MICE sector still looking for window of opportunity

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.

Potential

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.

Target

"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).

Review

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."