Sun, 18 Oct 2009
From: Asia Times
By Muhammad Cohen
UBUD, Bali - The island's ability to stand out from the crowd has for decades made Bali an acclaimed tourist destination. Its distinctive landscape of terraced rice fields on volcanic slopes leading to white sand beaches and renowned surf, epitomizes a tropical paradise. A Hindu environment, seen in the island's more than 1,000 colorful temples, adds cultural flair.

These days, Bali tourism has an added distinction: immunity from the global economic crisis. Bali, an island of 5,632 square kilometers (2,175 square miles) at the centre of the Indonesian archipelago, is heading for its third consecutive year of record foreign tourist arrivals, despite the crisis and terrorist hotel bombings in Jakarta, the national capital, in July.

To be sure, the global economic crisis has touched certain parts of Bali's US$2 billion-plus tourism industry, but overall the island is booming. Statistics through August project 2.22 million tourist arrivals, 12.8% above last year's record of 1.97 million. That's 52.2% above arrival numbers for 2004, a record-setting year between the Bali terrorist bombings of 2002 and 2005, and nearly double arrivals in 1998.

"This is our best year ever," said Brian Aldinger, who opened Naughty Nuri's restaurant in Bali's artsy hill town of Ubud with his wife Nuri in 1995. "We're packed every night. Our friends in the hotel business say they're full - in October!" Traditionally, Bali's busy months have centered on July and August along with the Christmas-New Year period.

Veteran Bali public relations director Kora Amalwati, working with the season-ending WTA women's tennis tour's Commonwealth Bank Tournament of Champions, which will be held on the island next month, lists five factors in Bali's resistance to the current global economic woes: the island's vast variety of tourism products; easy, cheap access via budget airlines; tourism industry stakeholders promoting Bali to new markets such as Russia, India, the Middle East and China; and political problems at other Asia tourist destinations.

While Bali is powering ahead, its visitor profile is changing, with some long-term trends accelerating due to the global economic situation. Fewer tourists are coming from recession-hit Western countries, magnifying the growth in markets closer to home. "Europe is a little down," AsiaBeds travel agency executive Ida Gusti Agung Mahadewi reports, "but the Asia-Pacific market is making up for that: Australia, of course, but also Southeast Asia."
Neighboring Australia has displaced traditional leader Japan as Bali's leading source of tourists, with Australian arrivals averaging a monthly 34,000 this year.

Australia has suffered less from the global recession than many other industrialized countries and many of its Asian neighbors, thanks to its resource-based exports to fuel-hungry China. Last week, the Reserve Bank of Australia raised interest rates to stave off inflation as the economy regains momentum. Arrivals from Japan, reportedly now emerging from its worst recession since the end of World War II, are down 8% from a year ago, and nearly 10% from their peak in 2000.

Mainland China sent 1,898 visitors to Bali in 2001, the first year enough Chinese visitors showed up for authorities to tally their numbers. This year, China ranks third in arrivals, averaging nearly 17,000 per month. Former number three spot occupants Taiwan and South Korea have been hard hit by the recession, while China has countered the downturn through a massive stimulus package.
Although Chinese authorities probably didn't intend their stimulus funds to wind up in overseas vacation destinations, staving off recession is helping to maintain prosperous lifestyles, which increasingly include travel abroad. Macau, the gambling enclave that relies on Chinese tourists, has seen a rebound as China has primed the economic pump.

Malaysia, with 8,292 arrivals in Bali in 1999, is sending an average 11,732 visitors per month this year, putting it fourth on the arrivals list. Tourists from the entire Association of Southeast Asian Nations (ASEAN) group accounted for 3.5% of Bali arrivals in 2000 - the grouping wasn't even counted in 1999 - averaging a mere 4,165 monthly. In 2009, ASEAN provides 10.5% of Bali's arrivals, approaching 20,000 per month. Pioneer budget airline Air Asia flies direct to Bali from ASEAN hubs Kuala Lumpur, Singapore and Bangkok, with one way fares starting as low as US$60.

As reported by website, Bank Indonesia projects Bali's economic growth will slow because Asian visitors spend less per day and leave sooner than longer-haul visitors from Europe. But this month's anniversaries of the 2002 and 2005 Bali bombings, which combined killed more than 220 people, the majority of them foreign tourists, and sliced arrivals to 993,029 in 2003, serve as important reminders that the situation has been far worse.

Home cooking
Direct arrivals reflect only part of Bali's success story. Tourists to Bali can also arrive through other Indonesian cities, most notably the capital, Jakarta, and not all tourists to Bali are foreigners.

"People underestimate domestic tourists," Aldinger notes. "They're not drinking martinis, but they eat and they turn the place over."

Since the 2002 bombing, the Indonesian government has encouraged domestic travel to Bali, rearranging national holidays for more long weekends. That's also coincided with strong economic growth in Indonesia, averaging 5.4% over the past seven years. Indonesia's growth in the first half of this year slowed to 4.2%, still quite respectable in a global recession that has pummeled its more export-oriented neighbors.

The recession has crept into certain aspects of Bali tourism. "In terms of business, it's been really good," restaurateur and Ubud Writers and Readers Festival founder Janet De Neefe said. "In terms of the festival, it hasn't been as positive."

The just-concluded sixth annual festival featured Nigerian Nobel laureate playwright Wole Soyinka, New Zealand's Lloyd Jones, whose Mister Pip was short-listed for the 2007 Booker Prize, and India's Vikas Swarup, whose novel Q&A became the film Slumdog Millionaire, and it seemed as well attended as in past years. The festival also made its first foray beyond Bali with a reading and performance by 15 Indonesian and international writers at the Borobudur temple in Yogyakarta, Java.

De Neefe, an Australian who started the festival to help lift spirits and tourism numbers after the first Bali bombings, nevertheless laments, "You wonder why you do it when people and big business don't support it." Before this year's festival, an appeal went out for donations of frequent flyer miles to the festival to provide transport for authors.

Corporate cutbacks have also hit the business sector collectively known as MICE - meetings, incentives, conventions and exhibitions - a lucrative niche market with both domestic and international companies. "Despite the strong continued interest in Bali as a leisure destination, perhaps even an increased interest in these economic times, we have felt the impact of a dramatic decline in enquiries and delivery opportunities here over the past year," Tirian International director Gaia Grant reports.

The company specializes in programs for corporate meetings and conferences, including Balinese team building sessions. "While in busy times we may be dealing with up to several corporate client groups a month, for this second half of 2009 we have no clients at all booked to come to Bali."

Author of A Patch of Paradise, a book about relocating from Sydney to Bali with her husband and children, Grant believes that the general economic malaise and Bali particulars has factored in the MICE retreat. "Many companies are simply not spending on these perceived discretionary extras," Grant said. "So the conferences are simply not going ahead in any destination.

"Where a modest budget has been allocated to meetings and conferences, it is more likely to go towards a simple domestic destination rather than a perceived-to-be-exotic international destination like Bali."

Grant also noted the lingering security issues associated with Bali.

"With heavy [government] travel warnings still in place, corporate companies are not willing and often not able to take the risk. Many have higher level restrictions in place prohibiting them from holding meetings in a country with such travel restrictions. For others, the security issues have been enough to deter individuals, and as soon as there are a few concerned individuals, there is an issue for the group as a whole,” she said.

"Such a trend has been so unfortunate, as Bali always has been and continues to be an amazing destination."

Former broadcast news producer Muhammad Cohen told America's story to the world as a US diplomat and is author of Hong Kong On Air, a novel set during the 1997 handover about television news, love, betrayal, financial crisis, and cheap lingerie. Follow Muhammad Cohen's blog for more on the media and Asia, his adopted home.

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