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Strategy to minimize the leakage of Balitourism by Made Antara

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paper text:STRATEGY TO MINIMIZE THE LEAKAGE OF BALI TOURISM By Made Antara1), I Gusti Ayu OkaSuryawardani2), Agung Suryawan Wiranatha3) University of Udayana, Bali, Indonesia Email: 1)[email protected]; 2) [email protected]; 3) [email protected] ABSTRACT Tourism hasbecome an engine of the economy, both at the national and regional levels, as well as in Bali. Touristsexpenditure in Bali for various purposes has been captured by various groups engaged in tourismactivities. But there is a phenomenon that the tourists expenditure in Bali is not all enjoyed by the people ofBali, because there is a leak (leakages). The goal of the second (2013) was formulated 'strategy tominimize leakage of tourism in Bali’. If the at first-year study (2012) using quantitative methods, butresearch in second year (2013) using qualitative methods, i.e. with the help of SWOT and Focus GroupDiscussion (FGD), the respondent is expert in tourism to make an assessment and consideration of theinternal factors and external factors of bali tourism, and the strategies and programs that have beenformulated to minimize the leakage of Bali tourism. The results of research showed that the strategy ofminimizing leakage bali tourism, especially the leakage of accommodation, among others: (1) Improve theimage of Bali as a world tourism destination based on the unique local culture; (2) Improve comfort fortravelers in Bali; (3) Enhance the competitiveness of bali tourist products; (4) Improve the quality andquantity of managers/ local workforce, making them competitive; (5) Develop and promote domestic andlocal agriculture to supply of bali hotels; (6) Develop and promote the national production hotels equipmentin order to international standard, so it is ready to supply the needs of the hotels; (7) Reduce the import



needs of the hotel and substitution with domestic or local product; (8) Reduce foreign investment byproviding local and domestic investment priorities; (9) Increase the quantity, quality and continuity anddiversification of local agricultural products, so as to reduce imports; (10) Increase production of hotelequipment, thus reducing imports; (11) National Policy for pro-local products, in order to stimulate thedevelopment of agricultural and industrial of hotels equipment; (12) Improve the performance andcompetitiveness of tourist destinations of Bali, so as to compete with other tourist destinations of thecountry ; (13) Increase the quality of goods and services of domestic and Bali, so as to compete in the eraof economic globalization, and (14) Increase competitiveness manager local hospitality workforce. Basedon the research results, it can be recommended, among other things: (1) Stakeholder tourism, especiallythe hotel and restaurant management in hotels need to implement programs that are formulated in thisstudy, resulting in leakage of tourism, particularly from sector accommodation can be minimized, and (2) Inan effort to determine the leakage impact on the economy of Bali, simulation leakage reduction throughfurther research needs to be done in 2014 MP3EI the "Impact of Bali tourism leakage on the growthsectors of the economy and the distribution of income (year-3, 2014). Keywords: Strategy, Minimize,Leakages, Bali Tourism Paper presented at The

155th IRSA International Institute, Tourism and Sustainable Economic

Development, 3-4 August 2015, Bali, Indonesia.

INTRODUCTION GBHN TAP MPR No. II/MPR/1998 confirms and statement of President of republicIndonesia Joko Widodo in 2015 that tourism has becomes a beacon of hope in supporting the economicdevelopment with various of positive aspects for national economy. Therefore Indonesian Governmentseriously encourage the development of tourism with continuing to effort to improve the image of tourismby increasing of security, organized an international conference, to develop the attractions anduniqueness as one element of attraction, improve the tourism facilities and infrastructure as an element ofamenities, so accesibility of and to lead the tourist destination is created, and regulations relating to theinstitutional and organizational of tourism services as an ancillary element, so that increasing theconvenience of tourists in visiting attractions and tourist destinations in Indonesia. From an economicperspective, the positive impact of tourism in Bali in general are (1)

8bring in foreign exchange for the country, through the exchange of foreigncurrency to spend in tourist destinations; (2) The potential market for goods

and services

in Bali; (3)

8increase the income of the people whose activities are directly or indirectlyrelated to tourism services;

(4) expand job creation,

8both on sectors directly related such as hotels, restaurants, travel agencies,



as well as sectors that are not directly related such as

craft industry, the supply of agricultural products, cultural attractions, retail, others services and so on; (5)The sources of local governed revenue, and (6) stimulating the artists creativity, both artist and craftsmanof small industry as well as percussion and dance artists dedicated for tourist consumption. The tourismsector is the priority in the development of Bali's economy has shown very rapid development, which ismarked by several indicators, among others, an increase in the foreign exchange, tourist visits, length ofstay, tourist spending and the number of tourism facilities and infrastructure. Tourist visiting which directlycomes to Bali every year continues to increase, only when the first Bali bombing in 2002 tourist visitingdeclined. In 1989 foreign tourists visiting who directly to Bali only amounted to 436 358 people by thecontribution of foreign exchange of 26.87% of the national tourism foreign exchange. Direct foreign touristsvisiting Bali in 2000 as 1.42.839 people with foreign exchange contribution amounting to 20.91%, and in2012 foreign tourists visits directly to Bali as many as 3,137,385 with foreign exchange contributedapproximately 40% of the total national income (Bali Tourism Office, 2012). So it seems clear that theincrease in tourist arrivals will increase total spending travelers as an injector in the economy of Bali. Theforeign tourist spending will be the perpetrators of tourism revenue, and then removed again for variouspurposes, and this expenditure will be the income of the other economic actors outside the tourism sector,and ultimately will create a multiplier effect in the form of creating income and labor absorption in thesectors economy in the Province of Bali. However keep in mind that the total tourist expenditure in an areaof tourist destinations such as Bali within a certain period of time, not entirely become revenue of tourismactors and community in the area, there are some who leak (leakages) before it was spun in the Balieconomy becomes Bali community income. Base on the research of Antara et al. (2012), total leakage Balitourism through all hotels in Bali (stars and non-star hotels) is Rp 3.119.328.498.425 or 24% of theaverage income of the hotel, or 12,46% of bali tourism revenue from foreign tourists (Rp38.867.763.900.000), or 6,09% of total tourism revenue from foreign and domestic tourists in year 2012(foreign + domestic = Rp 38,867,763,900,000 + Rp 12,394,464,264,000 = Rp 51.262.228.164.000). If aleakage is broken down by the classification of hotel group, the group of 4 and 5 star hotel leaked thelargest Bali tourism revenue of Rp 2.278.255.301.110 (73% of the total leakage), 1, 2, and 3 star hotelgroup leaked Rp 157.914.870.365 (5% of the total leakage), and a group of non-star hotels leaked Rp683.158.326.950 or 22% of the total leak. Although appear leaks non-star hotel group larger than 1, 2,and 3 hotel groups, it is solely caused by non-star hotels most populations, so that when the average leakdeveloped on the population (blow-up), obtained leaks groups of non-star hotel to be larger than theleakage of 1, 2, and 3 hotel groups. Efforts to minimize leakage of tourism should be made by tourismstakeholders, both tourism and local government actors. In this regard, it is necessary to research a‘strategy to minimize the leakage of tourism Bali'. The research objective is to formulate strategies andprograms to minimize leakage of Bali tourism. Based on the results of the study are expected to obtain thebenefits of the practice as a basis for policy making tourism players such as hotel and restaurantbusinesses, central and local governments in order to minimize the leakage of tourism in Bali, and thetheoretical benefit is as an academic reference for similar or related research in other areas that theregional economy

7based on tourism. LITERATURE REVIEW The term leakage is used to refer tothe amount spent on importing goods and services to meet the needs oftourists. Leakages occur when the local economy is unable to providereliable, continuous, competitively priced supply of the required product or



service and of a consistent quality to meet the market demand (LortonConsulting, 15 April 2015). In

the

2study of tourism, the leakage is the way in which revenue generated bytourism is lost to other countries’ economies. Leakage may be so significantin some developing countries that it partially neutralizes the money generatedby tourism. Leakage occurs through six different mechanisms. It is an intrinsiccomponent of international tourism and thus is present in every country, towidely varying degrees. (1) Goods and services. Many countries mustpurchase goods and services to satisfy their visitors. This includes the costof raw materials used to make tourism-related goods, such as souvenirs. Forstarting tourism industries, this is a significant problem, as some countriesmust import as much as 50% of tourism-related products; (2) Infrastructure.Some less economically developed countries do not have the domestic abilityto build tourism-related infrastructure (hotels, airports, etc.). The cost of suchinfrastructure is then leaked out of the country; (3) foreign factors ofproduction. Smaller countries often require foreign investment to start theirtourism industry. Thus, profits from tourism may be lost to foreign investors.In addition, travel agents outside of the destination country remove moneyfrom that market as well; (4) Promotional expenditure. Many countries spendconsiderable sums of money for advertisements and publicity. Maintaining apresence abroad may increase the volume of tourists to a country but alsorepresent a considerable loss of money to foreign markets; (5) Transferpricing. Many foreign companies manipulate their pricing to reduce taxes andother duties. In smaller or less developed countries, where many tourism-related companies may be foreign owned, this can represent a substantialloss of income; (6) Tax exemptions. Countries with a small tourism industrymay have to give tax exemptions or other offers to increase foreigninvestment. While this may enlarge the tourism industry there, it must betaken into account as an instrument of income loss

(Wikipedia, April 2015; Archer and Fletcher, 1996; Unluonen, et al., 2011).

4Leakages are payments made outside the destination economy: in otherwords, the proportion of the total holiday price that does not reach or remainin the destination. Some leakage happens internally, where tourists spend



money at the destination but this pays for imported goods and services. Othertourism leakages are external payments that never make it to the destinationcountry, such as travel agent commissions, tour operator profits and foreignairlines

(Eldis, April 25, 2015). Wikipedia (22 April, 2015) inform that

1study of tourism 'leakage' in Thailand estimated that 70% of all money spentby tourists ended up leaving Thailand (via foreign-owned tour operators,airlines, hotels, imported drinks and food, etc.). Estimates for other ThirdWorld countries range from 80% in the Caribbean to 40% in India. Leakage isnot restricted to less-developed countries. Australia experiences a significantleakage effect from Japanese tourists. Though they spend the most per capitaof all tourists to Australia, much of what they spend is through Japanesetravel companies, Japanese hotels, and other foreign- owned businesses.There is thus significant leakage to Japan's economy. Leakage not only variesfrom country to country, but also from industry to industry. High-incometourism may well significantly increase leakage, as that industry likely involvesimporting more goods and services than usual. Ecological or adventuretourism may exhibit a very small degree of leakage, however, as they placevalue solely on what the host country has to offer. As a result of the leakageeffect, tourism industries in developed countries often are much moreprofitable per dollar received than tourism in smaller countries. Islands, inparticular, suffer from significant leakage. In countries such as Turkey and theUnited Kingdom, the benefit to the economy from tourism is twice the dollaramount spent by tourists. In smaller places, such as Micronesia and Polynesia,that benefit is half the dollar amount spent. Some locations have managed tonullify the leakage effect almost entirely - New York City claims to generateseven dollars for the local economy per dollar spent by tourists. Someestimates of the degree of leakage claim only 5% of money spent on tourismremains in a developing country's economy

(Wikipedia, 22 April 2015)

1For many countries, some sources of leakage are unavoidable. Foreign-owned hotels and airlines are necessary for all but the most established oftourism industries. However, encouragement of domestic involvement in acountry's tourism industry may reduce leakage in the long run. Currently, the



most popular measure is restrictions on spending. Countries may limit the useof foreign currency within their borders, reducing the effect of transferpricing (see above). Many countries require visitors to have a certain amountof money before entering, as well

(Wikipedia, 22 April 2015). Meanwhile According Lorton Consulting (22 April 2015).

5when the local economic linkages are weak that revenue from tourismreceipts in a local economic area leaks out. Engaging with local suppliers,using local capital and resources and developing the skills necessary todeliver consistently at an appropriate quality and at a competitive price canreduce leakage. One of the best ways to enhance economic benefits to thelocal community and to increase the contribution to poverty reduction is toincrease the extent of linkages between the formal tourism sector (hotels,lodges, restaurants, tour operators and transport providers) and the localeconomy. Increased integration can develop strong linkages between tourismand other economic sectors including agriculture, fisheries, manufacturing,construction and crafts production

According Lorton Consulting (15 April 2015), the

3creation of local linkages needs to be part of the overall tourismdevelopment strategy in the planning, construction and operational phase.

Three key sets ` factors are important in enhancing the extent of locallinkages, i.e.: 1) The creation of employment at all skills levels and particularlywhere there is existing capacity 2) New attractions created through anti-poverty tourism development strategies need to be integrated into the tourprogrammers of the ground handlers and inbound operators. Creating mutuallybeneficial linkages between the formal and informal sectors is critical. Localgovernment needs to ensure that micro-enterprises and emergingentrepreneurs are promoted in local tourism marketing initiatives where theyare often neglected. 3) The requirements of new micro-enterprises for credit,marketing skills and a thorough understanding of tourist expectations need tobe met. Micro enterprises may have particular difficulties in meeting healthand safety, licensing and other regulatory requirements. Such regulationsthemselves need to be crafted to encourage inclusion through assistededucation and training to ensure engagement by the poor in the industry.



6Economic linkages stop leakages. Buying supplies from people in the hostcountry allows the benefits to remain. Many developing countries nowencourage local farmers to supply fresh fruit and vegetables to hotels. Laboris often the most important linkage between a hotel and the local economy,through the payment of salaries and wages. Even a foreign owner will recruitlocally to minimize costs. Hotels enhance economic linkages by working withinformal tourism businesses (such as a local taxi company). Governments andtourism companies in destination countries can support initiatives to reduceleakages further by

(Eldis, 25 April 2015): •

4using locally-owned accommodation (this can be up to half of the totalholiday cost) • endorsing destinations that integrate tourists into the localeconomy, where they can purchase local products • promoting resorts thatemploy local • staff and pay reasonable salaries • Using airlines from the hostcountry (for long-haul destinations this may constitute one- third of the totalpackage cost).

RESEARCH METHODS

13Research Location The research location is the Bali selected purposively,based on several considerations, namely: (1) Bali is a popular tourist destination

in

the world, which is annually visited by at least 3 million people, where the total tourist expenditure in Balicaptured by various groups thus becoming community and government revenue Bali. (2) So far there hasnever been conducting research on strategies to reduce the leakage of Bali tourism, so it is urgent to doresearch "Strategies Minimize Tourism Leakages Bali", then the following year as the base material fordissemination to the actors of Bali tourism. Key Informan of Research In formulating research strategies tominimize leakage of Bali tourism unknown sample population terms, but it is known the key informan orexpert is the person who really knows and experts in the field of tourism, especially in the field ofhospitality. Expert in this study amounted to as many as 25 people were invited to discuss the focus group,which is known as Focus Group Disccusion (FGD), discuss justify internal and external factors of tourismand hospitality, and give consideration to strategies and programs formulated by the researchers. Expertdetermination purposively, means deliberately chosen people or leaders who know and understand aboutthe tourism and hospitality in bali Kind and Sources of Data The kind of data collected is quantitative dataand qualitative data. Quantitative data is numeric data, among others, the development of the number offoreign tourist viisiting, the average tourist expenditure per person per day, the average length of stay of



foreign tourists, the contribution of foreign tourist in Bali on a national exchange, etc. Qualitative data isdata in the form of words or sentences, among others, internal factors such as the strength andweaknesses of Bali tourism, external factors such as opportunities and threats of Bali tourism, the opinionof the expert on internal and external factors, etc. Source of research data is a primary source and asecondary source. The primary source is the data from the first source or obtained directly or in a place ofresearch, ie non- star hotel, and the star hotel, both of not chain and international chain which is the objectof research. Secondary sources are data from the second party as governments office, such as theStatictic Central Bureau of of Bali Province, Bali Tourism Board, Regional Development Planning Agency,Bali Provincial Tourism Office, etc. Method of Collecting Data Collecting data using several methods,namely, observation, in-depth interviews, Focus Group Discussion (FGD), and documentation study. 1)Observation, is action observations to the location of the hotel, especially star hotels and non star hotelsthat do import various products and services. 2) In-depth interviews, are doing a question and answer withthe hotel management to dig up information that is qualitative, especially strategy to minimize leaks ofvarious kinds of imported foods, drinks, etc. 3) Focuss Group Discussion (FGD), which held discussionsfocused to talk internal and external factors of tourism and hospitality in bali, and discuss strategies andprograms to minimize the leakage. 4) Study the documentation, which is studying the documents, thedocuments are owned by the hotel as well as government agencies, both as a source of primary data orsecondary data sources. Method of Data Analysis (1) Descriptive of Qualitative Qualitative descriptiveanalysis is the process of arranging, sort, classify, give of code, categorizing, meaning and interpreting thedata and information of qualitative and without any quantitative calculations. This process seeks todescribe, illustrate the phenomena or relations between phenomena are studied systematically, actual andaccurate (1) Analysis of SWOT The formulation of strategies and programs that are used in this researchis SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). Referring Rangkuti (2002),

12SWOT analysis is a way to identify the various factors systematically in orderto formulate the company's strategy.

The formulation process of the 'Strategies Minimize Leakage of Bali Tourism' with SWOT can be donethrough the eight stages, namely: 1) Make a list of the internal strength of Bali tourism, especially hotels inBali; 2) Make a list of internal weaknesses of Bali tourism, especially hotels in Bali; 3) Make a list of externalopportunities of Bali tourism, especially hotels in Bali; 4) Make a list of external threats of Bali tourism,especially hotels in Bali; 5) Interpreting of the combination of strengths and opportunities and note theresults in the cell SO strategy (Strengths-Opportunities, SO); 6) Interpreting of combination of weaknessesand opportunities and note the results in the cell WO strategy (Weaknesses-Opportunities, WO); 7)Interpreting of combination of strengths and threats and then record the result in cell ST strategy(Strengths-Threats, ST); 8) Interpreting of combination of weaknesses and threats and then record theresult in cell WT strategy (Weaknesses-Threats, WT). Internal External STRENGTHS (S) Determine theInternal Strengths Factors WEAKNESSES (W) Determine the Internal Weaknesses FactorsOPPORTUNITIES (O) SO-STRATEGY WO-STRATEGY Determine the External Opportunities FactorsCreate a strategy that uses the strengths to take benefit of opportunities Create a strategy that minimizethe weaknesses to take benefit of opportunities THREATS (T) ST-STRATEGY WT-STRATEGY Determinethe External Threats Factors Create a strategy that uses the strengths to overcome threats Create astrategy that minimize weaknesses to overcome threats Figure 1 SWOT Matrix of Formulation “Strategy toMinimize the Leakage of Bali Tourism” (Ssource: Adapted from Rangkuti, 2002) RESULTS ANDDISCUSSION Identification of Internal and External Factors Identification of Internal Factors Based on theresearch team identification and agreement in the Focus Group Discussion (FGD) with tourism



stakeholders, success identified and agreed upon eight factors which become strength ( S) and fivefactors of weakness (W) of Bali tourism, as presented in Table 1. Table 1 Internal Factors of Bali TourismInternal Factors Strength (S) Weaknesses (W) 1. Bali is world tourism destination 1. Import various needsof hotel (foods, beverages, fruits and vegetables, and utensils) 2. The facilities’ of star and non-star hotelsvery adequate 2. The activities of services abroad, such as .: promotions, public relations, pay strangerswho became an agent in abroad and others 3. The hotel services very satisfactory 3. Payment for foreignproductions, such as .: transfer commission payments, the cost of importing goods, transfer of profits toforeign owners, foreign fund loan interest payments, and more 4. unique culture Tourism 4. The ownershipand / or management star hotel in Bali by foreign companies 5. Many Different tourist attraction 5. Thelimited supply of local agricultural products (quantity, quality and continuity), so it must import 6. Hospitalityof local residents 6. Limited supply of industrial products so that should be imported hotel equipment 7.Bali as a competitive destination (value for money) 7. The government's policy still pro-imports, thusinhibiting the development of agriculture and hotels industrial equipment in domestic 8. Bali has strategicgeographical location between Asia and Australia, as well as between Western Indonesia and EasternIndonesia Identifikasi of External Factors Based on identification of the research team and agreement inthe Focus Group Discussion (FGD) with tourism stakeholders, so can be identified five factors intoopportunities (O) and seven factors become a threat (T) of Bali tourism as presented in Table 2. Table 2External Factors of Bali Tourism External Factors Opportunity ( O) Threath (T) 1. The upward trend in thenumber of tourists the world (tourism as lifestyle) 1. The economic crisis in some European countries, suchas Spain, Italy, Portugal, etc. 2. The globalization of information and technology 2. The development oftourism destinations in other countries 3. Many foreign direct flights to Bali 3. The economic globalization(World Trade Organization rules on free trade / free trade) 4. Bali often become international MICElocations, such as APEC, Miss World, etc. 4. Globalization and mobility managers / expatriate labor,especially in the hospitality 5. Increased prosperity of East Asian countries were becoming a supplier offoreign tourists to Bali, such as Japan, China, Taiwan, South Korea, etc. 5. Implementation of theliberalization of services, including employment in ASEAN started in 2015 (AFTA and AEC) 6. Thedevelopment and progress of agriculture in countries abroad, such as Thailand, China, Australia, and NewZealand are more prepared to supply the needs of hotels 7. The development and progress of productionequipment in foreign countries, so it is ready to supply the needs of an international standard hotelStrategy to Minimize the Leakage of Bali Tourism SWOT Analysis "Strategy Minimize the Leakage of BaliTourism” result the strategies and programs that can be implemented to reduce the leakage of tourism, inparticular the leakage of accommodation based on a combination of internal and external factors, asfollows: 1) SO strategy is a strategy that uses the strengths of Bali tourism to capitalize on the growingopportunities outside of Bali tourism. 2) ST strategy is a strategy that uses the strengths of Bali tourism toovercome threats which come from outside Bali tourism. 3)

10WO strategy is a strategy that minimizes the weaknesses of Bali tourism to

capitalize on the

growing opportunities from outside of Bali tourism 4)

10WT strategy is a strategy that minimizes the weaknesses of Bali tourism andavoids the threats



that come from outside of Bali tourism. The fourth kind of strategy is expressed in the form of a SWOTmatrix as presented in Table 3. and more detail of each strategy expressed in tables 4, 5, 6, and 7. Table3 Alternative Strategy to Minimize the Leakage of Bali Tourism Internal Factors External Factors Strength(S): 1. Bali is a world tourist destination 2. The star and non-star hotel's facilities very adequate 3. Thehotel services very satisfactory 4. Unique culture Tourism 5. Many different tourist attraction 6. Thehospitality of local residents 7. Bali as a competitive destination 8. (value for money) Bali has strategicgeographical location between Asia and Australia, as well as between Western Indonesia and EasternIndonesia 1. 2. 3. 4. 5. 6. 7. 8. Weakness (W): Import the various needs of hotel (foods, beverages, fruitsand vegetables, and utensils) The activities overseas services, such as .: promotions, public relations, paystrangers who became an agent in abroad, and others Activities overseas services (services abroad),such as .: promotions, public relations, pay strangers who became an agent in LN, and others Payment forforeign productions, such as .: transfer commission payments, the cost of importing goods, transfer ofprofits to foreign owners, foreign fund loan interest payments. Owner and / or management of star hotel inBali by foreign companies Limitations of local agricultural product supply (quantity, quality and continuity),so it must import The limited supply of hotels industrial equipment products, so that should be importedThe government's policy is pro-imports, thus inhibiting the development of agriculture and industrialequipment in domestic hotel Opportunity (O): SO-Strategy WO-Strategy 1. 2. 3. 4. 5. The upward trend inthe number of tourists the world (tourism as lifestyle) The globalization of information and technology Manyforeign direct flights to Bali Bali often become international MICE locations, such as APEC, Miss World, etc.Increased prosperity of East Asian countries were becoming a supplier of foreign tourists to Bali, such asJapan, China, Taiwan, South Korea, etc. 1) 2) Increasing the image of Bali as a world tourism destinationbased on the unique local culture. Increase travelers convenience for in Bali. 1) 2) 3) 4) 5) Reduce theimport needs of the hotel and substitute with the local Bali or domestic products. Reduced the foreigninvestment with give priority to the local Bali or national investment Increase the quantity, quality andcontinuity as well as the diversification of local agricultural products, so as to reduce imports Increase thehotel equipment production, thereby reducing imports The policy of pro-local Bali and national products, inorder to stimulate the development of agriculture and industrial of hotel equipment (like Pergub 2013 onlocal fruits) Threath (T): ST-Strategy WT-Strategy 1. 2. 3. 4. 5. 6. 7. The economic crisis in someEuropean countries, such as Spain, Italy, Portugal, etc. The development of tourism destinations in othercountries The economic globalization (World Trade Organization rules on free trade / free trade)Globalization and mobility managers / expatriate labor, especially in the hospitality Implementation of theliberalization of services, including employment in ASEAN started in 2015 (AFTA and AEC) Thedevelopment and progress of agriculture in countries abroad, such as Thailand, China, Australia, and NewZealand are more prepared to supply the needs of hotels The development and progress of productionequipment in foreign countries, so it is ready to supply the needs of an international standard hotel 1) 2) 3)4) Increasing the competitiveness of tourism products bali Develop the quality and quantity of the manager/ local workforce, making it competitive Develop and promote local and national agriculture to supply theneeds of the hotels Develop and advance the production of local and national hotels equipment becomeinternational standard, so it is ready to supply the needs of hotel 1) 2) 3) Increase the performance andcompetitiveness of Bali tourist destinations, so it can compete with tourism destinations in other countries.Increase the quality of goods and services of local and national, so it can compete in the era of economicglobalization Increase the competitiveness of the manager / workforce of local hospitality 10 Table 4Strategy of Strength-Opportunity (SO) to Minimize the Leakage of Bali Tourism Faktor Eksternal InternalFactors Strength (S): 1. Bali is a world tourist destination 2. The star and non-star hotel's facilities veryadequate 3. The hotel services very satisfactory 4. Unique culture Tourism 5. Many different touristattraction 6. The hospitality of local residents 7. Bali as a competitive destination (value for money) 8. Balihas strategic geographical location between Asia and Australia, as well as between Western Indonesia and



Eastern Indonesia Opportunity (O): SO-Strategy 1. The upward trend in the number of tourists the world(tourism as lifestyle) 2. The globalization of information and technology 3. Many foreign direct flights to Bali4. Bali often become international MICE locations, such as APEC, Miss World, etc. 5. Increased prosperityof East Asian countries were becoming a supplier of foreign tourists to Bali, such as Japan, China, Taiwan,South Korea, etc. 1. Increasing the image of Bali as a world tourism destination based on the unique localculture 2. Increase travelers convenience for in Bali. 11 Table 5 Strategy of Strength-Threat (ST) toMinimize the Leakage of Bali Tourism Internal Factors External Factors Strength (S): 1. Bali is a worldtourist destination 2. The star and non-star hotel's facilities very adequate 3. The hotel services verysatisfactory 4. Unique culture Tourism 5. Many different tourist attraction 6. The hospitality of localresidents 7. Bali as a competitive destination (value for money) 8. Bali has strategic geographical locationbetween Asia and Australia, as well as between Western Indonesia and Eastern Indonesia Threath (T):ST-Strategy 1. The economic crisis in some European countries, such as Spain, Italy, Portugal, etc. 2. Thedevelopment of tourism destinations in other countries 3. The economic globalization (World TradeOrganization rules on free trade / free trade) 4. Globalization and mobility managers / expatriate labor,especially in the hospitality 5. Implementation of the liberalization of services, including employment inASEAN started in 2015 (AFTA and AEC) 6. The development and progress of agriculture in countriesabroad, such as Thailand, China, Australia, and New Zealand are more prepared to supply the needs ofhotels 7. The development and progress of production equipment in foreign countries, so it is ready tosupply the needs of an international standard hotel 1) Increasing the competitiveness of tourism productsbali 2) Develop the quality and quantity of the manager / local workforce, making it competitive 3) Developand promote local and national agriculture to supply the needs of the hotels 4) Develop and advance theproduction of local and national hotels equipment become international standard, so it is ready to supplythe needs of hotel 12 Table 6 Strategy of Weakness-Opportunity (WO) to Minimize the Leakage of BaliTourism External Factor \ Internal Factors Weakness (W): 1. Import the various needs of hotel (foods,beverages, fruits and vegetables, and utensils) 2. The activities overseas services, such as .: promotions,public relations, pay strangers who became an agent in abroad, and others 3. Activities overseas services(services abroad), such as .: promotions, public relations, pay strangers who became an agent in LN, andothers 4. Payment for foreign productions, such as .: transfer commission payments, the cost of importinggoods, transfer of profits to foreign owners, foreign fund loan interest payments. 5. Owner and / ormanagement of star hotel in Bali by foreign companies 6. Limitations of local agricultural product supply(quantity, quality and continuity), so it must import 7. The limited supply of hotels industrial equipmentproducts, so that should be imported 8. The government's policy is pro-imports, thus inhibiting thedevelopment of agriculture and industrial equipment in domestic hotel Opportunity (O): WO-Strategy 1.The upward trend in the number of tourists the world (tourism as lifestyle) 2. The globalization ofinformation and technology 3. Many foreign direct flights to Bali 4. Bali often become international MICElocations, such as APEC, Miss World, etc. 5. Increased prosperity of East Asian countries were becoming asupplier of foreign tourists to Bali, such as Japan, China, Taiwan, South Korea, etc. 1) Reduce the importneeds of the hotel and substitute with the local Bali or domestic products. 2) Reduced the foreigninvestment with give priority to the local Bali or national investment 3) Increase the quantity, quality andcontinuity as well as the diversification of local agricultural products, so as to reduce imports 4) Increasethe hotel equipment production, thereby reducing imports 5) The policy of pro-local Bali and nationalproducts, in order to stimulate the development of agriculture and industrial of hotel equipment (likePergub 2013 on local fruits) 13 Table 7 Strategy of Weakness-Threat (WT) to Minimize the Leakage of BaliTourism External Factors Internal Factors Weakness (W): 1. Import the various needs of hotel (foods,beverages, fruits and vegetables, and utensils) 2. The activities overseas services, such as .: promotions,public relations, pay strangers who became an agent in abroad, and others 3. Activities overseas services(services abroad), such as .: promotions, public relations, pay strangers who became an agent in LN, and



others 4. Payment for foreign productions, such as .: transfer commission payments, the cost of importinggoods, transfer of profits to foreign owners, foreign fund loan interest payments. 5. Owner and / ormanagement of star hotel in Bali by foreign companies 6. Limitations of local agricultural product supply(quantity, quality and continuity), so it must import 7. The limited supply of hotels industrial equipmentproducts, so that should be imported 8. The government's policy is pro-imports, thus inhibiting thedevelopment of agriculture and industrial equipment in domestic hotel Threath (T): WT-Strategy 1. 2. 3. 4.5. 6. 7. The economic crisis in some European countries, such as Spain, Italy, Portugal, etc. Thedevelopment of tourism destinations in other countries The economic globalization (World TradeOrganization rules on free trade / free trade) Globalization and mobility managers / expatriate labor,especially in the hospitality Implementation of the liberalization of services, including employment in ASEANstarted in 2015 (AFTA and AEC) The development and progress of agriculture in countries abroad, suchas Thailand, China, Australia, and New Zealand are more prepared to supply the needs of hotels Thedevelopment and progress of production equipment in foreign countries, so it is ready to supply the needsof an international standard hotel 1) Increase the performance and competitiveness of Bali touristdestinations, so it can compete with tourism destinations in other countries. 2) Increase the quality ofgoods and services of local and national, so it can compete in the era of economic globalization 3)Increase the competitiveness of the manager / workforce of local hospitality 14 Program to Minimizes theLeakage of Bali Tourism The program is the elaboration of the strategy is assumed still general or global,or set of activities. Programs are translated from a strategy intended to better concrete of strategy.Actually the program could be further elaborated and targeted activities that have been put into practice.However stripped down to the level of activity and the target is not done, because it is already dealing withbudgeting. Strategies to minimize the leakage of tourism in Bali translated into a program, meaning thatevery strategy can be elaboration at least two programs, or more than two kinds of programs. Theprograms that have been formulated from each of the strategies presented in Table 8; 9; 10; and 11.Table 8 Program to Minimize the Leakage of Bali Tourism Based on SO-Strategy SO-Strategy (Create astrategy that uses the strengths to take benefit of opportunity) Program (Elaboration of any strategy basedon the interpretation and judgment of experts and researchers) 1. Increasing the image of Bali as a worldtourism destination based on the unique local culture 1) Preserving a unique Balinese customs 2)Fostering a unique Balinese arts groups 3) Maintain Balinese hospitality towards tourists 4) Urge theactors of tourism businesses in order to be fair and friendly towards tourists 5) Socialization ‘Sadar Wisata’and ‘Sapta Pesona’ to society 2. Increase travelers convenience for in Bali 1) Implement the integratedsecurity system based on community with involving a security officer 2) Assigning security officers (tourismpolice) to maintain security and comfort in various tourist attraction 3) Improving the quality of facilities /infrastructure supporting tourism (such as pedestrian, parking, traffic, etc.) 4) Socialization ‘sadar Wisata’and ‘Sapta Pesona’ to tourism actors Tabel 9 Program to Minimize the Leakage of Bali Tourism Based onST-Strategy ST-Strategy (Create a strategy that uses the strengths to overcome threats) Program(Elaboration of any strategy based on the interpretation and judgment of experts and researchers) 1.Increasing the competitiveness of tourism products bali 1) Increase the quality of tourism products Bali 2)Increase the quality of services to tourists 3) Keeping the standard of product prices of Bali tourism 4)Avoid fraud committed by businesses towards tourists 2. Develop the quality and quantity of the manager /local workforce, making it competitive 1) Provide training to local human resources on a variety of tourismcompetency in collaboration with industry associations and professional organizations 2) Certifying thecompetence of local tourism human resources in cooperation with the industry association, professionalorganization, and the Professional Certification Agency 3) Labor exchange abroad through thecooperation of professional organizations and industry associations 3. Develop and promote local andnational agriculture to supply the needs of the hotels 1) Increase domestic agricultural production to supplyhotels in Indonesia 2) Increase the Bali agricultural production to supply the needs of Bali hotels in Bali 3)



Provide training to the farmers on quality agricultural production an appropriate the standards of tourismneeds 4) Provide financial support to the farmers to produce quality agricultural products according to theneeds of tourism 4. Develop and advance the production of local and national hotels equipment becomeinternational standard, so it is ready to supply the needs of hotel 1) Fostering industrial the hotelequipment in the country to be able to produce hotel equipment that meets international standard 2)Provide financial support to the industrial of hotel equipment in the country (especially Bali) to be able toproduce a quality hotel equipment according to the needs of tourism Table 10 Program to Minimize theLeakage of Bali Tourism Based on

18WO-Strategy WO-Strategy (Create a strategy that minimize the weaknesses totake benefit of opportunities)

Program (Elaboration of any strategy based on the interpretation and judgment of experts andresearchers) 1. Reduce the import needs of the hotel and substitute with the local Bali or domesticproducts 1) Reduce imports of food and substitute with domestic products and local Bali 2) Reduce importsof drinks (beverages) and substitute with domestic products and local Bali 3) Reduce imports of fruit andvegetables (fruits and vegetables) and substitute with domestic products and local Bali 4) Reducing Importtableware and kitchen (utensils), substitute with domestic products of international standard 2. Reducedthe foreign investment with give priority to the local Bali or national investment 1) Giving priority to domesticinvestors, and in particular Bali local to invest in Bali 2) Provide incentives to local investors to invest in Bali3) Develop investment rules that incorporate elements of local culture (local wisdom) requirements ofinvestment in Bali 3. Increase the quantity, quality and continuity as well as the diversification of localagricultural products, so as to reduce imports 1) Increase the quantity of local agricultural products, so asto supply the needs of hotels in Bali are increasing 2) Increasing the quality of local agricultural products,so as to compete with imported products 3) Improving continuity of local agricultural products, so as tomeet the needs of hotel 4) Diversifying local agricultural products, so that more diverse products 4.Increase the hotel equipment production, thereby reducing imports 1) Improve the quality and quantity offood and drink products equipment used hotel which is produced by the domestic industry, so as to reduceimports 2) Improve the quality and quantity of the kitchen equipment products used hotel produced by thedomestic industry, so as to reduce imports 5. The policy of pro-local Bali and national products, in order tostimulate the development of agriculture and industrial of hotel equipment (like Pergub 2013 on local fruits)1) Central government policies that prioritize the hotel equipment industrial products in the domestic 2)Government policies that prioritize domestic agricultural products 3) Provincial government policies thatprioritize local agricultural products (Pergub 2013 on local fruits) Tabel 11 Program to Minimize theLeakage of Bali Tourism Based on WT-Strategy WT-Strategy (Create a strategy that minimize weaknessesto overcome threats) Program (Elaboration of any strategy based on the interpretation and judgment ofexperts and researchers) 1) Increase the performance and competitiveness of Bali tourist destinations, soit can compete with tourism destinations in other countries 1) Digging, identifying, and developing newtourist attraction based on Bali local potentials 2) Develop artificial tourist attraction (like Safari Park) thatdo not conflict with Bali local wisdom 3) Optimization of empowerment of the local culture as a touristattraction 4) Maintaining the uniqueness of the Bali local culture 2) Increase the quality of goods andservices of local and national, so it can compete in the era of economic globalization 1) Standardization ofthe quality of goods and services produced in the country and Bali 2) Certification of product quality ofgoods and services in domestic and bali production 3) Increase the competitiveness of the manager /workforce of local hospitality 3) Standardization of quality manager / labor hospitality in Bali 4) Competencycertification of manager / labor of Bali hospitality in order to compete with the foreign manager / labor



CONCLUSIONS AND RECOMMENDATIONS Conclusion Strategy to minimize the leakage of Bali tourism,especially leakage of accommodation, namely:. 1) Increasing the image of Bali as a world tourismdestination based on the unique local culture. 2) Increase travelers convenience for in Bali 3) Increasingthe competitiveness of tourism products bali 4) Develop the quality and quantity of the manager / localworkforce, making it competitive 5) Develop and promote local and national agriculture to supply the needsof the hotels 6) Develop and advance the production of local and national hotels equipment becomeinternational standard, so it is ready to supply the needs of hotel 7) Reduce the import needs of the hoteland substitute with the local Bali or domestic products. 8) Reduced the foreign investment with give priorityto the local Bali or national investment 9) Increase the quantity, quality and continuity as well as thediversification of local agricultural products, so as to reduce imports 10) Increase the hotel equipmentproduction, thereby reducing imports 11) The policy of pro-local Bali and national products, in order tostimulate the development of agriculture and industrial of hotel equipment (like Pergub 2013 on local fruits)12) Increase the performance and competitiveness of Bali tourist destinations, so it can compete withtourism destinations in other countries. 13) Increase the quality of goods and services of local andnational, so it can compete in the era of economic globalization 14) Increase the competitiveness of themanager / workforce of local hospitality Recommendation Based on the research results, it can berecommended, among others: 1) Tourism stakeholders, in particular the management of hotel andrestaurant in Bali needs to implement strategies and programs formulated in this study, so that the leakageof tourism, especially from the accommodation sector can be minimized. 2) Regional government(provincial or district) have to make regulation a kind of local regulations (perda) or the governorregulations (pergub) or regent regulation (perbup) which requires tourism stakeholders, such as hotel andrestaurant employers to prioritize the consumption of the products and services of local bali or Indonesia,so that the leakage of tourism revenue to decline and tourism revenue captured by the community toincreases. 3) Starting grown attitudes and properties fanaticism toward the local Bali or Indonesia productsamong the society in general and actors Bali tourism in special, as things Japanese society. REFERENCESAntara, Made; I GA Oka Suryawardani, Agung Suryawan Wiranatha. 2012. Identifikasi Jenis dan BesarKebocoran Pariwisata Bali. Laporan

11Penelitian Prioritas Nasional Master Plant Percepatan dan PerluasanPembangunan Ekonomi Indonesia 2011-2025 (Penprinas MP3EI 2011-2025).Dinas Pariwisata Bali, 2012. Statistik Pariwisata Bali

2012. Dinas Pariwisata Provinsi Bali. Eldis. 25 April 2015.

14Sharing the best of the Development Policy, Practice and Research.(http://www.eldis.org/id21ext/ insights62art4 .html

19Garis-Garis Besar Haluan Negara (GBHN) TAP MPR No. II/ MPR/

1998. Lorton Consulting, 15 April 2015. The

16Impact of Leakagee and Linkages of Tourism- Led Local Economic



Development. http: //tourism planning professionals .com/?p=262.

17Rangkuti, F. 2002. Analisis SWOT Teknik Membedah Kasus Bisnis. Jakarta:Gramedia Pustaka Utama.

9Unluonen, K., A. Kiliclair and S. Yukel. 2011. The Calculation Approach forLeakages of International Tourism Receipts: The Turkish Case. TourismEconomics Journal. 17(4) 785-802.

Wikipedia, 22 April 2015. Leakage Effect. http://en.wikipedia.org/wiki/Leakage_effect. ` ` ` ` ` ` ` ` ` ` ` ` ` ` `` ` ` ` 1 2 3 4 5 6 7 8 9 15 16 17 18 19



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