E-Journal of Tourism Vol.8. No.1. (2021): 70-76 70http://ojs.unud.ac.id/index.php/eot e-ISSN 2407-392X. p-ISSN 2541-0857 Accommodation Business Competition in Bali: Competitive Strategy for Star Hotel in Sanur Agung Rendra Wijaya1*, Komang Gde Bendesa2, Agung Suryawan Wiranatha2 1Master Program in Tourism, Udayana University, Indonesia 2Centre of Excellence in Tourism, Udayana University, Indonesia *Corresponding Author: rendra_wijaya29@yahoo.com DOI: https://doi.org/10.24922/eot.v8i1.71446 Abstract Sanur area, with Kuta, are two of Bali’s pioneering tourism areas. Most of the star hotels in Bali are located in these two areas. This paper is intended to determine the conditions of competition in the accommo- dation business in Bali Province, especially competition between star hotels in Sanur Tourism Area, as well as to elaborate the competitive strategy to maintain business sustainability. Through primary data col- lection by interviewing 8 managers and 14 employees at 3-star hotels in the Sanur area in 2018, the Delphi method was used to find a viable competitive strategy to choose from. The results of the SWOT analysis showed that the hotel location near the beach, and the incompleteness of MICE facilities were the main strength and weakness respectively. On the other hand, Bali’s popularity as a world-class destination and unfair price competition were the main opportunity and threat facing the accommodation business in Sanur respectively. This research found the competitive strategy to use is to intensify the use of Information Tech- nology in the form of digitizing accommodation businesses. Keywords: SWOT analysis, business digitization, Delphi method, Sa- nur Beach, competitive strategy Article Info Submitted February 9th 2021 Accepted March 18th 2021 Published March 31th 2021 cember 2018 Bali was visited by 6,070,473 foreign tourists, an increase of 6.54 percent from the number of previous visits (BPS Bali, 2019). Relying on the sector of providing ac- commodation and food & beverage which is traditionally considered to be representa- tive of the tourism sector, as well as the ag- riculture, forestry and fisheries sectors, the economic growth of Bali Province in 2018 was recorded at 6.35 percent and excee- ded the national economic growth. Based on current prices, the contribution of the tourism sector and the agricultural sector INTRODUCTION Sanur Beach and Kuta Beach are two of the main tourism destinations in Bali. Sanur Beach, which is located in Denpasar City as the capital of Bali Province, is the favorite destination of Denpasar City. As a province that is not endowed with adequate natural resources, cultural uniqueness and beautiful landscapes are Bali’s prime po- tential in implementing tourism as a major sector for economic growth and the welfare of the Balinese people. The Central Bure- au of Statistics noted, from January to De- E-Journal of Tourism Vol.8. No.1. (2021): 70-76 71http://ojs.unud.ac.id/index.php/eot e-ISSN 2407-392X. p-ISSN 2541-0857 tained. This paper is intended to determine the perceptions of star hotel managers in the Sanur Tourism Area in responding to the competition between star accommoda- tion businesses in this area. Through this perception, a viable competitive strategy can be identified. Taking into account the number of star hotels in Denpasar City which dominantly has 3-star and 4-star qualifications (BPS Bali, 2019), the object of study was selected a 3-star hotel in Sa- nur, called Respati Beach Hotel. LITERATURE REVIEW Strategy needs to be managed pro- perly. Referring to Hunger and Wheelen (2003), strategic management has at least 3 domains of discussion, including (a) preci- sely formulating the problems at hand; (b) implement the selected solution from the problem formulation; and (c) evaluate the outcomes and impacts for the organization from the implemented solutions. Strategy, according to Boyd (2000), can be inter- preted as the optimal use of organizational resources through its interactions with mar- kets, competitors, and various internal and / or external factors of the organization. By paying attention to this definition, strategy is an effort to match internal factors with organizational external factors that can affect organizational performance and its in 2018 to Bali’s Gross Regional Domes- tic Product (GRDP) was 23.34 percent and 13.81 percent, respectively. PDRB worth Rp. 154.15 trillion. Observing the domi- nant role of accommodation and food & be- verage businesses in the economy of Bali, it is not surprising that investment in these two types of businesses is growing massi- vely, especially in Bali’s leading tourism destinations, such as the Sanur, Kuta, Nusa Dua, and several other destinations in Bali such as Ubud and Tulamben. In the period of year 2014-2018, the number of star-rated accommodation businesses and the number of rooms available increased drastically, as shown in Table 1. The significant increase in the num- ber of star hotels as well as the number of rooms available in Bali has resulted in increased competition between hotels. So- metimes, competition is counterproductive and tends to be negative occurs, especially during the low season. Observing the ave- rage growth in the number of star hotels by 27.23 percent, exceeding the growth of fo- reign tourist arrivals of 6.54 percent, it is not surprising that the competition between star hotels in Denpasar City - ranked second after Badung Regency from the number of star hotels in Bali, is getting tighter. Efforts to identify and identify the right competiti- ve strategy are absolutely necessary for the accommodation business in Denpasar City, so that business sustainability can be main- Table 1. Number of Star-Rated Accommodations and Rooms in Bali, Year 2014-2018 Number of Star Year Annual Growth (percent)2014 2015 2016 2017 2018 Hotel Room Hotel Room Hotel Room Hotel Room Hotel Room Hotel Room 5 Star 58 12,122 65 13,172 65 N/A 73 17,357 73 13,388 6.09 2.09 4 Star 71 9,354 76 9,287 76 N/A 144 20,954 144 18,418 24.13 19.38 3 Star 75 5,304 89 6,513 89 N/A 229 19,713 229 14,846 43.99 35.98 2 Star 25 1,469 30 2,014 30 N/A 79 6,548 79 5,283 45.83 51.93 1 Star 20 562 21 610 21 N/A 26 1,705 26 992 7.20 15.30 Total 249 28,811 281 31,596 281 N/A 551 66,277 551 52,927 27.23 16.74 N/A: Data not available Source: Bali Statistics Office (2019) E-Journal of Tourism Vol.8. No.1. (2021): 70-76 72http://ojs.unud.ac.id/index.php/eot e-ISSN 2407-392X. p-ISSN 2541-0857 sustainability. A slightly different definition of strategy, which emphasizes the organi- zation to focus on its strengths and weak- nesses, was proposed by Hitt et al. (2011) which states that strategy is a commitment from all parts of the organization in reali- zing coordinated and integrated actions to elaborate on the core competencies of the organization and gain a competitive advan- tage over competitors. Marketing is one of the activities commonly carried out by industry as a stra- tegy to maintain and/or expand the market it already has. Referring to the definition from Kotler and Keller (2009), the mar- keting mix is a set of tools that companies can and usually use in gaining market ad- vantage over their competitors. Kotler’s traditional marketing theory known as 4P’s emphasizes that the company is: (a) able to provide products and/or services according to what consumers need at a quality level that exceeds consumer expectations; (b) able to provide a fair price for the product/ service being offered in accordance with the willingness of the consumer to pay for it; (c) able to attract consumers to buy the products and/or services it offers through the delivery of information about the su- periority of the product or service compa- red to competitors’ products/services; and (d) able to facilitate consumers who wish to consume the products and/or services produced by providing an effective and ef- ficient distribution channel. Observing 4P’s Kotler’s theory, it is implied that the competitive strategy of star hotel accommodation business in Sanur re- quires an understanding of effective techni- ques and methods in ‘selling’ the resulting accommodation products and/or services. Marketing effectiveness will only be achie- ved if the internal and external environment of the business is well understood, as stated by Boyd (2000) and Hitt et al. (2011). One technique commonly used is an analysis of Strengths, Weaknesses, Opportunities, and Threats (SWOT). Strengths and Weaknes- ses describe the internal conditions of the organization, and Opportunities and Thre- ats describe the external environmental conditions faced. These two types of en- vironment play a very vital role in identi- fying the problems faced and in choosing a suitable strategy to solve organizational problems (Kotler and Keller, 2009). METHODS In order to identify the problems fa- ced by the star accommodation business in Sanur and choose the appropriate compe- titive strategy, a 3 star hotel was assigned as the research object and involving 8 di- vision managers and 14 employees as res- pondents. All division managers and emp- loyees were interviewed separately to find out the internal and external environmen- tal conditions of the hotel. All respondents were given a questionnaire which must be filled in independently (self-administered questionnaire). The questionnaire contains a number of questions that describe the SWOT of the hotel with answers prepared in the form of a Likert scale choice. Similar method was undertaken by Sugandi, Patu- rusi and Wiranatha (2020) to study about homestay management in Lombok, and Rumere, Wiranatha and Pujaastawa (2020) to establish the development strategy of tourism destination in Jayapura City. The hotel competitive strategy is identified using the following 3 stages: Identify the strengths, weaknesses, oppor- tunities, and threats faced by the hotel by using the opinions of division managers. Consensus on SWOT items was obtained using the Delphi Method, in the form of a round-table meeting; Evaluating the current situation faced by the hotel by utilizing the perceptions of managers and employees. The results of the situation evaluation were arranged in a matrix form and divided into 2, namely: (a) Internal Factor Evaluaton E-Journal of Tourism Vol.8. No.1. (2021): 70-76 73http://ojs.unud.ac.id/index.php/eot e-ISSN 2407-392X. p-ISSN 2541-0857 (IFE) Matrix, and (b) External Factor Eva- luation (EFE) Matrix; Determine the hotel competitive strategy by looking at the com- binaton of he IFE Matrix and EFE Matrix, called I-E Matrix (David and David, 2016). RESULTS AND DISCUSSIONS The Internal Factors Using the Delphi method, obtained 16 strength indicators and 12 weakness in- dicators that represent the internal environ- ment of the hotel. The ranking results of the 16 strengths and 12 weaknesses of the hotel are shown in Table 2. The five indicators that were percei- ved as dominant strengths indicate the im- portance of hotel accessibility, accessibility to available tourist attractions, and the fac- tors of employee friendliness and empat- hy for the needs and services to tourists. Accessibility and service quality were the main determinants of industry sustainabili- ty. On the other hand, the three indicators that were perceived as having the lowest level of importance were the location of the hotel close to the tour agent, terraced rooms, and quality human resources (HR). The last two indicators had a low level of importance (amounting to 0.038) conside- ring that most of the competing hotels in Sanur also have them, so that the two indi- cators can no longer be relied upon to be a competitive advantage in the competition. The proximity of hotels to tour agents was an indicator that was considered the least important in competing. The rapid deve- lopment of information technology (IT) that was used in the industry, was able to ‘get closer’ customers to product and/or service providers. It was not surprising that this indicator was perceived as having the lowest level of importance by respondents. At the hotel weakness factors, three indicators that were considered to have the lowest level of importance for improve- Table 2. Ranking of Strengths and Weaknesses Faced by the Hotel Strengths Value Weight (W) Rating (R) Weaknesses Value Weight (W) Rating (R) Strategic location 220 0.043 3.667 Crowded 136 0.026 2.542 Direct access to the beach 233 0.045 3.958 Performances still low 148 0.029 2.583 Near shopping center 199 0.039 3.542 Uncompetitive workers 155 0.030 2.708 Room with terrace 198 0.038 3.250 Limited facilities 163 0.032 2.583 Qualified workers 198 0.038 3.167 Lack of entertainment 147 0.029 2.667 Quality of services 222 0.043 3.750 Overbooked 172 0.033 3.000 Hospitality 225 0.044 3.708 Education 148 0.029 2.583 Availability of Wi Fi 207 0.040 2.833 Disciplines 153 0.030 2.417 Bungalow choice 210 0.041 3.208 Old equipment 155 0.030 2.375 Room price 199 0.039 3.250 Lack of meeting room 114 0.022 2.458 Beach restaurant 214 0.042 3.625 Restaurant too near with room 138 0.027 2.833 Hotel atmosphere 208 0.040 3.333 Limited breakfast menus 174 0.034 2.500 Good reputation 216 0.042 3.500 Total 1,803 0.350 Responsiveness 222 0.043 3.542 Have repeater guests 206 0.040 3.417 Near the tour agent 172 0.033 2.833 Total 3,349 0.650 Source: Primary data (2019) E-Journal of Tourism Vol.8. No.1. (2021): 70-76 74http://ojs.unud.ac.id/index.php/eot e-ISSN 2407-392X. p-ISSN 2541-0857 ment, respectively, were the unavailability of meeting rooms, congestion in the Sanur area, and the location of restaurants was near to tourist rooms. The unavailability of meeting rooms that had the lowest im- portance weight was inseparable from the type of tourists targeted not as tourists who would carry out meeting, incentive, con- ference, or exhibition (MICE) activities. The results of interviews with operational managers found that the market niche that the hotel targets was tourists in the elderly category (elderly tourists). The External Factors In the external environment of the ho- tel it was agreed that there were 10 indica- tors of opportunity along with 9 indicators of threat. The ranking results of these two types of indicators are shown in Table 3. Observing the rating of 10 indica- tors of opportunities for star hotels to face competition, it was clear that the utilizati- on of the tourist market growth (opportu- nity number 7) had not been optimal and the number of room orders (opportunity number 2) was the two opportunities with the lowest average rating. With a high ra- ting, it was clear that Bali’s popularity as a world-class destination was the greatest opportunity for hotels to address their ex- ternal environment. The indicator with the second highest rating was IT development and its impact on the accommodation bu- siness. Noting that the hotel has prepared adequate IT resources and infrastructure, this indicator was a second opportunity that should be utilized optimally. At the hotel’s threat factors, the lo- west rating were found in three factors, namely the construction of new hotels in Sanur, issues regarding natural disasters, and the safety of traveling in the area. In the perception of respondents with high ratings, it can be seen that the two threats with the highest rating that describe the current situation were reduced hotel reve- nue from the F&B and restaurant business due to the increase in restaurant or restau- rant businesses in Sanur, and an increase in hotel budgets in the area. These two indica- tors outperform the indicators of unhealthy Table 3. Ranking of Opportunities and Threats Faced by the Hotel Opportunities Value Weight (W) Rating ® Threats Value Weight (W) Rating ® Visitors increase 180 0.051 3.208 Hotels’ location 176 0.050 2.583 Room reservation increase 179 0.051 3.125 Operational budget increase 175 0.050 2.958 Online reservation 196 0.056 3.500 New hotels 156 0.044 2.375 Tourists’ activities increase 194 0.055 3.208 Government’s regula- tion 168 0.048 2.542 Easy to make room reservation 219 0.062 3.542 Natural disaster 181 0.051 2.375 TIC development 215 0.061 3.583 Visitors’ safety 184 0.052 2.375 Some markets have not been penetrated 175 0.050 2.792 Unfair price competi- tion 194 0.055 2.917 Popularity of Bali 220 0.062 3.625 External F&B 183 0.052 3.042 Government promo- tions increase 198 0.056 3.250 Negative reviews 158 0.045 2.458 Free visa policies 180 0.051 3.250 Total 1,575 0.446 Total 1,956 0.554 Source: Primary data (2019) E-Journal of Tourism Vol.8. No.1. (2021): 70-76 75http://ojs.unud.ac.id/index.php/eot e-ISSN 2407-392X. p-ISSN 2541-0857 room price competition, which were in the third place. The IFE-EFE Matrix Utilizing the previous IFAS and EFAS matrices, Internal Factor Evaluati- on (IFE) and External Factor Evaluation (EFE) can be prepared as a foundation for developing a hotel competitive strategy by paying attention to the internal and external environment of the hotel. IFE and EFE va- lues are calculated using equations (1) and (2) and are used to determine the competi- tive position as shown in Figure 1. IFE = Weighted Strength + Weighted Weakness(1) IFE = = (0.043x3.667 + … + 0.033x2.833) + (0.026x2.542 + … + 0.034x2.500) IFE = 2.228 + 0.913 = 3.141 EFE = Weighted Opportunity + Weighted Threat(2) EFE = = (0.051x3.208 + … + 0.051x2.500) + (0.050x2.583 + … + 0.045x2.458) EFE = 1.843 + 1.175 = 3.018 Figure 1. Choice of Hotel Competitive Po- sition Based on IFE-EFE (I-E Matrix) Taking into account the weighted value of IFE and EFE, respectively 3.141 and 3.018, in I-E Matrix as in Figure 1 it can be seen that the competitive position of the research object hotel is in quadrant I. Hotel must aggressively penetrate the market they have mastered, target new markets, and diversify and development of new products and or services. In addition, hotels should start to have the courage to integrate, upstream through cooperation with travel agents; downstream with tourist attraction providers within and or outside the area. Considering the external and internal factor, the competitive strategy for the hotel was an aggressive competitive strategy by penetrating into new markets and maintai- ning traditional markets and can be imple- mented through intensifying off-line and on-line promotions, increasing cooperation with tour operators or agents in the form of Information Technology-based e-marke- ting as an effort to increase hotel branding for tourists, and intensify the use of Infor- mation Technology in hotel operations so as to increase hotel competitiveness against similar accommodation businesses. CONCLUSIONS The rapid development of tourism in Bali Province has led to an increase in the number of businesses and the number of accommodation rooms available and offe- red to tourists. This implies that an optimal competitive strategy was needed so that business sustainability can be guaranteed. A study on the competitive strategy of star hotels in the Sanur area, by taking the rese- arch object of a three star hotel in this area, concluded: The dominant strengths of the hotel were safe and comfortable accessibi- lity to Sanur Beach, employee friendliness, and the hotel’s strategic location very close to Sanur Beach, shopping centers and tra- ditional markets and equipped with quali- ty services; The main weaknesses identi- fied included the lack of readiness of the hotel in preparing MICE facilities as well as congestion that often occurs due to the accumulation of tourism businesses in the Sanur area; The popularity of Bali as an international destination and the massive use of Information and Communication Technology with reliable service quality was an opportunity for accommodation bu- sinesses in the Sanur area; The occurrence of unhealthy price competition during the E-Journal of Tourism Vol.8. No.1. (2021): 70-76 76http://ojs.unud.ac.id/index.php/eot e-ISSN 2407-392X. p-ISSN 2541-0857 low season and the increasing number of budget hotels were the two main threats fa- ced by star hotels in this region; Conside- ring the internal and external environment of the hotel, using IFE and EFE matrices, the appropriate competitive strategy used by hotels wass an aggressive competitive strategy by penetrating into new markets and maintaining ‘traditional markets’, in addition to diversifying existing products and or services offered. This strategy could be implemented through: Increase offline and online pro- motions; Increasing cooperation with tour operators or agents in the form of e-mar- keting based on Information Technology as an effort to increase hotel branding for tourists; and intensifying the use of Infor- mation Technology in hotel operations, so that to increase hotel competitiveness against similar accommodation businesses. REFERENCES Boyd, H. W. 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