ISSN 2685-3051 2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019 ISSUE 1 – JULY 2019
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 1 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
A. The Hosting of the 2018 Asian Games
The Asian Games is a multi-branch sports 11,238 athletes. Further, 5,460 country event involving all nations in the Asian officials also took part, adding to the hun- Continent and an official four-year agenda dreds of OCA officials and representatives of the Olympic Council of Asia (OCA). In- of various international sports federations. donesia had the golden opportunity to To ensure that the grand event ran suc- host the 2018 Asian Games, officially cessfully, more than 13 thousand local known as the 18th Asian Games Jakarta- committees were involved, comprised of Palembang 2018. The mega event took the Indonesia Asian Games Organizing place from August 18 to September 2 in Committee (INASGOC) and its volun- three provinces - DKI Jakarta and Su- teers, apart from task forces from various matera Selatan (Palembang) as the host government institutions and community and Jawa Barat as a supporting region. organizations that helped smooth the The 2018 Asian Games was the biggest event. in the history, with 10,391 participating The 2018 Asian Games successfully at- athletes from 45 Asian countries including tracted international attention beyond the Indonesia, competing in 40 sports and Asian Continent. The event was covered 465 events, surpassing the number of ath- by more than 7 thousand international letes in previous Asian Games of 2014 journalists from printed, online and broad- (Incheon, South Korea), 2010 (Guang- cast-based media from across the globe. zhou, China) or 2006 (Doha, Qatar), and The event also attracted nearly 79 thou- even comparable to the 2016 Rio de sand foreign tourists whose main intention Janeiro Olympics (Brazil) which featured are to attend the Asian Games’ matches.
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 2 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
B. Economic Impact Survey of the 2018 Asian Games
Given the massive scale of the event, the Hence, the survey aims to: (a) estimate Ministry of National Development Plan- the short-term economic stimuli generated ning/National Development Planning from the spending of athletes, country of- Agency (Bappenas) carried out the Eco- ficials, committees, journalists and specta- nomic Impact Study of Asian Games tors; (b) identify the long-term potential 2018. As part of that study, the Institute impacts on the tourism sector due to posi- tive changes in perceptions towards Indo- for Economic and Social Research, Facul- nesia, the propensity to repeat visitation to ty of Economics and Business, Universi- Indonesia for travelling purposes, the will- tas Indonesia (LPEM FEB UI) carried out ingness to recommend Indonesia as a a survey to capture the increasing eco- tourism destination, and to recommend nomic activity that arose from the Asian Indonesia as the host of future interna- Games, during and beyond the event tional sports events; (c) capture the im- completion. pact from the businesses part, especially affected micro, small and medium enter-
prises (MSMEs).
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 3 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
The survey took place on August 19 - tional athletes, foreign country officials September 4 in Jakarta, Palembang and (trainers, medical personnel and contin- several other cities in Jawa Barat. The gent support staff), Indonesian officials, survey managed to collect data from a international journalists, national journal- total of 2,618 sample respondents, includ- ists, international spectators, national ing 1,914 international respondents and spectators, OCA and International Sport 704 Indonesian respondents. Federations (IF) officials, INASGOC offi- They encompassed 12 respondent cate- cials and volunteers, MSMEs around the gories including international athletes, na- venues and INASGOC official partners.
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 4 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
C. Short-term Economic Stimuli
Despite the 2018 Asian Games lasted for were difficult to separate from their per- 16 days, the respondents’ length of stay sonal spending. varied. Among the international respond- When considering age group, the spend- ents, the group with the shortest stay was ing amount correlates positively with age the international athletes (average of in all groups of international respondents. 11.23 days) while the longest was interna- Age may be related to experience or tional journalists (average of 17.81 days). ranks, which in turn affects the amount of Length of stay may be affected by match allowances. schedules, other international competition schedules and budget. International jour- Based on country of origins, the spending nalists generally had to arrive in Indonesia of international respondents from non- before the opening ceremony and depart- ASEAN countries were, on average, high- ed after the closing ceremony. er than that of their ASEAN counterparts, except for country officials. Respondents The spending of international respondents from non-ASEAN countries may be more also varied across respondent groups. interested in souvenirs, foods or shopping International athletes only spent because they might find Indonesia differ US$457.7 on average, less than foreign to their countries. country officials (US$952.09). Larger amount of expenditure was made by Apart from the variation in total amount, groups of respondents who did not com- the respondents' spending also differ in its pete directly, such as international specta- composition. In general, the largest tors (US$1,495.55), followed by interna- spending portion of international respond- tional journalists (US$2,455.23) and OCA ents was for accommodation, followed by & IF officials (US$2,661.44). souvenirs and food & beverages. Different spending composition was observed in As for national respondents, national ath- international athletes, where the main letes had the highest average spending spending was for ‘other’ category, namely (Rp8.88 million), while national specta- a spending which amount had been allo- tors, officials, journalists and committees cated but the purposes had not yet been only spent an average of Rp2.08 million, determined. Most international athletes Rp1,80 million, Rp1,486 million and stayed at the athlete's village and opted to Rp1.03 million, respectively. wait until the last day in Indonesia before The average spending also varied across deciding how to spend their money. gender, age groups and country of ori- For the national respondents’ category, a gins. Among international respondents, considerable spending was observed on the average spending of women is higher food and drinks, and souvenirs, while than that of men for athletes, officials, spending on hotels was less dominant journalists and OCA & IF official groups, because of higher possibility of being giv- while for international spectators the op- en accommodation by family or friends posite is true. Male spectators may bear near the match locations. some families or groups expenses that
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 5 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 6 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
D. Long-term Potential Economic Impact on Tourism Sector
Although the 2018 Asian Games has 95% of international respondents ex- ended, there remains a potential long- pressed their fondness for Indonesian cul- term positive impact on the Indonesian ture (people, hospitality and food), and economy. First, 80% of international re- more than 70% liked the scenery, ser- spondents stated that the Asian Games vices and transportation arrangements in has positively changed their perceptions the city where the matches took place. towards Indonesia. In addition, more than .
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 7 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
Second, international respondents had considered for future travel. Most of them favorable views towards the organization planned to revisit along with colleagues or of the 2018 Asian Games. At least 70% of family for approximately two weeks. This athletes, country officials, OCA & IF offi- planned length of stay exceeds the Indo- cials, journalists and spectators rated nesia’s international tourists average of 'Good' or 'Very Good' in each criterion 8.42 days in 2016. Further, 2/3 of them measured in the survey including: 1) had already determined the future travel sports facilities and venues; 2) accommo- destinations in Indonesia. dation and food; 3) transportation ar- Fourth, most international respondents rangements; 4) telecommunications and expressed their willingness to give posi- internet networks; 5) access to infor- tive referrals to Indonesia. More than 95% mation; 6) security, and; 7) match sched- of them will refer Indonesia as a travel ules. Interestingly, there were no signifi- destination for their colleagues and fami- cant differences in rating given by those lies. Further, 89% of country officials and experienced and first-timers of interna- 97% of OCA & IF officials will support In- tional sporting events donesia as host of other international sporting events in the future. Around 82% Third, international respondents had a of country officials will even consider In- high propensity to repeat visitation to In- donesia to be a training location for their donesia. About 69-80% of respondents respective country's sports team. made sure to return and around 18-25%
E. Impact on Business
In addition to capturing the impact of the Hence, the average MSME required 1-2 2018 Asian Games from international and additional workers during the event. The national participants and visitors’ side, the MSMEs at Jakarta earned daily sales of survey also portrayed the impact on the about Rp1.9 million on average during the business’ side. Two types of business event, while in Palembang it reached groups were targeted: MSMEs that ran Rp.2.4 million, or equivalent to an in- the stall nearby the venues and the sup- crease of 76% and 15%, respectively, pliers of INASGOC (lodging services, when compared to their daily sales out- venue management and the official part- side the Asian Games event. The differ- ners that produced official merchandises). ence in the sales increase between MSMEs in Jakarta and Palembang was Most MSMEs at the venues in Jakarta influenced by the type of merchandise and Jawa Barat sold food and beverages, sold, the number of days trading, the while in Palembang mostly sold cloth and number of sports competed at the nearby apparels. Other products commonly sold venues and the number of spectators. by MSMEs included handicrafts, souve- nirs and leather products. Most MSMEs In general, MSMEs in Palembang used did not go through a complicated process the additional profits from Asian Games to obtain the rights to open the stalls trading to increase inventories while around the venues. MSMEs in Jakarta used it to replace or purchase new equipment, or for the own- Most MSMEs did not close their main er’s personal needs. store while trading at the Asian Games.
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 8 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 9 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
F. Conclusions and Recommendations
Most of international and national re- sales during the event, of which the profits spondents considered the 2018 Asian were used to increase inventories in the Games as a well-organized event, as short-term or to invest in equipment. measured in various aspects including Hence, it can be concluded that Indonesia sport venues, accommodation and food, is ready and should bid to host other transportation arrangements, telecommu- international scale sports event in the nications and internet access, information future, including multiple-event and single- availability, security and match schedules. event. Nevertheless, to maximize the The 2018 Asian Games had economic economic stimuli of hosting a national or impact on Indonesian economy in the international sports event, there are short term, stimulated by the spending of several lessons learned from 2018 Asian athletes, country officials, journalists, Games. spectators and committees, both domestic First, it is necessary to arrange match and foreign alike during the event. schedules that are more accommodating In the long-term, the 2018 Asian Games for participants to carry out activities has the potential positive economic im- outside the matches. Second, there pact on Indonesia’s tourism sector. The should be more information on nearby event enhances Indonesia’s positive im- shopping centers and short tour package age globally. Further, most of international deals near the match venues provided to respondents expressed their desire to re- participants and visitors. turn to Indonesia for travelling purposes, Third, should Indonesia host future sports bringing families or colleagues with them events, better efforts are needed to on a long-stay plan. Most of them were provide more reliable telecommunications also willing to give positive referrals to and internet access, better traffic Indonesia as a tourist destination for their management and transportation facilities, respective colleagues and families. availability and quality of information In the long-term, the 2018 Asian Games related to the competition and the also has the potential to generate positive attractions or the region where the match impact on sport-tourism activities in take place. Indonesia. It increases the opportunity for Fourth, there is a need for better Indonesia to become a host of future arrangement in the involvement of the international sports events, both on single MSMEs. Broader public notification is or multiple-event scales. There also needed to give equal opportunities for remains the possibility of making every MSMEs located in the hosting cities Indonesia a training location for sports to participate. MSMEs need to occupy team from various countries and sports. more strategic location for their stalls. The economic stimuli generated by the MSMEs need better deals regarding the Asian Games was also captured in the charged fees or more profitable profit- survey to MSMEs and INASGOC’s official sharing schemes. MSMEs also need partners. MSMEs who ran the stalls near easier access to venues for their the match venues enjoyed additional employees and supplies during the event.
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 10 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
Fifth, there needs to be a better infor- Asian Festival held at Gelora Bung Karno mation system regarding ticketing and area which ran parallel to the Asian match scheduling. Besides the sports Games. The enthusiasm and spending of matches, the organizing committee can the locals can magnify the economic also hold other events that escalate pub- stimuli of a sports event. lic’s excitement of the event, such as the
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 11 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org
2018 Jakarta – Palembang Asian Games Research Brief Economic Impact Survey No. 1 – July 2019
Sixth, it is necessary to improve the Finally, similar studies need to be production planning and distribution of the conducted on various sports events in the event’s official merchandise. The demand future, with which the economic impact of for the 2018 Asian Games’ official sports event can be analysed and merchandises was very high as the maximized. In the future, larger-scale merchandise served as a memorabilia of studies will be able to better capture such one-time events, while the produc- spending variations of respondents across tion and distribution was less prepared to sports, country of origin, various types of fully maximize the opportunity. OCA vendors, as well as referee and match officials.
Editorial team: Mohamad D. Revindo Devina Anindita Uka Wikarya Devianto Chairina H. Siregar Nurindah W. Hastuti Ainul Huda Wahyu Pramono Hamdan Bintara Srie Mustika Rahayu Moslem Afrizal Andi Ronaldo Marbun
Acknowledgement: This study is a part of the project on the Economic Impact Analysis of Asian Games 2018 undertaken by the Ministry of National Development Planning/Bappenas, the Republic of Indonesia, in 2018. We thank Bappenas team, especially Amalia Adininggar Widyasanti, Mochammad Firman Hidayat, Bertha Fania Maula, Yusuf Faisal Martak, Nur Siti Annazah and Dinda Rahmania. We thank the survey team for their contribution in data processing and data collection. We also thank Australia’s Department of Foreign Affairs and Trade that made the survey possible.
LPEM FEB UI Phone +62-21-3143177, Fax. +62 - 21 - 31934310 12 Jl. Salemba Raya No. 4, Jakarta 10430, Indonesia Email: [email protected] Website: www.lpem.org