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)