1997 tourism growth rates rocked by the haze
By I. Christianto
JAKARTA (JP): The thick haze which blanketed most parts of Sumatra and Kalimantan for several months has resulted in significantly reduced tourist arrivals this year.
Many foreign tourists from the United States, Europe and other industrialized nations such as Japan canceled their trips due to the choking haze, caused by forest fires in the country's two largest islands.
The haze, which also affected neighboring Singapore and Malaysia not only raised concerns about air quality but also travel safety, especially after an Airbus A-300 airplane owned by state-owned Garuda Indonesia crashed in late September just before it was due to land at Polonia Airport in Medan, North Sumatra. All 234 people on board died.
The regional currency crisis, which has blighted Indonesia since early July, made Indonesia a cheaper place to visit but not enough to overcome people's fears over air safety.
Tourists from other Southeast Asian countries affected by the currency crisis also stayed away in significant numbers in the past several months.
They are clearly feeling the pinch following regional currencies depreciating by between 30 percent and 60 percent against the U.S. dollar.
Tourism officials estimate the number of foreign tourist arrivals will increase by only 2.67 percent to 5.16 million this year, making it the smallest rise in the last 10 years.
In the past few years the growth rate has averaged more than 20 percent per annum.
Foreign tourists' spending is also expected to increase by only 6.49 percent to about US$6.71 billion. This year's level will be much lower than the average of 20 percent in previous years.
Last year, about 5.03 million foreign tourists visited Indonesia, spending some $6.3 billion. Last year's growth rates were 16.42 percent in terms of the number of arrivals and 20.64 percent in terms of spending.
Record low
The first record low in the number of foreign tourist arrivals happened in 1995 when unfounded reports about cholera in Bali spread to Japan and other rich countries.
The growth rate in overseas tourist arrivals was only 7.9 percent in that year while the expenditure growth rate was only 9.3 percent.
Minister of Tourism, Post and Telecommunications Joop Ave admitted Monday that this year's growth rates could be the worst in the last 10 years.
Indonesia originally expected to see between 5.3 million and 5.7 million international tourist arrivals this year. Revenue generated from the foreign tourists was initially estimated to total between $6.64 billion and $7.14 billion.
The government has also revised its targets for 1998. Foreign tourist arrivals are projected to be 5.7 million instead of the original target of between 6 million and 6.5 million. Foreign exchange earnings from tourism are expected to total about $7.14 billion, less than the original target of between $7.51 billion and $8.14 billion.
The country expects the tourist industry to become the country's biggest foreign exchange earner by the end of the Seventh Five Year Development Plan period in 2004.
Tourism was the country's sixth largest foreign exchange earner in 1985, earning around $525 million, behind oil and gas, timber, rubber, textiles and coffee. In 1995, tourism, which earned $5.2 billion from foreigners, was ranked third after oil and gas exports ($10.46 billion) and textiles ($6.2 billion).
Downturn
The director general of tourism, Andi Mappi Sammeng, said the government had anticipated a downturn in foreign tourist arrivals in the first semester of this year, but not in the following months.
"We forecast fewer visitors to Indonesia in the first six months of 1997 due to political reasons such as the general election in May," he said.
Sporadic riots that rocked several areas in Indonesia starting in late 1996 and early this year also contributed to the decline in tourist arrivals to Indonesia.
A number of star-rated hotels in the capital reported slight drops in occupancy rates shortly before, during and after the campaign which started a month before the general election last May.
In the January to June period this year 2.1 million tourists visited Indonesia, up by only 1.56 percent over the same period in 1996.
Tourist arrivals in October plunged 7.7 percent from a year ago to 321,536. However, the total number of foreign visitors in the 10 months to October still increased by 14.1 percent to 3,525,327 from a year ago.
Indonesia is not alone. According to media reports, tourism in Singapore will have unchanged or negative growth in 1998.
Andi admitted that the government had not anticipated the forest fires in Kalimantan and Sumatra several months ago and the consequential drastic drop in tourist arrivals during the second half the year.
"It has seriously affected the image of Indonesia due to the widely publicized reports by overseas media," he said
Minister Joop Ave, meanwhile, has rejected arguments that the recent Singapore SilkAir Boeing B-737-300 plane crash would also affect foreign tourist arrivals.
The crash near Palembang, South Sumatra last Friday killed all 104 passengers on board.
"The government has nothing to do with that as the airline is not owned by Indonesia," he said.
Table: Foreign tourist arrivals and expenditures in Indonesia
Year Arrivals Foreign Exchange Growth Rate (%)
(US$ million) Arrivals Earnings
---------------------------------------------------------
1987 1,060,437 874.3 28.53 48.06
1988 1,301,049 1,024 22.68 17.12
1989 1,625,965 1,284.5 24.97 25.43
1990 2,177,566 2,105.29 33.92 63.89
1991 2,569,870 2,522.01 18.01 19.79
1992 3,064,161 3,278.19 19.23 29.98
1993 3,403,138 3,986.58 11.06 21.6
1994 4,006,312 4,785.26 17.72 20
1995 4,324,229 5,228.34 7.93 9.25
1996 5,034,472 6,307.69 16.42 20.64
1997* 5,169,000 6,717.29 2.67 6.49
* Estimated figures