Conclusion and Recommendations
This paper has dealt with three key steps of implementing smoking legislation in Indonesia’s hospitality industry. Indonesia has one of the world’s largest smoking population; its tobacco industry is also one of the world’s largest cigarette adverses. Indeed, some of these statistics led the implementation of smoking laws under Present Megawati in 2003 (EuroMonitor, 2008). Though smoking was banned in many public areas, the hospitality industry was braced with tough challenges considering that it had to adjust its operations in order to provide smoke-free areas for non-smokers and proper environment for those who smoked. With was a challenge that many in industrial players had not anticipated and were thus faced with a sudden change of laws. This last section will reiterated on the various important points in other sections as well as provide some recommendations on how the industry can cope with the changes, though it has been half a decade since the law was enacted.
Before the law was enacted in 2003, Indonesia had been dragging its feet despited repetitive calls by individuals, citizen groups and health officials. Indeed, there had been close to no discussions in the public arena regarding the smoking ban. It had been business as usual until the government decided that something had to be done. First, the state had been fed up with the increased cost of health budget that was arising from smoking related health issues. Secondly, authorities in various local authorities sin Indonesia were getting complaints from residents regarding the erosion of proper relaxing environment in the hospitality industry. Both of these concerns led to the introduction of smoking laws. Indonesia thus joined other countries had similar laws. The hospitality industry had tried to do some lobbying regarding the harsh punishments that had to be paid in case of failed compliant. Just like in other countries, the tobacco industry had been lobbying seriously, claiming that their business would be most hurt by the law.
In addition, industry representatives had explained that thousands of jobs could be lost directly or indirectly. The government was also reminded that it stood to loose millions, because smoking restrictions would have reduced number of smokers and consequently tax collected. Indeed, this was a serious gamble that the Indonesian government, as well as others with similar laws are prepared to undertake. The courage to enact the laws despite the big costs on taxes arises from long runs savings that are made in health budgets. Further, the decrease in smoking habits in societies has a positive impact of brining future generations that are less likely to engage ins such a costly and health damaging behavior. Indeed, this is what governments that are yet to implement such laws should consider. Bottom-line for every local or national governments is that the short run tax income that fades with implementation of smoking laws are insignificant when the long run health benefits and budgets are considered.
Before implementation, it was feared that revenues of the hospitality industry, especially the small establishments would decline significantly. The repercussion of such occurrence would include significant increase in unemployment among the low skilled individuals. This included the people that were directly employed in these establishments and those working with small scale suppliers to the hospitality industry. As a result, industry representatives had been lobbying the government to reduce the rate at which the laws were being enacted. The industry wanted the government to implement the laws on peace-meal basis. However, the state could hear non of that and therefore embarked on implementing the policy forthwith. The industry players were therefore bombarded with several requirements that they had to comply with on a short time notice. Failure to comply was to attract a heavy fine from the authorities. Unfortunately, neither trade organisations nor individuals themselves that were well prepared to deal with the consequences. In addition, smokers themselves were never provided with long enough notice to prepare themselves for what was to befall on them. This paper has thus placed emphasis on what the affected stakeholders were going through in the process of their day to day activities. The paper has also illustrate effects of the laws on the government in terms of revenue (reduction) and efficiency in implementation.
Data for this study was collected from various stakeholders affected by the law, they include, businesspeople in the hospitality industry, employees, smokers, employers, customers in hospitality sector (specifically cafes) and government officials. The purpose of including the lager stakeholder group was to fully understand impact of the law in the Indonesian economy. Further, undertaking such wide step was to help in the development of recommendations contained in this section. Questionares were chosen because they could provide the much needed immediate feedback. They also made it possible to ask for clarifications from the respondents. The answers collected were later analyzed and the results consequently detailed on this report. Answers from respondents indicated that people members of the public were supportive of the smoking laws, but as long as cafes they frequently visited were compliant. For instance, 27.6 of respondents that frequented Starbucks said the they enjoyed patronizing these specific cafes because they offered smoking friendly zones. The respondents further claimed that they enjoyed visiting Starbucks because they could have their cigarettes and coffee at the same time.
The study further indicates that many cafes were supportive of the smoking laws, because they understood importance of the legislation in the country, and the repercussion of failing to abide. For instance, Hard Rock café had been remodeling outlets in order to meet the needs of the two distinct groups of customers: smokers and non-smokers. This chain was therefore interested in increasing revenue, despite the threat on its business by new law. Indeed, this has been the trend followed by many café chains in the country. Fact that many of these outlets were interested in following the law meant that they did not have hard time dealing with compliance. In addition, the government was less laborious work of ensuring that the law was being followed. The self managing industry such as th Indonesian one should be borrowed and applied in countries or regions wishing to enact smoking laws. This rises from the many benefits that accrue. First, government costs of ensuring compliance will decline, industry players get saved from the agony of being visited by government authorities at all times, and the general public benefit from visiting cafés or hospitality facilities that cater for their diverse needs.
Immediately after enactment of smoking laws in Indonesia, it slowly appeared that most of the cafés close to working areas had special sections for smokers. The non-smokers sections was further fitted with helped remove cigarette smell and smoke. This characteristic was meant to meet the needs of employees in nearby offices or factories. On the other hand, cafés that were located in neighborhoods were more restrictive when it came to smoking. Indeed, few provided specials smoking areas, meaning that smokers had to go outside or wait until their meals or drinks were finished. This disparity could have risen for two reasons. First would be budgetary constraints that limited the ability of neighborhood cafés to fits the required equipment. The second was most likely be the fewer number of visitors in these facilities. The study has further found that smokers were not willing to frequent cafés that did not provide proper environment. In this regard, respective facilities so it fit to have specially made areas that smokers could have their cigarettes coffee. The cafés close to working areas were requested by nearby employers to embark on dealing providing the necessary environment for employees. Those that were really close to office buildings saved respective employers from the agony of developing the much expansive smoking facilities.
The study further illustrated that non smokers were very much satisfied with the separation of smoking and nonsmoking areas in respective cafés. Considering that even smokers had been satisfied with the arrangement, it then occurs that needs of various stakeholders had been met successfully. In this regard, the cafés were slowly succeeding in outliving a challenge that was thought to have the ability to bringing them down. Respective entrepreneurs were therefore quick to develop coping measures that resulted to their businesses developing long term solutions, as well as winning wide range of customers. The separation between smoking and non smoking areas, or the construction of smoking parlors in respective areas resulted to remodeling of most of the cafés. Especially the ones that were located near offices. This provided owners with opportunities to provide new styles and decorations, both of which improved consumer experience. In the end, consumers hardly understood that the remodeling was caused by the new laws.
Respondents in the study further exemplified an understanding of the smoking laws, and their importance in the society. Smokers did not show annoyance with being separated from rest of patrons. In fact, they showed appreciation for café owners’ willingness to help in the process of helping them enjoy their cigarettes and coffee in improved environments. Equally, non-smokers appreciated fact that players in the hospitality industry were willing to provide them with the much needed environment without having to smell the cigarettes smoke. They further appreciated enactment of the law by the government of Indonesia. Among the café chains that had gone to the extra step of improving patron experience was Planet Hollywood. Indeed, the chain had completely remodeled its outlets in the attempt of keeping the old customers from both sides, as well as attracting new ones. Just like several other chains, Planet Hollywood was determined to create an opportunity from crisis that had proved hard to overcome in the first place. Indonesian cafés had a clear understanding of their line of business and were determined to keep it that way. In this regard, the emphasized on improving their environment in order to ensure that customers that would reduce their frequency of visiting ended up increasing. This was a tough trick for café to overcome in the short-run, but they eventually succeeded.
Despite the success in outliving the challenge, these cafés reported heavy short run costs that had threatened their existence. Fact that they were given a very short time to comply led to tough times in many entrepreneurs’ minds. Cafés that were willing to provide smoking environment were faced with the cost of installing separate air conditioners for each side, ventilation, and air purifiers. Given that this was the first time for the Indonesian industry meant that most of the equipment had to be sourced from outside, let alone being new. Further, sudden rise in demand for these products resulted to sharp rise in prices. Poor preparation meant that café dis not have much available cash for that purpose and this necessitated borrowing that increases cost of doing business.
The heavy fines that the government of Indonesia had placed on violators of the law meant that the café had to install the needed equipment forthwith or face closure. However, the government was not interested in collecting revenue from the café. Contrary, the heavy fines were directed at ensuring that the the industry players did abide by the law. In this regard, respective companies had to ensure following into government guidelines. Some mega establishments such as Stabucks had easy time installing the needed equipment and remodeling their stores because of the colossal amounts of money they had. In addition, these companies had already installed the equipments in their facilities way before the government enacted the law. This meant that they had just few adjustments to make in respective premises. However, small establishments in the country were faced with the challenge of starting afresh. Some of them did not have enough time to get the needed financing, and therefore had to close. However, the local establishments are slowly coming back to business, and the Indonesians are now living smoke free lives at homes, at work and during leisure. The Bill that had been seen as an industry killer had been turned into an opportunity by the country entrepreneurs.
EuroMonitor. (2008). Smoking tobacco in Indonesia. Retrieved July 02, 2008, from http://www.euromonitor.com/Smoking_Tobacco_in_Indonesia