TERM OF REFERENCE (TOR) The Mapping of Potential Demand for Quality Tourism in Indonesia to Support National Tourism Recovery DEPARTEMEN KEBIJAKAN EKONOMI DAN MONETER DEPARTMENT OF ECONOMIC DAN MONETARY POLICY Background: The Impact of COVID-19 on Tourism 2 The COVID-19 pandemic has significantly impacted tourism sector both in Indonesia and globally, which further prompts the need to develop quality tourism that emphasizes on providing quality experience while taking into account environmental, social, and economic aspects. THE TOURISM SECTOR IS PROJECTED TO RECOVER SLOWLY A NEW STRATEGY IS NEEDED TO ACCELERATE THE RECOVERY AND STRENGTHEN INDONESIAN TOURISM SECTOR NUMBER OF FOREIGN TOURIST VISIT AND TRAVEL INCOME PARADIGM OF TOURISM DEVELOPMENT IN THE FUTURE Source: BPS, Bank Indonesia SKENARIOGLOBAL KEDATANGAN TURIS INTERNASIONAL DUNIA 2005-2025 TOURIST ARRIVAL PROJECTION 2005-2025 Source: Kemenparekraf Background: New Trend of Tourism The COVID-19 pandemic has encouraged changes in tourism trend and preferences, which are characterized by 3 main aspects: increasing sustainable tourism preference; avoiding crowds, as well as an emphasis on cultural connections and local communities while taking into account environmental, social, and economic aspects. THE COVID-19 PANDEMIC TRIGGERS A LARGE SCALE CHANGE IN VARIOUS FIELDS, INCLUDING TOURISM 1 Increasing preference for travel that prioritizes sustainability AMENITIES ATTRACTIONS ACCESS 70% 40% Hope that the tourism sector is more eco-friendly Will reduce the use of aircraft transportation to reduce the impact of climate change 46% Think that waste management is important to be improved and developed in tourism sector activities Source: Survei Bappenas 2021 di Eropa; Travel Report 2022-Booking.com 2 3 Avoiding crowds TOURISM PLAN FOR THE NEXT YEAR 64% 40% Avoid popular tourist destinations and attractions 31% Exclusively travel in off peak seasons or outside of peak season Choose an alternative to their preferred destination Source: Tren Industri Pariwisata 2021, Kemenparekraf 3 Source: Travel Report 2022-Booking.com Emphasis on cultural connections and local communities 66% Want to have authentic experiences that are representative of the local culture. 27% Actively familiarize themselves with the local cultural values and traditions of their destination in advance of their trips. Source: Travel Report 2022-Booking.com 59% Want to leave the places they visit better than when they arrived. 25% Would be willing to pay more for travel activities to ensure they are giving back local communities. 78% Intend to stay at a sustainable property at least once in the coming year. The development of QT in Indonesia has been studied since 2020, and continued this year with focus on the demand side 4 INDONESIAN TOURISM Enhancement: Quality Tourism Existing: Mass Tourism SUPPLY DEMAND 2020 STUDY 2021 STUDY STRENGTHENING INDONESIAN TOURISM THROUGH THE DEVELOPMENT OF QUALITY TOURISM THE DEVELOPMENT OF QUALITY TOURISM BASED ON TYPES OF TOURISM TO SUPPORT NATIONAL RECOVERY Initial study to develop the concept and the indicators needed to measure quality tourism (QT); rank the performance of 10 tourism destinations in Indonesia based on QT indicators; and formulate policy recommendations to strengthen the quality of tourism in Indonesia Further study on the development of QT in Indonesia by developing QT indicators that are more specific based on types of tourism, e.g. eco tourism, marine tourism, MICE, and tourism villages; as well as identifying the strengths and weaknesses of each destination. FINDINGS: • Quality Tourism is a concept of tourism that emphasizes on sustainability with supporting basic competitiveness that gives tourists a unique experience with high values, so that it could provide maximum satisfaction while maintaining environmental, social, and cultural sustainability as well as making positive impact to the local economy. • QT index in 10 tourism destinations in Indonesia showed that Nusa Dua, Ubud, and Bintan were the best performing destinations in terms of QT implementation, better than the 5 Super Priority Tourism Destinations (5 DPSP). FINDINGS: • Sustainability indicator in all types of tourism has the highest weight, in line with the orientation of QT development. However, sustainability has the lowest performance among all other indicators and hence becomes the first priority that needs to be addressed in developing QT. • Basic competitiveness indicator in marine tourism and high value indicator in MICE also have one of the highest weights but relatively poor performance, and thus both indicators are also included in the first priority to develop QT in both types of tourism. 2022 STUDY The mapping of potential demand for quality tourism in Indonesia THE DEVELOPMENT OF SUPER PRIORITY TOURISM DESTINATIONS (5 DPSP) QT indicators will be used as reference by the Indonesian Gov’t in the development of 5 DPSP Study Purpose and Scope 5 Purpose of Study 1. Identifying the profile of foreign and domestic tourists that are potential to be the market of QT in Indonesia 2. Mapping the potential market of foreign and domestic tourists for QT in Indonesia based on 6 types of tourism 3. Formulating policy/strategy recommendations to efficiently market and promote QT in Indonesia Scope of Study The mapping of potential foreign and domestic tourists for QT will be done based on 6 types of tourism, i.e.: • Marine/beach/lake/river tourism • Arts and culinary tourism • Eco tourism/non-aquatic nature tourism • Rural/village tourism (community-based tourism) • City tour • History/religion/sports/health tourism Methodology 6 1 2 3 4 DESK REVIEW Desk review includes literature review and analyzing secondary data. The aim of desk review is to collect references from similar studies as well as to collect references regarding strategies to promote quality tourism. SURVEY A survey with random sampling has been conducted in June’22 on approx. 550 domestic tourists and 350 foreign tourists in 7 main provinces in Indonesia to obtain basic information on their profile and preferences for QT in Indonesia. FOCUS GROUP DISCUSSION FGD is conducted to gain more detailed qualitative information and other insights from related stakeholders regarding the preferences and profile of foreign and domestic tourists from respective countries that are potential to be the market of QT in Indonesia. QUANTITATIVE ANALYSIS • Analyzing survey result with tabulations • Mapping potential countries/provinces in each type of tourism using quadrant model Survey Preliminary Result 7 THE MAJORITY OF FOREIGN TOURISTS ARE WILLING TO SPEND MORE MONEY TO EXPERIENCE QT IN INDONESIA, I.E. DESTINATIONS THAT ARE STILL NATURAL, THE LOCATION IS SECLUDED, AND EDUCATIONAL/KNOWLEDGE-BASED TOURISM ACTIVITIES Tourist attractions/destinations are still natural (minimum… Not interested in QT 19% 52.5% The location of tourist attraction is secluded/far from the crowd 47.5% Educational/knowledge-based tourism activities that also have a… 47.2% Tourist attractions are unique and can't be found anywhere else 37.1% Tourist destination is supported by good infrastructure and… 32.0% Availability of premium/luxury facilities and amenities (e.g.… Willing to spend more for QT 81% 21.7% Takes full account of environmental, social, and economic… 11.0% Tourism activities involve and contribute positively to local… Others FOREIGN TOURISTS TEND TO CHOOSE MARINE TOURISM AND ARTS & CULINARY, WITH BALI AND LOMBOK AS FAVORITE DESTINATIONS 8.6% 1.5% IN GENERAL, FOREIGN TOURISTS WITH THE HIGHEST POTENTIAL FOR QT ARE FROM MIDDLE EAST, AMERICA, AND EUROPE; AGED > 42 YEARS OLD; MARRIED; HOUSEWIVES/WORK AS PRIVATE EMPLOYEES; HIGHLY EDUCATED; AND MAKE> $80,000/YEAR 100% Middle East Female GENDER Male 82.9% 81.5% COUNTRY OF ORIGIN America 90% Europe 90% Australia-New Zealand Asia Married without children 92% Others 90% Housewife Private employee Professional Retired Domestic partner STATUS 87% Married with children 80% Single 78% Others OCCUPATION Student Entrepreneur Government employee Post-graduate Graduate EDUCATION ATTAINED Middle/High School College/Under graduate Not working/unemployed 94% Alone 89% 76% 72% Family TRAVELLING GROUP Friends Colleagues/co -workers Sumber: Survei Preferensi Quality Tourism, Dsta & KPwDN Jun 2022, n = 335 81% AGE 66% 94% 91% 86% 83% 83.3% 76% 74% 64% 50% 42 – 57 years old 83.3% 25 – 41 years old 81.4% > $80,000 $40,000 - $79,999 ANNUAL INCOME 87% 58% 85.7% 20 – 24 years old 88% 75% > 57 years old 65.2% 97% 90% Prefer not to say 78% < $20,000 77% $20,000 - $39,999 75% > US$ 3,500 100% Others 100% 90% US$ 2,100 – 3,500 TRAVEL SPENDING US$ 700 – 2,100 79% < US$ 700 73% No cost/sponsored 50% CERTAIN REGIONS SHOW SLIGHTLY DIFFERENT INTERESTS: EAST ASIA (HISTORY/RELIGION), MIDDLE EAST (CITY TOUR), EUROPE EXCL. NORTHERN EUROPE (VILLAGE TOURISM & SPORTS) The role of VITO Becoming the source in FGD to provide information regarding the following questions: 1. What are the current trend/preferences in travelling in your country? Has there been any shift since the COVID19 pandemic? 2. What are the characteristics of premium travelers in your country that are usually interested to travel to Indonesia? (e.g. gender, occupation, age, marital status, lifestyle, hobbies, etc.) 3. Which factors influence the decision-making of travelers in your country when choosing certain destination/type of tourism? 4. In general, how big do you think is the market potential for QT in Indonesia in your country? FOCUS GROUP DISCUSSION • The FGD will be conducted online in the 5th week of August-the 1st week of September (subject to the availability of each VITO) • The duration of the FGD will be around 1,5 – 2 hours • There will be 2 – 3 VITO with similar time zone in each FGD session • The FGD will be conducted in English • Each VITO is expected to prepare materials regarding the above questions and present them in the beginning of the FGD • The FGD will be attended by participants from Bank Indonesia (Department of Economic & Monetary Policy and Representative Offices Abroad) and Ministry of Tourism and Creative Economy • Link zoom: http://bit.ly/PariwisataBI2022 (Meeting ID: 392 954 8503; Passcode: 80QTHC) 8 Suggested FGD Schedule 9 DATE JADWAL FGD VITO Australia - Melbourne Wednesday, VITO Saudi Arabia August 31st 2022 VITO Rusia VITO Malaysia Thursday, VITO Singapura st September 1 VITO Belanda 2022 VITO Jerman Friday, VITO Prancis nd September 2 VITO Inggris 2022 LOCAL TIME INDONESIAN TIME 13:00 - 14:30 10:00 - 11:30 10:00 - 11:30 14:00 - 15:30 10:00 - 11:30 09:00 - 10:30 10:00 - 11:30 15:00 - 16:30 10:00 - 11:30 09:00 - 10:30 15:00 - 16:30 THANK YOU DEPARTEMEN KEBIJAKAN EKONOMI DAN MONETER