Tourism, a glittering jewel in a tattered crown

Rendi A. Witular, The Jakarta Post, Jakarta

"Down in the dumps" could well describe the condition of the country's tourism industry after the Oct. 12 terrorist attacks rocked Bali, the heart of the country's tourism industry and one of the world's most popular resort islands.

The bomb attacks that leveled two bars and left close to 200 mainly foreign tourists dead, shattered the island's long- standing image as a safe haven for holidaymakers from all over the world.

While visitors avoided many parts of the country because of various security concerns, Bali prior to the attacks remained a favorite destination for global travelers.

The bomb attacks immediately changed that.

The devastating blasts came at a time when the country's tourism industry was beginning to recover from the 1997 financial crisis and the impact of the Sept. 11 attacks on the United States.

The industry plunged at the peak of the economic crisis in 1998 with tourist arrivals falling to 4.6 million from 5.15 million in 1997. The figures inched higher to 4.72 million in 1999 and 5.06 million in 2002. In 2001, the figures almost reached pre-crisis levels at 5.15 million.

The government entered 2002 with optimism that more tourists would come this year. At the start of the year, the Ministry of Culture and Tourism declared the year the national "Ecotourism Year".

The ministry set its foreign arrival target at 5.4 million and foreign exchange earnings at US$5.6 billion for this year.

Indonesia got a good opportunity to promote its tourism in January when ASEAN tourism ministers and industry players gathered at the ASEAN Tourism Forum (ATF) in Yogyakarta. During the meeting, ASEAN agreed to promote the region as a safe destination for tourists.

At the same time the Indonesian Culture and Tourism Board (ICTB) intensified its global campaign to promote tourism. Prior to the attack, 500 ads were aired on CNN and 250 ads on the BBC.

The efforts apparently bore fruit. By September, foreign arrivals reached 3.26 million and the government was optimistic its target could be reached as a great number of tourists were expected to come during the peak holiday season in December.

Normally, tourist arrivals in the fourth quarter account for 30 percent of the annual total.

Following the tragedy, the ministry revised its arrivals target to 4.3 million, the lowest year in six years, while the foreign exchange earnings target was lowered to $4.5 billion.

Shortly after the bombing the governments of Japan, Australia, Taiwan, Germany and the United States, who all account for the most visitors to the country, issued travel warnings advising their citizens to avoid Indonesia.

The impact was so huge that hotel occupancy rates in Bali dropped to single digit figures two weeks after the blasts, much lower that the minimum 20 to 40 percent occupancy rates needed to generate sufficient cash-flow to sustain break-even operations. Occupancy rates at hotels in other areas also decreased following the drop in the number of tourist arrivals.

The ministry expects the country's hotel industry to remain in the doldrums for the next few years, with a recovery expected to recover in mid 2004, provided there are no further security and instability problems in the country.

To revive the country's, particularly Bali's, tourism industry, the government launched a three-phase recovery program called "Bali get in to it".

The first phase is called the rescue period which runs from October to December 2002. It will be followed by the rehabilitation phase from January to June 2003 and the normalization period from July to November 2003.

As a short-term solution, the government called on all businesses and local governments to encourage domestic tourists to go to Bali or remain in Indonesia.

ICTB chairman Setyanto P. Santosa said "luring more domestic tourists to Bali could, over time, attract foreign tourists back to Indonesia."

He said domestic tourists contributed $7.7 billion to the country's tourism industry.

The government urged state-owned airline Garuda Indonesia to provide attractive promotional packages for domestic tourists, while state agencies were told not to cancel their meetings, seminars or other activities they had planned for Bali.

The government also allocated $4.6 million for a global promotional campaign to lure back tourists to Indonesia and Bali.

Part of the funds will be used to set up tourism promotion agencies in Japan, Australia and Europe and to hire public relations firms to handle the marketing campaigns.

The government is also planning to finish the Draft Tourism Bill by the end of the year to provide a better legal foundation for the country's tourism industry.

Minister of Culture and Tourism I Gede Ardika said "the government was expecting that by the end of 2003 the country's tourism industry would regain its attractiveness for world travelers."

However, many tourism business players were disappointed by what it said was the government's slowness in drawing up a concrete recovery program for the industry.

Bali businessmen took the initiative to launch a program called "Bali for the World", which comprises a number of tourism events to rebuild the island's lost image as a tropical paradise.

"Bali businessmen have decided to join hands, without involving the government, to launch their own campaign to assure world travelers that Bali is safe," Bali Chamber of Commerce and Industry chairman I Gde Wiratha said.