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The View from Sydney

Nick Deacock, Sydney-based Product Manager of Garuda Orient Holidays, Shares His Views on the State of Bali-Australian Travel.

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As the leading wholesaler of travel from Australia to Bali, Garuda Orient Holidays (GOH) is well-positioned to provide an update on the state of Australian-Bali travel and the progress of current efforts to revive that business. recently caught up with GOH's Product Manager, Nick Deacock for the following exclusive interview.

The Interview Australian arrival numbers are still dramatically down by more than 50% as compared to 2005. What do you see as the leading causes of this downturn?

Deacock: Although statistics show the Australian market languishing 50% down on 2005 levels, I am pleased to say that our (Editor: GOHís) levels are well above the general trend. There are many reasons why consumer sentiment towards Bali remains soft in Australia, including the obvious terrorist attacks and string of arrests and subsequent court cases of Australian drug smugglers in Bali. Many in Australia do not understand the legal processes which saw the increase in sentence under appeal for some of the Bali Nine smugglers. Some people may have a misplaced fear for their personal security (i.e., their luggage) if they travel to Bali, which is hard to fathom considering Corby's defense was built around the premise her luggage was tampered with in Australia! The Australian DFAT Travel Advisory, which continues to suggest some kind of paranoiac expectation of a terrible future, deters those unfamiliar with Bali.

Recent natural disasters like the eruption of Mt. Merapi, Yogyakarta earthquake and Java tsunami - whilst tragic due to the horrendous loss of life, probably won't have any long-term impact on the tourism industry under normal circumstances. However, the Australian public are being force-fed a diet of 100% bad news - and most of the Australian media are having a field day reporting it.

If the Indonesian Government was serious about tourism, if a professionally managed and well-funded Indonesian Tourism Promotion Board existed, and if just one percent of the revenue raised by the Indonesian Government through tourism was channeled back into promoting Indonesia's ultimate diversity, I doubt Bali's tourism from Australia would be in the dire predicament we see today.

In late 2005 the Government pledged US$7,000,000 for strategic tourism marketing. Most of those funds have already been spent, according to the Ministry of Culture and Tourism. Where and how? Considering Australia contributes a huge proportion of the tourist market to Indonesia and Bali, latest reports suggest only 5.7% of the total budget (i.e. US$400,000 out of US$7,000,000) has been earmarked for Australia.

However, more than a year since funds were first pledged, nothing has actually been spent here yet. Do you see the Australian market coming back and, if so, in what time frame?

Deacock: There is no doubt Australians will return to Bali. Aussies love Bali and everything the island offers: the peace loving Balinese, the relaxed and friendly atmosphere, the climate, the culture, the history, the scenery, the diversity, the proximity, and the affordability. Garuda Orient Holidays continue to work closely with Garuda Indonesia and our retail partners to promote Bali at a time when other destinations are receiving the majority of marketing expenditure. If, when the promotional budget is put to use, all sectors of the retail/wholesale/airline industry work together, and there are no further 'disruptions' affecting Bali and/or the traveling public, we hope to see Australian tourist levels return to some kind of normalcy by the middle of next year. What specific steps are Garuda Indonesia and Garuda Orient Holidays taking to revitalize the travel market to Bali?

Deacock : Our 100-page "Bali on ANY Budget" brochure, website and 'e-brochure' feature over 140 hotels and dozens of tourism activities in Bali, plus adventure sports, overland tours, cultural and historical destinations, Komodo and surfing cruises and much more throughout Indonesia. With Garuda in March we co-hosted 30 TAG (Top Achiever Group) travel agents on a luxury familiarization trip to Bali; in May we co-hosted over 100 travel agents for a week in Bali and other regions on our "Faces of Indonesia" MEGA Familiarization; and we have provided logistical support to Garuda Indonesia to send several media delegations to Indonesia including extensive itineraries through Bali as well as Java overland, Komodo cruised and Kalimantan eco-touring. Nearly every week we release new product flyers and we have invested heavily in both trade and general press advertising. Our monthly e-GOH News keeps the industry informed about developments and new product in Bali. We have also worked with the Indonesian Consulate to support a variety of fund and awareness-raising events. There's much in the news about Garuda's debt restructuring, rationalization and efficiency drives. What is the approximate percentage of Garuda Australia's contribution to Garuda system-wide revenues and what will be the impact of the various changes and streamlining now underway on Garuda Australian operations?

Deacock: Garuda would be in a better position to answer this, but I recall just a few years ago South West Pacific, (Australia/New Zealand) operations were heralded as Garuda's most profitable region. Seat load factors were high, airfares were realistic, revenue/profit was healthy, and there were plans for additional services and new routes. Then global events turned everything upside down. Competition in the airline industry drove prices down, rather than the Bali market growing it was simply diluted by the competition, revenues and profits fell, plans for expansion had to be shelved, and Garuda is now having to consider unpalatable ideas just to see themselves through this difficult period. The temporary suspension of Bali services from Auckland/Brisbane will place additional stress on Garuda's Sydney services, but schedules can be resumed when demand picks up. Proposals to hub East Coast services through Jakarta from April next year are just that - proposals aimed at reducing operating costs. Whilst some market slippage would no doubt occur if Jakarta became a transit point for Bali from East Coast, Garuda's extensive Asia network would be opened up and we would expect growth in that area to offset some of the losses in Bali volume. You've just attended the Tourism Indonesian Mart & Expo - TIME 2007 in Makassar? What's your general assessment of this annual marketing effort to promote Indonesian travel and what do you foresee for PATA Mart 2007 in Bali in September 2007?

Deacock: This year was my 8th consecutive TIME. Whilst I understand Indonesia's desire to showcase other destinations, and I commend the hospitality and tourism industry in Makassar for an excellent show, the sad fact is that participation at TIME has continued to fall over the past several years to the point where, this year, my primary reason for attending was because TIME was being held in Sulawesi allowing my first visit to Sulawesi. I was able to visit the culturally and historically significant region of Tana Toraja Ė which is a "must see" destination. At TIME, both Sellers and Buyers were in short supply. Some of the major business partners I meet with every year did not attend, and many of those I did meet with I see on a regular basis in Bali anyway. Greater effort is needed to attract more, new Buyers - but they will not come if there are not more, new Sellers - but neither will come if the Government doesn't invest heavily in promoting Indonesia's diverse attractions to create demand in

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