Published: Sep 30, 2007

During September 23-28 Indonesia's largest annual tourism convention was held in Jakarta for the fourth time. Around 250 buyers from 35 countries met with Indonesian sellers of tourism related services and products. Business deals worth millions of dollars were closed. Officials held seminars, and the international businessmen were entertained with city tours, dinner parties and post-conference tours to other parts of Indonesia. TIME '97 (Tourism Indonesia Mart & Expo 1997) also included a four day expo open to the public, where Jakartans wandered through stalls exhibiting anything from luxurious holiday resorts and white-water rafting to furniture and glittering home decorations.

Smog

However, the timing of the convention turned out to be rather unfortunate. Starting more than a month earlier, huge forest fires raging in Kalimantan and Sumatra caused thick smog to cover parts of Indonesia and neighbouring countries. Many areas were classified as 'very unhealthy' or 'dangerous'. Furthermore, riots broke out the previous week in Ujung Pandang, Sulawesi, with violent clashes between Muslims and Indonesian Chinese. On the fourth day of the convention, Indonesia was hit by yet another disaster when a Garuda jet crashed in north Sumatra, killing all 234 passengers and crew on board. It was the fourth serious plane crash in Indonesia this year. Mrs Emiati Djojosoebroto of the Indonesia Tourism Promotion Board (ITPB), the main organiser of the convention, nevertheless maintains that TIME '97 was a big success. 'The only thing that wasn't a success was the fact that we had to cancel several of our post-conference tours because of the smog', she says. 1997 Seems to be a bad year for the Indonesian tourist industry, with the lowest growth of foreign arrivals in thirty years. They were already low in April and May, probably because of reports of social unrest, increasingly common since last year. The campaign leading up to the general elections in late May was unusually violent and no doubt contributed to the low number of tourist visitors. In July numbers rose, as they do every year when (mainly) Europeans have their summer vacation.

Currencies

However the figures dropped sharply again in August. Tourism officials blamed it on the fluctuations of Southeast Asian currencies. Asian currencies like the Thai baht and the Malaysian ringgit have been unstable in 1997, and the Indonesian rupiah lost 45% of its value between January and September. Because of the alarmingly low value of their currency, Southeast Asians have drastically cut back on their trips to Indonesia. Since visitors from this region make up no less than a third of Indonesia's total number of visitors, this is a serious blow for the industry. A devalued currency often attracts more tourists, but this positive effect did not occur in Indonesia because of similar developments in neighbouring countries. Thus, the first six months of 1997 saw a rise in foreign tourist visits of only 2.6% from the same period last year - far from the targeted 12%. The largest losses, however, are probably still to come, as the more recent smog crisis is expected to push down the number of tourists. 'We still have the Christmas season, which is usually very busy, and we can only hope that the haze will be gone by then. But we can't predict anything at this stage - it is all in God's hands', says Mrs Emiati somewhat anxiously. In sum, four factors dampened tourism growth this year: the smog, the four plane crashes, the political unrest - all creating bad publicity - and the unstable currency.

Long term

However, when the worst disasters are over and forgotten, tourism will probably continue to be a booming sector. It is already one of the largest foreign exchange earners, up there with oil and gas. Businessmen at TIME '97 appeared to be optimistic and eager to invest. Many participated and big deals were done. In other words, it seems to have been business as usual. International tourism in Indonesia has grown at an average rate of 10% annually since the late 1960s, when foreign tourists were very rare. In 1996 just over five million visited. Until the late 1980s Westerners, especially Australians, were the largest group. Recent trends, however, show that more Asians are travelling to Indonesia, while the number of Europeans is growing more slowly. Singapore is now leading, with no less than 1.3 million visitors (out of a population of three million) coming to Indonesia last year. Then come Japan, Taiwan, Malaysia, and as number five Australia, closely followed by South Korea. The total number of Europeans was 0.75 million and Americans only 0.24 million last year. Asians are the big holiday-makers in Indonesia. The ever larger and richer Asian middle class is expected to continue to dominate among foreign visitors. This means a significant change in the appearance of tourism, as Asians seem to have a taste for more expensive things than the 'typical' Westerner. Asian tourists more often stay at luxurious resorts and spend their time playing golf or scuba diving. The main tourist attraction seems to be shopping - the expensive way. Some Balinese shop keepers apply three different price categories: the highest price for Japanese tourists, the middle for Europeans and the lowest for Australians.

Domestic

Another aspect of the same trend is rapidly growing domestic tourism in Indonesia. Mr Chalik Hamid, Director General of Domestic Tourism at the Department of Tourism, Post and Telecommunication, expects this phenomenon to grow tremendously in the near future as Indonesians become better off and want to spend their vacation as tourists. 'Most Indonesians still travel to visit relatives, but leisure tourism is becoming very popular, especially to famous places like Bali. I suppose people are curious and want to find out why so many Westerners go there, why Bali is so popular among foreigners', Mr Chalik says. Last year Bali received just as many Indonesian as foreign tourists, each around 1.6 million. While Bali is already well-known internationally, one of the most important aims for the Indonesia Tourism Promotion Board is to promote tourism to other parts of Indonesia for the foreign market. Indonesia: A World All Its Own is the slogan that ITPB hopes will open up people's eyes to the rich diversity of nature and culture of the vast archipelago. During TIME '97 a particular focus was directed towards marine and adventure tourism. Coral reefs in pristine tropical waters and river-rafting through dense rain forests are expected to lure more adventure-seeking tourists than the usual beach-comber. The trend points to more promotion towards wealthy East and Southeast Asians interested in adventurous - and expensive - nature experiences. Western backpackers have long been a low priority group since they bring in far too little money. However, Indonesian tourism officials are well aware of the negative effects that the recent disasters may have. 'We will have to work very hard in the future to persuade the world that Indonesia is OK to visit', Mrs Emiati underlines. Anna Karin Eklöf is researching the Indonesian tourist industry for a PhD degree in social anthropology at Lund University, Sweden.

Inside Indonesia 53: Jan-Mar 1998