Fri, 22 Dec 2000

MICE sector still looking for window of opportunity

By Rita A. Widiadana

JAKARTA (JP): The country's business events organizing community is dealing with an unpredictable future amid unstable economic and political conditions.

Chairman of the Indonesian Congress and Convention Association (ICCA) Iqbal Abdul said he wanted the country to rank as a preferred destination in Asia for both holidays and conventions.

The association dreams of promoting Indonesia as one of the most attractive sites for conventions in the Asia and Pacific region in addition to Singapore, Thailand, Malaysia and Australia.

The country should be able to position itself as a premier MICE destination, bolstered by its hospitality and service tradition, cultural diversity, exquisite cuisine and growing number of quality hotels.

Indonesia, he said, has great potential. Geographically, Indonesia is strategic, and Jakarta, Medan, Bali and now Yogyakarta as well as Bandung have international-standard convention centers.

The potential is here, but untoward circumstances have destroyed attempts to exploit it to the full.

Iqbal said Jakarta and Medan were previously earmarked for business, trade and financial meetings, Bali for scientific and sociopolitical meetings, while Yogyakarta was established for world cultural and education conventions.

"The rosy picture was shattered by the ongoing crisis," he said, referring to the meetings, incentives, conventions and exhibitions (MICE) industry which started in the 1980s.

Iqbal said the crisis badly affected the local MICE industry, especially with the recent unrest in Maluku, Irian Jaya, Aceh and East Nusa Tenggara along the border with East Timor.

As it currently stands, Indonesia is far down the list of MICE destinations.

Before the crisis, in 1994 to 1996, the MICE sector was at its peak, with 15 percent annual growth. In 1996, there were 995 events with about 165,572 participants; two years later, in the heat of the crisis, there were only 23,492 participants, or 0.5 percent of the total 4,606,416 visitors to Indonesia.

Iqbal said Indonesia's MICE industry throughout this year was almost stagnant.

The sector's contribution to the country's tourism is still relatively small, and it reached only 75 percent of its targeted Rp 1 billion in revenues for 2000.

Up until November this year, the contribution of MICE accounted for only 5 percent of the total tourism revenue.

The number of MICE participants were 35,000 with between 500 and 600 events.

Iqbal said past predictions put growth of the MICE industry in the country at 10 percent in 2001 and 15 percent in 2002.

"However, the outlook for the MICE industry in the coming years could not be predicted. It depends on the political and economic conditions, this year," he said.

Globally, prospects for the MICE industry are promising.

The World Tourism Organization revealed in 1998 that the number of visitors to the Asian region would reach 900 million in 2004.

In Asia, the MICE industry is predicted to record between 20 percent and 40 percent growth. This means Indonesia will have to tap this great opportunity to become one of the promising convention centers in Asia.

"What we are trying to do now is to convince foreign exhibitors and MICE organizers that Indonesia is still safe and all the riot-torn areas are far away from event locations," he said.


President of the Jakarta Convention Center Frederick Kurse said the convention business would bring Indonesia onto the world tourism stage.

"Indonesia has everything to offer. It is a pity if we don't promote it widely, while at the same time improving the existing MICE facilities," said Kurse.

International companies would have to take into account Indonesia's huge market with a population of more than 200 million, comparable only to China and India.

"If they exhibit their products here, they will likely gain abundant potential buyers," he pointed out.

He also said that exhibitions and conventions could also bring in more foreign exchange into the country.

The length of stay for a person attending MICE events was approximately five days, with spending of US$500 a day compared to only $100 a day by tourists. A convention could have at least 500 participants.

"If you have businesspeople coming into the country, they will certainly spend more money. They will travel business class on their flights, stay at star-hotels and eat in expensive places," Kurse.

The result will be an increase in tourism revenue.

"It is time for Indonesia to focus on quality tourists rather than increasing the number of backpacker tourists," he added.

If Indonesia improves its MICE industry, there are several benefits for the country.

First, the MICE industry will play a significant role in boosting Indonesian tourism. At this critical time, it can help improve the tarnished image of Indonesia overseas.

Second, participants of MICE events are usually decision makers in the private or government sector as well as in international organizations.

MICE events, especially those of an international scale, will become an effective means for tourism promotion.

"MICE activities involving local participation are still flourishing," said Kurse. JCC has hosted hundreds of local events, ranging from housing, automotive vehicles, audio-visual technology, to computer-related products.


"But our primary target is to encourage international industry players to consider holding events in Indonesia and therefore tap into the many investment opportunities that Indonesia can provide," he said.

Areas showing growth and innovation are those of information technology, finance, health, and service sectors.

Kurse said that in order to attract world-class exhibitors and MICE players, Indonesia should consider upgrading buildings and infrastructure. He added that access to transportation such as airplanes, trains, buses and taxis combined with excellent infrastructure and local-international transportation networks all contributed to global business appeal.

He said Indonesia had JCC, Kemayoran Jakarta Fairgrounds, Bali Nusa Indah Convention Centers and other world class venues.

"But we still have a lack of access to international airports and poor urban transport systems," he said.

Most problematic are the inconsistent and inefficient MICE regulations which prevent the industry from growing properly.

Iqbal said only a few foreign players would come here due to the complex regulations.

In Singapore, the government has simplified all regulations and permits on MICE business, attracting many businesspeople to hold world-class events.

Thailand and Malaysia have also eased the procedures to lure more world-class meetings.

"Indonesia must be more active in promoting the MICE industry and revamp all existing rules, otherwise we will be left behind by potential clients," Iqbal said.

Budget constraints for promotions and development of MICE hardware and software are other lingering problems faced by Indonesia. The government has only allocated Rp 71 billion for the tourism sector.

Indonesia also pays very little attention to networking with related global tourism industries and associations.

Iqbal said the country also pays little attention to membership in international organizations such as the World Tourism Organization and International Congress and Convention Association (ICCA). He said they were crucial because Indonesia would be able to maintain a strong network with other member countries and it was also a way to attract them to exhibit and to hold events in Indonesia.

However, Indonesia's reluctance to pay its regular fees could result in losing its membership.

Obtaining permits is another headache. To hold an event, a PCO must apply to 11 institutions, such as the Ministry of Industry and Trade, Ministry of Foreign Affairs, Police, Directorate of Export and Import and the State Intelligence Coordinating Board (Bakin).


The association and other tourism-related industries have called for the government to critically review policies in order to elevate the status of the sector and give it higher priority on the government agenda.

Despite many dialogs with the government and other related parties, the country's uncompetitive condition still undermines the shared goals of ensuring that Indonesia is an attractive MICE venues.

The government's acknowledgement of the industry will help build people's awareness of the business.

Rocky B. Kalalo, managing director of Panorama Convex, said human resources also played a significant role in the MICE industry.

There are only 34 registered professional convention organizers (PCOs) included in the Indonesian Congress and Convention Association.

The use of professional organizers would improve the quality of the events, which would in return bring more benefits to the participants of an exhibition of a convention.

The lack of recognition of the country's PCOs partly contributed to the slow growth in the industry.

"If there is an international event in the country, why not hire professionals instead of assigning a national committee," Rocky said.

He said that of 945 events held in 1997, less than 100 were arranged by PCOs.

It caused poor development of human resources in the MICE industry.

The government also requires foreign exhibitors to hire a local PCO if they want to hold an exhibition or a meeting here.

Rocky said in the coming free-trade era, such a regulation would be outdated. "Let us compete fairly. It will encourage local PCOs to upgrade their professionalism to enter the world market."