Sustainability of Tourism Industry and Contribution of Development in North Sumatra

UNIVERSITY OF GREENWICH (UOG)
Bachelor of Arts (Hons) in Business Management (Top Up)
ASSIGNMENT / PROJECT COVER SHEET
(to be completed individually by student)
UOG ID Number 000893391
Course Specialization Tourism and Hospitality Management
Subject Code/Name BUSI 0011/ Dissertation
Assignment Title Dissertation
Topic
The Sustainability of Tourism Industry and The
Contribution of Development in North Sumatra
Lecturer/Supervisor Mr. Constantine Ng
Word count 2,932
DECLARATION
I, the above named student, confirm that by submitting, or causing the attached
assignment to be submitted, I have not plagiarized any other person’s work in
this assignment and except where appropriately acknowledged, this assignment
is my own work, has been expressed in my own words, and has not previously
been submitted for assessment.

1. CHAPTER 1: INTRODUCTION:
Tourism is one of the industry that have big impact on the economy growth which can
increase the gross domestic product (GDP) of a country. Therefore, many countries had set
tourism as a leading sector by increasing destinations and investments in order to make tourism
the key factors of increasing domestic income, creation of workplace, enterprise and
infrastructure development and it will make the people in the country prosper due to the
increasing availability of job.
Indonesia is rich with natural resources that serve tremendous benefits to various industry
and one of them is the tourism industry in Indonesia. Moreover, Indonesia also have a variety of
culture that have high history value (Yuwana, 2010). As an archipelago country, Indonesia have
the potential in developing tourism industry. The development of the industry is not the only
impact on the increasing foreign exchange income but also will give an opportunity for the
people to open up a new business to reduce unemployment and maintaining the damaged
environment is important as well. Increasing international tourist by improving tourism will have
positive impact on the supply in tourism industry.
The success of the development in tourism industry is based on the acceptance of the area
and the PDRB through the total of souvenir that being sold, the total tourist from domestic and
international, hotel occupancy and the income per capita. From the perspective of economic, the
activity of tourism will give contribution to the area such as tax, car park retribution and
ticketing or getting foreign exchange from the international tourist. Having tourism will push the
economy from the activity which will increase the income of the people in the area. Tourism in
North Sumatra have the potential to be managed and marketed as a trading because having many
employee and give a huge contribution to the PDRB.
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Tourism industry is one of the useful source in the country after the decrease of the oil
(Rahma & Handayani, 2013). It plays the vital role to increase the environment, create new
business and infrastructure to make a better life for the society (Yudananto, 2011). There is a
positive impact on the non-economic infrastructure which caused by tourism. The positive
impact in the non-economic infrastructure such as using the technology and developing the
modernisation value or to achieve the social culture value such as to show the country identity or
to show respect on the country also be friend between the ethnic and the nation (Sunaryo, 2013).
People tend to travel a lot either out of town or overseas for different purposes such as
business trip, for education, relaxation or for the medical purposes. This literature review will
discuss about the objective of the research, the aim for this research and three research question
that are taken from some journals.
The topic of the literature review is about the sustainability of tourism industry and the
contribution of development in North Sumatra, Indonesia. Hereby, this research will find out on
how does the environtmental issue have been damaged by tourism industry. Moreover, to what
extent the economic development of North Sumatra can be contributed through tourism will be
investigated. The study will extensively cover in Lake Toba which is the key attraction to the
tourism in North Sumatra. As the consequence, the aim of this research is to identify the
emergence of environmental threats in North Sumatra particularly through tourism industry.
Furthermore, it can learn about the impact of sustainability in tourism industry of North Sumatra
and to what extend does sustainability contribute the development.
1.1. Research Question:
In the research question, there are three question that will be asked and discuss with the
appropriate solutions.
 What is the prospect of North Sumatra tourism
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 Is the tourism in North Sumatra sustainable? If yes, can it compared to other countries
with similar area?
 How can tourism contribute economic value of North Sumatra?
1.2. Definition of Tourism:
The term of tourism is where people can move to one place to another place for personal
purposes or business purposes (United Nations World Tourism Organisation 2008 cited in
Westcott, M. 2014) and it is also one of the global industry that makes the economy growth
growing rapidly. Based on American website (Go2hr.ca, 2018), it was said that the tourism
industry is competitive and need to meet the customer’s expectation such as safety, satisfaction
and pleasant.
1.3. History of North Sumatra:
North Sumatra is a province which capital is Medan. It is connected with the Aceh
province, Strait Malacca, the Riau province, and the West Sumatra. Furthermore, there is one of
the famous tourist places in North Sumatra which is Lake Toba. According to the Indonesia
Tourism Board (2018), Lake Toba is the largest lake in Asia and also one of the most famous
destination in North Sumatra.
2. CHAPTER TWO: LITERATURE REVIEW:
2.1. The Understanding of Tourism Industry in North Sumatra:
To understand more in depth of the tourism industry in North Sumatra, this research is
going to use the Triple Bottom Line (TBL). The TBL framework is going to include social,
environment and economic as a performance of a business (Goel 2010 cited in Alhaddi, 2015) in
North Sumatra. Rojek-Nowosielska (2015) said that the basic of the modern business
responsibility is based on the strategy of sustainable development. Moreover, the aim of TBL
framework is to value the asset and control the resources in which people can manage well the
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resources efficiently and effectively. The theory is known as people, planet and profit (3P’s) and
triple value adding (Robert & Cohen, 2002; cited in Hammer & Pivo, 2016). Using TBL can be
the strength that allows people adapt with the framework by the need of different organisations
such as businesses or non-profits, different projects or policies infrastructure such as investment
or educational programs, or different geographic boundaries in a city, region or country (Slaper,
2018).
2.2. Environmental:
Environment need to be sustained for tourism because without a place there are no people
living. The environment can be nature such as beach, lake, mountain and forest and the building
environment can be road, hotel, houses and historic building. Environment sustainability, which
will cause more on positive impact than the negative, occurs when all the resources can be use by
the people both local and tourist.
Figure 1: Lake Toba view
Source: Google, 2018
Tourism infrastructure is a tangible element that is created to attract the visitors. A
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number of authors has found out about the strong relationship between tourism development and
infrastructure (Adobayo and Iweka, 2014) because by having an easy access such as
infrastructure, which is (roads, airport, harbour and railway) and services (public services and
health care), in a country will attract the tourist. Moreover, building such as hotel, restaurant and
other entertainer place is the infrastructure as well that need to meet the want of the tourists
expected (Popesku, 2011).
Figure 2: Types of tourism infrastructure
Source: Tourism & Transport Forum (TTF), (2012) Tourism Infrastructure Policy and Priorities
(in JOVANOVIĆ, S. and ILIĆ, I. 2016)
In figure 1, the three types of infrastructure are showed tourism infrastructure is a shared
infrastructure, which the market is a tourist destination and it is engaged in the distribution of
tourism products that made of a network of regional, state, and national tourism organizations
(Tourism & Transport Forum, 2012).
Environmental infrastructure occurs when the tourist can enjoy the tour in a country
which have natural value such as national park and Marine Park. (JOVANOVIĆ, S. and ILIĆ, I.
2016)
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Figure 3: Components of tourism infrastructure
Source: Raina, A., Ecology, Wildlife and Tourism Development: Principles, Practices and
Strategies, 2005. pp. 192 (in JOVANOVIĆ, S. and ILIĆ, I. 2016)
The diagram in figure 2 shows that four components which is physical, cultural, service
and governance is part of tourism infrastructure, however the expansion of constructing tourism
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Tourism
Infrastructure
Physical
Hotels,
Restaurants
Transportation
Communication,
Water,
Electricity
Cultural,
Culture,
heritage fairs
and festivals
Local art and
music, dress and
dance
Language and
food
Service
Banking
facilities Travel
Agency
Insurance
agencies
Tourist guides
Governance
Law and order
machinery
Customs and
immigration

infrastructure concern a large number of countries and having higher results in tourism will
impact on economic development.
Creating the way of managing the connection between tourism infrastructure, tourism and
local economy is conditioned by the effect of the overall development (Swyngedouw, 2000).
Then the quality of the infrastructure is responsible by the state and public enterprise and public
sector. Smith (1994) pinpoint that with the lack of vicinity of tourist destination is an obstacle
that can affect tourist's experience and satisfaction in a certain tourist destination. Tourism
infrastructure become a crucial role for tourist’s experience while general infrastructure and
services is the most important factors for the tourist development.
2.3. Social-culture:
To measure the social line through community of a region of in a country, it is need to
include the quality of life, equity and access to social resources, health and well-being,
measurements of education, and social capital (Slaper 2018). Socio-culture occurs when the
negative impact is minimised and focused on exchanging culture with tourist and maintaining the
local traditions. The activity is by sharing the local interest such as dancing and handcraft.
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