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Foreign Exchange from Tourism Down 35%

Culture and Tourism Promotion Chief Sounds a Warning, Call for Incentives for Hotel Sector.

(5/26/2003) According to Seytanto P. Santosa, the Chief of the Indonesian Culture and Tourism Promotion Board, data provided by his office indicate foreign exchange earned by the tourism sector is down by 35% for the first quarter of 2003.

Commenting on the current situation and quoted in the Indonesian language Bisnis Indonesia, Setyanto said, "the situation is truly critical. If by July a drug to cure SARS is not found, Indonesian tourism will be more devastated. We estimated that 3.2 million foreign visitors for this year would be a good result. If the industry and the government do not soon sit down together and take concrete action, that figure will not (even) be achieved."

While special efforts are underway to stimulate travel to Indonesia from countries unaffected by SARS, such as Australia and Japan, the secondary gateways to Indonesia in places such as Singapore, Hong Kong and Taiwan have all been severely affected by the SARS epidemic.

Mr. Setyanto also emphasized that tourist number declines were not only affecting the tourism industry but also having a "lead on" effect in other sectors of the national economy including agriculture, handicrafts, general trade, and transportation.

Calls for Fiscal Incentives for Hotels

Pointing to the recent closure of the Grand Mirage Resort and Spa and the fear that similar closings may follow in the coming weeks, Setyanto called on the Central and regional governments in Indonesia to provide incentives to the troubled hotel sector. He suggested that these incentives might take the form of reductions or suspensions in electrical tariffs and delayed repayment of loans from banks and non-financial institutions to avoid looming mass layoffs in the nation's hospitality industry.