Indonesia has maintained the strong start to 2009 shown by its tourist arrivals data. Approximately3.56mn tourists visited the country during the January-July period, representing annual growth of 2.56%,according to figures from the Badan Pusat Statistik (Central Bureau of Statistics, BPS). At a time when itsneighbours are struggling with falling visitor numbers, this is an impressive result.
However, the July bombing of two hotels in Jakarta by a terrorist group with links to al-Qaeda may leadto tourists staying away from Indonesia and the capital in particular. Against this backdrop, and withconsumer demand already depressed by the global financial crisis, we still believe that a fall in touristarrival numbers is the most likely scenario for 2009, with 2010 then seeing a slight rebound. As always,much will depend on the security situation in the country. If it can be stabilised, then BMI remains upbeaton the long-term potential for Indonesian tourism given its low-cost reputation.
Fresh Terror Attack Raises Fears
Nine people, including the attackers, were killed when suicide bombers struck the Ritz-Carlton andMarriott hotels in Jakarta on July 17. A domestic terror group with links to al-Qaeda, Jemaah Islamiyah(JI), claimed responsibility for the attack, which caused significant damage to both properties and camejust a few days before the Manchester United team was due to arrive in Jakarta. The attack was the firstmajor terrorist attack since the 2005 Bali bombings and could revive tourist fears about the safety oftravel to the archipelago.
EU Lifts Ban On Four Indonesian Airlines
In July, the EU eased the ban on some Indonesian airlines that had been in place since 2007. GarudaIndonesia and Mandala Airlines, and the charter airlines Airfast and Premair, are now allowed back inEuropean airspace, with the EU satisfied that ‘significant improvements’ had been made to safety withinthe industry. Foreign Minister Hassan Wirajuda told local media that Indonesia country had met 62 of the69 safety requirements laid down by the EU. The lifting of the ban clears the way for the resumption ofdirect flights between Jakarta and the EU, with Garuda likely to launch services in 2010.
The lifting of the EU ban is a clear positive for the Indonesian aviation industry. Although no Indonesiancarriers were flying to the EU when the ban was introduced, it acted as a deterrent to European travellerswanting to travel around the country on domestic flights. Both international and domestic services withinIndonesia should benefit from the EU’s decision.
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