Expert upbeat about tourism outlook this year

Expert upbeat about tourism outlook this year

JAKARTA (JP): Hotel occupancy rates in Indonesia are expected
to increase to an average of 45 percent this year, from 40
percent in 2000, if political and economic conditions improve, an
expert said on Tuesday.

Director of the Institute for the Development of Information
on Tourism (Lepita) Diyak Mulahela said his organization
predicted occupancy rates for hotels in the greater Jakarta area
would be similar to the national rate.

"Some tourist destinations, like Bali, are likely to have a
higher occupancy rate than other parts of the country," he said
in a seminar discussing the prospects of the hotel industry in
2001.

Diyak said that Bali had emerged from the economic crisis
relatively unscathed due to its aggressive promotional
activities, especially during the critical years of the crisis.

"Bali has its own travel mart, and it organizes various events
to attract tourists," he said.

However, Diyak said that despite the increase in occupancy
rates, there would still be about 15,000 hotel rooms empty
nationwide every day throughout the year.

In terms of revenue, the increase in occupancy rates will also
bring in more money to hotels in terms of rupiah, but the revenue
could drop in dollar terms if the rupiah remains under pressure.

The Asian economic crisis, which peaked in 1998, has dealt a
heavy blow to the country's tourism industry.

Prior to the peak of the crisis the number of foreign visitors
steadily increased by about 16 percent per year, with 1997 seeing
a record-breaking 5.2 million visitors.

Prior to the crisis many investors invested money in the
country's hotel industry, lured by the fact that approximately
54.4 percent of foreign exchange earnings in the tourism industry
came from hotels.

"Some 36.3 percent of foreign exchange is generated from
accommodation revenue, while 18.1 percent from food and
beverages. Ultimately those two services are provided by hotels,"
he said.

Also, investors were attracted by the relatively fast return
on investments in the hotel sector, Diyak said, explaining that
returns on hotel investment could be realized in six to eight
years.

But after the crisis, hotel occupancy rates dropped to between
30 percent and 40 percent.

Sharp depreciation of the rupiah against the dollar since the
middle of 1997 failed to attract visitors and in 1998 only 4.6
million visitors came to Indonesia, an 18.61 percent decrease
from the previous year.

"Indonesia has become the cheapest tourist destination, yet
the number of tourists has failed to pick up significantly,"
Diyak said.

He said the crisis had severely hit hotel businesses, leading
some five-star hotels to slash their rates to as low as $44 a
night, down from the usual $100 a night, in a bid to attract
tourists.

Last year 5.06 million visitors entered the country at 70
points of entry, slightly down on the target of 5.1 million.

This year, Diyak said that he was optimistic the government's
target of 5.4 million tourists could be reached.

He said that while the number of visitors failed to exceed the
government's expected figure last year, it was still more than 6
percent higher than the 1999 figure of 4.7 million.

"Considering that every year the international tourism market
continues to grow, now reaching more than 100 million people, I
am sure this target will be reached," Diyak said, adding that, in
the meantime, the industry should step up its promotional
activities to help ensure success.

"Indonesia should keep participating in international travel
events, like the travel marts in Berlin and London, to ensure
that the country is not forgotten as a tourist destination," he
said. (tnt)