Profitability, Advertising Promotion and Government Support: Study in Tourism Corporate in Indonesia

Abstract

This study aims to review the impact of advertising and promotion expenses on profitability especially tourism companies listed in Indonesia and also to analyze the impact of Government Support especially in program “Wonderful Indonesia” on tourism companies’ profitability. Indonesia has many beautiful places, culture and culinary and much more identic and ethnic, what are its can increase tourism industry in Indonesia?. The variables used for this study are based on some previous research such as Kaguri (2013) and Sucuachi & Cambarihan (2016), Cancino & Bonilla (2015), Low & Mohr (1999). The sample of this study is tourism company listed in Indonesia who has complete data in the range 2012-2016. Path analysis regression and Paired Test are used for data analysis. The results showed that advertising and promotion expense positive impact directly or non direct via revenue on profitability. Empirical results indicate that when the company paid the advertising and promotion expenses in according to their product and business, these can significantly increase revenue and also increase companies’ profitability although unsignificant. These result can adopt by a company who has motivation for growth profitability. Government support by program “Wonderful Indonesia” in ending of the year 2014 has a correlation with profitability tourism corporate in Indonesia, there differences amount of profitability before and after this program.

Keywords: Profitability, Advertising Promotion, Government Support