The scrapping of a MICE directorate in 2014 plunged Indonesia’s MICE industry into the doldrums, but determined stakeholders are doing all they can to lift the business
The business events industry in Indonesia has gone through numerous ups and downs in the last decade, with the biggest obstacle facing stakeholders created by the country’s very own government.
Budi Tirtawisata, chairman of the Indonesia Convention and Exhibition Bureau (INACEB), said: “The root of the problem is the Tourism Law, whereby tourism is identified as a leisure activity, while business events are identified as a type of business and not a market segment.”
It resulted in the government focusing its strategy and budget squarely on the development of leisure travel, and neglecting the needs of the business events industry, he lamented.
In 2014, the Ministry of Tourism made a decision to scrap the directorate of MICE, sending shock waves through the country’s business events community.
Hosea Andreas Runkat, chairman of Indonesian Exhibition Companies Association (IECA), recalled feelings of abandonment among his peers. Without government backing, Indonesia lost lost power in bidding for international events. He described the situation as being worse than the crippling 2008 global financial crisis.
Ketut Jaman, managing director of Melali MICE, recalled that the hurt was made more severe when the central government went on to ban government bodies from holding meetings in hotels as part of an austerity drive. Between 2014 and 2016, Melali MICE saw a 50 per cent decline in the number of government business events in Bali.
Instead of wallowing in despair, Indonesia’s business events players took over the reins to steer business back on path as well as they could.
INACEB submitted a letter of recommendation in September with a short-, medium, and long-term plan to the Minister of State Secretary. It sought to ensure that the MICE sector has a proportional position in the government and be allocated a sufficient budget.
“We understand that revising the law will take time. But as the current government is focused on getting more revenue than arrival numbers, (we want to show that) business events is a means to achieve the target,” Budi said.
While the long-term plan is obtaining a revision of the law to classify business events as a market segment, the medium-term plan involved reactivating the Tourism Promotion Board (ITPB) to promote both leisure and business segments. The short-term recommendation, was the call for the Ministry of Tourism to appoint a deputy to be in charge of business events, Budi revealed.
On a positive note, Andreas pointed out that Indonesia’s MICE industry has been able to thrive despite having to face an uphill climb. He said that the emergence of various world-class convention centres and event venues opening across the country – such as Bali Nusa Dua Convention Center in 2011 and Indonesian Convention Exhibition in Tangerang, Banten in 2015 – was living proof of Indonesia’s MICE success.
Another achievement that Andreas indicated was ICCA’s recognition of Indonesia’s new MICE cities such as Bandung, Yogyakarta and Surakarta.
He said: “In the ICCA Statistics Report, these cities were ranked far below Jakarta and Bali. However, it (their inclusion in the report) proves that the MICE industry there has grown.”
Andreas also noted that many foreign PEOs have opened, or are opening, offices in Indonesia, attracted by the country’s trade potential. He believes that their presence will provide learning opportunities for local exhibition players.
“These PEOs will bring what they have in their home countries to Indonesia. I expect them to create new events to inspire us,” he opined.
Despite the lack government support, Susilowani (Susi) Daud, president director of PACTO Convex, said Indonesia’s status as a business events destination is regarded positively in the global marketplace. She credited the country’s economic and political stability as well as safety for this reputation.
Industry players agree that the road ahead remains an arduous one until the government comes around.
They, however, remain optimistic and believe that a better business climate is on the horizon as the government starts to value tourism revenue over tourism arrivals for the next five years.
The positive shift is partly due to the successful hosting of the IMF-World Bank Annual Meeting, which attracted 34,000 participants from 189 countries to Bali last year. The event drew the attention of the central government and allowed it to realise that business events can bring substantial economic impact.
Additional reporting by Alez Kurniawan
