RISK MANAGEMENT IN DEVELOPING KAMPUNG WISATA BATIK KAUMAN PEKALONGAN CITY

“Kampung Kauman is the oldest area of batik center in Pekalongan, even in Indonesia, .. since the 1950s there have been several batik industries in Kauman. And in 2007, the Mayor of Pekalongan inaugurated this area as Kampung Batik .. and the total number batik industries in Kauman reach over 50 stores. Most are home industries” (Kontan.co.id, 2013)

Tourist attractions: More than 50 shops and showrooms – over 14 local Batik Industries – 27 Historical Buildings – 10 Homestays available for visitors – Traditional cultures – IPAL (waste management installation) – Old Mosque Al Jamie’ Kauman – Local hospitalities.

Tourism development that promotes:

1. Socio-cultural development

2. Environmental protection

3. Economic sustainability

Sustainable tourism

Economy

Environment

Society

Dr. Stefanos Fotiou, United Nations Environment Programme

Typology

Of Risk

Market Risk

Credit Risk

Liquidity Risk

Operational Risk Legal &

Regulatory

Risk

Business

Risk

Strategic Risk

Reputation Risk

Not Popular among

Domestic & International

Booking with no prepayment &

cancellation

Funding management

from self funding, govt and private

Low service standard and

poor organization management Community

organization with strong individual

preference

Sustaining visitors arrival

Product differentiation; communication and promotion

Coordination among

staleholders and low service/ expectation

STEP 1. RISK IDETIFICATION

(WHAT MAY HAPPEN)

STEP 2. MEASURE &

ESTIMASTE THE RISK ANY INSTRUMENT

REDUCING THE RISK

STEP 3. ASSEST THE IMPACT

AND THE RISK

COST & ADVANTAGES

STEP 4. CREATE MITIGATION

STRATEGY

STEP 5. EVALUATIONS

COMMUNICATE

CONSULT

DOCUMENT

MONITOR

REVIEW

(Yetta Gurtner and Damian Morgan - Risk Management for Small Tourism Business, 2004)

Risk Typology Kampung Kauman Likehood Consecuence Risk Level

High domestic tourist market, low promotion and branding.

Hard to get international tourist but potential thru promotion

Batik is popular and Pekalongan is known for Batik. Promoting Kp Kauman in every international or national Batix fashion show or expo

Cash and advance payment after reservation Reservation are confirmed after receiving advance payment

Cancellation may happen Cancellation fee applicable to delayor cancelled visitors

Order and reserve by confirmed booking No purchase of preparation withour reservation (confirmed)

Development thru self funding and government or private

donation without any obligation.

Each sector work on each member may have different standard

As a New organization may not work as expected Target, evaluation and monitor achievements of the organization activities

The organization is extra (additional) job without payment Share profit as incentive thru organization and each perosn involved

Community based organization as made thru local community

with local government support

Strong individual preference against organization goals

Secure interaction (criminal action) during visitors' stay

Sustaining number of visitor (continous tourist coming)

New destination need to create a market need

Potential competiting among members of the organization

Differentiation among similar destination (Kp. Pesindon, Solo,

Jogya, Semarang and Tegal)

Active communication thru agency/ tour operator and media

(promotion)

Promoting destination thru local people and local tourist

(Pekalongan's tourist)

Unable to serve the tourist as expected

Coordination in managing and handling visitors

Over paid (over valued compare to other destinations)

Remarks: Low Small Low Rare No Impact acceptable

Moderate Moderate Medium My Happen No direct impact (minor) can be accpted but monitor

High Severe High Quite Ofter Large Loss Not accepteble

Very High Catastrophic Very High Very Often Serouose permanent loss Immediate action for low risk reduction

Create active promotion and agreement thru visitors centers, visitors arrivals and

hotels and malls in Pekalongan and beyond.

Always make sure that the price published meet the market price and demand by

doing price/cost maping and tours spending index.

Continues training and evaluation

Risk Typology & Mitigation Kampung Batik Kauman

Create training and communication among operators in Kauman and aware of

potential criminal action

Create sustainable potential visitors (monthly) and capablity to secure the visitors

arrival (sales dept.)

Active marketing and promotion thru traditional channel and thru millenial fave

funnels

Regula discussion and communication each sectors in how to improve service and

support each other

Create potential and unique attractions with continues improvement of service

standard

Sales department and PR should active communicate and promote thru travel

agency/ tour operator in major cities iin Java.Strategic Risk

Reputation Risk

Always have discussion for pre and post touris arrival (groups) for better service.

Open mind to any positive critics and suggestions.

Mitigation

High promotion and branding thru media in potential market (Jakarta, Semarang,

Bandung and Surabaya)

Introduction and join international expo thru Indonesian embassy and inbound tour

operator

Active for fundrising to government and private institution for facility support

funding

Legal and formal local tourism organization involving local government, private

businessman and local leaders as stakeholders

Person incharge have to get some creteria in developing Kauman tourism with low

personal interest

Market Risk

Credit Risk

Liquidity Risk

Operational Risk

Legal & Regulatory

Risk

Business Risk

Calculating risk management in developing a destination for Kampung Batik Kauman is a mechanism to control the performance and impact and how to anticipate consequences and negative impacts of the development Kampung Batik Kauman, and can reduce the potential for loss (failure) by reducing the probability of loss and damage. Risk management activities in Kampung Batik Kauman should not be viewed as a cost or expenses, but as an investment to stabilize and ensure the success of developing Kampung Batik Kauman as a tourist destination.

Widodo Heru Retail Business Professional, Branding and Channel Marketing Hospitality and Destinations Enthusiasm Contact me @: Y: widodo_heru@yahoo.com G: widodo.heru@gmail.com L: http://www.linkedin.com/pub/widodo-heru-santoso/22/b69/115 F: https://www.facebook.com/widodo.heru.1 T: https://twitter.com/widodo_heru P: http://www.pinterest.com/widodoheru/ S: http://www.slideshare.net/widodoheru

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