More travel agents may close as business gets worse<\/p>\n
Sudibyo M. Wiradji, The Jakarta Post, Jakarta<\/p>\n
The outbreak of deadly Severe Acute Respiratory Syndrome (SARS)
\nhas dealt a major blow to the country's tourism industry. This
\narticle and the other two stories in this special page highlight
\nthe impact of the flu-like ailment on the industry.<\/p>\n
Worldwide travel fears resulting from the outbreak of Severe
\nAcute Respiratory Syndrome (SARS) has brought the country's
\ntravel industry almost to a standstill.<\/p>\n
Canceled visits by foreign visitors and flight cuts by major
\nforeign airlines have severely affected tourist activities,
\nputting the already travel industry in its worst ever
\npredicament.<\/p>\n
\"A number of travel agents have been forced to close their
\noffices or lay off employees. Some have offered employees unpaid
\nleave or reduced work hours to enable them to get through this
\ntough time,\" the chairperson of the Association of Indonesian
\nTour and Travel Agencies (ASITA), Meity Robot, said.<\/p>\n
She warned that if the market did not show any improvement
\nwithin the next two months, most travel agencies would be forced
\nto close their doors.<\/p>\n
The number of foreign tourist arrivals peaked at 5.18 million
\nin 1997 but dropped to 4.60 million in 1998 and 4.72 million in
\n1999, due to the combination of the economic crisis and
\nuncertainty in security following the change in the country's
\nleadership.<\/p>\n
Tourism began to pick up in 2000, with foreign tourist
\narrivals rising to 5.06 million, but the Sept. 11, 2001,
\nterrorist attacks halted the positive trend, with a relatively
\nslight increase of 5.15 million foreign visitors recorded during
\nthe year. Foreign tourist arrivals plunged to 4.3 million in 2002
\ndue to the shocking images of the Bali bombing and foreign media
\nreports about Indonesia as a haven for international terrorist
\ngroups.<\/p>\n
The industry saw signs of recovery in January and February of
\nthis year after the adverse effects of the Bali bombing started
\nto wear off in people's minds.<\/p>\n
But the recent Iraq war and the outbreak of the deadly flu-
\nlike SARS immediately reversed that encouraging trend. The latest
\ntravel woes have brought the tourist industry to its lowest level
\nin years.<\/p>\n
Executives of companies involved in tourism-related businesses
\nhave strongly criticized the government for not doing enough to
\nsupport the ailing industry.<\/p>\n
Instead of lending its support to the devastated travel
\nindustry, the government issued early last month a presidential
\ndecree to revoke the visa-free facility given to nationals of 48
\ncountries since 1983. A government official said that a visitor
\ncould be charged between US$40 and $45 for a visa-on-arrival.<\/p>\n
Critics have called the move to revoke the visa-free facility
\n\"ridiculous\", especially at a time when tourism was in serious
\ntrouble.<\/p>\n
\"Charging (tourists) for the visa will further worsen the
\nalready battered tourist industry,\" said travel portal Indo.com
\nCEO Eka Ginting.<\/p>\n
Travel company Panorama president director Satriyanto
\nTirtawisata shared Eka's view, saying that the government's
\ndecision to revoke the visa-free facility had dealt another
\nheavy blow to the nation's shattered tourist industry.<\/p>\n
\"The policy is not only unnecessary but also
\ncounterproductive. It complicates things right in the midst of
\nthe survival game for most tourist industry players,\" he said.<\/p>\n
Like Satriyanto, Ika Nazaruddin, the public relations manager
\nof Pacto travel company, also supported the appeal to cancel the
\ngovernment's policy to remove the visa-free facility.<\/p>\n
ASITA which groups about 3,000 tour and travel agents, has
\nsuggested the government to issue a stimulus package to keep
\ntravel companies afloat instead of removing the visa-free
\nfacility.<\/p>\n
ASITA's chairperson Meity said the stimulus package could
\ninclude low-interest rate loans, which were needed to prevent
\ncompanies reliant on the tourist trade from closing.<\/p>\n
Besides proposing an extension of subsidized loans, ASITA also
\nappealed to the government to abolish a value-added tax imposed
\non tour operators.<\/p>\n
\"Abolishing the value-added tax, income tax and departure tax
\ncould act as an incentive for encouraging people to start
\ntraveling, and would in turn salvage the ailing tourist
\nindustry,\" Panorama's Satrijanto said.<\/p>\n
Meanwhile Pacto's Ika Nazaruddin said that compared to the
\nIraq war, SARS had had an even worse effect on our business
\nbecause the majority of tourists come from Europe.<\/p>\n
Pacto has seen a 70 percent drop in sales due to the Bali
\nbombing, the Iraq war and fears of SARS. Before the Bali tragedy,
\nPacto used to annually handle travel arrangements for 50,000
\nforeign visitors, who traveled throughout the archipelago. \"They
\nwere mostly from European countries, such as the Netherlands,
\nGermany and France,\" she said.<\/p>\n
Similarly, Indo.com, the country's largest travel portal, saw
\na 75 percent drop in international bookings. \"We had begun to
\nrecover in January and were back up to almost half the normal
\nnumbers. But because of the war and SARS, the recovery process
\nground to a halt in March,\" said Eka Ginting of Indo.com.<\/p>\n
Vaya Tour also saw a significant drop in its sales of inbound
\nservices, especially after the outbreak of SARS. It suffered a 70
\npercent drop in outbound tour sales.<\/p>\n
The Indonesian Hotel and Restaurant Association (PHRI) said
\nthat since the outbreak of SARS, the country's hotel occupancy
\nrate has dropped significantly, with Batam, Medan and Bali
\nhardest hit.<\/p>\n
Currently, the country's average hotel occupancy rate is
\naround 30 percent.<\/p>\n
The SARS has caused hotel occupancy rate in Batam, a favorite
\ndestination for Singaporeans, to drop significantly to 20 percent
\nbecause many travelers from Singapore have canceled their visits.<\/p>\n
The association also said that the average hotel occupancy
\nrate in Bali was around 25 percent. \"With 25 percent occupancy
\nrate, a hotel is facing serious financial problem,\" said PHRI's
\nExecutive Director Carla Parengkuan.<\/p>",
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"sponsor": "Okusi Associates",
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