Government expects 6 million tourists in year 2000

Government expects 6 million tourists in year 2000

JAKARTA (JP): The government is upbeat that Indonesia's
tourism industry will grow robustly next year following an
improvement on both the political and economic fronts.

State Minister of Tourism, Art and Culture Djaelani Hidayat
predicted on Monday that foreign tourist arrivals would grow by
five percent next year to reach from between 5.2 million to six
million people, up from only 3.93 million this year.

This year, tourist arrivals are projected to reach 3.93
million, higher than the government's initial projection of 3.84
million. Last year, Indonesia welcomed 3.51 million visitors.

The minister attributed the improving tourism industry this
year and its rosy picture next year to the election of President
Abdurrahman Wahid, which proved to be acceptable to the majority
of the people and boosted the security environment.

"The establishment of this new, legitimate government has
definitely restored foreigners' trust in security and safety in
Indonesia, which are very crucial for the tourism industry," he
said.

The optimistic prediction was also driven by the government's
expectation of receiving more visitors from China next year,
following President Abdurrahman's recent visit to that country.

"We will recommend that the government provide visas on
arrival, if not free visas, especially for Chinese visitors in a
bid to attract as many Chinese as possible," he added.

Indonesia currently applies free visas for short-term visit
purposes for visitors from 48 countries, including the United
States, Australia, the Netherlands, Britain, Japan, Ireland,
Germany, Kuwait, Malaysia, Singapore, Egypt, Mexico, France,
Saudi Arabia, the United Arab Emirates, Greece and Hong Kong.

Djaelani said the country's ailing tourism business had shown
signs of recovery this year, with an improving average hotel
occupancy rate of 39.83 percent in the first quarter last year to
43.91 percent this year.

The tourism industry contributed US$3.36 billion in foreign
exchange to the country's balance of payments during the first 11
months of this year, from $3.21 billion in the same period last
year.

Foreign exchange contributions from the tourism sector this
year were expected to reach $4.4 billion, slightly higher than
$4.33 billion in 1998, Djaelani said.

Director of the Institute of Tourism Information Development
Diyak Mulahela warned that the government should not be too
optimistic in planning the development of the tourism industry.

He predicted that the government would not see six million
tourists coming to Indonesia next year, but would likely meet its
lower target of 5.2 million foreign visitors.

"Yes, many are placing high hopes on the new government. But
there are also many other people who are still cautious about
safety and security in Indonesia," he said.

He said the government must improve its promotion in overseas
markets if it wanted to meet the optimistic target.

He noted that relative to governments in other countries, the
Indonesian government spent very little on tourism promotion.

"It allocates only $5 million in promotion to attract six
million visitors, while other countries spend five to ten times
that figure," he said.

Nevertheless, he agreed that the tourism industry would grow
next year. He even predicted that as a result of the growth, the
average hotel occupancy rate would increase to 44 percent next
year.

"However, the increase in the number of visitors and hotel
room occupancy rates will not necessarily save hoteliers from
financial hardship," he said.

Diyak said the hotel industry would possibly encounter a worse
financial condition next year as gross operating profits, which
currently stood at about 20 percent, would drop as a result of
the government's plan to increase the cost of electricity for
commercial premises.

More than 100 hotels, most of which are four and five-star
rated hotels in Jakarta, are currently under the control of the
Indonesian Banking Restructuring Agency because of their mounting
bad debts, which are estimated to exceed Rp 3 trillion ($428
million). (cst)