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)