1997 tourism growth rates rocked by the haze
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