Bali's car rental firms on the brink of bankruptcy

Bali's car rental firms on the brink of bankruptcy

DENPASAR, Bali (JP): The car rental sector on the tourist
island of Bali is facing hardship because of a drop in tourist
arrivals and the country's critical economic, social and
political conditions.

A young businessman in Bali, Putu Sutarta, 35, said, "I should
have closed my business a long time ago."

Putu said that business has plummeted since the economic
crisis hit the country in the middle of l997.

"If I analogize it with boxers, we are like a loser who has to
immediately leave the ring," he said.

In the past two months, only 20 percent of his fleet of 50
cars has been rented. The rental fee for a Suzuki Jimny jeep is
set at Rp 70,000 (US$10) a day. "I calculate the daily losses at
about Rp 1 million or Rp 31 million a month," Putu added.

Not to mention the possible loss from luxury cars like Honda
Civics and other sedans, which range from Rp 300,000 to Rp
350,000 a day.

"My company has various kinds of vehicles, from jeeps to
Mercedes, so it is obvious that I face a great loss," he said.

Businesspeople also pay for monthly maintenance, which can
cost at least Rp 150,000 per car, excluding annual insurance
fees, which can reach 3 percent of a car's price.

He said that a businessperson who wants to establish a car
rental company must invest billions of rupiah to purchase cars
and other necessary expenses.

Bali's car rental business had its glory days in the early
l980s, when the island experienced a tourist boom.

But now, the decreasing number of tourist arrivals has badly
affected the car rental business.

An employee of CV Bali Orient, a car rental firm, said, "We
have received only a small number of customers, compared to
December last year."

To build a healthy business, each company should rent at least
75 percent of its cars each month.

"But, it is very difficult to achieve such a target at this
time of year," he said.

Currently, there are about 86 car rental companies in Bali
operating more than 1,100 cars and hundreds of bicycles and
motorbikes.

Dwi Yani, a tourism observer, said that the paradise island of
Bali has been hit not only by economic but also by social and
political conditions in Indonesia.

Starting from Aceh, Maluku, Irian Jaya and East Timor, to the
riot recently in Bali, the problems in these areas have badly
changed the image of Indonesia as a safe tourist destination.

"At first, many visitors were not influenced by the news of
riots and commotion of other islands outside Bali. But when Bali
was ransacked and burned by followers of a certain party, Bali's
face was bruised," he said.

A large number of airline companies, hotels and travel agents
have received bulk cancellations from potential clients.

"The most recent incident was the Kerobokan incident, in which
hundreds of convicts ran away from the Kerobokan prison, located
just five kilometers from the island's most popular tourist spot,
Kuta," Dwi said.

Currently, many travel agents in European countries, the
United States and Japan have decided to send their clients to
alternative destinations in Thailand, Fiji and other exotic
places in the Pacific.

"Usually, in the second week of December, both domestic and
foreign tourists are already flocking the island," Dwi said.

Today, many hotels in Bali are only able to fill 40 percent
from their occupancy rates.

In addition to the economic downturn, Bali's car rental
companies are facing other problems, like car theft.

It is no secret among businesses that these crimes are
organized by a syndicate which sets rental cars as its main
target.

Data from Bali's police department shows a steady increase in
the number of car thefts. In September, police recorded 54
thefts. The number increased to 68 in October and 70 in November.
In the first week of December, they have already recorded 35.

An owner of a car rental firm said, "Once, a man with his
'family' hired a car from my company saying they were taking a
vacation in Bali, but the car never came back."

He said he lost three cars and a number of motorbikes this
year. The crimes were generally committed by local people.

"All entries to Bali including ferry ports are tightly guarded
by the police and immigration officers but the thefts still
happen," he said.

Lt. Col. Y. Suyatmo, head of information section of Bali's
police, admitted it was difficult to deal with car thefts.

"We can only solve 15 percent of the reported thefts," said
Suyatmo.

Many owners of rental car firms in Bali are pessimistic about
the future of their businesses. But, with the coming of the year
2000, there might be a hope for them, as the country's economy
and political condition are predicted to recover soon. (I Wayan
Juniarta)