INTERNET-BASED HOTEL MARKETING STRATEGY IN INDONESIA: EMPIRICAL STUDY WITH VECTOR AUTOREGRESSION MODEL

Abstract

Purpose: The purpose of this study is to determine how the Indonesian hotel sector may use the internet as a productive and successful marketing tool.   Theoretical Framework: The opportunities offered by the internet include ease of accessing and disseminating information about hotel products and services, the ability to reach a wider and more diverse market, and the opportunity to improve the quality and efficiency of services (Kapoor & Kapoor, 2021). However, the internet also poses challenges, such as increasingly fierce competition, changes in consumer preferences and behavior, and threats to data security and privacy (Bandara, Fernando, & Akter, 2020).   Design/Methodology/Approach: This research uses secondary data from the World Bank and UNWTO regarding Internet users, Number of hotel rooms, Total guests, and Tourism arrivals from 2000 to 2022. This research applies a vector autoregression (VAR) model with two lags to test the relationship between five time variables. series, namely Total Guests, Tourism Arrivals, Room Rate, Number Of Rooms, and Internet Users. The VAR model was chosen because it has the lowest information criteria values, namely AIC, SC, and HQ, which shows a high fit to the data.   Findings: Number of Rooms is the variable that has the most influence on other variables, which indicate the capacity and quality of hotel accommodation. Therefore, hotels are advised to increase the Number Of Rooms in order to attract more tourists and increase revenue. Apart from that, Total Guests, Tourism Arrivals, and Room Rate also have a significant effect on several other variables, which reflect the dynamics of market demand and supply, as well as hotel competitiveness. Therefore, hotels are advised to maintain and improve these variables with appropriate marketing strategies, such as promotions, distribution channels and social networks. Meanwhile, Internet User is the weakest variable in the VAR model, which has a negative relationship with Total Guests, Tourism Arrivals, and Room Rate, which reflects the influence of information technology on consumer behavior.   Research, Practical & Social Implications: This research makes a practical contribution by providing solutions for the hotel industry in Indonesia to increase performance and income by utilizing the internet as an effective and efficient marketing medium.   Originality/Value: This research provides a theoretical contribution by examining the influence of the internet as an effective and efficient marketing medium for the hotel industry in Indonesia, which is a topic that has rarely been researched before.