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)