Ni Komang Erviani , The Jakarta Post , Denpasar | Fri, 10/10/2008 10:49 AM | Bali
The crisis engulfing the U.S. financial sector has yet to impact Bali’s tourism industry, a senior tourism association official says.
“We haven’t received any reports of booking cancellations from our members,” said Perry Markus, secretary general of Indonesia Hotels and Restaurants Association (PHRI) Bali chapter on Thursday.
However, Markus believes Bali’s tourism industry, which is the island’s economic backbone, could experience adverse effects of the crisis anytime soon. The decrease in the number of foreign visitors, he predicted, would be one of its impacts.
“We hope that the decrease will not be a significant number,” he added.
The financial crisis, he explained, would cause many U.S. nationals to re-evaluate their future expenses, including their plans to travel abroad during the holidays.
“This thriftiness will result in an increase in postponing travel plans and in the future it may affect not only U.S. nationals but also the Europeans, considering the fact that the effects of the financial crisis have begun to be felt on the continent.”
He also predicted that it would cause a decrease in the number of domestic tourists visiting Bali.
“The U.S. financial crisis will certainly have an impact on our national economy, reducing the purchasing power of our people. Moreover, the interest rates have increased, a factor that might slow down the business sector.”
In anticipation of its impacts, Markus asked the island’s tourism sector to initiate aggressive efficiency efforts to cut operational costs without sacrificing the level of services offered to its patrons.
“However, I hope no hotel takes the easy route of laying off its employees because it will only create a new problem for the industry,” he stressed.
He also urged the island’s hotels not to repeat the grave mistake they had committed in the slow period following the 2002’s bombings. During that period, a large number of hotels were locked in a bitter tariff war as they slashed their room rates to lure more visitors.
“Such a policy will eventually put us on the losing side because when things return to normal it will be very difficult, if not impossible, for the hotels to introduce their regular rates.”
“We shouldn’t sell our destination cheaply.”
Separately, Bali Governor Made Mangku Pastika urged the Balinese to be prepared for impacts from the crisis.
“We have to be prepared, particularly since the island’s economy heavily depends on the tourism industry,” Pastika said.
Similar sentiments were also echoed by the general manager of Garuda Indonesia’s Bali Chapter, Y Siregar. The airlines would conduct a thorough review of the crisis and its impacts at the end of this week, he said.
A different perspective was offered by the chairman of Bali’s Chamber of Commerce (Kadin), I Gde Wiratha. He believes it will not affect tourism.
“Everybody needs to take vacations or holidays. The crisis will increase the number of foreign visitors to Bali because many businessmen will choose to take a holiday until the economic condition returns to normal,” Wiratha said.
He even went so far as suggesting that now was the perfect time for the island’s hotels to raise their rates.
“A 30 percent increase will be ideal. A room at a five-star hotel shouldn’t be sold for less than US$110 per night while a room in a budget hotel must be at least Rp 350,000 (US$37) per night,” he said.
As of Aug. 2008, a total of 1,298,046 foreign visitors have visited Bali. The top five markets for the island’s tourism industry are still Japan, Australia, Taiwan, South Korea and China. The U.S. is in tenth place.