Jakarta builds for the futureCategory: Country report
Issues: April 2013
Indonesia’s bouyant economy makes the city red hot for business events, but the lack of guestrooms and trade show venues creates a painful restriction, writes Mimi Hudoyo
Jakarta is expecting exhibition, convention and conference sectors to boom over the next couple of years, in line with Indonesia’s buoyant economy.
Cucu Ahmad Kurnia, promotion director of the Jakarta City Government Tourism and Culture Office, believes that the MICE sector has great growth potential in Jakarta, the capital city of Indonesia and where most businesses are headquartered.
“In fact, MICE demand in Jakarta has been growing in tandem with the country’s economic progress,” said Kurnia, adding that the MICE sector “can also foster growth in other tourism businesses, such as shopping and golf”.
Reflecting the city’s allure as a destination for major business events is the growing presence of international exhibition companies. Jakarta Convention & Exhibition Bureau (JCNEB) executive director, Indra Sukirno, pointed out that specialists such as UBM and Reed Exhibitions – forming Reed Panorama Exhibitions in partnership with local firm Panorama Group – had established offices in Indonesia.
Unfortunately, Jakarta is packed to the rafters for business events.
Sukirno told TTGmice that while a number of international associations had visited Jakarta for site inspections, none of them were converted into real pieces of business because of the lack of space.
Sharing the same observations, Kurnia said: “The city is lacking in convention and exhibition facilities. It is not easy for organisers to find an exhibition space here unless they book way in advance.
“There are also times when booking a hotel room is difficult, let alone securing a meeting venue.”
Jakarta Convention Center (JCC) deputy general manager, Trikarya Satyawan, said some events, such as the annual Jakarta International Java Jazz Festival and the Indonesia International Motor Show, had moved to Jakarta International Expo in the north of the city, as they had outgrown the venue.
Construction works are now underway to remedy Jakarta’s space constraints.
Tangerang, a city 25km west of Jakarta, is set to welcome the Indonesia International Expo & Convention Center (IIECC) in 2014 and the Jakarta International Congress and Convention Centre (JICCC) in 2016.
Phase one of IIECC, comprising 10 exhibition halls covering 60,000m² and a convention centre for 10,000 people, is slated for completion in 2014. The second phase, which will be built at a later stage, will include a 22,000m2 exhibition hall, a convention centre for 15,000 people and a 17-floor office building.
JICCC, located 30 minutes from the airport by car, will have a total exhibition area of 60,000m² including a multi-purpose arena with retractable seats for up to 18,000 people. There will also be a 6,000m² ballroom and 66 meeting rooms, as well as parking space for 6,000 cars, 2,000 motorcycles, 150 buses and a marshalling area for 48 trucks.
Sukirno said: “We (already) have five bookings for major exhibitions between 2016 and 2019 at the JICCC, (and these events are) in the areas of electricity, building and construction, among others.”
Kurnia said: “These facilities will ease the problem Jakarta is facing, which is the lack of venues for large exhibitions and conventions.
New hotels with meeting facilities will also be added to Jakarta’s tourism infrastructure. IIECC has a 300-key, three-star hotel planned for its first phase of developments, as well as a four-star hotel with 250 keys and a budget property with 350 rooms for its second phase. Three hotels ranging from three- to five-star categories will be built near the future JICCC site, supporting event organisers with some 1,000 rooms.
But event planners need not wait that long for more hotel options. Accor has opened three new properties in the city. Grand Mercure Maha Cipta in Central Jakarta has 483 rooms, a ballroom for up to 1,200 people in a cocktail setting and six meeting rooms. The 230-room Novotel Gajah Mada offers 12 meeting rooms and a ballroom for up to 600 guests. Mercure Jakarta Simatupang in southern Jakarta has 232 rooms and four flexible function rooms that can accommodate more than 200 guests.
Local hotel company, Parador Hotels & Resorts, is also in on the action. It is building the 136-room Atria Inn Paramount Serpong in Tangerang, arming it with four meeting rooms, each able to host events with up to 100 guests.
Also under construction is Atria Hotel & Conference Slipi in Central Jakarta’s Paramount City. It will have 342 rooms, five meeting rooms, six conference rooms and a ballroom. Joining this property close by is the Atria Inn Slipi with 199 rooms and three meeting rooms.
Over the next few years, Jakarta will also welcome several high-end hotels, such as The St Regis Jakarta and W Jakarta in early-2016, and a Fairmont in the Senayan area.
Meanwhile, Jakarta is fending off competition from sister destination, Bali, which in the last 10 years has gained in popularity among business event planners. Furthermore, the emergence of new conference and exhibition facilities in Bali has made the island a strong competitor.
Industry sources lamented that Jakarta’s weak destination promotion had made it a “best kept secret”.
The Ritz-Carlton Jakarta, Pacific Place’s general manager, Karim Tayach, said: “The city needs more publicity. We have all that is necessary to be a major player in the MICE business, not only regionally but also globally. We just need to tell the world what Jakarta can offer. We need to be active and aggressive at major travel and MICE shows.”
Jakarta’s solution to this issue may come in 2014.
Kurnia revealed: “At a recent meeting between Jakarta’s tourism stakeholders and the new governor Joko Widodo, the latter approved our request for the city administration to channel 30 per cent of its tourism income into destination promotions, provided that the private and public tourism sectors are able to come up with solid programmes to justify the investment.”
The tourism sector contributed 2.6 trillion rupiah (US$268.5 million) to the city’s total direct income of 17.83 trillion rupiah last year, a 17.9 per cent increase over 2011.
“So, we are looking at a tourism budget of some 654 billion rupiah,” Kurnia said hopefully. The current budget is a mere 80 billion rupiah.
Sukirno expects a better future for Jakarta, as Widodo “wants Jakarta to actively bid for international events”. Widodo is well regarded for his success in developing the MICE industry in Solo, Central Java when he was its mayor.
“Jakarta also stands a chance (at winning over more business events from Bali), as there are businesses such as pharmaceutical companies that no longer allow conferences to be held in a resort destination,” added Sukirno, who observed that Bali attracted a stronger conference and incentive mix, while Jakarta drew more exhibitions and conferences.
According to industry sources, the capital city has been hosting a healthy number of large retail exhibitions and B2B trade fairs in the last 15 years, a segment they said Bali is not suited for.
Jakarta is also a preferred destination for government and corporate meetings.
Sukirno said: “Domestic and regional corporate meetings with 300 to 800 delegates are plenty, and JCNEB has been channelling such businesses to the hotels here. Out of the 53 four- and five-star MICE hotels in Jakarta, 10 to 15 of them are equipped to accommodate regional association meetings with up to 800 people. There are also three-star properties which have meeting spaces for up to 300 delegates.”
Hotel Borobudur Jakarta, whose MICE contribution to total business in 2012 was 25.1 per cent, is expecting an increase of 14 per cent this year. It already has several medical events and government meetings on the books.
The Ritz-Carlton Jakarta, Pacific Place has received 50 per cent more MICE enquiries to-date, compared to the same period last year, while its sister hotel The Ritz-Carlton Jakarta, Mega Kuningan is hoping to draw 25 per cent of its total business from corporate events this year.
Tayach revealed: “We have a major regional event confirmed in May this year, with approximately 1,000 delegates and 500 room nights. We also have some strong leads, especially during the fourth quarter this year.”
With a heftier destination marketing budget coming on-stream and the development of new MICE facilities, Kurnia expects Jakarta to be able to compete effectively with other Asian MICE cities within the next three to five years.