10 May 2022 (closed)
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The tourism industry is among the most heavily disrupted industries in the COVID-19 crisis as restrictions made it difficult (sometimes even impossible) to travel while various tourist destinations had to close temporarily. Moreover, we assume that the psychological impact of the crisis on people is bigger than estimated (implying that people become less willing to travel to distant locations, in particular to emerging economies where healthcare is generally not at world-class standards).
Data from Bali, Indonesia’s most popular tourist destination, are in fact alarming. In October 2021 Bali re-opened its borders for international tourists (albeit under very strict regulations, including a ban on the arrival of travellers from various countries) but, problematically, foreigners are not coming back to Bali (yet).
Prior to the COVID-19 pandemic, more than six million foreign visitors travelled to Bali each year (for example, in 2019, a total of 6.2 million foreigners entered Bali via Ngurah Rai International Airport; this number excludes foreign visitors who arrived by sea as well as those who entered Indonesia at a different location and then went to Bali via a domestic flight). So far in 2021, however, only 43 foreign visitor arrivals were counted at Bali’s Ngurah Rai Airport (and eight more via Bali’s Tanjung Benoa seaport). This consequently has a big impact on occupancy rates in hotels on Bali. Total hotel rooms on this island number around 150,000 units. However, less than six percent of the total is occupied. That is disastrous for the operators.
Especially for an island like Bali, which is for about 65 percent dependent on tourism (directly and indirectly), the complete collapse of the tourism industry is a huge and unprecedented problem. But Indonesia as a whole, too, definitely feels the impact of the plunge in tourist arrivals as foreigners bring foreign currency into the country. In full 2020 foreign exchange earnings in the tourism sector only reached USD $3.54 billion, down sharply from USD $16.9 billion in the preceding year.
Moreover, 2021 is bound to become an even worse year. A few months back when the Tourism and Creative Economy Ministry revised the foreign exchange earnings target for full 2021, the target was cut from around USD $6.0 billion to around USD $360 million. Meanwhile, the target for 2022 was cut from around USD $11.0 billion to around USD $1 billion. This revised target shows that the Indonesian government is extremely pessimistic about attracting foreign visitor arrivals in 2022, despite the nation being nearly COVID-19-free for the past couple of months.
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