Tourism Demand in Indonesia - Research Paper Example

Tourism Demand in Indonesia 1.1 Introduction There has been a gradual global increase in tourism demand for the past three decades. OECD (2000) attributes the growth to rapid globalization and economic development that has increased personal disposable income in addition to increasing political stability in most countries around the world. Tourism entails traveling mainly for leisure and business objectives. Tourism industry is very vulnerable to economic and political environment. A slump in economic growth as witnessed in 2008 global recession resulted to a drastic drop in the tourist arrivals in virtually all international destinations. Similarly, political instability in any tourism destination is a major deterrent, as observed in the recent political upheavals in Egypt and the Middle East. This paper explores the characteristics of tourism demand and methods of promoting it in developing and developed country, focusing on Indonesia and Switzerland. 1.2 Characteristics of tourism demand in Indonesia In the past two decades, tourism has consistently asserted its economic importance in Indonesian economic growth. As a developing country, Indonesian tourism industry has undergone various transformations to the current state. Overall, tourism demand in the country had been increasing gradually since 2000 to 2010 (Pryce and Darren 2010). According to Roby (2008), cultural and ecological diversity are the major tourism attractions in Indonesia. The country is the world largest archipelago consisting of over 17,000 islands. The numerous islands provide the country with one of the widest diversity of animal and plant species in the world. Roby (2008) estimated that the country accommodates over 18% of the worlds plant and animal species in terrestrial and aquatic habitats. Indonesia has a tropical climatic conditions characterized by high humidity. In addition, scenic sites such as beaches and volcanoes enhance the allure of the country to foreign tourists. Demographically, Indonesia is the most densely populated country in the world with over 200 million inhabitants (Bieger and Laesser 2002). The large population provides a wide cultural and ethnic diversity, which comprises of over 700 languages. The wide ethnic diversity has endowed the country with rich and ancient cultural history that supports a large proportion of cultural tourism in the country. Some of the popular cultural tourist destinations include the prehistoric Borobudur and Prambana temples in addition to ancient religious heritage of Buddhists, Muslims, Christians and Hindus (Roby, 2008). Tourism in Indonesia has been receiving little attention from the government until the early 1990s’ when the government realized the immense potential of the industry to the country’s economic growth. Before this period, Indonesian economy was mainly established on manufacturing industry. However, Bali and Jakarta have long tourism history because they form an important link between Asia and Australian continents. Roby (2008) argues that the rate of tourism growth in Indonesia was slower compared to its Asian neighbors such as Singapore, Thailand and Malaysia due to political upheavals and economic policies that focused on manufacturing and development of export oriented enterprises. The early 1990s’ marked the Indonesian government’s paradigm shift to tourism. Although the country was still under the repressive President Suharto regime, it made remarkable efforts in promoting the country as an attractive tourist destination in the region and the world at large. Through aggressive marketing campaigns by the ministry of culture and tourism, the country has managed to increase tourism demand impressively in the last decade. In addition, the ouster of President Suharto regime in the late 1990s’ encouraged the development of a more open and democratic society that has encouraged remarkable growth of tourism demand at the beginning of the century (Roby, 2008). Currently, tourism industry in Indonesia involves four major segments, namely natural, sport, cultural and metropolitan tourism (Alan, 2009). The rich diversity of flora and fauna in addition to geographic features such as volcanoes, beaches and the long coastline provide attractive sceneries for tourist. The country has an ancient conservation history of wildlife. According to Alan (2009), the country has the oldest botanical gardens and national parks in the Asian continent. Six of the 50 national parks in the country are recognized as world heritage sites (WTO, 2007). Sport tourism in Indonesia is a rapidly growing segment in the country supported by the rich aquatic diversity, impressive diving sites, volcanic mountains and surf breaks. According to Pryce and Darren (2010), the country is globally renowned for water surfing, recreational fishing, hiking, mountain climbing and other adventurous activities in the rich natural sceneries. Cultural tourism is a special attraction for historians, academicians and cultural enthusiasts who visit the country to experience the rich cultural diversity, ancient temples and other religious structures in addition to the prehistoric colonial remnants in the country. A combination of these natural, historic, upcoming industrial and amusement parks attract many tourist who come for sightseeing and recreation. The increasing number of international tourists affirms the growing popularity of Indonesia tourism in the last five years. According to Pryce and Darren (2010), the country recorded about 6.5 million international arrivals in 2009 compared to 5 million tourists in 2000. Aggressive marketing and strategic tourism packages targeting tourists from the Asian region has resulted to rapid growth of the industry that is relatively independent from American and European tourists. 1.3 Characteristics of tourism demand in Switzerland Switzerland is a developed tourist country that has a long tourism history spanning a couple of centuries. Unlike Indonesia, Switzerland is not a mass tourism destination and it attracts visitors with high purchasing power. In the scale of countries with high cost of living, Switzerland ranks in the fifth position globally (OECD, 2000). The country is a high-end tourist destination that attracts mainly the elderly and affluent visitors from North America and Europe. The scenic Alps Mountains are the hallmark of the country’s tourism from as early as the 18th century. As a developed country, Switzerland has advanced communication and transport network in addition to a vibrant service industry such as banking and luxurious hotels have been major incentives for affluent international tourists. Moreover, the country has enjoyed long, peaceful and politically neutral stance even amidst global changing events such as the first and the second world wars. The major tourism segments in the Switzerland tourism industry includes unique geographical features especially the Alpine range, lakes and a wide diversity of natural resources (Bieger and Laesser, 2002). Swiss climatic conditions favor sports and tourism during the winter. According to Andreas (2006), regions such as Lake Geneva and Ticino enjoy mild climatic conditions through out the seasons making the country a favorable destination for European visitors during extreme summer seasons. Switzerland has an efficient and modern transport network comprising of superior railway and road system in addition to excellent airports. During the winter, tourists in the country enjoy “thirteen rack railways, over 2000 ski tows, over 60 funiculars and over 600 cable car sections” (OECD, 2000). Moreover, the linkage of all ski resorts with rails and public transport system enhances mobility and convenience of tourists (OECD, 2000). Tourism industry in Switzerland relies heavily on the scenic landscape and the countryside. This fact highlights the importance of maintaining sustainable tourism practices to ensure that the sanctity of the environment is maintained in the country. Tourism demand in Switzerland therefore relies on the high quality of tourism infrastructure, favorable climatic conditions that enable all year sport tourism and stable political system. Bieger and Laesser, (2002) indentified the high quality services offered in the country as the greatest value addition to the Swiss tourism sector. Due to heavy dependence on affluent tourists, the tourism sector in Switzerland depends heavily on the economic performance of tourist source countries. As a result, the number of tourists has been declining steadily especially after the recent global recession. Moreover, concerns of the strong Swiss currency, competition from other high-end tourist destinations and worries of the aging Swiss tourism infrastructure have been indentified as the key areas that need attention from the Swiss tourism stakeholders (WTO, 2007). In 2008, the country recorded 8.6 million tourist arrivals (Alan 2009). The major sources of foreign tourist visiting Switzerland include Germany, United Kingdom and United States in that order. However, Switzerland itself offers the greatest market for its domestic tourism. Most of tourists visit Switzerland for business and recreational purposes. 1.4 Sport tourism and its characteristics Sport tourism is a growing segment in the hospitability industry. Boli (2004) classified sport tourism is divided into six categories depending on the concepts and characteristic of the sports. These categories include sightseeing sport tours, competitive sport tours, holiday sport tours and, health and recreational sports tours. In addition to extreme, adventure sports tours, and field sport tours (Boli, 2004). These types of sport tourism have distinct features, but there are several common characteristics. Integrity of the demanding in sports tourism is one characteristic. This refers to the totality demanded by sports tourists from tourism services and products on offer. They include safety and physiological needs, in addition to self-fulfillment, high level of excitement and thrilling experience (Boli, 2004). The second characteristic is sensitivity of the demanding in the sports. This implies that sport tourism is prone to changes in political, social, and the prevailing ambience in the destination of the sport (Boli, 2004). In this case, political instability, natural and artificial disasters reduce the demanding in sport tourism. The third characteristic is directivity of the demanding in sport tourism. This implies that it is imperative for the sport tourists to travel from their homes or residences to destinations where the sporting activities are offered in order to achieve their objectives. In addition, the traveling tourists have diverse interests and demands in their travelling endeavors from their counterparts participating in the same sport (Boli, 2004). High elasticity of the demanding in sports tourism is the fourth feature .This implies that sport tourism is luxurious activity undertaken by people who are well above the basic or essential living standards. Therefore, as people’s income increase, the demand for sport tourism increases proportionately. Boli (2004) argues that sport tourism is characterized by numerous artificial limitations that restrict many people from joining the activities leading to high elasticity. The fifth characteristic of sport tourism is the variability or unpredictability of the demanding in sport tourism (Boli, 2004). Sporting events with high public following such as the FIFA World Cup, Olympics among other global sporting events are held after specific period in different host destination cities and hence their hosting is unpredictable. This results to distribution of the benefits and negative effects of sport tourism as people travel from the different venues as defined in the sporting calendar. Benefits of sport tourism include creation of employment opportunities and promoting international understanding and harmony (Andreas, 2006). Sport tourism has is associated with promoting harmful social and environmental effects. Some of the adverse social effects include promoting drug use, promiscuity and introduction of adverse cultures by the international visitors. Moreover, some sport tourism activities such as game hunting has lead to persecution and extinction of targeted animals in aquatic and terrestrial ecosystems. Some animal species remain at the risk of elimination in the planet due unregulated sport tourism activities (Andreas, 2006). 1.5 Recommendations Both developed and developing countries can enhance their tourism demand by implementing measures relevant to their economies. Political instability, poor tourism infrastructure and reliance to international tourists are major shortcomings for growth of tourism demand in the developing economies. In addition, poor promotion and marketing of tourism due to low funding from the respective government is major impediment to creating tourism demand. Therefore, developing peaceful and stable political governance, investing in tourism infrastructure in addition to aggressive marketing of tourism in both domestic and international market would spur tourism demand. In developed economies, such as Switzerland, competition from fellow advanced counterparts has significantly reduced tourism demand. To mitigate this trend, the countries should invest more in developing strong tourism brands, improving the quality of their services in addition to enhancing the capacity of their human resources in order to offer excellent hospitality services (Lucas, 2004). 1.6 Conclusion Tourism is a growing and dynamic industry in both developed and developing economies. The industry plays critical role in economic development, job creation and it supports other sectors of economy, directly and indirectly. However, tourism demand is vulnerable to political, economic and social factors inherent in the tourist destination. In developing countries, political instability, poor infrastructure and lack of government support in promoting tourism demand are major impediments to growth of the sector. On the other hand, tourism demand in developed economies is being undermined by intense competition, economic crisis in the source markets in addition to increasing widespread unsustainable practices in the tourism sector. References Alan, N. (2009). Vulnerability and sustainability in the global tourism industry: A model for Practice. Saarbrucken: VDM Verlag. Andreas, P.(2006). Corporate rivalry and the market power: Competition issues in the tourism industry. Athens: IB Tauris. Bieger, T., and Laesser, C.(2002). Travel market Switzerland . St. Gallen: IDT. Boli, L. (2004). Types and characteristics of demand in sports tourism market. Retrieved on 29 August 2011, from http://www.isdy.net/pdf/eng/18.pdf Buhalis, D., and Costa, C. (2005). Tourism business frontiers: Consumers, products and industry. London: Heinemann. Lucas, R. (2004). Employment relations in the hospitality and tourism industries. New York: Routledge. OECD (Organization for Economic Co-operation and Development).(2000). Swiss tourism policy: Background report. Retrieved on 29 August 2011 from http://www.oecd.org/dataoecd/13/40/33651085.pdf Pryce, J. and Darren, L. (2010). Human resources and tourism: Skills culture and industry. New Jersey: Channel view Publications Ltd. Roby, A. (2008). Strategic sustainable tourism development in Indonesia. Retrieved on 30 Aug 2011 from http://www.budpar.go.id/filedata/4032_1283- STRATEGICSUSTAINABLETOURISMDEVELOPMENT.pdf WTO (World Tourism Organization). (2007). Policies, strategies and tools for the sustainable development of tourism. Geneva: World Tourism Organization. . Read More