Travel agencies say they deserve fiscal incentives

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)