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Has Anyone Seen Our Tourists?

Despite Record Setting Foreign Tourist Arrival Numbers, Many Businesses Complain that Business is Bad.

(6/2/2007) While balidiscovery.com's continuing series "Bali by the Numbers" suggest foreign tourist arrivals to Bali are hitting record highs [See: April Foreign Arrival Numbers Set New Records], we are often accused of "cooking the numbers" by local observers who have a difficult time reconciling buoyant arrival reports with quite shops, restaurants and hotels across the Island.

And, in fact, local press reports confirm that many handicraft shops and their supporting workshops are closing down in the face of a dramatic downturn in customers as compared with business in the recent past. A similar fate is also being experienced by restaurant owners and small hotels no longer able to generate the necessary cash flows to meet daily operating expenses.

Where are All the Tourists?

Recent surveys carried out by the Bureau of Statistics (BPS) and Bank Indonesia (BI) in Bali confirm that while the quantity of tourists visiting Bali is increasing dramatically, the overall quality of those tourists is on a sharp decline. Increasing competition among accommodation providers, which now include hundred of private villas and new resorts, has made the current lack of quality embodied in current arrival numbers even more apparent. The survey, conducted in January 2007, showed many starred hotels in Bali are running with occupancies at less than 50%, a fact underlining the dramatic over-supply of rooms facing the Island.

The BI and BPS surveys also showed that there have been fundamental changes in the complexion of inbound tourism to Bali. Much of the growth in arrival numbers can be credited to the advent of low-cost carriers serving short-haul markets in the Asia-Pacific region bringing visitors who spend less and stay for shorter duration than their long-haul counterparts from Europe and the Americas.

While the Bali-based survey suggested an average overall length-of-stay (LOS) of 9.87 days, this figure is down markedly from the 11.71 day LOS recorded just a few years ago. That the actual length of stay may be even lower is suggested by the overwhelming preponderance of Bali visitors who opt for a 7-day visa-on-arrival as opposed to the next alternative of a 30-day visa. This is consistent with other results from the survey which show that North Asian and East Asian visitors are staying on the Island for only 6.83 days while ASEAN visitors spend an even shorter period of 5.10 days in Bali.

Overall, 55.20% of all visitors to Bali stay for less than 7 days.

Spending Less

While regional airlines championing "Now Everyone Can Fly" have largely lived up to that promise, the amount of money left in Bali by regional travelers on perhaps their first trip abroad is much less than more seasoned travelers of yesteryear. One local hotelier said that requests for three or four people sharing a single room are increasingly common and these customers leave the hotel to purchase their meals from local street vendors or dine on food items purchased from local supermarkets.

Arguably, if there is a bright side to this situation it is the money reaped by street vendors lucky enough to snare a share of the "new travelers" and the local inns and home-stays attracting the conservative-spending regional tourists.

In the end, however, the overall net effect for both Bali's larger businesses and small local traders experiencing larger arrival numbers comprised of visitors who stay briefly and spend sparsely means that business is down.