Indonesia still vital to Asia-pacific tourism

Indonesia still vital to Asia-pacific tourism

JAKARTA (JP): In spite of the ongoing thick haze caused by the
widespread forest and brush fires in Indonesia, the Pacific Asia
Travel Association (PATA) predicts that Indonesia will be one of
the 10 key tourist markets in the Asia-Pacific region in 1998.

In its 1997 annual report, PATA projects that despite the
diversity of tourism flows within and into the Asia-Pacific
region, just 10 of its member nations generated over 70 percent
of all arrivals in the region.

PATA estimated that the prospects for the Asia-Pacific region
next year rest on the performance of the 10 key origin markets.

These are, in order of importance, Japan, the United States,
Taiwan, China, South Korea, Singapore, Malaysia, Britain,
Australia and Indonesia.

The association said that as far as leisure travel prospects
were concerned (which account for around 70 percent of all
trips), the underlying trends in origin-country economies --
notably the predicted growth in income and private consumption --
set the pattern for travel demand.

Japan illustrates the point well, according to PATA. "Japan
currently has an economy which is only slowly emerging from
recession. Income growth for 1998 is forecast to be only 2.4
percent and private consumption will expand by just 2 percent
that year."

Nevertheless, the key features of the Japanese outbound travel
market are the strength of the yen and the fact that almost 17
million Japanese travel abroad each year.

After Japan, the three most important origin markets in Asia
for the PATA region are Taiwan, China and South Korea. The three
nations together generated almost 15 million visitors to the
region in 1996 and all have excellent prospects as travel origins
for the region.

"Elsewhere in the region, Singapore is forecast to expand its
income by over 7 percent in 1998 and its private consumption by
over 5 percent. Forecasts for Malaysia are 7.2 percent and 8.1
percent, making this market an especially dynamic prospect with
Indonesia exceeding 8 percent for income growth and approaching
that level for consumption growth."

Lower

The Indonesian government has lowered its projection for
foreign exchange receipts from foreign tourists this year on
fears that the haze problem will cause a decline in tourist
arrivals.

According to data provided by the Ministry of Tourism, Post
and Telecommunications, revenue from foreign tourists will total
about US$6.5 billion this year, much lower than the initial
projection of between $6.64 billion and $7.14 billion.

The number of foreign tourists will be about 5.19 million this
year as compared to the previous projection of between 5.3
million and 5.7 million.

The Indonesian Tourism Promotion Board has said that the haze
caused by prolonged forest fires in Sumatra and Kalimantan and
the currency crisis facing several Southeast Asian countries will
discourage foreign tourists from visiting Indonesia.

It is also estimated that the government will only receive
$7.14 billion in foreign exchange from foreign tourist arrivals
next year, lower than the original target of between $7.51
billion and $8.14 billion. Foreign tourist arrivals are also
projected to decline next year to 5.7 million from the original
target of between 6 million and 6.5 million.

Currency

PATA said that on the currency front, the Singapore dollar was
forecast to strengthen a little against the U.S. dollar in 1998,
the ringgit would remain stable and the rupiah was forecast to
devalue slowly by about 3.6 percent a year against the U.S.
dollar.

Barring any major external catastrophe, the underlying
prospects for these three markets are also good.

"Economic trends do not tell the whole story. Some countries
limit travel abroad for political or administrative reasons;
others may not have much of an international travel tradition;
non-tourism influences such as key elections, political
instability or uncertainty, natural disasters and so on can
dampen travel demand in the short term, according to PATA."

PATA confidently draws two conclusions about 1998.

The first is that through 1998 the global economy and
particularly the economies of the PATA region's most important
origin markets will be relatively healthy.

It believes the demon of inflation is largely under control;
open markets are functioning with reasonable efficiency in most
regions, with international trade also enjoying a measure of
stability and relatively liberal expansion.

This leads to the second conclusion, which is that the
conditions for the continuing expansion of the PATA region's
tourism sector are generally favorable. The organization accepts
that extraneous events can affect even the firmest of short-term
predictions, but still believes 1998 should see strong growth in
travel to the region.

"The immediate challenge for 1998, however, is one of the
marketing; how can one tourism destination best ensure that it
achieves at least a fair share of these market next year? How can
a destination translate encouraging general origin market
performances into increased arrivals and tourism receipts at
home?"

PATA suggested two basic requirements for good tourism
marketing.

First, understand the market concerned and more important
perhaps, the key segments within that market. Second, stratify
the marketing process. (icn)