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February Arrival Figures - What Do They Mean?

Bali by the Numbers: Depending on How You View Them, February Arrival Figures Either Vindicate or Condemn the New Visa Policy.


Bali News:
Click Image to Enlarge

(3/8/2004)

Preliminary figures showing 84,348 direct foreign arrivals via Bali's Ngurah Rai Airport in February 2004 can be cited by both sides in the hotly contested debate over the wisdom of the Government's decision to impose a US$ 25 visa on arrival fee on the nationals of 21 countries and require pre-arranged visas from the nationals of a host of other countries given visas without charge prior to the introduction of the new police on February 1, 2004.

The Pros and the Cons

The Pros will cite the 25.02% improvement for February 2004 arrivals over February 2003 as proof that the visa fee is having no effect on tourism arrival numbers.

The Cons will cite the same arrival figures and come to a different conclusion:

a) the 25.02% improvement for February 2004 shows a slow-down in recovery as compared with the 55.88% rate of improvement achieved in January – the month before the visa free policy was introduced. From this perspective, they claim that the visa-on-arrival policy has slowed Bali's tourism recovery by at least 50%;

b) Although February's figures represent an improvement over the same month in 2003, it must be factored in that the 2003 figures still showed the devastating after-effects of the October 2002 bombing;

c) Seen historically, February 2004's performance represents a retreat of ten years in Bali tourism, with arrival totals roughly resembling those achieved in 1993-1994;

d) Based on the historical data, the new policy has pushed Bali's recovery back at least another 7 years: While January's arrivals (without the new visa policy) resembled totals achieved 3 years earlier in 2000-2001, February's figures (following the visa change) were reminiscent of totals achieved 10 years ago in 1993-1994.

The Pros favoring the visa policy will also boast that because of the new policy more than US$ 1.65 million was collected in visa fees by the Government from incoming tourists in Bali alone.

The Cons, meanwhile, will counter that suggestion reminding that, based on the Government's own estimations of average spend by each tourist visiting Indonesia of US$ 1,000, the US$ 1.65 million collected in visa fees translates into an equivalent out-of-pocket spend by only 2% of the total February arrivals. In other words, if the new policy costs Bali more than 2% of its potential visitors, then the nation is the overall loser in terms of foreign exchange earnings.

The Cons will further underline this point in their analysis, citing the 55.88% improvement in arrivals in the month before the new policy which declined to a 25.02% improvement in February. If February 2004's arrival had shown the same level of visitor improvement as January an additional US$ 20.82 million in foreign exchange would have been earned by the island's tourism industry. Using this statistical method and deducting the US$ 1.6 in visa fees collected in February and Bali's economy experiences a shortfall of US$ 19.17 million in foreign exchange caused by the new visa policy.

The Jury's Still Out

While the statistics on Bali's arrival are being hurled about with equal ferocity by those on both sides of the current visa polemic, it appears the jury is still very much "out" in deciding whether or not the policy of charging a visa fee to many visitors to Indonesia represents good public policy.


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