CASE STUDY: PARADISE REOPENED - BALI HOPES FOR TOURISTS TO RETURN

From his home high atop the cliffs overlooking Bali's resort district of Jimbaran, German expat Pak Kriss has a perfect, unobstructed view of the island's international airport.

Composed of a single runway stretching out into the ocean, it notes that at its pre-pandemic peak, it handled some 700 flights a day, ushering more than 6.3 million international tourists a year to the Indonesian island.

"Then, one day... nothing," he says with a sweep of his hands. He expected it to last a few weeks, but it went on for two years.

In 2020 the island received just one million foreign visitors, almost all before Bali and the rest of the world went into lockdown in March of that year. Thenin 2021 the island reportedly saw just 45 overseas tourists. Yes, just 45 people.

Bali has been a hugely popular holiday destination for many years.Back in February, Mr Kriss watched anxiously as the first international passenger fight for 24 months arrived from Singapore. The expat, who runs a digital marketing and web design business catering to the local tourism industry, even recorded the event on his mobile phone. Like many in Bali, he was optimistic, especially after the island ditched quarantine rules for overseas arrivals in March. But as the computer screens in his home office call up the latest visitor numbers, he says there's little cause for celebration.

In May, Balisaw 237,710 international arrivals, up from 114,684 a month earlier,but half the number in the same month in 2019. And Indonesia's tourism ministerhas set the modest aim of Bali welcoming 1.5 million overseas tourists for 2022 as a whole.

"I think it will be 10 years before Bali is back to pre-coronavirus numbers," someone says.. He believes that foreign travellers are reluctant to visit more remote destinations like Bali due to a perfect storm of the war in Ukraine, high inflation around the world, and lingering concerns about Covid-19.

Withtourism accounting for more than 60% of the island's economy,driving through the once-bustling tourist centres of Kuta, Seminyak and Nusa Dua, Covid's impact is immediately visible. Dozens of tourism businesses, from shops, to bars, restaurants, nightclubs, and villas sit empty or abandoned, with some even reclaimed by the island's pervasive and all-consuming jungle vegetation. And the streets once crowded with Australian, Asian and European tourists are now still eerily quiet. Many shops, bars and restaurants remain shut in tourist areas of the island

Made Suryani reopened her small souvenir store close to the Club Med Beach resort near Nusa Dua in April, even though most of the other retail units beside her remain shuttered.

"Before Covid, in a good month, I could earn more than two million rupiah ($140; 116) a month," she says. That was slightly belowthe minimum wage for employees in Bali."Now sometimes I make 50,000 rupiah in a week. I borrowed money from family to survive, and I don't know how I'm going pay it back," she says.

At Nusa Dua's shopping and restaurant mall Bali Collection the area that previously held some of the island's top restaurants is now fenced off and deserted. Of the remaining units, about 80% remain unoccupied. Made Suryani remains cheerful despite her woes since the start of the pandemic.

"Most of these businesses are gone for good," says Kiran Vijay, who runs a crafts and jewellery store at the development. He says that the site's management have been very helpful, allowing tenants to be remain rent-free for most of the past two years. Yet Mr Vijay adds that tourist footfall is down from as many as 5,000 people a day before the pandemic to just a few hundred today. "They're going to have to lower rents significantly to attract new tenants," he adds.

Yet there are some bright spots. Bali's110,000-strong expat community,which includes lots of digital nomads, yogis and surfers, has kept areas like Canggu, Ubud and Uluwatu thriving, with villa rental prices now nearly back to pre-Covid levels.

And bookings at Bali's five-star resorts are also surprisingly robust, with high-end hotels seeing a large spike in demand. However, the vast majority of these visitors are domestic travellers from other parts of Indonesia, primarily the capital Jakarta and Surabaya, the second-largest city.

Bali is currently more reliant upon tourists from other parts of Indonesia. Prior to Covid-19, many of these would have considered Bali too expensive. But with foreigners temporarily out of the picture, they're now able to get discounted rates, and special perks like free helicopter rides exclusively available on Indonesian travel booking sites.

Many of the hotel staff are however still working on reduced salaries, some down to as little as 10% of pre-pandemic rates. But for them and the resorts, some income is better than none. Meanwhile, many hotel employees and other hospitality workers who were laid off at the start of the lockdowns went back to their home villages to work on the family farm plots.

Julia Lo Bue-Said is chief executive of Advantage Travel Partnership, an organisation that represents the UK's independent travel agents. She says that while long-haul travel from the UK to destinations such as Bali has been "slower to rebound" compared to holidays within Europe, "the appetite is there and growing".

"Long haul will see a significant growth in the next 12-18 months, as despite the cost of living crisis, people are still eager to explore, travel and have something to look forward to, banking life long memories."

Source: BBC News, 7 July 2022

QUESTIONS

1. According to theories, what is the elasticity of demand for tourism in Bali? Support your answers with theories and facts.

2. From theories to your personal insights, what are the main determinants for the demand in the tourism industry in general?

3. Whilst you have read the case study, what have been the main determining factors for the drop in tourists in Bali? What have been the main causes contributing to the negative growth rates in tourism sectors around the world since 2020?

4. Suppose you are employed as a manager in a top-notch luxury resort in Bali and you have been tasked to devise strategies in attracting tourists to stay in your resort. Elaborate your strategies that will eventually be submitted to the CEO of the resort.

5. Suppose, now, you are the Minister of Tourism in Indonesia, and the Prime Minister has urged you, in a Cabinet Meeting, to prepare a strategic document highlighting key strategies to promote the tourism industry in Bali. Point out the strategies and promotional activities your Ministry envisages to uplift the tourism industry in Bali.