Visa changes darken Bali's happy holiday recovery
By Gary LaMoshi

DENPASAR, Bali - It was a merry Christmas and a happy new year for Bali. Tourists packed hotels to enjoy a peaceful tropical idyll during the festive season, giving Balinese reason to celebrate during their own Galungan and Kuningan holidays this month. More than half of the families on the island earn their livelihoods from tourism; some estimates put the figure as high as 80 percent. This joyous beginning may prove to be the high point of 2004 for the hub of Indonesia's tourism industry and the spokes it supports.

Bali's hotels enjoyed high occupancy rates for the holidays, according to hospitality-industry sources. But that's nothing new for the island's traditional high season (along with the July-August Northern Hemisphere summer holidays). Holiday makers packed Bali even in December 2002, just weeks after bombs ripped through Kuta killing more than 200 people, most of them tourists (see Indonesia bombed into awareness, October 15, 2002).

In 2002, though, those tourists were mainly Indonesians. Different this season "was a marked increase in support from international markets", according to Bali Hotels Association chairman Robert Kelsall, "giving a glimmer of hope that a recovery from some key international markets is imminent". Those overseas markets are critical for Bali and for Indonesian tourism, an industry that brings the nation more foreign exchange than any industry except energy.

Back to the future
After the October 12, 2002, Bali bombings, foreign tourist arrivals on the island throughout 2003 stabilized around the levels of 1997-98, www.balidiscovery.com reports, or about 25 percent below 2000, the last year free of the impact of September 11, 2001, and subsequent terror attacks. Even those figures may fail to capture the full impact of the decline (see Bali plots its recovery ... someday, October 10, 2003).

Bali Discovery president director J M Daniels estimates that crucial Western markets remained down 30-60 percent from 2000 levels during this festive season. Kelsall, whose association - previously known as Casa Grande Bali - represents 54 leading hotels, agrees: "Certain markets are certainly depressed, in particular some key European markets where travel advisories [against visiting Bali] still exist" such as Britain, traditionally Bali's leading European Union source of tourists.

Visitors from Asia, notably Taiwan, have taken the places of some Western tourists in the visa lines at Bali's Ngurah Rai International Airport. Compared with Westerners, Asian vacationers tend toward shorter stays and group tours, meaning rock-bottom prices on hotels and other services. Domestic tourists visit even more briefly and spend less than foreigners. So shortfalls in tourism revenue generally are greater than the 25 percent drop in foreign arrivals suggests.

Indonesian tourism officials share Kelsall's optimism about recovery in overseas markets. The government has set targets of 5 million overseas visitors and $5 billion in foreign-exchange revenue for 2004. This year's target was revised downward to 4.6 million, and actual figures expected in a few weeks will likely fall just short of that goal.

The magic of Bali tourism
In calling for approximately 5 percent growth in tourism, the Indonesian government apparently believes in miracles. Legislators slashed the Ministry of Culture and Tourism's promotional funding request by 68 percent to Rp113.5 billion ($13.5 million), far below major ASEAN (Association of Southeast Asian Nations) rivals' budgets. More ominously, Indonesia will hold legislative elections in April and separate presidential voting, most likely requiring two more trips to the polls. Two people died late last year in northern Bali in clashes among party faithful. More electoral violence is likely across the sprawling Indonesian archipelago, and this will not encourage tourism even if it's a thousand kilometers away from Bali; one hidden consequence of the 2002 bombing is that tourists now know Bali is part of Indonesia.

Given budget constraints and the demands of democracy, lower spending and the electoral uncertainties may be unavoidable. But the Indonesian government has chosen to go out of its way to discourage foreign tourism.

The Ministry of Justice and Human Rights, which runs the immigration counters at ports of entry, announced on January 2 that it will introduce new rules for tourist visas on February 1. The new policy narrows the list of countries and territories eligible for free 60-day visas on arrival from 48 to 11. The new preferred list excludes most major sources of tourism in Indonesia, such as Australia, Japan, the United Kingdom and Taiwan, while including lightweights Chile, Peru, Morocco and Vietnam.

Passport holders from another 20 countries plus Taiwan can buy visas when they arrive, $10 for up to three days, and $25 for up to 30 days (down from 60 days); everyone else must apply at an Indonesian embassy or consulate before arrival. Various reasons have been advanced for the policy change, from generating funds to computerize the Immigration Department to reciprocity - granting the same visa privileges to other countries that they grant to Indonesia - to the rumor that Justice and Human Rights Minister Yuzril Ihza Mahendra wanted revenge after being forced to remove his shoes before boarding a plane in Australia.

Minister of Culture and Tourism I Gede Ardika, the only Balinese in the cabinet, is calling on the government to reconsider the implementation date, as is the hospitality industry. "We are saying 'the time is not right!'" Kelsall explains. "Bali Hotels Association has been petitioning the government, along with other tourism stakeholders, to try and delay implementation of the visa fee until tourism has properly recovered and other obstacles, such as travel advisories, have been removed."

Kelsall, who is also the general manger of Kuta's four-star Bali Dynasty Resort, cites a survey in member hotels that found 30 percent of guests would seriously reconsider coming to Bali if they faced a visa fee. Letters to balidiscovery.com also indicate a negative impact on tourism from the new rules. One travel agent calls the visa changes "good news for Australia and other competitor destinations", and others cited the expense, particularly for a family of four or more.

"What are you guys thinking?" one letter writer asked the Indonesian government. Whatever it may be, the authorities in Jakarta aren't thinking about helping Bali and the nation's critical tourism industry overcome the uncertainties it faces and build toward sustainable growth. In other words, visa rules may change, but it's still business as usual.

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