Travel industry seeks financial aid to weather multiple crisis

Travel industry seeks financial aid to weather multiple crisis

Fitri Wulandari, The Jakarta Post, Jakarta

The country's travel industry has asked the government for a
subsidized credit facility to help travel agencies battle the
collapsing tourism business due to the outbreak of Severe Acute
Respiratory Syndrome (SARS) and other uncertainties.

Chairwoman of the Association of Indonesian Travel Agents
(ASITA) Meity Robot said travel agents needed "emergency soft
loans" to make up serious cash-flow deficits for at least six
months, to avoid bankruptcy.

"We have never asked the government to provide credit for us
even during the economic crisis that began in 1997. But this time
(the problem) is too much. The travel industry is on the brink of
bankruptcy," Meity told The Jakarta Post on Thursday.

Meity said that due a huge decrease in tourists, both coming
and going, travel agents have been forced to close down their
outlets, cut salaries, cut operational costs, cut working hours,
give long unpaid leave and lay off their workers.

"If this continues, travel agents will not be able to pay
their obligations. A further drop in tourism business would
follow suit," Meity said in the proposal.

ASITA, at present, has some 2,500 members nationwide.

While saying that ASITA had yet to come up with a sum for the
requested credit facility, Meity applauded the stimulus package
provided by the Malaysian government to SARS-affected businesses.

The Malaysian government announced on Wednesday a US$1.92
billion stimulus package for SARS-affected industries. It
includes a one billion ringgit relief fund, interest rate cuts
and tax breaks for the tourist-related companies.

The requested subsidized credit facility is part of a stimulus
package proposed by ASITA to five ministers as reported by this
paper earlier.

Other measures include reinstating the free visa-on-arrival
facility, abolishing value-added taxes and income taxes on tour
operators and abolishing the Rp 1 million fiskal, or departure
tax, for anybody traveling abroad.

ASITA sent the proposal to the offices of the Coordinating
Minister for the Economy, the Coordinating Minister for People's
Welfare, the State Minister for Culture and Tourism, the State
Minister for State Enterprises and the Ministry of Manpower and
Transmigration.

Although Indonesia is not a SARS-infected country, the tourism
industry has still had to face the brunt of the outbreak as many
regular tourists and businesspeople normally go to and come from
countries that have been hit. The impact has been even more
severe than the Bali Bombing last year as it has also discouraged
people from traveling outside Indonesia.

Reservation system company PT Abacus Indonesia revealed that
airline bookings for international flights from Indonesia had
dropped by 60 percent during March and April, compared to the
same period last year.

The number of foreign arrivals in March was 288,417, or 30
percent lower than same period in 2002.

Meanwhile, President Megawati Soekarnoputri, in a meeting with
The Indonesian Hotel and Restaurants Association (PHRI) and
ASITA, on Thursday could only suggest that the cash-strapped
tourist-related businesses spend more money on an "international
campaign to promote Indonesia as a safe travel destination."

PHRI chairwoman Yanti Sukamdani Hardjoprakoso, quoting the
President, said travel advisories imposed by several countries to
Indonesia were no longer necessary because security had been
improving and Indonesia was not a SARS-infected country.

Megawati told the industry players to aggressively promote
Indonesia.

According to Yanti, several western European countries such as
Germany, the Netherlands and Italy have lifted their travel
advisories. The U.K. still has travel advisories in place, but
does not advise its citizen against traveling to Indonesia. And
Japan has lowered its travel advisories.

Yanti added the hotel occupancy rates had hit rock-bottom.
Occupancy rates in Batam have now plunged to around 25 percent,
Bali 20 percent to 25 percent and Jakarta 35 percent.