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Jones Lang LaSalle: Time for Bali to be Optimistic

Major Property Investment Consultants Gives Their View of Bali's Tourism Fortunes.


The Friday, September 11, 2009 edition of The Jakarta Post carried the following overview of Bali's tourism economy by Djodi Trisusanto, a consultant to Jones Lang LaSalle Indonesia:

Time to Be More Optimistic than ever for Bali Tourism Market

By Djodi Trisusanto, Consultant, Jones Lang LaSalle Indonesia

The JW Marriott and Ritz-Carlton Bombings in Jakarta last July may have caused a setback for the Bali tourism market that has performed relatively very well despite the global financial crisis and the threat of a global H1N1 pandemic.

The growth of the Bali tourism market has been fueled by regional and international Meeting Incentive Conference and Exhibition (MICE) events and depends not only on the global economy but also on the safety and security aspects of the island.

Recent data derived from the international direct arrivals to Ngurah Rai Bali, however, have shown a relatively stable growth during the period after the bombings in July.

International tourist arrivals for the seven months up to July 2009 were recorded at over 1.2 million, a growth of around 12 percent over that of 2007.

Security measures and government initiatives to minimize the effect of recent Jakarta bombings on the Bali tourism market as well as efforts to capture and to bring the perpetrators to justice have given confidence and positive perception to international tourists that Bali remains a safe tourist destination.

The continued growth of Bali tourism market, albeit slower than in 2008, was not anticipated given the magnitude of the economic crisis felt during the end of 2008 and the beginning of 2009.

Most analysts had predicted that global international tourist arrivals would decline following the global financial crisis with corporations expected to cut travel and meeting programs.

Bali was no exception with many of the feeder countries such as UK, US and Japan expected to be greatly affected by the crisis with unemployment rising and consumer confidence declining.

As a result earlier in the year UNWTO (World Tourism Organization) predicted that international arrivals would decline between 2 percent and 3 percent.

Contrary to these forecasts, Bali has again, just as for the past three years in a row, proven to be resilient.

Arrivals from its key feeder countries have mostly continued to increase as indicated on the following graph showing international arrivals to Ngruah Rai Bali for Year-to-Date June (YTD) 2009.

As shown on the graph, aside from Japan, South Korea, Japan and Germany, almost all key markets exhibited growth during the period with tourists from China, France, and Australia recording the highest year-on-year increases of about 55 percent, 40 percent and 39 percent respectively.

This is followed by the growth in visitors from Malaysia (28 percent), Singapore (16 percent), Russia (5 percent) and UK (2 percent). Other source markets grew marginally.

With loyal repeat visitors from Japan, Europe and Australia and the ability to always find new markets such as China, India, and Russia, the Bali tourism market is expected to outperform other markets globally.

Civil unrest and political instability in Thailand and the favorable tourism environment in Bali have helped its performance to date. The outlook of the Bali tourism market would continue to be positive.

Jones Lang LaSalle has listed the following factors affecting Bali's continued tourism market growth:

Improved aviation safety standards, in response to the newly enacted Aviation Law No. 1 2009, with the EU lifting the two-year ban on selected Indonesian carriers, including Garuda Indonesia, as from July 2009.

The popularity of Bali, voted for the seventh year running as the "Best Island in the World" by Travel and Leisure Magazine in 2009, reinforcing its position as one of the world's top destinations

In addition to the existing luxury brands in Bali that include Bvlgari, Four Seasons, Aman, and Orient Express, the newly opened and upcoming branded hotel developments such as St. Regis, Alila, Banyan Tree, and the Retreat and Spa will strengthen Bali's positioning as a favored travel destinations amongst affluent international leisure travelers

The diversity of Bali's hotel supply that has been in the past few years expanded with different kinds of accommodation targeting a large spectrum of international travelers, from long staying travelers that demand more privacy and tailored services to week-end travelers that demand relatively simple but central locations. This includes private villas in cliff locations and mountain resorts in Ubud and condo hotels in Kuta, Seminyak, and Nusa Dua

Recovery of the global economy with expected recovery of the Japanese, South Korean, and Taiwanese markets that in the past have been predominant.

Large and strong domestic market that has been one of the main market sources for hotels particularly in popular destinations such as Nusa Dua, Seminyak and Kuta.

Political stability and strong government for the next five years following the successful presidential election in July 2009. This will ensure continuation of infrastructure developments and promotion of sustainable development that is much needed for Bali's future.

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