Bali mulls cutting prices, but experts disagree

Bali mulls cutting prices, but experts disagree

I Wayan Juniartha and A'an Suryana, The Jakarta Post, Denpasar, Bali

As the number of tourists visiting Bali is continuously declining after the devastating bomb blasts more than a week ago here, the island's tourist industry is mulling a concerted effort to provide generous discounts for tourists, both foreign and domestic, to revive the battered industry.

But, experts warned that price cutting measures were not an effective solution to the problems confronting the industry.

Better security measures and stronger government action in dealing with terrorism were the correct answers to the problem, they said.

"Price cutting is a very bad strategy since it gives an impression that we are only concerned about money," Bali-based tourism expert Rio Helmi said on Wednesday on the sidelines of the National Coordinating Meeting on the Recovery of the Image of Indonesian Tourism in Ubud.

Some 200 representatives from various government agencies, experts, airlines and the tourist industry attended the two-day meeting. Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro-Jakti and State Minister for Tourism and Culture I Gede Ardika were among the attendees.

The meeting was aimed at examining various strategies and efforts to contain the damage caused by the terrorist attack, which claimed more than 185 lives.

Following the incident, thousands of foreign tourists left the island and many tour operators canceled trips to Bali, sending the average hotel occupancy rate on the island into a four-year low of 29.4 percent from a previous 70.18 percent.

During the meeting, heated discussions occurred over the government's proposal that airlines and hotels cut prices to lure back visitors.

Rio noted that tourists' main concerns were whether the Indonesian government was ready to take the necessary steps to prevent a similar attack in the future and more importantly, whether it was aggressively pursing the perpetrators of the bombing.

"Unless these concerns are addressed properly, they will not return to Bali no matter how cheap our tour packages are," Rio said.

Nyoman Erawan, also a tourism expert, said he understood why many industry players favored the price cutting strategy.

"Price cutting is the only way to secure enough money to keep the business running and to retain employees. But, I would caution that cutting prices should be a short-term strategy only -- just for one or two months -- since in the long-term it would severely damage both the industry and the island.

Head of Bali Tourism Authority I Gede Pitana Brahmananda stressed the industry should be very cautious in employing the price cutting policy.

"I have two objections to this policy. First, price is not the thing that has prevented them from coming, the security issue is. Second, is there any guarantee that we will be able to raise the prices to normal levels once we cut them. Cutting prices is easy, raising them is very difficult.

I would rather offer a complimentary program than cut prices," he said.

Moreover, Pitana said he believed that the flow of tourists would return to normal within a six-month period.

Separately, at the Grand Mirage Hotel in Tanjung Benoa, Setyanto P. Santosa, the chairman of the Indonesian Culture and Tourism Board, in a meeting with businessmen at the Grand Mirage Hotel, argued that cutting prices could be effective to revive the island's tourism.

"The immediate concern is how to keep the industry going, how to maintain the cash flow even at a subsistence level," he said

Setyanto said Bali should also learn from Egypt.

"Hotels offered temporary free accommodation after some foreign tourists were murdered in Luxor in 1998. And, it was quite helpful for the recovery of the industry," Setyanto recalled.

He noted that the price cutting strategy would need active participation from all industry players, while the role of the government would be to facilitate the program and to help promote Bali.

"Next week, we will extend our condolences over the bomb attack through some magazines in Australia, and we will also set up a condolence announcement on CNN," said Setyanto.