Travel agencies say they deserve fiscal incentives
JAKARTA (JP): The Association of Indonesian Tour and Travel Agencies (Asita) said yesterday that its members deserved government fiscal incentives.
Speaking at a hearing at the House of Representatives, the association's vice chairman, Sjarman Sjarif, said the government should provide them with fiscal incentives as those given to export-oriented companies.
Sjarman said like export-oriented companies, tour and travel agencies also focused their activities on raising foreign exchange.
The government has targeted tourism to become the country's biggest foreign exchange earner, outperforming the oil and gas sector by the end of the Seventh Five-Year Development Plan in 2004.
Unlike tourism-related companies, export-oriented companies receive several fiscal incentives to help them penetrate foreign markets.
"The government has never provided us with special incentives such as those given to non-oil, export-oriented businesses," Sjarman said to House Commission IV for public works.
He said that with the absence of fiscal incentives, the tourism-related companies often faced financial difficulties to further expand their activities.
Sjarman, who ran Kemang Nusantara travel agency, said to handle a tour group of 30 foreign visitors, for instance, a travel agency had to spend US$30,000 based on the assumption that foreign tourist spending was $1,000 per person per visit.
"Travel agencies usually have to pay the cost first before their overseas counterparts pay. Sometimes the overseas counterparts never pay," he said of why government assistance was needed to help their operations.
He said travel agencies could actually bring their counterparts to court for breaking the contracts, but such legal action was almost impossible for Indonesian agencies because there was no proper documentation.
"We usually use the telephone, fax machine, telex and memos. With a letter-of-credit scheme, for instance, we might have more of a chance to take legal action," he said.
Asita secretary-general Endang Respati said travel bureaus also needed funds to launch promotions and to participate in international travel/tourism exhibitions in order to increase the number of foreign tourists in Indonesia.
The government has predicted that 11 million foreign tourists will visit Indonesia in 2005 and will spend US$15 billion. The figure is almost double the government's target of 6.5 million tourists in 1999, the final year of the Sixth Five-Year Development Plan.
But this year's target of between 5.3 million and 5.7 million visitors will likely be unachieved. Haze from forest fires has become a serious threat to Indonesia's tourist industry because of extensive international reporting on the situation.
Respati said yesterday that some 30 percent of tour groups to Bali had canceled their trips in the last three months.
"It's ridiculous, because the haze has never affected Bali. Therefore it's essential to place an organization in several foreign countries to clarify the situation," she said.
Director General of Tourism Andi Mappi Sammeng said last week that international tourist arrivals were still increasing, but the growth rate was not high enough.
"The growth rate must be at least 5 percent to meet this year's target of 5.3 million foreign visitors. However, international tourist arrivals are up only 3.7 percent in the first nine months of this year compared to 1996."
The government and any related-party had to work hard in 1998 as there had to be a growth rate of between 13 percent and 20 percent to reach the target of between 6 million and 6.5 million overseas visitors next year, he said. (icn)