Jakarta, IO – The Mandalika Circuit in Lombok, West Nusa Tenggara, is one of the Government’s go-to source of income as a tourist attraction. It is meant to especially attract foreign tourists through international sports events, such as MotoGP 2023 and World Superbike (“WSBK”).
These glamorous events actually left shabby losses for Indonesia. In organizing the WBSK, RI sustained Rp 100 billion in losses, and organizing MotoGP caused a loss of Rp 50 billion. Even worse, this failure caused InJourney, the State-owned tourism holding company in charge of managing the Mandalika, to sustain a debt of Rp 4.6 billion, per CNN Indonesia, Tuesday (20/6).
InJourney President Director Dony Oskaria complained about the debt in the joint hearing with Commission IV of the House of Representatives: “We have a short-term credit obligation of Rp 1.2 trillion and long-term credit obligation of Rp 3.4 trillion. To be honest, I am unable to settle the short term liabilities, which include payment for the construction of the Grandstand and VIP Village, as well as the working capital required to hold the event,” he declared grimly.
Conversely, State-Owned Enterprise observer Herry Gunawan notes that the tourism business, especially host venues like circuits, are based on “events”. In other words, they will only earn income and profit based on the number and success of events they held.
“Investments for constructing the Mandalika is huge, and it will only break even and become profitable in the long term. Therefore, managers must have extremely huge resources of money and patience from the start. You cannot be a crybaby in this sort of ventures-you need to have endurance, innovation, and solid medium-to-long-term strategies. It’s very common to sustain initial losses in the business. What matters is that you have calculated beforehand,” Herry declared. “InJourney may consider other sources of income to cover their long-term debts. For example, they may opt to collaborate with Regional Government.”
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Governor of West Nusa Tenggara Zulkieflimansyah declared that the local Government is ready to take over if InJourney is finally unable to manage the circuit with its current debt. “If InJourney cannot cut it, they should just hand over the management of Mandalika Circuit to us, the Government of West Nusa Tenggara,” he said. “Sports events are not always profitable on first iterations – sponsors tend to become limited, and organizers are quite likely to suffer losses at first. However, we will continue to push the management and promotion to ensure that Mandalika Circuit can run huge, profitable events in the future.” (un)