Tourism to become third biggest foreign exchange earner by 2000
JAKARTA (JP): A survey predicts that by the end of the century, the tourism industry will become the third biggest non- oil foreign exchange earner after textile products and wood, reaping US$8.9 billion a year from 6.5 million foreign visitors.
Christianto Wibisono, the director of the Indonesian Business Data Center, in a release made available to The Jakarta Post last week said that in line with the increasing role of the industry, rumors of a property crash will encourage owners of apartment buildings to shift their businesses to the hotel industry.
Last year, the country gained $4.9 billion in revenues from tourist arrivals. This indicated a 40 percent increase over 1993, when the tourism industry ranked fourth among the major non-oil foreign exchange earners.
The survey reported that currently 61 business groups, both from the private and government sectors, are in the hotel industry.
Of these 61 groups, 35 (57.3 percent) also operate in the apartment business, 24 (39.3 percent) own travel bureaus, 22 (36 percent) have golf courses and three (4.9 percent) own airline companies.
Forty or 65.5 percent of these groups conduct general-scope businesses, while the remaining 21 (34.5 percent) specialize in specific fields, 11 of which own their own national chains in the tourism industry.
According to the survey, which was conducted at hotels of three-star ratings and above, travel agencies, convention tourism businesses, golf resorts and airlines, Indonesia ranked 22nd in 1993 of the most favored tourist destinations in the world, up from 26th in 1985.
The 1993 rating puts Indonesia above South Korea (23rd), Australia (24th), Japan (25th) and Taiwan (26th). Meanwhile, Singapore's position dropped from the 17th to 19th and Thailand from 18th to 20th. That year, France was the leading tourist destination, but the United States ranked first in generating revenue from the business.
Improve
In the Asia-Pacific region, Indonesia improved its position from the 11th most favored in 1989 to seventh in 1993, pushing aside Hawaii which dropped from the topmost position (with 6.6 million visitors in 1989) to number nine (3.1 million people in 1993).
According to the survey, in the next two or three years, 225 new hotels of three and more stars -- the majority of which will be of three stars -- with a total capacity of 48,000 rooms, will be built to make a total of 462 hotels in the country, with a total capacity of 88,000 rooms by 1997-1998.
From the 462 hotels, 85 (18.4 percent) with 28,000 rooms will be located in Jakarta, 85 with 19,000 rooms in Bali and 60 with 9,000 rooms in West Java.
The survey concluded that, based on the figures, 22 provinces will still not have five-star hotels by then.
The survey shows that there are presently 36 international hotel chains managing 70 hotels with 19,000 rooms in Indonesia. This figure accounts for 48.8 percent of the total 39,000 hotel rooms in the country.
By 1997-1998, 13 new chains will have entered the business to manage 70 more hotels with 16,000 rooms.
Thus, international chains will be managing 140 hotels with 35,000 rooms, or about 40.6 percent of the total number of hotels in the country.
The survey said that future trends would lead international chains to invest not only in four-star or five-star rated hotels but in three-star hotels as well.
The new international chains established in 1997 will push down Hilton's popularity (presently ranking the fourth) and Inter-Continental (ranking the third) to the 10th and ninth ranks, respectively, and will place Sheraton (presently ranking the fifth) first rank, Hyatt (presently ranking the first) at second, Shangri-La (ranking second) at third, Ibis (ranking ninth) at fourth and Century (ranking sixth) at fifth.
Meanwhile, the share of 10 major international hoteliers in the country's hotel market will drop from the present 62.6 percent to 54.4 percent in 1997-1998.
Indonesia currently has 12 national chains, managing 86 hotels with 13,000 rooms.
According to the survey, no drastic change in local ownership will occur in the next three years and the five major hoteliers -- namely Sahid, HII/Natour, Aerowisata, Jayakarta and Horison -- will continue to maintain their positions.
On the conglomeration side, the survey predicts that of the five major groups in the business, only the Metropolitan group will be pushed aside to rank sixth from its present place of fifth, by the Danayasa/JIHD group (presently ranking eighth).
The Sahid group (presently ranking third) will rank first, replacing HII/Natour, which will drop to third in 1997.
The Jan Darmadi group (presently ranking second) will rank third, the Salim group will maintain its position at rank four and the Brasali group, a newcomer in the business, will surge to rank seven.
Travel
According to the survey, the travel agency industry will not attract direct foreign investment to the country.
Since 1991, only seven foreign companies have invested in the business, including the Japan Travel Bureau and Thomas Cook (Amex TRS Group).
The survey concluded that because of up to 25 percent of the integrated tour packages were conducted in other countries, domestic travel agencies were unable to manage the total revenues they received, meaning that about 30 percent (US$1.3 million) of accommodation costs spent by foreign tourists would return to their respective countries.
The survey reported that the convention tourism business would become more attractive in the future. In 1993, it brought in 783,000 tourists, or 23 percent of the total number of foreign tourists visiting the country, most of whom originated from Singapore, Japan, Malaysia, Taiwan and the United States.
To meet the target set for the year 2000, the survey recommended airlines increase their seat capacities and the government reviews the current open-sky policy.
The construction of airports, the survey said, should also be given high priority to be able to accommodate the increasing number of passengers.
Variations in tourist attractions and cultural programs should also be improved to meet the expectations of foreign travelers.
The survey also recommended that airlines, hotels, travel agents and other supporting agencies upgrade their services and professionalism to meet globalization trends, especially since the increasing trend shows that more international hoteliers are keen on entering the three-star hotel business. (pwn)