Economics and Accounting JournalVol.1, No.2, May 2018

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THE STRATEGIC MANAGEMENT OFLAKE TOBA DEVELOPMENT

Posma Sariguna Johnson KennedyChristian University of Indonesia

posmahutasoit@gmail.com

Abstract

To fulfill Sustainable Development Goals which is a document that become a reference inthe framework of development in the world, one of the goals is the suistainable tourismissue for welfare. The government wants to make Lake Toba as one of the priority touristdestinations. Lake Toba with the beauty of the largest volcanic caldera in the world caninvite demand for both domestic and foreign tourists. It is important to improve theenvironmental condition of the lake itself and how the infrastructure to reach the touristdestinations. The main purpose of this paper is to analyze the strategic management ofLake Toba development. The research method used is qualitative method. Thegovernment wants the best strategy with various implementations to prepare Lake Tobaas a world tourism destination.

Key Words: Lake Toba, Strategic Management, Tourism Destination.

1. INTRODUCTION

Lake Toba has very high potentialtourism. The main attraction is the lakeitself. Lake Toba is expected to be aworld-class environmentally-friendlydestination that focuses on its volcanicheritage combined with Batak culture. Inthe middle of Lake Toba there is anisland called Samosir Island. Manythings are popular in Samosir Island.Among them are Chairman of Batu RajaSiallagan, Tomb of King Sidabutar,Ambarita, Parbaba Beach, GunungPusuk Buhit, there is also Tuktuk Villageas the main accommodation area.[BPIW,2015]

Lake Toba is a land that inhabitedby individuals and ethnic groups ofBatak Toba, living at an altitude of 900m above sea level. This lake is formedfrom eruption of volcanic mount. Theeruption had an impact sprayed the crater

which was filled with a very large waterdebit. The people of Sumatera Utaraconsist of various ethnic groups such asMelayu, Batak Karo, Batak Toba,Mandailing Batak, Batak Angkola, BatakSimalungun, Batak Pakpak, Nias andanother ethnic groups Minangkabau,Aceh, Jawa, etc). Population in LakeToba area is dominated by Batak Toba,Batak Karo, and Batak Simalungun.Lake Toba is one of the pride BatakToba community that is very useful forthe source of life. [BPIW, 2015]

The main objective of this paper isanalyze the strategic to national tourismof Lake Toba to increase tourist visits,both domestic and foreign. This isbecause there is a desire of governmentto create new tourist destinations such asBali which has long been known byinternational tourists, one of which is

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Lake Toba to increase national incomeother than taxes.

2. LITERATURE REVIEW

2.1 Supply and Demand in TourismThe function and the tourism

system, consists demand or the market astourists who visit, and supply as a touristdestination itself. The demand andsupply of a tourism activity is a majorforce in tourism planning. The demandand supply, as a market, determines whattourists want, the needs and ability oftourists to pay. Market can becategorized, but will change over time.Supply and demand must be developed,not only as a response from the marketbut also as one of the geography andmanagement factors associated with thetourist destination. Planning in thetourism development should be able torun with both strengths in the same time.

There are two things that can beoffered to tourists, namely products andservices. The tourism product is theoverall coverage of a product that isdestined for a person or consumed by aperson during a tourist activity. Serviceis a service that tourists receive during atour. There are three basic componentsforming tourism products and touristdestinations, namely tourist attraction,amenitas and accessibility. Attraction isan advantage that can be used to "sell"the area to attract tourists to conducttourism activities. Amenitas is a comfortsupported by various completeness offacilities and infrastructure supportingtourism activities. The availability offacilities and infrastructure of tourismactivities can affect the sustainability oftourism activities in an area.[Haynes,2000]

2.2 Strategy Management as a Foun-dation for PlanningThe process of strategy

management is the way in which

strategic planners set goals and makedecisions. Some important steps areformulated: 1) Setting the vision,mission and objectives of the company;2) Examining threats, opportunitiesstrengths, and weaknesses (SWOTanalysis); 3) Consider alternativestrategies; 4) Choosing a Strategy; 5)Implementation of Strategy; 6)Evaluation Strategy.Vision is a desire for a condition in thefuture that will be in accordance with theideals of all company members. Themission is a fundamental purpose thatdistinguishes a company from othersimilar companies and that explains itsoperational coverage. Purpose is thetranslation of the mission. To formulate astrategy, the most important step is toconduct an environmental analysis. Thisanalysis covers the environment outsidethe company (external environment) andthe environment within the companyitself (internal environment). Both resultswill be combined to get a picture of theconditions that are being faced by thecompany, and also will be faced in thefuture. From the external and internalenvironment circumstances we know theSWOT of the company. SWOT analysisis a systematic way to identify internalcompany factors based on theassumption that an effective strategy willmaximize the strengths and opportunitiesand minimize the weaknesses and threat,[Pearce and Robinson, 2014]

From the SWOT analysis it can bedetermined the alternative strategies. Inthe implementation of the strategy.Strategies should be implemented inaccordance with the stated goals andplans. The implementation of thestrategy spells out more clearly how thestrategy choices are realized as planned.[David, 2017]

The last stage is the evaluation tosee how far the results of the stages aregoing through, as well as the feedback inimplementing the strategy managementprocess. [Jauch and Glueck, 1988]

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3. RESEARCH METHOD

The Paper Research Method wasdeveloped using descriptive qualitativeresearch literature research methods.Secondary data are obtained fromCentral Bureau of Statistics of SamosirDistrict [BPS Kabupaten Toba Samosir.2017], Regional InfrastructureDevelopment Board [BPIW, 2015], andespecially from Horwath HTL TourismHotel Leisure Report under the title"Market Analysis and DemandAssessment of Lake Toba" [Howarth,2015]. This paper is in support of WorldBank Selection #1223583 as Howarth'sreport in developing Lake Toba tourismdestinations. Several field observationsare also conducted. Strategicmanagement of the development of thisLake Toba destination uses the structureof thinking as shown below:

Figure 1: Strategic Management

Source: from various sources

4. RESULT AND DISCUSSION

Here is the analyze of strategymanagement for planning thedevelopment of Lake Toba tourismdestination in determining the decisionmaking.

4.1 Vision of Lake Toba

Government of North SumatraProvince wants to realize the vision:"Realizing Lake Toba Area as the WaterSource of People's Life, KampungCenter for Indigenous Batak Communityand Sustainable Tourism Area of theWorld". The mission are: Realization ofthe environment of Lake Toba Area;Realization of infrastructureimprovements in support of regionaldevelopment; Realization of Lake Tobaas a world-class tourism area connectedwith domestic and global tourismmarket; Realization of region-basedcommodity-based economy of superiorvalue added and able to compete in theglobal market; and Realization of localcommunities as the main actors in theeconomic activities of the region.[BPIW, 2015]

The expected goal is the significantgrowth of visitors both by domestic andforeign tourists.

Table 1. The Number of Visitors Growth

2015 2021 2026 2041

Foreigners

58.709 81.070116.850

264.650

Domestic

1.743.500

2.041.950

2.498.160

3.083.420

TOTAL

1,802,209

2,123,020

2,615,010

3,348,070

Note: The number of visitors includingday visitors and includes passengers onboard.

2016-2021

2022- 20262027-2041

Foreigners 5.5% 7,6% 5,6%

Domestic 2,7% 4,1% 1,4%

TOTAL 2,8% 4,3 % 1,7%

Source: Horwath ( 2015)

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4.2 Environmental Analysis ofTourism Destination

4.2.1 Macro Environmental AnalysisThe Indonesian Government desire

to increase significant revenue from thetourism sector as non-oil revenues. Thusestablished a program of tourismdevelopment with 10 priority objectives.Through the National Medium-TermDevelopment Plan (RPJMN). A numberof objectives have been set up to enhancethe role of tourism in the Indonesianeconomy.

In 2015-2019, the Government andthe Ministry of Tourism target theincrease of international visitors from 9million to 20 million, domestic visitsfrom 250 million to 275 million, tourismcontribution to GDP from 4 percent to 8percent, tourist income from Rp120trillion to Rp240 trillion, Indonesiaranked in Tourism and Tourism Rankfrom 70th place to 30th, and tourismsector workforce from 11 million to 13million workers.

4.2.2 Natural Environmental AnalysisThere is a deterioration in water

quality as a result of the various wastesdumped into the lake causing pollution.Existing wastes are domestic waste,agricultural waste, waste fromaquaculture in floating net, as well aswaste oil derived from water transportactivities. More than 50% of solid wastein 7 districts around Lake Toba is notcollected and disposed of properly.There is a destruction of forest areas, inthe form of deforestation for variouspurposes around the lake. Causesfluctuations in water flow into the lakeresulting in erosion and increasedsedimentation. Drainage does not have adirect impact on visitors around LakeToba.

Less than 10% of the population in3 major tourism districts do not haveaccess to PLN power supplies. Powerdemand for tourism activities is smallerthan 5% of total demand.

Approximately, 90% of the populationin 3 major tourism districts do not haveaccess to PDAM water supply. Waterdemand for tourism activities is smallerthan 5% of total demand. About 20% ofhouseholds in 3 major tourism districtsare not equipped with adequatesanitation facilities.

4.2.3 Demand AnalysisThe number of domestic visitorsrepresents 92% of total visitors to LakeToba. Day visitors with an estimatednumber of 483,000 visits by 2015.Visitors who live in non-commercialaccommodation (friends and relatives)with an estimated number of 598,000visits by 2015. Visitors staying incommercial accommodation with anestimated arrival amount of 662,500 by2015. 95% of Indonesian domestictourists come for holiday destinations.Their arrival increased in the last 5 years.The number of visitors to internationaltourists is still very limited, ie as many as58,700 tourists in 2015. Internationalvisitors represent only 3% of the totalvisitors. They mostly live in commercialaccommodation (120,700 night guestswith an average duration of 2.1 nights).

International visitors have continuedto increase over the last 5 years. Mostforeign visitors come from Malaysia andSingapore (50% and 10% respectively).

4.2.4 Supply AnalysisThe length of national road in

Danau Toba is 542.98 km. Consists of,the length of provincial road is 172,74km, the length of district road is 4,170,59km and the length of ring road in DanauToba area is 277,08 Km. The existingroad network in the Lake Toba area ismostly quite good, especially the roadthat connects to the district capital.

Airport Silangit, has terminalcapacity - 36,500 passengers/year,adequate capacity (17,800 passengershandled by 2015). Runway Capacity -2400 m, no parallel taxiway, capable of

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handling 16 aircraft per hour, adequatecapacity (currently 2 hours peakmovement). Sibisa Airport, has runway:750 m x 18 m, terminal: 120 m2.

For trains, there are no railconnections to the core tourist areas ofLake Toba. Medan-Pematang Siantarpath with a train journey isapproximately 4 hours. It is estimatedthat 5% of foreign visitors and 10% ofdomestic visitors use trains/publictransport.

Lake transportation, several smallports (no proper docking facilities),small boat, service every half hour. Itmainly operates in Tigaraja -Tomok andTigaraja - Tuk Tuk, adequate capacitywith 28 fleet, 30 capacity per ship. Thereare 2 ferry operators RORO: Ajibata -Tomok privately operated and Balige -Onan Runggu & Simanindo - Tigarasoperate in public. Ferry RORO every 2.5hours. Current capacity and frequencyare still sufficient.

Local collector roads along thecoast of Samosir island are poorly linkedbetween subdistricts, but on some roadsconnecting sub-districts are quite good.Medan to Tebing Tinggi (83 km) withtravel time 2 hours 20 minutes. TebingTinggi to Pematang Siantar (52km),travel time 1 hour 40 minutes. PematangSiantar to Parapat (43 km), travel time 1hour 10 minutes. Parapat to Balige(60km), travel time 1 hour 30 minutes.Balige to Siborong Borong (19.6km),travel time 1 hour. Toba - Berastagi -Medan via Tigaras (147km), travel time6 hours.

By the end of 2015, there are a totalof 131 hotels (3,391 rooms) in 3 maindistricts that surround Lake Toba. Only16 hotels (more than 10%) have a 4 starrating. Star hotels focus on major touristtowns, Tuktuk (Samosir District) andParapat (Simalungun Regency).Simalungun and Samosir regenciesdominate star hotels with a total of 116hotels. The maintenance of hotels isgenerally below standard. The average

room is composed of 22.9 small rooms.The growth of hotel rooms from 2009 to2015 in 3 main districts are: Simalungunby 1%, Samosir 3% and Toba Samosirby 6%. Overall, 3 Toba districts aretargeting growth of around 3% in 6 yearsfrom 2015.

4.3 SWOT AnalysisWe can deliver some strength,

weakness, opportunity and threat factorsof destination.4.3.1 Strength

Lake Toba is the rich natural beautylake as a world-class attraction. A strongawareness that Lake Toba is a touristdestination at national and internationallevel. Good flight connections betweenIndonesia (Medan) and Southeast Asiancountries. Culture and way of life Batakstrong and unique in Indonesia. LakeToba is the largest volcanic caldera inthe world, created by the eruption 74,000years ago which is the largest eruption ofthe last 2 million years.

4.3.2 WeaknessRoad infrastructure between Medan

and Parapat is poor. The environment isdeteriorating. Low quality and lessvaried hotel accommodation. Companydemand and MICE are very limited inincreasing occupancy. Limited numberand variety of supporting tourismfacilities, such as restaurants,recreational activities retail andcommercial. Limited investor interest.Fog events, almost every year in themiddle of the year caused by forest fireshave a negative impact on the visit.

4.3.3 OpportunityRoad improvement between

Medan- Tebing Tinggi is expected toreduce travel time. There is strongsupport from the central government fordevelopment and promotion. Possibilityto introduce recreational attractions (boattrips, water sports and activities, golf,hiking and bcycling). Lake Toba tourism

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is possible packed with other attractions(shopping in Medan, Brastagi and BukitLawang). The government has appliedfor Geopark Toba Caldera written on theUNESCO Global Geopark Network.Opportunity to promote Batak culture totourists with the new Kualanamu airport.More air connections can be built withother regional gateway towns.

4.3.4 ThreatsAbsence of proper waste

management, waste disposal,deforestation and commercial fishingmethods, and smoke pollution. Negativenatural lakeside regulations are noteliminated by the district/provincialgovernment, that allow for illegalconstruction that damages the lakeside.Lake Toba has an earthquake risk(occurred around Bukit Pusuk Bukit,especially in 1987 along the south bank).

From SWOT analysis above, themain problem in Toba Lake tourismdestination is: environmental degradationis currently a significant threat to thesuccess of development in future; andLake Toba is a natural asset with poorroad accessibility.

4.4 Alternative StrategyFrom the environmental analysis of

Lake Toba Destination Tourism andSWOT analysis, as well as the mainproblems faced, two strategic scenariosare defined. Namely, the first strategyscenario as business as usual and secondstrategy scenario as the best scenario.

4.4.1 Scenario Strategy 1: Business asUsual Strategy

This strategy is described that thedegradation of Lake Toba naturalenvironment continues to occur, andtravel time through the road will stillharm the visitors and potential investors.Projections for the market response are[Howarth, 2015]:1. Demand will remain unchanged

significantly.

2. If environmental degradationcontinues, it will dampen visitorinterest in tourism destinations

3. Growth in accommodation andtourism activities will be in minimaldemand .

4. The average duration of stay willremain the same as the past.

5. The visitor's spending will remainlow.

6. Projected growth in domestic visitorswill slow down

7. Forecast of domestic visitors to LakeToba will continue to grow but inlimited rate

8. The attractiveness of Lake Toba islow due to the degradation ofenvironmental and road access

9. Due to environmental degradation,Lake Toba will lose its appeal.

4.4.2 Scenario Strategy 2: BestScenario Strategy

This strategy is described as anintegrated tourism master plan wherethere are real efforts to rehabilitate,preserve the lake environment, facilitatepublic investment in bike lanes andhiking, as well as the development ofother new tourism facilities.Accessibility from Medan and NorthCoast of North Sumatra increasesbetween 2016 and 2021 (where the traveltime from Medan to Parapat decreasesfrom more than 5 hours to a maximum of2 hours 30 minutes. Faster flightscheduling between Airports in Jakartaand Silangit to facilitate weekend travelFrom Jakarta Mining MICE facilities andleisure activities, marinas, hotels and realestate in major accommodation areas inParapat and Samosir Island. Theprojection of the market response to thisbest scenario is [Howarth, 2015] :1. The market potential is very high as

there will be an increase in day tripsand stay briefly at Lake Toba fromMedan and surrounding areas

2. Increased visitor accessibility willlead to increased investment in

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commercial offerings in Toba Laketourism destinations.

3. In 2016-2021, although accessibilityhas not been fully improved it canencourage realization of someinvestments.

4. In 2021-2041, the attractiveness ofobjectives increases.

5. The average duration of stay andtourist expenditure will increase overtime.

6. The projected growth of domestictourist arrivals experienced high andsignificant growth.

7. By 2041 it is estimated that dayvisitors from the Medan area willincrease from 483,000 (2015) to902,000 (2041)

8. Travel on non-commercialaccommodation grows faster

9. Lake Toba will increasingly attractvisitors from the provinces outside ofNorth Sumatra.

10.Produce 4.5 times more internationalvisitors by 2041 compared to 2015.

4.5 Implementation by the Govern-mentTo realize the development of

tourism destinations of Lake Tobasignificantly, the government hasestablished an Authority ManagementAgency of Lake Toba Tourism Areabased on Presidential Regulation No. 49of 2016. Some plans will be and arebeing done.

First, begins with the cleaning of theenvironment of Lake Toba as a whole.The government will ban the existenceof floating net cages. Fish productionfrom keramba in Lake Toba reaches 80thousand tons of fish in 2015. A total of51 thousand tons of fish come fromcommunity owned cages, while the restare from corporate keramba. But, thecarrying capacity of Lake Toba is only50 thousand tons every year. Damage tothe lake marked the existence of 5600floating net cages that produce highorganic waste. In addition, the damage

from industrial timber estate permits(HTI) and truckloads from Toba PulpLestari. Restoration of Lake Tobawithout waste from keramba is now thehomework of seven districts thatovershadowed the lake, namely Samosir,Toba Samosir, Humbang Hasundutan,North Tapanuli, Simalungun, Dairi andKaro.

Second, is by optimizing theproduction from the local area. Forexample for fruits, coffee, vegetables anda variety of food Toba lake mainstay.There are seven districts around LakeToba and all agree on the development.They want all area of around Lake Tobaenjoy the rise of destination.

Third, is from the connectivity side.Infrastructure becomes important in thedevelopment. There are the ring road onSamosir Island and a major road thatpasses towards Kualanamu Airport.Developing the 97 km-long Siantar-Parapat toll road, which will start in2017, is expected to be completed by2019. Extend the airport runways ofSilangit in North Tapanuli and SibisaAirport. Prepared a ferry to connect fromthe ground to Samosir. The watersbetween Tano Ponggol and SamosirIsland will be deepened, in order tofacilitate the boat to enter the lake Toba.It will be provided 600 ha of greeneryland. Inside the tourist area will be built5 five-star luxury hotel, conventioncenter, and golf course. 600 hectaresland is also included for the LandAuthority of Tourism Agency. There arenew attractions, namely Taman BungaNusantara.

Fourth, is the strengthening of theside history of Lake Toba. The historycan be an attraction to come to the lake.Lake Toba is a large natural volcano, isthe largest caldera lake in the worldlocated in the province of NorthSumatra, 176 km to the west of Medanas the capital of the province. [BPIW,2015]

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5. CONCLUSIONThe development of Lake Toba's

destinations needs to be done jointly bythe government with the community. Ifthe future strategy is done by business asusual scenario, it will remain to thedetriment of visitors and potentialinvestors. The degradation of Lake Tobanatural environment continues to occur.

For that reason, the best scenario shouldbe done. Economic impacts with the bestscenario allow the projected number ofvisitors to Lake Toba to increase almosttwice from 1.8 million in 2015 to 3.3million in 2041. Investments will alsorise to anticipate future demandincreases.

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