Bali bomb, SARS and Iraq, triple threat to tourist trade

Fitri Wulandari, The Jakarta Post, Jakarta

Tour packages to mainland China, Hong Kong and Singapore used to sell like hot cakes for travel agency Smailing Tour. Every month, the agency, which has 16 offices in Jakarta and Bali, could send at least 20 people to those destinations.

But now, "Zero..we haven't had any reservations for tour packages to those countries since the SARS outbreak," Hadiyanto, a senior outbound tour leader at Smailing Tour told The Jakarta Post.

Hadiyanto was referring to the recent outbreak of Severe Acute Respiratory Syndrome (SARS) which has killed over 230 people and infected more than 4,000 worldwide, mainly in Asia.

Similarly, tourists from China, Hong Kong and Singapore who used to use Smailing Tour's inbound tour packages to Indonesia's most popular tourist destinations such as Bali, Lombok and Yogyakarta have also dried up.

"We have a few western tourists, but zero tourists from Taiwan, and China," Hadiyanto added.

"With this condition it is really difficult for us," he lamented.

Hadiyanto said that in a bid to cut costs, around 600 of Smailing Tour's employees had started to work in part-time shifts with two days off and two days on.

Smailing Tour is just one of several tour and travel agencies that are starting to feel the pinch of the SARS outbreak and the impact of the recent war in Iraq.

Chairwoman of the Association of Indonesian Tour and Travel Agencies (ASITA) Meity Robot confirmed that many travel agencies were scrambling to survive the tough situation by taking efficiency measures.

"They offer unpaid leave, shift work or just reduce working hours," Meity told The Post, adding that ASITA now had some 2,500 travel agents as members nationwide.

Meity said the SARS outbreak had been far more devastating to the industry than the Iraq war.

Airlines have cut their flights as the number of passengers drop. The Association of Asia-Pacific Airlines (AAPA) as quoted by AP said that airlines in the region had cut a total of 650 flights per week in April as people were afraid to travel.

According to Meity, the latest data from the Association of Indonesian Hotels and Restaurants (PHRI), showed that hotel occupancy rates had dropped to 25 percent in Jakarta and 15 percent in Bali.

Some travel agencies who are managing to do business as usual are those which do not rely on selling outbound and inbound tour packages.

Pan Travel corporate sales officer Titus Indrajaya said that the business was going because the company had targeted the handling of corporate and government officials' trips.

"Everything is still normal here, we haven't taken any drastic measures. People still have to take business trips," he said, adding that the company had not taken any efficiency measures with its 100 employees in its 4 offices in Jakarta, Makassar and Denpasar.

Meity Robot said if the bad situation continued, travel agents might be forced to lay off their workers.

SARS has been the third blow to the country's tourism industry after the Oct. 12 Bali bombing last year which killed more than 200 people, mostly foreign tourists.

The number of foreign visitors dropped from 5.15 million in 2001 to 5.03 million in 2002. Revenue from the industry also dipped from US$ 5.4 billion in 2001 to $4.3 billion in 2002.

The drop in visitors will have widespread effects, not only on the tourism-related businesses, but also for the economy as a whole.

"It's discouraging foreign travelers from coming and would-be domestic travelers from taking as many holidays," Diyak Mulahela, director of Institution of Information Development (LEPITA) said.

While domestic airlines have not been severely affected (because they can still rely on an abundance of domestic flights), the outbreak of the potentially lethal pneumonia-like disease has further depressed hotel occupancy rates.

Diyak predicted that SARS and the Iraq war would reduce hotel occupancy rates by some 15 percent, with Jakarta and Bali to suffer the most.

Diyak said the occupancy rates in Jakarta and Bali earlier in the year had actually started to recover from the impact of the Bali bombing, as rates slowly inched back up to 50 percent and 35 percent respectively, by February 2003. But now, SARS and the situation in the Middle East are lowering the rates again.

"With such low occupancy rates, imagine the huge losses at each hotel," he said.

Diyak said there were 260,000 rooms available in both star and non-star rated hotels nationwide. With an average occupancy rate of 30 percent, there were more than 180,000 rooms empty every night.