How much of the money being generated by Bali tourism actually goes into the local economy? In the absence of meaningful statistics this important question is not an easy
one to answer.

The Lack of Analyzing Information

The statistics show that more people than ever are coming to Bali, these figures are derived from the number of people arriving on the island and we know where they come from but
how long do they stay and how much money do they spend while they are here? Without analyzing these important statistics the number of arrivals is in fact a pretty meaningless figure.

Years ago it was generally known that most tourists came to Bali from Europe. It was a long expensive flight halfway around the world and these people tended to stay for 3 weeks at a time, they had money and they were the type of people who “engaged” with the island appreciating the Balinese people and their culture. They stayed at good hotels, ate in the local restaurants and walked around the shops on the streets. Each tourist brought considerable financial benefit much of which went directly into the hands of local people and so into the local economy.

Over the past ten years the tourism mix has changed considerably. While many more tourists are arriving each year it is clear that the length of time they stay is a lot less than in
earlier years and it is also fairly obvious that the amount of money injected into the local economy by each visitor is also considerably less than it used to be.

Unfortunately people seems don’t use statistics that tell us exactly how long these people stayed or how much they spent while they were here. These are basic statistics in the tourism
industry around the world that provide clear information directly relating tourism numbers to economic benefit. They provide the starting point for planning and managing tourism
strategies.

Several years ago changes were made to the visa on arrival arrangements suddenly revealed some disturbing information, far more people than had previously been thought were staying
for very short periods of only 3 or 4 days.

Tourism Mix

Since the bombing of 2002 the tourism mix has changed dramatically. The proportion of tourists arriving from Europe has declined to be replaced by South East Asia and Australia.
For a while large numbers came from Japan but these have declined since the tsunami and economic problems hit Japan.

These days large numbers of people come from Korea, China and Taiwan, they tend to come in well-organised package tours and stay for only 3 or 4 nights. They follow strictly preplanned itineraries while they are here which are planned to keep them “captive” and not allow them time to get out onto the streets and spend money in local restaurants or shops.

To make matters worse these tourists pay for their “all inclusive” holiday at home before they set off. Some will stay at foreign owned hotels and eat in specially created foreign
owned restaurants while others will, due to the shear power of large numbers, pay the minimum prices possible to local hoteliers and restaurateurs. Transport and trips are also tightly controlled and aggressively negotiated to maximise the profits to the foreign operators. There have been a number of complaints of foreign operators “selling” their guests to tour
guides for exploitation purposes.

Larger numbers of people are also arriving from Australia. The advent of low cost airlines combined with the high value of the Australian dollar has made travel to Indonesia cheap.

In the absence of meaningful figures we have to go back to observations and past experience but it is likely that these people will tend to stay in and around Kuta, they will stay for a
week and party hard. Many will be people who will look for a bargain, they will stay at low cost or self-catering accommodation and they are unlikely to take much of an interest in the island or its people.

We have to ask the question: how much economic benefit does Bali actually gain from these visitors? We also have to ask how many of these people are actually chasing away the visitors that appreciate and bring genuine economic benefit to the island and its people.

Development is out of control

Over the past 10 years Bali has seen a major boom in development on the island. Much of the new development has centred around new hotels, apartment blocks and villa developments. The shear volume of new accommodation means there is an oversupply of beds with a lot more on the way and this will inevitably lead to lower room rates. To maximise their income levels many hotels are offering all-inclusive packages, which keep people inside the hotels,
once again fewer people go and spend money on the streets and the local economy suffers.

Villas and apartments are everywhere and often have absent owners who live overseas. A substantial proportion are not licensed, they do not comply with strict hotel safety regulations
and do not pay taxes. They do, however, compete with local hotels and, with their rentals being paid overseas, much of their income totally bypasses the Balinese economy.

Unfortunately the lure of quick tourism dollars appears to have overidden basic common sense and any consideration for the long term good of the island. In spite of strenuous efforts by the
governor to apply a moratorium on hotel building and to introduce a special plan in order to manage development and protect agricultural and green areas, development is out of control.

Already Bali is suffering the consequences of this shortsighted approach. The island’s infrastructure cannot cope with ever more crowded roads, loss of agricultural land, water shortages,
power cuts and endless garbage. The price of land is spirally to ever more ridiculous heights well out of reach of even the wealthiest Balinese.

In the longer term it could well be that Bali will follow the path of Florida which, due to cheap rents resulting from an over supply of apartments and hotels, became a haven for
dropouts living on government benefits, a place that tourists
avoid because of the high levels of street crime, drug addiction
and aids, in short a tourism garbage tip.

Years ago the elders of Bali in their wisdom declared that they wanted to attract high quality tourists, people who would respect the island, its people and its culture. Sadly this laudable desire has gone by the wayside long ago destroyed by the lure
of money.

Perhaps the time is now to start analyzing meaningful statistics, to develop a comprehensivestrategic plan for managing tourism and to get everyone to work together for the future of Bali and the good of its people. There again perhaps it is already too late.