Strategic Development Plan for MICE Destinations to Increase

Comparative Advantage using the Cooper Method

Nursiah Fitri

Department of Bussiness Management, Politeknik Negeri Medan, Jl. Almamater No.1 Kampus USU, Medan, Indonesia

Keywords: Stratregy, Destination, MICE.

Abstract: The purpose of this research is to understand the conditions of attributes of MICE destinations in Medan

City and strategic development plan for MICE destinations to increase comparative advantage using the

Cooper method approach in Medan City. This research is conducted using quantitative survey method.

Questionnaire and interview are carried out as the data collecting method. The population of this research

are the government stakeholders, which are represented by Medan City Tourism Office, and MICE industry

entrepreneurs. The sampling technique is conducted by choosing the appropriate respondents which fit the

sample criteria. Gap analysis is used as the data analysis method. The outcome of this research shows that

the perceptions of the government stakeholders regarding the attribute of MICE are higher compared to

those of the MICE industry entrepreneurs. Only the attribute of amenities has low gap, with the value of -

0.1. The attribute of attraction possesses the highest gap value. Therefore, it is important for the government

to increase the attribute of attraction which includes everything that can be shown to the tourists whether it

is culture, natural richesse, or man-made attractions of Medan City to increase the level of comparative

advantage of Medan City as a tourism destination.

1 INTRODUCTION

Nowadays, government continues to try developing

the MICE industry. MICE can be defined as all

activities revolving around Meeting, Incentives,

Conference and Exhibition. Medan City has the

potential to be one of the MICE destinations in

Indonesia (Siregar, 2017). Sitepu (2012) stated that

there are three factors which affect Medan City as

MICE destination which are participation from

government, bussiness and educational institutions.

However, Medan City has not been able to

compete with other cities as a MICE destination.

Significant decrease, with the value of 24 %, in the

number of tourists visiting Medan City. Tourist

arrival drops from 28.642 visits at the end of 2017 to

21.769 visits in Desember 2018. Upon observing,

the average of monthly occupancy of 5-star hotels in

December 2018 was 43.96% which decreased

compared to previous month with average

occupancy of 50.54%. The length of stay of both

domestic and international tourists in hotels averages

at 1.40 days. There was a decrease of 0.56 points of

length of stay in December 2018, compared to the

one of December 2017 (BPS Sumut, 2018). This

decrease shows that Medan City has not been able to

compete as MICE destination with other cities in

Indonesia, not to mention in the international scale.

Therefore, it is important to analyse the conditions

of attributes of MICE destinations in Medan City,

followed by analysis of strategic development plan

for MICE destinations to increase comparative

advantage using the Cooper method approach.

To increase the comparative advantage of Medan

City as a MICE destination, problems are

formulated, which are:

1) How are the conditions of attributes of MICE

destinations in Medan City?

2) How to develop strategic development plan for

MICE destinations to increase comparative

advantage using the Cooper method approach?

2 LITERATURE REVIEW

2.1 MICE Destination

According to Pendit (in Indrajaya, 2015), MICE

activities can be categorized into tourism activities

Fitri, N.

Strategic Development Plan for MICE Destinations to Increase Comparative Advantage using the Cooper Method.

DOI: 10.5220/0010019003230328

In Proceedings of the 3rd International Conference on Social and Political Development (ICOSOP 3 2019) - Social Engineering Governance for the People, Technology and Infrastructure in

Revolution Industry 4.0, pages 323-328

ISBN: 978-989-758-472-5

323

which brings the visitors to attend Meeting,

conferences, incentives, and exhibitions. Kesrul (in

Indrajaya, 2015) said that Meeting is an event where

a group of people congregate to spread information

and publication, to develop human resources, and to

create an enviroment where staffs and commitees

can work together. Noor (2007) defines incentives in

MICE activities as a mean to recognize employers’

acheivement in the form of interesting travel. This

can lead to an increase in performance. Conference

can be defined as an activity when people gather to

discuss and exchange ideas in regards of particular

mutual problem. In practice, the term Meeting is

inter-changeable with the term Conference.

Meanwhile, the term Exhibition defines an activity

which serves a purpose to spread information and to

promote goods and services (Pendit, 2004).

In all simplicity, MICE Destination can be

defined as destinations in which MICE activities are

being held. The development of the destinations can

be seen as a management system. This system must

be able to respond to the problems and manage the

complexity of the problems to fulfil the needs of

tourists, tourism industries, and domestic tourists.

(Howie in Presenza, 2010).

Fitri (2019a) stated that the marketing mix,

which are product, price, place and promotion,

entirely and partially affect the decision to use a

MICE destination. Fitri (2019b) also stated that there

are three factors which affect the decision making of

event organizers in term of usage of exhibition

venues. These factors are cost, comfort, and

capability.

In addition to the statement above, Cooper at all

in Sunaryo (2013) described that a MICE destination

must provide:

1. Tourism attractions which includes everything

that can be shown. These attractions can be

culture, natural richesse, or man-made

attractions.

2. Accessbilities, which includes everything related

to local transportations, land transportations, and

air transportations which connect people to the

destinations.

3. Amenities, which can be defined as additional

and supporting facilities, such as hotels and

resorts, restaurants, gifts and souvenirs, and other

supporting facilities.

4. Ancillary Services, which can be described as all

service facilities needed during the stay in which

the tourists resides including hospitals, banks,

post office, and telecommunications means.

2.2 Comparative Advantage of

Destination

Comparative advantage of destination can be

defined as the ability of a destination to provide

better various goods and services when compared to

other destinations (Cvelbar et al. in Ardiansyah,

2018).

Comparative advantage of destination can also

be described the power of a destination to gain

advantage to compete with other destinations.

According Philip Kotler and Gary Armstrong

(2003), comparative advantage in competition can

be defined as the superiority in term of the ability to

provide goods and services with better quality and

lower price. Other definition also describes

advantage in competition as the ability of a company

to behave better than other companies in the same

industrial environment. (Kuncoro, 2006).

Comparative advantage of destination is closely

related to the ability of the tourism destination to

provide better goods and services compared to other

destinations that serves as the mean to provide a

better tourism experience for the tourists (Komšić

and Dorčić, 2016). Aquilino and Wise (2016) define

comparative advantage of destination as the ability

of the tourism destination to create additional

integrated values which can sustain the acquired

resources while maintaining the position in the

market along with other competitors. Cooper et. al.

in Pangestuti (2018) said that to analyse existing

conditions of a tourism destination can be done with

4 (four) ‘A’, which are Attractions, Accessibility,

Amenities, Ancillary service. In this research,

Cooper theory is used to evaluate the strategic plan

of Medan City as a MICE destination.

2.3 Strategic Development Plan of

MICE Destination

Rangkuti (2013) said that strategy is the act to plan

detailed and clear activities by an organisation so

that the initial goals can be achieved. Therefore, it

can be concluded that strategy is an activity that

must be carried out to achieve the initial goals which

are determined at the beginning of the activity.

Hamel and Prahaland in (Rangkuti, 2013) said

that a well-developed strategy must be able to be

improved from time to time to be able to sustain and

maintain the activity and to be able to be focus

towards the future goals.

Strategic development plan of MICE destination

can be defined as a plan carried out by stakeholders

so that the MICE destination can be marketed

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towards the public using a long-term plan and

various tactics so that the number of tourists visiting

the MICE destination can be improved.

To create a competitive MICE destination,

Indonesian government issued a Regulation of

Ministry of Tourism No. 5 year 2017 which

describes the guidelines for a MICE destination.

This regulation is used as guidelines to help MICE

destinations to increase their comparative advantage.

There are four criteria to measure the power of a

destination, described by indicators of power of

destinations. These four criteria are Attractions,

Accessibility, Amenities, Ancillary service,

including human resources services and MICE

stakeholders. This regulation is based on the theory

presented by Cooper

at all in Pangestuti (2018).

3 EXPERIMENTAL METHOD

This research uses survey method to evaluate things

happening at the location of the research. This

research is descriptive with quantitative approach.

The method used in this research is research and

development method with hope in mind to create a

strategic development plan for MICE destination in

Medan City to improve the comparative advantage.

The Cooper theory is used in developing this

research, combined with the criteria of MICE

destination according to the Ministry of Tourism of

Indonesia. The chosen location for this research is

Medan City.

The population of this research are the

government stakeholders, which are represented by

Medan City Tourism Office, and MICE industry

entrepreneurs, which are represented by professional

exhibition and conference organizers.

A hundred (100) samples were taken from the

population, referring to Roscoe in Sugiono (2012, p.

91) which stated that the appropriate size of the

sample is between 30 to 500 samples. Samples are

determined based on quotes and chosen from each

population which fit the criteria. Those who are

chosen must have been involved in MICE activity.

Using the Cooper method approach, the

conditions of attributes of MICE destination were

evaluated. These attributes are Attractions,

Accessibilities, Amenities, and Ancillery service.

From these attributes, an indicator was created based

on the priority scale from 1 to 5 in a questionnaire

form. The gathered data is analyzed using GAP

technique analysis which are used to understand the

disparity of perception between the MICE

stakeholders and MICE entrepreneurs. The results of

GAP analysis are then evaluated to create a strategic

development plan for MICE destination in Medan

City to increase the comparative advantage.

Matolla in Puspandika (2007) set criteria used to

determine the level of Gap. The following are the

criteria: a) Low Level Gap, if G

< 0,35, b) Medium

Level Gap, if 0,35 ≤ G

≤ 0,5, c) High Level Gap, if

> 0,5. The indicators used in this research can be

found in Table 1.

Table 1: MICE destination criteria.

No. Cooper Theory Indicators

Accessibilities

Everything related to transportations to connect

people to the destination.

1. Marine, air, and land Transportation.

2. Road facilities and infrastructure.

3. Customs, immigration and quarantine.

4. Airport connectivity.

Attractions

Everything that can be shown to tourist, including

culture, nature, and man-made attractions.

1. Interesting Attractions and Locations,

2. Shopping centres.

3. Art show

4. Nature,

5. City events

Amenities

Supporting facilities such as hotels, meeting room,

restaurants, souvenirs, and other supporting

facilities.

1. Hotels

2. Meeting rooms

3. Exhibition galleries

4. Culinary/Restaurants

Ancilery Service

All services needed during the stay in a MICE

destination.

1. Support from association of industry/profession

2. Human resources of Professional Exhibition

Organizers and Professional Conference Organizers

3. The presence of MICE suppliers

4. Support in marketing the MICE Destination

5. Security

Strategic Development Plan for MICE Destinations to Increase Comparative Advantage using the Cooper Method

325

4 RESULTS AND OUTCOMES

4.1 Stakeholders’ Perception in Medan

City

Table 2 shows the results of the questionnaire of

stakeholders’ perception represented by Tourism

Ministry Office of Medan City and North Sumatera.

Table 2: Stakeholders’ perceptions of conditions of

attributes of MICE destination in Medan City

No. Attributes Government Categories

1 Accessibilities 4.1 Very Good

2 Ancillary

Service

3.9 Good

3 Amenities 4.0 Very Good

4 Attractions 3.6 Good

Average 3.9 Good

Respondents representing government perceive

accessibilities as the best attributes, followed by

amenities, Ancillary Service. Attractions attributes

placed as the last. The average value of perception is

3.9. This value falls into Good categories.

4.2 MICE Entrepreneurs’ Perception

in Medan City

Table 3 shows the results of the questionnaire of

entrepreneurs’ perception represented by Tourism

Ministry Office of Medan City and North Sumatera

Table 3: Entrepreneurs’ perceptions of conditions of

attributes of MICE destination in Medan City.

No. Attributes MICE

Entrepreneurs

Categories

1 Accessibilities 3.4

Good

2 Ancillary

Service

2.8

Quite

Good

3 Amenities 4.1

Very

Good

4 Attractions 3.0

Good

Average 3.3 Good

Respondents representing the entrepreneurs

perceive Amenities as the best attributes; followed

by Accessibilities, Attraction and Ancillary Service

in the second, third and last position respectively.

The average value of perception is 3.3. This value

falls into Good categories.

Figure 1: Perception of government stakeholders and

MICE entrepreneurs in Medan City

4.3 Gap Analysis of Perception of

MICE Destination Attributes of

Government Stakeholders and

MICE Entrepreneurs in Medan

City

Figure 2 shows the gap of perception between

government stakeholders and MICE entrepreneurs in

Medan City regarding the conditions of attributes of

MICE destination. The perception of government

stakeholders represents the management side of

MICE destination, meanwhile the one of MICE

entrepreneurs represents the consumers of MICE

destination.

Figure 2: Gap of perception between government

stakeholders and MICE entrepreneurs in Medan City

The chart above demonstrates the gap of

perception between government stakeholders and

MICE entrepreneurs. The Amenities attribute has the

lowest gap, with the value of -0,1. This means that

there is almost no difference in perception between

the two groups regarding the Amenities attributes.

Accessibilities

Ancillary…

Amenities

Attractions

PerceptionofMICE

Attributes

Entrepereneurs Government

0.7

1.1

‐0.1

1.6

‐0.5

0.5

1.5

GapofPerceptionbetweenGovernment

StakeholdersandMICE Entrepreneurs

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Both groups are confident that supporting facilities

such as hotels, venues, restaurants, exhibition

galleries, and other supporting facilities already have

the potential to develop MICE activities in Medan

City. However, there is still room for improvement.

The Accessibilities attributes has the gap value

of 0.7, which is a high-level gap. This means that

there is a significant difference in perception

between the two groups regarding the Accessibilities

attributes. Therefore, government must put an effort

to improve infrastructures which connect tourists to

the destination, such as local, marine, and air

transportations. This also includes better service in

customs, immigration, quarantine, and airport

connectivity.

The attributes of Ancilary service have the gap

value of 1.1. This means that the MICE

entrepreneurs perceive that there is a lack of

participation from the associations of industry and

lack of human resources competences in Medan

City. There is little to no effort to market the city as

MICE destination and to provide adequate security.

The attributes of Attraction have the highest gap

value, with the value of 1.6. This can be interpreted

that MICE entrepreneurs perceive that all of the

attractions shown in Medan City, including culture,

nature and man-made attractions, are far from

adequate.

Based on the gap analysis above, the proposed

strategic development plan for MICE destination

based on Cooper theory can be prioritized as the

following:

1. Attractions

2. Ancillary Service

3. Accessibilities

4. Amenities

5 CONCLUSIONS

1. Government stakeholders’ perception towards

attributes of MICE destinations in Medan City

has the value of 3.9, which is higher compared to

the one of MICE entrepreneurs, with the value of

3.3. The gap of perception has the value of 0.6

which can be categorized as high-level gap.

2. The attributes of Amenities have the lowest gap,

with the value of -0.1. There is no difference in

perception between the government stakeholders

and MICE entrepreneurs towards attributes of

amenities.

3. The attributes of Attractions have the highest

gap, with the value of 1.6.

6 SUGGESTION

Based on the gap analysis, it is found that the

average value of Government stakeholders’

perception towards attributes of MICE destinations

in Medan City is higher than the one of MICE

entrepreneurs. Therefore, it is important for the

government to improve the conditions of attributes

of Attractions, Ancillary service, Accessibilities and

Amenities to increase the comparative advantage of

Medan City as MICE destination. This can be done

by implementing regional tourism regulations which

will benefits Medan City as a MICE destination.

From the gap analysis, it is also found that the

attributes of Attractions have the highest gap.

Therefore, it is crucial to make these attributes as

number one priority while developing the MICE

strategic development plan in Medan City. The

improvement of attributes of Attractions can be done

by incorporating technology in various attractions to

increase the interests of tourists.

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