Analysis of Solow Growth Model in Sharia Hotel Industry In Pandemic Era, Case Study: Indonesia and Malaysia

Abstract

This journal aims to determine the business prospects for the Islamic hotel industry in the digital era and post-pandemic. We carry out simulations based on the estimated growth of internet users, tourism arrival, and the performance of sharia and non-sharia hotels using data from the annual report of all hotels listed on the stock exchange both in Indonesia and Malaysia every year from 2000 to 2019. In making hotel performance forecasting, This study uses the Autoregressive moving average (ARMA) model. The estimation results are used to compare the performance of the sharia and non-sharia hotel industries in Indonesia and Malaysia from 2000 to 2019. We find that massive internet inclusion makes it easier for consumers to make decisions in choosing accommodation both sharia hotels, non-sharia hotels, and non-hotel accommodations. To understand the resilience of Islamic hotels in facing the Covid-19 pandemic and the opportunities and threats aimed at Islamic hotels, the SWOT Matrix is used through a qualitative research literature approach to strengthening analysis based on ARMA forecasting and to understand the competitive conditions of Islamic hotels both in Indonesia and in Malaysia. We find that the key factor in increasing the competitive power of Islamic hotels is the use of internet inclusion for campaigns that encourage the perspective of prospective Islamic hotel customers in taking purchase actions or encourage prospective customers' perspectives towards creating demand for Islamic hotel services. Based on the results of analysis and forecasting that combines a quantitative approach based on the theory of the firm and absolute income theory, adopting the Cobb-Douglas function and the Solow model with a qualitative approach to research literature tested in the SWOT Matrix, Islamic hotels have a competitive advantage with clear segmentation and positioning as well as has a great chance to rise and recover the financial performance of the organization after the Covid-19 pandemic ends