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Bali tourism hit as wealthy travellers choose not to fly

The top-end hotel industry in Bali, one of Asia's premier tourist destinations, has been badly hit as fear of flying and the global recession keep big-spending visitors away.

Resorts and boutique hotels where wealthy American, European and Japanese tourists used to pay up to US$500 a night or more for views of the Indonesian island's pristine beaches, volcanic mountains or emerald green rice paddies are suffering the most.

Some hotel owners say occupancy rates in Bali hotels have fallen to levels not seen since the Gulf War a decade ago, and room rates have sunk as hotels offer deep discounts. Only partly cushioning the fall has been growth in domestic tourism.

"People were just about getting over their fear of flying [after the attacks], but now they are worried about the economy, they are holding on to their money. These are sad times," said Pamela Bathgate, manager of the Kupu Kupu Barong, a small upscale hotel in the picturesque mountain town of Ubud.

The suicide attacks on the US last September have also been a major problem for Bali.

The island has largely escaped the violence to hit Indonesia, the world's most populous Muslim nation, since it plunged into chaos four years ago.

But threats by Muslim radicals against Americans during the US-led attacks on Islamic Afghanistan have done nothing to bolster Bali's image for potential tourists, especially those with little knowledge of the Hindu island, which lies around 1,000km east of Jakarta.

Foreign governments often single out Bali as safe when advising citizens not to visit various other parts of Indonesia. But many tourists do no make that distinction and give Bali a miss.

"I have never seen it like this. We remember the Gulf War, but then the slump did not last so long," Kupu Kupu Barong manager Bathgate said.

She added that the hotel -- which has had famous guests such as Mick Jagger and Denzel Washington -- would soon close for six months of renovations. "We needed to do renovations anyway, better to do it while things are this quiet," she said.

Occupancy at the Kupu Kupu Barong, whose rooms range from US$225 to US$695, has swung from 50 to 15 percent in recent weeks.

At the Komaneka hotel in central Ubud things were equally quiet. Only a few of the stylish rooms were occupied last week and staff offered attractive discounts.

"I've been here a week now, and I've had the place pretty much to myself," one German tourist said.

The picture was also pretty grim for most of the large resorts dotted along the island's south coast.

The long strip of five-star hotels from the center of the Nusa Dua resort area to the village of Benoa was eerily quiet the week before Christmas. Restaurants were empty, most hotels offered deep discounts and souvenir vendors frantically pursued the few tourists with a determination bordering on desperation.

"Bali is bankrupt. It's been like this since the attacks [on the US]. This cannot go on," said Dicky Nuripa, a longtime driver and tourist guide who makes his living along the strip.

Bucking the trend was the Grand Hyatt in Nusa Dua. The five-star resort was nearly full of Asian tourists and Western expatriates last week.

Infamous Kuta, a long strip of beach popular with backpackers, has also had a steady stream of visitors this month.

Local media have quoted Tourism Minister I Gde Ardhika as saying the target for total foreign tourist arrivals to Indonesia this year had been reduced to 5.1 million from the original target of 5.4 million.

Bali usually accounts for around 30 percent of all arrivals.

Balancing the lack of foreign tourists is a surge in local visitors. Tourism specialists said the cheaper hotels in bustling Kuta had suffered less, as domestic tourists took up some of the space vacated by foreign travellers.
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