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(5/3/2004) In an editorial carried in the April 28, 2004, edition of the Indonesian language Bali Post, the former Head of the Bali Tourism Authority, Dr. I.Gede Pitana, contributed his views on the question – "Has Bali Tourism Recovered?".
In that editorial, Dr. Pitana explains that determining whether or not Bali tourism has regained its footing is a matter of which statistical indicators you choose to examine and what base line is used to define "normal."
The Qualitative and Quantitative Approaches
Quantitatively, the factors that are used generally to measure tourism's state of health are statistics related to arrival numbers, hotel occupancy rates, length of stay totals, average levels of expenditures, and foreign exchange earnings. Meanwhile, the qualitative measure is gauged by a single factor, namely, the vitality of the local "peoples" economy.
Foreign Direct Arrivals
In Dr. Pitana's analysis, foreign direct arrivals in Bali for the first 3 months of 2004 show a significant improvement over the same 3 months in 2003. January 2004 arrivals totaled 104.062, a 71% improvement over the 60,836 recorded in January 2003. February 2004 figures improved 25%, climbing from 67,469 in 2003 to this year's figure of 84,374. March's performance for 2004 climbed 39% to 99,826, up from 72,263 in the same month just a year before.
April's partial figures also serve to encourage. Average daily arrivals through the first half of the month totaled 3,900 foreign arrivals, up significantly from the average 2,400 daily arrivals recorded in April of last year.
What do these figures mean in terms of Bali's tourism recovery? The answer to that question is less than clear. 2004 arrival figures, while better than those reported in 1997 and 1998, are still below those recorded in 2000 and 2001.
In evaluating Bali's current tourism situation length of stay statistics are a cause for real concern. Prior to the Bali bombing, in 2000 and 2001, the average length of stay for foreign visitors to Bali averaged 10.97 days and 9.48 days, respectively. By 2003, the average length of stay was down to just 6 days. Dr. Pitana assessment is that the dramatic erosion of European and American tourists following the WTC and Bali bombing tragedies and their supplanting with domestic and Asian travelers are responsible for the drop in room night production and average occupancies at Bali hotels. According to Pitana, average occupancies in Bali hotels for the first three months of 2000 averaged 46.33%, dropping to 31.87% for the same period in 2003. Figures for average occupancy in Bali hotels in January 2004 tallied in at 31.41%, underlining that stronger arrival totals do not necessarily translate into higher hotel occupancy levels.
In continuing his analysis, Dr. Pitana shows how average spends of US$134.66 per person per day in 1994 had fallen to US$74.38 in 2001, declining even further to US$60.95 in 2003. The causes for this large decline in spending include the change in the composition of Bali's visitors and the substantial discounts on offer to visitors.
Seen from a qualitative perspective, the improvement in visitors numbers in the first quarter of 2004 following the business exodus for the same period in 2003, the period immediately following the Bali bombing, have helped to buoy the spirit of the people of Bali.
The New "Normal"
Are these truly better times? Certainly, things are much better than they were just one year ago.
Are things back to normal? Now, that is the question.
In trying to find a base line against which to measure current performance we always come back to the same question: What is normal? In 1997/1998 tourism number were negatively impacted by an Indonesian monetary crisis. 1998 and 1999 arrivals suffered due to widespread social unrest in Indonesia, including Bali. The year 2000 offered a brief respite of normalcy, only to be interrupted by the WTC attacks in September of 2001 followed by the Kuta bombing in October of 2002. 2003 dawned and remained lackluster, still suffering the fallout of the Bali bombing with the embellishments of the War in Iraq and a SARS epidemic.
The results of these developments were obvious on Bali's tourism sector. 1998 foreign direct tourist arrivals dropped 3.51% totaling 1,187,153. In 1999 figures recovered, increasing 14.21% to be followed by a more modest increase of 4.2% in 2000 tallying in at 1,412,839. In 2001 number began a downward ride dropping 3.97% (1.356,744 foreign direct arrivals); declining a further 5.23% in 2002 (1,285,844 foreign direct arrivals); and plummeting 22.77% in 2003 (993,029 arrivals).
Dr. Pitana discourages the viewpoint held by those that view "normal" years as tourism development in Bali in the late 1980s. His view: the low arrival numbers, totaling less than 400,000 per year, argue against that period serving as any benchmark.
In fact, according to the veteran tourism observer, Bali's real problems may have more to do with issues of oversupply. The so-called "golden year" of 1988 featured an island with only 12,155 rooms spread over 625 hotels. The guests visiting in that era were served by 69 travel and tour companies' lead around the island by 753 registered guides; and dined at 426 restaurants.
While current arrivals hover around 1 million, a total nearly thee times as much as in 1998, those tourism visitors are spread among 1,198 hotels with 35.212 rooms; 440 tour and travel agents; 840 restaurants; 6,781 guides.
Is Bali's current dilemma one of too few visitors, staying too short a time, and spending too little money or more a result of two much product in a stagnant or declining market?
According to Dr. Pitana, it's really a matter of how you want to look at the numbers.
Too Few Visitors or Too Much Supply?