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VOA Revenues Take a Sudden Dip in August

Bali by the Numbers: Sudden Drop in Visa on Arrival Revenues in August 2005 Underline Quality Issues Surrounding Bali Tourist Arrivals.


Bali News:
Click Image to Enlarge

(9/10/2005)

With preliminary total foreign tourist arrivals to Bali for August hitting a record 157,197 visitors, those counting the money collected for visa-on-arrival must have been initially surprised to discover a substantial drop in total fees collected for the month.

Compared to July 2005 when 158,424 tourists paid Rp. 31.2 billion (approximately US$2.97 million), the total VOA fees accumulated from 157,197 visitors in August amounted to only Rp. 21.6 billion (approximately US$2.06 million). In other words, a less than 1% drop in total visitors from July to August resulted in a disproportionate 30.6% dip in VOA fees.

In an article published in Bisnis Bali, an official from the Bali immigration office explained the sudden drop in VOA fees as the result of changes introduced by the Government in the VOA policy on August 1, 2005. On that date, new countries were added to the list of those eligible for the VOA facility, bringing to a total of 36 nations whose citizens can pay either US$10 for a 7 day visa and US$25 for 30 day visa upon arriving at Bali's airport.

The Devil's in the Detail

While the general assumption was that the liberalization of the visa policy would result in more visitors paying more in VOA fees, it now appears that the lengthening of the validity period for the US$10 visa from 3 to 7 days effective August 1, 2005 has, in fact, resulted in sudden surge of people opting for the shorter and much cheaper US$10 VOA option. In fact, with arrivals largely stable between July and August, the percentage increase in total arrivals purchasing the short-stay visa increased July to August by a remarkable 2,524%!

Expressed in terms of a percentage of all arrivals to Bali, those purchasing the 3 day visa grew from a 1.7%share of all arrivals in July to become 44.6% of all arrivals in August.

Bali's Quality Issue

These figure, once again, serve to underline the fundamental changes that have occurred in the market mix of Bali's arrivals over the past several years. While total number are setting new records, the overall quality of visitors as measured by actual length-of-stay and per diem spending have deteriorated markedly, suggesting the total value of Bali's foreign tourist arrivals, as measured in foreign exchange generated by tourist visitors, has decreased when compared to just 4-5 years before.


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