The

information of a short case

(Source: MBA final project)

Background

Bandung is one of the cities in Indonesia, which has a wide range of attractions;
nature, artificial, shopping and culinary which can attract the attention of tourists from
time to time. These advantages make Bandung as one of the main destination of the
domestic and foreign tourists. Paris van Java is the nickname for Bandung that
described as the Paris of Indonesia. Located at the base of the arch is like being
surrounded by mountain ranges, the air is cold, complete with beautiful natural
scenery. No exaggeration if Bandung has this designation, a variety of beauty offered
from nature, artificial tourist, shopping, and culinary tours (www.bandung.go.id,
2013).

In the last four years an increase in tourist arrivals to Bandung. This increase cannot
be separated from the increased flight way into and from Bandung. Not only
connecting with cities in Indonesia but also opening a new possible to a number of
cities overseas. This makes an addition to having existence ones like a highway
connecting Jakarta and Bandung. (ww.pikiran-rakyat.com, 2014).
This makes Bandung be promising business area, Bandung is known as a creativity
city, shopping and culinary paradise, as well as a tourist destination, became a magnet
for businesses to offer a number of business opportunities, including the hospitality
business. The prospect of profitable business makes investors interested in investing.
Currently Bandung as if surrounded by many hotels. Bandung has 428 hotels ranging
from budget to star with room number as many as 21.082 rooms.

Based on the above data, hotel occupancy rates has decreased in last four years (see
Figure 1.2), this is not proportional to the increase in the number of tourists. In 2010
to 2011 occupancy increased by 0.75%, but from 2011 to 2013 has a decline of 5.61%. This is a result of the absence of restrictions on the permit construction of new
hotels so that tourists have a lot of alternative lodging.

Decline of occupancy rate amid the growth of new hotels, making the competition in
this industry is getting tougher. Each company will design a strategy to maintain its
presence in the face of competition. Reformulation of business strategy by designing a
good marketing strategy will help the company to increase occupancy rate.

Business Issue
Recent years, the hospitality industry in Bandung City experiencing a golden era.
Many investors are competing to set up a new hotel; it put the hotel into increasingly
strong competition. So this affects SUPER Hotel (SH) occupancy during the past two
years.

Figure 1.3

Based on data from 2009 until 2013 the SUPER Hotel occupancy has fluctuated. In
2009 to 2011 has increased while in 2011 to 2013 has decreases. The lowest
occupancy occurred in 2009 amounted 54.77% of the total room saleable as much as
59.740 rooms. Occupancy in 2010 and 2011 there was an increase of 4.85% and
6.98%, while in 2012 has decline in occupancy becomes 2.92% followed by a
decrease 7.85% in 2013, this is the highest percentage decrease in occupancy. Thus
achieving the target occupancy in the last five years never reached (see Figure 1.3).
The level of occupancy and Average Room Rate is a component of room revenue,
which would affect hotel revenue. Average Room Rate (ARR) is obtained from the
income in one day divided by room saleable. Average Room Rate during 2009 to
2013-increase approximately 6% every year except in 2013 only increased by 0.4%.
Room revenue SH from 2009 to 2013 increased by 41.44% while in 2011 to 2013
decreased by 8.34%. Based on interviews with sales managers should increase in
ARR affect the increase in room revenue while happens to SH be an increase in ARR
was not accompanied by an increase in revenue. This is an indication that SH decline
in occupancy.

Figure 1.4:

If the view of the market segments, SH is divided into two segments, Frequest
Individual Traveller (FIT) and Group Individual Traveller (GIT). Frequest Individual
Traveler is an individual consumer who travels on their own and do their own travel
arrangements including FIT corporate, FIT holiday, FIT government and FIT travel
agent. Group Individual Traveler including MICE corporate, MICE government and
GIT Travel Agent. MICE corporate/government segment is a meeting planned by the
corporate /government including training meetings, sales meetings, new product
introduction, socialization and other. This activity is usually held monthly, semester
or yearly.
The ratio of guest member from 2009 to 2013 based on market segment that will be
explained in the graph (see Figure 1.5)

Figure 1.5

Based on the data above, it can be seen from 2011 to 2013 decline in the government
segment of 28.43% followed by travel agents segment decreased to 22.73% while the
corporate segment increased by 22.90% and holiday segment increased by 16.45%.
Needs and wants of consumers are always changing from one attraction to another
attraction offered by the hospitality industry. Currently SH makes government
segment, as a cash cow but this demand will gradually decline. In the last five years
SH shifting market segment, in 2009 to 2011 government segment increased but from
2011 to 2013 has decreased while for the corporate and holiday segment is slowly
began to increased. As shown in Figure 1.6

Figure 1.6