Factors Affecting Workers in Choosing a Boarding Services at

Batam City - Indonesia

Shinta Wahyu Hati, Dwi Yunita Purnama Sari

Applied Business Administration Study Program, Politeknik Negeri Batam, Jl. Ahmad Yani, Batam Centre, batam 29461,

Indonesia

Keywords: Boarding Service, Partial Least Square (PLS), Preferences #ICIB.

Abstract: This study aims to determine what factors are influencing the worker preference in choosing a boarding

service in the area of Batam City. The sample in this study is the worker who uses the services of boarding in

the area Batam City by using purposive sampling method. The samples used as many as 100 respondents.

Data were analyzed using SEM-PLS techniques through software SmartPLS 2.0 M3. The results showed that

the reference factor, facilities and prices directly affect the worker preference in choosing a boarding service.

While the location factors, environmental, security and service do not affect the worker preference in choosing

a boarding services. The results of the study also showed that the most dominant factor affecting the worker's

preference in choosing a boarding services is a factor of the facility with the highest estimate of the original

sample is 0.26729

1 INTRODUCTION

Batam is a city with a very strategic location. In

addition to international shipping was on track, the

city has a very close distance and directly adjacent to

Singapore and Malaysia. Batam city strategic location

targeted by local and foreign investors as a business

base. According to BPS (2014) Batam has 298

industries, both corporate clients and medium. That's

why the city of Batam referred to as one of the largest

industrial cities in Indonesia.

Every year the number of people arrivals of Batam

always increases. The population density is indirectly

affecting an increasing number of residential lands in

Batam city. Total availability of land settlement in

Batam is not comparable with the number of requests

from the public. This makes the price of housing or

property in Batam becomes high. Some reasons for

the arrival of the community, among others for

school, college, courses, and work. The reason often

requires people to settle down long enough in Batam.

As a newcomer trying to adapt to a new living

environment, require expenses for daily necessities

such as food, clothing, and shelter. Some people,

especially the job seekers prefer to rent a boarding

room is cheaper than a hotel or apartment, for reasons

of an efficient economy. Given the migrants or job

seekers have in fact not yet received a fixed income.

One of the existences of boarding services in Batam

is city area. In the region found many boarding houses

were built for being around the business sector in the

form of banking services, hotel services, and

industrial area Citra Buana Centre Park I - Seraya,

Citra Buana Centre Park II - Batu Ampar and other

industrial enterprises. Every worker has different

preferences in terms of choosing a boarding place.

In general, tenants viewed boarding place are

included the physical form of a building boarding, the

price offered in accordance with the acquired

facilities, locations where boarding and perceived

convenience in choosing a boarding place. According

to previous studies (Black et al, 2012), many factors

influence your decision in choosing a boarding house

are: 1) References, 2) image/reputation, 3) Security,

4) Prices, 5) Environment, 6) Services, 7) facilities,

and 8) Location. Based on the above, the title of the

research in this study is "Factors Affecting Worker

Preferences in Choosing a Boarding Service in

Batam City".

The formulation of the problem to be addressed is

whether the reference factor, location, environment,

security, service, amenities, and price affect the

worker preference in choosing a boarding service,

and which is the most dominant factor influencing the

worker preference in choosing a boarding service.

Hati, S. and Sari, D.

Factors Affecting Workers in Choosing a Boarding Services at Batam City - Indonesia.

DOI: 10.5220/0008435306830692

In Proceedings of the 2nd International Conference on Inclusive Business in the Changing World (ICIB 2019), pages 683-692

ISBN: 978-989-758-408-4

683

The purpose of this research is to investigate and

analyze whether the reference factor, location,

environmental, security, service, facility, and price

affect the preferences of workers in choosing

boarding service, and determine which is the most

dominant influence on the preferences of workers in

choosing services boarding.

The benefits of this research are for the local

government or related parties can provide input in the

establishment of policies related to housing and

residential development in Batam city. For employer

services boarding, is expected to provide useful input

to determine whether there is the influence of

reference, location, environment, security, service,

amenities and price, to be determined what strategies

can be used in the marketing of boarding place in the

area Batam City. For the people of this study provide

additional information in the corporate world of

worker preferences in choosing boarding places.

2 LITERATURE REVIEW

2.1 Services Theory

According to Kotler and Keller (2012) in Tjiptono

(2014) services can be defined as "any act or acts that

can be offered by one party to another that is

essentially intangible (intangible physical) and

produces no ownership of anything.

2.2 Demand Theory

According to Sukirno (2005) theory of demand

analysis in economics that explains the factors that

determine demand, and how these factors influence

the market balance. These factors include:

a. Prices of goods itself

b. The price of other goods related to such goods

c. Household income and the average income of

the community

d. The pattern of income distribution in society

e. The taste of the community

f. Total population

g. Forecasts regarding the situation in the future

2.3 Demand Boarding Services

Understanding boarding or often called the boarding

house is a kind of rental rooms are rented for a period

of time in accordance with the agreement and the

room owner agreed price (Utomo, 2009). The

principle function of boarding houses is a means of

temporary residence for workers who generally come

from outside the region who are seeking employment

or already have a job, it just not has a private house

that is adjacent to the work site.

2.4 Consumer Preferences

An understanding of consumer preferences for

businesses either product or service can be used to

identify market segments and develop strategies to

respond to the needs of the consumer market.

According to Kotler and Keller (2007) in Putri (2014)

there are several steps that must be passed to

consumers to form preferences:

a. It is assumed that the consumer sees the product

as a set of attributes. Different consumers have

different attributes of a product that is relevant.

b. The level of importance of attributes varies

according to the needs and wishes of each.

Consumers have a different emphasis on

assessing what is the most important attributes.

Consumer purchasing power wills most

concerned attribute the ultimate price.

c. Consumers develop a number of beliefs about the

location of the product on each attribute.

Figure 1. Research Framework

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684

d. The level of customer satisfaction with the

product will vary in accordance with different

attributes.

Consumers will arrive at a different attitude

toward the brand through evaluation procedures.

2.5 Framework

The framework shown in figure 1,

3 RESEARCH METHODOLOGY

The research used explanatory approach

(Explanatory Research), an article describing a causal

relationship between the study variables with

hypothesis testing. The object of research in this

paper is the workers who live in the boarding area of

Batam. As in table 1, the scope of research related to

the analysis of trade preferences in choosing a

boarding house includes a reference (X1), the

location (X2), the environment (X3), security (X4),

Service (X5), facilities (X6), and price (X7).

Table 1. Operational Variables

Variable/

Sub

Variables

Indicators

Preferenc

e (Y)

1. Suitability

2. The level of satisfaction

Reference

(X1)

1. Information gained from previous

experience

2. Information obtained from the relevant

parties

3. The information obtained from the

mass media and electronic

Location

(X2)

1. to reach out to various places

2. The ease of finding access to transport,

health and others

Environm

ent

(X3)

1. The existence of a clear organization of

space

2. The level of cleanliness

3. The level of comfort

4. The existence of social interaction

Security

(X4)

1. Security Level

2. The presence of guards boarding

Service

(X5)

1. The ability of service immediately,

accurately and satisfactorily

2. There must be guaranteed when there is

damage

3. The existence of good communication

Facility

(X6)

1. Availability of public facilities in the

boarding house

2. Availability of special facilities in

boarding house

Price

(X7)

1. suitability with the price and quality of

rooms or facilities or boarding house

expected

2. Compliance / affordability by

segmenting the target

Measurement of variables and indicators in this

study was designed to form an Ordinal scale as in

Table 2 below.

Table 2. Measurement Scale

Statement

Scale

Strongly Agree

Agree

Disagree

Strongly Disagree

3.1 Population and Sample

The population in this study is the workers who live

in the boarding area of Batam City as many as 537

people. The sampling technique in this research is

purposive sampling, while the number of samples in

the study, the authors used a formula Slovin (Umar,

2008).

n =

1 + Ne

n =

537

1 + 537(0,1)

= 84,30

Explanation:

N = Number of population

n = Number of samples

e = Limit fault tolerance (error tolerance of 10%)

Based on the above calculation results obtained

84.30 which is rounded to 100 people, which means

that the sample of respondents in this study is 100

people. Source of data derived from primary data

obtained from questionnaires and secondary data

obtained through the study of the documentation, and

other journals. Techniques of data collection are

observation and questionnaires.

The analytical method used is the method

Structural Equation Model - Partial Least Square

(SEM - PLS) using software smartPLS 2.0 M3 starts

of the measurement model (outer model), the model

structure (inner model) and hypothesis testing.

4 RESULT

4.1 Data Characteristics of

Respondents

Here is the demographic data of respondents

comprised of data on gender, age, education,

profession, work location, and origin of the

Factors Affecting Workers in Choosing a Boarding Services at Batam City - Indonesia

685

respondents obtained from the questionnaire

research.

Table 3. Characteristics of Respondents Based on Gender

Gender

Number

Percentage

Male

50%

Female

50%

Total

100

100%

Table 3 shows that the gender of male and female

balanced. It can be estimated that the population of

male and female in Batam is balanced.

Table 4. Characteristics of Respondents Based on Age

Age

Number

Percentage

18-22 years old

11%

23-27 years old

45%

28-32 years old

27%

33-37 years old

38-42 years old

43-47 years old

<42 years old

Total

100

100%

Table 4 shows that the general age of the

respondents who chose boarding services in the

Batam City area most are aged 23-27 years by 45

people (45%).

Table 5. Characteristics of Respondents Based on Latest

Education

Number

Percentage

SD/MI/Equal

SMP/MTS/Equal

SMA/SMK/Equal

60%

17%

D4/S1

Total

100

100%

Table 5 shows that the general age of the

respondents who chose boarding services in Batam

City are educated SMA / SMK / equivalent of 60

people (60%).

Table 6. Characteristics of Respondents Based on

Profession

Number

Percentage

TNI/Polri/PNS

Employees of Government

Institutions

Employees of Private Firms

72%

Entrepreneur

18%

Others

Total

100

100%

Table 6 shows that respondents generally work as

employees of private firms amounted to 72 (72%). It

is estimated that recent education respondents related

to the job position they can.

Table 7. Characteristics of Respondents Based on the

Location of The Job

Work Location

Number

Percentage

Sei Panas

10%

Seraya

Batu Ampar

24%

Batam Centre

16%

Muka Kuning

Sekupang

Pelita

Tj.Ucang

Panbil

Kabil

Tunas

Others

25%

Total

100

100%

Table 7 shows seen that generally work sites,

respondents chose the services of boarding In Batam

Most is located in Batu Ampar by 25 people (25%).

It is estimated respondents chose boarding services in

Batam City due to the distance between Batam City

to Batu Ampar area within ± 4.1 km or ± 10 minutes.

Table 8 shows that in general the place of origin

of respondents who chose boarding services in Batam

City comes from outside Batam in the amount of 79

people (79%). This indicates a majority of

respondents are newcomers.

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Table 8. Characteristics of Respondents Based On Place of

Origin

Place of Origin

Number

Percentage

Batam

21%

Beyond of Batam

79%

Total

100

100%

4.2 Outer Test or Measurement Model

There are three criteria for assessing the outer models

of convergent validity, discriminate validity and

reliability of composite. According to Chin in

Jogiyanto (2011) the rule of thumb used for

convergent validity is the outer loading> 0.7,

communality > 0.5 and average variance extracted

(AVE)> 0.5. Jogiyanto (2011) also explained that if a

score of loading between from 0.5 to 0.7, preferably

researchers do not remove the indicator has a score of

loading the whole score AVE and Communality

indicators> 0.5.

Based on the results of processing using a value

SmartPLS outer construct models or correlations

between variables was not initially meet the

convergent validity because it is still quite a lot of

indicators that have a value below the loading factor

of 0.50. Modification of the model is done by issuing

the indicators that have a value below the loading

factor of 0.5.

Table 9. Outer Model Test of Reference / Information

Indicator

First

Model

Modified

Model

IF1

0,70685

0,71308

IF2

0,45934

IF3

0,71983

0,74474

IF4

0,12416

IF5

0,15198

IF6

0,73514

0,80347

IF7

0,73406

0,81969

In Table 9 it appears that from 7 indicators, there

are three indicators that must be removed. Indicators

released are information from family / relatives (IF2),

the information from the electronic media (IF4), and

information from the mass media (IF5).

Table 10. Outer Model Test of Variable Location

Indicator

First

Model

Modified

Model

LO1

0,7193

0,71669

LO2

0,78887

0,77637

LO3

0,70518

0,7382

LO4

0,69027

0,7392

LO5

0,66819

0,66856

LO6

0,58337

In Table 10 it appears that only one of the six

indicators issued indicators is about access to health

care (LO6).

Table 11. Outer Model Test of Variable Environment

Indicator

First

Model

Modified

Model

LI1

0,5188

LI2

0,7

0,7853

LI3

0,66384

0,75576

LI4

0,62596

0,67198

LI5

0,67313

0,73394

LI6

0,63725

0,6603

LI7

0,48601

LI8

0,40833

Table 11 shows that the indicators are of eight 3-

issued indicators, namely the primacy of

environmental factors (LI1), interaction with local

residents (LI7), and the ease of finding a boarding

(LI8).

Table 12. Outer Model Test of Variable Security

Indicator

First

Model

Modified

Model

KA1

0,70279

0,70339

KA2

0,73086

0,73035

KA3

0,84196

0,84188

KA4

0,87269

0,87259

In Table 12 it appears that all the indicators no

incurred due in accordance with the rule of thumb

used.

Factors Affecting Workers in Choosing a Boarding Services at Batam City - Indonesia

687

Table 13. Outer Model Test of Variable Service

Indicator

First

Model

Modified

Model

PL1

0,40665

PL2

0,76802

0,78966

PL3

0,80226

0,86817

PL4

0,85124

0,85896

PL5

0,47132

PL6

0,73858

0,81748

In Table 13 it appears that there are two of six

indicators issued indicators, namely the primacy of

service factor (PL1) and a parking lot (PL5).

Table 14. Outer Model Test of Variable Facility

Indicator

First Model

Modified

Model

0,42334

0,6699

0,68452

0,58388

0,57948

0,85317

0,8884

0,81028

0,82091

0,87317

0,90244

In Table 14 it appears that only one of the six

indicators issued indicators, namely the primacy of

the facility factor (F1).

Table 15. Outer Model Test of Price

Indicator

First

Model

Modified

Model

0,77474

0,77414

0,74028

0,74068

0,70656

0,7071

0,7553

0,75523

Table 16. Outer Model Test of Variable Preference

Indicator

First

Model

Modified

Model

PR1

0,83941

0,84018

PR2

0,81995

0,82156

PR3

0,79589

0,7989

PR4

0,69187

0,6856

In Table 15 and Table 16, it appears that all

indicators were excluded because none are in

accordance with the rule of thumb used.

Table 17. Average Variance Extracted and Communality

Variable

AVE

Communality

Reference/Information

0.595

Location

0.531

Environment

0.523

Security

0.625

Service

0.552

0.696

Facility

0.616

Price

0.555

Preference

0.622

Based on Table 17 it can be concluded that all

constructs meet the criteria of convergent validity.

This is evidenced by the AVE and commonality

values above 0.50 as recommended criteria.

Discriminate validity parameters were measured

by comparing the root of the AVE a construct should

be higher than the correlation between the variables

of the latent, or by looking at a score of cross loading.

Table 18. AVE and AVE Root

Variable

AVE

AVE Root

Reference/Information

0.595

0.771

Location

0.531

0.729

Environment

0.523

0.723

Security

0.625

0.790

Service

0.552

0.743

Facility

0.616

0.785

Price

0.555

0.745

Preference

0.622

0.789

Results of discriminate validity construct mention

the root of the AVE is higher than the value of cross

loading. This means that any latent variables have

good discriminate validity where some latent

variables do not have your measurements correlated

with the construct bigger one. According to Hair et al

(2008) in Jogiyanto (2011) rule of thumb or

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composite reliability alpha value should be greater

than 0.7 even if the value of 0.6 is acceptable.

Table 19. Cronbach's Alpha and Composite Reliability

Variabel

Cronbach's

Alpha

Composite

Reliability

Reference/Information

0.772

0.739

Location

0.779

0.848

Environment

0.770

0.812

Security

0.796

0.868

Service

0.855

0.840

Facility

0.835

0.860

Price

0.737

0.833

Preference

0.795

0.868

Based on Table 19 above, it can be concluded that

all constructs reliably meet the criteria. This is

evidenced by the value of Cronbach's alpha and

composite reliability above 0.70 as recommended

criteria.

4.3 Inner Test or Structural Model

The models made to look at the relationship between

constructs using R2 (R-square) to construct the

dependent, the value of the coefficient paths or t-

values for each path to be tested significance between

the constructs in the model structural.

Based on Figure 2 seen from variable Preferences

(PR) obtained value of R-Square preferences (Y)

amounted to 0.480 then, the interpretation is

positioned enough to mean that the variability

construct a reference (X1), the location (X2), the

environment (X3), security (X4), service (X5),

facilities (X6), and price (X7) of 48% while 52% is

explained by other variables outside the research.

4.4 Hypothesis testing

If the value of t-statistic greater than t-table value,

the hypothesis is accepted, and vice versa. T-table

value for df (degree of freedom) by 92 at 0.05 ɑ is

1.66159. Here is output estimation for testing the

structural model.

Table 20. Hypothesis Based on Path Coefficient (Mean,

STDEV, T-Values)

Original

Sample

(O)

Sample

Mean

(M)

Standard

Deviation

(STDEV)

Standard

Error

(STERR)

T Statistics

(|O/STERR|

)

RF ->

0,250

0,247

0,097

2,585

LO ->

0,107

0,109

0,120

0,892

LI ->

0,051

0,082

0,113

0,448

KA ->

0,047

0,045

0,112

0,419

PL ->

0,084

0,078

0,113

0,748

FA ->

0,267

0,265

0,117

2,293

H -> PR

0,147

0,143

0,083

1,784

Figure 2: Structural model

Based on the above table it can be seen that the

value of the original sample in the construct is

positive, it indicates that constructs have an influence

on the dependent variable. But there are some

Factors Affecting Workers in Choosing a Boarding Services at Batam City - Indonesia

689

constructs in which the value of t-statistic <t-table is

the location, environment, security, and service.

This means that the factor of location,

environment, security, and service has no significant

effect on the election boarding services, while

reference, amenities and prices significantly

influence the election boarding services.

Judging from the value of the original sample

contained the highest scores on amenities, this

indicates that the facility is the most dominant factor

in the selection of a boarding services.

Service business owners must know and

understand the preference factors of the workers to

choose boarding houses. According to research

findings, references, facilities, and prices give

preference to workers to choose boarding services.

According to research findings, references, facilities

and prices give preference to workers to choose

boarding services at competitive prices. Satisfaction

and loyalty that customers have felt will give a

positive impression to the image of a boarding house.

To compete with each other, facility a like boarding

management companies must seek to improve the

quality of their services and customer satisfaction to

ensure customer loyalty and financial gain. It is one

of the reasons that explain the importance and benefit

of understanding the factors that affect customer

opinions. (Lepkova, G. Žūkaitė-Jefimovienė,2012)

The expectation of consumers is the suitability or

facilities of the expected boarding house. As

consumers who work as workers, they always

consider affordable housing prices. While Zalzar and

Alimohammadzadeh (2015) explained that effective

factor in choosing place is service, lowest effective

factor is factor was service costs. Among the six

factors which included: type of service, processes,

providers, costs,advertising and place factors, " the

service" and " the providers " have the greatest impact

on choosing place. This was while "the process" and

"the cost” were the most common affecting

indicators.

In line with the research Pradana JP et al (2019)

shows that the factors that influence the choice of

boarding houses are security, price, location,

facilities, environment, influence, references and

services. Pradana et al (2019) suggest that boarding

owners or entrepreneurs prioritize the development of

consumer priority board. Boarding house investment

offers passive income that is not small, especially the

boarding house with middle up segmentation.

However, the costs involved in developing a boarding

house are very large, so it is necessary to study what

the prospective customer prioritize in deciding the

decision to choose a boarding house

The importance of facilities being factors that

influence according to the results of Bahadori's

research (2016) shows that the environment and

facilities make a high contribution to the choice of

places. In this study Bahadori added that the

environment is a factor to be considered. Therefore, it

is very important that these two factors and before

being considered at the strategic level.

The reference factor is that considered by the

respondents, namely the workers in choosing

boarding services. References relating to information

in the form of experience of other workers have felt

satisfaction and comfort.

An interesting result of this study compared with

other studies that Batam City is an industrial area

where many migrants as workers will look for

boarding houses. The position of Batam City is a

complex that provides rental boarding houses. The

mouth-to-mouth reference factor from previous

workers' experience has a significant impact on

choosing boarding houses. The experience of

previous workers can provide a positive image that

high-quality boarding houses can be chosen. In

addition, information on boarding places according to

your needs can be obtained from electronic media

such as social media or information from reliable

parties

The results of this study in line with Husnan and

Akhtar (2015) show that the consumer buying

behavior is influenced by their need, product quality

design brand name and the image of the product as

developed by the word of mouth

Originality in this study was the preference of

workers in Batam City in choosing boarding houses

in the background of the workers motivated in

making decisions. Attitudes in choosing boarding

houses are determined by consideration of references,

facilities, and prices. Bretmen (2008) explains that

expressed preferences will be calculated when and

only when decision makers (1) are motivated to

process information related to the decision, (2) face

cognitive constraints, and (3) do not have an

accessible attitude or underlying preference stored in

memory.

5 CONCLUSION AND

RECOMMENDATION

5.1 Conclusion

Conclusion of results research as follows:

ICIB 2019 - The 2nd International Conference on Inclusive Business in the Changing World

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a. Factors that affect the workers in selecting the

reference is a reference factor boarding services,

facility and price. This means that these factors

directly affect the workers in choosing boarding

services.

b. Factors that do not affect the election boarding

services are factors to location, environment,

security, and service. This shows that these factors

do not directly influence preferences in choosing

boarding services.

c. The most dominant factor in choosing boarding

services is factors that support the facility where

the facility daily activities can affect workers

directly in the selection of boarding services.

5.2 Recommendation

Recommendations The results of this study are input

for providers of boarding services to pay attention to

facilities. Boarding service facilities must always be

maintained and maintained properly because

boarding service facilities in Batam City are very

important factors to choose boarding services

In addition to facilities, service providers must

determine house prices because competitive prices

determine competition between boarding house

service providers. Boarding service providers must be

in accordance with the facilities offered

Service providers must pay attention to references

by making a positive impression about the facilities

and prices offered through promotions and

impressions on users of previous boarding services.

Overall the results of this study contribute to the

development of scientific marketing

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