Asian Journal of Humanities and Social Studies (ISSN: 2321 – 2799) Volume 02 – Issue 05, October 2014 Asian Online Journals (www.ajouronline.com ) 695 Strategic of Empowerment to Improve the Success of the Business Owners' Homestay Ayat Taufik Arevin 1 , Ma’mun Sarma 2 , and Pudji Muljono 3 1 Students in the Doctoral Program IPB Graduate School (Bogor, Indonesia) Email: mr.arevin {at} gmail.com 2 Chairman of the Supervising Committee, IPB Graduate School (Bogor, Indonesia) 3 Members of the Commission Supervisor IPB Graduate School (Bogor, Indonesia) _________________________________________________________________________________ ABSTRACT— The homestay is one of the tourism businesses that can be pursued by coastal communities. Homestay as a micro-business, According to the concept of community-based tourism (CBT), plays an important role in rural development. Service family-oriented, adaptable to the environment and local culture, and relatively affordable price makes the homestay as a trend for foreign tourists. This study aims to formulate a strategic of empowerment to improve the success of the business owners' Homestay. Sample was 160 persons in five of KSPN (the Strategic Areas of Indonesian National Tourism) are Pangandaran-West Java, Parangtritis-Yogayakarta, Karangasem, Bali, Untung Jawa Island-Jakarta, and Tanjung Lesung and Ujung Kulon National Park, Banten. The research was conducted between June 2013 and February 2014. Analysis of the data was performed using Pearson product moment correlation analysis, and Structural Equation Modeling (SEM) by SmartPLS 2.0 M3. The results of SEM analysis showed that the success of the business owners' homestay is influenced by: (1) the extension process (the correlation coefficient value is .365); (2) entrepreneurial behavior (.417); and (3) Empowerment (.405) were previously affected by occupational competence (.359). The process of extension and entrepreneurial behavior have not been able to increase of empowerment. There are four strategies of empowerment in tourism extension programs: (1) an understanding of internal and external problems; (2) the establishment of the organization/groups; (3) an increase of in occupational competence and entrepreneurial behavior; and (4) develop the ability to compete through promotion. Keywords— the extension process, occupational competence, entrepreneurial behavior, empowerment _________________________________________________________________________________ 1. INTRODUCTION Indonesia has beautiful beaches along approximately 81,000 kilometers, but the local people are only able to work as fishermen. They have not seen the tourism business opportunities which can be pursued. The homestay business is a small micro enterprises (MSEs) in line with the concept of CBT, has an important role in rural development. Home- stay is a term of accommodation associated as a private home with a particular culture, the interaction with the host or family, any space into a public area (Lynch and MacWhannell, 2000). In addition to an authentic experience and the architecture of the host culture, homestay can provide the cultural experience (Cole, 2007). The existence of homestay business in line with the Indonesia regulation, about the coastal zone management. Homestay business also supports community development through tourism program, on the establishment of the KSPN. Homestay is the provision of accommodation such as a private home occupied by owners and used partly for rent, give an opportunity to the tourists to interact in the owners activity (Regulation of the Minister of Culture No.: PM.86/HK.501/2010). Soekadijo (1997) explains that the homestay is owned by individuals with use of a private residence that was not really meant to accommodate tourists. Homestay concept could play an important role in rural development invites the public to participate in the tourism business, because it can be integrated with all components tourism, to develop rural tourism industry (Tzschentke et al.2004). Homestay become a trend for foreign tourists, due to the characteristics of family services, easily adapt to the environment and local culture, and the rental prices are relatively cheap. Homestay owners are important person;