Jakarta sells itself to MICE markets abroad

JAKARTA (JP): Better late than never, as the saying goes. Although quite late, Jakarta is now vigorously selling itself abroad to grab a slice of the burgeoning meetings, incentives, conventions and exhibitions (MICE) business in the region.

Compared with Hong Kong and Singapore, which have been popular MICE destinations for over 20 years, "Jakarta is a teenager," said Brendan Inns, marketing director of the Grand Hyatt Jakarta hotel.

Before the establishment of the Jakarta Convention Bureau in 1994, Jakarta had no professionally managed and funded organization to promote the city as a MICE destination in the region.

It was Casa Grande, a group of four-star and five-star hotels in Jakarta, which founded the Bureau in cooperation with the city administration.

"As far as Jakarta becoming a regional hub for MICE businesses is concerned it was I who originally brought up the idea to have a convention bureau. Therefore, I am a believer," Casa Grande chairman Christopher Green noted.

From the city administration's point of view, the MICE business is worth developing. From the hotels' point of view, they are also attractive, said Dieter C. Becht, general manager of Hotel Ciputra Jakarta.

The city now has some of the best hotels and convention venues in the region. It has the superb Jakarta Convention Center, the Jakarta Fair complex, grand five-star hotels, luxury shopping centers and most importantly, superb destinations for pre- and post-convention trips.

"What is required is a commitment from everyone in Jakarta -- street hawkers, shop assistants and hotel people -- to ensure that when people come here, they experience great value and fantastic Indonesian hospitality," Green said.

The travel and tourism industry is now the largest and one of the fastest growing industries in the world.

The World Travel and Tourism Council has forecast that by the year 2005, the industry will generate revenues of US$7.3 trillion, more than double 1995's gross output of US$3.4 trillion.

First class

Tourists visiting overseas destinations for MICE purposes are believed to spend more money because they choose first-class hotels, first-class restaurants and expensive souvenirs.

Data from the Asian Association of Convention and Visitors Bureau show that the number of MICE meetings held in its member countries increased to 12,142 in 1994 from 10,831 in 1993.

Singapore claimed to be the most popular meeting venue in Asia in 1993 with 116 international meetings out of the 690 held in the island republic. In the same year, Indonesia hosted 642 events, but less than 100 events were categorized as international events.

After Jakarta. the main MICE destination in the country is Bali. And the government is currently promoting other cities as MICE destinations, including Bandung in West Java, Surabaya in East Java, Yogyakarta, Medan in North Sumatra and Bukittinggi in West Sumatra.

For the incentives business, Bali is better positioned than Jakarta, said Inns.

However, for corporation conventions, Jakarta is more popular than Bali, he said.

"We must understand that this is a very new market for incentives. While for meetings, especially corporate meetings, there is certainly a high growth potential here," Inns said.

Moreover, Jakarta is not well positioned to compete with other capitals in the region because the average room rate of star- rated hotels is higher than in Singapore, Kuala Lumpur, Manila and Bangkok.

In the first semester of this year, rooms at star-rated hotels in Jakarta averaged around $109.81, more than those in Singapore ($109.76), Bangkok ($68.23), Beijing ($94.13), Kuala Lumpur ($80.21) and Manila (100.94).

However, Jakarta's average room rate is still lower than Hong Kong's ($153.17), Seoul's ($159.4), Shanghai's ($112.2), Sydney's ($126.23), Taipei's ($131.57) and Tokyo's ($178.37).

"So it's not true that rooms at star-rated hotels in Jakarta are the most expensive in Asia," Tony Bruggemans, chairman of the board of directors of the Jakarta Convention Bureau, said.

"Anyway, room rates in Jakarta will go down by between 5 and 8 percent in 1997 because there will be a number of new star-rated hotels," Bruggemans said.

There are currently 5,334 rooms in five-star, 5,303 in four- star and 4,239 in three-star hotels available in Jakarta. And by 1998, it is expected that there will be 3,115 additional rooms in five-star hotels coming into the market, with the reopening of the 816-room Borobudur Intercontinental Hotel.

Difficulties

Unlike Singapore and Hong Kong, Jakarta does not attract much international attention and it is thus quite difficult for Jakarta to attract MICE meetings.

The geography of Indonesia is not conducive, given that it is made up of over 13,000 islands scattered over 5,000 kilometers between the Indian and Pacific Oceans.

"Somehow or other, Indonesia tends to escape one's attention when looking at a map of the world," said Jakarta Convention Bureau executive director David Hall.

Singapore and Hong Kong are city states, and are vigorously promoting tourism.

Besides, both Hong Kong and Singapore have long been recognized as centers of finance and commerce in the Asia Pacific region.

"This is significant because it is upon the back of commerce that Jakarta's profile is now starting to be recognized," Hall said.

Unfortunately, once international businesspeople get to know Jakarta, they often recognize it as an unpleasant city, with horrible traffic jams and polluted air and rivers.

To promote Jakarta as a regional hub of the MICE business all parties concerned need to address such structural problems.

The simplification of licensing procedures would also help the MICE industry, as the bureaucratic rigmarole discourages people from organizing events here. (team)