Long Distance Aftershocks

(3/19/2011)

The 8.9 magnitude earthquake and subsequent tsunami that devastated the eastern shores of northern Japan may have lead-on effects for Bali's economy. Bali Post reports that the Bali chapter of the Indonesian Hotel and Restaurant Association (PHRI) has counted 1,298 room nights cancellations in the first day immediately following the March 11th natural disaster.

Perry Markus, the secretary-general of the Bali PHRI, confirmed the business downturn ex Japan saying, "since March 12-13, 38 hotels have confirmed that they have experienced cancellations." He went on to explain that of the 38 hotels reporting cancellations, 20 were located in Kuta, 7 in Nusa Dua, 9 in Tuban (South Kuta) and 2 in Jimbaran. The highest number of cancellations were in Kuta where 1,151 room nights of bookings were wiped off the books, followed by Tuban (114 room nights), Nusa Dua (31 room nights) and Jimbaran (2 room nights).

Japan Arrivals Decline

BeritaBali.com reports that arrivals from Japan experienced a sudden drop in the days immediately following the Japanese earthquake.

The Bali immigration office at Ngurah Rai International Airport recorded that arrivals on March 11, 2011, the day of the tragedy, totaled 1,183 visitors. However, two days after the quake, on March 13th, Japanese arrivals had dipped to only 588. On March 15th that number had declined even further to 497 visitors.

Despite the drop in new arrivals and cancellations of forward bookings, the Japanese earthquake did not trigger a sudden exodus of Japanese tourists out of the island during the quake. Loads on outbound flights to Japan during the days immediately following the incident operated at normal levels.

Markus told the press that the PHRI has extended its condolences to the Japanese people following the natural disaster and issued a circular to all members urging hotels assist in the facilitation of Japanese guests who may be temporarily stranded in Bali because of the earthquake and tsunami.

Separately, the chairman of the Bali Tourism Board (BTB), Ngurah Wijaya, predicted that the Japanese tragedy may have a macro-effect on Bali tourism, causing further declines in what was in 2010 the second largest source of foreign tourist visitors to Bali. "There's a big chance that the number of Japanese tourists will go down following the disaster," warned Wijaya. He expressed the concern that widespread destruction in Japan will affect the Japanese economy as a whole, creating an economic recession that will have a knock-on effects throughout the Asia-Pacific region.

Exports

The head of Bali's Department of Trade, Gede Darmaja, is concerned that Japan - Bali's largest trading partner after the United States, may lose market momentum due to the earthquake disaster. Predicting that exports to Japan will decline over the coming three months, Darmaja elaborated, saying, "mainly (the decline) will be in non-food items like handicrafts and textiles.

He went on to explain that fisheries and food dominate Bali exports to Japan, together with important shares for textiles and handicrafts.

Overall, Bali's exports increased 19% in 2010 reaching US$ 95.61 million compared to 2009 when exports totaled US$80.16 million.