The Indonesian travel industry has suffered its fair share of setbacks in recent years, with the multiple threats of SARS, avian flu, terrorist attacks and tsunamis causing some citizens to rethink their travel plans. But the country is fighting back. In Bali, too, where an estimated 80% of the population relies on tourism for their living, positive steps are being taken to boost the industry.

Following the 2002 and 2005 bombings of Balinese resorts frequented by Westerners – and the subsequent warnings issued by some foreign governments to their citizens about the potential risks of travelling to the island – tourists appeared to be deserting Bali. According to the Bali Tourism Board, direct foreign tourist arrivals to the island fell from 1.356 million in 2001 to 1.285 million in 2002 and a further drop to 993,029 in 2003. Since then the sector has rallied and in 2004 the number of arrivals climbed back to 1.458 million. However, the 2005 bombing once again shook tourist confidence and arrivals that year fell to 1.386 million. And between January and November 2006, there was a decrease of 13.21% in arrivals compared with the same period in 2005.


Hitting the bottom

In November last year, a time of year that is traditionally quiet for tourism, some hotels in the more remote north of the island struggled to attract even one guest and reported that business was tougher than after the 2002 bombing. Proactive campaigning is now improving the situation throughout the island, however, and hotels and restaurants have been making good use of the slack periods to carry out renovations and improve security.

Figures from the government and the tourist authority now make promising reading, and initiatives are being launched to improve the industry in the long term. According to figures from the Central Bureau of Statistics in Jakarta, 119,280 foreign nationals arrived on vacation at Bali’s main airport in December 2006, compared with 75,877 for the same month in 2005.

Turning around

To ensure the long-term growth of tourism on the island, Bali’s local government has introduced a strategy to develop its infrastructure and services to world-class levels. The plan, ‘Bali #1 Destination 2011’, which aims to turn the island into the world’s premier tourist destination by 2011, was revealed to locals and expatriates on the island at the end of last year. According to local weekly paper The Bali Times, it will involve a $87m upgrade of the island’s main airport, Ngurah Rai International, which will result in its current size being tripled.

Roads will also be improved, and the government will push to make Bali self-sufficient in electricity so that it is no longer reliant on neighbouring Java for supplies, which are often interrupted. The government has also pledged to target illegal discharge of sewerage and to overhaul real estate regulations.

Building a base

Government official Drs I Ketut Sudikerta, the deputy regent of Badung, whose authority in the south of the island includes some of the biggest tourist resorts, told local reporters: “If we have the proper infrastructure in place, a far bigger airport to handle more passengers and a clean environment, people will come in their droves. We have a lot of work to do but by starting now, I really believe by 2011 we can achieve it.”

Investors, as well as tourists, are taking a greater interest in the island. For example, Bulgari Hotels & Resorts opened a 59-villa boutique hotel in the south of Bali last September.

The roll-out of high-speed internet access in the most populated parts of the island is also helping investment, enabling individuals to continue doing business while away from their offices and thereby offering them a real opportunity to purchase or rent property for an extended stay on the island.

A new land registry system, which could improve foreign investment confidence, is being established in Bali and the government is looking at making it a nationwide programme. The scheme will register foreigners’ property rights on a database.

One of the first companies to take part in a trial run of the project is C151 and PT Hanno Bali. “A proper land registry system will create transparency and increase sales and direct investment into real estate in Bali,” Hanno Soth, president/director of C151 Resorts and Pt Hanno Bali, told fDi.