In Desperate Need of Liquid Refreshment

(Dec 22, 2008). The December 18, 2008, edition of The Jakarta Post carried the following article by their Bali-based correspondent, Andra Wisnu, under the headline “Businesses Ask for Leeway on Alcohol.”

As the holiday season nears, Bali’s tourism businesses are asking the government to provide some leeway on alcohol imports following the recent shortages. As of December, certain products, particularly European ones such as whiskey, vodka and tequila, are still hard to find, even after all the complaints lodged by businesses from the alcohol scarcity of over three months ago.

Reasons behind the sudden shortage remain unclear. Customs officials said there had been no increase in duties on imported alcohol. Some experts blamed tightened bureaucracy. Several businessmen went so far as to call the shortage part of an effort to weed out European brands to make way for Chinese brands.

Whatever the theory, tourism businessmen said Bali could only end up with the short end of the stick should the alcohol shortage last any longer. Ngurah Wijaya, head of the Bali Tourism Board, said a prolonged alcohol shortage would pose a “major problem” for the island’s tourism industry. “The government must remember that alcohol products bring in up to 80 percent of Bali’s tourism revenue. “This means the industry is going to experience a major income loss due to this shortage, especially with the ongoing global financial crisis,” he said. He urged the government to provide some leeway, such as making trade deals to allow unrestricted traffic of imported alcohol from certain countries to the island. “Europe, the United States and Australia remain our most trusted exporters for alcohol, we should be making trade deals with them soon for alcohol,” he said.

I Gde Wiratha, chairman of the Bali Chamber of Commerce and Industry who is also the owner of a number of high-class night clubs, said the prolonged shortage showed a lack of government commitment and support of Bali’s tourism industry. “How can the government allow Black Label to sell for up to Rp 1.2 million? How are we supposed to make money? Who will want to spend that much money?” he said.

He criticized the government for allowing this to last through the holidays, calling it a snub to Bali’s tourism industry. “Just imagine, Singaporeans pay three times less than we do here for alcohol. How is that supporting the industry?”

Meanwhile, most restaurants, hotels and bars continue to struggle to supply guests with alcoholic drinks. Aulianty Fellina, marketing communications manager from the Hard Rock Hotel in Bali, said the hotel was facing a 100 percent price increase in alcoholic drinks due to shortage. “Right now we don’t have a shortage because we have a good stock of alcohol, but I can’t say that we won’t be affected and we may end up raising prices, although we’re still holding to the current prices,” she said.

Jeanie Grace, a spokesperson for Sector Bar, said her establishment had also been struggling to find certain beverages, but was encouraged by the opportunity to introduce local drinks. “Right now we’re just looking at the bright side, it’s still going to be Christmas, we have a lot of events planned and it’s going to be a good time to promote some locally made drinks,” she said.

A ‘Sacred’ Figure: 7 Million Foreign Tourists?

(Dec 22, 2008). Pande Putu Setiawan S.T, M.M. an alumnus of Yogyakarta’s Gadja Mada University post-graduate program and the University of Victoria (Canada) contributed an editorial for the December 18, 2008 edition of the Bali Post. Our free translation of that provocative editorial follows:

This year Indonesia’s tourism industry can take pride in its achievements. A new record will be set in 2008 with some 7 million foreign tourists visiting Indonesia. This meshes with Bali where a record 1.9 million foreign tourists will be recorded. This compares most favorably with the 5.5 million foreign tourists who came to Indonesia in 2007 and the 1.5 million who visited Bali in that same year.

What’s interesting is that the achievement of 7 million foreign tourists certainly represents a phenomenal performance for Indonesia. However, closer examination is warranted, including viewing arrivals from several countries in Southeast Asia to Bali and Indonesia and the tourism performance of those countries. For example, Malaysia has attracted 18 million visitors spending US$36 billion; Thailand has netted 15 million foreign tourists; and Singapore 10 million. This does not include the impressive performance of the tourism industries in China, India or Hong Kong. Singapore is able to attract more Indonesian tourists than the total foreign tourists that visit Bali.

Through comparing tourism arrivals at a the aforementioned Southeast Asian countries, we can see that Singapore, a small country the size of Bali, is able to surpass Indonesian tourism by attracting 10 million visitors in a single year. Meanwhile, Indonesia, which is a vastly larger country with thousands of natural attractions and thousands of islands can only attract between 5-7 million foreign tourists. This is also the case with Bali, a destination that has won the label as “the best island in the world” for eight times as well as other honors, where we should actually be able to attract more tourists than we are at presently achieving.

We can derive many important lessons from our neighboring countries – such as Malaysia, Thailand and Singapore – who have only recently discovered their tourism potential. These countries are very serious about tourism and have clearer visions, stronger marketing, behave more strategically, and are bolder in their execution than their near neighbor Indonesia. In fact, when seen from the standpoint of their tourism products and the attractions they offer, these countries have no significant advantage over Indonesia.

Singapore is active in its promotion of special events in the electronic and print media to markets not dissimilar to those sought by Indonesia. Every activity is expertly packaged, such as their great sale as well as cultural and religious celebrations.

Malaysia is even more successful with its program “Malaysia, Truly Asia” which has managed to launch new tourism destinations, such as the resort island of Langkawi and the FI circuit of Sepang. In fact, Malaysia has sought to strengthen its “truly Asia” positioning by utilizing the icons of neighboring countries; a step that caused Indonesia to protest Malaysia’s use of reog, batik, angklung and songs – all considered to belong to the endemic culture of Indonesia. Such tactics show that while Malaysia may be lacking domestic destinations capable of attracting tourists, such as the beaches of Bali and the exotic cultures of Indonesia’s other islands, their strategic promotional plan in combination with a very serious intent to build a national tourism industry, have allowed Malaysia to become the Southeast Asian destination capable of attracting the largest number of foreign tourists.

Then, lastly, we have Indonesia which has apparently been left far behind in the management of its tourism industry, marketing strategies, product packaging and service provided to visitors. It is as though we have been assisted by the global phenomenon of tourism growth and the difficulties of other destinations, such as Thailand, who have encountered internal political problems. How goes Bali? If we are truthful, we have done little of significance to develop our tourism fortunes.

Little Effect or Influence

Examining closer what has been achieved by Bali tourism, the various programs have had little significant impact. Casting our eyes back to the recent past, “Bali for the world, Bali is my life” and the latest branding of “Shanti Shanti Shanti” have all failed to create any tangible results. It is rare to have a hotel or other tourism industry component that displays the Shanti Shanti Shanti branding, despite Bali having launched this island branding program more than one year ago. Such is also the case at Bali’s airport and tourism destinations within the island where the latest branding has become so much jargon.

Similarly, few members of the general public – including both domestic and international tourists – have any appreciation or understanding of the Shanti Shanti Shanti branding. Some have complained that the central government, in the guise of the Department of Culture and Tourism, has failed to support programs for Bali branding. However, the fact that the central government has also failed to support other successful branding programs, such as “Enjoy Jakarta”, deny Bali the use of that excuse.

With this understanding, the government of Bali must create a tourism promotion program which stands out for its creativity and effectiveness. More appropriate media placement and promotional material are needed. Don’t we have sufficient unique materials that can be used in the execution of promotional activities? Certainly we must have learned from past mistakes where every project lasts for but a moment and absorbs substantial amounts of money. We have yet to learn from our neighbors how to truly promote tourism in a proper way

The question has become: How long will we continue to be left behind? Outside of facts beyond our control, “the best island in the world” should be able to demonstrate the required synergy that matches that honorific – an island presenting “the best” for its visitors and “the best” for its own people.

New Indonesian Aviation Law Ratified

(Dec 22, 2008). The long-discussed aviation law has now been ratified by the House of Representatives (DPR) on December 17, 2008, and is expected to place greater emphasis on airline security and safety. Among the highlights of the new law are:

• The private sector will be given the opportunity to operate airports in Indonesia, ending a monopoly held by state-owned PT Angkasa Pura I and PT Angkasa Pura II.
• Airline operators are now required to own a minimum of 5 aircraft and rent as least 5 more in order to create armadas deemed by the government to be sufficient to support an adequate management and maintenance regime. This change in the rules is expected to fuel mergers and acquisition as small operators struggle to stay in business and meet minimum fleet requirements.
• Airlines must demonstrate financial soundness with sufficient assets to finance flight safety.
• A three-year grace period during which airlines will be given the opportunity to bring their operations into compliance with the new operating rules.
• Air traffic control and navigation support will become the direct responsibility of the government and no longer be operated by airport authorities.
• In a controversial move, the government now has the right to set minimum selling rates for economy class fares.
• Special attention must be paid by Indonesian operators for aged and disabled passengers.
• Airlines must provide compensation for passengers on delayed or cancelled flights.
• In addition to a requirement to hold a valid air operating certificate, Indonesian
• Airlines are also required to maintain minimum levels of spare parts.
• Air accidents will now be investigated by an independent body.

At the present time, Indonesia has a total of 14 airlines operating 964 aircraft over 167 different routes. The Jakarta Post reports that some 30 more airlines are in the process of seeking operating licenses, a number expected to decline in the face of requirements levied under the new aviation law.

The passage of the new aviation law, now being translated into English, was widely seen as a critical step in efforts to lift the current European Union “blacklisting” of all Indonesian registered aircraft.

How Green is Our Island?

(Dec 22, 2008). Bali’s provincial government has begun sounding warning alarms due to the degradation of the island’s natural environment over the past decade. In an article published in Kompas, the erosion of Bali’s shore line now approaches 20%, 55,000 hectares of land mass are considered in a critical state and the island’s average temperature has increased to 33 degree Celsius. According to that report, much of the blame for the rapid decline in Bali’s natural environment is being laid at the door of the Island’s tourism industry.

The head of the Bali Environmental Agency, Gede Putu Wardana, confirmed the government’s growing concern over the environment, and said a long-term environmental protection plan stretching to 2050 is now being formulated

According to Wardana, in the shorter term of 2009 to 2014 there are plans to replant Bali’s forests, stop the erosion of shorelines and re-green critical water-absorbent green zones

Data provided by the Director General of Water Resources the air temperature in November 2008 reached 22-33 degrees Celsius. Previous to that, the average temperature ranges between 28-30 degrees Celsius

At the same time, water levels are now 50 centimeters higher on almost all beaches of Bali

The fast-declining condition of Bali’s environment is also underlined by the fact that the 51.950 kilometers of eroded shore line recorded in 1987 has now grown to 91.070 kilometers or approximately 20% of Bali’s entire shoreline (436.5 kilometers). At the same time, officials report that the intrusion of sea water into the water table has become a major concern in many areas of the island

A local activist from Conservation International Indonesia, Made Iwan Dewantama, has characterized the soon-to-be-announced timetable for preventing further environmental degradation as coming too late. He points to the many environmental and green conferences held in Bali, including the U.N. Climate Change Conference held in December 2007, as demonstrating that Bali has done little for the environment despite the dire warnings sounded during numerous conference held at the Island’s conventions centers. spent US$100 million to attract tourists in 2008.

Indonesia TArgets 6.8 Million Tourists for 2009

(Dec 22, 2008).  Indonesia is targeting 6.8 million foreign tourist visitors in 2009 with tourism officials insisting that the tourism sector will remain the “prima donna” of the nation’s foreign exchange generators.

The Director General of the Department of Culture and Tourism, Sapta Nirwandar, told Bisnis.com, “Even more so in the middle of the global economic crisis which is also affecting Indonesia, we hope the contribution from tourism will help speed the recovery of the national economy.”

The central government has budgeted a total promotional budget of Rp. 289 billion (US$ 26 million) from a total departmental budget of Rp. 1.1 trillion (US$99 million) to achieve an approximate 10% increase in foreign tourist arrivals in 2009.

Is the Promotional Budget Enough?

Diplomatically fielding questions regarding the sufficiency of the funding allocated for tourism promotion, Sapta referred to the World Tourism Organizations’ yardstick of US$10 for every foreign tourist arrival. By that standard, Indonesia should be spending US$ 100 million in order to achieve its stated target for 2009.

Reflecting the current world economic crisis, Indonesia has lowered its target of 8 million tourist in 2009 to only 6.8 million. The Department of Culture and Tourism had originally asked for Rp. 340 billion (US$30.6 million) in promotional funding, resigning itself to the final figure of only Rp. 289 billion (US$26 million). According to the Secretary General of the Department of Culture and Tourism, Wariyatmo, the money allocated for tourism promotion in Indonesia is still miniscule in comparison to competing destinations, such as Malaysia, which spent US$100 million to attract tourists in 2008.