Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
A Corporate Strategy of Hotel Industry in Bali
*Nurhikmah Ola Lairi and Prof. Dr. Cheng-Wen lee**
The purpose of this paper is to examine the corporate strategy for hotel unit
Performance, to identify the existing and potential threats/problems and
opportunities, to evaluate the hotel’s current strategies and performances. The study
also attempts to determine the strengths and weaknesses of the hotel. After finding
the answer for the previous purposes, the research proposed alternative strategies
and recommend the practical strategy for the hotel to achieve its goals.
The study includes the functional areas of marketing, human resources, operations
and their financial implication on the overall strategy. The operational sections are
mainly the Front Office, Housekeeping and Food and Beverage. Other sections are
supporting departments.
The data are obtained from Indonesian Bureau ofSatistics,Survey and direct
evaluation, data and Management Report of Hotel Sahid Raya Bali and Published
reports from the government, key economic data and experts’ opinions.
The study use qualitative method. We use survey and interview to General Manager,
all Department Head and staff of the hotel. The interview is a semi-structured
questionnaire. The quality of the answers is more important than the number of
answers. The interviews are conducted during September 2013 in a convenient
location.
The findings support the existence of corporate strategy in Bali’s hotel industry. It is
revealed that Maintaining strategy and growth strategy of Hotel Sahid Raya Bali has
not been defined clearly. The study suggested to Hotel Sahid Raya Bali to change
the first effort and priority to Meeting, incentive, convention and Exhibition (MICE)
market in their new startegy. The hotel has to enhance the business by expand
industry coverage, identify Niche segment of MICE, and functional Niche by
strengthening marketing, HR and operations management. The research is useful for
hotel industry in Indonesia specifically Bali.
JEL Codes: M00, M1 and M10
1. Introduction
Tourism industry in Indonesia contributed over $80.8 billion to the country’s
economy in 2013. It was the highest in the ASEAN. The next country followed
Indonesia was Thailand with its tourism industry contributed $78.1 billion, the next
was Malaysia with $50.3 billion, and Singapore with $31.7 billion. The World Travel
& Tourism Council (WTTC) reported that Indonesia recorded double digit growth in
international visitor spending (15.1%) and 7.2% economic growth in domestic
tourism in 2013. Bali is the most priority destinations.
The Objectives of the Study are to describe the macro environment of tourism/hotel
__________________
* Ms. Nurhikmah Ola Lairi, Department of Business, PhD student of International Trade, Chung Yuan
Christian University, Chung Pei Road 200 Chung Li, Taiwan.
Tel:+886-3-265999, Fax: +886-3-265-888, Email: olahikmah@yahoo.co.id
** Ms. Prof.Dr. Cheng-Wen Lee. Vice Dean of Academic Affairs Office.International Business
Department. Chung Yuan Christian University. Chung Pei Road 200 Chung Li, Taiwan.
Tel: 886-3-265999, Fax: +886-3-265-888, Email: chengwen@cycu.edu.tw
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
industry including study of competitor and the hotel itself, to identify the existing and
potential threats/problems and opportunities, to evaluate the hotel’s current
strategies and performances, to determine the strengths and weaknesses of the
hotel, to propose alternative strategies and project their impacts on the hotel and to
recommend the practical strategy for the hotel to achieve its goals.
The study focus the research on Hotel Sahid Raya Bali to evaluate the corporate
strategy implemented in the hotel industry. It is a four-star hotel. The capacity is 214
guest-rooms and 23 suite rooms.
This study is divided into two parts: external analysis and internal analysis of Hotel
Sahid Raya Bali which will be used to come up with the corporate strategy.
The study limits on the available data and competitors analyzed in the study
include the hotels located in Kuta who are the direct competitors. There is no
financial analysis of the competitors due to unavailability of data. This study is
qualitative study. We use survey and interview to General Manager, all
Department Head and staff of the hotel. The interview is a semi-structured
questionnaire. The quality of the answers is more important than the number of
answers. The interviews are conducted during September 2013 in a convenient
location.
The data are obtained from Survey and direct evaluation, data and Management
Report of Hotel Sahid Raya Bali and Published reports from the government, key
economic data and experts’ opinionsThe World Bank (1995) mentioned that a
Bangladeshi bank assuming 40 percent of loans to be non-performing required a
spread of 20 percent between lending rates and the bank’s costs of funds just to
break-even.
2. Literature Review
Bowman and Helfat (2001) suggest that, theoretically, corporate strategy is a subset
of total corporate effects on profitability, and corporate strategies that affect these
corporate-level factors are believed to influence the firm’s profitability. Strategic
management researchers agree that strategies are the results of the strategic
analysis of an organization, which focuses on an organization’s external
environment and its internal context (e.g. David, 2001; Mintzberg, 1990).
From a resource-based view of the firm, corporate strategies are considered from an
internal perspective, and previous studies have revealed that analysis of internal
resources can enable firms to determine their potential or realized sources of
competencies and capabilities, and a firm can achieve competitive advantage if its
resources are inimitable by its competitors (e.g.Barney, 1991).
According to Barney (1991), firm resources include all assets, capabilities,
organizational processes, knowledge, etc. that are possessed by a firm and can
enable firm to develop and implement strategies that improve performance.
The literatures mentioned will be implemented and used in this research as a
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
guidelines of the basic theory to the study.
3. External Analysis
External analysis is the analysis of the impact of the external factors that will
influence the existence and demand of the hotel industry in Indonesia. The analysis
studies the economic environment, political environment, socio-economic
environment and the discussion of travelers visiting Bali as well as their spending
patterns.
3.1 Economic Environment
The economic crisis which started in 1997, affected the economic situation of Asian
countries like Singapore, Malaysia, Thailand, Taiwan, China, Japan, Korea, and
eventually Indonesia. Local currencies were sharply devaluated which forced the
tourism sector to offer competitive price.
Tables 1 and 2 show the changing environment in international traveling Asian
recovery from the crisis and stable growth helped the people to grow economically
and venture into international tourist destinations
Table 1: Outbound Travel by Some Nationalities
Outbound tourists from these countries (in millions)
Country
Singapore
Malaysia
Japan
Korea
Australia
China
USA
UK
Netherlan
ds
2005 2006 2007
5.2
5.5
5.8
30.8 31.8 32.9
17.4 17.6 17.8
10.1 12.47 15.13
4.8
5.2
5.6
31
35.3 40.2
63.5 64.6 65.7
66.5 69.4 72.3
2008
6.4
34.0
18.0
18.35
6.1
45.8
66.8
75.5
2009
6.5
35.2
18.3
22.29
6.6
52.2
67.9
78.7
2010
7.0
36.4
18.5
27.09
7.2
59.4
69.1
82.1
2011
7.3
37.6
18.7
32.9
7.8
67.7
70.3
85.6
2012
7.8
38.9
18.9
39.9
8.4
77.1
71.5
89.3
17.1
19.1
19.9
20.6
21.4
22.2
17.7
18.4
Sources : Actual Data derived from Biro Pusat Statistik Indonesia (2013)
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Table 2: Tourism Expenses by Some Nationalities
Gross spending in tourism spending of various nationalities (In billions of rupiah)
Country
Singapore
Malaysia
Japan
Korea
Australia
China
USA
UK
Netherlan
ds
2005 2006 2007
7.3
7.5
7.7
4.3
5.1
6.0
48.1 51.9 56.1
16.8 20.4 24.7
15
18.1 21.9
24.7 29.1 34.3
99.6 110.5 122.5
73.8 85.4 98.8
2008
8.0
7.2
61.5
33.0
30.5
43.5
141.8
128.3
2009
8.3
8.8
65.4
38.2
35.0
47.6
152.0
134.5
2010
8.4
9.7
70.7
44.1
38.7
56.0
168.1
153.0
2011
8.6
11.4
76.3
53.5
46.8
66.0
185.3
177.0
2012
8.8
13.5
82.4
64.9
56.6
77.8
205.5
204.8
13.1
15.1
15.6
16.0
17.5
17.9
13.5
13.8
Source : Data derived from Biro Pusat Statistik Indonesia (2013)
Analyzing table 1 and 2, we could see that among Asian countries, Chinese are the
future growth engine for the tourism industry. The Chinese tourist travel is expected to
increase at a compounded annual growth rate (CAGR) of 14% by 2012 and the spending
by Chinese tourists is expected to rise annually by 18%. Even though countries like
Korea, Australia, Japan, USA and UK remain steady in their tourists outflow, these
countries still remain the big spenders in the tourism sector and the trend is on the rise.
Tourists from USA and UK are among the biggest spenders in the field. Hence for any
country which has tourism industry, need to do marketing and positioning strategies
aimed at these big
Spending tourists.
3.2. Natural Disasters and Diseases
This factor is unpredictable. However the preventif could be done by looking the
environment and the latest situation.
3.3 The Environment of Indonesia
The first factor is political stability of a country which is crucial to the success of its
tourism industry. The political environment of Bali was disturbed because of the
bombings in 2002 and 2005. However, after 2005, the tourist arrival to Bali is increasing
year by year. Some important international forum has been done during the year of 2006
to 2012. It is indicated that nation all over the world has given big trust to Indonesia.
The second factor is Socio-Economic Environment in Indonesia. Some substantial
success has been achieved in Indonesia’s economic development after the economic
crisis in 1997. By 2013 growth returned to a 6% rate. Indonesia is one of G20 members
posting growth.
From macro environment study, there is a promising growth trends in the world economy
as well as economy of Indonesia. Growth is observed in both domestic and international
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
tourism despite the threats from both international and domestic issues. In international
environment, there is increasing year by year on tourism spending by some nationalities,
specifically the major countries visiting Indonesia.
4. Industry Study
4.1. Tourism Industry in Indonesia and Bali
Local government is taking lot of initiatives to promote Bali as a tourist destination.
Looking into all aspects discussed previous we could conclude that tourism industry
in Indonesia has a bright prospect.
Table 3: Arrival of Foreign Visitors to Bali Year 2004-2013
Month
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Jan
104057
102146
80002
109875
147799
174541
179273
209093
253286
232935
Feb
84368
100839
73075
118483
161776
147704
191926
207195
225993
241868
Mar
99826
117340
84262
119458
160708
168205
192579
207907
230957
252210
Apr
111022
116486
104044
125393
154911
188776
184907
224704
225488
242369
May
117191
116814
101951
129039
167463
190803
203388
209058
220700
247972
Jun
131685
136544
109825
145500
178404
200566
228045
245652
244080
275667
Jul
148086
158731
122323
164972
190854
235198
254907
283524
271512
297878
Ags
155000
157456
118441
167031
195549
232255
243154
258377
254079
309219
Sep
141900
162307
118551
152804
189346
218443
240947
258440
257363
305629
Oct
128399
81343
112876
146385
189234
221282
229904
247565
255021
266562
Nov
110506
62894
114081
142124
173077
184803
199861
221603
242781
307276
Dec
125525
76084
123106
147467
175963
222546
227251
253591
268072
299013
Yearly
1460420
1388984 126253
7
1668531 2085084 2385122 2576142
2826709 2949332 3278598
4.2. Micro Market Analysis
Hotel’s guests can be divided in two segments: commercial and leisure.
a. Commercial
The commercial hotel customers can be sub divided into Meeting, Incentive,
Convention and Exhibition (MICE) guest and business travelers.
The characteristic of this segment, Meeting, Incentive, Convention, and Exhibition
(MICE) is seasonal especially for exhibitions. An average of 11, 5% visitors in Bali
were attendees of MICE category .The exhibition hall in Bali is located in Kuta.
However, MICE are done in selected hotels which have sufficient convention hall
and function rooms. From the guest registration records in Kuta hotels, the average
percentage of guests from MICE is much higher than the hotels in Ubud and
Tabanan.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
The data shows an average of 27 % in Hotel Sahid Raya Bali, 28 % in Hotel Santika,
23 % in Hotel Mercure are catering to MICE. These figures indicate that hotels in
Kuta are the primary choice of the guests of Meeting, Incentive, Convention and
Exhibitions ( MICE) at Bali.
Tourism board of Bali reported that the market of hotel industry in Bali is corporate
form 60% of the domestic market and 40 % are leisure. 70% of this corporate
customer is MICE customers. Tourism board reported that there is an increased
trend of MICE customers especially from international corporations to come to Bali.
Business Travelers has Rough estimates by tourism board of Bali corporate
bookings form 60% of the domestic market. Business travelers could be from foreign
and domestic traveler. Business travelers commonly occupy the hotel with one or 3
days stay only.
b. Leisure Demand
Customized service and product for leisure demand has to be clearly defined by
getting more details and information of the needs of the guests. It can bee seen also
from the pattern of the guests.
5. Competitor of Hotel Sahid in Bali
Hotel Istana Rama and Sanur Paradise are the two major competitors for Hotel
Sahid Bali. The hotels are located in Kuta areas. The facilities of the hotel are mostly
the same.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Porter’s Five Forces of Competitive Position SJ Bali
New Market Entrants:









Competitive Rivalry:
 Many competitors
 Low switching costs
 Low customer loyalty
 They offer attractive
product and services
 their strategy are
different, mix to all
Supplier Power:




High start up cost 
Many existing competitor 
New entry is not easy 
Some economics of scale 
Experiences needed,but
training is available 
brand
reputation
large suppliers
product/servic
e are similar
substitutes is
Buyer Power:



buyer power
is high
buyers are
very large
ability to
substitute
Threat of substitutes:



alternatives price/quality is available 
market distribution changes 
some substitution 



6. Customer Analysis
Looking into customer profile of Hotel Sahid Bali there was significant increasing for
MICE market 27 % in 2011, 41% in 2012, 43% in 2013 comparing to Bali tourist in
general figure for MICE in 2011 was 11.50%, 2012 was 9 % and in 2013 is also
small increasing to 12%.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Table 4: The Customer Profile of SJ Bali
Year
Leisure
MICE
2011
Numbers
%
14,282
39%
10,094
27%
2012
Numbers
%
10,441
29%
14,958
41%
2013
Numbers
%
10,678
27%
16,996
43%
Business
4,028
11%
3,601
10%
4,155
11%
Others
Total
8,492
36,896
23%
7,623
36,623
21%
7,719
39,548
20%
7. Key Success Factors
During survey we found out that the customers value the service and approach of
the staff as the key factor. The other factors are quality of rooms, quality and variety
of food, cleanliness and additional offerings.
To be profitable in the hotel industry, the critical areas that become necessarily
addressed are:
1) Competitive price
Pricing in the hotel competition in Bali become one of the major factor of gaining the
guests. Therefore hotel has to create attractive package with competitive price.
2) Focus on the Customer
Hotel organizations will be best served by focusing less on their hotel assets as
measures of success, and more on their customers. A customer focused must
involve business decisions at all levels of developing and operating a hotel
organization.
3) Create a defensible position through corporate strategy
Strategic planning must be led by the top people in the organization of the hotel.
Vision is driven by the strategic planning process, a function which has become
critical for success.
4) Empower Management
Core Management capacity is essential. A clear vision without the management
skills to support it cannot be a recipe for success. First and foremost, hotel
management must have strategic development skills and the ability to integrate
complex factors affecting success.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
5) Image
Image is major important sustainable factor to the success of a hotel. Visitors will
choose a hotel because its image.
6) Proper target market
A hotel has to set up its target market properly. Therefore, a hotel has to determine
the appropriate strategy for its target market to maintain higher level and get higher
market share.
8. Internal Analysis - Hotel Sahid Raya Bali Analysis
8.1 Background of Hotel Sahid Raya Bali
Hotel Sahid Raya Bali started operation in 1986.Hotel Sahid Raya Bali is a four star
hotel owned by Sahid Sukamdani’s Family. Mr. Sahid Sukamdani is one of the
entrepreneurs in Indonesia who have made significant contributions to the business
development in Indonesian hotel industry. Hotel Sahid Raya Bali is considered to be
one of the major choices for government-alliances and corporations.
8.2 Current Strategy of the Organization
Hotel present strategy is to maintain the existing clientele and serve leisure customer
who are referred by travel agents. There were no major changes in the strategies of
the hotel from 1997 until now. Assessing Hotel Sahid Bali using internal assessment
framework:
First level of assessment:
OUTPUT
Friendly service.
Marketing and sales focused on
MICE
Food as per customer needs
OUTCOMES
Increased number
occupancy
of
room
Increased income from food and
beverage
Training in English,
Japanese, 100% Training of staff
Chinese language and culture.
Training of basic duties and
courtesies
Training of cooking and serving,
continental, Japanese and Chinese
cuisines.
8.3. Strategic importance
This proposed project is strategically important to Hotel Sahid Bali, because this
project will provide them competency and improvement in performance which is very
important to survival and growth of the hotel group under growing competition.
Focusing on MICE segment will increase the revenue and in turn the capacity to
grow.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
The vision of the hotel is “to be the professional hotel group in delivering services to
its guests”. The hotel motto is ‘Winning the heart’.
The Top position in Hotel Sahid Raya Bali is the General Manager. The General
Manager is assisted by six department heads. Each department head is responsible
for one department.
8.4 Financial Analysis
Financial statements show that Hotel SRB has total assets worth Rupiah 28.2 billion
and have yearly revenue of Rupiah 16.4 billion. The Hotel financial statement shows
a current ratio 1:4.3 and in debt to equity ratio of 1:4.2 From these figures, we can
understand that company is in good financial condition.
The room contribution to the total sales is 55 %. It means that the management has
to do more effort and appropriate strategy to be implemented in Front Office
Department.
Table 5: Financial Statistics on Room and F&B Performance
Description
No of Rooms
No. of days
RNA
RNO
% Occupancy
No. of guest
Total PT&ER
No. employee
Total Sales
Room Dept.
Sales
expenses
Room profit
F&B Department
Total Sales
Total F&B
expenses
F&B Profit
2011
%
208
365
75,920
36,896
2012
201
365
73,225
36,623
48
68,591
3,746,479,893
194
15,206,462,793
8,018,008,452
1,649,341,904
7,268,666,548
24.6
81.5
5,679,011,046
2,029,158,980
2,096,047,680
%
50
69,540
3,695,349,742
192
15,347,707,976
8,693,914,829
1,648,529,574
7,045,385,255
1,743,773,802
2,750,420,335
%
197
365
71,905
39,548
24.1
81
6,132,855,207
36.9
2013
55
73,955
3,862,465,000
192
16,449,990,600
9,293,780,000
1,705,408,630
7,588,371,370
23.48
81.65
6,492,157,000
44.9
1,876,522,757
2,921,652,143
45
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Table 6: Summary of all Departments
NUMBER
OF STAFF
GENERAL
MANAGER
HUMAN
RESOURCES
ENGINEERING
SALES & MKT
FRONT OFFICE
HOUSEKEEPING
PROBLEMS
HAS NO RESIDENT
1 MANAGER AND EAM
RECRUIT RESIDENT
MANAGER
LACK OF SYSTEMATIC
17 TRAINING
COMPLACEMENT
EMPLOYEE
HAS TO CREATE
TRAINING DIVISION
18 NO MAJOR PROBLEMS
LACK OF
PROFESSIONAL
6 MANAGER
NOT SUFFICIENT
EFFORT
LESS PROMOTION
EFFORT
NO INCENTIVE
LIMITED GUEST
52 CONTACT
POOR ENGLISH
LACK OF PASSION
OLD AGES OF STAFF
TRAINING IS NOT WELL
32 PLANNED
NO PERFORMANCE
EVALUATION
POOR QUALITY LINEN
FOOD AND
BEVERAGE
RECOMMENDATION
LACK QUALIFIED
63 JAPANESE CHEF
NOT SYSTEMATIC
TRAINING
UNSKILLFULL
WAITRESS OF
JAPANESE
AND WESTERN QUISINE
CONTINUE
MAINTENANCE
SCHEDULE
NEED ONE DIRECTOR
OF SALES,
ONE PROFESSIONAL
PUBLIC RELATION
MANAGER AND 3
ADDITIONAL SALES
NEW STAFF
NEW PERFORMANCE
TRAINING PUBLIC
RELATION
BALANCE NUMBER OF
STAFF BETWEEN
OTHER DEPARTMENT,
TAKEN FROM
OTHER DEPARTMENT
SUCH AS FO
RECRUIT JAPANESE
CHEF
ROLLING THE
QUALIFIED STAFF
FROM OTHER SAHID
UNIT
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
9. SWOT Analysis and Strategic Alternatives
Internal Environment
External environment
OPPORTUNITY
O1.Growing arrival of
tourists.
O2.Local government
STRENGTHS
S1.
Competent
leadership
S2. Strategic location of
the Hotel.
S3. Part of large net
work of Hotel
S4. Excellent relationship
with political institutions.
S5. Good brand name
9.1.
1
S-O
1. Expand industry
coverage
WEAKNESS
W1.Less
sales
efforts.
W2. Quality of staff .
W3.
Staff
are
complacent and lack
passion
W
-O
1. Identify
Niche
segme
nt
2. Integrate with group
member
O3.Increasing accessibility hotels
2. Functional
and promotion
Niche
by
THREATS
S-T
W-T
T1. New destinations
1. Diversify into other
1. Explore tie-ups with
T2. Advisory warning
services
the support industry.
T3. Epidemics
supporting activities.
From the various strategic options emerged from the SWOT matrix as mentioned
above; the following three options have been selected which will enhance the
business by:
1. Expand industry coverage
2. Identify Niche segment MICE
3. Functional Niche by Strengthening Marketing, HR and Operations groups
10. Proposed Corporate Strategy and Implementation Plan
(1) Expand industry coverage
The Programs, Activities, Tasks and Resources required to accomplish the
strategy are mentioned below
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Programs
Develop a core
Sales and
Marketing
plan to utilize the
benefits of Bali as a
destination and
Sahid as a group
Activities
Tasks
Resources
Promotion
Design promotion
package like
Wedding,
Honeymoon,
Weekend, Meeting,
etc.
Experienced sales
officers with good
customer network
Advertisement
Use Electronic
media, Print media
and Print Souvenir
for VIP guest
Tie-ups
Management
Information
System
Establish tie-ups
with Travel agents,
Airlines, Event
organizers, etc.
Sahid Raya Bali has to expand the Industry coverage in-order to increase
the occupancy of the Hotel. It has to develop a core Sales and Marketing
plan to utilize the benefits of Bali as a destination and Sahid as a group. It
has to work on various activities like Promotion, Advertisement and tieups.
(2) Identify and focus on Niche segment MICE
The Programs, Activities, Tasks and Resources required to accomplish
the strategy are mentioned below
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Programs
Activities
Tasks
Resources
Design promotion
package and
incentives to
event manager ,
travel agent and
Promotion
corporations.
Budget planning for
the promotion and
Incentives.
Sales team to be
rewarded by
incentives for
achieving targets
Sales and marketing
Advertisement
Use Electronic
media, internet,
international
Management
Information System
business Print
media
Tie-ups
Establish tie-ups
with Travel agents,
Airlines, Event
organizers, etc.
The second strategy for Hotel Sahid Raya Bali is to position itself as the hotel for
MICE customers. This could be established by having a close tie ups with event
organizers and travel agents and corporations. The sales/marketing team has to be
rewarded for achieving the monthly sales targets. The incentive system to promote
the above is to be planned in yearly budget.
(3) Functional Niche by Strengthening Marketing, HR and Operations groups
The Programs, Activities, Tasks and Resources required to accomplish the strategy
are figured below
Proceedings of Annual Tokyo Business Research
Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Programs
Activities
Tasks
Resources
 Regular
maintenance .
 skill training
Repair and
maintenance of
infrastructure.
Functional Niche by
Strengthening
infrastructure, HR,
Operations and
Marketing groups
 English speaking
training
 training on
Regular training of
staff
information on
different country
cultures.
HR
Operations
Budget planning
for training

Management
control System
 Performance
Marketing
evaluation.
 Incentives and
performance bonus
system
Hotel Sahid Raya Bali in its new strategy needs to attract more international tourists
for increasing its revenues. For this they need to shift from their current marketing
strategy which is concentrated mainly with local corporate and government
departments. They are currently looking at bulk bookings through local MICE
program. Hence Sahid Bali needs to develop its international marketing department
along with maintaining its local hold.
New target market for Hotel Sahid Raya Bali internationally should be the markets of
Japan, South Korea, China, Australia and Middle East. Hotel Sahid Bali need to
create cross selling program to increase its domestic market.
Hotel Sahid Bali needs to develop its marketing strategy as per the marketing mix.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Table 7: The Current Marketing Mix for the Hotel Could Be Summarized
Market segment
% of Total Market
Travel agent
MICE
Airlines
Walk in
Government
Corporate
Others
27
43
5
4
6
6
9
The marketing mix underlines the fact that the concentration is for the MICE and
corporates/Government. With the new target market development the marketing mix needs
a shift as seen in table 8.
The average occupancy of hotel SRB is around 55% , by focousing on MICE through our
stratergic activities the target occupancy rate is 70%.
Table 8: The Percentage of the Market Segment of Hotel Sahid Raya Bali
Market segment
% of Total Market
Travel agent
MICE
Airlines
Walk in
Government
Corporate
Others
27
52
5
2
6
6
2
11. Financial Implication
Table 9: Financial Implication
Total sales
Room
F&B
Others
Expenses
Room
F&B
Others
Operating income
Admin
Sales & marketing
Repair and maintenance
Gross profit
Capital expenses
PBIT
% of Total Sales
56%
40%
4%
11%
11%
13%
65%
10%
3%
21%
31%
4%
27%
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
The financial statement for 2013 shows that F&B is the major contributor to the hotel
revenues.
The contribution of F& B to the total sales with 45 % percentage is due to the utility
of the F&B breakdown in the room sales of MICE market.
Current Ratio
Current
Assets
Current
Liabilities
Current Ratio
Figures in
Rupiah
2013
2012
1,229,544,2 1,158,141,1
86
97
4,698,579,0
5443933218
07
0.23
0.25
The current ratio is on the lower side since the hotel has higher trade credits and
accrued expenses. The current ratio has further reduced in 2013 due to increase in
other account payable from Rp, 972,000 to Rp. 1.87 million. The current ratio has
reduced from 0.25 in 2012 to 0.23 in 2013.
Figures in
Rupiah
2013
2012
Total Current
5,443,933,2 4,698,579,0
Liabilities
18
07
Non-current liabilities
0
0
5,443,933,2 4,698,579,0
Total liabilities
18
07
Debt Ratio
Shareholder Equity
Debt Ratio
22,803,690, 18,912,119,
352
742
23.87%
24.84%
Debt ratio is calculated including the current liabilities since most of the liabilities for
the hotel are current, while the non-current liabilities are insignificant. The debt ratio
for the hotel has improved due to the higher increase in the shareholder equity as
compared to the increase in the liabilities.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
12. Financial Projections Until 2015( In 10 Millions)
Table 10: Financial Projections
total sales
room
F&B
others
expenses
room
F&B
others
Operating
income
admin
Sales &
marketing
Repar &
Maintenanc
e
Gross profit
capital
expenses
PBIT
2007
153
86
61
6
200
8
179
107
66
5
200
9
209
125
76
6
201
0
238
143
88
7
201
1
274
164
101
8
201
2
272
163
101
8
201
3
313
188
76
9
201
4
360
216
133
11
201
5
414
248
153
12
16.8
17
19.9
20
20
18
23
23
21
27
26
24
30
30
27
30
30
27
23
34
31
27
40
36
46
46
41
99.5
16
122
18
142
19
162
21
186
25
185
27
213
28
245
32
281
37
4
13
15
17
11
19
22
25
17
32.1
47.3
54
38
44
65
50
73
55
96
82
57
66
97
76
73
83
145
6.12
41.2
21
27
8
56
8
64
11
85
33
41
13
84
8
97
17
128
13. Conclusion
There is no system for maintenance of the existing client. Maintaining strategy and
growth strategy of Hotel Sahid Raya Bali has not been defined clearly. The challenge
for the management is to hire replacement of the turnover of qualified people by
doing promotion in the group, cross assignment from other Sahid Groups, and
clearly defined the personnel and staff point of view within Hotel Sahid Raya Bali and
other groups. Customer is the most important success factor of Hotel Sahid Raya
Bali.
Proposed corporate strategies for Hotel Sahid Bali are to expand the Industry
coverage, shift the target market to MICE, Strengthen the Marketing, HR and
Operations groups.
For international target, the market should be the markets of Japan, South Korea,
China, Australia and Middle East.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
The proposed corporate strategies could allow the hotel to reduce its risk of
depending on government and local corporates for business. By following the new
strategy Hotel Sahid could also capitalize on the networking facilities of the Sahid
group.
References
th
Johnson, A., & Scholes, K.(2002).Exploring corporate strategy (6
Edition). Harlow,
England: Prentice Hall
Mintzberg, H. (1988). Opening up the definition of Strategy, in Quinn, J. B. ,
Mintzberg, H., & James, R.M. (Eds).The Strategy Process. Englewood Cliffs,
New Jersey: Printice Hal
Andrews,K.R. 1980.The Concept of Corporate Strategy. Homewood (IL): R. D. Irwin
Evans, N. & Campbell, D. & Stonehouse, G. 2003. Strategic Management for Travel
and Tourism. Burlington ( MA): Elsevier Butterworth-Heinemann.
Indonesian Bureau of Statistics. 2013. Travel and Tourism in Indonesia, Indonesia,
2013.
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Appendix 1: The Status of Recommendation
Priority
Recommendations
1 Staff Training
2 Hiring Process
Activities
Department related
Status
product and skill
attitude and
manner
HR,FO,FB,MKT,ALL
done
All Department
done
English
All Department
done
Training on IT
All Department
done
Hire new qualified
Human resources
on Progress
Training
All Department
and assesment
3 Promotion
Cross assignment
All Department
done
design promotion
Marketing
done
Marketing
done
Marketing
done
Marketing
done
Marketing
done
package
incentive to event
manager
incentive to travel
agents
incentive to
corporates
Sales team
rewarded for
achievement
Improvement on
team
4 Advertisement
program of
assesment
done one in a
month
Marketing
done
electronic media
done
internet
done
international print
on progress
business
5 Tie- up
6 Repair and
Maintenance
Travel Agents
Marketing
done
Airlines
Marketing
done
event organizer
Marketing
done
up grading facilities
Renovation of
Rooms
Housekeeping, Engineering
done and
progress
Housekeeping, Engineering
on progress
Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, Japan
ISBN: 978-1-922069-67-2
Appendix 2: Map of Bali