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Crisis Impacts on Tourism Events in Indonesia Through a Perspective of Creating Shared Values

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Crisis Impacts on Tourism Events in Indonesia Through a Perspective of Creating Shared Values International Journal of Management (IJM) Volume 11, Issue 11, November 2020, pp. 872-889. Article ID: IJM_11_11_082 Available online at http://iaeme.com/Home/issue/IJM?Volume=11&Issue=11 Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 DOI: 10.34218/IJM.11.11.2020.082 © IAEME Publication Scopus Indexed CRISIS IMPACTS ON TOURISM EVENTS IN INDONESIA THROUGH A PERSPECTIVE OF CREATING SHARED VALUES Andriani Kusumawati*, Edriana Pangestuti, Supriono Faculty of Administrative Science, Universitas Brawijaya, Indonesia *Corresponding Author ABSTRACT This study describes the suitability in discussing crisis management of tourism sector, especially on the impact occuring in the tourism sector for the event type in East Java Province, Indonesia. In a crisis like this, it is necessary to manage and renew tourism events as a whole, based on value creation, building networks for the community, and providing tourism benefits to the surrounding environment. The goal is to be able to restore and restart tourism events. Therefore, they can continue to exist, compete, and sustain through co-creation with what is needed by the surrounding environment, especially local communities. Also, they will be able to gain confidence in tourism management which can have social and economic impacts. This study applied a qualitative case study research with 17 sources inwhich each resource was based on their profession and involvement in managing tourism events in East Java. Key words: Crisis Impact; Tourism Events; Ceating Shared Value; Indonesia Cite this Article: Andriani Kusumawati, Edriana Pangestuti and Supriono, Crisis Impacts on Tourism Events in Indonesia through a Perspective of Creating Shared Values, International Journal of Management, 11(11), 2020, pp 872-889. http://iaeme.com/Home/issue/IJM?Volume=11&Issue=11 1. INTRODUCTION Tourism is an important phenomenon affecting global socio-economic development (Odunga et al, 2020). Its sector provides a positive boost to the economy and helps improve the welfare of local residents (Kumar et al, 2015; Odunga et al, 2020). Du et al (2014) wrote that an international tourism has proven to be relatively more resilient to the global economic downturn, despite the repression in other global sectors. Furthermore, according to a report from the United Nations World Tourism Organization (UNWTO) (2017) stated that the tourism sector accounts for at least 10% of global gross domestic product (GDP), providing 1 in every 11 world job positions, generating 277 million jobs in 2016 and accounts for 30% of global service exports and generated approximately US $ 1.5 trillionn in export revenue. The http://iaeme.com/Home/journal/IJM 872 [email protected] Crisis Impacts on Tourism Events in Indonesia through a Perspective of Creating Shared Values tourism sector may be a neoliberal era state policy to increase the focus on economic value (Ziakas and Costa, 2011; Ormerod & Wood, 2020). The Ministry of Indonesia Republic‘s Tourism and Creative Economy (Kemenparekraf) expects that tourism will be one of quick solutions to increase national economic resilience in realizing the President's Vision for 2024, and can add a value to the creative economy being able todrive the national economy (Kemenparekraf / Baparekraf Strategic Plan, 2020). Tourism is also an important sector in Indonesia to contribute to Government Revenue (Handriana et al, 2019). However, at the beginning of 2020 there was Covid19 pandemic worldwide which resulted in lockdowns in most countries. Djalante et al (2020) stated that the decline in tourist arrivals during the end of February and March 2020 has made the tourism industry one of the first and hardest hit business sectors. The United Nation World Tourism Organization (UNWTO) noted that from 217 global destinations around the world, all of them carried out travel restrictions for international tourists. It has caused the level of tourist visits to decrease significantly. In accordance with these external conditions, the Ministry of Tourism and Creative Economy / Baparekraf has readjusted the targets set in RPJMN, one of which is by lowering the tourism foreign exchange target which was originally USD 32 billion in 2024 to USD 22.9 billion in 2024 (Kemenparekraf / Baparekraf Strategic Plan, 2020). In addition, the government also decided to loosen up fiscal policy, namely by widening the 2020 State Budget deficit to around 2.5% of GDP from the original plan of 1.76% of GDP. Tourism can be an alternative policy for neoliberal countries to increase the focus on economic value (Ziakas and Costa 2011, Ormerod & Wood 2020). More and more countries have developed policies todevelop tourism events. An event tourism not only serves as a means to attract tourists but also promotes the image of a destination (Getz, 2008; Wong et al, 2019). Ziyadin et al (2019) revealed that event tourism has established itself in the tourist market and becomes more popular among tourists. Furthermore, Ziyadin et al (2019) also revealed that event tourism can create opportunities to reduce seasonal fluctuations in tourist arrivals and extend the tourist season, increasing the number of tourists, including repeated visits. The prospect of tourism in East Java has a strategic role in the framework of national development. The Performance Report of Government Agencies records that the tourism sector in East Java Province contributes to the acquisition of foreign exchange and GDP, and participates in encouraging development and employment. In 2015, the impact of tourism on the employment of East Java was 208,629 people and in 2016 was 237,404. It can be said that the tourism sector is an effective sector to answer the need for increasing economic value added in reducing poverty and creating jobs (Government Agency Performance Report, 2016). Therefore, this study aimed to explore the impact of Covid-19 pandemic on managing event tourism and exploring the efforts made by event tourism managers to share community values in East Java. Precisely there are 3 (three) tourism events in Indonesia, namely Jember Fashion Carnaval. (JFC), National Reog Festival (FRN) and Batu Street Food Festival (BSFF). The selection of the 3rd (third) place represents various tourism sub-sectors in East Java, namely the Fashion sub-sector, the arts and culture sub-sector, and the food and beverage sub-sector. 2. LITERATURE REVIEW 2.1. Creating Shared value Creating Shared value (CSV) is the next stage after Corporate Social Responsibility (CSR). Unlike CSR, CSV aims to create social value through business functions. By implementing CSV, a company can have a positive impact on society while simultaneously create economic http://iaeme.com/Home/journal/IJM 873 [email protected] Andriani Kusumawati, Edriana Pangestuti and Supriono value for itself (Ham et al, 2020). Creating Shared value (CSV) is often defined as a set of policies and operating procedures which enable companies to maximize their competitiveness and provide social and economic improvements for their local communities (Porter & Kramer, 2011). Dembek et al. (2016) and Wu et al (2020) defined CSV as social value creation which can simultaneously produce economic value and vice versa. Gámez (2020) devised that CSV strategy is a new way to understand clients, productivity, and external influences are used to increase company success. Therefore, CSV is a strategic answer to improve the competitiveness and social conditions of communities in which they operate. Changing CSR into CSV is accomplished by showing the interdependence between company and community activities (Aly, 2020). Creating Shared value (CSV) theoretically conceptualizes the business role in society to create economic and social values for shareholders and society as a mutually beneficial proposition (Wójcik, 2016; Chen et al, 2020). CSV establishes a framework for identifying opportunities to improve socio-economic outcomes and related core business performances (such as, reduced operating costs, increased productivity, and/or a predictable and stable business environment). CSV‘s goal is to find a meeting point between the needs of business and society, then build collaborative partnerships to deal with complex social problems (Fraser, 2019). CSV‘s concepts are defined as policies and operating practices creating business value by addressing social problems or turning social problems into real business opportunities by using three ways: (1) restructuring products and markets; (2) redefining productivity in the value chain; (3) enabling the development of local clusters (Porter and Kramer, 2011; Alberti & Belfanti, 2019). Furthermore, Alberti & Belfanti (2019) recorded that CSV strategy can increase innovation and collaborative productivity. In the tourism sector, CSV value is needed to see tourism as a process for value creation (Serra et al, 2016). Camilleri (2015) asserted that tourism can be used to create shared value. 3. CRISIS MANAGEMENT Crisis management broadly describes actions and communication of organizational leaders who seek to reduce the likelihood of occurring crisis, work to minimize losses from a crisis, and rebuild order after a crisis (Bundy & Pfarrer, 2015; Bundy et al, 2017). Coombs & Laufer (2018) explained that there are three stages commonly used to describe crisis management, namely the pre-crisis phase (prevention and preparation), the crisis phase (response), and the post-crisis phase (learning and revision). According to Ritchie
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