Indonesia sees drop in tourism spending next year

Indonesia's tourism ministry said on Tuesday it expects a decline in tourist spending next year because of the global economic crisis, but sees visitor arrivals in a similar range to 2008.

Tourism accounts for about 3 percent of gross domestic product in Southeast Asia's biggest economy, but some areas, including the resort island of Bali, are heavily dependent on tourism for jobs and growth.

A recent shortage of alcohol in Jakarta and Bali, and concerns over Indonesia's new anti-porn law -- seen by some as a threat to artistic, religious and cultural freedom in the diverse archipelago -- have led some tourists to complain or even threaten to stay away.

Other deterrents include long queues at the visa and immigration counters, and fears about the safety record of Indonesia's domestic airlines.

"I understand that for foreigners alcohol is like tea or coffee for us, if there's no alcohol then tourists are reluctant to come here," Culture and Tourism Minister Jero Wacik told a press briefing, adding that the issue was being resolved, particularly in top-tier hotels.

Importing alcohol has became prohibitively expensive following a clampdown by the authorities on widespread smuggling and under-invoicing of wines and liquor.

Earnings from tourism are forecast to fall to $6.5 billion next year, from an estimated $7.57 billion in 2008, the ministry said in a statement, with the average tourist expected to spend $1,000 per visit to Indonesia next year, compared with $1,178 per visit in 2008, and $970 in 2007.

The ministry also forecast that foreign arrivals would be between 6.25-6.5 million in 2009, compared with a preliminary figure of 6.4 million in 2008 when the government launched its "Visit Indonesia 2008" campaign.

While tourist arrivals have risen this year, up from 5.5 million foreign tourists in 2007, Indonesia still lags far behind much smaller Asian countries, despite a wide variety of tourist attractions ranging from temples to volcanoes and jungle.

Neighbouring Singapore attracted 10.3 million visitors in 2007 thanks to its popularity as a stop-over on the way to other destinations. Thailand had targetted 15.5 million arrivals this year.

"As vacation isn't a primary need, next year will be quite tough," said Carla Parengkuan, executive director at the Indonesia Hotels and Restaurants Association.

The occupancy rate at hotels in the country may fall by 5 percentage points to 60 percent next year as the crisis prompts travellers from Australia, South Korea, Japan and Russia to cancel their bookings, Parengkuan said.