Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2018 Vol: 17 Issue: 2

Pro-Poor Tourism: Findings from Bangka Island, Indonesia

Agung Wahyu Handaru, Universitas Negeri Jakarta

Keywords

Created Resources, Supporting Facilities, Destination Management, Private Investment, Destination Competitiveness, Pro-Poor Tourism.

Introduction

For more than two decades, Pro-poor tourism studies continuously managed in various places by many researchers like Africa and Asia (Truong, 2014; Truong, Slabbert & Nguyen, 2016; Drosos & Skordoulis, 2018; Knight, 2017) Some studies that investigated deeply on Pro-poor tourism and infrastructure can be found in Mahadevan, Amir & Nugroho (2017); Gascón (2015); Ashley, Boyd & Goodwin (2000). However, they only focus more on the pro-poor concept and less discussed on how to achieve the benefits. Some scholars in tourism management studies are having disagreement on what factors that truly affected the competitiveness of a pro-poor tourism benefits. Cattarinich (2001) explained that pro-poor benefits strongly supported by tourism attractions in particular location. Furthermore, Cattarinich (2001) also clarified that tourism attractions itself comprises effective tourism management, healthy natural environment and appealing location. Similarly, Drosos & Skordoulis (2018) stated that tourism development is deeply connected with the environmental conditions. Still, they only focus more on the environmental aspects and less on the tourist attractions. Some scholars have addressed the importance of community capacity building to support pro-poor tourism agenda (Saito, 2017; Rogerson, 2018). Unfortunately their studies have not mentioned the relationship between pro-poor tourism agenda and its antecedents. Meanwhile, other scholars like & Massiera (2009) explained that pro-poor tourism is highly affected by some factors like planning experience and on-site experience. Nevertheless, specific information about pro-poor benefits in marine-based tourism is unclear. Dissimilarity of finding on pro-poor benefits studies also found in Das & Ghosh (2014); Rogerson (2014) who stated that micro and macroeconomics play important role in creating tourism benefits within a location. However, they only explained about general aspect of tourism and its contribution on local economy.

Study of Faulkner & Walmsley (1998) also revealed that tourism benefits is strongly influenced by situational conditions and resources including climate, geographical condition and local culture (inherited resources) and created resources such as buildings and facilities. Nonetheless, specific thing related to pro-poor benefits was not being discussed. Interesting studies have been done related to the role of information technology and service quality in the tourism industry (Drosos et al., 2017). They have confirmed that information technology is “the lifeblood of travel” and service quality in tourism industry is positioned as strategic part of this industry. Nonetheless, they have not mentioned the real factors that contribute to the pro-poor tourism agenda. Some studies approved that pro-poor tourism benefits strongly affected by destination competitiveness. Famous tourist destinations can have more opportunities to give many benefits for local people and their community (Christofle & Massiera, 2009; Das & Ghosh 2014; Durydiwka & Duda-Gromada, 2014). Even so, detailed explanation about what factor that largely contributes to pro-poor benefits is still uncertain.

Different from previous studies, this study specifically introduced created resources, supporting facilities, investment, destination management and destination competitiveness as new pro-poor tourism benefits model. Based on previous details, the need to understand profoundly about pro-poor benefit and its antecedents motivated this study. The present study is focus to expose the extent of beach competitiveness in Bangka Island and what factor that primarily affected the accomplishment of pro-poor benefits in Bangka Island. The novelty in this study is the comprehensive model of pro-poor tourism benefits which will further contribute to tourism management and strategic management studies. In order to answer research questions, this paper is structured as follows. First, literature review and conceptual framework are detailed. Then, the method used to manage empirical testing is explained. Next, the results of hypothesis testing and overall significant of research model are presented. The paper closes with the discussion of findings together with interpretation of result, conclusion, implications for beach stakeholders and advices of future research.

Theoretical Background and Hypothesis Development

Destination Competitiveness and Pro-poor Tourism Agenda

Competitiveness refers to “a force” or “a power” to compete among rivals where in several strategic management writings it was categorized into nation-level and firm-level competitiveness (Kaharuddin et al., 2017; Meutia & Ismail, 2015). In order to create competitiveness, a firm must undergo several crucial processes such as strategic management process, human resources management process, operation management process and technology innovation process (Khavi & Enu, 2013). Presently, some experts in competitiveness studies associated the competitiveness with the tourism sector and fostering the destination competitiveness concept (Kirovska, 2011; Ashley, Boyd & Goodwin, 2000). Destination competitiveness also explained by Kumar et al. (2015) who clarified that competitiveness of a destination is the capability of a specific location to achieve high financial performance. Some expert mentioned that measurement of destination competitiveness particularly in tourism management should lead to poverty reduction (Levine, 2003; Kirovska, 2011; Ashley, Boyd & Goodwin, 2000). Rios-Morales et al. (2011) explained that study of destination competitiveness are including analysis of tourism management effectiveness, the role of infrastructures and marketing program.

Ashley, Boyd & Goodwin (2000) mentioned that main agenda of tourism management is poverty alleviation. Similar to them, Ashley et al. (2000) also explained that tourist attraction is important aspect that inseparable within tourism management. Cattarinich (2001) argued that tourism is the backbone of economy in developing countries. Besides, Yunis (2004) that pro-poor tourism is a set of policy and program to strengthen local economy and residents awareness of tourism management. Likewise, Mowforth & Munt (2003) explained that pro-poor tourism is strongly related to benefits for poverty mitigation as well as increasing the extent of natural environment quality. Meanwhile, Hovinen (2002) argued that pro-poor tourism policy is fostering economy resilience of local residents and refining the quality of tourism destination. In conclusion, we promote that the extent of destination competitiveness is positively affected pro-poor benefits agenda.

Created Resources as Essential Support in Beach Management

Description of created resources can be found in Li et al. (2015) who simplified that infrastructures are main feature of created resources. Infrastructure as a big part of created resources plays an important role to support whole visitor’s activities starting from arrivals until departures. Therefore, created resources can also take form as a transportation system which is safe, comfort and affordable for all visitors and ready to serve all channels of air, land and sea. Other experts like Liu et al. (2012) argued that other forms of created resources are entertainment, shopping and tourism infrastructures. In conclusion, created resources are the whole man-made infrastructure which is built to provide convenient, comfort, security and deliver memorable experience for all visitors. Briefly, we claimed that the quality of created resources will affected the extent of destination competitiveness.

The Role of Destination Management in Tourism Sector

Destination management defined as the process of creating, leading and adjusting some factors that related to product and service formulation in tourism business (Pasa, 2013; Ma & Hassink, 2013). Other processes in destination management are including location management, service marketing management and human resource management. Some key points in destination management are called physiographic of a destination including landscape, climate, weather, topography, which are crucial for tourism industry (Pasa, 2013). Destination management also related to management staff in particular tourist destination. Peteley (2013) mentioned that main scopes of destination management are marketing and promotion, membership and stakeholders, policy and strategy perspective, information and research, together with financial management. In summary, we promote that the extent of destination competitiveness is affected by the quality of its management.

Primary Role and Forms of Supporting Facilities for Tourist

Liu (2013) and Hall & Page (2009) have mentioned that every tourism destination has to have adequate tourism facilities that intentionally build to create comfortable condition. Supporting facilities for visitors can take many forms such as accommodation or hotels, restaurant, shopping facilities or souvenir center. Similar view is mentioned by Durydiwka & Duda-Gromada (2014). They believe that tourist destination should be supported by comfortable tourist facilities like recreational center, accommodation and attractions. Weaver (2000) also mentioned that sport facilities are very important to specific visitors. Furthermore, Durydiwka & Duda-Gromada (2014) suggested that tourist destination can create their own accommodation facilities by cooperation with local residents. Other scholars like Zili & Benhua (2014) stated that supporting facilities in tourism destination are including sport facilities, recreational center or shopping center. As stated by Zunic (2012), hotel and accommodation facilities are central to tourism management. Study of Ionita (2014); Christofle & Massiera (2009), argued that supporting facilities for disable people are very important to support the extent of destination competitiveness. Therefore, we deliberate that the extent of destination competitiveness fostered by the quality of its supporting facilities.

Private Investment to Enhance Destination Competitiveness

The extent of private investment is fundamental to develop tourism destination especially in new location (Kornai, 1992). As Soegiono, Pranoto & Haryani (2011) mentioned that private investment is related to a set of activities that intentionally crafted to increase and add the assets. Furthermore, they stated that assets are financial and non-financial (Soegiono et al., 2011). Study of Smith (1992) explained that private investment can promotes several benefits such as flow of cash, refinement of technological aspect, increase of managerial expertise and promoting more market penetration. Li (2009) and Box (2011) also mentioned that private investment can also bring negative impact such as degradation of natural environment. To minimize this, Li (2009) suggested that local government as regulator should proactively protect natural environment by providing necessary regulations. Another scholar argued that investment is crucial in terms of regional trade agreement like ASEAN (Lesher & Miroudot, 2007). In their study, Hassan, Othman & Abd Karim (2011) explained that in order to increase private investment, local government should actively provide public investment. Public investment plays an important role to attract private investment because public investment needs huge capital to develop basic infrastructure such as harbors, railroads, toll roads and airports (Hassan, Othman & Abd Karim, 2011; Terenteva, Vagizova & Selivanova, 2016). More detailed explanation about investment role in tourism industry can be found in Florea & Ciovica (2014). Rodriguez, Parra-Lopez & Yanes-Estevez (2008) also mentioned that tourism industry is very attractive to private investment. Additionally, they also mentioned that accommodation and hotel development are crucial in private investment. For above explanation, we concluded that the extent of destination competitiveness is fostered by the extent of private investment in particular location.

Hypotheses

Numerous empirical studies have observed the relationship between pro-poor tourism campaign and external factors of particular tourism destination. However, some of previous studies are only discussed about qualitative aspects related to specific destination. Therefore, this study is focus on formulating more comprehensive model of pro-poor tourism management. To accomplish this, some hypotheses are formulated as follows:

H1: The extent of destination competitiveness is positively affected pro-poor benefits agenda.

H2: The quality of created resources will affect the extent of destination competitiveness.

H3: The extent of destination competitiveness is affected by the quality of its management.

H4: The extent of destination competitiveness fostered by the quality of its supporting facilities.

H5: The extent of destination competitiveness is fostered by the extent of private investment in particular location.

Method

Samples in this study are two hundred and fifty visitors of Batu Kapur and Belimbing Beach in Bangka Island. Primary data retrieved from questionnaire distribution alongside some interviews with beach visitors and secondary data retrieved from local government office. This study used PLS technique to test all hypotheses and answer research questions. The result of average variance extracted, composite reliability and loading factors will be the main parameters to decide the goodness of proposed research model. All analysis is based on qualitative method and the structural model output, path coefficients and p-value scores. The impact of each exogenous latent variable on destination competitiveness is evaluated by effect size (f2) scores.

Results and Discussion

Beach Condition

In-depth observation at Batu Kapur and Batu Belimbing Beach revealed some information. In general, these beach are poorly managed and far below expectation. These two beaches actually gifted by beautiful natural landscape. But basic and tourism facilities are poorly managed. There are no appealing facilities for tourists and even basic facility such as restrooms or toilets are hard to find. The main road which connected airport and beach is relatively in good condition. It only takes two hours by bus or car to get to the beach from Depati Amir Airport in Pangkal Pinang. Close observation in two locations also exposed other facts. Batu Kapur and Batu Belimbing Beach are still managed by local residents unprofessionally. Some local residents were trying to provide basic facilities such as food stalls, rest areas, parking lot and restrooms. Nevertheless, the qualities of those facilities are poor. The descriptive statistics of all variables in this study are presented in Table 1. These empirical results have been estimated using SPSS statistical software.

Table 1
Descriptive Statistics
  N Minimum Maximum Mean Std. Deviation
CREAT 250 1.00 2.75 1.9630 0.26771
SUPP 250 1.00 2.82 1.9566 0.26212
DEST 250 1.00 3.00 1.9700 0.29058
PRIVATE 250 1.17 2.50 1.9731 0.17863
DESCOMPT 250 1.00 2.50 2.0280 0.15911
PRO 250 1.00 3.00 1.9984 0.32271

Model Evaluation

The first evaluation of research model in this study is construct validity test which correlates research construct with its indicators. Construct validity test essentially based on basic assumption that indicators and research construct should have strong correlation. In this study, the result of construct validity depicted from Average Variance Extracted (AVE) scores as follows: Destination Competitiveness (0.742), Destination Management (0.694), Pro-Poor Tourism (0.682), Created Resources (0.568) and Supporting Facilities (0.692). This result shows that the validity of research model is acceptable. The second evaluation of proposed research model is composite reliability test. Composite reliability measurement is used to check internal steadiness of survey instruments. The result of composite reliability test is as follows: Destination Competitiveness (0.852), Destination Management (0.819), Pro-poor tourism (0.865), Created resources (0.840) and Supporting Facilities (0.818) which are acceptable for further analysis. The result of AVE and composite reliability showed that present research model is satisfactory. Another evaluation of present research model is the outer loading of its each indicator. The result of outer loading of present research model is represented in Table 2:

Table 2
Outer Loading
  CR SF DM PRI DC Pro
x1 0.755          
x2 0.722          
x3 0.698          
x4 0.787          
x5   0.852        
x6   0.811        
x7     0.881      
x8     0.782      
x9       0.815    
x10       0.863    
x11         0.875  
x12         0.849  
y1           0.898
y2           0.752
y3           0.822

Based on Table 1, strongest indicator for created resources is x4 (clean water system); the strongest indicator for supporting facilities is x5 (shopping facilities); the strongest indicator for destination management is x7 (marketing strategy); the strongest indicator for private investment is x10 (tourist facilities); the strongest indicator for destination competitiveness is x11 (competitive advantage) and the strongest indicator for pro-poor benefits is y1 (economic benefit).

Path Coefficient and Total Effect

The present study formed some path coefficients represented in Table 3.

Table 3
Path Coefficient and Total Effect
  Original Sample (O) Sample Mean (M) Standard Error (STERR) T Statistic P Values
DC → PRO -0.052 -0.056 0.073 0.715 0.475
DMGT → DC -0.054 -0.051 0.106 0.514 0.608
DMGT → PRO 0.150 0.154 0.061 2.436 0.015
PI → DC -0.183 -0.188 0.108 1.690 0.092
PI → PRO 0.139 0.139 0.075 1.862 0.063
CRES → DC 0.579 0.584 0.120 4.843 0.000
CRES → PRO 0.609 0.615 0.088 6.881 0.000
SUP → DC 0.405 0.406 0.119 3.397 0.001
SUP → PRO 0.193 0.183 0.089 2.165 0.031

Based on Table 3, created resources and supporting facilities are positively supporting destination competitiveness. Meanwhile, created resources, supporting facilities and destination management are positively developing pro-poor benefits.

F-Square/Effect Size

Some exogenous latent variables have significant impact on beach destination competitiveness and pro-poor benefits. The extent of exogenous latent variables effect are as follows: destination competitiveness → pro-poor tourism (0.010), destination management → destination competitiveness (0.003), destination management → pro-poor tourism (0.094), private investment → destination competitiveness (0.033), private investment → pro-poor tourism (0.066), created resources → destination competitiveness (0.227), created resources → Pro-poor tourism (0.743), supporting facilities → destination competitiveness (0.180) and supporting facilities → pro-poor tourism (0.126). In summary, created resources have the strongest effect on the development of destination competitiveness and the weakest is destination management. Besides, created resources also have the strongest effect on pro-poor benefits. Overall, total contribution of exogenous latent variables on pro-poor benefits is 87.5%.

Discussion

Positive contribution of destination competitiveness on pro-poor benefits implementation is consistent with Yunis (2004); Zunic (2012). One destination can give many benefits for local community if it has competitive advantage among other beach destinations. In this study, the three benefits from pro-poor tourism (economic, livelihood and less tangible benefits) are scored low. Implementation of Pro-poor tourism benefits could be succeed if these beach are well organized and managed professionally by local government in cooperation with private investors as explained by Ashley et al. (2000). Unfortunately, several survey questions of created resources such as “clean water quality” and “transportation infrastructure” also scored low. Cooperation between local government and investors is highly needed because the cost of development of tourist destination is huge. High cost of destination development in return will provide many benefits such as poverty alleviation, better infrastructure, positive image of region and better environment quality. This study also revealed that supporting facilities play an important role to enhance competitiveness of two beaches. Specifically, local government together with private investors must provide various facilities to serve beach visitors. This are including accommodations or hotels, banks and ATM, restaurants, rental facilities, shopping retails, food stalls, local souvenir center, travel agents, tourist information center and other amenities. Unfortunately, several survey questions of supporting facilities such as “ticketing”, “toilet/restroom”, “accommodation quality” and “shopping retails” are answered far from satisfactory. Another important aspect that highly contributes to pro-poor benefits campaign is the quality of tourist attractions, festivals and events. At the moment, Batu kapur and Batu Belimbing Beach do not have appealing attraction, festivals or event that well managed and prepared. Survey questions like “local culture festivals”, “international events” and “recreational package” are scored unacceptable. This negatively affected the sum of visitors. Learn from other more settled beach destination like Kuta Bali, many water-based attraction can be made such as marine sport (canoeing, sailing, banana boating, water skiing, snorkeling, diving), marine festivals (seafood, exhibition, kites), culture festival (traditional food and dance, local history) and recreational sport (biking, tracking, hiking, beach volleyball, beach running).

This study however, has limitation that can be addressed in future research. First, our samples are visitors of beach with various backgrounds. This could result in potential bias of response and data. We have tried to minimize potential bias of data by adding more samples to gather more robust data from relatively similar background by using specific criteria such as educational level and age, as advised by Davcik & Sharma (2015) and Ntanos et al. (2018).

Conclusion and Recommendation

The present study explored antecedent of beach competitiveness and its impact on pro-poor tourism program. Some steps were used to answer research questions. First, mean score was used to measure the extent of beach competitiveness. Then, partial least square analysis technique was used to determine what antecedents are positively developed beach competitiveness and pro-poor tourism benefits program. This study empirically validates some findings. First, created resources and supporting facilities are positively enhancing beach competitiveness. Next, created resources, supporting facilities and destination management are positively developing pro-poor benefits. In summary, pro-poor tourism benefits can be successfully created if supported by 1) well-maintained created resources such as basic infrastructure (roads, transportation system, public utilities); 2) good supporting facilities such as accommodation, amenities, shopping centers, restaurants, tourist information center and travel agents and 3) destination management such as attractive marketing promotion programs. Future research is needed to measure other potential factors to enhance beach competitiveness and pro-poor tourism benefits such as cultural aspect and local heritage.

References