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BALI UPDATE #412 - 02 August 2004

Best June Arrivals in History
Bali by the Numbers: June Arrivals Soar While Europe and Americas Continue to Lag.

Total direct foreign arrivals for June of 131,707 visitors represent a new all-time record for June, surpassing the previous high of 130,563 established in 2002. Growth in arrivals flowed mainly from massive gains in arrival totals from the Asia-Pacific region and ASEAN regions, while Europe and the Americas still lack the momentum of just three years ago as they labored under the negative pressure of travel warnings and recently introduced visa restrictions.

The First 6 Months of the Year

Overall arrivals for the first half of 2004 totaled 648,182 foreign visitors, a 64.06% improvement over the same period in 2003 which was sorely depressed in the period immediately following the Bali bombing in late 2002. Despite the strong gains overall arrivals for the latest 6 months, performance still lagged 4.8% behind the 680,884 visitors logged in the same period of 2001.

Australia and Taiwan Lead Asia-Pacific Arrivals

Total arrivals for the Asia-Pacific region also set a new record for the period January-June 2004 with 410,838 arrivals. However, when measured against the first six months of 2001 – a period then still free of the negative impacts of 9-11 and the Bali bombing – the 2004 figures still trail 6.44% behind that year's first-half visitors arrivals total of 384,387.

Australian arrivals staged a strong comeback totaling 119,740 arrivals for the first six months of this year, reflecting the strong demand from that market and setting a new Australian record for the first half of any year. Both Japan and Taiwan turned in strong performance for the period, but, again, still failed to equal arrivals from the stasis year of 2001.

ASEAN Visitors Rule the Roost

Mirroring improving economies across the region and the advent of discount carriers, visitors from ASEAN totaled 59,081 for the first six month of 2004, reflecting a new record for travelers from that region. Comparing 2004 to 2001, ASEAN marked a near 100% increase in arrivals over the past 3 years.

America – Ever So Slowly

Unimpressed with travel advisories and visa fees, the Americas are making a sluggish return to Bali, totaling 35,595 for the first half of 2004, a figure still far behind the same period in 2001 (57,053).

Europe – Failing to Materialize

Although improved over post bombing 2003, arrivals from Europe for the first 6 months of 2004 are showing little sign of returning to more normal totals, such as those achieved in 2001. European arrivals tallied 138,076 - still down 32.68% from the 2001 figure for the same period (205,092).

Major tourist producing countries in Europe have failed across the board to regain the lost splendor of arrivals achieved just 3 years before in 2001: U.K. arrivals are down 54.45% at 25,476 when compared to 2001; Germany is down 24.19% (31,195); Italy is down 49.81% (6,258); The Netherlands down 23.41% (15,021); and France down 19% (16,645).



VOA Fees - Money Spinner or Money Loser?
Officials Count the Proceeds After Almost 6 Months of Visa Fees.

The imposition of a US$ 25 visa fee on arrival for the nationals of 21 countries visiting Indonesia has become something of a cash cow for the state coffers, if not for the tourism industry as a whole.

According to figures released by the National Immigration office, Rp. 144.7 billion (approximately US$ 16.1 million) has been collected during the nearly first 6 months since the fee's introduction on February 1, 2004.

No Impact on Tourism Numbers?

According to an Immigration Department spokesman, the introduction of the fee has had no negative effect on tourism flows to Indonesia, with officials citing the steady increase in total tourist arrivals during the same period.

Immigration statistics quoted in the Indonesian-language newspaper Bisnis Indonesia, report that from February 1 through July 23, 2004, the number of foreign tourists visiting Indonesia totaled 1,998,394 people. From that total 822,505 fell under the visa-free facility granted to selected nations; 385,458 arrived with visa secured at an Indonesian embassy abroad before arriving in the Country; and 385,458 purchased either a 30 day (US$ 25) or 3 day (US$ 10) Visa on Arrival (VOA) upon arrival. The same report says a total of 963 foreign visitors were denied entry to Indonesia during this period.

Statistics Worthy of a Closer Look

Closer scrutiny of the total revenues collected and statistics for tourist arrivals to Bali, however, provide cause to question official assertions that the visa fee has not negatively impacted the tourism industry.

Using the just announced tax revenue total of US$ 16.1 million and dividing that by a factor of average per diem spend per visitor and average length of stay suggests that any tax revenues collected may pale insignificantly in comparison to foreign exchange revenues that have been lost due to the new policy. Using the currently depressed average length of stay approximated at 8 days and an average per diem spend of, say, US$75 means that a loss of only 26,800 tourist arrivals due to the new policy manages to cancel out in foreign exchange losses any tax advantage accrued from the new visa fee.

Moreover, the breakdown of arrival figures for the same five months for Bali presented at [balidiscovery.com] open the way to an altogether different interpretation of the visa fee's impact than that put forth by immigration officials:

• While overall tourism numbers are making a dramatic improvement in comparison to the post bombing arrival figures of last year, the numbers when compared to a stasis year, such as 2001, show that the strong recovery has been limited to visitors from ASEAN and the Asia-Pacific region.

• In fact, the nearly 100% increase in ASEAN arrivals, when comparing the first six months of 2004 with the same period in 2001, serve to make the reverse argument of the case being presented by immigration officials. ASEAN nationals, who are granted visas on arrival without charge, are logging in the strongest arrival totals for Bali, supporting those saying that a laissez-faire approach to visa granting is the surest way to increase tourism visitor flows.

• Arrivals for February-June for the America's – the citizens of which must pay for their visa's on arrival in Bali, is down 17,334 for the 2004 period when compared to the same period in 2001. Arrivals for Japan, a major producer of tourists for Bali and a group also required to purchase visas at Bali's airport under the new rules, are down 13,022 for the period February to June - 2004 versus 2001. Meanwhile, Europeans, who either must pay for a visa on arrival or apply for one before traveling to Bali, are down a dramatic 58,437 for the period February-June, 2004 versus 2001.

• Therefore, using only Europe, the Americas and Japan as a yardstick, the argument can be made that at least some or all of the resulting shortfall of 88,793 may be due to the visa policy, with some of this total shortfall, undoubtedly, due to those who decided not to travel due to negative travel advisories.

Balancing the Books

Whatever the actual reason for the 88,793 shortfall in travelers from Japan, the Americas and Europe - the 88,793 shotfall extrapolates into a minimum US$ 53.3 million loss in badly needed foreign exchange, a figure 231% more than the US$ 16.1 million secured in tax fees collected at Bali's airport.


Garuda to Stop Amsterdam Service
Garuda Will Cancel Amsterdam Service in November 01, 2004. Other Routes Also Targeted for Cutbacks.

Garuda Indonesia is preparing to cancel its last remaining self-operated European service to Amsterdam.

An official announcement from the Amsterdam office of Garuda has confirmed that effective November 01, 2004 the airline will stop flying to Amsterdam. Service is being phased out gradually with flight frequencies reducing to three times a week for the month of September and to twice a week for October – the last month of operation for the service.

The same announcement told of other cutbacks in the Airline's operations including the route from Bali to Taipei and Seoul which is set to stop on November 01 and the Jakarta-Shanghai service which will reportedly not operate in September and October.

One Garuda Indonesia ranking source said the airline hopes conditions in the marketplace and the airline improve sufficiently to allow the airline to resume its Amsterdam flights with the 2005 Summer schedule.

Passengers holding confirmed tickets on any of the confirmed sectors are being re-assigned to other carriers by Garuda Indonesia.


Bali's F1 Powerboat Race Cancelled
Conflict with Religious Holidays and Lack of Government Support Cited as Reason for Change of Venue.

A much publicized international F1 powerboat championship race scheduled to be held on Bali's Benoa beach in October 2004 has been cancelled. The organizers, whose decision it was to move the event away from Bali, say a similar event may soon be held in Indonesia, perhaps as early as April 2005.

A number of reasons were blamed for the world championship race's cancellation and the decision to move the race set to be held October 29-30 October in Bali to its new location in Japan. Apparently the main consideration in making the decision was a conflict in dates for the race with the Islamic month of ritual fasting. Efforts to advance the date of the race to October 10, a period preceding the fasting month, were eventually vetoed by security officials who felt the proposed new dates were too close with national elections scheduled to be held on September 20, 2004.

Local press reports also suggest that a lack of financial sponsorship may have also played a role in the decision to move the event. According to the Indonesian-language newspaper Kompas, organizers have managed to line up only half of the estimated Rp. 24 billion (approximately US$ 2.7 million) in sponsorships needed to hold the races.

A Lack of Government Support?

Organizers have complained to the press regarding a lack of financial and moral support for the races. Quoted in Kompas July 29, 2004 edition, Mr. A. Reza Ali, Chief of the local steering committee for the F1 races said, "the F1 powerboat racing is a most prestigious event. It is not only an exclusive event its own right, but also so because the owners of teams will attend. The owners are Arab oil kings, princes and wealthy individuals. They attend to watch their teams compete while at the same time transacting business at the race locale. It is regrettable that the Government does not wish to actively support this event."


Not as Cultured as We Thought
Errata: Last Week's Announcement of the Addition of 3 UNESCO Heritage Sites in Bali.

A late July 2004 announcement in many major national and local newspapers and at least one official Indonesian government web site of the addition of 3 locations in Bali to the list of UNESCO World Heritage Sites was, in a word, wrong.

Joining in the general rejoice of having three Bali sites added in a fell stroke to the prestigious UNESCO Heritage list, balidisocvery.com also carried a similar erroneous report in its coverage [UNESCO Heritage List Adds 3 Bali Sites].

Not on the List and Not Even in Consideration

Further indepedent enquiries by balidisocvery.com with UNESCO officials have revealed the following:

• Indonesia has no Heritage Sites under consideration in the current 17 month review process undertaken by UNESCO before any new Heritage Site is announced.

• Indonesian officials, either on a national or regional basis, reportedly did submit separate recommendations for the addition of the three Bali Heritage Sites and Tanah Toraja in Sulawesi in the last round of nominations. Apparently, all the Indonesian applications were returned by UNESCO's Selection Committee due to administrative and application deficiencies. According to a UNESCO official, those deficiencies remained unaddressed until the deadline for new applications passed.

• All submissions for addition to UNESCO's World Heritage List undergo a 17 month review process and, as a rule, any one U.N. member nation is limited to a maximum of one new heritage site inductee in any given year.

Unfortunately, the recent widespread announcement of the addition of 3 new UNESCO Heritage Sites in Bali is more reflective of wishful thinking than any reality.


Not a Popular Decision
Many in Bali Protest Recent Constitutional Court's Decision Affecting the Bali Bombers.

Peaceful demonstrations were held on Saturday, July 31, 2004, at Bali's Peace Monument, the scene of the tragic bomb blast of October 12, 2002.

Protestors representing a number of non-governmental organizations and Hindu religious groups unfurled a 100-meter longer banner rejecting a recent Constitutional Court ruling that found Law Number 16 of 2003 unconstitutional in its retroactive application of Law Number 15 of 2003 – Indonesia's new Anti-Terrorism Law. The controversial decision by the Constitutional Court has opened a far reaching debate within Indonesian society and left the fate and eventual punishment of the 33 people convicted with involvement in the Bali bombing in question.

Protestors at the Saturday demonstration presented a 3 point statement which:

• Rejected the decision of the Constitutional Court that declared Law Number 16 unconstitutional.

• Called on members of the Constitutional Court to revoke their controversial decision and resign their posts.

• Called on the Supreme Court to reject any judicial review of the punishments handed out to Amrozy and the other Bali bombers.

Echoing statements made by many national legal experts, the protestors argued that the exceptional nature of the Bali bombing offers sufficient basis for the crimes connected to that event to be declared Extraordinary Crimes, a basis for waving the constitution prohibition on retroactive legislation.



Something to Yodel About
Bali's Swiss Community and Their Friends Celebrate National Day and More in Bali on August 1, 2004.

Representatives of the Swiss Embassy in Jakarta, those who work at Bali's Swiss Consulate, numerous Swiss Nationals living in Bali and many friends gathered together twice on Sunday, August 1, 2004.

That's right. Twice.

The first gathering was at the newly opened Consulate Office at Bali's Istana Kuta Galleria, to officially inaugurate that office, a party that later reformed 15 kilometers further south at Rumah Bali at Tanjung Benoa to celebrate the official lunching of Heinz von Holzen's new Balinese Cook Book - "Bali Unveiled." Contact details for the new consulate are posted at [The Swiss and Austrian Consulate has Moved].

Additional information on Heinz's beautiful new cook book are at at [Bali Unveiled].

While on August 1 the first people in Switzerland traditionally gather to celebrate the independence of Switzerland, which dates the separation from its Austrian rulers with the Grόtli Pact of 1291, in Bali where a single consulate serves the citizens of both Austria and Switzerland, perhaps politeness dictates that less fuss is made about the separation the day commemorates.

A highlight of both gatherings was the special appearance of a Swiss Alphorn Group flown in from Mount Blanc especially for the celebrations. A musical traditional that traces its Swiss roots back 500 years when the sound was used to herd grazing cattle, the Swiss take their Alphorn playing seriously, performing on the nearly 4 meter long horns until, quote literally until the cows come home.

Later, at the Rumah Bali, two alphorners also demonstrated their professional musicality on trumpets presenting moving renditions of the Swiss Psalm - the National hymn of Switzerland, followed by Tanah Airku Indonesia's national anthem.

Swiss beers and wines, Swiss and Balinese food, and speeches celebrating the Swiss, their country, and their love for Indonesia as demonstrated by projects such as Von Holzen's definitive cookery book on Bali – filled out a most memorable evening.


Bali Loses Interhash 2006 Bid
Hopes Dashed for Major Running Event in Bali as Chiang Mai in Thailand Gets the Nod for 2006 Event.

Hundreds of Indonesian Hash Members who traveled all the way to Cardiff, Wales to run in the Interhash 2004 and to support Bali's bid to host the next Interhash 2006 in Bali had their hopes dashed when Chiang Mai in Thailand was selected for the event expected to draw over 5,000 runners for the near-week long event.

As reported at balidiscovery.com in [Bali Runners to Cardiff for Interhash in July], four destinations were competing for the honor of hosting the 2006 event. In addition to Chiang Mai and Bali, Edmonton (Canada) and Perth (Western Australia) made sponsorship bids. In the final voting carried out among participants at this year's event, Perth ranked second, Bali third and Edmonton was in fourth place.


Sky High at the Bali Hyatt
Staff and Guests Celebrate Annual Kite Festival at Sanur's Bali Hyatt Resort.

Brad Kirk, General Manager of Sanur's Bali Hyatt welcomed his guests, calling it one of the best days of the year, and with good reason.

On Saturday, July 31, 2004, representatives of the hotel's various departments gathered on the beach for a fun-filled morning of friendly competition at the annual Bali Hyatt Kite Festival.

For weeks before the event, representatives from each of the hotel's departments gathered in secret clusters at undisclosed locations around Sanur to work together in building the most beautiful and aerodynamic kite to compete in the hotel-wide competition. Hoping to walk away with the winner's trophy and prizes, the housekeepers, engineers, spa personnel, front office staff, gardeners, and food and beverage personnel designed magnificent, large kites to be launched aloft along the beach to the delight of guests and the careful scrutiny of a panel of judges.

Kites in the shape of a Koi fish, a giant turtle, a flying zebra, and an airborne scuba diver were just some of the many creative designs sent aloft by the resort's staff. Balinese in spirit and character, all the kite teams wore traditional Balinese dress and each launching was accompanied by the music of the hotel's gamelan orchestra.


Introducing Pansea Orient Express Hotels
Pansea and Orient Express Join Forces to Create New Company and a New Brand.

Orient Express Hotels and Pansea Hotels have combined forces to create a combined company and a new brand - Pansea Orient Express Hotels.

Orient Express owns 40 hotels, restaurants, a luxury tourist train, a river cruise and properties in 17 countries are joining forces with 6 Pansea Hotels in operation or under construction in Southeast Asia.

Pansea properties are located in Luang Prabang, Laos; Rangoon, Burma; Siem Reap, Cambodia; Bali, Indonesia and Koh Samui on the Gulf of Siam in Thailand. The Pansea Hanging Gardens in Ubud, Bali, is currently under construction and scheduled to open at the beginning of next year.

The Pansea group will continue to remain under the control and management of its existing executives, Robert Molinari and Stanislas Rollin, and will retain its existing personnel. The Pansea Hotels and developments situated outside of Asia (in Tunisia and the Caribbean) will remain under the Pansea brand.

The Pansea properties in Asia, however, will now bear new names and be sold under the new banner of Pansea Orient-Express Hotels. The Pansea Puri Bali under the new arrangement becomes the Jimbaran Puri Bali, Bali, Indonesia while the Pansea property in Ubud now under construction will open as the Ubud Hanging Gardens, Bali, Indonesia.

All the resorts and hotels operating under the new combined corporation will share a common tag-line - "A Pansea Orient Express Hotel."


A Victim of its Own Popularity
September Promotional Trip for Australian Travel Agents Postponed Until October 31, 2004.

Garuda Orient Holidays plan to bring 150 top travel agents from Australia and New Zealand to Bali, Lombok, Surabaya and Yogyakarta in September had been pushed back due to a lack of available airlines seats caused by levels of unprecedented travel demand between Bali and Australia.

The "familiarization trip" with the theme "Bali – The Key to Indonesia" originally scheduled for September will now depart Australia and New Zealand on October 31 and run until November 6, 2004, when the participants will fly back to home ports.

A similar event "Bali – Seeing is Believing", held in 2003, attracted some 200 travel agents.

In cooperation with the Ministry of Culture and Tourism, Garuda Orient Holiday is expanding the format of last year's successful event by introducing agents with a proven ability to sell Bali to the wonders of other Indonesian ports of call, such as Lombok, Surabaya and Yogyakarta.

Because invitations to participate are based on production, the delay may be a blessing in disguise to interested agents who now have the chance to sell more travel to Indonesia over the coming few months in order to win a place on the prestigious familiarization trip.

For more information contact Nick Deacock of Garuda Orient Holidays (GOH) via the e-mail link.

More information: GOH's Nick Deacock's E-mail


Open Skies for Indonesia and the U.S.A.
Historic 'Open Skies' Agreements Signed in Bali.

On Monday, July 26, 2004, a historic open-skies agreement was signed between Indonesia and the United States that virtually removed all restrictions covering air communications between the two nations.

The bi-lateral agreement was signed by U.S. Transportation Secretary Norman Mineta and Indonesia's acting Minister of Transportation, Soenarno. Both men were in Bali where they signed the wide-ranging air agreement prior to the commencement of a meeting of Asia-Pacific Transport Ministers held at Nusa Dua.

Quoted by Reuter's News Service, Secretary Mineta said, "the Open-Skies agreement will connect our countries, our citizens and our economies, opening new opportunities for trade, tourism and investment."

The agreement removes all restrictions on the number of flights, type of aircraft and pricing regulations for aircraft operating by Indonesian and the U.S.A. carriers and flying between the two nations.

U.S. Grant to Assist Indonesian Aviation

Concurrent with the signing of the new aviation agreement between the U.S.A. and Indonesia, the United States Trade and Development Agency (USTDA) has provided three grants totaling US$ 1,187,500 to Indonesian aviation development projects.

The first grant worth US$ 443,500 is a technical assistance agreement to assist Indonesia in the assessment of safety and security procedures at Indonesia's airports. A second grant worth US$ 627,000 will permit Indonesia to re-establish air traffic control systems in the airspace above Natuna Island in the South China Sea. Currently, air traffic control in this Indonesian sector is provided by Singaporean and Malaysian air traffic controllers. The final grant of US$ 117,000 is for technical assistance to the Indonesian airline industry to support and encourage competition in the management of computer reservation systems (CRSs).

Shown at balidiscovery.com is U.S. Transportation Secretary Norman Mineta addressing a cocktail following the bi-lateral air agreement signing in Nusa Dua, Bali.


 
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