Strategy to Minimaze The Leakage of Bali Tourism.

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STRATEGY TO MINIMIZE THE LEAKAGE OF BALI TOURISM
By
Made Antara1), I Gusti Ayu Oka Suryawardani2), Agung Suryawan Wiranatha3)
University of Udayana, Bali, Indonesia
Email: 1) antara_unud@yahoo.com; 2) gungdani@gmail.com; 3) balitruly@yahoo.com

ABSTRACT
Tourism has become an engine of the economy, both at the national and regional
levels, as well as in Bali. Tourists expenditure in Bali for various purposes has been captured
by various groups engaged in tourism activities. But there is a phenomenon that the tourists
expenditure in Bali is not all enjoyed by the people of Bali, because there is a leak (leakages).
The goal of the second (2013) was formulated 'strategy to minimize leakage of tourism in
Bali’. If the at first-year study (2012) using quantitative methods, but research in second year
(2013) using qualitative methods, i.e. with the help of SWOT and Focus Group Discussion
(FGD), the respondent is expert in tourism to make an assessment and consideration of the
internal factors and external factors of bali tourism, and the strategies and programs that have
been formulated to minimize the leakage of Bali tourism. The results of research showed that
the strategy of minimizing leakage bali tourism, especially the leakage of accommodation,
among others: (1) Improve the image of Bali as a world tourism destination based on the

unique local culture; (2) Improve comfort for travelers in Bali; (3) Enhance the
competitiveness of bali tourist products; (4) Improve the quality and quantity of managers/
local workforce, making them competitive; (5) Develop and promote domestic and local
agriculture to supply of bali hotels; (6) Develop and promote the national production hotels
equipment in 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 by providing local and domestic investment priorities; (9) Increase
the quantity, quality and continuity and diversification of local agricultural products, so as to
reduce imports; (10) Increase production of hotel equipment, thus reducing imports; (11)
National Policy for pro-local products, in order to stimulate the development of agricultural
and industrial of hotels equipment; (12) Improve the performance and competitiveness of
tourist destinations of Bali, so as to compete with other tourist destinations of the country ;
(13) Increase the quality of goods and services of domestic and Bali, so as to compete in the
era of economic globalization, and (14) Increase competitiveness manager local hospitality
workforce. Based on the research results, it can be recommended, among other things: (1)
Stakeholder tourism, especially the hotel and restaurant management in hotels need to
implement programs that are formulated in this study, resulting in leakage of tourism,
particularly from sector accommodation can be minimized, and (2) In an effort to determine
the leakage impact on the economy of Bali, simulation leakage reduction through further
research needs to be done in 2014 MP3EI the "Impact of Bali tourism leakage on the growth

sectors of the economy and the distribution of income (year-3, 2014).
Keywords: Strategy, Minimize, Leakages, Bali Tourism

Paper presented at The 5th IRSA International Institute, Tourism and Sustainable Economic Development, 3-4
August 2015, Bali, Indonesia.

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INTRODUCTION
GBHN TAP MPR No. II/MPR/1998 confirms and statement of President of republic
Indonesia Joko Widodo in 2015 that tourism has becomes a beacon of hope in supporting the
economic development with various of positive aspects for national economy. Therefore
Indonesian Government seriously encourage the development of tourism with continuing to
effort to improve the image of tourism by increasing of security, organized an international
conference, to develop the attractions and uniqueness as one element of attraction, improve
the tourism facilities and infrastructure as an element of amenities, so accesibility of and to
lead the tourist destination is created, and regulations relating to the institutional and
organizational of tourism services as an ancillary element, so that increasing the convenience

of tourists in visiting attractions and tourist destinations in Indonesia.
From an economic perspective, the positive impact of tourism in Bali in general are (1)
bring in foreign exchange for the country, through the exchange of foreign currency to spend
in tourist destinations; (2) The potential market for goods and services in Bali; (3) increase the
income of the people whose activities are directly or indirectly related to tourism services; (4)
expand job creation, both 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 craftsman of
small industry as well as percussion and dance artists dedicated for tourist consumption.
The tourism sector is the priority in the development of Bali's economy has shown
very rapid development, which is marked by several indicators, among others, an increase in
the foreign exchange, tourist visits, length of stay, tourist spending and the number of tourism
facilities and infrastructure. Tourist visiting which directly comes to Bali every year continues
to increase, only when the first Bali bombing in 2002 tourist visiting declined. In 1989 foreign
tourists visiting who directly to Bali only amounted to 436 358 people by the contribution of
foreign exchange of 26.87% of the national tourism foreign exchange. Direct foreign tourists
visiting Bali in 2000 as 1.42.839 people with foreign exchange contribution amounting to
20.91%, and in 2012 foreign tourists visits directly to Bali as many as 3,137,385 with foreign
exchange contributed approximately 40% of the total national income (Bali Tourism Office,

2012). So it seems clear that the increase in tourist arrivals will increase total spending
travelers as an injector in the economy of Bali. The foreign tourist spending will be the
perpetrators of tourism revenue, and then removed again for various purposes, 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 the sectors economy in the Province of Bali.
However keep in mind that the total tourist expenditure in an area of tourist
destinations such as Bali within a certain period of time, not entirely become revenue of
tourism actors and community in the area, there are some who leak (leakages) before it was
spun in the Bali economy becomes Bali community income. Base on the research of Antara et
al. (2012), total leakage Bali tourism through all hotels in Bali (stars and non-star hotels) is
Rp 3.119.328.498.425 or 24% of the average income of the hotel, or 12,46% of bali tourism
revenue from foreign tourists (Rp 38.867.763.900.000), 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 a leakage is broken down by the
classification of hotel group, the group of 4 and 5 star hotel leaked the largest Bali tourism
revenue of Rp 2.278.255.301.110 (73% of the total leakage), 1, 2, and 3 star hotel group
leaked Rp 157.914.870.365 (5% of the total leakage), and a group of non-star hotels leaked
Rp 683.158.326.950 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


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that when the average leak developed on the population (blow-up), obtained leaks groups of
non-star hotel to be larger than the leakage of 1, 2, and 3 hotel groups. Efforts to minimize
leakage of tourism should be made by tourism stakeholders, 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 and programs to minimize leakage of
Bali tourism. Based on the results of the study are expected to obtain the benefits of the
practice as a basis for policy making tourism players such as hotel and restaurant businesses,
central and local governments in order to minimize the leakage of tourism in Bali, and the
theoretical benefit is as an academic reference for similar or related research in other areas
that the regional economy based on tourism.
LITERATURE REVIEW
The term leakage is used to refer to the amount spent on importing goods and services
to meet the needs of tourists. Leakages occur when the local economy is unable to provide
reliable, continuous, competitively priced supply of the required product or service and of a

consistent quality to meet the market demand (Lorton Consulting, 15 April 2015). In the study
of tourism, the leakage is the way in which revenue generated by tourism is lost to other
countries’ economies. Leakage may be so significant in some developing countries that it
partially neutralizes the money generated by tourism. Leakage occurs through six different
mechanisms. It is an intrinsic component of international tourism and thus is present in every
country, to widely varying degrees. (1) Goods and services. Many countries must purchase
goods and services to satisfy their visitors. This includes the cost of raw materials used to
make tourism-related goods, such as souvenirs. For starting tourism industries, this is a
significant problem, as some countries must import as much as 50% of tourism-related
products; (2) Infrastructure. Some less economically developed countries do not have the
domestic ability to build tourism-related infrastructure (hotels, airports, etc.). The cost of such
infrastructure is then leaked out of the country; (3) foreign factors of production. Smaller
countries often require foreign investment to start their tourism industry. Thus, profits from
tourism may be lost to foreign investors. In addition, travel agents outside of the destination
country remove money from that market as well; (4) Promotional expenditure. Many
countries spend considerable sums of money for advertisements and publicity. Maintaining a
presence abroad may increase the volume of tourists to a country but also represent a
considerable loss of money to foreign markets; (5) Transfer pricing. Many foreign companies
manipulate their pricing to reduce taxes and other duties. In smaller or less developed
countries, where many tourism-related companies may be foreign owned, this can represent a

substantial loss of income; (6) Tax exemptions. Countries with a small tourism industry may
have to give tax exemptions or other offers to increase foreign investment. While this may
enlarge the tourism industry there, it must be taken into account as an instrument of income
loss (Wikipedia, April 2015; Archer and Fletcher, 1996; Unluonen, et al., 2011). Leakages are
payments made outside the destination economy: in other words, the proportion of the total
holiday price that does not reach or remain in the destination. Some leakage happens
internally, where tourists spend money at the destination but this pays for imported goods and
services. Other tourism leakages are external payments that never make it to the destination
country, such as travel agent commissions, tour operator profits and foreign airlines (Eldis,
April 25, 2015).
Wikipedia (22 April, 2015) inform that study of tourism 'leakage'
in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand (via
foreign-owned tour operators, airlines, hotels, imported drinks and food, etc.). Estimates for
other Third World countries range from 80% in the Caribbean to 40% in India. Leakage is not
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restricted to less-developed countries. Australia experiences a significant leakage effect from
Japanese tourists. Though they spend the most per capita of all tourists to Australia, much of

what they spend is through Japanese travel companies, Japanese hotels, and other foreignowned businesses. There is thus significant leakage to Japan's economy. Leakage not only
varies from country to country, but also from industry to industry. High-income tourism may
well significantly increase leakage, as that industry likely involves importing more goods and
services than usual. Ecological or adventure tourism may exhibit a very small degree of
leakage, however, as they place value solely on what the host country has to offer.
As a result of the leakage effect, tourism industries in developed countries often are
much more profitable per dollar received than tourism in smaller countries. Islands, in
particular, suffer from significant leakage. In countries such as Turkey and the United
Kingdom, the benefit to the economy from tourism is twice the dollar amount spent by
tourists. In smaller places, such as Micronesia and Polynesia, that benefit is half the dollar
amount spent. Some locations have managed to nullify the leakage effect almost entirely New York City claims to generate seven dollars for the local economy per dollar spent by
tourists. Some estimates of the degree of leakage claim only 5% of money spent on tourism
remains in a developing country's economy (Wikipedia, 22 April 2015)
For many countries, some sources of leakage are unavoidable. Foreign-owned hotels
and airlines are necessary for all but the most established of tourism industries. However,
encouragement of domestic involvement in a country's tourism industry may reduce leakage
in the long run. Currently, the most popular measure is restrictions on spending. Countries
may limit the use of foreign currency within their borders, reducing the effect of transfer
pricing (see above). Many countries require visitors to have a certain amount of money before
entering, as well (Wikipedia, 22 April 2015). Meanwhile According Lorton Consulting (22

April 2015). when the local economic linkages are weak that revenue from tourism receipts in
a local economic area leaks out. Engaging with local suppliers, using local capital and
resources and developing the skills necessary to deliver consistently at an appropriate quality
and at a competitive price can reduce leakage. One of the best ways to enhance economic
benefits to the local community and to increase the contribution to poverty reduction is to
increase the extent of linkages between the formal tourism sector (hotels, lodges, restaurants,
tour operators and transport providers) and the local economy. Increased integration can
develop strong linkages between tourism and other economic sectors including agriculture,
fisheries, manufacturing, construction and crafts production
According Lorton Consulting (15 April 2015), the creation of local linkages needs to
be part of the overall tourism development strategy in the planning, construction and
operational phase. Three key sets ` factors are important in enhancing the extent of local
linkages, i.e.:
1) The creation of employment at all skills levels and particularly where there is existing
capacity
2) New attractions created through anti-poverty tourism development strategies need to be
integrated into the tour programmers of the ground handlers and inbound operators.
Creating mutually beneficial linkages between the formal and informal sectors is critical.
Local government needs to ensure that micro-enterprises and emerging entrepreneurs are
promoted in local tourism marketing initiatives where they are often neglected.

3) The requirements of new micro-enterprises for credit, marketing skills and a thorough
understanding of tourist expectations need to be met. Micro enterprises may have
particular difficulties in meeting health and safety, licensing and other regulatory
requirements. Such regulations themselves need to be crafted to encourage inclusion
through assisted education and training to ensure engagement by the poor in the industry.

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Economic linkages stop leakages. Buying supplies from people in the host country
allows the benefits to remain. Many developing countries now encourage local farmers to
supply fresh fruit and vegetables to hotels. Labor is often the most important linkage between
a hotel and the local economy, through the payment of salaries and wages. Even a foreign
owner will recruit locally to minimize costs. Hotels enhance economic linkages by working
with informal tourism businesses (such as a local taxi company). Governments and tourism
companies in destination countries can support initiatives to reduce leakages further by (Eldis,
25 April 2015):
• using locally-owned accommodation (this can be up to half of the total holiday cost)
• endorsing destinations that integrate tourists into the local economy, where they can

purchase local products
• promoting resorts that employ local
• staff and pay reasonable salaries
• Using airlines from the host country (for long-haul destinations this may constitute onethird of the total package cost).

RESEARCH METHODS
Research 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 Bali captured by various groups
thus becoming community and government revenue Bali. (2) So far there has never been
conducting research on strategies to reduce the leakage of Bali tourism, so it is urgent to do
research "Strategies Minimize Tourism Leakages Bali", then the following year as the base
material for dissemination to the actors of Bali tourism.
Key Informan of Research
In formulating research strategies to minimize leakage of Bali tourism unknown
sample population terms, but it is known the key informan or expert is the person who really
knows and experts in the field of tourism, especially in the field of hospitality. 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
tourism and hospitality, and give consideration to strategies and programs formulated by the
researchers. Expert determination purposively, means deliberately chosen people or leaders
who know and understand about the tourism and hospitality in bali
Kind and Sources of Data
The kind of data collected is quantitative data and qualitative data. Quantitative data is
numeric data, among others, the development of the number of foreign 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 is data
in the form of words or sentences, among others, internal factors such as the strength and
weaknesses of Bali tourism, external factors such as opportunities and threats of Bali tourism,
the opinion of the expert on internal and external factors, etc.

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Source of research data is a primary source and a secondary source. The primary
source is the data from the first source or obtained directly or in a place of research, ie nonstar hotel, and the star hotel, both of not chain and international chain which is the object of
research. Secondary sources are data from the second party as governments office, such as the
Statictic 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 hotels that do import various products and services.
2) In-depth interviews, are doing a question and answer with the hotel management to dig up
information that is qualitative, especially strategy to minimize leaks of various kinds of
imported foods, drinks, etc.
3) Focuss Group Discussion (FGD), which held discussions focused to talk internal and
external factors of tourism and hospitality in bali, and discuss strategies and programs to
minimize the leakage.
4) Study the documentation, which is studying the documents, the documents are owned by
the hotel as well as government agencies, both as a source of primary data or secondary
data sources.
Method of Data Analysis
(1) Descriptive of Qualitative
Qualitative descriptive analysis is the process of arranging, sort, classify, give of
code, categorizing, meaning and interpreting the data and information of qualitative and
without any quantitative calculations. This process seeks to describe, illustrate the
phenomena or relations between phenomena are studied systematically, actual and accurate
(1) Analysis of SWOT
The formulation of strategies and programs that are used in this research is SWOT
analysis (Strengths, Weaknesses, Opportunities, and Threats). Referring Rangkuti (2002),
SWOT analysis is a way to identify the various factors systematically in order to formulate
the company's strategy.
The formulation process of the 'Strategies Minimize Leakage of Bali Tourism' with
SWOT can be done through the eight stages, namely:
1) Make a list of the internal strength of Bali tourism, especially hotels in Bali;
2) Make a list of internal weaknesses of Bali tourism, especially hotels in Bali;
3) Make a list of external opportunities 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 the results in the
cell SO strategy (Strengths-Opportunities, SO);
6) Interpreting of combination of weaknesses and 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 the result in cell
WT strategy (Weaknesses-Threats, WT).

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Internal

STRENGTHS (S)
Determine the Internal
Strengths Factors

External
OPPORTUNITIES (O)
Determine the External
Opportunities Factors

THREATS (T)
Determine the External
Threats Factors

SO-STRATEGY
Create a strategy that uses
the strengths to take benefit
of opportunities

WEAKNESSES (W)
Determine the Internal
Weaknesses Factors
WO-STRATEGY
Create a strategy that
minimize the weaknesses
to take benefit of
opportunities

ST-STRATEGY

WT-STRATEGY

Create a strategy that uses
the strengths to overcome
threats

Create a strategy that
minimize weaknesses
to overcome threats

Figure 1
SWOT Matrix of Formulation “Strategy to Minimize the Leakage of Bali Tourism”
(Ssource: Adapted from Rangkuti, 2002)
RESULTS AND DISCUSSION
Identification of Internal and External Factors
Identification of Internal Factors
Based on the research 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 five factors of weakness (W) of Bali tourism, as presented in
Table 1.

1.

2.

3.

4.
5.

Table 1
Internal Factors of Bali Tourism
Internal Factors
Strength (S)
Weaknesses (W)
Bali is world tourism destination
1. Import various needs of hotel (foods,
beverages, fruits and vegetables, and
utensils)
The facilities’ of star and non-star hotels 2. The activities of services abroad, such as .:
very adequate
promotions, public relations, pay strangers
who became an agent in abroad and others
The hotel services very satisfactory
3. Payment for foreign productions, such as .:
transfer commission payments, the cost of
importing goods, transfer of profits to
foreign owners, foreign fund loan interest
payments, and more
unique culture Tourism
4. The ownership and / or management star
hotel in Bali by foreign companies
Many Different tourist attraction
5. The limited supply of local agricultural
products (quantity, quality and continuity),
so it must import
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6. Hospitality of local residents

6. Limited supply of industrial products so
that should be imported hotel equipment
7. Bali as a competitive destination (value 7. The government's policy still pro-imports,
for money)
thus inhibiting the development of
agriculture and hotels industrial equipment
in domestic
8. Bali has strategic geographical location
between Asia and Australia, as well as
between Western Indonesia and Eastern
Indonesia
Identifikasi of External Factors
Based on identification of the research team and agreement in the Focus Group
Discussion (FGD) with tourism stakeholders, so can be identified five factors into
opportunities (O) and seven factors become a threat (T) of Bali tourism as presented in Table
2.

1.

2.
3.

4.

5.

Table 2
External Factors of Bali Tourism
External Factors
Opportunity ( O)
Threath (T)
The upward trend in the number of
1. The economic crisis in some European
tourists the world (tourism as lifestyle)
countries, such as Spain, Italy, Portugal,
etc.
The globalization of information and
2. The development of tourism destinations
technology
in other countries
Many foreign direct flights to Bali
3. The economic globalization (World Trade
Organization rules on free trade / free
trade)
Bali often become international MICE
4. Globalization and mobility managers /
locations, such as APEC, Miss World,
expatriate labor, especially in the
etc.
hospitality
5. Implementation of the liberalization of
Increased prosperity of East Asian
services, including employment in
countries were becoming a supplier of
ASEAN started in 2015 (AFTA and AEC)
foreign tourists to Bali, such as Japan,
China, Taiwan, South Korea, etc.
6. The development and progress of
agriculture in countries abroad, such as
Thailand, China, Australia, and New
Zealand are more prepared to supply the
needs of hotels
7. The development and progress of
production equipment in foreign countries,
so it is ready to supply the needs of an
international standard hotel

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Strategy to Minimize the Leakage of Bali Tourism
SWOT Analysis "Strategy Minimize the Leakage of Bali Tourism” result the
strategies and programs that can be implemented to reduce the leakage of tourism, in
particular the leakage of accommodation based on a combination of internal and external
factors, as follows:
1) SO strategy is a strategy that uses the strengths of Bali tourism to capitalize on the
growing opportunities outside of Bali tourism.
2) ST strategy is a strategy that uses the strengths of Bali tourism to overcome threats which
come from outside Bali tourism.
3) WO strategy is a strategy that minimizes the weaknesses of Bali tourism to capitalize on
the growing opportunities from outside of Bali tourism
4) WT strategy is a strategy that minimizes the weaknesses of Bali tourism and avoids the
threats that come from outside of Bali tourism.
The fourth kind of strategy is expressed in the form of a SWOT matrix as presented in
Table 3. and more detail of each strategy expressed in tables 4, 5, 6, and 7.

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Table 3
Alternative Strategy to Minimize the Leakage of Bali Tourism
Internal Factors
1.
2.
3.
4.
5.
6.
7.
8.

Strength (S):
Bali is a world tourist destination
The star and non-star hotel's
facilities very adequate
The hotel services very satisfactory
Unique culture Tourism
Many different tourist attraction
The hospitality of local residents
Bali as a competitive destination
(value for money)
Bali has strategic geographical
location
between
Asia
and
Australia, as well as between
Western Indonesia and Eastern
Indonesia

Weakness (W):
1.
2.
3.

4.

5.
6.
7.
8.

External Factors
Opportunity (O):
1.
2.
3.
4.
5.

The upward trend in the number of tourists the world (tourism as lifestyle)
The globalization of information and technology
Many foreign 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 as Japan, China, Taiwan, South Korea, etc.

1)

2)

2.
3.
4.
5.
6.

7.

The economic crisis in some European countries, such as Spain, Italy,
Portugal, etc.
The development of tourism destinations in other countries
The economic globalization (World Trade Organization 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
ASEAN started in 2015 (AFTA and AEC)
The development and progress of agriculture in countries abroad, such as
Thailand, China, Australia, and New Zealand are more prepared to supply the
needs of hotels
The development and progress of production equipment in foreign countries,
so it is ready to supply the needs of an international standard hotel

WO-Strategy
1)
2)
3)
4)
5)

Threath (T):
1.

SO-Strategy
Increasing the image of Bali as a
world tourism destination based on
the unique local culture.
Increase travelers convenience for
in Bali.

ST-Strategy
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 the needs
of the hotels
Develop and advance the production of
local and national hotels equipment
become international standard, so it is
ready to supply the needs of hotel

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Import the various needs of hotel (foods, beverages, fruits and
vegetables, and utensils)
The activities overseas services, such as .: promotions, public
relations, pay strangers 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 for foreign productions, such as .: transfer commission
payments, the cost of importing goods, transfer of profits to foreign
owners, foreign fund loan interest payments.
Owner and / or management of star hotel in Bali 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 imported
The government's policy is pro-imports, thus inhibiting the
development of agriculture and industrial equipment in domestic
hotel
Reduce the import needs of the hotel and substitute with the local
Bali or domestic products.
Reduced the foreign investment with give priority to the local Bali
or national investment
Increase the quantity, quality and continuity as well as the
diversification of local agricultural products, so as to reduce imports
Increase the hotel equipment production, thereby reducing imports
The policy of pro-local Bali and national products, in order to
stimulate the development of agriculture and industrial of hotel
equipment (like Pergub 2013 on local fruits)

WT-Strategy
1)

2)
3)

Increase the performance and competitiveness 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 economic globalization
Increase the competitiveness of the manager / workforce of
local hospitality

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Table 4
Strategy of Strength-Opportunity (SO) to Minimize the Leakage of Bali Tourism
Internal Factors

Strength (S):
1.
2.
3.
4.
5.
6.
7.
8.

Faktor Eksternal
Opportunity (O):
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 Bali
4. Bali often become international MICE locations, such as
APEC, Miss World, etc.
5. Increased prosperity of East Asian countries were becoming
a supplier of foreign tourists to Bali, such as Japan, China,
Taiwan, South Korea, etc.

Bali is a world tourist destination
The star and non-star hotel's facilities very adequate
The hotel services very satisfactory
Unique culture Tourism
Many different tourist attraction
The hospitality of local residents
Bali as a competitive destination (value for money)
Bali has strategic geographical location between Asia and
Australia, as well as between Western Indonesia and Eastern
Indonesia
SO-Strategy

1. Increasing the image of Bali as a world tourism destination
based on the unique local culture
2. Increase travelers convenience for in Bali.

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Table 5
Strategy of Strength-Threat (ST) to Minimize the Leakage of Bali Tourism
Internal Factors
1.
2.
3.
4.
5.
6.
7.
8.
External Factors
1.
2.
3.
4.
5.
6.

7.

Threath (T):
The economic crisis in some European countries, such as
Spain, Italy, Portugal, etc.
The development of tourism destinations in other countries
The economic globalization (World Trade Organization 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 ASEAN started in 2015 (AFTA and AEC)
The development and progress of agriculture in countries
abroad, such as Thailand, China, Australia, and New Zealand
are more prepared to supply the needs of hotels
The development and progress of production equipment in
foreign countries, so it is ready to supply the needs of an
international standard hotel

1)
2)
3)
4)

12

Strength (S):
Bali is a world tourist destination
The star and non-star hotel's facilities very adequate
The hotel services very satisfactory
Unique culture Tourism
Many different tourist attraction
The hospitality of local residents
Bali as a competitive destination (value for money)
Bali has strategic geographical location between Asia and
Australia, as well as between Western Indonesia and
Eastern Indonesia
ST-Strategy
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 the needs of the hotels
Develop and advance the production of local and national
hotels equipment become international standard, so it is
ready to supply the needs of hotel

`

Table 6
Strategy of Weakness-Opportunity (WO) to Minimize the Leakage of Bali Tourism
Weakness (W):
Internal Factors
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 importing goods, transfer of profits to foreign
owners, foreign fund loan interest payments.
5. Owner and / or management 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 equipment products, so that
External Factor
should be imported
8. The government's policy is pro-imports, thus inhibiting the
development 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 of information and technology
3. Many foreign direct flights to Bali
4. Bali often become international MICE locations,
such as APEC, Miss World, etc.
5. Increased prosperity of East Asian countries were
becoming a supplier of foreign tourists to Bali,
such as Japan, China, Taiwan, South Korea, etc.

1) Reduce the import needs of the hotel and substitute with the local
Bali or domestic products.
2) Reduced the foreign investment with give priority to the local Bali or
national investment
3) Increase the quantity, quality and continuity as well as the
diversification of local agricultural products, so as to reduce imports
4) Increase the hotel equipment production, thereby reducing imports
5) The policy of pro-local Bali and national products, in order to
stimulate the development of agriculture and industrial of hotel
equipment (like Pergub 2013 on local fruits)
13

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Table 7
Strategy of Weakness-Threat (WT) to Minimize the Leakage of Bali Tourism
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
5.
6.
7.

External Factors

8.

of importing goods, transfer of profits to foreign owners, foreign fund loan interest
payments.
Owner and / or management of star hotel in Bali 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
imported
The government's policy is pro-imports, thus inhibiting the development of
agriculture and industrial equipment in domestic hotel

Threath (T):
1.
2.
3.
4.
5.
6.

7.

The economic crisis in some European countries, such as
Spain, Italy, Portugal, etc.
The development of tourism destinations in other countries
The economic globalization (World Trade Organization 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 ASEAN started in 2015 (AFTA and AEC)
The development and progress of agriculture in countries
abroad, such as Thailand, China, Australia, and New Zealand
are more prepared to supply the needs of hotels
The development and progress of production equipment in
foreign countries, so it is ready to supply the needs of an
international standard hotel

WT-Strategy
1) Increase the performance and competitiveness of Bali tourist
destinations, so it can compete with tourism destinations in other
countries.
2) Increase the quality of goods 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

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Program to Minimizes the Leakage 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 with budgeting.
Strategies to minimize the leakage of tourism in Bali translated into a program,
meaning that every strategy can be elaboration at least two programs, or more than two kinds
of programs. The programs 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
Program
(Elaboration of any strategy based on the interpretation and
(Create a strategy that uses
judgment of experts and researchers)
the strengths to take benefit
of opportunity)
1. Increasing the image of
1) Preserving a unique Balinese customs
Bali as a world tourism
2) Fostering a unique Balinese arts groups
destination based on the
3) Maintain Balinese hospitality towards tourists
unique local culture
4) Urge the actors of tourism businesses in order to be fair
and friendly towards tourists
5) Socialization ‘Sadar Wisata’ and ‘Sapta Pesona’ to
society
2. Increase travelers
1) Implement the integrated security system based on
convenience for in Bali
community with involving a security officer
2) Assigning security officers (tourism police) 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

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Tabel 9
Program to Minimize the Leakage of Bali Tourism Based on ST-Strategy
ST-Strategy
Program
(Create a strategy that uses the (Elaboration of any strategy based on the interpretation and
strengths to overcome threats)
judgment of experts and researchers)
1. Increasing
the 1) Increase the quality of tourism products Bali
competitiveness of tourism 2) Increase the quality of services to tourists
products bali
3) Keeping the standard of product prices of Bali tourism
4) Avoid fraud committed by businesses towards tourists
2. Develop the quality and 1) Provide training to local human resources on a variety
quantity of the manager /
of tourism competency in collaboration with industry
local workforce, making it
associations and professional organizations
competitive
2) Certifying the competence of local tourism human
resources in cooperation with the industry association,
professional organization, and the Professional
Certification Agency
3) Labor exchange abroad through the cooperation of
professional organizations and industry associations
3. Develop and promote local 1) Increase domestic agricultural production to supply
hotels in Indonesia
and national agriculture to
supply the needs of the 2) Increase the Bali agricultural production to supply the
hotels
needs of Bali hotels in Bali
3) Provide training to the farmers on quality agricultural
production an appropriate the standards of tourism
needs
4) Provide financial support to the farmers to produce
quality agricultural products according to the needs of
tourism
4. Develop and advance the 1) Fostering industrial the hotel equipment in the country
production of local and
to be able to produce hotel equipment that meets
national hotels equipment
international standard
become
international 2) Provide financial support to the industrial of hotel
standard, so it is ready to
equipment in the country (especially Bali) to be able to
supply the needs of hotel
produce a quality hotel equipment according to the
needs of tourism

16

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Table 10
Program to Minimize the Leakage of Bali Tourism Based on WO-Strategy
WO-Strategy
Program
(Create a strategy that minimize
(Elaboration of any strategy based on the interpretation
the weaknesses to take benefit
and judgment of experts and researchers)
of opportunities)
1. Reduce the import needs of
1) Reduce imports of food and substitute with domestic
the hotel and substitute with
products and local Bali
the local Bali or domestic
2) Reduce imports of drinks (beverages) and substitute
products
with domestic products and local Bali
3) Reduce imports of fruit and vegetables (fruits and
vegetables) and substitute with domestic products and
local Bali
4) Reducing Import tableware and kitchen (utensils),
substitute with domestic products of international
standard
2. Reduced the foreign
1) Giving priority to domestic investors, and in particular
investment with give priority
Bali local to invest in Bali
to the local Bali or national 2) Provide incentives to local investors to invest in Bali
investment
3) Develop investment rules that incorporate elements of
local culture (local wisdom) requirements of
investment in Bali
3. Increase the quantity,
1) Increase the quantity of local agricultural products, so
quality and continuity as well
as to supply the needs of hotels in Bali are increasing
as the diversification of local 2) Increasing the quality of local agricultural products, so
agricultural products, so as to
as to compete with imported products
reduce imports
3) Improving continuity of local agricultural products, so
as to meet the needs of hotel
4) Diversifying local agricultural products, so that more
diverse products
4. Increase the hotel equipment 1) Improve the quality and quantity of food and drink
production, thereby reducing
products equipment used hotel which is produced by
imports
the domestic industry, so as to reduce imports
2) Improve the quality and quantity of the kitchen
equipment products used hotel produced by the
domestic industry, so as to reduce imports
5. The policy of pro-local Bali
1) Central government policies that prioritize the hotel
and national products, in
equipment industrial products in the domestic
order to stimulate the
2) Government policies that prioritize domestic
development of agriculture
agricultural products
and industrial of hotel
3) Provincial government policies that prioritize local
equipment (like Pergub 2013
agricultural products (Pergub 2013 on local fruits)
on local fruits)

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Tabel 11
Program to Minimize the Leakage of Bali Tourism Based on WT-Strategy
WT-Strategy
Program
(Create a strategy that minimize
(Elaboration of any strategy based on the
weaknesses to overcome threats)
interpretation and judgment of experts and

researchers)
1) Increase the performance and

competitiveness of Bali tourist
destinations, so it can compete
with tourism destinations in
other countries

2) Increase the quality of goods

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

1) Digging, identifying, and developing new tourist
attraction based on Bali local potentials
2) Develop artificial tourist attraction (like Safari
Park) that do not conflict with Bali local wisdom
3) Optimization of empowerment of the local culture
as a tourist attraction
4) Maintaining the uniqueness of the Bali local
culture
1) Standardization of the quality of goods and
services produced in the country and Bali
2) Certification of product quality of goods and
services in domestic and bali production
3) Standardization of quality manager / labor
hospitality in Bali
4) Competency certification 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 tourism destination based on the unique local
culture.
2) Increase travelers convenience for in Bali
3) Increasing the competitiveness of tourism products bali
4) Develop the quality and quantity of the manager / local workforce, making it competitive
5) Develop and promote local and national agriculture to supply the needs of the hotels
6) Develop and advance the production of local and national hotels equipment become
international standard, so it is ready to supply the needs of hotel
7) Reduce the import needs of the hotel and substitute with the local Bali or domestic
products.
8) Reduced the foreign investment with give priority to the local Bali or national
investment
9) Increase the quantity, quality and continuity as well as the diversification of local
agricultural products, so as to reduce imports
10) Increase the hotel equipment production, thereby reducing imports
11) The policy of pro-local Bali and national products, in order to stimulate 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 with tourism destinations in other countries.

18

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13) Increase the quality of goods and services of local and national, so it can compete in the
era of economic globalization
14) Increase the competitiveness of the manager / workforce of local hospitality
Recommendation
Based on the research results, it can be recommended, among others:
1) Tourism stakeholders, in particular the management of hotel and restaurant in Bali needs
to implement strategies and programs formulated in this study, so that the leakage of
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 governor regulations (pergub) or regent regulation (perbup)
which requires tourism stakeholders, such as hotel and restaurant 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 to
increases.
3) Starting grown attitudes and properties fanaticism toward the local Bali or Indonesia
products among the society in general and actors Bali tourism in special, as things
Japanese society.

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(http://www.eldis.org/id21ext/insights62art4.html
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