Industries supporting the meetings, incentives, conferences and exhibitions (MICE) sector are bracing for possible losses in light of the government’s decision to reduce lavish state spending and dampen the extravagance of public officials.

The hotel industry, for instance, must take swift measures to adopt or risk losing a significant client base, an industry representative says.

Vivi Herlambang, the Sahid Hotel Group’s director of sales, marketing and business development, estimated that hotel occupancies by public officials would shrink from 30 to around 15 to 20 percent of all market segments, depending on market strategy and location.

“This policy will impact negatively on the industry, but we’ve been asking around in places like Manado or Papua and finding that people still need to conduct lots of meetings.”

Vivi believed that hotels operating in higher-class markets were more prone to losing business, but was optimistic that industry players could adapt to the conditions. She suggested that hotel operators either adjust their target market or focus on the industry’s secondary strengths, such as food catering.

At the request of President Joko “Jokowi” Widodo, Administrative and Bureaucratic Reform Minister Yuddy Chrisnandi recently issued three circulars banning government officials from lavish lifestyles and instructing them to make numerous savings.

One of these circulars, came into effect on Monday, ordering all government bodies to use their own meeting rooms and banned them from renting meeting halls or other venues, including resorts and villas, except for meetings that required many participants.

Jokowi has targeted to slash the 2015 budget for the meetings and travelings of government officials by Rp 16 trillion (US$1.31 billion) to Rp 25 trillion. –The Jakarta Post