PAPER ON EFFORTS TO RECOVER THE INDONESIAN HOTEL

INDUSTRY DURING THE COVID'19 PANDEMIC AND DURING THE

NEW NORMAL PERIOD

Compiled By:
1. Acintya Pijar Azzahroh (2019002057)
2. Feni Rama Dhanti (2019002026)
3. Meganada Nawwar Nawangsih (2019002088)

ENGLISH EDUCATION DEPARTMENT

FACULTY OF TEACHER TRAINING AND EDUCATION
SARJANAWIYATA TAMANSISWA UNIVERSITY
2022
Abstract : The Covid-19 pandemic has crippled the hospitality industry in Indonesia.The
number of tourist visits decreased significantly, followed by a decrease in the rate hotel room
occupancy. The hotel room occupancy rate had touched 15.6% and caused 27,607
accommodation businesses to close in 2020. As a result, a number of hotels close either
temporarily or permanently. Many hospitality industry workers laid off. Many hotel industry
workers are laid off. The hotel industry has a major role in supporting the economy and
providing employment in several regions. Any disruption to the hotel industry's activities will
disrupt the regional economy. Added to this is the conflict between Russia and Ukraine which
has affected the recovery of the hotel industry. This study aims to determine the recovery
strategy used to provide updates on the situation and development of the hotel industry recovery
program during the Covid'19 pandemic and during the new normal period as well as the
influence of the Russian and Ukrainian conflicts on the Indonesian hospitality industry, using
qualitative analysis methods through literature studies. and group discussions. The results of this
study found that there were strategies used in efforts to recover the hotel industry during the
Covid'19 pandemic and during the new normal period, as well as the influence of the Russia-
Ukraine conflict which caused a slowdown in the recovery process.
Keywords: Strategy, Hospitality Industry, Covid'19 Pandemic, New Normal, Russia-Ukraine
Conflict

INTRODUCTION
Tourism is the sector most affected and the first to be hit by the Covid-19 pandemic. This
sector is predicted to recover the most recently (Nufaisa et al. , 2020 , p. 6). This situation is due
to the fact that human travel from one place to another is the lifeblood of the tourism sector
(Garrido-Moreno et al., 2021, p. 1). In Indonesia, restrictions on people's travel activities due to
the Covid-19 pandemic in 2020 are also known as large-scale social restrictions or PSBB
(Pusdiktasari et al., 2021, p. 118). Throughout world history, this is the first time that 100% of
destinations in the world, a total of 217 locations, have restricted tourist travel, either totally or
partially in April 2020 (UNWTO, 2020, p. 3). Apart from the aviation industry, the hospitality
industry as the main supporter of tourism is automatically affected by the Covid-19 pandemic.
The hospitality industry in Indonesia must swallow a bitter pill due to the Covid-19
pandemic. The average room occupancy rate (TPK) in star hotels nationally dropped drastically
in 2020. As shown in Figure 1, the average decreased by 39.75 %, from 53.8% in 2019 to
32.42% in 2020. The worst decline occurred in Bali Province with a decrease in ROR of 73.78%
from 59.57% in 2019 to 15.62% in 2020. The decline in TPK in Bali is far below the national
average. In fact, the Province of Bali recorded sufficient TPK performance before the pandemic.
In 2015-2019, Bali's TPK has always been above the national average. During the Covid-19
pandemic, the TPK for star hotels in Bali immediately fell to 15.62 % . In fact, this decline will
continue in 2021 where the national average TPK has started to increase. Even though the hotel
industry is an important industry according to the Ministry of Finance (2020) because it is labor-
intensive and has a high impact on Indonesia's future economic growth.
The new order of life or New Normal is a new chapter after all this time
Indonesia's conditions have changed drastically. The New Normal is expected to be a breath of
fresh air for all sectors, including the tourism sector. Tourism was previously a sector that was
closed due to the corona virus pandemic causing an area's income to decline. For this reason, it is
necessaryto make efforts to increase tourism activities while not overriding
health protocols, namely through “recovery efforts”. However, the conflict that occurred
between Russia and Ukraine is expected to slow down the progress of the recovery of the
Indonesian hotel industry because it has very serious implications for the global market. The
Russia-Ukraine conflict affected the economic sector which caused several changes.
Such a weakening condition in the hotel industry cannot be allowed to remain in a state
of uncertainty due to the pandemic. Business actors need real action by the government
supported by other stakeholders to get back on their feet even though the pandemic is not
completely over (Pusdiktasari et al., 2021, p. 118). Noting the various problems in the hotel
industry during the Covid-19 pandemic, the government and hotels need to develop post-
pandemic rescue and recovery measures (Diayudha, 2020, p. 43).
Studies on recovery after the Covid-19 pandemic in the tourism sector, especially the
hospitality industry, have been carried out before. The most recent studies will be due in 2021
(Arbulú et al., 2021; Garrido-Moreno et al., 2021; Herédia-Colaço & Rodrigues, 2021; Le &Phi,
2021; Orîndaru et al., 2021; Rustika et al., 2021; Sakinari, 2022 ; Sanabria-Díaz et al.,
2021;Tobing, 2021; Yeh, 2021), that is, during the pandemic, things were starting to get under
control. However, several similar studies conducted in 2020 also have relevance in terms of
substance (Diayudha, 2020; Hao et al., 2020; Kusumaningtyas, 2020; Nufaisa et al., 2020; Susilo
& Sarosa, 2020). These studies are broadly divided into studies on the broad tourism sector and
studies directed at the hotel industry. Previous studies on tourism and hospitality recovery have
several weaknesses.
Studies conducted in 2020 (Hao et al., 2020; Nufaisa et al., 2020), have difficulty
obtaining supporting data due to the pandemic that has just started. In addition , the recovery
policies and strategies resulting from the study are still planning in nature and their effectiveness
cannot yet be assessed. On the other hand, studies conducted in 2021 and beyond provide
recommendations for further studies that are more specific in terms of location (Arbulú et al.,
2021; Garrido-Moreno et al., 2021), field of study (Yeh, 2021), types of hotels (Herédia-Colaço
& Rodrigues, 2021; Le & Phi, 2021), as well as policy evaluations that have been carried out
(Tobing, 2021).
Based on the results of previous research, this study tries to provide an update on the
situation and development of the recovery program during the Covid-19 pandemic and during
the new normal period, especially in the hotel industry and the impact of the conflict between
Russia and Ukraine on the Indonesian hospitality industry. Apart from trying to provide new
information, this study will also explore information from the point of view of hotel business
actors as preparation material government recovery policy. The contribution of this study to
previous research is that there is new information regarding policies and strategies for the
recovery of the tourism and hotel industry sectors in line with developments in the Covid-19
pandemic situation which continues to change.

METHODOLOGY
The type of research used in this research is descriptive qualitative in nature ,
in which research procedures produce descriptive data in the form of words from an analysis of
various reliable sources as well as some people who are needed and can be observed. The
research location is the place where research done. Determining the location of the research is an
important stage in qualitative research, because the determination of the location means the
object and purpose has been set so as to facilitate the author in conducting research. The data
used is data obtained or collected by the person doing the research from sources that already
exists. The data collection technique in this study is observation.

RESULTS AND DISCUSSION

Hotel Recovery Efforts During The Covid'19 Pandemic
During the Covid'19 pandemic, the condition of hospitality in Indonesia was quite
apprehensive. The drastic decline in hotel occupancy has forced many hotels to close because
they are unable to pay operational costs. This makes many employees have to be fired or laid off
by the company, because the hotel does not have enough income to pay employee salaries. Many
hotels are closed because occupancy has decreased by 60% to 80%. It is estimated that only 10%
of hotels are still open, while 90% of hotels must close due to the PSBB. However, as time goes
by, many companies, such as hotels, develop new strategies that are able to gain the trust of
consumers, so that occupancy can increase little by little. The following is the strategy carried
out by hotels in Indonesia:
1. Increase the ease of booking for visitors either by telephone, online web, or online travel
agents and carry out promotions online.
2. Hotels during a pandemic must continue to implement health protocols and promote them
through the "tagline" so that visitors can be attracted because they feel safe.
3. Improving restaurant services for visitors or the community around the hotel to be able to
order food at the hotel restaurant via delivery.
4. Maintain good service quality so that visitors can provide feedback in the form of good
ratings and reviews on travel agent applications.
 5. Increasing collaboration with genpi, influencers and the government through social media
for easy marketing.
6. The pandemic period, which does not know when it will end, can be used by hotels in
collaboration with local governments, both Regency/City or Province, to be used as
isolation places for Covid-19 patients or as transit points for medical personnel by
implementing health protocols. This can be used as income for the hotel so that
operational costs can be maintained and employees can still be employed.
Almost all hotel businesses have received government assistance for operations in the form
of grants . Some of the assistance comes from the central government in the form of Government
Assistance for Tourism Businesses (BPUP), as well as grants from local governments. 10% of
hotels that have not received assistance stated that there were requirements that they could not
fulfill, for example permits that had not been extended . The rest, hotels that do not receive
government assistance prefer to rely on private funding or assistance from central hotel
management.
Hotel Recovery Efforts During The New Normal Period
Many factors affect how quickly the hotel industry recovers in the New Normal era. The
right policy response in the field of tourism, positive psychological conditions for society
returning to travel, and community readiness in tourism destinations are the three main things.
Tourists will definitely return to travel, if there is a guarantee from the government that the
destination tourism is ready to accept tourists with health, hygiene and safety protocols. The
psychological condition of the community can improve through controlling the number of
sufferers Covid-19 and the discovery of the Covid-19 vaccine. In addition, hotel management
need support from the surrounding community, because in addition to preparing physical
facilities in accordance with the health protocol which is also very important is the readiness of
the surrounding community for cleanliness and safety.
From the results of the FGD in April 2022, we obtained several findings that could serve as
input for the formulation of recovery policies during the new normal period. The first finding
relates to the recording of hospitality statistics by the Central Bureau of Statistics (BPS). BPS
data exposure results as shown in Table 3 shows the findings of the actual situation in the hotel
industry during a pandemic.
 BPS (Marhaeni, 2022) noted that there was a significant decrease in the number of
accommodation providing businesses of 10.43 % in 2021 compared to 2020. This means that in
just one year thousands of accommodation providing businesses had to close their businesses due
to the Covid-19 pandemic. Meanwhile, the increase in the business of providing accommodation
during 2019 and 2020 was only recorded at 0.24%, much smaller than the amount of the decline
in 2021. The largest amount of decline was in other types of accommodation which had
relatively cheap prices. Even though one of the advantages of Indonesian tourism in terms of
competitiveness according to (Calderwood & Soshkin, 2019) is competitive prices compared to
competing countries.
The second finding relates to the point of view of business actors regarding the hotel
industry's recovery strategy. Hotel business actors through the Indonesian Hotel and Restaurant
Association (PHRI) have realized that there are markets for the hotel industry that have not been
explored so far (Yusran, 2022). The issue of banning travel abroad is also one of the market
segments that emerged during the pandemic and needs to be followed up on.
Several hotels have carried out digital transformations using technology support either
independently or in collaboration with online application providers (Listyowulan, 2022). Hotel
business actors through the Indonesia Hotel General Manager Association (IHGMA) admit that
the digital presence of the hotel industry is very necessary (Arimbawa, 2022). In terms of
collaborating with other parties, hotel business actors through IHGMA have prepared a special
marketing program. Through cooperation with online travel agencies, hotels participate through
short discount packages or flash sales on online vendors. Traveloka noted a 100% increase in
tourist preferences to book hotels participating in the flash sale program (Listyowulan, 2022). To
accommodate local tourists, hotels have prepared packages staycation and stuckcation.
Staycation prepared for short-distance tourists who want to take a vacation. Temporary,
stuckcation is a program for tourists who cannot return to their place of origin due to restrictions
imposed by the government. Traveloka notes that there has been a spike in the search for
accommodations that provide packages staycation as much as 220% compared to before the
pandemic. This shows the potential of these packages in helping the recovery of the hotel
industry during the new normal period.
The Effect of The Russian-Ukrainian Conflict on The Hospitality Industry
When the war between Russia and Ukraine peaked on February 24, 2022. Russia began
to increase world oil by 10%. This causes the increase in oil to be followed by increases in other
commodities such as wheat, petroleum and other processed products from the mining industry.
This impact will certainly be felt by Southeast Asian countries which are dependent on Russian
oil, gas and wheat. The war that occurs will have a major influence on growth and the global
economy. Indonesia is a country affected by the war and it is feared that it will have an impact on
Indonesia's trade with the two countries. Not only Indonesia, most ASEAN countries also felt the
impact of the war, especially in the increase in oil prices for the transportation industry.
Economic relations between Russia and Indonesia have developed slowly since the Cold
War. In 2016, the total trade between the two countries was $ 2.6 billion. This is in oil, gas and
petrochemical commodities which account for 64 % of Russia's exports to Indonesia. Then, in
2015, rubber and foodstuffs became the largest commodities of Russian imports. The two
countries have also been actively pursuing a number of joint energy projects in recent years,
including to develop offshore oil fields in the Java Sea. In addition , Russia's Inter RAO has also
discussed a project to build a 1.8 gigawatt power plant in Indonesia for $2.8 billion. Then, in
November 2017, Rosneft and Pertamina, an Indonesian energy company signed a major new
agreement, worth $15 billion to develop a new oil and petrochemical complex in East Java. This
cooperation is expected to become a major regional hub for oil distribution throughout Southeast
Asia. The two countries also discussed the possibility of cooperation to develop a traditional
nuclear power plant for Indonesia .
This makes the impact of the war between Russia and Ukraine has great potential in
increasing commodity prices. Thus, the influence of the wars between Russia and Ukraine had a
direct impact on the economies of countries in Southeast Asia, especially in petroleum because
Russia was an exporting country of more than 10% of the world's total oil. The influence spread
by Russia over the war was large enough to affect the national interests of other countries. As a
result of this, many people feel big changes, especially in the economic field because their
expenses are also higher which results in their low desire to travel and stay at hotels. In addition,
all Ukrainian and Russian citizens are not allowed to leave their country, so they cannot vacation
in Indonesia and there are no hotel opportunities to get tourists from Russia and Ukraine.
 CONCLUSION
This study produced several important findings as an effort to recover the hotel industry
during the Covid'19 pandemic and after the new normal, as well as the influence of the Russian-
Ukrainian conflict on the Indonesian hospitality industry . The first finding is the strategy carried
out by hotels in Indonesia in an effort to deal with the co-19 pandemic. Second finding which
can be used as input in the formulation of recovery policies during the Covid'19 pandemic. The
third finding relates to the recording of hospitality statistics by the Central Bureau of Statistics
(BPS). The results of the BPS data presentation show findings of the actual situation in the hotel
industry during the pandemic. The fourth finding relates to the point of view of business actors
regarding the hotel industry's recovery strategy during the new normal period and assistance
from the government to the hotel industry . Then the last finding is the influence of the Russian
and Ukrainian wars on the economies of countries in Southeast Asia, especially Indonesia, which
has economic relations with Russia since the Cold War.
The results of this study provide implications for existing crisis management policies.
The impact of existing policies in handling crises on the ground is that the action plans of each
work unit function are less focused on industrial recovery. Therefore, the tourism crisis
management policy in the Minister of Tourism Regulation Number 10 of 2019 needs to be
reviewed, especially at the recovery stage. The division of functions and roles in these
regulations needs to be clarified and focused on the steps needed to support industrial recovery.

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