Bali needs all 'classes' of tourists

Bali needs all 'classes' of tourists

By Rob Goodfellow

WOLLONGONG, Australia (JP): Bali Governor Dewa Made Berata
made the very reasonable statement in November that he wanted to
attract more high-spending, "value-added" tourists to the island.
The governor's comments were unfortunately interpreted as a
direct criticism of Australia and Australians, who for nearly
three decades have made up the vast bulk of package and budget
visitors to Bali.

The governor's perceptions also were interpreted as a singular
endorsement of Japanese visitors. This was because anecdotal
evidence suggests that as a group, the Japanese exhibit
particularly generous spending patterns.

Rather than concentrate on the vitriolic response of the
Australian press (with headlines such as Aussies in Bali Not all
Drunk and Cheap), which only served to further the debate rather
than resolve it, the governor's comments actually deserve a
scientific response. More knowledge is required about the
individual consumer segments that make up the internationally
recognized phenomenon we know as "Bali". For instance, are all
Australian travelers the same? Are all Japanese visitors to Bali
big spenders?

Bali presently commands about 8 percent of the world tourist
market, valued globally at US$100 billion a year. Since the high
point of the mid-1990s tourist boom, the island has unfortunately
been in slow decline as a holiday destination. This was mostly a
result of the Asian economic crisis. It was also an unfortunate
consequence of political instability in Jakarta and its perceived
impact on Bali.

At this point it is worth mentioning that when most European,
American and Japanese holidaymakers abandoned Bali in early 1998,
the Australians kept coming, albeit precisely because Bali was a
"budget destination".

And out of interest, riots in Jakarta usually fail to rank a
mention in the world press, while any disturbance in Bali, no
matter how relatively insignificant, is reported as
newsworthy.

The good news for Indonesia has been that the downward trend
has recently reversed.

The latest report by the Australian Bureau of Statistics (ABS)
shows the number of Australian visitors to Bali has risen
dramatically in the last three months. An examination of these
statistics do, however, reveal marked differences in "types" of
Australian visitors to Bali. And rather than confirm stereotypes,
the following examples indicate prima facie that the market is
actually very complex.

For example, Dr. Simon Leslie and his wife Margaret have taken
their three children -- Brendan, 16, David, 12, and Alexander, 3
-- to Bali twice. They stay at world-class five-star hotels, such
as the Intercontinental at Jimbaran Bay. This family's holiday
spending patterns reflect Dr. Leslie's professional income.

Bill and Madge Carey have been to Bali three times. The span
of their visits keeps getting longer. Their first holiday was for
10 days, the second for two weeks and the third over three weeks.
The couple will be retiring soon and plan to spend two months of
every year in Bali.

Bill and Madge represent a growing number of Australian
retirees, "baby boomers", who anecdotally plan to spend the cold
and windy eastern Australian winter of June to August in milder
climes. This group is typically financially independent, and they
represent important business for Bali. They do not "scrimp" on
comfort. They guarantee solid custom for the boutique or
bungalow-style accommodation market, particularly in and around
Legian Beach.

The final group may be closer to what Governor Berata was
suggesting in terms of their "shoestring" spending patterns.
Neville Cruckshank is 30. He is a self-confessed "budget" tourist
and stays in the cheapest losmen (boardinghouses).
Notwithstanding, he has been to Bali 10 times and will likely
visit another 10 times. Visitors like Neville represent important
repeat business for the bottom end of the market. The Neville
Cruckshanks of this world may not spend a lot on a single
holiday, but when their frequent trips are averaged, particularly
over a lifetime, even the airfare component to Garuda (Neville's
preferred airline), not to mention the departure tax at Ngurah
Rai Airport, becomes significant.

In contrast, most Japanese workers do not have the same
holiday entitlements as their Australian counterparts, who
receive an average of six weeks annual leave. Japanese workers on
the other hand receive only two weeks holiday a year and
typically "donate" one week back to their company. And unlike the
Australians, they spend in short bursts. But do they come back
like the Australians? What about the thousands of young Japanese
surfers who visit the island every year. Are they big spenders,
too? Or are they just like Neville Cruckshank and have a budget
to consider?

Last month the director of Australian-based IRIS Research,
Martin O'Shannessy, predicted a 30 percent increase in Australian
tourists bound for Bali. This was later confirmed by ABS. As a
market research expert, what are O'Shannessy's thoughts about
Bali?

"While Bali is a destination, it is actually one of the
world's best recognized tourism brands," said O'Shannessy.

"It is just like any product. When people come to Bali they
are purchasing a commodity. In the case of Australians there is
some evidence that most of the traffic is repeat business. As
with any brand, the best customer is the one you already have.
Garuda, for example, understands this concept well. They market
the 'destination rather than the journey', because they know that
most of their passengers know exactly what to expect when they
arrive."

O'Shannessy added: "The problem is that existing research does
not tell us a great about the broad demographic data. At the most
fundamental level understanding brands is about understanding
consumer patterns of behavior. In fact it is finding out who
people are, what they want, and then giving them a lot of it and
then getting them to pay for the added value.

"The Sanur-based Bali Adventure Tours has proven this. They
have been very successful in developing products that people
actually want. White-water rafting, the elephant safari park,
helicopter rides and so on. In fact, more than this, they have
identified that different market segments want different things.
This brings guests back. It strengthens the relationship between
the visitor and the brand. It ensures that overseas guests of
every 'economic category' continue to contribute hard currency to
the economy of Bali and to the whole of Indonesia year after
year."

The curious thing about Bali is that it appears that there is
very little known about how nationalities differ from each other
in terms of their spending patterns there. What are their
expectations? What pleases them? What brings them back? And how
homogeneous are these national groups? In view of the governor's
comments, and the Bali Adventure Tour experience, I could also
add, what other services are guests prepared to pay more for?

The general manager and director of operations for Bass Hotels
and Resorts Indonesia, Rolf Hubner, recently told this writer
that his market mix for the Bali Intercontinental was 30 percent
Japanese, 25 percent Asians (including 8 percent Indonesian
nationals), 20 percent Europeans, 15 percent Australians and 10
percent Americans.

The 15 percent Australian group, represented above by the
Leslie family, certainly deserves the attention of market
researchers like O'Shannessy, but so do the medium-range and
budget travelers.

Two decades ago government planners in Denpasar decided that
Kuta was to be developed as a budget destination, Nusa Dua
reserved for mass, medium-range package holidays and Jimbaran,
Sanur and Ubud "quarantined" as a retreat for more upmarket
visitors. I believe that it is time to further develop this
inclusive strategy and better understand how the Bali tourism
market actually operates. This can only be done by scientifically
measuring sentiment, accommodation preferences, spending
patterns, satisfaction indexes and so on.

Further, we need to appreciate that elite, mid-range and
budget holidaymakers each have an important role to play in
ensuring the long-term viability of Bali as one of the greatest
places on the planet for anyone to go on holiday.

Rob Goodfellow, a writer and Indonesian cultural consultant to
international businesses, is based at the University of
Wollongong. He can be contacted at sujoko@ozemail.com.au.