to make prediction and the implication. In this research the descriptive-evaluative method use to figure the condition of objects, gathering information about tourism development in East Java. The evaluative method gives a contribution to the knowledge development. This evaluative research objectives are to make recommendation to the decision makers about the strategic option and programs needed to develop the tourism in East Java. This research was conducted in East Java because of the following reasons below 1. East Java has some potential tourism objects such as beaches, exotic mountains, specific culture, caves, water fall, and historical landmark. 2. The population is big. It’s a potential market for domestic tourism. The population of East Java is about 36.4 million 3. East Java has better income per capita compare to others 4. The local government of East Java province has some special programs in tourism development, but the deep analysis and evaluation have not been well done yet.


Data collection In collecting data, the use of observation, interview and document study are needed to fulfill all data needed. The observation needed, since the scope of this research is wide, observation make researcher possible to collect the tourism data of behavior and condition in the real manner. The use of in depth interview to the people who have relation in the development and planning tourism in the East Java. From the interview, researcher can gain the comprehensive actual and objective information,. In this research, all parties that have direct relationship in the development of tourism industry in East Java such as people from tourism departments, hotels and restaurant associations, Association of Indonesian Tours and travel agencies. The secondary data will be collected with the documents study. Analysis East Java tourism has been built since 1956, this development was influenced by the national resources and the socio culture condition and the economic sector also. Since President Instruction No.7/1987 about the tourism deregulation, the growth of tourism sectors like hotels, recreation centers, travel agents, restaurants and airline industry start to grow. The growth of travel agents in 2002-2004 happened in many places (city) in the East Java, such as Banyuwangi, Jember, Tuban, Tulungagung, Probolinggo, Gresik, Lumajang, Pasuruan, Mojokerto, Ponorogo, Madiun, Pacitan, Sampang, Sidoarjo and Kediri. There are 258 company running the tourism businesses, consisting of 166 travel biro, 35 branch office and 57 travel agents. The growth of this business is about 17.5%. The number of tourist guides in East Java in 2004 has risen about 38.4% or 282 persons i.e young tourist guide qualification, 64 persons middle guide, and 130 persons is special tourist guide. The language capabilities are 10 person in Dutch, 139 person in English, 54 persons in Japanese, 16 persons German, 17 persons in Chinesse and 11 person in French. By the end of 2004, there are 104 consultants in the tourist development service area but its still location in a big cities like Surabaya and Malang. According to the tourist regulation the accommodation business are devided into 5 classification, namely star hotel, melati hotel, homestay, youth hotel and camping ground. In 2004 there are 69 unit star hotels, 8,273 rooms; 673 unit melati hotel, 17, 598 rooms; 565 unit homestay, 1,894 rooms, and 1 youth hotel, 31 rooms 118 beds; 26 camping grounds 131.5 ha. The growth of some business in recreation in East Java in 2004 are as follows : Recreation center 95 unit, Swimming pool 9 unit, natural swimming ground 26 units. Golf course 10 units, Cinema 42 units, Fantasy playing ground 5 units, Night club 12 units, discotheque 23 units, Massage center 42 units, open theater 8 units, water recreation 21 units, Sport center 33 units, general meeting building 124 units, swimming pool 73 units, tennis court 162 units, badminton 93 units, sport center 19 units. The number of visitor in East Java in 1997 was decreasing about 5% and 1998 even worse, the decreasing is about 43,1%. The positive growth was in 1999, increased about 16,2. In 2000 there were increasing of foreign tourists about 38.7% or about 104,155 foreign tourists and in 2001 raise 7.6% or 112,041 persons. Bali blast in Oct 2002 made the growth only about 2.55% or about


114.906. In 2003 again East Java tourists was decreasing significantly, about 42.97%, it was caused by SARS disease. SWOT Analysis Based on the strategic issues and factors which have influenced on the industrial environment of East Java tourism, it can be identified the internal and external factors. Strengths 1. Having 605 tourism object like nature, culture and specific intend. Moreover the natural tourism objects, can be the mainstay to snatch the tourists. If the tourism objects get well managed it can be a big thing to develop tourism by welcoming much more foreign and domestic tourists, increasing the length of stay and the amount of money for shopping. 2. The growth of specific intend tourism object such as golf, rafting and also MICE ( Meeting, Incentive, Conference and Exhibition) which show some proofs to get foreign and domestic tourists attention to come to East Java. 3. Accessibility of the object is good enough with the ability of any different kind of transportation. Such as Tanjung Perak harbor, Juanda International airport etc. which are ready to use for tourist needs. 4. Transportation like bus and train reach almost all over region (village and cities) in East Java. And for air transportation there are 15 airlines, and 8 international airlines 5. The support of accommodation such as high class hotels, restaurants are in a good condition. In 2006 there are 1099 units with the capacity of 26935 rooms in East Java. 6. Tourism services like Tourist travel Bureau, branch bureau and the travel agents are growing fast with good quality. There are 275 in East Java. To those joined in ASITA East Java, they have standard which has been accredited by international Association of Travel and Tourism Agencies (ATA). 7. Tourism planning, including strategic plans, and development of tourism programs are stick to the Ministry of culture and Tourism programs, with the adjustment of “Medium plan development” of East Java and envolving all stake holder of tourism in East Java. Weaknesses 1. Most of the management of tourism objects in East Java (which are owned by the government) are not well organized 2. There is no integration between tourism objects among regions 3. There is no tourism agenda, So it is difficult to make some tourism packets that interest tourists.


4. The access to the tourism objects are still not good enough in quality, the distance between one to another object is still far. This condition is getting worse because of the mud problem in Sidoarjo. 5. Promotion from tourism object in East Java is poor, both nationally and globally. 6. The availability of human resources is not enough. These problem happen in restaurant, hotel and in the tourism object sectors 7. Society who live around understanding about tourism the tourism objects still have a poor

8. The coordination between tourism department ( province and city) is still in bad shape Opportunities 1. Since the Reg No. 22/1999 and Reg. No. 32/2004 put into effect, it gives a big chance for some provinces and cities to do reconstruction, including tourism sector independently. 2. Rupiah’s depression of world’s main currency, tourism object in Indonesia seem cheaper and it can make foreign tourists put more interest coming to Indonesia 3. There are archeological remains, ruins, which spreaded around East Java. Even some of it are well-known in international world like Trowulan and Trinil museum 4. Technology advancement mainly in transportation sector, information and communication make a bigger opportunity for tourism industry in East Java 5. The big number of East Javanese (37 billion people) give a chance to rise tention of domestic tourists. And also being a source to get good quality of human resources in tourism sector. 6. East Java society which dynamic, religious, and have many different kind of ethnic enriched with the culture, such as dance, using, wayang, custom ceremony; those are something that can interest tourist to visit East Java 7. The geographic position of East Java in Java-Bali overland tour is a great opportunity to get more tourist interest both domestic and foreigners. 8. East Java fulfill the world’s trend of tourism. Such as the originality of nature and its unique. The theme of back to nature and basic culture is really what East Java has Threats 1. Politics instability, mass anarchy and harsh demonstration, can affect on visitors comfort 2. Bali blast, terrorism issues, avian flu, have made a bad image on tourism in Indonesia.


3. Area autonomy has negative effect by making sector ego became more influenced. 4. There are no specific rules about tourism in province level. So the tourism development doesn’t have a good support in law yet 5. The economic growth is still low. A big number of poverty and jobless is potential to rise criminality in society 6. Some of East Java societies still have a low awareness of the importance of tourism in developing it 7. Damaging environment like cutting down trees and destroying archeological remains are threatening the existence of tourism industry Strategic option and Tourism Development Programs SO Strategic Options 1. Optimizing the area autonomy which focus on tourism object development in each city through independent grand or cooperation with private industry/investor 2. Getting tourists interest with entry point o golf, rafting etc. Which are popular ad also use a big potency of MICE 3. Supplying interesting program with tourism object in each area integrated with the culture of East Java society. 4. Developing tourism object to make a better image of East Java Tourism. 5. Correlating the achievement point of tourism in East Java with the achievement point of tourism in Indonesia ST Strategic Options 1. Establishing the specific rules of tourism in province level for the persistence of tourism industry, improvement of environment quality 2. Generalizing visions between decision makers to force the development and reconstruction of facility which good in quality on some tourism objects that need synergy between government, private sector and society 3. Maximizing tourism facilities to get more tourist interest coming to East Java through promotion, get rid of negative issues that attack Indonesia’s tourism 4. East Java tourism plan to eliminate sector ego through communication and coordination intensively to all the stakeholders especially the government. WO Strategic Options 1. Focusing on marketing programs, promotion, public relation and also image building from tourism destination in East Java. 2. Developing tourism objects, and build integrated tourism area with two or more nearby tourism objects which aren’t far apart.


3. Raising the promotion and marketing of tourist destination in East Java as the main tourism objects by using the advancement of information technology and telecommunication 4. Supplying professional human resources in tourism sectors which are good enough both in quantity and the quality by optimizing the huge number of East Javanese WT Strategic Options 1. Focusing on promotion and reconstruction of tourism image in East Java 2. People participation that start from the awareness about the importance of tourism 3. Developing tourism objects. Making a better management for service system 4. Tourism reconstruction with the concept of low cost that still interest the tourists Results Based on the potential sides and properness, East Java is good enough to compete with other favorite places in Indonesia like Bali, Yogjakarta and Central Java. East Java has 605 tourism objects not only in natural tourism object and cultural but also in specific intend like rafting, golf and MICE in Each Java are very potential. East Java is in the third place after Bali and Jogja, for total number of tourism in leisure need. But for business and MICE need East Java is in the second place after Bali. The management of tourism object area and the quality of tourism service are not maximized yet. Most of tourism object area do not have a good management based on international standard. Except for some objects which have a good corporation with private industry like “Kawasan Bromo”, “Jatim Park”; “Wisata Bahari Lamongan” , “Taman Safari Prigen, and Bentar Beach. Promotion and marketing are still poor, moreover there is no financial support from regional and national budget. The geographic position of East Java in national tourism map which is in the Java-Bali overland is very potential. It gives the biggest chance to rise the traffic tourist visit. The area of East Java in general is easy to access for tourist. But the infrastructure which support the development of tourism still need to be optimized, especially in the South area of East Java. Human resources are the main weaknesses in order to develop tourism in East Java. We need more human resources in tourism industry. The obstacle of developing tourism sector ( planning, coordination and evaluation) which need synergy between sectors and region. This research makes an opportunities to the next researcher, especially to those who concern in strategic management in tourism. Basically we can break this research into some other topics. Such as research about management in tourism destination and the research about human resources management in tourism.


Implication and discussion The department of Tourism in East Java needs to go along with the department of tourism for cities and villages in order to optimize the potency of tourism in East Java. Include making a cooperation with private party of investor in managing the tourism object area which has economic potential and maximize the role of tourism industries. Making clear the role of distribution between the department of tourism in east java and the department of tourism for cities and village in order to be more focused on effective, efficient in developing tourism. It is good for province department of tourism to give more attention and financial support on promotion and marketing activities for tourism destination in East Java. For department of tourism in some cities and remote areas need more concentrate on managing tourism object, tourism package programs, rising quality of service in tourism object area like toilets, parking lot, road, and public transportations. Forming special department that has responsibility of running promotion and marketing function. This department consists of province tourism agency, city/village tourism agency, and some tourism investors and also some professionals concerning in tourism marketing. Not only to promote East Java tourism destination, but also to generalize movements and synergy for all the tourism elements. Suggestion to all of the executives and legislatives in the province level and city level to stake out special area rules for tourism. It means to give a strong basis regulation for developing tourism, certainly regulation for investor in tourism, keeping the environmental conservation and culture, developing the same vision and perception, making a bigger access to source of finance.


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