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

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 and Jiang (2019), in a world which is increasingly prone to crises and disasters, the focus at these stages is basically to help businesses and tourism destinations reduce vulnerability and build resilience before crises and disasters. Meanwhile, Aliperti (2019) marked the evolution of studies which have focused on crises and disasters over the years, and revealed that the processes leading to crises and disasters need to be continuously monitored with the aim of identifying the actions to be adopted during each stage. The overall performance of crisis management will be influenced not only by the capacity to coordinate, deliver, organize, and analyze, but also by input and output legitimacy (Christensen et al, 2016). Bundy, et al (2017) identified two main perspectives in crisis management. First, an internal perspective focuses on organizational dynamics in managing risk, complexity and technology. Second, an external perspective focuses on the interaction of organizations and external stakeholders, meaning that crisis management involves forming perceptions and coordinating with stakeholders to prevent, resolve, and grow from a crisis. da Silva et al (2017) explained that successful crisis management requires full integration of all parties involved. Furthermore, he stated that efficient crisis management occurs when information is exchanged and updated in real time between the organizations involved. COVID-19 forces

http://iaeme.com/Home/journal/IJM 874 [email protected] Crisis Impacts on Tourism Events in Indonesia through a Perspective of Creating Shared Values society to give in to conditions of mobility restrictions, uncertainty and extraordinary risk. Although COVID-19 resulted in a paralysis period, new forms of solidarity have emerged to challenge the prevailing ethics of competitiveness (Haywood, 2020). Furthermore, Haywood (2020) specified that post-COVID updates require a higher level of cooperation. In the tourism sector, transformational tourism can provide conceptual resources during a pandemic for transformations which support inequality (Rowen, 2020). Rowen (2020) also affirmed that creative responses from members of a transformational festival culture can help overcome conditions of mutual difficulties, and support more sustainable tourism practices in the post- COVID-19 domain.

4. METHODOLOGY Based on the research objective to describe problems in the tourism sector, especially event tourism, it was carried out by collecting data on several tourism events in Indonesia, namely Jember Fashion Carnaval (JFC), Reyog Ponorogo National Festival (FNRP) and Batu Street Food Festival (BSFF). This study applied interview data collection methods. Krehl and Weck (2019) proposed a suitable case study research approach to offer in-depth insights into the driving and limiting factors in achieving better cohesion. Case studies are also very suitable to investigate the role when an innovation plays in company success (Dinesh & Sushil, 2019). Goffin et al (2019) found that case study research is the method most commonly used for long-term studies. Interviews in this study were conducted with several stakeholders including the organizer of tourism event, the government (in this case the Tourism Office), the community, and the society.

5. RESULTS AND ANALYSIS In the period of Covid-19 pandemic resulting in a global health and economic crisis, companies are demanded to start by evaluating strategic options based on the consequences, namely which options will lead to shared value creation (Lee, 2019). For these companies, the advantages of this strategy have been demonstrated in various areas, such as a better economy (Fernández-Gámez et al, 2020), interconnectedness with the surrounding environment (Hsiao and Chuang, 2016), and added values associated with social changes (Kramer and Pfitzer, 2016). However, the success of CSV is requisite to be analyzed from the perspective of different interest groups (Fernández-Gámez et al, 2020). One of the interesting measures to develop is by creating actions on perceptions and satisfactions of stakeholders in developing issues. Through CSV, it can solve on going problems. On the concerned issue, it can be related to problems which are currently happening, namely the impact of health and economic crisis on tourism, mainly tourism events which have disrupted stability in the tourism sector. In recent years, some literature have discussed the relationship between pandemics and tourism regarding the perceived risk (Page et al, 2006; Kuo et al, 2008; Page et al, 2011; Novelli et al, 2018; Hanrahan and Melly, 2019). In a study by Page et al (2006), they scrutinized how VisitScotland prepared itself to respond to influenza pandemic, and provided case studies on implementing these measures. Their study began in October 2005 as the media focused on the spread of Avian Influenza from Southeast Asia to Northern Europe which had been developed globally. The interest of media was largely due to the impact on chickens as food source, the potential for AI mutation, and the trigger of global flu pandemic. Interestingly, in almost all media agitation, the most obvious impact on tourism had been either ignored or only mentioned at glance. At the same time, Visit Scotland, the National Tourism Organization (NTO) had conducted a scenario planning exercise to plan for such a possibility. The research referred to several studies conducted as part of scenario planning exercises to illustrate how they represented as the best

http://iaeme.com/Home/journal/IJM 875 [email protected] Andriani Kusumawati, Edriana Pangestuti and Supriono practice case studies in planning for flu pandemic, in terms of sharing this knowledge with NTOs and global tourism organizations through the World Tourism Organization and other communication channels. Meanwhile, Kuo et al (2008) found that international tourism demand was negatively affected in countries with SARS (Severe Acute Respiratory Syndrome), instead of countries with bird flu. The aim of study was to investigate the impact of infectious diseases including Avian Flu and SARS on international tourist arrivals in Asian countries by using a single data set and panel data procedures. An autoregressive moving-average model together with an exogenous variable model (ARMAX) was used to estimate the effect of this disease in each SARS and Avian Influenza-infected country, while a dynamic panel model was adopted to estimate the overall impact in two disease regions. The empirical results of both approaches were consistent. They revealed that the number of affected cases had a significant impact on countries with SARS instead ofcountries affected by Avian Flu. However, the potential damage caused by Avian Flu and the subsequent influenza pandemic was much greater than that caused by SARS. Thus, the demand to take compulsory precautions in the event of Avian Flu outbreak and influenza pandemic required further attention and action. Therefore, empirical findings from these studies can add knowledge about the relationship between tourism and crisis management, especially in terms of managing infectious diseases. Even the current global health and economic crisis which resulted from the Covid-19 pandemic, they first appeared in Wuhan and spread to several areas such as Hubei. Then, the Chinese government has taken a policy to close in and out accesses for abroad, domestic, and every region itineraries (Zhong et al, 2020). Although Chinese culture is deeply rooted in collectivism and the Spring Festival is considered the most important time for Chinese families to gather, in response to the rapid spread of COVID-19 in Hubei province (Bogoch et al, 2020), the Chinese Government implemented a lock-down in Wuhan on 24 January 2020, the day before the Spring Festival. Such condition made it impossible to bring in tourists, both domestic and foreign, to visit tourist attractions (Zhong et al, 2020), since it was too risky to the public health and became a distribution cluster. There were several points which can be captured on the occurred cases regarding the impact of global pandemic from several existing regions. Based on the occuring cases in various regions regarding the handling of crisis natural cases (influenza, swine flu, bird flu, Ebola, even Covid-19) and also the impact on tourism, this study analyzed and correlated cases which happened in Indonesia. In line with the impact occuring as the result of Covid-19 spread, this study has analyzed and examined tourism events in several selected locations. It focused on three places which hold tourism events in East Java, namely Jember Fashion Carnaval (JFC), Reyog Ponorogo National Festival (FNRP), and Batu Street Food Festival (BSFF). Some of these tourism events represent three tourism sectors, namely fashion in JFC, arts and culture in FNRP, for food and beverages in BSFF.

5.1. Conditions during Covid-19 Jember Fashion Carnaval (JFC) Based on the study results, we conducted a series of data processing through a qualitative approach with data collection techniques by interviews. Thus, triangulation rules could be performed toemphasize the qualitative approach and snowball sampling for the sampling technique. Also, various sources could be interviewed in several research locations showing that all event agendas were canceled, only Jember Fashion Carnaval which continued to perform its activities in terms of agenda preparation for the international collaboration event. The following is the impact after holding Jember Fashion Carnaval:

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 It was cancelled in 2020 as a result of meeting between Jember Fashion Carnaval and Jember Regency Government;  Jember Fashion Carnaval big agenda, both national and international, havebeen canceled;  There will be several agendas coordinated through virtual meetings;  For the provisions in next year perfomance, Jember Fashion Carnaval cannot confirm whether it will be held. Meanwhile, Jember Fashion Carnaval has collaborations with outside parties to be able to hold big events from each continent. This agenda can be considered large as it is planned before Covid-19 pandemic spreads in Indonesia. It evidently had a very significant impact, regarding the implementation under the condition where in September the total of cases in East Java had 38,809, while Jember Regency had 694 cases (Melani, 2020).

Reyog Ponorogo National Festival (FNRP) With the growth of cases in Covid-19 pandemic per day, Reyog Ponorogo National Festival was also affected. Based on observations by media, there were 276 cases in Ponorogo Regency (Bakrie and Kusuma, 2020). This condition made Ponorogo Regency as the orange zone area again, after previously being in the yellow zone. It meant cases of Covid-19 pandemic continued to increase, which resulted in the impossibility of carrying out Grebeg Syuro event along with Reyog Ponorogo National Festival. The following is the impact felt by the organizers of Reyog Ponorogo National Festival, so-called Reyog Ponorogo National Foundation:  Reyog Ponorogo National Festival agenda was cancelled after the meeting with Tourism Office and Reyog Ponorogo Regency;  There was no plans for 2021 under the situation of increasing Covid-19 cases every day;  It was still in the review phase to be conducted in compliance with health protocols, but it was uncertain; and  Reyog Ponorogo Dance Studio Community is recommended to carry out new normal activities by tightening the Covid-19 health protocol. Thus, it had an impact on the community and crafts in Ponorogo Regency. Despite that, Reyog Ponorogo dance studio community for now has made updates after the new normal such as, a) communicating and confirming with students; b) updating the syllabus of teaching Reyog Ponorogo dance; c) innovating Reyog Ponorogo dance; and d) enforcing strict health protocols.

Batu Street Food Festival (BSFF) The occurring conditions between Jember Fashion Carnaval and Reyog Ponorogo National Festival were very different from those happened in Batu Street Food Festival. They were reported from various sources exposing that Batu Street Food Festival was also not held in 2020. However, the difference was it was decided without thecontinuity of coordination and communication among organizers and Batu City Government, including the planning ahead for the festival. It was confirmed by PHRI Batu and several communities involved in organizing the festival. Furthermore, even in the new normal condition, there is no continuity of coordination and future planning.

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5.2. Prospects in Post-Covid-19 The existing crisis occured in the health sectors also significantly affected others. One of the most affected sectors was tourism. However, this impact is definitely a challenge for the sustainable tourism sector in terms of management, existence, and even the value created. The implemented concept with this transformation—Creating Shared Value, can increase the company's competitive values and simultaneously advance social and economic conditions (Porter & Kramer, 2011). CSV approach requires that social engagement is treated as a long- term investment necessary for business success. CSV involves businesses which link corporate success with social progress as an important driver for long-term economic value creation (Porter and Kramer, 2011). Through the concept of CSV, Porter and Kramer (2011) have three ways the company can create value, namely:  Reconceiving products and markets, developing innovative products and services. In this first dimension, Jember Fashion Carnaval developed the concept of fashion and carnaval, even the annual themes were based on developing issues, both national and international. For example, 2004 earthquake occurred in Aceh Province, and the case occurred in Rohingya.. Meanwhile, a similar condition was also carried out by Reyog Ponorogo National Festival where the Reyog Ponorogo National Foundation carried out the planning and development in terms of the event‘s concept. In fact, there is an agenda that Reyog Ponorogo National Festival will be a national agenda included in the "Calendar of Events in Indonesia". In addition, Reyog Ponorogo National Foundation wanted to re-collect data on Reyog Ponorogo community throughout the region. It indicated their involvement in participating in National Reyog Ponorogo Festival. These conditions were different from those carried out by the Batu Street Food Festival, where the organizers were still conceptualizing that the event could become a provincial and national event. However, the concept had been rejected by Batu Tourism Office and Mayor of Batu on the grounds that the event is included in Batu City Budget.  Redefining productivity in the value chain. An organization can improve various value chain channels to create added value to products. Jember Fashion Carnaval had made several efforts, such as increasing the number of involved communities so that they could attract various communities in one event. It is in line with the vision of Jember Fashion Carnaval intending to be the center of fashion trendsetters and carnivals in the world. In addition, it is definitely fundamental to add SMEs engaged in fashion to be able to provide socio-economic benefits and to meet product-market fit. Furthermore, Reyog Ponorogo Foundation is still in the grounding stage through promotion to be able to increase the number of domestic tourists and the next targets are foreign ones (Kominfo, 2019). In 2019, Reyog Ponorogo National Festival presented a more attractive performance and was supported by Indonesiana Platform (an institution under the Indonesian Ministry of Education and Culture) by holding approximately 37 activities in 2019 Grebeg Suro series (Kominfo, 2019). Therefore, Reyog Ponorogo Foundation, which has been directly under the auspices of Tourism Office and Ponorogo Regency, made major improvements and promotions after Covid-19 Pandemic ended. Batu Street Food Festival, which is held 3 times each year, has a planning concept so that it can become a national event. However, the being made efforts were still at the hotel networking stage in Batu and Malang City areas. The rest of planning concept has not been discussed again due to the rejection the Tourism Office and the Batu Mayor. Itis expcted that Batu Street Food Festival can become a national agenda and provide benefits to Batu City people largely.

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 Enabling local cluster development, the organization created shared value by building clusters to increase productivity along with overcoming gaps or failures in the framework around the cluster. In line with Jember Fashion Carnaval, which was initially engaged in social orientation, and by this event it could make branding for Jember Regency and become the center of world carnival agenda. The impact would be sensed by various communities, SMEs and local people. As a social oriented organization, Jember Fashion Carnaval in its activities also provides education, mentoring, and training for up to one full year. It means Jember Fashion Carnaval has prepared for the big event. It has even become an international event, before, shortly, and after the event is held. SMEs would get good knowledge and experience, and the society would get values conveyed through the designated theme. There were even several activists and participats in Jember Fashion Carnaval known in the fashion world of national level. Further, in the future, when the agenda gets bigger, there would be plans in which the event involve five continents. Jember Fashion Carnaval will continue to benefit people of Jember Regency. Then, in Ponorogo Reyog National Festival, with the existence of grebeg suro series held within ten (10) days, it could provide benefits for arts and cultural activists, both in the fields of dance studios and SME‘s craft. Moreover, in the future, the on going improvements can make Reyog Ponorogo National Festival a national agenda and continue to provide greater appeal for art lovers, domestic and foreign tourists. Also, it is expected that they have selling point and become an economic driver for Ponorogo residents. The festival maintains a sustainable arts and culture in the increasingly massive development of globalization. An education to support local arts and culture is the main value given to local communities. Additionally, in the context of Batu Street Food Festival which focuses on hotel collaboration to create hotel-standard food and beverage products at reasonable prices for local people and tourists. In organizing Batu Street Food Festival, it is collaborated with Indonesian Chef Association as the director of food and beverage processing. They can be a reference in the performance to process food and beverages based on raw materials owned by Batu City. It can provide its own value for Batu Street Food Festival in terms of food and beverages.

6. DISCUSSION Covid-19 outbreak has spread rapidly and reached 4,618,821 cases (WHO, 2020). The most important of all is related to the human tragedy, affecting hundred thousand of people in many countries (Craven et al, 2020). This condition forces countries and companies to break the distribution chain with physical social distancing restrictions, even more than 136 countries have implemented a lockdown policy (WHO, 2020). However, some verified policies to prevent Covid-19 spread are implemented lockdowns, disciplined physical social distancing, rapid tests, traces of direct contact with victims having contracted the virus (Smit et al, 2020b). Several countries, such as China, Japan, Singapore, and Korea, have shown that such policies can inhibit Covid-19 virus spread and allow economic activity to recover, at least to some extent. The policies of each country will also cause economic depressions and also affect global economic growth (Barro et al, 2020; Craven et al, 2020; Zhang et al, 2020). They aimed to implement the best possible response to stop the crisis. However, the impact of global crisis caused the largest and fastest decline in modern economic history. Altman (2020) estimates that currently there are sectors which have experienced a significant decline, namely goods trading by 13-32%, a reduction in foreign investment by 30-40%, and a decrease in international airline passengers by 44-80% in 2020.

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Table 1 Plummeted International Trade, Investment, and Travel Sectors Percentage of decline International Trade 13-32 % Investment Flows 30-40 % International Travel 44-80 %

As seen in Table 2 above, there was a number of large decreases which occurred globally in international markets. However, it did not constitute or indicate that the actual significant decline was the profound bankruptcy of international market integration. Altman (2020) predicts that when Covid-19 pandemic is well controlled, the global economy will begin to grow again. World Economic Forum (WEF) noted that in 2018, there were 1.401 billion international tourist arrivals worldwide, with a growth of 5.4% compared to 2017. In WEF‘s data, France got number one in main destination for international tourists in the world. The latest figures of UNWTO show had nearly 90 million people visiting the country in 2018. Spain was not left behind, with more than 82 million visitors. The United States, China and Italy were placed at the top five. The following is ranking table for countries with the largest number of visitors in the world.

Table 4 Countries with the Largest Number of Visitors Number of Visitors Country Year (in thousands) France 2018 89.322,00 Spain 2018 82.773,00 United States 2018 79.745,92 China 2018 62.900,00 Italy 2018 61.567,20 Turkey 2018 45.768,00 Mexico 2018 41.313,00 Germany 2018 38.881,00 Thailand 2018 38.178,00 UK 2018 36.316,00 Source: World Economic Forum, 2020. Under the condition of the global pandemic, even UNWTO argues that the number of international tourists could fall by 80% in 2020. It has affected countries with Covid-19 to lock-down and other countries also cover their access to and from the region. They have also been among the hardest hit by Covid-19, with the US, Italy, France and Spain (along with Britain and Brazil) up to now by recording the highest number of coronavirus deaths in the world. As a result, it has an impact on countries who depend on their tourism industries. There were several studies showing that the tourism industry is able to recover in the future, by designing and implementing crisis recovery and response strategies (McKercher & Chon, 2004), and building resilience to overcome future crises (Hall et al, 2017). However, according to Sigala (2020), some are still lacking in tourism management during a crisis namely 1) knowledge of how a crisis can drive industrial change; 2) how the company can turn this crisis disorder into transformative innovation; and 3) how to conduct research which makes possibility, provides information and shapes the following rethinking and normal resetting. The crisis should have been a trigger for change, but so far, no crisis has been a significant transitional event in tourism (Hall et al., 2020). Masco (2017) added that the crisis has also been used as a political tool to stabilize the existing structure and reduce the possibility of collective shifts because changes can be selective and/or optional for tourism

http://iaeme.com/Home/journal/IJM 880 [email protected] Crisis Impacts on Tourism Events in Indonesia through a Perspective of Creating Shared Values stakeholders (e.g. tourists, destination organizations, policymakers, local communities and employees). The nature and degree of transformation induced by a crisis depend on whether and how those stakeholders are influenced, respond to, recover, and describe a crisis (Sigala, 2020). Most importantly, there are several warnings that pandemics are a major threat to society and tourism from tourism itself (Gössling, 2002; Hall, 2006, 2020; Page & Yeoman, 2007; Scott & Gössling, 2015) health (Bloom & Cadarette, 2019; Fauci & Morens, 2012), government agencies (National Academies of Sciences, Engineering, and Medicine, 2017, 2018) and institutions (Jonas, 2014; World Bank, 2012).

6.1. Tourism Management in the Perspective of Creating Shared Value The tourism sector pays close attention to the socio-economic and perceived contribution of tourism to the targeted communities (Qiu et al, 2020). The entry of tourism has a big impact on the community, and can provide social and economic welfare for the population in tourism environment. However, the negative impact is exacerbated during crises and disasters (Qiu et al, 2020). Meanwhile, the world is currently facing a crisis in the form of a novel coronavirus disease 2019 (Covid-19) pandemic which has spread to 206 countries or regions (WHO, April 3, 2020). As COVID-19 hits worldwide, travel restrictions and border closings are in place in many countries and regions to prevent its spread. Urbanization and globalization drive the rapid spread of virus (Hilsenrath, 2020), but tourism has clearly played a role in exacerbating the resulted public health crisis. Therefore, it is important to identify and measure the perceived risks and social costs of tourism during Covid-19 pandemic in order to minimize the negative effects of tourism on cities and destinations. The concept of Creating Shared Value developed by Porter and Cramer (2011) can become a new perspective/paradigm in tourism management during a crisis era. There is Goodwin‘s publication (2011) entitled "Taking Responsibility for Tourism" connecting the sustainable business paradigm based on a business case for responsive tourism. He analysed the main perspectives of tourism, namely 1) socially and economically responsible tourism; and 2) environmental responsibility, ecotourism and conservation. In addition, he suggested that the economic benefits in the tourism sector should be maximized when employment can be absorbed by local residents and have an impact on the community's economy. In a sense, this argument was also replicated in the UNWTO - UNEP report (2012) which showed how the increased investment in the sustainable tourism sector had the potential to increase the sector's contribution to economic growth, development and job creation, while addressing environmental challenges in a sustainable manner. Furthermore, Goodwin (2015) also reported how the responsible tourism movement in Kerala has focused on local economic development, on job creation and business opportunities. Likewise, Sustainable Development Goals address various issues on the social agenda at the global scope including poverty alleviation, hunger and food security, life and welfare, inclusive and equitable education, gender equality, water security, sustainable and modern energy access, unemployment, building resilience, sustainable consumption and production, climate change, conservation and biodiversity and a peaceful and inclusive society (UN, 2015). Through Creating Shared Value, there is a potential for private sector in tourism to play a major role when addressing challenging problems of the community. There were many examples of successful business cases in helping the community by building community welfare covered in the tourism environment (Lloyd, 2015). Such corporate behaviour was in line with the "creating shared value" framework developed by Porter and Kramer (2011). The idea is rooted in identifying specific problems which improve business performance in the tourism sector. At the same time, however, a responsible behaviour can create large-scale social benefits. In some cases, it was a matter of re-emphasizing the social mission of the

http://iaeme.com/Home/journal/IJM 881 [email protected] Andriani Kusumawati, Edriana Pangestuti and Supriono company founder. Likewise, Goodwin (2015) argued that tourism in Kerala area helps rural communities. He also emphasized that tourism can "Creating Shared Value" by showing that hotels support the community to be able to create local food and specialties from the area. Goodwin (2015) further stated that Creating Shared Value would not exist without a partnership agreement between industry and local communities. Therefore, the idea of Creating Shared Value is about embedding sustainability and corporate social responsibility into its portfolio where all business processes operate in an environmental setting within a wider community context (Camilleri, 2014). Interestingly, the concept of ―Creating Shared Value‖ has been an ongoing and popular theme during the World Economic Forum in Davos. An effective communication with stakeholders is a very important element of business behaviour that reflects responsiveness to local communities (Camilleri, 2015). By implementing Creating Shared Value, companies in the tourism sector are able to identify problems arising in their surrounding environment, then capture them through responses from the surrounding environment, and continue to encourage improvements in company performance. Porter and Kramer (2011) argued that the Value Proposition which is created together will establish new business opportunities as it creates a market. Thus, it can increase profitability and strengthen competitive position. The Value Proposition collectively focuses on the scale of impact and the level of innovation in which companies can bring to society (Camilleri, 2015; Kramer, 2012). Pfitzer et al (2013) stated that there are five constituents for Creating Shared Value, namely 1) social goals; 2) specified needs; 3) measurement; 4) an appropriate innovation structure; and 5) co-established creation. Intercontinental Hotel Group (IHG) is a relevant example of a multinational organization which has used the "Creating Shared Value" approach (Porter and Kramer, 2011). It has identified innovative opportunities in the environment by collaborating more closely with the communities who perform business (Jamal & Getz, 1995). IHG aligned its corporate responsibility report with the Global Reporting Initiative Scorecard (IHG, 2012a). At that time, the hotel chain claimed that IHG could achieve a 10% reduction in energy consumption during the next three years. Furthermore, IHG plans to achieve these targets by applying a sustainability strategy called "Green Engage". IHG suggested that the strategy aids to measure and monitor energy, water and waste management (IHG, 2012b). There are research results exposing CSV‘s influence on strategic management by improving business and social conditions (Awale and Rowlinson, 2014; Camilleri, 2015; Goodwin, 2015). Based on the CSV framework, there are three areas—each of which has a role and contribution, so that when a value increases in a certain area, opportunities will be generated in other areas. In the first area, take-back products and market strategies are often oriented towards community needs; the second area, productivity is redefined in the value chain. It focuses on internal operations such as increased costs, productivity gained through improvements in the environment around the oriented company, and better use of resources. And in the third area, innovation and productivity can be carried out under strong influence of cluster regulation, and through developing local clusters to improve the company‘s environment and productivity itself (Porter and Kramer, 2011). Therefore, CSV strategy has important implications for company‘s competitiveness, behaviour, consumers, value, and performance (Jin, 2018).

6.2. Sustainable Tourism Development after the Crisis Period Industries should not only recover but also reshape and reform the next normal and economic order (Smit et al, 2020a), while researchers should not simply use Covid-19 as another context for replicating the existing knowledge to measure and predict tourism impacts

http://iaeme.com/Home/journal/IJM 882 [email protected] Crisis Impacts on Tourism Events in Indonesia through a Perspective of Creating Shared Values

(Gössling et al, 2020; Hall et al, 2020). In addition, there is insufficient evidence to claim that both tourism industry and research are mature in providing sufficient knowledge to: (1) design and implement post-crisis recovery and response strategies; and (2) build resilience to face the future after a crisis. Therefore, transformational actions from the impact of pandemic in modern era are not new. However, they have greatly affected all countries and even become a global crisis from the impact of health and economic crisis caused by Covid-19 spread (Gössling et al, 2020). There are several studies predicting quite a risky future, especially when it is still in such crisis without knowing how the pandemic will develop, when this pandemic will end, as well as how the resilience phase of organization will recover properly. In a research from Lew et al (2020), Covid-19 transition from current pandemic will return to recovery through four adaptive cycle phases. It also revealed that in the short term, probably for the next two to five (or more) years, efforts will be made for recovery by the government, the tourism industry, and many tourists who wish to travel to visit various tourist destinations, particularly the delayed tourism events due to current pandemic. It seems to be the case in certain countries, such as China, which is several months ahead of other countries in terms of experience related to handling and recovery from Covid-19 pandemic (Lew et al, 2020; Enger et al, 2020b). There were dominant and undesirable values in the past (before Covid-19) which were eventually abandoned as the new values emerging from Covid-19 experience took precedence (Lew et al, 2020; Loannides and Gyimóthy, 2020). Consequently, based on such pandemic case it can change tourist behaviour. Loannides and Gyimóthy (2020) mentioned that there is a growing speculation, especially in the mass media, that a pandemic can trigger sustainable changes in market behaviour, which can radically change the pattern of global tourism travel. It means companies/organizations in the tourism sector will innovate and be creative in designing value for products or services offered to tourists, including in the scope of new business model (Lew et al, 2020). Hence, it is necessary to realize that after going through the prevailing crisis, the tourism industry can bounce back, then show a stronger resilience to reduce risks in future crises (Novelli et al, 2018; Papatheodorou et al, 2010). Adaptive resilience and change in capabilities have been discussed in organizational studies related to sustainable transitions (Engle, 2011; Keskitalo, 2008, Tsao & Ni, 2016). In a company case, a crisis can trigger an emergence of new business models and strategies, which will ultimately determine chances of a company's survival. Innovative and adaptive capabilities play a key role in post-crisis recovery (Engle, 2011); however, many tourism businesses suffer from lack of innovation (Hjalager, 2002; Sundbo et al, 2007). Previous research has shown that local economies can respond to crises with collaborative action and bureaucracy with a social approach (Di Domenico et al, 2010), while local tourism businesses have a better view of recovery than urban ones (Johannisson & Olaison, 2007). In this case, there is a tourism business performing a transformation, such as a restaurant which shifts to takeaway operations during lock down, so that it can affect their income, which actually increases due to loyal customers in the surrounding environment which can still be contacted by customers (Skinbjerg, 2020). The tourism sector has traditionally shown considerable resilience to recover after crises and disasters, including previous region-based epidemics such as SARS (Sigala, 2020; Loannides and Gyimóthy, 2020). In general, such recovery is assisted through local or national government intervention, which creates an environment by attracting investors through a series of incentives (arranging tax breaks, lifting strict land use regulations, etc.) (Brouder, 2020). By providing guarantees only to the tourism business sector on a large scale (such as airlines), there is a real danger when the asymmetry of existing forces in that sector will dominate. What about local-based small and medium enterprises, including the millions

http://iaeme.com/Home/journal/IJM 883 [email protected] Andriani Kusumawati, Edriana Pangestuti and Supriono of low-paid workers who rely heavily on international tourists? (Loannides and Gyimóthy, 2020). On a global scale, such interventions aim to keep markets growing (Fletcher, 2011). Thus, Loannides and Gyimóthy (2020) argued that any interventions must be accompanied by many considerations. Various studies have stated that crisis management needs to be performed before, during and after a crisis (Sigala, 2020; Loannides dan Gyimóthy, 2020; Lew et al, 2020; Brouder, 2020).

7. CONCLUSION AND LIMITATION Covid-19 has resulted in many socio-cultural, economic and psychological impacts on various tourism stakeholders. Therefore, this study is addressed to comprehend, explain, and analyze the impacts on the tourism sector in the form of event held in Indonesia. Meanwhile, Indonesia‘s tourism in recent times has become an attraction for tourists from various countries and has proven to be contributing to national income combined with the development plan carried out by the Indonesian Government through the Ministry of Tourism and Creative Economy in the future of Indonesian tourism. The impact caused by the global health and economic crisis has significantly affected the arrival of foreign tourists. On the other hand, the government has targeted the absorption of foreign tourists to come and enjoy tourism in Indonesia. Furthermore, they have also prepared a national event tourism calendar. The calendar is definitely very capable of providing information to foreign tourists to come to Indonesia. In such crisis, it is necessary to manage and renew tourism events as a whole, both based on creating value, 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 so that they can continue to exist, compete, and be sustainable through co-creation with what is needed by the surrounding environment, especially local communities. As a result, they will also be able to gain confidence in tourism management which can have social and economic impacts. This study has been performed in the field of predetermined research location. We decided the location of study at three tourist event sites held in East Java, which represented event tourism in three types, namely carnival (Jember Fashioan Carnaval), arts and culture (Reyog Ponorogo National Festival), and culinary (Batu Street Food Festival). Unfortunately, this study has shortcomings. Thus, for future studies it is recommended to investigate through a quantitative approach with the aim of being able to find out and explain how the impact on the value created by companies is engaged in the tourism sector, and even it can probe tourist behavior in current pandemic conditions.

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