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Indonesia tourism won't benefit from visa policy BATAM - It is welcoming news to see that our new State Minister of Culture and Tourism Jero Wacik is looking at extending the number of countries whose tourists will be eligible for a visa on arrival, albeit a visa that costs US$25 and is only valid for 30 days. Jero says he is undertaking a survey of major entry points to see what needs to be done to improve the performance of Indonesia's queue-up-and-pay visa policy.
May we suggest to Jero that he extend his survey to the tourist industry itself, to determine that this visa policy is not only earning, but also costing the country? The losses caused by this policy are large but invisible; it will take more than some visits to airports and ferry terminals to understand what this visa policy costs Indonesia.
Indonesia is only realizing only a small percentage of it's potential to attract tourists. For example, in the case of Batam vs Singapore, if we could follow the model of Macau vs Hong Kong, Batam should be receiving the same or more than Macau -- five million tourists per year. Instead, Batam gets about 1.5 million.
This pitiful performance is caused by decades of ineffective tourism promotion, poor image management, no effort to counter negative reports in the international media; now compounded by unfriendly, expense and restrictive Visa-On-Arrival regulations. For example, Singapore has nearly half a million wealthy expatriates, whose children attend various International Schools in the city-state. There is a huge demand from Singapore's schools to get the kids out of the city and into a wilderness experience.
A number of first class wilderness locations exist in the neighboring Riau islands. Schools and private businesses have invested in developing wilderness camps in the neighboring islands of Bintan, Batam and Sugi. This kind of business is ideal for Indonesia: It encourage use of the natural environment, it is labor intensive and brings jobs, skills and prosperity to otherwise poor subsistence farmers and fishermen. The interaction between the kids and villagers promotes life-long personal friendships and international understanding. A classic win-win situation.
The benefits of school camp business far outweighs a paltry $10 or $25 collected by the Jakarta government. Unfortunately due to onerous visa rules, passenger transfers to these camps, which used to take two or three hours, now takes nearly a day. In terms of time, a children's camp in Malaysia or Thailand is now more easily reachable than one which you can nearly see from a Singapore high rise building! Where once, wilderness camps were poised for growth into a business employing thousands of villagers, the Riau Islands now has just two remaining camps. (Three others have closed.)
A second example can be found on the island of Batam, which has struggled over the past decade to upgrade it's seedy image as cheap weekend getaway for minimum wage workers from Singapore and Malaysia. Investors have built a world class tourism infrastructure of star rated hotels, resorts, golf courses and casinos.
Compared to Macau, Batam is three times closer and easier to reach, more efficient and more friendly. Batam's Nagoya Entertainment District (NED) had a slogan: For the same price as a few hour's drinking on Singapore's Orchard Road (say, US$200), the well heeled visitor could come to Batam and for the same money enjoy a four star hotel room, return ferry tickets, meals, drinks, taxis, entertainment and tips.
Unfortunately the $25 visa that takes up over a page in the visitors' passport has killed this business. Immigration queues to pay are long and slow, the immigration officers are stressed and surely with the visitors. Batam's shrinking number of loyal golfers and overnight pub trippers quickly end up with a passport full of huge and useless visa stickers. The whole experience leaves such a bad taste in visitor's mouths that too many Singapore-based expats now choose to spend their weekends in Johore or Phuket.
The once popular pastime of the after work ferry trip from Singapore to do an hour's jogging in Batam's pristine forests is a now thing of the past. The loss to Batam is not just a few bankrupt entertainment outlets but a loss of revenue and opportunity. When Indonesia loses a thousand high spending visitor arrivals, the loss of a US$10 visa fees is not the main issue.
Where does the expenditure of that overnight visitor with a US$200 budget go? A lot goes into the government's pockets as taxes. Let's do the sums: Ferry ticket $15 (terminal taxes = $2), Hotel room for $85 - (10 percent tax = $8.50), taxi fares of $10 (no tax), $50 worth of drinks and entertainment (10 percent taxes and 2 percent customs and excise = $5.20 ). Total in directly deducted taxes =$15.70.
In other words, some tourism bigwigs may look down their noses at the overnight visit market, but if you lose a thousand of them, governments lose 1,000 x $15.70 in taxes and the people lose $200,000 in tourist spending. But according to the lessons to be learned from Macau, Batam isn't losing thousands of tourist arrivals, it is losing millions.
What we really hope our new minister for tourism will do is launch a truly bold objective for Indonesia's tourism industry. If tiny Singapore can recycle tourist taxes into promotions that brings seven million tourists a year, let's remove Indonesia's small minded and antiquated business obstructions, start spending some tax revenues on promotion and shoot for, say, 14 million tourists a year as a starting point.

Posted in Tourism @ 17 November 2004 00:03 CET by Jeroen · 'Blog' RSS feed · permalink

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