Academic journal article International Journal of Business and Society

Market Study on Hospitality Sector: Evidence from 4/5-Star Hotel in Bandung City Indonesia

Academic journal article International Journal of Business and Society

Market Study on Hospitality Sector: Evidence from 4/5-Star Hotel in Bandung City Indonesia

Article excerpt


As the capital city of West Java province, Bandung is well known as "the Paris of Java" (or "Parijs van Java"), with its natural potential, its wealth, its status as a center of fashion, and its richness in creativity. It is located in a mountainous area with fresh air, cool water, and beautiful landscapes, along with abundant creativity in fashion and culinary products. The number of tourist sites is quite large. For example, Bandung boasts a floating market, Japan Cave, Lembang, Ciater, Tangkuban Perahu Mountain, Braga City-walk, and many more. Tourism in Bandung city demonstrates the city's wealth in nature, modern city tours, culinary offerings, fashion, and creative craft.

This diversity, in fact, has attracted local and foreign tourists to visit Bandung city. Tourism growth in Bandung is marked by the growth of the hospitality sector. In 2003, Bandung had four 5-star hotels, seven 4-star hotels, fifteen 3-star hotels, seventeen 2-star hotels, and five 1-star hotels, with a total of 210 hotels, including non-star hotels (BPS, 2014). After ten years of development, this number reached 347 hotels in 2013, with an average of thirteen hotels built on a yearly basis, and the trend is continuing to increase (BPS, 2014). Non-star hotels showed rapid growth during the period of 2003 to 2013, while 4/5-star hotels showed significant growth and 4/5-star hotels showed relatively small growth. More detailed data are provided in Figure 1. This situation has led to competition among

hotels becoming increasingly tight. The competition occurs not only among hotels with the same star rating but also among hotels across different ratings.

Further, this condition has led to the hotel room occupancy rate in West Java decreased in both starhotel and non-star hotel (NN, 2016). The hotel room occupancy rate in December 2014 only reached 49.14% for star-hotel and 35.13 % for non-star hotel. While in December 2015 it reached 46.2% for star-hotel and 34.55% for non-star hotel (NN, 2016). This shows that the rapid development of hotel in Bandung resulting an uncontrollable and over supply.

Hospitality is a sector with a strong service-dominant logic. Services in general are categorized into two elements of tangible and intangible services. Existing studies have contributed to exploring these service elements. Examples of tangible elements include food, guest facilities, room quality, and cleanliness (Abdullah & Hairil, 2012; Narangajavana, 2007; Lo, 2010; Poon & Low, 2005; Dolcinar, 2002). Intangible elements considered important include staff training and manners, and a feeling of well-being (Seo, 2012; Chang, 2012; Narangajavana, 2007; Dolcinar, 2002; Durodola & Samuel, 2011; Ongori et al., 2013; Curakovic, 2012). Furthermore, hotel occupancy depends on internal and external factors. The external factors involve macro issues such as the economy, technologies, politics, legislation, and demographics (Abdullah & Hairil, 2012). Internal factors relate to challenges in hotel management, quality of services, pricing and fees, facilities, variety and quality of food, accommodations, entertainment, and location (Abdullah & Hairil, 2012). In this regard, service quality becomes a critical element in success in the hospitality sector, in which high performance in service may contribute to positive behavior intentions toward hotel occupancy (Narangajavana, 2007; Lo, 2010; Chang, 2012; Abdullah & Hairil, 2012; Ongori et al., 2013). Thus, this study aims to observe customer preferences with regard to service quality by using the five dimensions of Servqual (i.e., tangible, reliability, responsiveness, assurance, and empathy). A questionnaire survey for hotel customers who had experience staying in 4/5-star hotels was conducted in Bandung during 2015 and 2016. The findings from this study will contribute to strengthening the existing literature, particularly for the hospitality sector, and the study also provides references for hotel management for the design of service innovation programs. …

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