Tailored packages help MICE business survive in Bandung

Yuli Tri Suwarni ,  The Jakarta Post ,  Bandung   |  Sun, 07/05/2009 11:28 AM  |  Supplement

Meetings, Incentives, Conventions and Exhibitions (MICE) have been the backbone of hotels in Bandung since the end of 2006. With a more than 60 percent occupancy rate on weekdays, hotel managements and MICE organizers in the West Java capital are racing to pamper their customers with tailor-made packages.

With most MICE organizers in Bandung guaranteeing full services, the business is back on its feet after it slumped in the first quarter of 2009 as a result of the global economic downturn.

Bandung is indeed not categorized as a MICE destination for major international or national events, unlike Jakarta, Surabaya and Makassar. However, smaller meetings for between 50 and 250 people support thousands of people in Bandung.

The MICE business decreased drastically from January to April 2009 when many companies and event organizers decided to wait and see while calculating the impact of the global economic crisis on the local business.

Diah Suhandi, PR manager of Hotel Aston Braga, said that during this period there were only 20 meetings per month, which was far fewer than in 2008 when there were 70 meetings per month. Aston has 10 meeting rooms with a capacity of between 10 and 250 people, while the average event was for 50 people.

The five-star Hyatt Regency on Jl. Sumatera had the same experience. Milla Milkani, PR manager of Hyatt Regency, revealed that the occupancy rate dropped by 50 percent in the first quarter of 2009 due to fewer meetings.

"Meetings have been important to our business since the end of 2006, because our occupancy rate had gone up to 80 percent," said Milla.

The Ganesha Cultural Hall (Sabuga) on Jl. Tamansari, which has an auditorium for 4,000 people, which makes it the largest hall in Bandung since its establishment in 1997, charges Rp 25 million per 12 hours.

Indra, the operations manager of Sabuga, said that academic and commercial events, which comprise 60 percent of its entire business, dropped drastically in the first quarter of 2009. In the first quarter, Sabuga was used for just a few events, namely by the owner, the Bandung Institute of Technology (ITB) for its golden anniversary and one Peter Pan concert in March.

"But toward May and June the political and macro economic situation became better and many event organizers staged events," said Indra.

Sabuga, which has been handed over by ITB to PT Gobel International for its daily operation, made history when on May 14, 2009 it became the location for the declaration by presidential and vice presidential candidates, SBY-Boediono.

During the slump, a customer like the government became an important customer for the Sabuga management.

"A customer like the government is active throughout the year, that is why we always make more intensive approaches when business is slow," said Diah Suhandi, adding that government orders could be 50 percent higher than those of corporations.

Hyatt Regency, which has a ballroom with a capacity for 1,200 people, offers tailor-made packages. Milla said that based on this strategy, the hotel could accommodate the needs of a corporation with a limited budget.

"We do not press for cash payments as payment can be made much later after the event is over. We also provide a unique venue, on the hotel roof, that is," she said.

With the arrival of new hotels, competition is becoming tougher in Bandung. This has led to a price war for the facilities. The Bandung City administration continues to issue permits for the construction of new hotels. Currently, there are more than 60 hotels, ranging from three- to five-star accommodations, in the city and each has an average of 10 meeting rooms.

Diah said that it was important to determine how much a customer could afford, which was the key to getting orders due to the tight competition.

"Of course, we don't reduce the quality of our services. We only adjust the prices through small measures, such as by downsizing products, changing the menu without affecting the food quality. We make it as efficient as possible as long as the customer does not suffer," said Diah.

Diah acknowledged that the price war made things difficult, because the government did not regulate prices. As a result, some five-star hotels have reduced their rates, which are now similar to those of four-star hotels, and, likewise, four-star hotel rates have been decreased to as low as those of three-star hotels.

According to Indra, discounts are necessary in the ongoing price war as price is an important factor to negotiation in this tight monetary situation. Sabuga has to compete head-to-head for the organizing of musical concerts with The Venue Eldorado on Jl. Setiabudi and for exhibitions and weddings with Graha Manggala Siliwangi on Jl. Siliwangi, the Landmark building on Jl. Braga and the Islamic Center on Jl. Diponegoro.

"We offer discounts to event organizers as well as a stimulus for total support to produce the event, because they are an extension of our marketing efforts," said Indra.

He said the management of Sabuga had to focus more on the local market because 60 percent of its customers were event organizers and corporations based in Jakarta. He said Sabuga was turning its attention to wedding receptions, which only accounted for 0.4 percent of the 120 events held at Sabuga in 2008.

Currently, the Islamic Center hosts most big wedding receptions in Bandung.

Although not affected by the business slump at the beginning of 2009 due to numerous government events, the general manager of PT Bidakara Savoy Homann, Budi Sasongko, said he had a principle of "never saying no to a customer" to survive.

Budi acknowledges that it is difficult to lower rates further because it would ultimately affect the hotel's revenue and render the business unprofitable.

He said he must make guests feel at home, so the hotel's employees had to be friendly and see to guests' every need.

"This includes when a guest is sick, in which case we take him or her to the hospital and later visit them as part of our family. Also, when a guest wants to play golf, we help make a reservation," said Budi.

Total service is provided by Homann, starting from providing a car to take guests to shopping centers and factory outlets. Extra incentives are also offered in the form of tours to resorts like Ciater and Saung Angklung Udjo to refresh meeting participants.

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