Strong Growth for Visitor Arrivals to Bali in 2015

Indonesia

A total of 1,555,609 foreign tourists have visited the island of Bali, the most popular tourist destination in Indonesia, in the first five months of 2015, an 11.3 percentage point growth from the same period last year. Given that the number of foreign tourists usually peaks in the period June-September it is most likely that the government’s target of welcoming 4 million foreign tourists on Bali in 2015 will be achieved, or exceeded. Most tourists that visit Bali originate from Australia, China and Japan.

The significant growth of tourism numbers in the first five months also implies that there has been limited negative influence caused by the Indonesian government’s reluctance to block several executions. In January 2015, despite fierce international resistance, Indonesia allowed the execution of five foreigners (from Brazil, the Netherlands, Malawi, Nigeria, and Vietnam) and one Indonesian citizen who were all found guilty of drug trafficking. These executions temporarily led to diplomatic tensions as the Netherlands and Brazil recalled their ambassadors. Then, in April 2015, seven more foreigners (from Australia, Nigeria and Brazil) and one Indonesian citizen were executed for smuggling or distributing drugs in Indonesia. This led to troubled diplomatic relations between Australia and Indonesia. Meanwhile, earlier this week, a Frenchman (drug trafficker) lost its appeal against his death sentence.

To boost development of the tourism industry on Bali, the government and other stakeholders are eager to pay more attention to the island, including the provision of accommodation (with high quality facilities), infrastructure development as well as tackling safety issues and enhancing the quality of local human resources. For example, the Indonesian government is planning to construct a two-runway international airport at Singaraja (North Bali) as well as a toll road from the capital city of Denpasar to Gilimanuk (West Bali).

Bali, which has been a popular destination for foreigners since the 1930s, is one of the islands that receives special attention from the government in order to achieve the government’s middle-term target of attracting about 20 million foreign tourists by 2020 in the whole archipelago.

The marketing budget of the Indonesian government was raised fourfold to IDR 1 trillion (approximately USD $75 million) for 2015. This budget will be primarily used to promote Bali, Jakarta, Bintan and several islands of Batam (near Singapore) to the international audience. Together these areas account for about 90 percent of Indonesia’s revenue from foreign tourists.

The government is eager to compete with regional neighbours Malaysia, Singapore and Thailand. Although Indonesia is the largest country in the Southeast Asian region and contains ample attractions for tourists, it lags behind in terms of attracting foreign tourists, welcoming less than half the foreign tourists than its regional peers. In 2014 Indonesia welcomed 9.4 million foreign tourists, much less compared with Thailand (24.8 million) and Malaysia (27.4 million).

One of the strategies of the Indonesian government to attract more tourists is the granting of visa-free entrance to citizens of 30 countries for a holiday with the maximum duration of 30 days. According to Indonesian state news agency Antara this new policy comes into effect on 1 July 2015. By waiving visa requirement for these 30 countries, the government targets to increase the number of foreign tourist arrivals by around 5 percent to 10 million in 2015.

These 30 countries are Austria, Bahrain, Belgium, Britain, Canada, China, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Japan, Kuwait, Mexico, the Netherlands, New Zealand, Norway, Oman, Poland, Qatar, Russia, South Africa, South Korea, Spain, Sweden, Switzerland, the United Arab Emirate and the United States. Fifteen other countries, mostly located in Southeast Asia, were already exempted from tourist visa requirements.