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Coronavirus: Bali tourism 'almost paralysed' as flow of Chinese tourists to Indonesia dries up

South China Morning Post - March 21, 2020

Randy Mulyanto – I Gusti Ngurah Adi Mahendra, the owner of a tour agency in the Indonesian holiday island of Bali, has lost 80 per cent of his income after receiving mass cancellations from clients amid the ongoing coronavirus outbreak.

About 98 per cent of people who book tours at his Bali OneTwo Trip tour agency are from Australia, New Zealand, the United States, Western European countries and others, and many have postponed their holidays for "an indefinite period of time".

Although the 27-year-old entrepreneur has no Chinese customers so far, he admitted "we were also affected" as a result of declining tourists from China visiting the island.

For now, Mahendra is closely watching the situation and waiting for updates from the government. He said he would only get in touch with his customers and promote his tours again "when things get back to normal".

Mahendra, who started his business three years ago, said he would still partner with 10 drivers and four tour guides despite slowing business. He is also maintaining the same prices for his tour packages, which start from 600,000 rupiah (US$39) for a car of two to seven passengers, and lasting eight to 10 hours.

"The current impact is quite felt here and concerning for everyone," he said. "Bali's tourism can be said to be almost totally paralysed. This is very worrying."

As the pandemic puts pressure on Indonesia's economy, the tourism industry has also been hit due to plummeting number of inbound tourists.

The nation reported its first cases on March 2, and has 369 infections as of March 20. Seventeen people have recovered from the illness, while 32 patients have died.

According to the latest figures from Statistics Indonesia (BPS), 1,272,083 foreign tourists visited the country in January this year. The number went down from 1,377,067 in December 2019.

On the same day Indonesia's first infections were confirmed, a BPS official said the country's declining tourist arrivals was "closely related" to the coronavirus outbreak that originated in China, as reported by Indonesian online publication Katadata.co.id.

Last month, Indonesia imposed a temporary travel ban to and from mainland China, and halted 260 direct flights from Bali to a number of Chinese cities such as Beijing, Guangzhou and Shanghai.

On March 20, the government also suspended visa-free and visa-on-arrival arrangements for 169 countries and territories for one month – documents which had been part of measures to increase the nation's foreign exchange reserves through tourism.

Across Indonesia's regions, "Bali is certainly the most affected" by plunging tourism numbers due to the coronavirus outbreak, said Bagus Sudibya, the chief adviser of the Association of the Indonesian Tours & Travel Agencies Bali.

The popular holiday island was the only province in Indonesia with a significant dependence on tourism, he said.

Last year, Australian and Chinese tourists formed the largest groups of foreign visitors to Bali, making up 27.7 per cent and 26.9 per cent of the total visitors, respectively, according to figures from I Gusti Ngurah Rai International Airport.

Travellers from China have been increasing over the years, with 1,196,497 Chinese visitors travelling to the island last year, spending an average of US$600 each for a four-night trip, Sudibya said.

Tour and travel operators in Bali that specifically cater to Chinese tourists have lost about 70 to 80 per cent of their income since Wuhan, the Chinese city that became an epicentre of the outbreak, was under lockdown from January 23.

The situation for travel agencies serving a fully Chinese clientele is even worse, with "almost 100 per cent of income" lost due to direct flight suspensions, Sudibya said.

As of Friday, Bali had one confirmed case of infection, while the country's first coronavirus casualty was a 53-year-old British woman who died in Bali on March 11.

The impact of tourism has heavily affected the Balinese regency of Badung, where about 90 per cent of its revenue is generated from hotel and restaurant taxes, making it "tough" for local authorities to cope during the pandemic. Such taxes make up about 40 to 60 per cent of income in other districts in Bali, Sudibya said.

"Bali is almost the only island in Indonesia where 70 per cent of people's lives depend on tourism, both directly and indirectly," Sudibya said. "There are a lot of downstream industries [connected to tourism in Bali], such as agriculture, fisheries, animal husbandry, home industry, crafts, performing arts. All of them are affected."

In the Balinese town of Ubud, a co-owner of a small holiday home, who did not wish to be named, said before the coronavirus outbreak, her monthly income was about US$8,000 to US$10,000. However, her income has plunged nearly 50 per cent in March.

The 35-year-old businesswoman said occupancy was down to 25 per cent this month, lower than the usual "90 per cent of occupancy every month" because of booking cancellations and the travel ban to and from mainland China.

About one in five of her clients came from mainland China and Hong Kong, she said, while most of her customers are from Europe.

She said some European travellers had cancelled their bookings because they were "very reluctant" to fly to Bali, where they could land mostly after transiting in Tokyo or Hong Kong – two cities deemed "heavily impacted areas". Others found out that their work or travel insurance could not cover their trip during a pandemic.

The co-owner, who opened the place in 2016, said she was not trying to promote the business now as she understood this is "a difficult time for everyone". Instead, she has halved her holiday home's rental, which are usually priced at US$235 to US$350 per night.

She hoped she and her business partner would not need to do any lay-offs, as her main concern was to ensure they could still take care of their staff.

"There's a lot of uncertainty ahead, especially because of the lack of transparency and contingency plan from the government," she said. "Ultimately, I believe that beyond anything, public safety should be the utmost priority."

Andreas Purwoaji Santiago Lalenoh, general manager of Swiss-Belhotel Rainforest hotel in Kuta, southern Bali, also shared similar concerns as 40 per cent of his foreign guests were Chinese, the largest of all his international guests. There were still visitors from China staying at his hotel – operating since 2014 – on the first week of February, but bookings from this group dried up after that.

Lalenoh declined to disclose the hotel's total revenue before and after coronavirus outbreak, but as "the company's survival becomes a priority", he could only continue to employ four out of initially 12 daily workers that he hired, one of whom now works at the hotel's restaurant, and three others as the hotel's security staff members.

"Hotels are one of the many businesses that suffer today, especially for some hotels that are very dependent on Chinese tourists," Lalenoh said.

To spur sales, his hotel cut fees for travel agents – with whom Chinese tourists did their bookings – to US$18 for each room per night, down from the usual fee of US$25. It was also coping with the drop in guest numbers by making use of its meeting facilities, as government agencies and companies still hold events there.

Lalenoh said he was now also focused on promoting more of the hotel to domestic tourists, while Indians and Indonesians were the main guests for now.

He said the management would have to deal with potential losses every month if they were not careful with managing all its sources of income and expenditure.

Other than lowering room rates, Lalenoh said the hotel had to lower its expenses, including minimising the use of cooking gas in the kitchen and closing off some floors. He also asked Indonesia's telecommunications, cable TV and electricity distribution companies for "monthly fee waivers".

Trisno Nugroho, the head of Bank Indonesia's Bali office, said earlier this month that "threats of virus in Bali on January until early February" contributed to an increase in the island's "worry index" score for foreign travellers. Bali had a score of below 0.1 from 2010 to 2019, while it shot up to 0.6 this year.

To ease tourists' concerns, tour agency owner Mahendra said he was telling customers that the current situation in Bali was not as portrayed by some media outlets, which have reported sensationalised instances of travellers behaving irresponsibly during the outbreak. He was also offering guests free hand sanitisers and face masks in his cars throughout the tours.

"Many people [online] and members of the media actually make things worse," he said.

"They hear and see videos of things in Bali, but they do not get the whole picture. Everything is connected to coronavirus," he added, referring to a tourist who got drunk in Bali and was falsely labelled as infected with the Covid-19 disease on social media.Lalenoh, of Swiss-Belhotel Rainforest in Kuta, said it was a challenge to ensure his guests felt safe. "For us, the hardest thing is how to keep our tourists from panicking," he said.

Source: https://www.scmp.com/print/week-asia/health-environment/article/3076168/coronavirus-bali-tourism-almost-paralysed-flow-chinese